06 August 2008

Dell, USPTO and 'Trademark Insanity'

It's not even been a week since I revealed my discovery of Dell's trademark application #77139082 in the cloud-computing Google Group, and a few weeks since I actually discovered it. I was too busy at the time trying to find a consensus definition and write an encyclopaedic reference for cloud computing to worry about a pending trademark application that I figured wouldn't affect me or my business, as I had long since given up on selling and recommending hardware in favour of 'true' cloud computing solutions like Amazon's Elastic Compute Cloud. I also assumed that those affected would call their lawyers and the matter would be swiftly extinguished (Update: Maybe they did.).

It seems I underestimated both the chilling effects of the trademark and the public reaction as we've already seen:
On Dell's side of the fence:
  • Dell originally declined to comment.
  • David Frink told Computerworld "The intent is to protect our intellectual property in our growing cloud computing business, ... Our intent is not to stop others from using the term.", except in their "narrow" definition. When it was pointed out that the definition Dell provided doesn't sound "narrow", Frink reiterated that the trademark has not been opposed.
  • Jess Blackburn claimed that at the time of the filing (March 2007) the term 'cloud computing' was not common, but many others have disputed this typically citing earlier news articles. "A registered trademark on this term would not give Dell the exclusive use of it ... It would protect us from others using the term specifically as it relates to our solution.". She also said that they hadn't decided how it would be used: "We now have six months to file our statement of use for the trademark, and will decide what we will do during that time, ... We have and will continue to conduct appropriate due diligence around adoption and use of this trademark to ensure we do not infringe on anyone else’s intellectual property."
Fortunately all is not lost:
  • According to internetnews.com it has the 'durability of a glass hammer' in that 'legal experts say it liable to lose the first time the company tries to enforce the trademark'.
  • A University of Michigan law professor (Jessica Litman) notes "Your trademark is subject to cancellation. It gives you a property right in a brand name, but if it enters the language as the name for something, there's not a lot you can do about it ... By now everybody's using [the term 'cloud computing'], and the law is quite clear that even though it's not Dell's fault, if the phrase is now a generic phrase for that kind of computing, nobody can own a trademark for it, because people need to be able to describe the generic product," "If they try to enforce the trademark, they may not be able to ... Their trademark lawyer may say yes, procedurally you have rights here but as a practical matter this is not going to work as a trademark because too many people use cloud computing in a non-trademark way. Dell may decide it's not worth it."
  • Trademark Attorney Frank Duffin says the public needs to associate 'cloud computing' with Dell: '"If it does not indicate origin with Dell and could apply to HP or IBM, then it doesn't serve as an indicator of origin and it does not serve as a trademark," In which case IBM, HP, and probably Sun, Amazon and anyone else using the term "cloud computing" to sell a product or service will gang up on Dell, and Litman said its chances aren't good.
  • New York IP firm Ostrolenk Faber's Peter S Sloane says third parties "can still petition to cancel the registration on the ground that the mark is merely descriptive". pointing out that Wikipedia defines cloud computing "as a 'style' of computing and a 'general concept.' "These definitions are not consistent with any claim to exclusivity of the term as a trademark."
  • Shutts & Bowen's Joe Englander also sees challenges ahead for the trademark. The term cloud computing is "generic" for computers that are connected to the internet, he says.
  • Bromberg and Sunstein LLP's Keith Toms concedes that 'Dell will probably get this trademark' but notes 'Whether or not they can defend it remains to be seen -- and I'm skeptical about that', adding that 'You can't steal a generic term from the lexicon and make it your own'
  • UPenn's Language Log calls for an end to descriptive trademarks and a reader notes the 'UK system works quite well in allowing only 'descriptive' trademarks which aren't actually descriptive. So, if you wanted to trademark Arctic Bananas™ you could do so, but you wouldn't be allowed Brazilian Bananas™'
So where to from here?

Dell brags about its long history of enforcing trademarks on the Internet (not only pursuing cybersquatters but also the registrars themselves), so if they do press on with the formalities of registration it seems likely they will throw their weight behind enforcement. Indeed they have to both use and enforce the registration or they risk losing the trademark for non-use. On the other hand, many trademark attorneys and law experts have said that they've got a snowflake's chance in hell of prevailing with this 'glass hammer', and if they so much as try they run the risk of being lynched by the mob (they've already had a taste of that this week).

