Not All Trademarks Are Created Equal: What You Need to Know Before You Meet with Your Marketing Team

“All animals are equal, but some animals are more equal than others.”
– George Orwell, Animal Farm

As far as intellectual property attorneys are concerned, when George Orwell wrote the infamous quote above, he may as well have been talking about trademarks. As with the animals in Animal Farm, not all trademarks are created equal. Some are not eligible for protection at all; others, while eligible for protection, may be protectable only under certain circumstances or may not be granted as much protection as others.

Whether a trademark is protectable, and the amount of protection it receives, is analyzed in part based on the trademark’s conceptual strength or its “distinctiveness.” The less distinctive a mark is, the less likely it is protectable (if at all); conversely, the more distinctive a mark is, the more likely it is protectable.

The classifications of trademark distinctiveness are as follows:

  • Not Inherently Distinctive – These types of marks are either never protectable or are only protectable upon a showing of additional evidence.
    • Generic – Generic marks exist where the mark is the common name of the good or service with which it is used. For example, “apple” would be generic for a mark used in connection with the sale of apples. Generic marks have no distinctiveness and are never eligible for trademark protection.
    • Descriptive – Descriptive marks exist where the mark is descriptive of a characteristic or quality of the good/service for which it is used. For example, Zatarain’s “Fish-Fri” mark was held to be descriptive of a breading that is used to fry fish. Descriptive marks are not inherently distinctive (and therefore are not inherently protectable as trademarks).They can acquire distinctiveness over time, but this requires additional evidence to show that this distinctiveness has been acquired.
  • Inherently Distinctive – These types of marks are protectable without any additional evidence.
    • Suggestive – Suggestive marks refer to a characteristic of the relevant good or service, requiring some imagination to identify the good or service. For example, “Coppertone” is suggestive for sunblock.
    • Arbitrary – Arbitrary marks are existing words that have no logical relation to the relevant goods or services. For example, “Apple” is arbitrary when used for computers.
    • Fanciful – Fanciful marks are marks that did not previously exist and were only created by the producer to identify its brand. For example, “Exxon” is a fanciful mark.

The types of trademarks that companies and their marketing departments often prefer either name the product directly or describe the product or its qualities. This allows the mark to immediately convey the type of product to the consumer. However, as you can see, from a trademark perspective those marks are typically generic or descriptive, and therefore are the least desirable because they are not inherently distinctive. In contrast, distinctive marks, which do not describe or name the goods or services, most easily obtain trademark protection.

George Orwell also said, “The worst thing you can do with words is to surrender them.” Do not surrender your words by choosing unprotectable or weak trademarks. As attractive as it may seem to choose a generic or descriptive mark, if you are choosing a trademark that you plan to build and grow into a successful brand, and want to be able prevent others from infringing your mark and trading off of your hard-earned goodwill, you should choose a more distinctive mark, one that is created more equal than the others.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Increase in Circuit Courts’ Jurisdictional Amount

Since 1992, the Florida circuit courts have had original jurisdiction over civil lawsuits seeking more than $15,000 in damages. But on May 24, 2019, Governor Ron DeSantis signed CS/CS/HB 337, which raises the county courts’ maximum jurisdictional amount from $15,000 to $30,000, effective January 1, 2020. CS/CS/HB 337 further provides that the county courts’ maximum jurisdictional amount will rise an additional $20,000, to $50,000 in three years’ time, on January 1, 2023.

CS/CS/HB 337 has received remarkably little attention. With less than two weeks until the bill takes effect, no one (including members of the Florida Legislature) appears to have made any serious effort to study how the change in jurisdictional amount is likely to affect the operation of the county and circuit courts. Clearly the county courts will handle more cases while the circuit courts will handle less. What is not clear is how the shift in the number of cases before the respective courts will affect the litigants.

Small business disputes alone will probably place a significant additional burden on the county courts, particularly in the Sarasota area, which is home to numerous small and growing businesses. (Earlier this year, Go.Verizon ranked Sarasota second on its list of “Best Small Cities to Start a Small Business.”)

Disputes arising out of automobile accidents are also likely to impact the Sarasota and other county courts. In 2018, according to the Sheriff’s Office, Sarasota County alone had over 12,000 automobile crashes. Many of those crashes result in litigation, much of which has been filed in the county courts.  But as of January 1, 2020, a large number of car crash cases that would have been filed in circuit court will go to county court instead.

