Wednesday, January 22, 2014

Confusion and Conflict Over "Candy Crush" Trademark Status

Over the last several weeks, news reports began to circulate that Limited, the software developer that designed the hugely popular "Candy Crush Saga" game, had trademarked the term "CANDY" in the United States, and had begun to send cease and desist demands to developers who were using the term "candy" in connection with other, unauthorized applications.

The developer is also the creator of PetRescue Saga and the FarmHeroes Saga.

Yesterday, the Los Angeles Times reported on the more accurate status of the matter.

Namely, the game maker had applied for a federally registered trademark for the word "CANDY" nearly a year ago, and on January 15, 2014, the application was "approved for publication" in the Official Gazette.

This status means that the public has thirty (30) days within which to file any formal oppositions to the pending trademark application.

If, after that period, no one objects (or any formally litigated opposition is unsuccessful), the application will proceed to receive a federal registration.

To protest King's trademark application, several game developers have reportedly created a "Candy Jam" protest website that encourages others to create unauthorized games themed around "candy."  Extra credit may be offered to those who also use the words "scroll", "memory", "saga", "apple", or "edge".

One of the creators of the protest website reportedly told the Los Angeles Times: "Reaching a point where a company is allowed to trademark a common word is complete nonsense.  You don't need to have a great understanding of the laws to understand that this is ridiculous and totally unethical."

But these protesters are legally incorrect.  During the prosecution of the application, the U.S. Trademark Examiner conducted an exhaustive search and found that the word "CANDY" is not commonly nor descriptively used in connection with any other mobile digital applications.

The Examiner did find an existing trademark for "KANDY" in one of the classes of services at issue, but that conflict seems to have been resolved.

Monday, January 20, 2014

Trends in the Intellectual Property Legal Marketplace

One of the most frequent questions that I am asked is what trends I see in the areas of intellectual property, brand protection and the marketplace for legal services.

There are a few interesting, long-term trends in the data worth mentioning, that affect everyone and not just lawyers or those who work in the brand protection and IP industry.  Perhaps the most glaring one is that:

The Cost of Doing Business Globally is Going Down, But the Cost of Protecting Intellectual Property Keeps Going Up

By 2014, the out-of-pocket costs of engaging in global commercial activity have become extremely low.  In fact, they are the lowest they have ever been.

For example, a relatively desirable Internet domain name can be leased for only a few dollars a year.  Using templates and shared hosting, virtually anyone can design and host an e-commerce website very cheaply.

This is a departure from a decade ago, when designing a website required an understanding of HTML and related computer languages, technical knowledge generally limited to IT Departments and computer consulting firms.

Similarly, marketing has become cheap.  Today, by using free e-mail accounts and social media platforms like Facebook, Pinterest, Google+ and Yahoo! for communication and marketing, and low-cost international distribution and shipping channels like eBay,, AliBaba and others, a well-managed small business can conceivably generate hundreds of thousands of dollars per year in only a short amount of time.

Yet the out-of-pocket cost involved in protecting a brand against Intellectual Property theft and infringement, both online and in the brick and mortar context, continues to spiral ever upward.

For example, the high-profile attorneys in the Apple v. Samsung patent wars charged their clients $1,200 per hour.  The hourly billing rates at all the large law firms have reached an all-time high, with many lawyers routinely charging well over $1,000 per hour.

And clients who choose smaller law firms and those firms that offer "flat fee" arrangements may get a better deal, but are not immune from the increased competition for high-quality intellectual property legal services.  

For example, one small law firm in Maryland posted its flat fees online, and notes that it is charging up to $12,000 for filing a provisional U.S. patent application.  An appeal if it is denied could add another $8,000.  That may be less than a large law firm's services, but just filing for a patent is still an expensive proposition.

And of course, that is just the first step in protecting Intellectual Property.  Filing for a patent or trademark is no guarantee that it will be respected by others. 

When infringers are inevitably discovered, commencing and pursuing complex litigation against them routinely costs companies many hundreds of thousands of dollars per year.

Therefore, it is clear that while many are finding it easier and easier to start and develop businesses, they are also finding it more and more expensive to effectively protect their Intellectual Property assets against thieves and infringers.

What does this trend signify?  It would appear that the marketplace is beginning to fully understand that the legal services offered by experienced Intellectual Property lawyers are at a premium, because branding and IP assets in general are as valuable -- if not more valuable -- than traditional ones.