It seems they've not helped their case by using the generic term generically themselves (though generocide presumably doesn't apply to an already generic term). According to Keith Toms (an IP attorney): "On Dell's blog ['In the clouds'] they use the phrase 'cloud computing' in a generic sense which is trademark law no-no number one ... If it's a generic thing, no one will recognize the trademark." And who better to explain the generic concept of cloud computing to us (from Dell's point of view) than Forrest Norrod, VP & GM—Data Center Solutions (the division responsible for Dell's cloud computing solutions) in his inaugural video blog post (download):


Hi, welcome into the clouds. I'm Forrest Norrod, I'm the general manager for Dell's Data Center Solutions division which is responsible for Dell's cloud computing solutions and I'd like to welcome you here to this video log, this blog, this site, where we hope to facilitate a discussion around the next wave in computing: the 'cloud computing' phenomenon. We think that cloud computing is an important paradigm shift (although nowdays I guess I hesitate to use that word) but it is a technology, an approach to deliver computing services that you're starting to see getting traction in the consumer space, in things like many of the applications for example that Google is distributing, Google or Yahoo. And you see it starting in the enterprise space, things like Salesforce.com's software as a service for sales teams delivered via the cloud, or probably more, most notably in Amazon's EC2 and S3 compute and storage services 'by the drink' if you will, delivered by a very rapidly growing and highly reliable cloud service. So here we think that are the harbinger of things to come. The applications that point the way to what might become the most significant wave in computing in quite some time. And we'd like to have the dialog here and facilitate the discussion around how will the cloud develop. Will there be... how many clouds will there be? Will there be 5, will there be 50,000, will there be 5 million? What is a cloud? There's quite a bit of debate over the definition of what cloud computing really is, or what it encompasses. We also want to talk about some of the new businesses that are going to be enabled by cloud computing. Every significant paradigm shift in computing (I use that word again) has generated new businesses and created new applications that nobody really thought of. We also want to talk about what are some of the issues that need to be resolved to support applications and to grow these clouds at the size and scale and ramp that are going to have to be put in place to support these applications. So we think, we hope, that this is going to be a rich dialog. We invite your participation and we certainly welcome the conversation as we look forward into the clouds.
Regardless, Dell it seems aren't ready to concede defeat just yet, stating that they 'now have six months to file [their] statement of use for the trademark, and will decide what [they] will do during that time'. Toms notes "The reason for intellectual property law is to assert it against other people as a sword. There is not much value in sitting back on a trademark and not enforcing them... But in this case, I'd prefer to be council for the defense". Trying to sit it out is not all that unsurprising given they believe it's a billion dollar business, but proceeding to registration will not go unnoticed this time, and the reaction both from the public and from the others in the industry who want a slice of the pie will be swift, severe, and likely effective.

Personally I don't have a problem with Dell - I've been recommending their hardware to large enterprise clients for over a decade and been responsible for many (commission-less) sales over the years, but I've long since moved on to cloud computing where hardware becomes someone else's problem. I resist[ed] the (strong) urge to make comment in my original post (out of respect for the Dell people on [the] list, apparently including Michael Dell himself) and I will do so again now, except to say that there's more than enough room for everyone so I hope that sanity prevails.

That said, I am somewhat curious though as to whether Dell, while 'ensur[ing they] do not infringe on anyone else’s intellectual property', licensed the Hyperscale registered trademark, and also what exactly it was USPTO was thinking when they registered the Web 3.0 trademark to flowchart.com a month or two ago...

Update: Sanity prevailed: 'The Notice of Allowance for this application was canceled.'

Update: Dell is in the cloud computing doghouse until they put the application out of its misery or it expires after 6 months, whichever comes first.

Note: Image used without permission but with thanks to boingboing gadgets. See 'Dell trademarked "Cloud Computing" and no-one noticed' article which declares the application 'bogus', cloud computing a 'generic technical term' and 'saturated buzzword used by countless companies and journalists to try and make the server-client model sexy' and Dell itself a 'bunch of disgusting shysters'. Why don't you tell us how you really feel? :)

2 comments:

  1. Just for the record: Language Log is hosted at UPenn but has no institutional connection with it.

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