Posts Tagged 'small business'

Domain Names: Danger Lurks Below the Surface

You register the perfect domain name, spend a lot of time and money to create a killer web site and open for business on the Internet. Business is good and prospects are even better until one day you receive a certified mail letter from the lawyer for ABC, Inc., notifying you that: (i) your domain name infringes on ABC’s federally registered trademark, (ii) you must immediately cease and desist from using the domain name and all references to the trademark, (iii) you must transfer the offending domain name to ABC, and (iv) pay ABC damages equal to all the profits made by your online business.

Domain names pose a specific challenge not only because of the host of options to choose from (e.g. .com, .net, .org, .biz, .info), but because some domain names are protectable under trademark law while others may infringe on the legitimate rights of trademark owners. It is important to understand that obtaining or using a domain name (1) is not a substitute for securing trademark rights (which is usually accomplished by a combination of actual use of the mark in commerce and federal registration) and (2) does not, in and of itself, create or establish any trademark rights merely by its use as an Internet address. The federal trademark and domain name registration systems exist independently with no cross-checking of the other database prior to registration. Moreover, a trademark owner does not have an absolute right to a domain name consisting of its mark, in whole or in part.

Dangers of Trademark Infringement Involving a Domain Name.

Unfortunately, the above scenario occurs far too often to domain name owners. The cease and desist letter alleging trademark infringement should be taken very seriously. Because trademark owners have a duty to protect their marks and to take appropriate action to prevent others from infringing on their marks, more often than not the trademark owner who sends a cease and desist letter intends to follow it with an infringement lawsuit unless the alleged infringer concedes to the trademark owner’s demands.

If you obtain a domain name that is identical or similar to a trademark or service mark that you do not own, you may be the defendant in a lawsuit brought under the Anticybersquatting Consumer Protection Act or an arbitration procedure brought under the Internet Corporation for Assigned Names and Numbers Uniform Dispute Resolution Policy (“UDRP”). Defending a cybersquatting lawsuit or UDRP arbitration can be very expensive, especially if you lose. The good news, however, is that there are steps you can take before acquiring a domain name to reduce and possibly eliminate the risk of trademark infringement arising from your use of a domain name.

Avoid Acquiring a Domain Name that Infringes a Trademark.

A prospective domain name owner can substantially reduce the risk that a desired domain name will infringe on a trademark by doing proper due diligence before investing the time and money in registering the domain name. You should never register or purchase a domain name without first investigating if the desired domain name is identical or similar to an existing trademark or service mark. The following is a list of the things you can and should do before you acquire a domain name to investigate possible trademark infringement problems.

1. Do a search on several popular search engines (such as Google) to determine if the desired domain name is being used as a business trade name or the name of any goods or services. Review all links that look like they could contain your desired domain name used as a business name (trade name) or the name of goods or services. If you find a business or any goods or services that are identical or similar to your desired domain name, you should probably seek another domain name.

2. Do a search at Whois.net to see if there are any domain names that use domain names that are identical or similar to your desired domain name or that contain identical or similar text. If you find a trade name or any goods or services that use your desired domain name, you should probably seek another domain name.

3. Do a search of the United States Patent & Trademark Office database called the Trademark Electronic Search System (TESS). TESS contains all federally registered trademarks and services marks, all previously filed, but dead or abandoned trademarks and service marks, and all pending applications for trademark registration.

4. Hire a reputable search firm to do a national trademark, service mark, trade name and domain name search for you. A good search by a capable search firm will do a comprehensive search of these four important categories and give you a written report of the results. If the search results show that there are any identical or similar trademarks, service marks, trade names or domain names, you should seriously consider seeking another domain name.

As an alternative, you can hire a trademark attorney to perform steps 1 through 4 for you. Frequently the question of whether a possible domain name will infringe on another person’s trademark is not obvious and requires knowledge and interpretation of trademark law. It is possible that in some cases a desired domain name will not infringe on another trademark or service mark even if steps 1 through 4 all find identical or similar marks. Whether there is an infringement problem usually depends on the facts and circumstances of each potential domain name and an experienced trademark attorney should be able to tell the difference.

