Conversational Commerce: Are You Ready?

Guest post by Jason Miller.

Texting Dominos a pizza emoji and a deliveryman showing up at you door “30 minutes” later with a pizza exemplifies the integration of Business to Consumer (B2C) transactions. Well, the same transactional principles may forever change the B2C relationship. Imagine if instead of sending a text and receiving a pizza, you could text your local grocery store your shopping list or text Amazon about a product you want—and have it delivered the same day.

These possibilities represent the next evolution of the B2C relationship called, “conversational commerce,” which has already taken Asia by storm. It allows users to order on-demand services and products through text messages or other messaging services, established a new commercial platform that may change the game yet again. TechCrunch reported that: China’s WeChat generates over $1B in revenue from its 440 million users, which allows them to use text messages to their pay bills and order products, while Japan’s LinePay takes a similar approach.

The principle is most mobile-phone users spend most of their time texting; why should they have to switch a different app, search for the product, enter their payment information, and then place their order. But soon consumers will be able too simply send a text to the company they wish to make a purchase from. Expanding texting’s potential to making payments, buying products, etc. may alleviate these cumbersome tasks altogether.

While at first-glance commercial communication may seem a bit novel, the United States has certainly taking notice of its impact in Asia. American tech-giants, like Facebook and Google, are jumping on the bandwagon. TechCrunch noted that Facebook, for example, is in the process of implementing these capabilities into their “Messenger App,” allowing users to order food and even speak with businesses directly. Meanwhile, many start-ups have also developed to take their share of this expanding market. Such as Magic, a concierge-type delivery service that lets uses order almost any product for delivery through text, which oddly enough I started using the day I read about it.

Though the market is young in the States, its validity as a commercial platform is clear and a possibly lucrative one at that. If there’s money to be made, then I think its safe to presume that large companies will attempt to adapt their current systems to implement this developing commercial space within their business model (i.e., Facebook, etc.). Hopefully allowing me text a masseuse to and recreate my favorite scene from Boy Meets World; Griff was my hero.

Note from the Digital Counselor:

Entrepreneurs and small business owners should be on the look out for ways to integrate this into their business model. Early adoption could be a standout feature and create a niche that may enable rapid growth. However, rapid growth necessitates the ability to scale quickly, which can be hard for a small business with little capital. Although a great tool, businesses looking to implement must look at potential impacts to their business model and ultimately their bottom line.

About the Author:

Jason Miller is law student at American University Washington College of Law. Jason is originally from Rockville, MD, and studied communications at University of Maryland. While in undgrad, Jason & his friends founded a globally followed music blog, with about 100k unique visitors per month. After graduating, Jason worked at the U.S. Senate for two years before going to law school.

 

Disclaimer: The views expressed here are solely those of the author in his private capacity and do not in any way represent the views of TheDigitalCounselor.com, any other poster/blogger of this blog or any entity affiliated with blog posters. Any comments by TheDigitalCounselor.com do not reflect the views or ideas of any organization or individual that may or may not be affiliated or associated. 

Accepting Guest Blog Posts

I have accepted a position that will not allow me to write in 2016. However, I want to continue to provide information on cyber, intellectual property (IP), social media, security, privacy, and technology law and policy to you all.  So…. I am accepting  submissions from guest bloggers!

Please send me your best cyber, IP and tech law and policy posts. Many of this blog’s followers are entrepreneurs, technophiles, tech novices, bloggers, social media user and those intrigued by tech, so please cater your posts to that audience. Please send posts to thedigitalcounselor@gmail.com. I will notify you if your post is selected.

Thank you for your submission, in advance, and more importantly, THANK YOU FOR READING!

I hope the readers find previous posts and any information others are able to provide in my absence helpful! And I look forward to returning in 2017!!

Great Opportunity for Women Entrepreneurs in DC!

fastrac2 fastrac

Dear Entrepreneurs,

DC Women’s Business Center has announced FastTrac New Venture is now open for enrollment!

This 12 week course assists early stage entrepreneurs in successful completion of their business plan. Through weekly classes and 1-on-1 business counseling, entrepreneurs will access the small business resources needed to grow a successful enterprise.

