OWE’s Greg Owen provided answers to The Recorder on February 4, 2013 in a feature entitled, “Is Facebook’s ‘Paper’ on the Mark? Q&A With Trademark Expert Gregory Owen.”
According to The Recorder: “Facebook, Inc.’s release of its news reader app, Paper, on Monday has kicked off a trademark spat with FiftyThree, a Seattle and New York-based startup whose own popular Paper by FiftyThree app has been available for several years.” Greg’s responses are set out below.
Are there issues with trademarking the word “paper” for such purposes to begin with?
“Paper” for these types of applications is in the gray area between descriptive and suggestive, but even if it is descriptive, it can serve as a trademark if it acquires distinctiveness (secondary meaning) such that consumers associate the word with a source of goods rather than as merely a description of the product or a feature, quality or characteristic of the product. If a mark is deemed suggestive, then it is immediately entitled to protection without having to establish distinctiveness, but the scope of protection may be limited to goods that are directly competitive.
Does FiftyThree have any legal recourse in this matter?
FiftyThree can sue Facebook for trademark infringement and unfair competition. Whether it is likely to succeed is a different question. The marks are very similar, but the purposes and uses of the respective applications appears to be different … The issue before a court then is whether the concurrent use of “Paper” in association with mobile software applications that serve different purposes is likely to cause confusion among consumers. The answer is “maybe”; a successful litigation outcome for FiftyThree is far from certain.
Is it common or generally advisable for companies to work around this issue with names like “Paper by FiftyThree”? Why?
Yes, it is common to work around issues of descriptiveness and weak marks by associating the weak element with a source identifying house mark or other distinctive word or phrase. This is also a common means of trying to avoid a conflict with another who might have prior rights in the weak element. The notion is that by combining the weak element with the house mark the source of the product is readily identifiable, creating a stronger trademark, establishing the desired distinctiveness and source identification, and providing consumers with a means to distinguish one’s product from the products of others that may use a similar word.
The issue of whether it is advisable to add a house mark to a weak element is fact—and circumstance—specific. It can be a useful means to achieve a desired objective. On the other hand, it can also invite situations like this where there is uncertainty as to whether FiftyThree has rights in “Paper” alone or its rights are limited to the registered mark “Paper by FiftyThree.” This uncertainty in turn opens the door for Facebook to take the position that its use of “Paper” is sufficiently different from “Paper by FiftyThree,” such that there is no infringement.
FiftyThree appears to be appealing to the public on this one. Why might that be?
The David and Goliath story generally resonates with the public. The goal is to use public opinion and the potential for negative press and consumer disfavor to prompt the big company to back down. If it works it can be an inexpensive and powerful means to achieve a positive result. On the other hand, poking a giant is not without significant risk.
What does the precedent for this type of situation—between a promising startup and a more established company—look like?
The precedent for the most part is settlement, often with the terms kept confidential. As a general proposition, the party with the greater resources has a better chance of a positive outcome because of the leverage that resources provide. Litigating a trademark infringement dispute through to a final judgment is a very expensive undertaking that requires not only money, but management of time and resources. … Because trademark infringement disputes are so highly fact and evidence driven, each case is unique and therefore it is not possible to say that a small company or a large company is more likely to win if disparate resources were not a factor.
What are the takeaways from this matter?
It is too early to say what the takeaways will be from the standpoint of an outcome, but the matter is interesting because of the proliferation of applications, the need to identify and distinguish one’s application from all of the others, and how conflicts of this nature, where the applications may serve different purposes, will be resolved. Is the fact that two marks are similar and are used on mobile applications sufficient to establish likelihood of confusion, or does the nature of the applications, their uses, and the differences between the products suffice to permit concurrent use of similar marks? This matter provides a useful vehicle for exploring the meaning of “consumer confusion” in the mobile application space. Is it enough that people make an association between the two “Papers,” or must FiftyThree establish that people are thinking that FiftyThree and Facebook are affiliated and their respective applications come from a common source?
The small start-up versus established giant and the role of social media in influencing the outcome will be telling, as well. With the ability to immediately and widely disseminate information the dynamics for involving the public in a dispute of this nature has changed dramatically. Parties now have much more control over the message that they disseminate, the means of dissemination, and the immediacy of the dissemination. The lack of filters for the accuracy or completeness of the information being disseminated raises interesting questions and could have a profound impact on the outcome of these matters, irrespective of what the law might provide in the way of a remedy.