IP Thoughts

Is Dell Trying to Self-Destruct?

Rand Bateman — Tue, 27 Apr 2010 06:27:00 GMT

Every once in a while you have to take a look at a company and wonder if it is trying to self-destruct. I think Dell is a prime candidate for the Darwin Awards.

For the last 4 years my firm has been buying Dell computers. We have bought 12-15. It was easy to get on line, build what you wanted and get it delivered in a fairly short order. Well, that was the old Dell. The new Dell is trying to make sure customers do not come back.

About 2 months ago I decided it was time to order a new laptop. The ADAMO looked pretty good. It is very thin and had good reviews. So I put in an order. Well, at least I tried to. It turns out that Dell has assigned a representative to handle our account. What does that mean? It meant it took 4 telephone calls, 2 days and over 30 minutes on hold to talk to our representative so we could place the order. Dell would not allow us to simply order on the phone like individual customer could. O.K. so we finally got it ordered. When it arrived, it looked pretty good - well except that the cd/dvd drive (which is separate) was "pearl" and the compute was black. O.K. so we had to send the drive back to get the proper color.

So I finally had my new machine. The batter life was much shorter than advertised. I got about 2.5 hours, which is not great when it is a built in battery.

I decided I could live with the short batter life. Would by an external that would plug in. However, before I could order the external battery, the ADAMO crashed. We are talking EPIC FAIL. It would not even reboot. Yes the solid state drive - looks like it was not that solid. It appears that the computer also had major heat problems.

Well what do you do with a new dead computer? You call to get it replaced. Due to demand they told me it would take just over a week to get the new one shipped. Fortunately, I had been too busy to clean off my old lap top - and it has been in use ever since. Unfortunately, shortly before the first ship date I was notified that the ship date had been delayed. I got the same message just before the second scheduled ship date. Now, three weeks later, I do not even have a ship date on a replacement. I do however, get a call every couple days from a nice young lady in India ensuring me that they are doing their best to meet my urgent need.

I recently looked at a service that gave consumer rankings for websites. Dell.com got a 1.6/10. Can a company with such poor customer service be around long? If I owned any Dell stock, I think now would be a good time to sell.

So, if you are looking for a new laptop, I would definitely recommend skipping the ADAMO, unless you want a nice looking paperweight. As for me, I think I will try the MACBOOK PRO.

Unintended Consequences

Rand Bateman — Sat, 24 Apr 2010 00:15:00 GMT

One of the problems when Congress acts is that they often do not look at the unintended consequences. In the rush to do something to regulate the banks who help create our current financial mess, they are proposing regulations that will adversely affect financial institutions that had nothing to do with the meltdown. A prime example is USAA. USAA is an organization that is open to members of the military and their children. It provides banking, insurance and a host of other services. It is consistently rated among the best run financial companies. Unfortunately, the current financial reform bill will interfere with that. The following is an email I received from USAA earlier this week.

Dear Mr. Bateman:

Rarely in our 87-year history have we turned to USAA members to weigh in with elected representatives on an issue of great importance. But, we are now.

The U.S. Senate currently is considering legislation (S.3217) that would impose new rules on the nation's financial services industry, including USAA.

As the leading provider of financial services to America's military community, USAA supports financial services reform.

However, the current Senate bill would disproportionally impact USAA because we are a unique and fully integrated association. USAA is not like the banks and other companies that helped bring down our economy, and we never took a penny of TARP funds. We do not engage in the harmful practices this legislation seeks to resolve.

If unchanged, the bill would:

Prevent USAA from managing the association's portfolio as we have for the past 87 years.
Jeopardize our ability to continue offering many of our competitive products.
Limit our ability to return money to our members. Last year, USAA returned $1.2 billion to our members in the form of distributions, dividends, and bank rebates and rewards.*

So, we are asking all USAA members and employees to urge their U.S. senators to amend a portion of the bill, known as the "Volcker Rule," to eliminate its effect on a company like USAA. Please know that this legislation does not impact individual member's investments.

Regardless of the outcome of the legislation, USAA will remain a unique and enduring association that's all about you — the military and their families.

Please take action on this matter by immediately contacting your U.S. senator. You may click here to access a special website that will enable you to quickly send an e-mail message to your senator.