Topics for this course include:

  • Identifying and Meeting Market Needs
  • Setting Financial Goals
  • Reaching the Market
  • Planning for a profitable Business

Courses begin February 17, 2015 and will meet every week through May 19, 2015. All sessions are 2:00pm – 5:00pm unless otherwise noted. This is a competitive application process so they request you submit a thoughtful and complete application.

Click here to submit an application!

Before You Start Crowdfunding, Know the IP Concerns!

http://www.hongkiat.com/blog/crowdfunding-sites/
http://www.hongkiat.com/blog/crowdfunding-sites/

Crowdfunding has become a major financing tool for small businesses from tech start ups to small services companies. This source of funding, made available by The 2012 Jumpstart Our Business Startup Act (JOBS Act) which enables small businesses to raise funds from non-accredited investors.  An accredited investor must meet a personal net worth or income test that excludes the majority of the population. There are still rules about how much each person can invest for equity crowdfunding but Title III truly opens up the ability for the average American to invest.

If you are considering a crowdfunding platform for your new venture, or if you are contemplating investing in a crowd-funded project, attention to intellectual property protection is critical.  Often, companies considering crowdfunding are in the early stages of development and owners may not have the appropriate intellectual property (IP) protections in place yet. Here are a few things to consider about each of the major types of intellectual property:

Trademarks:
Securing federal and/or international trademark protection is an important early step to establishing a company and launching a brand.  This, however, can be hard to do or forgotten prior to using the mark in commerce, the standard set by the USPTO. Therefore, posting a project with a proposed trademarkcould serves as an open invitation for trademark infringers in the U.S. and abroad to file for registration first.  The same is true with respect to domain name registrations.  Additionally, without the proper research you could inadvertently launch a brand with a trademark already in use. This is not only bad PR but could open you up to suit before you’ve even begun.Action Items: Do a thorough search on potential marks and make sure it does not conflict with state, federal or international trademarks. Consider filing an Intent to Use trademark application if you are not at the place to file a trademark application based on use. Consult an attorney to make an informed decision based on a thorough search and knowledge of requirements for proving use such that you can file a trademark based on use.

Copyrights:
Although filing is not required to benefit from copyright protection, it is a prerequisite for a U.S. copyright owner who wishes to file suit for infringement in the U.S. If you are going to post copyrighted works in connection with your project disclosure or business plan, and if those works integral to the success of the project or business make sure you protect them. Additionally, make sure if you use the copyrighted work of others in your proposal you have the proper permissions to avoid copyright infringement.

Action Items: Review your copyrighted work and consider filing for copyright registration if any of the work you will loose is integral to the business.  If you plan to use images, music, or other content from third-party sources in your proposal, be sure to obtain appropriate licensing/permission prior to posting such works publicly.

Patents:
Disclosing the details of an invention before filing a patent application may bar patent protection due to required disclosures or missing the first to file window.  Some crowdfunding sites require projects that involve the manufacture and distribution of “gadgets” to “show as much as they can about how they’re going to make their project, including things like a production plan, an estimated schedule, and any details you can provide for backers.”

Action Items: Preserve your rights, patent applications should be filed as early as possible as required by the America Invents Act, under “first to file”. By filing a patent application prior to disclosing a project, the inventor can preserve patent rights and potentially avoid problems with both the statutory bar and potentially conflicting applications.  While U.S. patent law gives the inventor a year after disclosure in which to file, the same is not true in most of the rest of the world where a prefiling disclosure bars patent protection.  Keep this in mind for projects that will rely on foreign marketing and revenue for their success.

General considerations:

  1. Think about your IP on a local and global scale. Develop a state, federal and international IP development plan. As your brand grows, depending on industry and target market you want to make sure your protections are as robust as possible.
  2. Consult an attorney early and often to help you develop your IP strategy and think through the hurdles associated with crowdfunding.
  3. Investigate services like U.K.-based Creative Barcode. that are designed to provide a provide protection for early stage intellectual property. This is NOT an endorsement of these services but this is an option to consider.

Conclusion
Your intellectual property is one of your biggest assets and the last thing you want to do is damage your IP rights while trying to secure funding through crowdfunding. This is just a high level view of the general issues associated with crowdfunding. Depending on the project, the IP issues could be substantially more complex.