The presumptive decrease in pending cases bodes well for circuit court litigants; among other things, litigants may find more available hearing and trial dates. For county court litigants, however, the outlook is considerably more grim. The county courts may be overwhelmed by an influx of new cases, resulting in crowded courtrooms, a backlog of cases and lengthy wait times for hearings and trials. Accordingly, anyone contemplating or planning to file a civil lawsuit in which the amount of money damages at issue is between $15,000 and $30,000 should seriously consider filing suit on or before December 31, 2019.

Bailey S. Lowther
(941) 552-2565
blowther@williamsparker.com

Insuring Against the Cost of Compliance: Ordinance and Law Coverage in Florida

Florida is the most expensive state in the country for home insurance, with annual premiums well over twice the national average. Although little can be done to change the high cost of insurance, you can take steps to ensure your premium dollars are well spent. Among other things, your insurance should include coverage for any increase in repair or construction costs as necessary to comply with the Florida Building Code.

The fact that your home may be relatively new or newly renovated does not eliminate the need for such coverage. The Florida Building Code, which governs the design, construction, and repair of buildings throughout the state, is updated every three years. The 7th Edition of the Florida Building Code will go into effect in just over a year, on or about December 31, 2020. As a result, previously completed construction may no longer be in compliance with the building code.

In the course of day to day life this lack of compliance poses no problem; the building code applies only to new construction, not existing buildings. If, however, an existing building is damaged, by fire, flood or some other catastrophic event, repairs are typically required to comply with the current building code. Moreover, if the damage is substantial, i.e., the cost of the repairs exceeds 50 percent of the building’s value, the entire building must be brought into compliance with the current building code.

The cost of compliance can be significant, especially for an older home. According to a recent Wall Street Journal article, builders estimate that compliance with the building code can add as much as 45 percent to the price of a home in some parts of Florida.

Traditionally insurance policies contained an Ordinance or Law Exclusion, pursuant to which the insurer is not responsible for additional costs incurred to comply with current building code laws and regulations. But in 1992, Hurricane Andrew provided a devastating illustration of the burden such exclusions can impose as many South Florida homeowners discovered the cost of rebuilding in compliance with the building code exceeded the coverage available under their insurance policies.

The Florida Legislature responded by enacting legislation intended to provide protection against the increased costs of code compliance. Signed into law in 1993, Section 627.7011 of the Florida Statutes requires insurers to offer law and ordinance coverage in the amount of 25 percent of dwelling coverage. In 2005, Section 627.7011 was amended to require insurers to offer law and ordinance coverage in the amount of 25 percent or 50 percent of dwelling coverage and include a description of law and ordinance coverage and flood insurance in 18-point bold type. According to the legislature, the required language is intended to encourage policyholders to purchase sufficient insurance coverage and discuss options such as law and ordinance and flood coverage with their agents.

As of 2019, many Florida insurers automatically include 25 percent law and ordinance coverage in their homeowner insurance policies while offering the policyholders the option of purchasing 50 percent law and ordinance coverage.  Other insurers, however, do not build law and ordinance coverage into their policies, choosing instead to offer policyholders the option of purchasing such coverage. Another approach, seen most often in policies intended to cover high-value properties, includes law and ordinance coverage in the amount of 50 percent, while offering a reduction in premium for policyholders selecting a lesser amount.

In an environment that frequently seems to favor the insurer over the insured, the availability of law and ordinance coverage is a rare boon to Florida property owners. Make sure you take advantage and verify that your property insurance includes such coverage in the appropriate amounts.

Bailey S. Lowther
(941) 552-2565
blowther@williamsparker.com

What Is the Right of Publicity (and Are You Violating It)?

Is there a reference to your company’s notable clients on your website, or do your company’s social media posts include the names or images of individuals? If so, you may be violating their right of publicity.

The right of publicity allows an individual to prevent the use of his or her identity for commercial purposes without permission. “Identity” can include the individual’s name, voice, image, or likeness. And “commercial purposes” under Florida law is an uncertain standard.

Florida’s right of publicity is relatively broad.  Some states only allow “celebrities” to bring a claim, and some states only allow living persons to bring a claim.  Florida gives all individuals, regardless of their celebrity status, the right to bring a lawsuit, and Florida law extends its statutory publicity right for 40 years after an individual’s death.

One area where right of publicity issues arise often is social media. If your social media posts include the names or images of individuals, it is important to consider whether their consent is required. Some Florida cases have held companies liable when using others’ likenesses in Facebook posts to promote their company or event. These recent cases have warned against the potential suggestion of any type of endorsement (without permission) in online posts by businesses.

