pieterh wrote on 24 Mar 2016 13:22

Trademarks. What are they, do you need them, and how much do they cost? These are questions that often crop up when we build open source projects. Trademarks can be key to protecting a project from bad actors. Yet there is little advice on line. So here is my guide to using trademarks in open source. This is practical advice, IANAL, and certainly not your lawyer.

Background to Trademarks

Definitions first. A trademark is a name, phrase, logo, or even a specific color (the "mark") that you're using for business ("trade"). The simple fact of using a mark for some period of time establishes the trademark. However as with all property, the devil lies in enforcement. The question is, always, if you go before a judge with a complaint, what standards of evidence will the judge expect and demand?

No matter the case, criminal or civil, it always comes down to convincing one or more humans. If you ever go to court, keep this in mind. The facts of a case, as each party knows them, are irrelevant. How those facts are documented and presented is all that matters.

Let's back up a little and ask why courts even care about protecting businesses' trademarks. First, it's to protect consumers from misleading sales tactics. Just selling junk isn't an offense as such, except when there are legal minimum standards for health and safety. However selling junk that claims to be a more expensive, well-known brand is an offense. So secondly, trademarks let businesses distinguish themselves and stop unfair competition.

So the judge in a trademark violation case will ask, "Was the intent to deceive the consumer? Would a reasonable consumer be deceived?" And then the judge will ask, "Who owned the trademark, and can they prove it?" Even though the simple act using a mark creates it (under so-called Common Law), that can be hard to establish.

For instance, business A creates a chain of restaurants. Business B opens a competing chain using the same colors and similar name. B is clearly hijacking A's investment in branding, stealing goodwill. Yet when A takes B to court, B produces a document showing their restaurant plans, a full year before A started. How does the judge know who is the liar?

In clear cut cases, you can convince a judge that a copycat is deceiving consumers and stealing your goodwill. Yet the risk of losing such a case is high. It's also costly for courts to deal with such cases. Judges may simply refuse to hear them.

Hence most countries provide a way to register your marks, for a fee. Registration gives you a dated document that establishes your claim to the mark. The trademark office does the job of searching for prior marks in the same area. Before it grants you the registration, it publishes your claim and gives others a chance to dispute it. So after a search, and if there are no disputes, a judge will take the trademark registration as solid evidence.

It is not that simple. A competitor can still claim that their Common Law mark outweighs your registered trademark. They can argue that the registration does not represent real goodwill. This is often understood as, "if you don't enforce your mark, you will lose it," which is inaccurate. As trademark holder you're not expected to police the world. However you are expected to be truthful in court when the judge asks you, "are you using your mark, and suffering real damage due to the unfair competition?"

Finally, courts consider trademarks to apply per segment of the market. So you can have XYZ Car Co, and XYZ Clothing Co, with no confusion to the market. When you register a mark you'll need to explain what "classes" you're using it in. You'll probably want international class 9, which is anything that beeps.

Where and How to Register

If you are large enough to need to register in multiple countries then you are large enough to have trademark lawyers. For the rest of us, it's a bit like buying a domain name. Sure, there are hundreds of domain extensions. Yet we still want a dot-com for our main business.

So it is with trademarks. If you decide to register a mark, do it in the US (via the USPTO) first. That's cheap, and simple. Then over time you can register in the EU (via the OHIM), if you find your project is worth it.

The cost for a US registration is around USD 1500, depending on what lawyer you use. You can find trademark attorneys on line. They'll ask you for details of the mark, proof that it's being used, name and address of the registrant, and credit card details. The process takes about six months. After nine years (and before ten years have passed) you can renew the mark.

Getting a US registration will speed up registration in other countries, if you decide to apply for that later. The risk, and it's a small one, is that a troll will register your trademark in some other country, effectively excluding you from doing business under that name, there.

Before you register, however, ask yourself "what is the chance someone would rip off my name and logo?" If it's low, don't bother. If it's high, then ask "what is the chance a cheat would take this to court?" If that is still low, then don't bother either.

Instead of registering a mark you can raise its visibility. This means being explicit on your website and other materials. "X, Y, and Z are trademarks of MyCorp." This scares off potential cheats, improves your case, if you do try to defend the mark in court, and makes it easier to get registration if and when you need it.

How to Enforce your Trademark

Registered or not, you enforce your mark by telling the other party, in writing, "stop now, or else." If they do not stop, you repeat the warning, with initial claims of damages. If they do not stop, you add on more damages and when you have a solid file, you take it to court.

The vast majority of people will back-off at once. The trouble is when you face someone who's well aware of trademark law, has cheap legal resources, and enjoys time in court.

If you are facing such a firm, and you did not register your mark, you should probably fold your hand, and change your name. The risks are high that you would lose, and have high legal fees and possibly damages to pay. Judges don't always get it right.

If you did register your mark, then you should push ahead and claim damages. You will win, if you stick to the basic rules (you're still using the mark, the damages are real.) Do I need to say, any court case will have to happen in the country of registration? Judges in Belgium won't accept paper from the USPTO.

Trademarks For Open Source Projects

The common misconception about open source is that because the code is free, it does represents no property nor value. The opposite is true: successful projects represent considerable value, owned by many. How does a trademark represent and protect that value?

It comes down to authenticity and reputation. If you download a package calling itself "XYZ v2.0", then you may have expectations. It is compatible; it works; it has no trojans or advertising; it is from the same people as "XYZ v1.0".

If a successful project does not register its name, then anyone can fork it, repackage it, and use the same name. Imagine competing, incompatible versions of "Linux."

When a person or a business registers the name as a trademark, those incompatible forks may still exist. However they may not use the mark. If they try to do that, it's damages time.

I've had this happen at least once in my own projects, and the trademark was the tool I used to stop the incompatible forks and punish the perpetrators. Trademark law is clear enough that saying "trademark violation" will stop 99% of cheats dead still. Producing a registration filing number stops 99% of the remainder.

Conclusions

In a serious project like ZeroMQ you'll end up with three or four marks you want to register, over a period of five to ten years. Register only when it's worth it. That is, to protect real trademarks that you would be willing to defend in court. Consider that in the worst case you might have to spend ten or twenty times the cost of registration, to defend your mark. You might get that back, or you might now.

I hope this small brief has helped you understand trademarks, and how to use them (or not) in your open source projects. And, if someone claims you're infringing on their trademark, how to defend yourself. (Hint: ask them for a registration number.)