USPTO doles out rejection to KGB's 542 542 servicemark application

What a HUGE HUGE embarrassment for a company that processes something on the order of one billion search inquiries per year and prides itself on having the ability to turn just about any simple question into a simple answer. Yet, KGB hasn't the foggiest idea of what a trademark is. For had they any idea of what a trademark is, they wouldn't have failed two times at trying to prove to the U.S. Patent and Trade Office that their '542 542' 'brand' functioned as a service mark (a service mark falls under the category of trademark.) In late August, the USPTO maintained and finalized its rejection, initially made by a USPTO examining attorney in January 2009, of KGB's applied servicemark '542 542,' which is the SMS number for the kgbkgb service. The rejection notice was stamped, sealed and delivered with the explanation that KGB's application 'shows the mark used as a text number and informational in the nature of an instruction.' The USPTO was referring to a 'specimen' submitted as proof months after the initial rejection; the specimen was a photo of the back windshield and side panel of one their Smart Cars that bore the following phrase in large lettering: 'got questions? text 542 542 now.' The USPTO rejection notice states that this 'specimen' was simply an instruction to dial a phone number and bore no qualities of a mark; it failed to act as a distinctive indicator to identify that kgbkgb's services originates from a unique source. The USPTO went the step further of clarifying that 'not every word, design, symbol or slogan used in the sale or advertising of goods and/or services functions as a mark, even though it may have been adopted with the intent to do so.' KGB didn't understand this simple nuance the first or second time.

First, KGB established the kgbkgb service, which coincidentally (or more likely not) spells a confusingly similar SMS code (542 542) to ChaCha's (242242). (ChaCha lodged a letter of protest with the USPTO over this bizzare-ity.) Then, the USPTO's 'FINAL...refusal to register the mark.'

Perhaps KGB ought to rethink their tagline: 'got questions? text your friends, not us.'


Here's the text of the August 24, 2009 decision:


THIS IS A FINAL ACTION.

The office received the applicant’s response on July 16, 2009. The examining attorney has carefully read and considered the applicant’s response. The identification of services is accepted. However, the refusal to register the applicant’s mark under Trademark Act Sections 1, 2, 3 and 45 is maintained, and now made FINAL.

FAILURE TO FUNCTION AS A SERVICE MARK

Registration is refused because the applied-for mark, as used on the specimen of record, does not function as a service mark to identify and distinguish applicant’s services from those of others and to indicate the source of applicant’s services. Trademark Act Sections 1, 2, 3 and 45, 15 U.S.C. §§1051-1053, 1127; see In re Moody’s Investors Serv., Inc., 13 USPQ2d 2043 (TTAB 1989); In re The Signal Cos., 228 USPQ 956 (TTAB 1986); In re Hughes Aircraft Co., 222 USPQ 263 (TTAB 1984); TMEP §§904.07(b), 1301.02 et seq.

The applied-for mark, as shown on the specimen, does not function as a service mark because it shows the mark used as a text number and informational in the nature of an instruction .

The specimen of record, along with any other relevant evidence of record, is reviewed to determine whether an applied-for mark is being used as a service mark. In re Volvo Cars of N. Am., Inc., 46 USPQ2d 1455, 1458 (TTAB 1998). Not every word, design, symbol or slogan used in the sale or advertising of goods and/or services functions as a mark, even though it may have been adopted with the intent to do so. A designation cannot be registered unless purchasers would be likely to regard it as a source-indicator for the services. TMEP §1301.02; see In re Moody’s Investors Serv. Inc., 13 USPQ2d 2043, 2047-49 (TTAB 1989).

ChaCha lodges formal protest over KGB's mark '542 542'

Ok, I'm far from a legal expert, and please chime in if I'm wrong, but from what I gather, information on the USPTO database indicates that last week the Office received a 'letter of protest' from ChaCha's lawyers regarding KGB's application for the servicemark '542 542,' which incidentally was initially refused by the Office in February. ChaCha brought attention to its own mark and objected to KGB's mark (application) apparently because of infringement (it is confusingly similar to ChaCha's mark of '242242'). The USPTO notices indicate that ChaCha's letter was 'accepted' - because ChaCha's evidence 'established a reasonable case for refusal, requirement or suspension' - and the Examining Attorney is going to mull it over. Since the 'letter of protest' was received prior to the timeframe for 'publication' (for objection by protestors) the decision lies within the EA's jurisdiction.