There are many issues to consider when considering registering a domain name and possible trademark infringement should be one of the main ones. By taking some preemptive action, you can avoid being the recipient of a cease and desist letter alleging trademark infringement. A relatively small upfront investment could prevent you from having a very large legal bill defending a trademark infringement lawsuit or arbitration proceeding.

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Disclaimer: The information provided in this article is for general information purposes only and should not be construed as specific legal advice. The application of any matter discussed in this article to anyone’s particular situation requires knowledge and analysis of the specific facts involved.

Contact the Portland Attorneys at Peak Law Group for more information.

Government Grant Scams

If you have looked for a government grant for your business, it is very likely you have encountered several websites promising access to “free government grants that you don’t have to pay back” and testimonials from apparent business owners who received tens of thousands of dollars to start a business.  Are these legit?  No.  They are scams.  Here’s how they work:

The company guarantees that you will get a small business grant or your money back.  For a fee of $30 – $50 you get a subscription to a grants database or a grant package with information on how to write a grant proposal and a list of government agencies that provide business grants.

You pay the fee and you may (or may not) get information. However, the government agencies listed do not actually provide grants to help start or expand a business.   In fact, you’ll probably find it difficult getting your money back, and you could lose more than your initial investment if you’ve signed up for a subscription with a credit or debit card.

Economic Stimulus Grants

The recent Economic Stimulus package signed by President Obama has created a whole new class of scam sites offering information on stimulus grants for individuals and small businesses.  These sites are particularly preying on small business owners who are struggling to stay in business and in search for money to keep them afloat.  As tempting as it may be to explore these programs offering free stimulus money, you will be wasting your money by signing up with one of these websites. There is no money in the stimulus package for sending individual checks to small business owners.

Contrary to what you may read, the government does not secretly give away excess budget money to individuals in the form of grants.  There is no secret door with free money behind it.

Grant Information is Free

Government agencies publish grant information on the web, and make it accessible for free.  You do not need to pay anyone to access grant information.  Grant information is easily accessible by visiting agency websites, searching on your favorite web search engine, or using one of these databases:

  • Business.gov’s Loans and Grants Search Engine (http://search.business.gov/startLoans.html) provides legitimate small business loans and grant programs (when available) for which you might qualify.  Currently, this tool contains mostly loan programs, but it is continuously being updated, and relevant grant programs are added when identified.
  • Grants.gov (http://www.grants.gov/ ) is a database of federal grants, most of which are available to non-profits, cooperatives, other government agencies, and academic institutions.  Grants.gov is the one-stop resource for finding grants offered by federal agencies.  Some grant programs do allow eligible for-profit entities to compete for grant money; however, these are highly specialized programs, such as specialty crop research.  However, you won’t find small business grants for starting a business, paying off debt or otherwise help for running your business.

The Bottom Line

The bottom line is that federal and state agencies do not provide small business grants for starting a business, paying off debt, or to cover operating expenses.  However, government agencies do provide guarantees on low-interest loans for these purposes.  You can use the Loans and Grants Search Engine to find programs for which you may be eligible.

For more information on government grants, visit the following resources:

If you have paid money to a grant website and feel you have been the victim of a scam, you can contact the Better Business Bureau (http://www.bbb.org/us/), Oregon Department of Justice Consumer Complaint page (http://www.doj.state.or.us/finfraud/index.shtml), or the Federal Trade Commission Consumer Complaint page (https://www.ftccomplaintassistant.gov ).

Disclaimer: The information provided in this article is for general information purposes only and should not be construed as specific legal advice.  The application of any matter discussed in this article to anyone’s particular situation requires knowledge and analysis of the specific facts involved.

Contact the Portland Attorneys at Peak Law Group for more information.

What’s in a Name: Trademarks, Service Marks and Trade Names (Part 2 of 2)

Now that we have those definitions out of the way, what can Greg do to protect his brand name?

