Kickstarter Lesson #131: Everything a Kickstarter Creator Needs to Know About Trademark Law

14 December 2014

I asked the Board Game Lawyer, Zachary Strebeck, to follow up his “4 Legal Issues Every Kickstarter Creator Should Know” guest post with a detailed post about trademark considerations. Thanks so much for lending your expertise to us again, Zack!

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I am often asked about my opinion on whether one brand name (whether it’s a game name, company name or slogan) is too close to another. What they’re really asking is whether or not they could get sued for trademark infringement. What does it take to be infringing under trademark law? Let’s find out.

The reason for trademark law to exist:

There are two major reasons for giving trademark protection to brands and other marks. These are:

  1. Protect consumers from confusion as to the source of goods and services, and
  2. Protect the investment by those sources into their brands and the goodwill associated with them.

The second reasoning is ancillary to the first, however. Protecting consumers from confusion is the most important reason for trademark to exist.

We don’t want consumers to walk into a store and see Coca-Cola branded instant noodles. If that was okay, then consumers would no longer be assured that they are getting a product of the quality they come to expect from the owners of the Coca-Cola brand. Plus, Coca-Cola’s brand is diminished by others being able to use that mark with lesser-quality goods.

Now let’s take a look at what constitutes trademark infringement:

There are a few different causes of action under trademark law, but the major test used to decide if there is infringement is whether or not there is a “likelihood of confusion.”

Sounds simple, right?

It never is. Here’s a quote from the Supreme Court in 1877 (emphasis added):

“What degree of resemblance is necessary to constitute an infringement is incapable of exact definition, as applicable to all cases. All that courts of justice can do, in that regard, is to say that no trader can adopt a trade-mark, so resembling that of another trader, as that ordinary purchasers, buying with ordinary caution, are likely to be misled.”

It is important to understand that it doesn’t take actual confusion to prove infringement. It is simply whether or not a consumer is likely to be confused by the marks that shows whether the use is lawful or not.

So we’ve got a doctrine, but how does a court make the decision?

Each court has their own specific set of factors, but they generally follow the same themes. Let’s take a look at one, the Ninth Circuit and their Sleekcraft factors (named after the 1979 case, AMF, Inc. v. Sleekcraft Boats):

  1. strength of the mark;
  2. proximity of the goods;
  3. similarity of the marks;
  4. evidence of actual confusion;
  5. marketing channels used;
  6. type of goods and the degree of care likely to be exercised by the purchaser;
  7. defendant’s intent in selecting the mark; and
  8. likelihood of expansion of the product lines.

The court analyzes these eight factors, chews them up and spits out an answer at the end. I’d love to say that it’s easy to predict, but it’s not.

This is because the court (at least the 9th Circuit) doesn’t weigh each factor equally. They may find some more important than others. For instance, evidence of actual confusion would probably be very good proof of the likelihood of confusion, yes?

For some good examples of likelihood of confusion in different situations and industries, check out this link. For the most part, making a mark plural or making minor changes or additions is not enough to escape confusion. For instance:

  • ISHINE and ICE-SHINE were likely to confuse consumers because they are soundalikes;
  • ON-LINE TODAY and ONLINE TODAY are likely to confuse, even though one is an internet connection service and the other is an Internet news service; and
  • AQUA-CARE and WATERCARE are wholly different words, but since their meanings are the same and they are the same industry, it is likely to confuse.

So what does this mean for the name I’ve chosen?

It could be a bad name, depending on the outcome of an analysis of these and other factors.

This is just one step in the “knockout search” that attorneys do when advising trademark clients. It is important to intuitively apply these factors to an idea for a name, while comparing the proposed name to others that are out there.

This is also a situation where my “If you have to ask, you probably shouldn’t do it” principle applies. If something is close enough that there is even a question, it’s probably safe to say that there could be confusion there. Unless the goods are in vastly different markets or classes, a court could find confusion.

The real question is, do you want to deal with the hassle of a lawsuit or other issues due to potential confusion?

A real-life example:

Let’s look at another real-life example of a trademark dispute that could have been. Game Salute ran a Kickstarter for a game called Story Realms. There exists a federal trademark registration for Story Realm (USPTO Registration #4006870).

Generally, just pluralizing a mark is not enough to escape confusion. While the goods and services are different (Story Realms is a board game and Story Realm is apparently an online store selling eBooks, toys and other things), I can see how there could be a potential for confusion. There probably wouldn’t be any evidence of actual confusion, unless the company that owns Story Realm could produce Internet posts showing consumers confused over the names. In fact, many of the factors may have gone in Game Salute’s favor, except the extreme similarity of the marks.

Game Salute, however, changed the name of the game mid-Kickstarter to Storm Hollow. Their reasoning was that, even though they believed they could win a case at trial, it was beneficial for all parties to simply avoid any dispute in the first place. This name change, judging from comments on the update, was almost universally praised. Sometimes meeting with some resistance can force some extra creativity and brings some positive results, as in this case.

It is possible to negotiate a trademark coexistence agreement with the senior mark holder. This is an agreement that sets out the terms of coexistence between the two parties, preventing them from overlapping geographically or in the same industry. It’s a promise not to sue each other, provided that each party adheres to the terms of the agreement.

If you are thinking of creating a new brand or registering an existing mark, why not contact an attorney? Also, check out my free eBook on the legal issues that game developers face. It covers trademark protection and a host of other issues relevant to the game development community.