Thank you for your help and support,

Josue (Joe) Robles Jr.
Major General, USA (Ret.)
President and CEO

One of the problems with passing laws in response to problems is that they often penalize those who are trying to play by the rules and are ignored by those who are not. One thing that the government ought to try is going after firms under current rules or carefully drafting rules to apply to the misbehavior rather than penalizing the companies that play it straight.

Utah Genius 2 Weeks Away

Rand Bateman — Thu, 22 Apr 2010 03:05:00 GMT

The Second Annual Utah Genius awards are now just two weeks away. The awards are designed to recognize those who are making prolific contributions to our creative economy. Sheri Dew of Deseret Book is the lifetime achievement honoree. Awards are also given for Utah's Top 20 Inventors for 2009, Utah Top 20 Companies by Patents Issued to Utah Inventors, the top cities by number of patents and Utah's Top 20 Trademark Registrants.

Governor Herbert is providing opening remarks and Doug Fabrizio is the Keynote Speaker

For more info check out Utah Genius

Robbing Peter to Pay Paul

Rand Bateman — Fri, 09 Apr 2010 14:14:00 GMT

"A government that robs Peter to pay Paul can always depend on the support of Paul." This quote by George Bernard Shaw takes on new meaning when you look at the recent statistics about American taxpayers. Forty-seven percent (47%) of households pay no Federal Income tax and forty percent (40%) of households actually get money back, offsetting whatever they pay in Social Security taxes. (It is hard to understand how Pres. Obama will keep his promise to lower taxes for the bottom fifty percent (50%) other than simply sending everyone making less than $50,000 a year a check courtesy of the evil rich people.

Those evil rich people, the top ten percent (10%) of income earners, refuse to pay their fair share. After all, they only pay seventy-three percent (73%) of all income taxes. So much for the oft repeated lie that the middle class is bearing an unfair tax burden.

It may sound good at first to be able to have the upper 10% pay all of the taxes. I mean, why steal when you can get the government to take it for you. The problem arises in that those who are truly rich can vote with their feet. New York found this out when it passed a "millionaires tax" to raise extra revenue. For some reason the revenue did not pan out like New York had hoped. Rather than pay the additional taxes, a large number of millionaires decided to move to sunny Florida and other states with lower taxes. Not only did New York lose out on the taxes, it also lost jobs as these millionaires relocated their companies to more business friendly environments.

For decades the U.S. has benefited from wealthy Europeans relocating to the U.S. to avoid high rates of taxation in the countries of origin. The problem is that while the U.S. is now advocating even greater taxes on the rich, many European countries and cutting taxes. Are we setting up a scenario to reverse the flow of capital. To paraphrase Margaret Thatcher - The problem with Socialism is that sooner or later you run out of other people's money.

Can you imagine what it would happen if for one year the top ten percent (10%) decided to defer enough income to reduce their taxes by fifty percent. It is not that hard for someone making $350,000 to defer $110,000 in income and drop out of the top tax bracket. In fact one wealthy American during the great depression arranged his finances to pay no taxes for several years at the height of the Depression to protest Pres. Roosevelt's confiscatory taxes. If it happened on a widespread scale, Pres. Obama could go down in history as the first President to have a $1 Trillion deficit and the first to have a $2 Trillion deficit.

Utah Genius May 5th at the Little America

Rand Bateman — Thu, 08 Apr 2010 16:14:00 GMT

It is that time of year again - time to honor the most prolific innovators in Utah. This year Utah Genius will be honoring Utah's Top 20 Inventors, The Top 20 Companies/Organizations based on Utah inventions, the Cities whose residents get
the most patents and the Top 20 Trademark Registrants.

Governor Herbert will be providing our opening remarks. Doug Fabrizio of KUER will be the Keynote Speaker and Sheri Dew, CEO of Deseret Book will be the Lifetime Achievement Honoree. For more information, visit Utah Genius

Indispensable By Monday

Rand Bateman — Tue, 16 Mar 2010 15:08:00 GMT

Last week we had a training session in firm from an outside consultant. I often do not use outside consultants because few of them understand the legal profession. However, after hearing Larry Mylar speak at the UVEF

luncheon I thought I would give him a try. While Larry's focus is really on much larger corporations and law firms are not an exact match for his model, Larry did a great job of customizing the discussion to the needs of our organization and helped us focus on a couple of points were we could improve our firm. I would also recommend his book, Indispensable by Monday for anyone looking to get their employees vested in profitability of your company.

