One of the world’s most influential companies and recognized brands formally announced a transition to the name META on October 28th. The desire of Facebook, the 34th-ranked company on the 2021 Fortune 500 List, to hit re-fresh on its corporate name is understandable. After months (years) of scrutiny from social media users and critics, governmental regulatory agencies, and both sides of the political aisle for practices that may be considered, at best, unscrupulous, the idea of shedding a negative public perception and capitalizing on the tantalizing prospect of the METAVERSE seems attractive. BUT – does Facebook have the right to transition its name to Meta? According to Meta PC, an Arizona based company, it does not – and doing so will come with a $20 million dollar price tag.
On October 28th 2021, Facebook, Inc. filed an “intent to use” application to register the mark META at the USPTO in connection with seven classes of recited services. The fact that Facebook filed an “intent-to-use” application is meaningful, as it has not yet identified a date by which it has used the mark META, in commerce, in connection with the services identified in its application. This leaves it vulnerable to attack from a senior user of a similar mark in connection with similar services. Facebook’s META application bears serial number 97097363 and if you are so inclined you can search the application on the USPTO site and read through the painstakingly detailed recitation of services. To no one’s surprise though, the application indicates that Facebook plans on using META in connection with online social media networking, the design and development of computer hardware and software, entertainment services, telecommunications, etc.
SO….WHAT’S THE ISSUE?
On August 23, 2021 - more than two months prior to Facebook’s application being filed – Meta PC filed an application to register the same mark at the USPTO, namely META, in connection with the following identification of goods:
Computers, laptops and portable computers, tablets, computer peripherals, servers, networking equipment, software, computer components, namely, ram, disk drives, namely, hard and optical disk drives, and all related accessories, namely, keyboards, mice, wireless keyboards and mice, speakers, external hard drive backup devices, wireless air cards, wireless routers, monitors, chairs.
Most importantly, this application was filed based upon Meta PC’s alleged actual use of the mark META, in commerce, in connection with the recited goods. Meta PC’s application indicates a date of first use of November 1, 2020; meaning it alleges to have been using the mark for nine whole months prior to filing its application at the USPTO.
So – to recap – Meta PC is not only the first to file an application at the USPTO, but also, and more importantly, the first user of the mark in commerce. Is there a storm brewing at the USPTO?
Once an application is filed at the USPTO, the first step in the registration process is for the application to be assigned to an Examining Attorney. The Examining Attorney’s role is akin to the registration gatekeeper, as he/she will be the one responsible for initially approving applications for publication and registration or raising through the issuance of an “Office Action,” issues which it is believed bar registration. The standard that the Examining Attorney applies is essentially the same one that is used when a case of infringement is litigated in federal court, namely is there a likelihood that consumers/customers of the involved goods and/or services will be confused as to the source of those goods and/or services as a result of multiple parties using similar or identical marks.
Whether a likelihood of confusion exists between two marks is a legal conclusion that takes into account a variety of factors including the similarity of the marks, the similarity of the goods/services at issue, channels of trade, consumer sophistication, strength of the marks, and more. It is not enough to merely argue a slight difference in the marks or that the goods/services at issue are not identical. Again, the ultimate question is, based upon the totality of relevant factors, whether consumers would be likely confused as to the source or origin of goods/services, or would assume there is a sponsorship/affiliation/connection between the unrelated entities.
As of 11/18/2021, neither Facebook’s META application nor Meta PC’s META application has been assigned to an Examining Attorney. The Examining Attorney who eventually becomes assigned Facebook’s application will be tasked with answering the question of whether there exists a likelihood of consumer confusion between Facebook’s META mark, and all other marks found in issued registrations and pending applications at the USPTO, including and especially Meta PC’s META application. Consider:
1. Meta PC was the first to file at the USPTO. Filing an application at the USPTO is deemed to provide constructive notice of the mark’s use, so Facebook will be unable to argue it was unaware of Meta PC’s use of the mark META. If Facebook had been USING the mark Meta prior to Meta PC’s first USING its mark, Facebook’s rights in the mark would trump Meta PC’s (but that appears not to be the case!).