Also read: This related post by a Kickstarter creator who ran into an IP dispute during his campaign.

25 Comments on “Kickstarter Lesson #131: Everything a Kickstarter Creator Needs to Know About Trademark Law

  1. As gaming is global, how does trademark work internationally? There are so many international game publishers now that market to the US and US publishers marketing internationally. Is there a site that you can search international trademarks, not just US?

    1. There are international trademark treaties, but actually registering your mark in every country is prohibitively expensive. Even just a few countries will run you thousands of dollars. You can read up on international trademark issues here – http://www.wipo.int/portal/en/index.html

      The other question is the cost of actually going after someone in a country where you have registered, but have no presence beyond distributing your product. Do you want to pay an attorney in Malaysia (for example) to litigate against someone using your brand name? It’s fine for Starbucks, but for a cash-strapped developer it doesn’t always make sense.

      One advantage of trademark protection is that you can use it to take down infringing Facebook pages and other things like that. If you don’t have international protection, they may be able to just disable access to that page in the countries where you DO have protection.

  2. Also, I’d like to clarify the post title that Jamey came up with – this isn’t EVERYTHING you need to know, but it’s a good start! I’ll do another one about distinctiveness of your trademark next, I think. That’s the other important component!

  3. It’s also important to know WHAT TO DO about possible infringement. Contact the project creator and open civil communications about possible infringement. DO NOT under any circumstances berate the project creator in their own project area and threaten them with lawsuits especially when you are ONLY under review for said trademark or patent. In other words, don’t be “PLX Devices” and get all your comments banned from Kickstarter. It is NOT ok to break the site rules of a third party just because you “think” someone is infringing on your pending submission.

    1. I agree here. The answer is twofold – first, you have to mix legal concerns with business concerns. However, there is always the possibility that NOT protecting your trademark will lead to the loss of trademark rights that you’ve fought hard for and spent money on. However, doing it in the open may get you the reputation of a King Games. Putting it all “on Front street” may not be the best option, as you say, at first.

      The Moriarty’s Machinations situation comes to mind, actually, if you’re familiar with that.

      I have a few blog posts on these subjects here:
      http://www.strebecklaw.com/got-a-trademark-dont-make-these-mistakes-and-lose-your-rights/
      http://www.strebecklaw.com/developer-threatens-legal-action-against-allegedly-cloned-kickstarter-game/

  4. Having just gone through this process to get a trademark, I would also caution creators about all of the spam mail they will get. We were inundated with companies that tried to pass their services off as official trademark correspondence and non-optional. I am sure some were legitimate, but some were down right deceiving.

    1. Absolutely. The attorney gets those things, as well. It is very annoying. There’s one particular email I get all the time about international trademark registration. If you’ve done it through an attorney, be sure to ask them before you move forward with any mail you are getting. Most (if not all) of it is garbage.

  5. Thank you Zachary and Jamey!

    Zachary you definitely gave a lot of good information that is hard to know when you are just starting to get your feet wet within game design. As a result of reading this there are a few things that I am going to look into as far as how trademark laws affect my ideas.

    I’m going to make reading both of your blogs a regular habit!

  6. Zachary – amazing post and incredibly informative. As someone who spends his day job doing marketing in the CPG industry, I appreciate the emphasis on consumer confusion being the #1 issue (brands are important!).

    Also – you example about Storm Hallow – why it’s often better to change than fight – reminded me of another famous case where trademark issues: the Budweiser debacle between Budweiser Budvar and Anheuser Busch (http://en.wikipedia.org/wiki/Budweiser_trademark_dispute). Obviously neither one could have known this would happen when they opened up shop years ago, but it’s a powerful lesson to current start-ups that even if you secure a trademark and become successful with it – having something similar to someone else will never get easier – you’ll have headaches for years to come :)

  7. Very interesting read. And of course although I did the usual Google search for something similar to my new name – I have now discovered something similar. My name is Evolutionary Games (based in Australia). I’ve found a Latvian live casino company called Evolution Gaming.

    I presume there is good cause for confusion here and I’ll need to change mine?

  8. Paul: I think you’re probably fine, but it’s a close call. The Google test is a good one, as you get to see what others will see when they’re searching for your website. I just did a search for it, and a lot of articles about game theory came up, but not your company. I think that’s a bigger concern than the resemblance to the Latvian casino company.

  9. Thanks for the feedback. My thoughts are that I probably am okay with the other company but I should look for another name anyway. You are right in that my company name will be lost amongst evolutionary game theory pages, of which there are many!

  10. If you were asking me, I can’t give any specific legal advice over the Internet, unfortunately. Also, this is an Australia/Latvia issue as far as I know. Unless US trademark law comes into play, I’d be worthless anyway :)

  11. Hi Zachary

    Thanks for the comment.

    I think I’m going to have to change it. Better in its infancy than later though – which is what makes finding this article so valuable.

    Now unfortunately for the hardest part of games design – coming up with a meaningful original and cool name!

    1. Paul Matthews

      Hi Zachary and Jamey – thanks for taking the time to talk about this. As it turned out I should have done a simple google search which put me in a sea of other non gaming related pages and didn’t make me ‘pop at the top’. I changed my name (after looking at about 50 different names) to Reality Respite Games – but life has got in the way – which is why its nearly another year before my next post.

      once again – excellent blog and tons of very useful and valuable information

      Cheers Paul

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