Additionally, potential investors should be worried about these intellectual property issues as well. Potential Investors must conduct a due diligence assessment of any venture they seek to invest in as the success or failure of the idea may hinge, at least in part, on the strength and protection of those IP rights.

Will it be Hard to Register My Trademark?

Registered-Trade-mark-symbol
Photo from pinnacletms.com.au/difference-between-trademark-symbols/​

So you have great idea blog, business, product, brand, etc.! Now what?  ​How do you make sure you are protecting your asset?

Well, an important part of protecting your invention, product or business is protecting the name.  Start by​ outlining​ ​a strategic plan for trademarking your intellectual property. ​A very important part of that strategy is determining whether or not your proposed mark can be trademarked.

How can I​ ensure my mark is trademarkable? What is the likelihood for successfully trademarking this name? Should I consider changing the name to make sure that it can be trademarked? These are questions you should ask yourself, preferably while under the consult of an attorney. ​

O​nly the USPTO can make a final decision as to whether or not a mark is eligible for federal trademark registration. However, they have ​provided guidance on what terms can be trademarked and ways to make otherwise untrademarkable names trademarkable. This guidance is a great framework to use when determining if you can successfully trademark your name.


Trademark rights are designed to protect the consumer from confusion. Therefore, the overarching rule is the USPTO will not approve a trademark they think will cause consumer confusion. Here are a few things to consider to help you think about whether or not your mark may cause consumer confusion in the eyes of the USPTO. 


Originality
The first thing to know is the USPTO will not trademark a name that is already trademarked or similar to a mark that is already trademarked, in the same or similar classification. The USPTO wants consumers to be able to associate a specific set of goods or services to a mark so if two marks are confusingly similar and are associated to the same or similar goods or services it is not likely to receive a federal trademark registration.  A trademark clearance search is great tool to ensure that your mark does not infringe on the trademark rights of others. This search should scour federal and state registrations to ensure no one has already secured the same or similar trademark. Internet searches of businesses or brands operating with the mark that have not yet secured federal or state trademark protections are also very important because they may have common law trademark rights. Common law rights arise from actual use of a mark and may allow the common law user to successfully challenge a registration or application. It’s imperative to know all potential impediments.  Having a clearance search done by a trademark attorney during the planning stages of your new venture can help you avoid rebranding and the expenses therein, after you’ve already launched.

Also if you are starting a business you should check with your state’s business entity registration office to see if the name you’ve chosen is available for your entity name.

Distinctiveness
Trademark law requires that a mark be distinctive or unique such that it easily distinguishes a product or service from the product or services of others. The distinctiveness of a device can generally be categorized into one of five categories which fall along a spectrum of distinctiveness. From most distinctive to least distinctive, these categories are:

  • Fanciful – marks created for the sole purpose of being used with the product or service. This is the strongest type of mark. E.g., would be XEROX or KODAK,
  • Arbitrary – a common word which is used in connection with products or services unrelated to the dictionary meaning. E.g. APPLE for computers. Arbitrary marks are also immediately eligible for registration.
  • Suggestive – marks that suggest a quality or characteristic of the goods and services but requires imagination on the part of the consumer to identify the characteristic. E.g., MICROSOFT (suggestive of software for microcomputers)
  • Descriptive – ​​marks that merely describe the good or service. The mark likely uses the dictionary meaning of a works in connection with products or services directly related to that meaning. Unlike suggestive marks there is no imagination or creativity needed to identify the product or service. E.g., LEKTRONIIC was famously refused protection by the USPTO on ground of being descriptive for electronic goods.
  • Generic – the common name for the products or services in connection with which it is used, such as “salt” when used in connection with sodium chloride.
TM registration-table
Photo from http://www.patent-usa.com/trademark/


Devices that are fanciful, arbitrary, or suggestive are usually considered distinctive enough to function as trademarks. On the other hand, if a device is descriptive, the device can function as a trademark or service mark only if it has obtained secondary meaning. Generic devices can never be a trademark. A mark can become generic if the trademark becomes the generic name for the good or service. For example Escalator. ​ See my previous post “Trademark Holders Beware of the Generic Curse” for more details.

