Starting on December 1, 2009 the Federal Trade Commission’s new guidelines for testimonials by bloggers, Tweeters, Facebook-ers and others will take effect. These guidelines are set to help determine whether or not paid testimonials or endorsements are covered by the FTC Act. Bloggers who are paid by a company in exchange for a positive review of its products are making endorsements and may have to disclose any financial ties to that company.
I just wanted to say that the MinneBar event hosted by Best Buy yesterday was a great success. There were lots of great presentations and discussions. But most of all, there seemed to be an excitement and energy about building a startup and technology community in the Twin Cities that I hadn’t felt or noticed before. Congratulations to everyone who helped make it happen!
Google, Yahoo! and others offer advertising services that can pluck words from a web page to create customized advertisements. Contextual Advertising as its called, is a really cool feature but there are some potential problems that companies considering online advertising campaigns should consider.
1. They can make you look bad.
See this Business Insider story about the worst Google Ads ever. The ad in question appeared with a news story about terrorists and offered a Terrorist Certification program. Probably not what the advertiser had in mind. I hope. This isn’t necessarily a legal problem, but it can be embarrassing and costly to correct. If you are using an algorithm to create your ads, you need to be aware of what that algorithm could create as output.
2. It could violate privacy laws
AOL was recently sued for its contextual advertising program because it was allegedly gathering private information in order to better target the ads. Many times the information gathered by these services are not tied back to any one particular user, but it is something to be aware of. Wired magazine recently ran an article about how easy it becomes to identify someone just by collecting a few facts. Zip code, employer, car model. . . none of these would identify you by themselves, but put a few of them together and very quickly you can have an individual identified.
3. It could be trademark infringement
Keyword based advertising is big business for search engines like Yahoo! and Google. Its also been a hot topic in trademark law. If you select a trademark to trigger your advertising, you could be infringing. Its even more certain that you would be infringing if you have that trademark appear in the text of your ad. Just about any word could be a trademark so context is important.
4. It could be false advertising
False advertising laws vary from state to state but can include anything that creates a misunderstanding with a consumer. If your ads are designed to grab words from web pages be sure you offer goods or services that you are now claiming to offer.
Contextual Advertising is a powerful tool and I think we will see much more of it rather than less. But like any powerful tool it should be handled carefully.
It is true that you can legally protect a trademark the moment you start using it. So why go for the extra effort to get a federal registration? Here are a few reasons:
1. Increased Certainty. Once registered, you can be relatively certain that you actually have a trademark. If you are relying on common law rights only, you may not actually have something that can be protected. It may be too generic, or already in use or have a number of other problems that will prevent you from actually enforcing it.
2. Automatic protection in all 50 states. If you don’t register, you only have a trademark in the areas you are using it. If you are in Minnesota and only sell in the upper Midwest, you may not be able to stop a competitor in California.
3. Customs enforcement. Once registered, you can record your trademark with US Customs who can monitor imports for infringing goods.
4. Monetary damages. Though they are not frequently awarded, it is possible to get damages based on the profits made by infringing goods.
5. It puts others on notice. Records at the U.S Patent & Trademark Office are public. Courts will assume that anyone using a similar name had known or should have known about your trademark.
6. You can more easily stop cybersquatters. If a domain name is registered that is infringing your name, one of the things you will have to establish is that you have trademark rights. Registration is not required, but it will be much more difficult to either in arbitration or in court without one. Same goes for search keywords, adwords, etc.
7. You have an asset to borrow against. Nearly every business needs to borrow money at some time. It is easier to do so if you have assets to use as collateral. A bank can much more easily obtain a security interest in a registered trademark.
8. ®espect. This one is a bit vague, but a company that knows and uses its legal rights signals to the world that it should be taken seriously. Trademark registration is one small piece of that, but its an important one.