And The Lock Box Is - - - Mostly Empty

Rand Bateman — Tue, 16 Mar 2010 04:37:00 GMT

Does anyone remember when Al Gore talked about the social security lock box? The lock box got opened recently. Well, it isn't really a lock box, but a set of filing cabinets. And while it was projected that social security would be bringing in more than it paid out for several years to come, the economy has fast forwarded us to the time when more is going out in social security payments than is coming in.

So what was inside? Loads of cash to help social security? Nope! The lock box held nothing but binders full of IOUs. $2.5 Trillion worth. For decades our Presidents and Congress have been borrowing the surplus money in social security to minimize the amount which the government has to borrow from other countries. Now it is time to start paying it all back. So at a time at which our Federal Government is running record setting deficits, it now needs to borrow even more from abroad to pay back social security. Even with the government paying back the IOUs - which may be iffy if it cannot contain spending - social security is now projected to run out of money in 2037. (27 years may sound like a lot, but that is before anyone 40 or under will be able to require with full social security benefits).

This is a financial train wreck that is happening in slow motion. One only need to look around at our own neighborhoods to see the consequences of reckless spending. While we are in a deep mess, the first thing to do when you find yourself in a hole is to quit digging. If we start making hard decisions today, we have a chance of escaping a complete meltdown that will make Fall of 2008 look like an economic boom. If we keep trying to fix our economy by borrowing from our children and adding mounds of government regulations on businesses - we will be getting a foreclosure notice signed by Japan and China.

Equalization is Not Equal

Rand Bateman — Wed, 24 Feb 2010 04:40:00 GMT

I have to hand it to the Jordan School District. They have done a great job of playing the victim and spinning the facts. Their PR people should be proud.

For nearly a decade the Jordan School District poured money into building new state of the art schools on the west side while all but ignoring the aging schools on the east side of the district. After years of frustration, the residents on the east side finally decided to leave and start a school district that would take their children's safety and comfort a little more seriously.

Right out the gate residents on the west side complained that they did not get to vote. Of course, there is no doubt how they would vote. Why let the east side leave then all that tax money from the east side was busy building new, state of the art schools on the west side? Who cares if kids on the east side are going to schools built in the 1960s and 1970s that do not meet earthquake codes, if our kids are getting the latest and greatest?

So when the east side voted to leave, did they cash in. No! To the contrary, the new Canyons School District has to pay nearly 59 percent of the debt service on all of those new schools on the west side. ($20 Million per year). This while it is estimated that Canyons School District needs to spend nearly $650 Million on its aging schools.

Having received a $20 Million annual subsidy, the great PR department for the Jordan School District came up with yet another way to extract more money from Canyons. When Canyons left, the tax revenue per pupil went up in the Canyons and down in Jordan School District. There is now nearly a $1,000 per student variance. Ah! Jordan can claim victim status once again by demanding that Canyons District give some of that disparity to Jordan. Of course, when arguing its case to the media, the Jordan School District completely omits the fact that it has a stable full of brand new schools while Canyons District needs $650 million for capital improvements.

If Canyons were to keep that $1000 per student difference, it would take 19 years to make all of the renovations needed for its aging schools. However, legislators from the cities in the Jordan School District are now seeking an addition $15 million annual tribute to "equalize" tax revenues. Why don't they propose anything to "equalize" the great disparity in physical assets? Because, despite the claim to being a conservative state, many of our legislators love a bailout. Any time you can get your hands on other people's money, count them in.

Here is a really radical idea. The residents of the Jordan School District actually raise their taxes to provide adequate funding for their school district. Otherwise, you are doing the same thing you are complaining about OBAMA. Redistribution is redistribution, regardless of who votes for it.

Trademark Overreaching by IOC

Rand Bateman — Fri, 19 Feb 2010 16:24:00 GMT

Every so often a large entity gets the crazy notation that having a trademark gives them ownership of a word, rather than the exclusive use of the word for their goods or services. The NFL is notorious for trying to own the word SUPERBOWL, even though there are numerous contexts in which use of the word by others would be fair use.

