Question And Answer About The Entrepreneur Trademark Battle
1. How did the word "Entrepreneur" ever get trademarked?
The word "entrepreneur" was/is considered "descriptive." Descriptive trademarks can be registered with proof of secondary meaning.
Apparently, Entrepreneur Media, Inc., (EMI) showed "Secondary Meaning" upon registering the wordmark "entrepreneur." This means that EMI claims a substantial portion of the relevant market associates the single word "entrepreneur" with Entrepreneur Media, Inc.
We don't believe this is a factually-correct statement. It's almost impossible to believe that a substantial number of small business people associate the word "Entrepreneur," standing alone, with Entrepreneur Media, Inc.
It's possible the USPTO (U.S. Patent And Trademark Office) made an error upon registration. However, today, Entrepreneur Media, Inc.'s mark is considered "incontestable" which basically means they've had the mark for five years. Due to a legal decision (Park N Fly), incontestable trademarks are considered to have secondary meaning and they can't be challenged as being merely descriptive with a lack of secondary meaning.
That legal decision flies in the face of logic. It's as if the law says all apples are red, and someone holds up a green apple. Then, someone holds up a yellow apple, and the law continues to shout: "All apples are red! All apples are red!"
It would be interesting to see what proof of secondary meaning EMI showed when it originally registered the trademarks. Because we aren't involved in a lawsuit and haven't been through a discovery process (a legal process to gather information), we haven't tried to obtain that information.
2. How is the entrepreneur case unique?
First, we believe "Entrepreneur" is generic. The real product of EMI is information, repackaged in magazines, books, seminars, and online. EMI's product is information. Information is classified by subject matter. The word "Entrepreneurship" is the accepted generic name of the body of information that EMI sells. And, "entrepreneur" is the root word of "Entrepreneurship."
A trademark of "entrepreneur" when held by a company selling information about entrepreneurship to entrepreneurs, amounts to claiming exclusive right to the root word of a body of information that really belongs in the public domain. This makes the word "entrepreneur" generic with respect to EMI's market.
Consider the consequences if a company could trademark the words "Cancer," "Diabetes," or "Health," for example, and prevent other companies from using those words freely when providing information about those respective subject areas.
Trademark law tries to protect generic words for the public domain so that all competitors can freely and honestly name and describe their products.
For example, consider a forest of trees where each tree is a particular format of information. One tree represents books. Another tree is named "seminars." Another tree is named "magazines." Another tree is named "online networks."
There are a bunch of squirrels trying to collect acorns. And, a squirrelly court sets the rules for foraging. Squirrel law says all squirrels are to have equal access to each tree.
By denying one tree to any one squirrel, each squirrel can forage from any of the trees. That's the rule they set. Sometimes, however, an aggressive, well-funded squirrel will try to claim ownership of one of the generic trees (for example, "Books") and drive off the other squirrels. When this happens the squirrel court protects the "Book" tree, so the other squirrels have equal access.
EMI isn't just an aggressive squirrel trying to claim one tree, it's an aggressive 1,500 pound Venezuelan rodent trying to claim ownership of the entire forest.
Sometimes, people can't see the forest for the trees. A trademark of "entrepreneur" is probably more egregious than a trademark of the generic word "car."
Secondly, "Entrepreneur" is the only word in the English language that refers to an individual who assumes the risks of starting and running a business. It has no true synonyms.
Thirdly, by the definition of "entrepreneur," not only is it the generic name of the class of information EMI provides, but it's also the natural generic name of a member of EMI's target market.
This is akin to a company claiming ownership of the word "men" and saying other companies can't use "men" in their name.
Fourth, by the dictionary definition of "entrepreneur," entrepreneur is the generic name of the class of people who provide goods and services. In a trademark case, it's common to ask if the word or phrase in question is associated with the product or the producer. Here, the word entrepreneur is inherently confusing, because it's the generic name for the producer of goods and services.
Entrepreneur is generic because it's associated with the product (information, category entrepreneurship) and not with a single provider of information.
3. What is abandonment, and why is it an issue?
The issue really is fairness. EMI has threatened many smaller companies for using the word "entrepreneur." However, it seems EMI will not attempt to enforce or police its mark against larger, well-funded competitors. To the best of our knowledge, EMI hasn't followed through with serious legal action against any well-funded competitor who uses the word "entrepreneur."
For example, billionaire founder of Ascend Communication, Rob Ryan, has an organization called Entrepreneur America. Yet, it seems EMI won't attack him. If a smaller entrepreneur were using "Entrepreneur America," you could bet your bottom dollar that entrepreneur would be legally attacked.
Larger competitors can blow off a threat by EMI. They could afford to take this to court, examine all sorts of issues, the genericness of the word, abandonment, etc.
However, the average cost of trademark litigation is measured in the hundreds of thousands of dollars. Smaller entrepreneurs can't be cavalier about taking this to court. So, they run away.
Scott Smith is the only smaller entrepreneur to stand up and fight for his right to use the word "entrepreneur" in a full legal battle. Even universities have backed down, because they're apprehensive about spending limited funds.