Figure out where on the spectrum your mark falls. This will help gauge your likelihood for success and how long the application process will take. The closer you are to not distinctive portion of the spectrum the more likely you will need to prove distinctiveness tot he USPTO. If you have not yet selected a name, keep these limits in mind as you create one.

A few additional tips…
​Claim Your Mark
Until you have secured a federal registration you cannot use the ® symbol, which indicates that the trademark is registered with the U.S. Patent and Trademark Office (“PTO”). However,  you can use the ™ symbol with the mark to identify it as a trademark, whether or not a federal trademark application has been filed. The ™ symbol can be used with marks for both goods and services, although some companies use SM (referring to a service mark) with a mark that is used for services as opposed to goods. These symbols put people on notice that you claim rights in the mark, although common law (a trademark mark rights acquired merely by using the mark) doesn’t give you all the rights and benefits of federal registration.
Get Help!
Consult an attorney when determining whether or not to file a trademark. This is a brief overview and does not shed light on all of the intricacies of the process. Registration of a trademark is a very fact specific process and your mark must be analyzed on the merits. This article is just designed to help you frame your thought process. Attorney’s are uniquely equipped to position a mark to be successful and know how to fight a denial using case-law and previous registrations to get a seemingly untrademarkable mark trademarked.
Good luck!!

 

Enforcing Trademarks on Social Media

As a trademark owner you have an obligation to “police” your trademark. What does that mean? You are responsible for finding and addressing infringement of your trademark rights. (Copyright holders have a similar obligation.)  A major part of policing or enforcing those rights is monitoring and addressing violations on social media.

Platform Content Removal Policies

Each social media platform has their own policies for removal of content whether trademarks or copyrighted work.  It is important to determine the appropriate method and provide all the necessary information to secure timely removal. Social media content changes very quickly so to be effective at protecting brand perception you must be swift and efficient about requesting content removal.

Use this infographic I created as a quick reference guide for Takedown Policy Requirements On Top Social Media Sites.

What Do I Take Down?

Not only is knowing the policy requirements important you need to determine when a post/content warrants removal. This is a strategic decision your company should make while engaging all necessary stakeholders including but not limited to management, legal and marketing/PR. Below are a few things to consider when determining when to take down a post:

  1. As an organization develop a policy for what types of brand use or content use are important to the company. Use that as a guide to addressing infringement.
  2. Embrace positive uses of your mark. There are positive uses that can promote your brand. Coca Cola illustrates a great example of embracing what could have been trademark infringement when two fans created a Facebook page for them.  Coca cola just dedicated a few members of their team to monitor the content.
  3. Know the social media platform rules and policies on content removal. See the infographic for some help but visit the policies on the platform.
  4. Figure out who is likely to comply with your request for content removal. It is usually easier to make a request through the platform. It can be hard to determine who posted content and their contact information. Additionally, it is unlikely that they will cooperate. Remember that the social media content provider is not likely liable for anything unless you can prove a partnership or joint ownership and control over the account.
  5. Reviews & other commentary about your brand, positive or negative, are allowed. Most social media sites will not take down content of this nature and this can cause backlash that will outweigh the potential benefit. This is a great opportunity to engage consumers and either address concerns or reinforce positive perceptions.
  6. Consider the public relations implications of requesting removal. Will attempting to remove the content cause backlash that will be more detrimental? There have been a number of instances of brands garnering greater negative media attention for trying to take something down justified or not. If infringer’s presence is significant enough to cause concern consider joining the conversation.
  7. Include all the requested information. Incomplete requests for content removal may cause unnecessary delays.
  8. Include trademark registration numbers for all jurisdictions. Some social media platforms will only block content in the applicable jurisdiction or country if you only provide proof of one registration. Provide all registrations so the social media platform is aware of the extent of your protection.
  9. List exactly where infringements are located on the site. Platforms are not required to search for infringements.
  10. Submit evidence of current use. This information only serves to strengthen your claim and is as easy as providing the url to your website.

