Tech Industry

Tech companies vie for trademarks

The booming high-technology industry is creating a land grab for catchy names in an effort to sell new goods and services.

The booming high-technology industry is creating a land grab for catchy names in an effort to sell new goods and services.

The most recent example is a dispute brewing between IBM and consulting start-up E Technologies Associates over the right to use the letter "e" to market electronic services for businesses. E Technologies recently filed suit in Amsterdam, alleging that it had registered to use the initial before Big Blue did. IBM, in turn, obtained a temporary restraining order from a French court that prevents E Technologies from using its logo in France. (See related story.)

Other examples include Microsoft's $5 million settlement yesterday with a bankrupt Internet service provider over the right to use the name "Internet Explorer," and a separate settlement in April between the software giant and 3Com over use of the word "palm" to market handheld products.

"You've got a new developing market, and people are trying to mark their space," said Robert Lyon, a name partner with the Lyon & Lyon law firm. "The tendency is for marketers to adopt a trademark...that is very descriptive, thinking it will be easier to gain market acceptance. In so doing, they adopt something that keeps us trademark lawyers employed."

The list of terms companies are claiming as their own is endless. Even common words such as "windows" and "word" are fair game.

In addition to the flood of new companies and products, other factors make the high-technology sector more prone to trademark squabbles. Chief among them is the growing global economy in which technology companies compete, said Mitchell Zimmerman, a trademark attorney at Fenwick & West.

"In addition to the uncertainties that have always existed for trademark clearance in the United States, companies are facing very difficult issues of attempting to assess the potential impact of other people's rights all over the world," Zimmerman explained. "It's difficult or impossible to find marks that are totally clean internationally. At the end of it all, there's always the specter of a lawsuit."

With the Internet and other technologies uniting markets that were once separated along geographic or industry boundaries, it is now harder for companies in different regions or markets to peacefully coexist when they have overlapping trademarks. An example: Yahoo's settlement of a trademark dispute with a Texas cake company, which ran into the millions of dollars.

As the high-tech industry continues to edge its way into the mainstream economy, companies will continue their mad rush to obtain and police their trademark rights, said Mark Radcliffe, a trademark attorney with Gray Cary Ware & Freidenrich. As an example, he noted the growing visibility of high-technology publicity campaigns--such as Intel's distinctive ads on national television--which demonstrate how painfully aware technology companies are of the importance of a good name.

"Who would have thought five years ago that we'd be seeing ads for microprocessors [during] the Superbowl?" Radcliffe said. "Companies don't pay millions of dollars on Superbowl advertising unless their trademarks are a critical part of their business."