The right of publicity is a little-known, but very powerful, right.  In today’s increasingly digital society, it is crucial to consider the right of publicity and whether consent may be needed before using another person’s name or likeness in connection with your business.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Do You Own Your Company’s Internet Presence? (The Answer May Surprise You.)

Websites can make or break a business, and catchy social media posts are becoming part of a company’s brand.  Consumers look to websites and social media for company information, making the management of these digital assets crucial to a business’s success. While most companies put much effort into creating and sustaining their online presence, many do not implement policies to ensure that they own those digital assets.

Domain Names
Domain names are not traditional items of property but should be safeguarded nonetheless as vital company assets. A domain name signifies the primary identifier and addresses of a business’s website. To “own” a domain name, you must purchase it from a domain name registrar like GoDaddy. Purchasing a domain name registers it in the database of the Internet Corporation for Assigned Names and Numbers. This database keeps track of all registered domain names purchased from authorized registrars.

In many cases, companies will have employees, contractors, or IT consultants register the domain name. Often, that person will enter his or her own name as the registrant. However, this results in that person, rather than the company, being listed as the owner of the domain. If the employee or contractor ever terminates their relationship with the company, this can lead to arguments over the ownership of the domain name and the website.  There have been several cases where unhappy employees attempted to use their control of a domain as leverage against a former employer.

Social Media Accounts
What happens when a company has a well-established social media account run by an employee? Who owns the account? Who owns its content? If the employee leaves the company, what rights does the company have over the information for the account? It is important that business owners know the answers to these questions before issues arise. Leading cases make it clear that the answer to these questions depend on the facts of the case and a variety of identifiable factors.

In one case in California, an employee had managed a Twitter account used to promote its employer’s services. Upon termination, the employee refused to turn over the login information for the account or remove the company name from the account. The company sued the employee for misappropriation of trade secrets. The case eventually settled, with the employee allowed to keep all rights over the social media account and its followers.

In another case, a company hired an employee to develop websites and social media accounts to promote the company’s products. The employee signed an agreement stipulating that they would return all confidential information to the employer if employment was ever terminated. Upon termination, the employee refused to turn over the login information for the accounts. The court held that the employee was required to turn over the login information.

Protecting Digital Assets
Disputes over digital assets can be costly and time-consuming. The cases discussed above demonstrate that the best course of action is to prevent these types of issues from arising in the first place. This can be done with a with a well-drafted agreement. Many business owners have employees and contractors sign agreements ensuring that intellectual property created by the employee or contractor will be owned by the business. In the modern age of the internet, these agreements should be updated to include provisions making clear that digital assets such as domain names and social media accounts, along with their contents, are also owned by the business.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Pink October: Be Careful That Giving Does Not Cause You Grief

For many years now, the arrival of October, which has been dubbed “Breast Cancer Awareness Month,” has been accompanied by an onslaught of pink products being sold to benefit various breast cancer charities. This practice of selling products or services to benefit a charity (often referred to as a “commercial co-venture”) has become increasingly popular among business owners—in addition to the philanthropic goal of donating to a worthy cause, the use of the charity’s name will also often result in an increase in sales for the company. Because these partnerships involve claims made to consumers regarding the recipient, and use, of the funds, many states have begun to regulate commercial co-ventures to ensure that accurate information is provided to consumers and that the money is ultimately used in the manner advertised.

Unfortunately, there is little uniformity among the regulations of the various states. For example, some states require a written contract with the charity specifying exactly how the donation will be calculated. In some cases, this contract must be filed with the state. Other requirements may include registration with the state and furnishing financial statements to the charity and/or the state. In each case, the regulations across the states differ with regard to whose responsibility (either the for-profit company or the non-profit company) it is to ensure that these requirements are satisfied. Adding to the complexity is the fact that many sales involve the internet and interstate commerce, so commercial co-venturers may unintentionally, and unknowingly, subject themselves to the regulations of multiple states.

Entering into a commercial co-venture is a noble, but complicated, endeavor. If you are considering entering into a commercial co-venture, you should take steps to ensure that you are complying with all applicable laws.  Some best practices include:

  • Entering into a written agreement that grants a license to use the charity’s name in connection with sales;
  • Including an honest disclaimer of the amount being donated (including any minimums or maximums) in advertisements and on the product;
  • Keeping a detailed accounting of sales during the promotion; and
  • Consulting with a lawyer to confirm all state-specific requirements are met.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Protecting Your Company’s Brand Through Trademarks

Protecting your company’s trademarks is important to grow your brand and prevent other companies from trading off your hard-earned goodwill. Below are a few things to keep in mind when creating and protecting trademarks.

