A trademark or service mark is any word, name, phrase, design, symbol, or combination thereof that identifies the source of goods/services. A trademark or service mark distinguishes a provider of goods/services from other providers.
But what makes the United States Patent and Trademark Office (USPTO) accept some marks and not others? The problem could be that the mark is too similar to another mark that is already registered. If two marks represent similar goods or services and these two marks are also similar in content or design, then there may be a likelihood of confusion. Likelihood of confusion simply means that consumers are likely to think that the goods or services from the two separate companies actually come from the same source.
For example, consider if Company A has registered the mark “BLAISICA” and it sells fireworks. Then Company B, which sells firework safety equipment, tries to register its mark, “BLAISIC.” Here, the marks are very similar, with Company B simply dropping the last “A.” Additionally, Company A and B are in the same marketplace. Therefore, a likelihood of confusion exists because consumers are likely to believe that Company A is actually responsible for selling Company B's fireworks safety equipment in addition to selling fireworks.
So what’s the big deal if consumers think Company A sells the firework safety equipment? Why would Company A be the one to get upset about it? Well, there could be many reasons. Imagine Company A prides itself on selling high-end fireworks and it has a pristine rating among both fireworks experts and 4th of July enthusiasts. Whereas Company B sells faulty safety goggles and has poor customer service. Then of course Company A would not want to be associated with Company B. It would hurt Company A’s reputation if consumers believed the products they were buying from Company B originated from Company A. Company A’s reputation would be ruined. So, naturally, Company A wants to protect its mark and keep companies like Company B from infringing on its mark and from confusing customers.
But these are just hypothetical situations. What does the real world have to say about this?
The Thirty-Year War: Apple Corps vs. Apple Inc.
The Beatles vs. Steve Jobs. Right now someone in the world is listening to “Hey Jude” on their iPhone. It’s a perfect balance and yet nothing can ever be so simple when it comes to internationally famous geniuses.
The Beatles founded Apple Corps Limited back in 1968 as a holding company that operates in various music business fields, including owning the band’s record label Apple Records. It wasn’t until eight years later in 1976 that Steve Jobs, Steve Wozniak, and Ronald Wayne founded Apple Computers, Inc. Now Apple, Inc. has become a gargantuan corporation that is expanding faster than kudzu. Apple, Inc. eventually created iTunes and Apple Music, but not without a few stumbling blocks along the way.
While Apple, Inc. has filed its fair share of trademark infringement lawsuits and is known for aggressively protecting its intellectual property rights, it was the Beatles’ Apple Corps that took issue. In 1978 when Apple, Inc. was still just a baby, it faced its first big challenge. Little did both parties know that this trademark war would continue into the 21st century.
The Fab Four thought Apple Computers had the potential to produce music and was thus a threat to their brand in the music marketplace. The two companies settled their initial differences in 1981 when Apple, Inc. agreed to pay the Beatles company $80,000 and promised to never enter the music business.
But $80,000 would just be a drop in the bucket before it was all over. In 1986, Apple, Inc. added audio-recording capabilities to its computers computer systems. The Beatles’ Apple Corps took notice and sued the California company in 1989, claiming the sound system violated the companies’ 1981 contract. As a result, Apple, Inc. agreed to keep its musical distribution digital and avoid selling any physical copies. Today, where everything is digital, it doesn’t seem like sticking to the digital realm is such a sacrifice. But in 1986, cassette tapes dominated the music storage marketplace and it wouldn’t be until the 1990s that CDs would truly replace the beloved cassettes. Steve Jobs’ company also had to pay $26.5 million to Apple Corps, quite an increase from $80,000.
But Apple, Inc. wasn’t ready to stop pushing the boundaries in the music industry. The computer company launched its iTunes Music Store in 2002 and the next year Apple Corps filed suit yet again, claiming that iTunes was a violation of the 1991 settlement. This time, it would be the beginning of the end of a hard-fought battle between two sides.
After a series of losses, Apple, Inc was ripe for a win and in 2006, it did just that. Ruling in favor of Apple, Inc., the court explained that there had been no breach of the trademark agreement. As anticipated, Apple Corps. filed an appeal. However, before an appeal was heard, a settlement was reached between the two parties and the peace treaty was at last signed.
The $500 million agreement saw the Beatles’ holding company selling its “Apple” trademark rights to Apple, Inc. In addition to the money settlement, Apple, Inc. agreed to license the Apple trademarks to Apple Corps. Sweetening the deal for Beatles fans, iTunes was finally able to begin selling Beatles music in 2010. After a decades-long dark forecast, everyone can now sing, “Here Comes the Sun.”
The Takeaways from the Feud Over the Forbidden Fruit
Trademark law is a very complicated field that can be costly and time consuming. But it doesn’t just affect multinational companies. Companies, big and small, have trademark law in the forefront of their minds. The topic hits a particular note with smaller companies. Small business owners take pride in their ideas and often treat their company as their baby. They’ve created it and raised it and no one is taking that from them. Many of them are turning to the U.S. Patent and Trademark Office as a sort of caretaker of their brand.
Companies do not want to grow and polish their brands just so their efforts will be in vain. Thus, federal trademark registration is on the rise and intellectual property rights are quickly becoming some of the most important assets to companies around the world.