Common Law Trademark

Enforceable rights in a trademark or service mark generally arise under common law by adoption and use of the mark in connection with goods and services moving in commerce.  The trademark or service mark rights acquired are enforceable in the trading area served by the user of the mark.  The first user of a trademark or service mark has the right to prevent others from using the same, or confusingly similar, mark in any manner which is likely to cause confusion among consumers, users or customers for the first user.
Before a mark is adopted, a search should be performed to determine whether the mark is available for use as intended, that is, whether the mark may be used on your goods and services without creating the likelihood of confusion, mistake or deception because of similarity to a prior mark.  Adopting a trademark without a search entails considerable risk.  Trademark infringement may be found even if the defendant innocently adopted its mark.  Having a search performed before adopting a mark costs little and makes sense because it helps avoid the expense and aggravation of changing the mark after it has been in use.

Registered Federal Trademark

Trademarks and service marks are often registered with the U.S. Patent and Trademark Office (“USPTO”).  The function of the federal statutes governing trademarks, the Lanham Act, is not to grant trademark rights (since those rights are secured by the common law principles), but rather to provide a central clearing house for trademarks through a registration process.  However, registration can create a presumption of exclusive use and provide significant advantages in enforcement actions.  Also, registration of a mark provides constructive notice of the registrant’s claim of ownership and removes any defense by a subsequent user of innocent, unknowing infringement and in effect gives national scope to a mark that has been used in only a limited geographic area.  Finally, the rights of an owner of a federally registered mark are paramount to the rights of the owner of a state registered mark.

The trademark symbol TM or service mark symbol SM may be used by anyone to alert the public that the name or symbol is claimed as a trademark or service mark.  These marks merely indicate that the user thinks he has a trademark or service mark.  The ® indicates a registered trademark, and can only be used after a trademark registration is received from the USPTO.

Registered Oregon Trademark

The state of Oregon, like most other states, provides for registration of trademarks and service marks.  Registration at the state level does not secure rights beyond the boundaries of the state.  On the other hand, registration in the state of Oregon is inexpensive ($50), easy (the form is on the Oregon Secretary of State’s website, www.filinginOregon.com/forms) and quick (trademark and service mark registrations go through a more detailed review process at the federal level).
Although state registration will not create the same degree of protection beyond the boundaries of the state as federal registration, registration in the state can be a cost effective precaution for a business that has a primary local customer base.  State registration gives you the right to exclude the later use of others of the same or confusingly similar trademark in Oregon only. State registration also provides additional enforcement rights, including minimum statutory damages of $10,000.

Another benefit is that your trademark becomes visible.  When others are conducting searches to decide what trademark to adopt, one of the databases that can be searched is state registrations.  If your registration shows up in someone’s search, they may be persuaded to use a different mark.  Registration in Oregon will not protect you from infringement claims by a possessor of a similar trade name, trademark or service mark (common law or registered).

Assumed Business Name

Any person who does business in Oregon under an ABN must register that name with the Secretary of State. The Oregon Secretary of State will not register a business name which “is not distinguishable on the records…from another assumed business name or from the name of a person.” The registration of an ABN, however, does not bestow trademark or service mark rights on the registrant.  The Oregon statute governing ABNs does not purport to give the registrant the exclusive right to use the name; the statute is intended to protect the public from confusion, not grant a private right.  Do not confuse a trademark registration with an ABN or any other corporate documents filed with state.  For instance, an ABN is filed with Oregon Secretary of State primarily for the benefit of creditors and has absolutely nothing to do with obtaining a protectable trademark registration.  The concept of protecting the name by filing for an ABN is perhaps one of the most common misconceptions in business communities.

So even though Greg, our hard-charging entrepreneur, might put the name of the business on the door, on his business cards and on his letterhead and file for an ABN, he might be prevented from using “Greg’s Gadgets” as the brand for his gadgets and services.  A company has a legal right to use a name as a trademark only to the extent that it does not infringe upon existing trademarks.  Greg should first research the name “Greg’s Gadgets” for potential conflicts and then register the name as a trademark with the appropriate entities.  He might still have more difficulty when he tries to reserve the website http://www.gregsgadgets.com, but that is yet another matter.

Disclaimer: The information provided in this article is for general information purposes only and should not be construed as specific legal advice.  The application of any matter discussed in this article to anyone’s particular situation requires knowledge and analysis of the specific facts involved.

Contact the Portland Attorneys at Peak Law Group for more information.