Not be be outdone, the International Olympic Committee apparently believes that it owns everything involved in the Olympics, right down to the names of the athletes. While some companies may legally challenge the IOC's silly position, others have responded with a flair that demonstrates the baselessness of the IOC's position while simultaneously having a little fun. Check out the retort by UVEX, when an athlete who uses their products, Lindsey Vonn, wone the gold medal in the downhill.

UVEX should post the letter from the IOC, just to give everyone a good laugh.

North Face's Case is the South Butt

Rand Bateman — Tue, 16 Feb 2010 16:29:00 GMT

One of the things that frustrates many people with our courts is the inability to resolve matters quickly. A plaintiff with a lot of money can drive a competitor under regardless of the merits of its claims. In part, it has to do with judges not just stepping up and saying that there is no way a jury could find for the Plaintiff. Even if it would not totally resolve the case, such action by a judge could really streamline the litigation.

One case that seems to beg such action by the court is The North Face Apparel Company v. Williams Pharmacy et al. Williams Pharmacy sells product of The South Butt, LLC another of the defendants.

While North Face has trade dress claims based on its "iconic" coat design, the major issue is whether the mark THE NORTH FACE is infringed by the mark THE SOUTH BUTT. Apparently, North Face believes that consumers cannot determine the difference between North and South or between a face and a butt.

Clearly, the THE SOUTH BUTT mark is a parody on THE NORTH FACE. Not only does South Butt parody the name, it also makes fun of THE NORTH FACE slogan "NEVER STOP EXPLORING" with the retort NEVER STOP RELAXING. On top of SOUTH BUTT's website, it also adds the question "Why climb mountains?"

It is clear that THE NORTH FACE does not like being the "BUTT" of the joke. But does anyone actually believe that consumers are likely to confuse the two marks as originating from a common source. One is clearly mocking the other. (Apparently the Court believes that a jury in Missouri could find a likelihood of confusion.)

"Winkelmann and The South Butt also argue that the marks are so dissimilar that The North Face cannot possibly prevail. I do not find it to be implausible that the marks cannot cause a likelihood of confusion or dilution."

That does not speak well for the jury pool in the Show Me State.

What is even more frightening is that, not only did the Court deny the motion, the Court suggested that the motion bordered on the frivolous. The Court noted:

"I remind counsel of their obligations under Rule 11 and that, with each filing, they certify to the Court that the motion is not being presented to harass, cause unnecessary delay or needlessly increase the cost of litigation and that the legal contentions are warranted by existing case law or nonfrivolous arguments for extending, modifying, or reversing existing law or for establishing new law. Although this filing may not reach the level of frivolity, it approaches the line."

WOW! So much for parody and the First Amendment.

U.S. IP Is Worth More Than The GDP Of Any Other Country

Rand Bateman — Fri, 12 Feb 2010 16:22:00 GMT

No one doubts that the U.S. is no longer a manufacturing giant. We have lost most of those jobs. So where does our wealth come from. According a presentation by Ocean Tomo (the largest marketer of intellectual property) at the Utah State Bar IP Summit, the value of U.S. intellectual property is worth between $5-5.5 Trillion dollars. That is greater than the gross domestic product of any other country. This makes up roughly 75 percent of the valuation of the S & P 500.

One of the eventual goals to is create a market for trading intellectual property analogous to the commodity exchanges in Chicago. One thing that is clear is that IP has become an asset separate from the operating entity where it is created.

Interesting Inventions

Rand Bateman — Fri, 12 Feb 2010 15:12:00 GMT

Being a patent attorney is enjoyable because you get to see cutting edge technology and some creative solutions to problems that have plagued people. Some solutions, though, are a little odd. One example is the Easy Inter Burial Container in which a body is a placed in a giant screw and then drilled into the ground. It would definitely be more efficient - but may a little less solemn as grandpa spins into the ground.

Steal Your Children's Future

Rand Bateman — Tue, 02 Feb 2010 01:51:00 GMT

It is ironic that it is illegal to open accounts in your children's' names and go into debt. It is identity theft and you can do jail time.

In contrast, you can steal much more from your children by simply electing politicians who will continue to run up the national debt. Currently, our national debt is just shy of $40,000.00 per person. A family of four owes $160,000.