2. The most important factor in a likelihood of confusion analysis is the similarity of the marks. Here, they are identical. The next most important consideration is the similarity of the goods/services offered under the respective marks. Here, Facebook wants to use its mark in connection with social media SERVICES and computer and software type SERVICES, while Meta PC is using the mark in connection with computer related equipment and GOODS. So, the goods of one vs the services of another – not identical…but are they related enough so as to likely cause consumer confusion, specifically when the marks are identical? Are the goods/services “substantially related” so as to cause the misperception of a sponsorship, affiliation, or connection between the owners of the marks?
3. One would think that an Examining Attorney should find the marks conflicting, and, therefore suspend Facebook’s application pending either the registration or abandonment of Meta PC’S mark. (Advantage of being the first to file – if two pending applications are deemed “conflicting” – the later filed application will be the one suspended.) Should Meta PC’s mark register, Facebook is left with the prospect of staring down an Office Action issued by an Examining Attorney refusing Facebook’s registration of META, citing a likelihood of confusion based upon Meta PC’s registration. Facebook would have an opportunity to respond to the Examining Attorney’s Office Action, but this is a process that would not be cheap, and more importantly for Facebook, would take additional time.
4. Let’s say Facebook persuades the Examining Attorney that confusion isn’t likely between the two marks, and thus as a result the Examining Attorney’s Refusal is withdrawn. The Examining Attorney would then approve Facebook’s mark for publication. But the next step would present a thirty day window (with extensions available) for Meta PC (or anyone else) to oppose registration of META to Facebook. This would spark litigation at the USPTO’s Trademark Trial & Appeal Board, and is a step Meta PC would surely take, as it would intensify pressure for Facebook to cut a deal with Meta PC. An Opposition proceeding of this magnitude would take YEARS before resolution, and this would only provide a ruling on the mark’s registerability, not actual use.
5. Suppose Facebook slogs it out with Meta PC, prevails in the Opposition, and is ultimately granted registration of the mark META. The door might still be open for Meta PC to sue Facebook in Federal Court alleging, amongst other causes of action, infringement and Unfair Competition under Section 43(a) of the Lanham Act. Facebook would be left risking a court ordered injunction against use of the mark, and possibly liability for damages, including treble damages (!) if willful infringement was found.
Facebook is basically left with two options: (1) risk YEARS of ugly and expensive litigation at both the TTAB and Federal Court levels where they could wind up enjoined from using the META mark AND possibly be found liable for substantial damages, or (2) work out an agreement with Meta PC to acquire rights to use the META mark. With infinite resources, Facebook is not daunted by the $20 million dollar price Meta PC has placed on the mark. But for the rest of the world, small and mid-size business owners, entrepreneurs, even owners of large businesses – there is no $20 million war chest lying around for avoidable trademark litigation! And, if there is, one would hope that is money that could be put to better use growing the company than litigating in court!
So what could Facebook – or any other business – have done to avoid a situation like this? The answer is shockingly simple. HAVE AN ATTORNEY SPECIALIZING IN TRADEMARK LAW CONDUCT A CLEARANCE SEARCH BEFORE COMMITTING TO A MARK. AND, IF A POSSIBLY CONFLICTING MARK IS LOCATED, MOVE TO ANOTHER, DISSIMILAR, MARK!
I find it hard to believe that Facebook’s legal team – which must be comprised of an army of attorneys – did not conduct a search for the mark META before publicly committing to it and filing an application to register it. They had to have known of Meta PC, and Meta PC’s previously filed META application, and its use in commerce of the mark. (This is why the antennae has to go up with a willful infringement claim!). And yet Facebook still filed its application. Even if the parties butt heads and Facebook winds up prevailing at the TTAB, and then subsequently in Federal Court if necessary, why risk CERTAIN exposure to further bad press, delays, and uncertainty in the first place? Either re-brand to a mark that safely clears searching or acquire the rights to the META mark from Meta PC before filing the application, and before making any commitment or significant expenditures relating to the possible adoption of what might very easily be concluded, at the TTAB and/or in Federal Court, to be someone else’s mark!
I guess when $20 million dollars is chump change you can afford to act recklessly. For the rest of us, make the initial investment of some hundreds of dollars to have an experienced trademark attorney search a mark before committing to it, and use your litigation war chest, or your credit line, to expand and develop your business instead!