Does this mean that ChaCha didn't want to wait until the 'publication' timeframe, if kgb's application went that far, and sent its objection early on to accelerate the 'refusal, requirement or suspension' of kbg's application?

The images of the USPTO public notices and internal correspondence are below:

kgbkgb tour

Something called the kgbkgb tour is brewing at the Knowledge Generation Bureau. That's all we know....

Friday Humor

A CEO texted kgb asking 'How do I successfully register a trademark?'

kgb answered: 'Do not know, text ChaCha.'

KGB's trademark '542 542' initially refused by USPTO

On January 13, 2009, the examining attorney at the United States Patent and Trademark Office (USPTO) sent a non-final notice to KGB initially refusing their application for the service mark of '542 542.' The text of the notice mailed to KGB in mid-January is below, copied in part.

What does this all mean? Well, it appears that KGB hasn't adequately established in the marketplace the association of '542 542' with its text-answer service (kgb_text) nor have they adequately established the association of the mark (542 542) with KGB. Uh oh! The USPTO charges that 542 542 has been marketed (and viewed as purchasers) as a telephone number (i.e., SMS code) and 'not used as a source-indicator for services as identified in the application.'

A quick look at ChaCha's 'prosecution history' with the USPTO shows that their mark application was never subjected to initial refusal; four days after ChaCha's mark was assigned to an examiner, the mark was approved for publication and well along the way in the process towards successful registration. However, the day after KGB's mark was assigned to an examiner, the non-final action was written and mailed. Uh oh!

What did ChaCha do right that KGB did wrong? For starters, ChaCha decided to create a mark of a continuous string of numbers ('242242') whereas KBG created a mark consisting of two '542's ('542 542') broken apart by a space. KGB's mark may appear to some as an incompletely written U.S. telephone number. ChaCha, obviously, avoided that confusion. Two, it appears that ChaCha did a better job leading up to its application for its '242242' mark by plastering '242242' everywhere ChaCha President Brad Bostic blogged and spoke, and of course in ChaCha's advertising. In contrast, KGB jumped the gun by filing its mark application well before they established '542 542' as an 'identifier' for its 'kgbkgb' text-services AND as a mark associated with KGB.

What's next? KGB will have to submit proof (specimens) to convince the examining attorney in their 'case' to reconsider. But at least KGB cleared the first hurdle of the 'similarly confusing' mark test. The examining USPTO attorney conducted a number of mark searches to determine if there are 'similar registered or pending marks that would bar registration under Trademark Act Section 2(d), 15 U.S.C. §1052(d). TMEP §704.02' to '542 542' and he/she found no such marks. It's not clear if USPTO examining attorneys look for confusingly similar registered marks (that correspond to SMS codes) using a phone keypad as a frame of reference; it appears they don't by the looks of the 'XSearch Search Summary' e-file for KGB's 'case'. This is something that ChaCha can bring up when they oppose KGB's mark for '542 542' after, if, it becomes published.

[Emphases ours]

FAILURE TO FUNCTION AS A SERVICE MARK

Registration is refused because the applied-for mark, as used on the specimen of record, does not function as a service mark to identify and distinguish applicant’s services from those of others and to indicate the source of applicant’s services. Trademark Act Sections 1, 2, 3 and 45, 15 U.S.C. §§1051-1053, 1127; see In re Moody’s Investors Serv., Inc., 13 USPQ2d 2043 (TTAB 1989); In re The Signal Cos., 228 USPQ 956 (TTAB 1986); In re Hughes Aircraft Co., 222 USPQ 263 (TTAB 1984); TMEP §§904.07(b), 1301.02 et seq.

The applied-for mark, as shown on the specimen, does not function as a service mark because it shows the mark used as a telephone number and not used as a source-indicator for services as identified in the application.

The specimen of record, along with any other relevant evidence of record, is reviewed to determine whether an applied-for mark is being used as a service mark. In re Volvo Cars of N. Am., Inc., 46 USPQ2d 1455, 1458 (TTAB 1998). Not every word, design, symbol or slogan used in the sale or advertising of goods and/or services functions as a mark, even though it may have been adopted with the intent to do so. A designation cannot be registered unless purchasers would be likely to regard it as a source-indicator for the services. TMEP §1301.02; see In re Moody’s Investors Serv. Inc., 13 USPQ2d 2043, 2047-49 (TTAB 1989).