So how are we dealing with our debt? The same way that we got into our current mess. This coming year the federal budget will be $3.83 Trillion. That works our to just shy of $12,500.00 per person, or $50,000.00 for a family of four. (The medium household income in the U.S. for 2007-2008 was $51,233).

So what will we do when the interest we pay on the federal debt exceeds the total revenues collected by the federal government (an event that could happen relatively soon if interest rates spike)? Simple, we will borrow more and pass the debt onto our children. We will have bankrupted the wealthiest nation on earth. We should be so proud.

Apple Is Having Trademark Troubles

Rand Bateman — Sun, 31 Jan 2010 05:02:00 GMT

It looks like Apple has made yet another mess in its trademark department. A few years ago Apple launched a revolutionary new telephone, only to get mired down in the fact that Cisco already had a registration for IPHONE for computer hardware and software for providing integrated telephone communication with computerized global information networks. Apparently Apple was able to work out a deal and get its own registration.

Having already been through that mess, you think Apple would have thought through the IPAD a little more carefully. The problem is that Fujitsu Transactions Solutions already has a pending trademark for IPAD and has use going back more than 8 years. Of course, Apple has filed for an extension to oppose Fujitsu's mark. Apple's likely position will be that it owns anything with an I in front of it. The odds of winning on that ground seem pretty slim. Thus, Apple will probably pay off another company. One wonders why not put a little more effort on the front end to naming your products so you avoid trademark conflicts.

When Patents are Worth Billions

Rand Bateman — Tue, 22 Dec 2009 14:13:00 GMT

The record setting patent awards continue. Recently a Federal judge ordered Abbott Laboratories to pay $176 M in interest to Centocor (a division of Johnson & Johnson) for sales of the drug Humira. That was on top of the $1.67 billion awarded for the infringement of Centocor's patent . A billion here, a billion there and pretty soon you are talking serious money.

Google Loses A Round

Rand Bateman — Tue, 22 Dec 2009 14:07:00 GMT

Google has lost a major round in its attempt to put digitized copies of books on the internet. Somehow Google thought it could overcome the copyrights of the authors whose works it was copying. A French court, however, recently disagreed, ordering Google to stop scanning French books and awarding $430,000 to copyright owners who sue Google for infringement. While the idea of having books on the internet is a great idea that will spread knowledge, Google does not get a free pass regarding infringing others copyrights.

Be Careful of What You Say - And More Careful of What You Don't

Rand Bateman — Wed, 28 Oct 2009 21:54:00 GMT

There has been a fair amount of press on the intention of the FTC to penalize bloggers for not disclosing renumeration (money, free product, etc.,) that they receive when the write posts endorsing products. When you think about it, disclosure makes sense. Do we really want to have friends tell us things that are in reality just a commercial. The $11,000 potential fine, on the other hand, may be a tad on the excessive.

While the disclosure requirements on blogs has caught the media's attention, the new FTC rules actually go much further. If you advertise, you probably will want to make sure you aren't walking into a hornet's nest.

Everyone has seen the ads for the guy who went from a 250 lb. marshmallow to a ripped Men's Fitness model in a couple of months. (Much as most of us would like - it usually does not happen that way). If you look carefully, the advertisement will almost always have a disclaimer "results not typical." One of the big changes is that the safe harbor disclaimer will no longer be allowed. Now you will have to identify what typical results are. So if the your spokesperson is a freak of nature who lost 50 times your customers' average of 2 lbs, you are going to have to disclose that typical results are two pounds.

The disclosure requirement is also going to extend to peer to peer advertising. If you are are giving award points to a million teenagers who proselyte their friends for you, be aware that those "spontaneous" endorsements have to be disclosed as advertising. Yes, it kind of ruins the effect of peer to peer advertising when people realize that you are paying people to be their friends. However, failure to do so may bring down the ire of the FTC. "Hey Johny, that new video game I bought rocks - This has been a paid commercial for Jimbo's new video game."

Another interesting change in the rules is that the endorser may now also be liable for violations of the rules. Thus, if you make your living endorsing people's products, what you do not say may be just as important as what you do.

What to do - read the rules and make sure that your latest ad campaign won't get you a visit from the FTC.

