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!!

New gTLDs Causing Trouble for Twitter

Screen Shot 2015-07-15 at 10.07.30 AMYesterday, a website that looked exactly like Bloomberg posted “news” that there was a $31 billion buyout offer for Twitter. Ummm not true! The website, called http://www.bloomberg.market, featuring a new gTLD, was fake. And so was the report. The fake website was a near-identical replica of Bloomberg’s site, and even used Bloomberg reporter Stephen Morris’s byline. OpenOutcrier, a Twitter account that bills itself as a destination for “Real-time stock & option trading headlines, breaking news, rumors and strategy” was the first to post about the report, although Bloomberg employees were quick to point out it was fake.

Most discussions about new gTLDs causing problems for brand owners is preventative such as with the .SUCKS and .PORN domains. This incident is a good example of a new gTLD causing the damage brand owners are trying to prevent in those other cases. As a brand owner you should make sure to not only use these new gTLDs as a tool for branding but remain aware of the release of new gTLDs to proactively register relevant domains and/or monitor for infringement like this. There are a number of free monitoring tools like Google Alerts or Talkwalker that you can use to monitor use of your brand name.  And you can see which new gTLDs have launched and when so you can remain up to date on gTLDs that you should register from a branding perspective and/or from a brand protection perspective.

As a result of this false story, Twitter shares shot up, only to fall back down when Twitter corrected . It’s not clear who was behind the faux story. With all that’s going on with Twitter, including the CEO being replaced by co-founder Jack Dorsey earlier this month, this incident was believable.  This could have caused more damage to company finances, reputation, and consumer trust. Don’t let your brand be next! Fraudsters are very savvy as you can see.

Should You Trademark Your Website?

It is extremely important for companies to protect their intellectual property. Developing a comprehensive intellectual property plan is essential to protecting your investment and protecting your consumers from confusion.  Trademarking your brand names, slogans and company name as well as copyrighting blog content, original imagery, and other original works of authorship are commonly know areas of focus for companies and entrepreneurs.  You want to be in control of your brand, your content and your creations.

Now, according to one federal court, companies can use trademark law to protect the unique look and feel of their websites from imitators. As a result of this ruling, companies should consider registering their websites as trademarks with the U.S. Patent and Trademark Office (the “USPTO”).

The U.S. District Court for the Northern District of California recently ruled in Ingrid & Isabel, Inc. v. Baby Be Mine, LLC, No. 13-01806 (N.D. Cal. Oct. 1, 2014) that the look and feel of a website used to market and sell products and services can constitute protectable trade dress under Section 43 of the Lanham Act. See 15 U.S.C. § 1125(a) (2012). Trade dress, a derivative of trademark law, protects the total image of a business or product, including the arrangement of identifying features such as graphics, packaging, designs, shapes, colors, textures, and décor.

This is an important development for companies seeking to protect their brand online. Your website is an important part of your brand as a company. It is often a customer’s first impression and point of sale.  Previous case-law suggested that a website could constitute protectable trade dress only if the website itself was the product. See Conference Archives, Inc. v. Sound Images, Inc., No. 06-00076, 2010 WL 1626072 (W.D. Pa. Mar. 31, 2010) The Ingrid & Isabel case provides an opportunity to expand those protections. This decision is reminiscent of the USPTO allowing Apple, Inc. to register a trademark for the design and layout of its unique retail stores. Your website is in effect your online store. This is a great example of the law starting to catch up with the times. Companies seeking to take advantage of this protection must make sure their website is 1)distinctive or has acquired secondary meaning and is 2) nonfunctional.RegisteredTM

  1. The court noted that the “Supreme Court has held that ‘design, like color is not inherently distinctive’ [citing a case involving Wal-Mart.]  Given the conceptual similarity between ‘look and feel’ and ‘design,’ Wal-Mart suggests that Plaintiff must show that its website‘s ‘look and feel’ is distinctive through its secondary meaning.” This eludes to the fact that the design of a website is not “inherently” distinct. You want to secure these protections before someone seeks to copy your website. However, per previous case-law  “secondary meaning may be inferred from evidence of deliberate copying of the trade dress…” Therefore, if you can show that your competitor deliberately copied your website, that will help to support your claim for acquired distinctiveness.
  2. Functional elements cannot be protected as trade dress. However, according to the court in Ingrid & Isabel “the placement and arrangement of functional elements can produce a non-functional aesthetic whole.”