Applicant may respond to this refusal by submitting the following:

(1) A substitute specimen showing the mark in use in commerce for the services specified in the application; and

(2) The following statement, verified with an affidavit or signed declaration under 37 C.F.R. §§2.20, 2.33: “The substitute specimen was in use in commerce at least as early as the filing date of the application.” 37 C.F.R. §2.59(a); TMEP §904.05,. If submitting a substitute specimen requires an amendment to the dates of use, applicant must also verify the amended dates. 37 C.F.R. §2.71(c); TMEP §904.05.

Examples of specimens for services are signs, photographs, brochures, website printouts or advertisements that show the mark used in the sale or advertising of the services. See TMEP §§1301.04 et seq.

If applicant cannot satisfy the above requirements, applicant may amend the application from a use in commerce basis under Trademark Act Section 1(a) to an intent to use basis under Section 1(b), and the refusal will be withdrawn. See TMEP §806.03(c). However, if applicant amends the basis to Section 1(b), registration will not be granted until applicant later amends the application back to use in commerce by filing an acceptable allegation of use with a proper specimen. See 15 U.S.C. §1051(c), (d); 37 C.F.R. §§2.76, 2.88; TMEP §1103. If the same specimen is submitted with an allegation of use, the same refusal will issue.

To amend to Section 1(b), applicant must submit the following statement, verified with an affidavit or a signed declaration under 37 C.F.R. §§2.20, 2.33: “Applicant has had a bona fide intention to use the mark in commerce on or in connection with the goods or services listed in the application as of the filing date of the application.” 37 C.F.R. §2.34(a)(2); TMEP §806.01(b); see 15 U.S.C. §1051(b); 37 C.F.R. §2.35(b)(1).

View ChaCha's specimen (and the Firefox browser 'bookmarks toolbar' links and Windows system tray icons used by one of ChaCha's legal executives!) used in their mark application here

'It only takes one 542 to see that 242242 is best. And free.'

If I were the CEO of ChaCha and saw that my only competitor, KGB, just 'happened' to have chosen a SMS code that is 80-90% similar to mine, I'd be miffed.

It's obvious that KGB acted opportunistically when its top-brass realized the wordnumber for 'kgb kgb' was strikingly close to that of 'ChaCha.'

The rest is history: apply for the trademark, get the shortcode, buy the dotcom domain, ad spots with TV actors, press releases (and the NY Times blogs about you), and voila, everything's starting to look great.

'Ladies and gentlemen, on this side of the ring, our lightweight challenger, ChaCha aka '242242!' And, on this side, our heavy-weight, 'KGB,' is [laughter] wearing...is wearing what seems to be ChaCha's outfit! It looks like KGB is mocking ChaCha's wardrobe, down to the robe, boxers and all. Our challengers, gents and germs, look nearly the same! And ChaCha's, eeeeeeeeeeeeeeeew, is not happy, and....'

If ChaCha wants to win the first round against their better trained opponent, they should give their opponent a dose of their own medicine. And so, why not do what KGB is doing to you: reverse the tide by eating at KGB's traffic! Why not register common shortcodes and domains that both you and KGB's customers might type by accident!

Here's a few shortcodes* that are available at the time of press that no one can argue against you registering for preservation of your brand:
242542 AVAILABLE
542242 AVAILABLE
54224 AVAILABLE
24254 AVAILABLE

* I'm not sure if the CSCA will approve shortcodes for this purpose, but it doesn't hurt to find out.

And here's a few domains:
542242.com AVAILABLE
242542.com AVAILABLE

Heck, why not go the extra mile. Call up the Giorgio Armani company and forge some marketing alliance with them for their GA 542 designer glasses. They're a less bulky version than the one 'Hunter' uses for KGB's spots. Why not get a few actors to do a series of ads all wearing these 'stunner' '542' glasses.

Your ad's tagline can be:

'It only takes one 542 to see that 242242 is best. And free.'

Is KGB infringing on ChaCha's trademark?

In July 2008, ChaCha, the first human-powered search engine, began attaching a trademark designation in its web communications to the numeric string '242242,' which spells ChaCha and is the company's official SMS code. The Indiana-based company filed for a trademark for 242 242 in February 2008 that was successfully registered in September 2008.

It seemed that by late 2008 ChaCha was fully protected from infringements from other mobile services, cybersquatters, and others attempting to mooch off its brands. ChaCha's fortress of protection included its trademark and dozens of defensively registered typo-variants of 242242.com and registrations of 242242 in various tlds and ccTLDs.

