LGJ: The 'Kinect' story, a case study in international trademark trickery
Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games:
I want to let everyone in on a little secret: Joystiq knew the name of the Kinect five days before it was announced to the public. For a variety of reasons, the story was never published, not the least of which was the possibility that "Kinect" was related to the ill-fated Kin rather than being the name for Natal. In any case, that is ancient history at this point. But where did this information come from? And more importantly, why is this relevant to the law at all? Well, it's a trademark issue, and one that's likely to be more and more prevalent going forward.
Everyone remembers countless times where trademark filings led to blog posts which outed new product names well in advance of their announcement. This is because trademark filings can be based on the "intent to use" a product name, rather than actually having the product available in the marketplace. "Intent to use" filings are a critical part of the modern product cycle, which requires a long term plan. It prevents someone else from showing up in stores the day before your product launches with a similar or identical name. But since filings at the Patent and Trademark Office are public record, it also lets everyone know what you're planning.
So what's a company like Microsoft to do? You want to have a cool unveiling, but you also don't want the world to know your product name in advance. You've picked a name, and you also don't want to risk losing it in the run up to the unveiling. The answer: Register the mark in another country and take advantage of the time allowed by the trademark system to wait on your US registration for six months. This goes back to the idea of the filing basis.
Microsoft had achieved exactly what it wanted to achieve: it had a product name locked down without that information leaking to the press.
In the US, there are basically five kinds of applications for trademarks: 1(a) for trademarks already being "used in commerce," 1(b) for trademarks with an "intent to use," 44(d) for trademarks that have been filed in countries with treaties with the US, 44(e) for trademarks that have been granted in countries with treaties with the US, and 66(a) for trademarks being filed under the Madrid Protocol, another international trademark mechanism. 1(a) is simple enough, and 1(b) I discussed before. 1(b) does have the limitation that the mark has to be introduced to commerce within a set amount of time (with limited extensions) and converted to a 1(a) mark. 44(d) and 44(e) are the same, other than they reflect two different stages in the trademark life cycle. It does take months, or sometimes even years, to get a trademark registration finalized. 44(d) is for the time from filing to registration (subject to some restrictions) and 44(e) is for after registration is granted. The Madrid Protocol allows for a simple multi-national filing among member nations, and 66(a) is applicable when Madrid is used.
So, I'm sure everyone is waiting patiently for an explanation of what Microsoft did. In this case, it found a treaty country with a difficult to navigate system such that it was unlikely anyone would discover its filing. The country was South Africa, and the Kinect mark was initially filed October 29, 2009. This gave Microsoft a six month window before filing in the US on 44(d). So, based on the records, the mark was filed in the US on April 29, 2010, and in early June, Joystiq got word of the trademark filing. I won't bore you with the details of what various members of the staff here in the US and in South Africa went through trying to get more information about the filing, but there was never enough for the story to come together.
How long will this strategy remain a viable option?
Microsoft had achieved exactly what it wanted to achieve: it had a product name locked down without that information leaking to the press and being posted on all of the news sites. And while it may have been a great sleight of hand, it was completely legitimate from a legal standpoint. I'm sure other companies have done just the same, with none of us ever noticing differently, but because of this close call, their strategy is now more clearly apparent.
The real question is: How long will this strategy remain a viable option? As more and more countries place their trademark systems online, and as filings become more transparent, it's difficult to say. Because of the treaty limitations on the 44(d) filing, it's possible companies like Microsoft will eventually run out of countries in which they can hide initial filings in. It's also possible that the game press will ramp up its efforts to monitor more international trademark agencies to uncover stories like this one. Of course, it's equally possible that we will see the Disney real estate model revived for trademarks.
For those not familiar with the story, many fake corporations were set up to buy land without triggering a huge price hike on word that Disney was looking to purchase a huge amount of land. It's a tactic that has been used many times since. A similar "dummy" filing entity could be used for trademarks, which later assign the rights to the filing back to the main company. Of course, with the ability to research entities as it is today, you would need a very private filing state to facilitate the process, like Nevada. In any case, that's the story of how Microsoft secured the name for Kinect. One can only wonder what other trademarks it may have already filed in various other jurisdictions worldwide that are now just waiting to hit their 44(d) deadline.
Mark Methenitis is the Editor in Chief of the Law of the Game blog, which discusses legal issues in video games. Mr. Methenitis is also a licensed attorney in the state of Texas with The Vernon Law Group, PLLC and a member of the Texas Bar Assoc., American Bar Assoc., and the International Game Developers Assoc., where he is a board member of the Dallas chapter. Opinions expressed in this column are his own.
Reach Mark at: lawofthegame [AAT] gmail [DAWT] com
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