Remember your objective when policing your mark is to make sure consumers will not be confused. Your trademark is your calling card, do not let anyone use it in a way that dilutes your reputation or capitalizes on the goodwill or value created in that trademark. If you do not have in-house legal counsel consult with an attorney to develop a comprehensive plan to address trademark infringement.

Bitcoin: How will this new “currency” affect you?

The other day I was making a purchase online and listed along with the other payment options– pay pal and credit card– was bitcoin…. What’s a bitcoin?  Can you actually use this to make purchases? Is this form of payment secure? How do I get bitcoins?

What is a Bitcoin?
 

A bitcoin is a form of virtual currency that only operates in cyberspace.

A virtual currency can be defined as a type of unregulated, digital money, which is issued and usually controlled by its developers, and used and accepted among the members of a specific virtual community. In 2009, the “Bitcoin” network was launched, introducing a worldwide virtual currency.

Bitcoin permits buyers and sellers to interact anonymously to facilitate instantaneous payments for goods and services, without the involvement of a third-party such as a bank. Bitcoin may be purchased to start but you must “mine” bitcoins. Mining is a resource-intensive processes where miners use special software to solve math problems and are issued a certain number of bitcoins in exchange.  Here are a few interesting facts about Bitcoin:

  • Bitcoin is typically stored on a user’s personal computer or in cloud based accounts called “wallets.”
  • Bitcoin wallets do not meet the UCC’s definition of a deposit account as they are not maintained with a bank.
  • Bitcoin wallets are not insured by the FDIC.​
  • Bitcoin has a high likelihood for extreme value fluctuations.
  • Bitcoin is gaining popularity.
 
The Warning!
On March 11, 2014, FINRA issued an Investor Alert to caution investors of the “significant risks” of buying and speculating in bitcoin and other digital currencies, as well as the risk of fraud and cybercrime related to online bitcoin exchanges and other bitcoin-related service providers.
Specifically, the alert outlines several risks surrounding the usage of and speculating in bitcoin, including:

  • Bitcoin and other digital currencies are not legal tender and if the trust built up among individual users and businesses should vanish, bitcoin would be valueless.
  • Online exchanges that allow users to buy and sell bitcoin and digital wallet services that allow users to store bitcoin are magnets for cyberthieves.
  • Because bitcoin transactions are essentially anonymous, users must take extra care to avoid fraudsters posing as legitimate services.
  • Bitcoin has been used for illicit transactions and such activities could impact users and speculators if an online exchange or service is shut down by law enforcement.
  • Price volatility has been bitcoin’s hallmark in recent years, and there is no uniform value of bitcoin across the various exchanges.

Is bitcoin the future?
Given the variable nature of bitcoin, it’s hard to foresee the future. Many questions remain: How will state or federal legislators regulate the bitcoin system?  Will volatility and data security destroy confidence in bitcoin?  Will bitcoin emerge as a standard payment option, remain a niche product, or otherwise become less interesting, but more predictable under new regulations? Will the average consumers embrace this new currency?

 
​Should Small Business Owners Use Bitcoin?
I would caution against it if your company will not survive the associated risks and building the necessary infrastructure. Accepting bit coin will necessitate updates to refund and exchange policies, calculation of sales tax, when to lock in the rate, etc.  Additionally, users will need to monitor developing regulations and consumer perception of bitcoin.  This volatility can be hard on sellers especially small sellers that rely on every dollar to survive and thrive. 
 
The retailers and other businesses that have announced that they are accepting bitcoin as payment are not established “brand” names that perhaps have a higher risk tolerance. One exception may be Overstock.com.  The major brands may soon follow. We have seen Vegas casinos, and Congressman accepting bitcoin.  But it seems the major brands are waiting to see how legislation develops,how consumer opinion develops, if the value will stabilize, etc before dabbling in a currency that offers little to no stability. The companies using bitcoin are predominately brands that have the benefit of anonymity, are seeking publicity or have a consumer base that is actively using bitcoin and will understand the volatility. Unless you run a tech business that caters to the bitcoin-savy, use caution when exploring new payment options. Your budding company may not bounce back from a dive in the value or new regulations that may emerge. Build a strong brand and strong consumer base then consider taking risks. Bitcoin may not be going away anytime soon but asses legal/regulatory, commercial/financial, and reputational risks before deciding whether to make bitcoin a part of your business.