This is also an important decision from a cybersecurity perspective. Most consumers are lured into phishing and other fraud scams when malicious actors mimic the look and feel of a brand’s website. Armed with a similar site they can lure unsuspecting consumers to insert personally identifiable information and financial data into their fake site. This can result in identity theft and financial loss. This is another tool in a trademark owner or company’s arsenal to combat fraud and protect their customers.

If your website is distinct, talk to an attorney about protecting it. This is an important consideration and should be part of developing a comprehensive intellectual property plan.

Trade dress protection has existed for decades, but its usefulness for websites and other Internet-based applications has been limited. It will be interesting to see how courts continue to apply the law to websites, mobile apps, and other non-traditional mediums.

Note that the court didn’t determine the ultimate outcome of this case; that’s still in dispute. This ruling merely allowed Ingrid & Isabel’s claim on this point to proceed to trial.

Quick Tip: Sign A Pre-Nup With Your Business Partner

Co-founder disputes are common in the business world, whether in television production, restaurants, real estate,or tech start-ups. With the staggering amount of money that can be at stake in today’s tech companies, founders should exercise caution. The best of friends and the most cohesive of partnerships can end in a bitter legal battle unexpectedly. A recent Los Angeles Times article, titled “Co-founder feuds at L.A .tech start-ups show how handshake deals can blow up,” recounts several telling tales of business start-up angst. The article analyzes recent tech-based businesses that began with a handshake and ended with relationship-ending conflict.

Entrepreneurs should consider entering into a prenuptial (“prenup”) agreement to avoid such a dispute. A prenup establishes the property and financial rights of each spouse in the event of a divorce. Figuring out how to divide property and assets should a company or partnership dissolve may be a smart way to start a business. Consult counsel and think through all the potential issues.

Quick Tip: Trademark Protection In Cuba

Cuba is now an open market for US businesses. President Obama announced in December 2014 that US is taking steps towards increased travel and improved relations with Cuba. This will mean a new frontier for many businesses as commerce restrictions are lifted.

One exception to the long-standing US embargo on trade with Cuba permits US companies to file for and obtain trademark registrations in Cuba. Many companies did not consider obtaining a Cuban trademark a high priority but it is now something to consider. Cuba is a “first to file” jurisdiction – in other words, a Cuban registration for a trademark will be awarded to the first applicant, even if that applicant has no legitimate claim to the mark. An applicant does not have to use the mark in Cuba, or even plan to expand its business into that country, before filing an application for trademark registration. Proactively seeking a Cuban trademark registration now will help ensure that the mark is available when the embargo with Cuba is lifted.

There are two ways to apply for a Cuban trademark registration: (1) if a US company owns a current US trademark registration, a Cuban application can be based on the US registration and filed through the international Madrid Protocol treaty; or (2) a national Cuban trademark application can be filed through local trademark agents with the Oficina Cubana de la Propiedad Industrial (OCPI), the Cuban equivalent of the US Patent and Trademark Office. Seek advice of counsel as you expand your trademark portfolio.

Being proactive about foreign registrations is an important part of a strong intellectual property portfolio.

Advertising Services Is Not Use In Commerce

Your website for your new service has gone live! You are building momentum for you launch in a few weeks by advertising your services. You know you need to protect your intellectual property so you seek federal registration of your new trademark. Is that new website or other adverting materials sufficient to show “use in commerce” as required to secure a federal registration for use?

Seems like it could, right? Unfortunately, the answer is NO.

In Couture v. Playdom, Inc., the Federal Circuit held that the use of a mark on a website to offer services is not use in commerce sufficient to support an actual-use service mark application. As a result, the Court affirmed the Trademark Trial and Appeals Board’s (“TTAB”) cancellation of the mark.  The PTO granted the petition because, at the time of Playdom’s service mark registration, it had not rendered any services under the mark, but merely advertised those services on a website.

This case is a great example of the unnecessary risk in prematurely applying for an actual use mark, rather than an intent-to-use mark.

To apply for registration under Lanham Act § 1(a), a mark must be “used in commerce,” which requires – as to services – that, as of the filing date, the mark (1) is used or displayed in the sale or advertising of services and (2) the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services. 15 U.S.C. § 1127; Aycock Eng’g, Inc. v. Airflite, Inc., 560 F.3d 1350, 1357 (Fed. Cir. 2009).

