Lisa Danny-Roberts will be appearing on the radio show Money in Motion Saturday November 2nd, at 2:00 PM MST on KZEW AM 1430 to discuss Preventing Fraud and Estate Planning Issues.
Crossposted on According to Hoyt.
I’ve wanted to write a bit about trademark law and writers for awhile now because its something that I think the publishing business is not handling correctly either in its practices nor its contracts. I’ve looked at a lot of book publishing contracts over time and especially recently, and they can be quite frustrating. As I’ve mentioned elsewhere, sometimes my frustration is more from the ambiguous drafting than the actual effect of the intended contract language. And one of the things that isn’t as well handled in the publishing business as I think it should be are trademarks.
This is a bit baffling to me, specifically why their treatment of trademarks embodied in the book trade is so unsophisticated. But let us discuss for a minute what trademarks are. The classic definition that I use is “a trademark is a distinctive word, symbol, design, phrase or other thing that is intended to distinguish the origin of goods or services”. (Technically “trademark” is for goods, and “service mark” is for services but I’ll just use “trademark” or “mark” here). So a trademark can be almost anything, indeed Harley Davidson tried to register a trademark in the sound of their motorcycle exhaust note and only failed because of a functional doctrine that I won’t go into here.
What are more common trademark issues for writers are book titles, series titles and such. Recall that, by statute, you can’t copyright a short phrase or a title. So if I write a book, I can’t protect the title using copyright law. That’s why we often have books published with the same title.
What Is Protectable?
In trademark law, we have a concept of a spectrum of marks with varying degrees of strength. A “strong” mark is one that is very distinctive. The spectrum, from strongest to weakest, is: Fanciful, Arbitrary, Suggestive, Descriptive or Generic. Fanciful mean a word that is madeup or coined for the mark. A common example is “Exxon” – a word that means nothing in any language. Arbitrary refers to the use of a word that has meaning, but unrelated to the product. “Banana Tires” would be an example the USPTO uses in its trademark booklet. Tires have nothing to do with bananas. These are very strong marks and easily protected. Suggestive marks are marks that suggest a product characteristic but don’t describe it. QUICK N’ NEAT for “pie crust” and GLANCE-A-DAY for “calendars” are examples from the USPTO. Suggestive marks are almost as strong as the first two categories.
Descriptive marks are marks that do describe the product. A classic, that seems to appear in every phone book (you remember what phone books are … right?), is “Accurate Accounting”. That’s a very weak mark. Probably utterly unprotectable or only protectable with a lot of proof that you are widely known under that mark. The USPTO trademark booklet gives us examples of CREAMY for “yogurt” and WORLD’S BEST BAGELS for “bagels”. Lastly, Generic marks are words that simply mean or have become to mean the product themselves and can never be protected.
In our world of book publishing, series titles are trademarks whether we realize it or not. I’ve had amusing arguments with authors where I asked about their trademarks and was told that they don’t have any … even as I was looking at the series title on the cover of one of their books. But where do they fall within the spectrum of marks above? Sometimes they can be weak if not well chosen, from being too descriptive. A series title like “A Bodkin Nettlesworth Mystery” is going to be easy to protect. But a series title like “Valkyries In Hell” is going to be weak, as its either descriptive or even generic.
Descriptive as mentioned is hard to protect without a lot of proof of existing recognition in the market. Lucasfilms’ “Star Wars” ® is an example of a descriptive mark that was protectable because of its rather obviously large amount of market recognition.
How To Clear a Mark?
Clearing a mark means to ensure that you won’t infringe another’s trademark rights with your use. Trademark law works in the United States on a principle of first in time, first in right. In other words, the first person to use a mark has priority. (With some caveats on geography that we won’t discuss). So how do we find out whether someone else is using that mark? Aye, That’s the rub. It is impossible to ever perfectly clear a mark without a literally infinite expenditure of time and money. Just doing a search on the internet search engines is not enough. Frankly, its not even a start. There are commercial firms who will for a fee dump out their databases of state and federal trademark registrations, corporate filings, advertising materials, phone books, etc. for a proposed trademark but then that dump of data has to be reviewed closely by someone who knows what they are doing and each potential conflicting mark evaluated. For an international company that is proposing to clear a new mark that may be used globally, the costs of a trademark search alone can be millions. I know, I’ve seen the invoice. Something far less ambitious can still cost hundreds of dollars in search firm fees and attorney time.
So one has to decide how much money the mark is going to represent in revenue and decide when that revenue needs to be protected by due diligence in clearing your mark.
Do I Need to Register My Trademark?