 

Copyright Owners Beware!! Are You Accurately Protecting Your Copyrights??

Personal Keepsakes, Inc. v. PersonalizationMall, No. 11 C 5177, Slip Op. (N.D. Ill. May 24, 2012) (Kendall, J.) is a great cautionary tale for small businesses and other copyright owners. Make sure you sufficiently protect your investment. Make sure your copyright notices are clear and that you are smart about what names you use when copyrighting your works. The details matter.

In this case, Judge Kendall denied plaintiff Personal Keepsakes’ (“PKI”) motion to reconsider in this copyright and Digital Millenium Copyright Act (“DMCA”) case.  The Court previously held that, a copyright notice on a separate page of a website from the allegedly copied work does not constitute the copyright management information (“CMI”) required by the DMCA.  Which means

The DMCA seeks to hamper copyright infringement in the digital age by protecting “copyright management information” (CMI) in various ways.17 U.S.C. § 1202. Specifically, the DMCA forbids distributing false CMI, removing or altering CMI, or distributing works knowing the CMI has been removed or altered. See id. CMI, is defined as the information about the copyright that is “conveyed in connection with copies” of the work, including the title of the work, the author of the work, the name of the copyright owner, and identifying numbers or symbols referring to copyright information. See17 U.S.C. § 1202(c).

PKI’s DMCA claim boils down two allegations: (1) that Defendants removed the CMI conveyed with the poems when it copied the poems, and (2) Defendants provided false CMI on the pages selling the infringing products and in their general website terms and conditions, which make various statements about copyrights on the website.

However all relevant CMI was not on the page where the poems and other works at issue were. The company name used to register the marks was PKI, however, the site only displays poetrygift.com. “Similarly, the titles cannot be CMI because the copyright registrations do not list the titles of the works as they appear on PKI’s website, but rather refers to them as ‘Personal Keepsakes VI’ and ‘Personal Keepsakes X.”‘ Pers. Keepsakes, Inc. v. Personalizationmall.com, Inc., 11 C 5177, 2012 WL 414803 (N.D. Ill. Feb. 8, 2012).  A general “Web Site and Original Verses—© (1991–2012)” on each page of PKI’s websitedid not make it clear that the poems were the “original verses” mentioned.

PKI also pointed to their terms of service which stated, “Our Site and all its content, including but not limited to its text, photographs including those of product, graphics, logos button icons, images, audio clips, and software, is owned by or licensed to ‘Abernook, LLC and may be protected by United States and international patent, trademark, and copyright laws and other intellectual property laws.” They claimed this general notice covered the entire site.

Put simply, these website terms are not close to the poem; rather, per PKI’s allegations, they appear on another page on the website. Some courts have held, persuasively, that a defendant must remove the CMI from the “body” or the “area around” the work to violate DMCA. See Schiffer Publishing, Ltd. v. Chronicle Books, LLC, No. 03 C 4962, 2004 WL 2583817, at *4, 14 (E.D.Pa. Nov.12, 2004) (finding no DMCA violation where a book contained 118 copyrighted photos with no CMI near them and the defendant had a general copyright notice on the whole book). That rule is consistent with the text of the statute, which requires the CMI to be “conveyed” with the copyrighted work. See 17U.S.C. § 1202(c).

This case teaches important lessons to copyright owners.

  1. Be consistent. The name used when you register copyrighted material should be the name used when distributing or using copyrights material.under. The same is true for all CMI.
  2. Be clear. Make sure your website makes clear the owner of copyrighted work and that your CMI is clearly linked to each work.
  3. CMI is extremely important. Items considered CMI should be carefully chosen and used are registered to protect works.
  4. CMI should be on the same page as each work. As a matter of law, if a general copyright notice appears on an entirely different webpage than the work at issue, then that CMI is not “conveyed” with the work and no claim will lie under the DMCA.  One copyright notice on an entire website is not sufficient!!

Do not lose rights to your copyrighted works because of small preventable errors. Consult a copyright attorney if you are unsure if your works are accurately and sufficiently protected. Remember the details matter, be strategic!