Choosing a Trademark
There are a number of considerations when choosing your company’s trademark.  Among other things, you should:

  • Make sure that your mark will not infringe on an existing mark. Your trademark could infringe another trademark because it is spelled the same, looks the same, or even sounds the same.
  • Consider choosing a more “distinctive” mark to receive a higher level of protection. While marks that are descriptive of your goods or services may be desirable from a marketing perspective, they can be harder to protect as trademarks.
  • Make sure that the domain name is available for purchase. Even if the trademark has not been registered, the domain name may be in use by another company.

Registration
The best trademark protection comes from registering the mark. Where you register will depend on where the trademark is used.

  • If the trademark is used for goods sent across state lines or services that affect interstate commerce, a federally registered trademark would provide the most complete protection.
  • If the trademark will only be used within one state, state trademark registration may be a simpler alternative to consider.

Keep in mind that just because your company is registered with your state’s Secretary of State or because you have registered a fictitious name does not mean your trademark is automatically registered.

Protection
Once a trademark application has been filed and the mark has been registered, you must have a plan in place to police your brand to make sure that others are not infringing it. If someone is infringing your trademark, this could lead to a loss of business or could affect your company’s reputation and its ability to fully protect its trademark.

Evolution
As your company evolves, so must your trademarks. As you create new products and services or expand the area of your business, you may want to create new trademarks or file existing trademarks in new jurisdictions.

These are just a handful of items to keep in mind for creating and protecting your company’s trademarks. Other forms of intellectual property protection for your company may also be available through copyright and trade secret protection. For more information on using intellectual property law to protect your brand, please give us a call or email.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

New Overtime Rules for Employers to Adopt Before the New Year

Employers, the long wait is over. You finally have an answer regarding whether the federal overtime regulations are going to be changed. As discussed in previous blog posts Let’s Try this Again: Department of Labor Proposes Salary Increases for White-Collar Exemptions and Once More, With Feeling: Proposed Increase to Minimum Salary for Highly Compensated Employees, in March 2019, the U.S. Department of Labor abandoned its 2016 attempt to increase the salary threshold for exempt employees when it issued a much-anticipated proposed rule. On September 24, 2019, the DOL formally rescinded the 2016 rule and issued its new final overtime rule.

The new rule, taking effect on January 1, 2020, increases the earnings thresholds necessary to exempt executive, administrative, professional, and highly compensated employees from the Fair Labor Standard Act’s overtime pay requirements from the levels that had been set in 2004.  Specifically, the new final rule:

  • Increases the “standard salary level” from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • Raises the total annual compensation level for “highly compensated employees” from $100,000 to $107,432 per year; and
  • Revises the special salary levels for workers in U.S. territories and in the motion picture industry.

And, for the first time, the final rule allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level for executive, administrative, and professional employees (not highly compensated employees).

Employers take note, however, that the new final rule does not change the duties portions of the otherwise affected exemptions. For more information about the new final rule, you can go to the Department of Labor website.

As New Year’s Day will be here before we know it, this is a good time for employers to audit their pay practices to make sure that employees are properly classified, update timekeeping and payroll systems, and train reclassified employees on new processes before the new rule takes effect.

Gail E. Farb
gfarb@williamsparker.com
941-552-2557

This post originally appeared on The Williams Parker Labor & Employment Blog.

Florida Sales Tax Rate on Commercial Real Property Leases Reduced Again

Governor Ron DeSantis signed House Bill 7123 on May 15, 2019, which reduces the state sales tax rate on commercial real property leases from 5.7 percent to 5.5 percent effective January 1, 2020. Prior legislation reduced the general 6 percent state sales tax rate for commercial real property leases to 5.8 percent for 2018 and to 5.7 percent for 2019. There is no reduction to the local option surtax, which is imposed in 0.5 percent increments by many Florida counties. So, for example, effective January 1, 2020, the applicable rate for commercial real property leases in Sarasota County would be 6.5 percent (5.5 percent level sales tax plus Sarasota County’s 1 percent local option surtax).

Michael J. Wilson
mwilson@williamsparker.com
941-536-2043