The Federal Circuit, in this case, explained the fundamental proposition that “[w]ithout question, advertising or publicizing a service that the applicant intends to perform in the future will not support registration;” the advertising must instead “relate to an existing service which has already been offered to the public.” Id. at 1358 (internal quotation marks and citations omitted) (emphasis added).

So what does all of that mean? Advertising for a service you have not yet begun to offer to the public is not enough. To successfully register a service mark, services associated with the mark must have been provided prior to registration. Do not use advertising for a service set to launch in 3 weeks or a month. The mark is not in use in commerce as necessary to secure federal trademark registration. It may not be obvious when filing but if there is ever a challenge you could lose your protections as Couture did.

Any doubt about actual use should lead to the filing of an intent-to-use application; it’s not worth the risk of losing your mark. An intent-to-use application would have given Couture the benefit of the earlier filing date when the mark was actually used in commerce and issued as an actual use mark. See 15 U.S.C. § 1057(c).

Cartier Offers Amazing Opportunity to Women Entrepreneurs!

I had the pleasure of attending Cartier’s Women Entrepreneurs: The Changing Face of Innovation at the French Embassy.  We had the pleasure of hearing past participants speak about their experience in The Cartier Women’s Initiative and their successful businesses. The connections, financing, and networking were invaluable for these budding entrepreneurs and if you have a for-profit business that is 1-3 years old I encourage you to learn more and apply.

The Cartier Women’s Initiative Awards are an international business plan competition created in 2006 by Cartier, the Women’s Forum, McKinsey & Company and INSEAD business school to identify, support and encourage projects by women entrepreneurs.

The mission of the Cartier Women’s Initiative Awards is threefold:
  • To identify and support initial-phase women entrepreneurs through funding
    and coaching
  • To foster the spirit of enterprise by celebrating role models in entrepreneurship
  • To create an international network of women entrepreneurs and encourage
    peer networking

The Cartier Women’s Initiative Awards aim to encourage the most vulnerable category of entrepreneurs in their most vulnerable phase: women entrepreneurs starting up. Since their inception in 2006, they have accompanied over 140 promising female business-owners and recognized 44 Laureates.

Cartier is currently accepting applications!!!

The annual competition involves two rounds:

Round 1 (in June): The Jury selects 18 Finalists*, the top three projects of each region (Latin America, North America, Europe, Sub-Saharan Africa, Middle East & North Africa, Asia-Pacific), on the basis of their short business plans. They receive coaching from experienced businesspeople to move to the next round.

Round 2 (in October): The Finalists are invited to France for the final round of competition which includes submitting a detailed business plan and presenting their projects in front of the Jury. They are also invited to the Annual Global Meeting of the Women’s Forum.

Based on the quality of the plan and the persuasiveness of the verbal presentation, one Laureate for each of the six regions is selected and receives a unique and comprehensive support package: US $ 20 000 of funding, one year of coaching, networking opportunities and media exposure.

Click here for information on how to apply: http://www.cartierwomensinitiative.com/how-to-apply

Great Opportunity for Women Entrepreneurs in DC!

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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!

Quick Tip: Fast Track Your Community Trade Mark Application

The Office for Harmonization in the Internal Market (OHIM), the European Union trade mark office, has announced the introduction of a new accelerated procedure for handling Community Trade Mark (CTM) applications.  ‘Fast Track’ guarantees that the early stages of the Community Trade Mark (CTM)  application process will be dealt with quickly by providing for the expedited examination and publication of applications (in just half the time of regular applications, according to OHIM).

Fast Track is free of charge.  An application will be automatically allocated to the track provided it meets certain conditions listed on OHIM’s website. Fast Track came into operation on November 24, 2014. Overall, it is good news for trade mark applicants who could benefit from obtaining EU-wide trade mark protection more quickly.  Fast Track is, however, unlikely to make a difference in the case of more complex, opposed applications.

Screen Shot 2014-12-08 at 12.25.56 PMScreen Shot 2014-12-08 at 12.29.34 PM

What is a Community Trade Mark?

The Community Trade Mark (CTM) system offers trademark owners a unified system of protection throughout the European Union (EU) with the filing of a single application. If successful, this one application results in a CTM registration that is recognized in all countries of the EU. The countries covered by a CTM registration are Austria, Benelux (Belgium, the Netherlands and Luxembourg), Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Malta, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.