Here is the FTC Announcement

Here is the Revised Endorsement Guide

How to lose sales and disinterest people

Rand Bateman — Wed, 14 Oct 2009 22:25:00 GMT

It is a tough economy and it is understandable that people might stretch a little. However, if you are being completely dishonest, it will not help your prospects in the long term. In the last week I have several calls from people trying to get my business. Some were selling things and others were trying to get my firm to sponsor events. In each case the caller made a misrepresentation in an attempt to speak with me. A couple claimed that they were returning my call or that I had expressed interest in their product. No one at my firm was familiar with the company and I certainly had no interest in their product. The moment I realized that the person calling had lied to get through to me, the chance that I would ever do business with the company - for any product or service - went to zero.

Likewise, someone left me a voice mail indicating that we had called about sponsoring their event. I was unaware of the event and probably would not have been interested even if I had been. However, the mere fact that the caller lied to try and get a return telephone call told me not to do business with them again.

I always wonder why someone thinks I would do business with them if our first encounter is based on a lie. It may work in the short term by getting some confused individual to listen. However, in the long term it creates a lot of people who are no longer potential customers.

Take Down Letters and Misusing Intellectual Property

Rand Bateman — Thu, 08 Oct 2009 22:30:00 GMT

Most people dislike being criticized. Sure, we should stop people from engaging in slander or libel, but how about when they are criticizing poor work? Do you have the right to avoid criticism.

Apparently RALPH LAUREN believes that it does. Recently RALPH LAUREN ran an add for its clothing. Apparently, the model it hired did not look quite anorexic enough, so they used a little PHOTOSHOP magic to show a woman you can wrap your hand around.

One could go on about the fashion industry and whether it is responsible for the problems of anorexia and bulemia in today's young women. After all, your typical teenager cannot use PHOTOSHOP to get down to 75 or 80 lbs. Boing Boing, however, simply made fun of the poor use of PHOTOSHOP.

Apparently RALPH LAUREN did not appreciate the criticism. They had their New York attorneys send a take down letter claiming copyright infringement. Fortunately Boing Boing did not cave.

Using the copyright laws to try and shut down criticism has two major draw backs. First, the copyright laws have a fair use exception that allows copying - and use for criticism is about as clear of a fair use as it gets. Second, it risks the "Streisand effect" - named for the singing Diva who tried to stop publication of a photograph that included her beachfront home. Not only didn't she succeed, the photo got far more attention than it would have.

When someone has done something you do not like on line, you need to ask yourself a few questions before you send cease and desist letters or take down letters. First - is what they are doing really violating your rights? If not, threatening legal action based on intellectual property only makes you look stupid. Second - even if they are violating your rights, is the cure worse than the disease? In other words, will threatening them merely result in more publicity of the improper post, etc., A prime example of the Streisand effect is DirectBuy's attempt to shut down dissent which only backfired, as I discussed a couple of years ago. Their cease and desist letter made DirectBuy and their attorneys look stupid.

Protecting your rights is important. Thinking before you act is more important.

Chasing the Money

Rand Bateman — Tue, 29 Sep 2009 23:26:00 GMT

Last night I was reading the paper and came across an article that indicated a majority of people in the U.S. are in favor of taxing millionaires at 50%. Wow, have we really become such a jealous country that we want to take half of what people earn. While many have the attitude - so what they are rich, it makes you wonder who is going want to take the risk to start new ventures. If you fail - sucks to be you. If you succeed, we will take half. (I am unsure whether than included state taxes, so maybe the total is more like 55-60%).

The great irony is that on the same page there was also an article about how New York is not receiving the money it expected from its new tax on millionaires. It seems that at least some of the big earners have decided to move out of state and resettle where taxes are lower. Many high income people already own second homes in other states so the switch will not be hard. Look for the number of millionaires in Florida, Wyoming and Nevada to increase.

While gouging the other guy always sounds better, it comes at a cost. One of the people they interviewed who had moved out of New York relocated her company to Florida. Not only does New York not get her tax money anymore, it also lost a number of jobs that the people in Florida were more than happy to fill.

The same thing can happen on a global scale. There is a reason that countries/states like the Bahamas, Monaco and others have a large number of very wealthy from other countries. If you raise taxes to high, the golden goose will fly away.