In the US, trademark rights are created by using a mark to sell goods or services or offer them for sale in commerce. Registration is not required. A mark that is used within a single state can be registered at the state level but that provides very little additional protection and only a limited amount of notice to others. Marks used in interstate commerce can be registered with the USPTO which provides a lot more benefits in statutory rights (e.g., it’s the only time you use the circled R mark) and a lot more notice to others. Registration cannot be made of any generic mark obviously, and the USPTO will reject marks it considers descriptive unless provided with compelling evidence that the mark is already widely recognized. Registration costs in the low thousands of dollars in attorney fees and USPTO fees. The USPTO charges fees for each mark for each category of goods or services in which you are registering the mark. So I recommend that a business decision must be made on how important the mark is, what it would cost to register and how much business revenue is protected by a registration.
At a minimum, include in your rights notices that you are claiming a mark and who owns it. After the copyright notice, include something like “’A Bodkin Nettlesworth Mystery’ is a trademark of A. Author”. Using the parenthesis “TM” or superscript TM on the cover will probably be unattractive but it could be done on the title page at least once.
The more important question is who owns your trademarks? This is where some of my frustration resides in the publishing business. Traditional publishing houses’ contracts are very uneven in whether they treat the issue at all. Some don’t discuss it, and most are ambiguous at best. And what happens if your book series’ title was chosen by your editor, if you get the rights back on the copyright of one or more books, do you also get the trademark? If not, will you have to omit the series title from it when you arrange independent publication?
Infringement of trademarks is something I want to address in a later article.
Robin D. Roberts
Posted in Intellectual Property.
– August 14, 2013
An author client and I were discussing some deep philosophical concept via email (probably ICANHAZCHEESEBURGER pictures) when she sent me a completely out of topic message: “if you have time and patience, would you do a post about electronic estate planning for writers”.
So what can I do? Here are some more or less random thoughts based on my years of estate planning and probate practice. Similar issues exist for anyone who has significant intellectual property assets. Estate planning for authors must be more carefully thought out than ordinary estate planning. Authors have a unique form of property in a copyright of a work. It is “intangible” property – in contrast to tangible property like cars, personal possessions or real estate. (Even bank accounts are “tangible” in the definition that I’m using). And in the more common vernacular of “intangible”, your heirs may not even think of that form of property in dealing with your estate.
In ordinary estate planning, one aspect of what we consider is whether or not the client’s estate would have to undergo the probate process upon death – the court administration of an estate. Most states have some form of easy non-court process – often nothing more than a sworn affidavit and a copy of the death certificate to claim property – for heirs to obtain their inheritances for small estates but what a “small estate” can be varies greatly from state to state. Sometimes a court appointed executor for the estate ( or personal representative as called in other states ) can have powers that make such a court probate useful even if the estate would qualify for “small estate” handling. We can also use trusts – revocable (aka “living”) or irrevocable – to organize an estate to avoid probate.
Authors, with their unique forms of assets, can use a couple of mechanisms to make it easier for their heirs to handled their copyright works upon their death. Certainly a well-drafted will can operate on an estate. Finding an estate planning attorney who also understands copyright can be important because of some of the statutory issues in US Copyright law, e.g., the Section 203 right to terminate transfers has a specific list of who succeeds to the right upon the author’s death. Consider that you may wish to separate control of your copyrights from the monetary benefit. In other words, you may wish to appoint someone to have the power to license your works after your death to control how your work is exploited that is different from who you want to receive the revenue from those works. That may require that your estate plan create some mechanism like a trust to hold those copyrights.
Another mechanism is to use a corporation or limited liability company to control the ownership of the works, then use your estate planning to decide who keeps control of the corporation and who receives revenue from it. Perhaps using more complex structures like voting trusts to keep control the corporation in the hands of a trusted administrator while seeing that your heirs receive the benefit of the proceeds. That can be more complex to set up during your lifetime but less work for your heirs.
Now for this purpose, trusts are very useful and there are lot of really neat things you can do with trusts that are well drafted. The original purpose of trusts was to separate the benefit of property like income, rents, profits etc. from the control of the property. But you won’t find a trust that is designed to work with intellectual property assets like copyrights and trademarks in a Nolo Press book or software will drafting programs or online legal document services. Estate planning firms charge serious money for drafting trusts and explaining to you how to use them. Indeed, the latter is the real problem. I can’t tell you how often I run across someone who has paid thousands of dollars to a law firm to draft a trust, then failed to fund the trust i.e., failed to transfer into the trust the property that its supposed to control. If you don’t know how to use a trust, you’ve bought very expensive but not very soft toilet paper.
Now what did my client mean by “electronic estate planning”?