Then came the Knowledge Generation Bureau, better known as 'KGB.'

Neither ChaCha nor we at Jamptap anticipated that 542542.com was a typo-variant worthy of registering. Had we, ChaCha's current troubles might have been lessened.

But KGB did go ahead and pick a strikingly similar SMS code to ChaCha's and register its corresponding domain. And, so, we have to first ask: why did KGB elect to choose a SMS code so similar to ChaCha's 242242 when it could have come up with a bunch of SMS codes that spell commonsense phrases like KGB-HQ, KGB-SPY, KGB-411, KGB-IQ, KGB-247, etc...? Is it because KGB wanted to mimic ChaCha's business model down to the 'T'' and didn't want to take any chances with a SMS code of different length and appearance from ChaCha's? (U.S. common shortcodes come in 5 or 6 digits.)

What can ChaCha do now? The first step is defining the issue at hand, which is that its new competitor, KGB, may be confusing ChaCha's existing and prospective customers with the SMS code of 542542 and the corresponding domain of 542542.com. (To make matters worse for ChaCha, KGB has deeper pockets, much more advertising, and the advantage of being a 'new' service.)

The second step is defining its options and the best option is defending itself via its trademark of 242 242. What ChaCha can do is OPPOSE the registration for the service mark of '542 542' filed by Grape Technology Group, Inc. (aka KGB) on October 10, 2008. That mark was for 'Telecommunication services namely two way sms messaging for search inquiries.' (KGB's filing, by the way, occurred four days before KGB registered the domain 542542.com.) ChaCha can oppose KGB's mark when it becomes 'published' [in the Official Gazette, a weekly publication of the US Patent and Trademark Office] and that may occur sometime in this spring (2009). source

If that fails, ChaCha certainly can file a suit in the federal courts and do the job there. The argument would simply be that another company picked a strikingly similar service mark for a very similar service. If ICANN's rulings provide any guidance here, if (usually) a typosquatter's domain is one character off from a domain protected by a trademark, then the complainant (trademark holder) prevails. One can argue that KGB's mark is one-character off from ChaCha's mark. That's the first part. The second part is proving that KGB provides the same or similar 'goods and services' as ChaCha. That is quite clear, even from their respective trademark filings: both marks pertain to providing 'search engine services' (ChaCha)/'search services' (KGB) via 'text messaging' (ChaCha)/'SMS messaging' (KGB).

ChaCha's survival is threatened and that wouldn't be anything unusual in the realm of business if everyone was playing fair. But KGB isn't playing fair.

ChaCha has KGB hot on their trail

In January 2009, a company called 'KGB' launched a premium text answer service that is so similar to ChaCha's that I doubt you'll be able to tell the two apart by the time you finish reading this post. The only difference between KGB and ChaCha's text services is that instead of inserting ads in text responses (as ChaCha does), KGB charges a $.50 fee per search.

So, what are the similarities?

1. Both are human-powered mobile search engines; instead of 'guides,' KGB uses 'Special Agents'

2. KGB also employs a catchy SMS code, but KGB's code spells the name of their company twice: 542542 for KGBKGB.

3. Both companies' SMS codes are repetitions of a three-character word (although only one SMS code spells the full brand name of a company)

4. Like ChaCha, KGB bought and forwarded the dotcom wordnumber for KGBKGB - 542542.com - to its website; KGB registered the domain via an entity called Tenpenny Group, Inc.

The indictment:

I seem to recall that ChaCha's text code is 242 242 and that numeric string seems awfully similar to 542 542. Is it coincidence or sleezy marketing? Any of ChaCha's customers for its text service simply need to slip their thumb down a notch - accidentally or purposely - when spelling out 'Cha' twice on a keypad and *somehow* arrive at their competitor's service. How convenient!

I'm not the first one to point out the coincidences behind KGB's 'offering.' 'Stephen' at forums.online-sweepstakes.com wrote on January 4:

I think they are trying to rip off ChaCha, personally.

They are charging 30-70cent per answer though.

Also, how can 542542 and 242242 be a coincidence?

ChaCha should get 'em for infringement I believe..

I think I'll start a company called BIL and launch a text answer service using the SMS code of 245 245 for BILBIL. All my agents/guides will go by the name of 'Bill' and, of course, I'll forward 245245.com to my site. And maybe, or perhaps very likely, I'll get some of the (texting) type-in traffic from both ChaCha and KGB.

Related post: ChaCha ventures into uncharted trademark territory