By not policing its trademark against larger companies (in particular, not following up against known, powerful, alleged "infringers"), it could be argued EMI has helped create confusion and has lessened the distinctiveness of an already weak mark.
A trademark holder has a responsibility to prevent a loss of distinction of its mark. Allowing well-funded companies to use "entrepreneur," such as Entrepreneur America, etc., violates the fundamental need to police the mark honestly and fairly.
Trademarks are unique in that they are owned by the trademark holder. But, the trademark holder also has a responsibility toward the public. Trademarks began when craftsmen put their mark on goods to identify the source.
The right of the craftsman is protected by preventing others from trying to sell products under that mark. This prevents the "palming off" of fake goods as the original. In another sense, it tells consumers that they may expect a certain level of quality with the product.
But, when a trademark holder fails to police its mark, the mark loses its source-identifying power and, with that, any level of quality assurance. It's that source-identifying power which gives the mark its legitimacy. A lack of policing can lead to consumer confusion.
A recent historical decision said that the mark Leonardo Da Vinci was abandoned due to naked licensing, a situation where a trademark holder failed to offer an assurance of quality control for its licensees. Trademark rights can be lost through the actions or inactions of the trademark holder.
The interesting question is: What happens when a company creates a façade of policing its mark by threatening smaller competitors, but fails to take action against larger, well-funded infringers? It opens up the question of anti-competitive behavior by the trademark holder.
4. What is "Secondary Meaning" ?
"Secondary" means second in time, not secondary in importance. The first meaning the word or phrase had is its "Primary Meaning."
The question becomes: How is the word or phrase understood by the appropriate market? Secondary meaning implies that a substantial portion of the market associates the word or phrase, not with the nature of the product, but with a single producer. Within the appropriate market, "Secondary Meaning" is actually taken to be the most common and "primary" or natural use of the word. The primary understanding of the word "Entrepreneur" within the appropriate market is the dictionary definition.
5. What is meant by "Mark Strength"?
If you create an entirely fanciful expression like NoodleEntrepreneur, Entrepreneurville (already taken. Drat!), or "Curious George," or something else totally silly, there really isn't a market need for others to be able to use those expressions. So, they are afforded a high level of trademark protection and called "strong" trademarks.
Another category of strong trademarks are "arbitrary" trademarks. This is where words are used far outside their heartland dictionary definition. For example, applying "Apple" to modify computers is an arbitrary application of the word apple. It has nothing to do with the original dictionary definition of apple.
Then there are suggestive trademarks, which aren't as strong. Finally, there are descriptive trademarks. Descriptive trademarks are the weakest of all. And, for a descriptive trademark to be registered, proof of secondary meaning is (theoretically) required.
The Ninth Circuit Court of Appeals has already ruled that at best "entrepreneur" is a weak, descriptive trademark. The only higher Court in the land is The Supreme Court.
6. What is "Incontestability"?
Incontestability means a mark that has been used for five years will be entitled to certain extra protections. For example, as mentioned, an incontestable mark can't be cancelled because it's merely descriptive with a lack of secondary meaning (even if it is merely descriptive and has no real secondary meaning). Courts are divided as to whether an incontestable mark can be cancelled if it's deemed to be functional.
Grounds for cancellation of an incontestable mark include: Fraud upon registration; Genericness; Anti-Trust Violations, and Abandonment.
The problem arises if a highly-descriptive word without secondary meaning sneaks through the USPTO and is registered. Then, if the mark sits for five years, it becomes incontestable. As the situation now stands, the registrant will have pulled a fast one on the USPTO and the registration process.
In theory, it's argued that registration provides constructive notice, and anybody could have filed an opposition to the mark. But, come on?! Who thinks they can't use a word like "entrepreneur" within its dictionary definition? And, if EMI didn't enforce the mark for the first five years, there wouldn't be any reason for anybody to challenge or cancel it.
In fact, by failing to police the mark within the first five years of registration, EMI has implicitly acknowledged the genericness of the term.
That's another aspect unique to the entrepreneur case. EMI's mark is incontestable, but it could be argued that they never enforced the mark until it became incontestable and couldn't be challenged for lack of secondary meaning.
7. What Can I Do To Help Protect The Word "Entrepreneur"?
We feel that Entrepreneur Media, Inc.'s (publisher of Entrepreneur Magazine) attempt to control a generic word and attack smaller companies for use of the word "Entrepreneur" while ignoring and acquiescing to fully equivalent use of the word by larger, well-funded companies is unconscionable.
Possible ways to help keep the word "entrepreneur" free:
Incidentally, if you use the expression "Entrepreneur Network," now is the time to cancel EMI's trademark of the word "Entrepreneur" with respect to online networks for entrepreneurs, because soon that trademark will also become "incontestable." It can still be challenged on grounds that it lacks secondary meaning. Only EMI's mark with respect to print publications is incontestable. For the trademarks in question see The Entrepreneur Trademarks. Of course, it appears EMI hasn't attempted to enforce this particular trademark against the numerous larger companies using "Entrepreneur" to point to their websites.
If you wish to cancel the trademark of "Entrepreneur" with respect to online networks, contact Jeff Busche (contact information at Entrepreneur.net.
Entrepreneurs.com also has more information about this trademark issue.