Today, so much of our lives are online, especially for people who feed themselves with words. So much of our lives are also in our email, on websites, in forums and such. Even outside of the literary world, when we handle estates we are finding a lot of trouble dealing with the deceased’s online life. Some of it is obvious, like online banking. If you don’t get mailed bank statements, it can be a struggle finding financial accounts.
So everyone needs to keep some records of where their accounts are, their email accounts with passwords, websites that they own, and such. And it can be a good idea to have a list of online forums if you have a significant online life. Our online lives are becoming more significant. I greatly miss some online friends or acquaintances, there have been many times that I’ve been truly grateful that someone was able to come online and tell me of an online friend’s passing because they knew about that forum.
But an author also has to consider how to organize for his heirs or executors the intangible assets of his writing business. The copyrights that he holds, are they registered? If not, is there documentation of the work sufficient to establish when it was created and published? If they are registered, is there a list of all the copyrights for the heirs/executor to use to find them? What accounts are setup with Amazon, Nook Press, Smashwords etc. and what are the account credentials? And pen names pose a special problem. Some are only decorative, in that the copyright is registered in the author’s real name. Compare “S. Andrew Swann” works with the copyright page in the name of Stephen Swiniarski for example. But its possible to register a copyright in a psuedonym that is opaque to the Copyright Office. Have you done this and if so, are there records in a convenient place for your executor to find?
Some authors use the tradename or “doing business as” registrations of their local Secretary of State to be able to accept royalty checks in their opaque pen names, do your records include these filings so that your heirs/executor can locate them and renew them if needed?
These problems are also among those more easily solved by an author owning a corporation or limited liability company that has in its records those works, or even has the works registered in its name as works for hire (see Science Fiction author Kevin J. Anderson and his use of Wordfire Inc.)
Robin D. Roberts
– July 18, 2013
– June 8, 2013
Posted in Uncategorized.
– May 23, 2013
Saturday March 30 at 6PM we’ll be doing a seminar on Copyright Basics for Writers and Artists at Anomaly Con. If you are attending the convention, we hope to see you there.
– March 10, 2013
Let’s be clear, I’m not a marketing expert. Unfortunately, I spend a lot of time talking to my business clients about things like marketing when they discuss their small business legal needs. I do it mostly because I need to understand what they are doing to advise them correctly. But I also do it because too many of them haven’t really figured out their business model in their plans, nor thought about the details of revenue stream and marketing.
So I’m not an expert, maybe not even very good at it, but I’ve got some observations.
Tomi Ahonen writes about the global cellular phone business at his blog. He is great for a good rant about smartphone strategy but I love the title of his blog “Communities Dominate Brands” which I think is a book title of his too. And that’s the theme that I’m stealing from him for this blog post.
In a lot of ways, the old method of funding entrepreneurship is dead. Good luck getting a bank to loan you money to start a business. Good luck finding venture capital. Both happen but rarely today.
Today we have a lot of interesting new ways to get together revenue for a project and I want to talk peripherally about one – Kickstarter. The Crowd Sourcing model.
But there are other variations such as the P500 model used by a friend of mine in the game publishing business GMT Games. The idea is to get your customers to demonstrate their enthusiasm for a project or a product by funding its development or manufacturing costs.
And that is where Tomi’s blog title comes in, Communities Dominate Brands.
It used to be that one developed value in a business (what we call “Good Will” in legal and accounting fields) by developing brand recognition. The concept still exists but it has morphed. Today, a business succeeds by building a community that its customers feel that they belong to.
Just last night, a man whose business is publishing a web-based cartoon – “Schlock Mercenary” – put up a Kickstarter project to manufacture commemorative coins (“Challenge Coins” in milspeak). He wanted a minimum of $1800 pledged to do the project (You can find it here on Kickstarter). You can tell that he has succeeded in building community with his web-comic because in 122 minutes his project has not merely achieved his goal of $1800 in pledges … it had received 1000 percent of that goal. Today, a half-day later, he is at 2000 percent – twenty times his goal.
Hence the power of Tomi’s title: Communities Dominate Brands.
Posted in Business Formation.
– February 21, 2013
Kathryn Rusch writes here about the estate issues that are unique to writers – that of the question of the ongoing administration of a literary estate.
– February 15, 2013
From Ars Technica, a story about how DMCA notices are abused to cause WordPress to pull articles that embarrassed some researchers. That the site claiming ownership in the DMCA notice is foreign, and has apparently fraudulent WHOIS info certainly leads to the obvious conclusion that someone is fronting an operation to pull embarrassing articles.
Posted in Uncategorized.
– February 7, 2013