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Q: Intellectual Property ( No Answer,   4 Comments )
Question  
Subject: Intellectual Property
Category: Business and Money
Asked by: mikus123-ga
List Price: $20.00
Posted: 06 Jul 2004 15:37 PDT
Expires: 05 Aug 2004 15:37 PDT
Question ID: 370506
Hello. 
Our company has been manufacturing an innovative product for the last
4 or 5 years.  When we started the company, one of our first sales
calls was to a very significant domestic retailer that I will refer to
as X.  I spoke with two buyers from X, and they showed an interest in
our product.  They asked for information, which we sent them, and we
also sent them a few samples.  We thought that they were going to
carry the product during its sell season, but then, all of the sudden,
they stopped talking to us.  That was in 2000.
Since then, those two buyers have moved around at X, but they still
work there, and as members of our mailing lists, they have been
getting e-letters and mailings from us every few months.
Over the last few years, we have made contact with other employees at
X.  They have shown interest in our proudcts, beyond the original
unit, and I considered them a very strong candidate for future
business.  In fact, my most recent conversation with a buyer at X took
place about 6 weeks ago, when I sent a sample in of our newest
product.
Recently, one of our employees was shopping at X and stumbled upon our
proudct on the shelf.  As he looked closer, he realized that it wasn't
ours at all; it was a full on knock off!
Our product has a very strong profile and extremely memorable shape. 
We consciously integrated that profile into the name of the product,
the name of our company, our logo, literature, future products, etc. 
The shape and functinality of the product are what we are known for. 
The product on the shelf at X is exactly the same shape, almost the
same exact dimensions and made in the same two colors of our original
samples!  The name is even a near match; they kept that same last 3
letters of our name, and substituted a pre-fix that means the same
thing as the beginning of our product and company name!
The biggest problem for us is not just the fact that they are carrying
such a similar product, we are really worried that they are hurting
our brand in the big picture.  The quality of this product that X has
chosen to stock is really bad, bordering on horrible.  It is cheap to
the point that it looses its functionality, every corner is cut on it,
it has no packaging and the workmanship is extremely shoddy. 
Basically, its an embarasement to the shelf, and we are worried that
people may think that we are responsible for it.

We do not have a patent on the product, but we do have several
registered trademarks.  We can prove that they were sent samples 4
years ago.  We can prove that we have been in back-and-forth contact
with them.  We are worried that X's  knock-off our product is so
similar in appearance and name, and of such poor quality, that it will
confuse customers into believing that we are responsible for
manufacuturing that product, and that will hurt our reputation with
both customers and buyers from other stores.  Beyond this product, we
have several others on the market and are planning many more, and
damage to our brand may greatly impair our ability to grow as a
company.
My questions are:  is there anything that we can do if we don't have a
patent? Does it matter that they are purposely confusing the
marketplace and hurting our business?  Is there anyway to pursue this
without destroying our relationship with this retailer (for other
products)?  What amount of information is legal for us to release to
the press?
Answer  
There is no answer at this time.

Comments  
Subject: Re: Intellectual Property
From: jurrasic-ga on 07 Jul 2004 01:32 PDT
 
There are many aspects of IP.
in your case I would suggest you to look into "industrial design".
Subject: Re: Intellectual Property
From: arinate-ga on 07 Jul 2004 03:32 PDT
 
If you did not let them sign a confidentiality agreement of some sort
I am afraid there is not much you can do.

The question before releasing information to the Press is:  what do
you want to achieve with it? You don't want to lose them as a retailer
for other products, so I would suggest not too attack them, but simply
to make your product more attractive.

You are just interested in selling your own product, so you simply
want the public to know that your product is better. Perhaps you can
make some sort of advertisement in which you just add the word "real"
to your punchline..like in " slurpie, the REAL water absorption kit"
or "slurpie, the ultimate water absorber". or whatever you can think
off that makes your product stand-out.

And next time, let somebody sign an agreement before you tell them any
details and send them a sample. And in this confidentiality agreement
you write down a line in which you say "if the co-operation between
the parties is discontinued, all samples and information will be
returned to the inventor company".

Good luck.
Subject: Re: Intellectual Property
From: daniel2d-ga on 07 Jul 2004 22:01 PDT
 
As for all legal questions - contact an attorney.  If you are running
a business than to the business like thing and have an attorney review
the facts in this case and recommend a course of action.  You can also
plan to protect future designs, etc.

As for not taking any action because X might, just might, carry your
products in the future; why would you want to do any business with
someone who appears to have hijacked your product design etc.?
Subject: Re: Intellectual Property
From: targususer-ga on 09 Jul 2004 08:00 PDT
 
You should not rely on any discussion on Google without first speaking
with an attorney. There is no substitute for speaking with an
attorney. Only an attorney with specific information about your
factual circumstances and familar with your jurisdiction can
competantly discuss how to enforce your rights. However, you may wish
to be generally informed about your options when you discuss it with
your attorney.

I assume you're in the United States. You probably have at least two
claims. Assuming that the packaging and physical shape of your product
have no functional aspect, X's most obvious intellectual property
right violation is trademark infringement. If you have registered the
name of your product as a trademark, their use of a confusingly
similar name would be straightforward trademark infringement. You may
be able to file an affidavit for incontestable status for your
trademarks, before suing X. This would reduce the kinds of defense X
could assert in the lawsuit. Likewise, if you can prove your packaging
is distinctive in your industry, then you can sue for unfair
competition based on your "trade dress." Both these trademark claims
require you to prove a likelihood of consumer confusion.

Again, assuming that the packaging and physical shape of your product
have no functional aspect, your company can assert a copyright in the
product's shape and packaging (as visual/graphic works). Because (on
the facts you give above) you have not registered for a copyright, you
will not be able to sue on that copyright until you do register. Also,
because X started reproducing your product before your registered it,
you will not be able to get statutory damages or an award of attorneys
fees. You still can get actual damages (which you will have to prove
at trial) and an injunction (against future reproduction of your
product). I mention copyright because it would be substantially easier
and cheaper to prove than any trademark claim. You would only have to
prove X's representatives had access to your initial samples and X's
subsequent product was substantially similar to your own -- not a
likelihood of consumer confusion.

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