An Early Retirement

http://blog.watsi.org/post/77866208338/an-early-retirement

by gracegarey • 12 years ago

303 72 12 years ago

blog.watsi.org

I'm assuming the company in question is Blue Cross Blue Shield. This kind of sucks, but looking at their logo[0], I would have to agree that they're uncomfortably close, if they are deemed to be in similar enough markets.

The only question is whether Watsi and BCBS operate within similar enough markets for their use to be considered infringement - I'm less sure of that.

On a related note, this is why early-stage startups shouldn't get too attached to their branding, product name, and/or company name. You're better off focusing your efforts on your product itself.

And don't waste money (as an early startup) on filing for trademark protection - because US trademark law respects common law use (ie, if you used it first, you are protected, even if you didn't file for protection)[1]. Registering your trademark does nothing if someone else (with more expensive lawyers) was using it first and can demonstrate that use.

And even if they accept your registration, that doesn't mean that it will hold up. Just like patents, the USPTO leaves this up to courts to decide. You could easily register something like the Coca-Cola[2] logo and they could accept it, but that doesn't prevent Coca-Cola from litigating against you and winning. They have no great way to check for conflicts, and they err on the side of issuing the trademark (and collecting your fee) so that the courts can be the final arbiters[3].

(Obligatory disclaimer: I am not a lawyer, and this is not legal advice).

[0] https://encrypted.google.com/search?tbm=isch&q=blue%20cross%...

[1] This is the opposite of the way that patent law works.

[2] In reality, probably not Coca-Cola per se, because it's popular enough that anybody reading your application would notice it, but a trademark that's very similar to an existing logo.

[3] If you're wondering, no, they won't refund your fee if your trademark is deemed invalid.

will_brown3• 12 years ago

I assumed the same company as you. However, I fall on the other side of the analysis, that Watsi is 1. not interfering with any trademarks registered by BCBS (all BCBS registered marks, which I found in TESS, are word/design marks, which means the blue cross on its own is not protected, it is only protected when it is accompanied by the word mark); and 2. otherwise not causing any confusion in the markplace (for example who is going to donate to Watsi under the belief they were donating to BCBS, there is a test of the reasonable consumer and BCBS would have to prove actual confusion in the marketplace...good luck on that).

I am sure Watsi being who they are made an informed decision and with the advice of counsel. The sad thing is the advice was probably to the effect that while Watsi has a reasonable likelihood of prevailing on their use of the mark, BCBS has enough money to try to enforce the mark without putting a dent in their litigation budget, and Watsi's money would be better spent on Watsi's mission of helping people not in defending litigation. Nevertheless I would have felt good defending Watsi's use of the mark.

paulbaumgart• 12 years ago

Yeah, using a plus-symbol for healthcare-related things really shouldn't be protectable under trademark law, considering it's been in use since the 1864 Geneva Convention.

chimeracoder2• 12 years ago

all BCBS registered marks, which I found in TESS, are word/design marks, which means the blue cross on its own is not protected, it is only protected when it is accompanied by the word mark

As I noted in my post, though, marks don't have to be registered in order to be protected. Even if BCBS doesn't have any instances of the blue cross alone registered with the USPTO[0], that doesn't mean that BCBS couldn't still have trademark rights to it.

while we have a reasonable likelihood of prevailing our use of the mark

I'm not convinced - there are many (seemingly) clearer-cut cases that have gone the other way. I'm not saying that this is the ideal state of trademark law, but I think that there's reasonable precedent for it.

they have enough money to try to enforce the mark without putting a dent in their litigation budget

I agree that this is probably the dominant reason.

[0] Which I would not necessarily conclude based solely on the fact that you couldn't find it. It's not a comment on your searching skills; I've used it before, and TESS (the USPTO database search) sucks.

jbooth• 12 years ago

An additional note, trademark lawyers are often obligated to try and sue people over trademarks, even if they'd rather not, because if they don't zealously defend their trademark, it's considered 'weakened' and that can then become evidence against them in some future case when a different party infringes.

So the blue cross people were doing what they had to do. It sure is funny though how almost every law is interpreted in a way that maximizes future legal work involved.

bbanyc• 12 years ago

BCBS isn't a company. It's an association of a few dozen regional companies, some of which have their own word marks - Empire BCBS in New York is a separate company from CareFirst BCBS in Maryland, and so on. In some areas, like California, the local Blue Cross never merged with the local Blue Shield and they remain separate. There are a lot of different possible trademark holders to check.

I did some TESS digging of my own and found that the Blue Cross & Blue Shield Association holds a trademark on the cross logo alone: serial number 72450146, granted for "pre-paid financing of hospital and medical services".

And given that all the Blue Cross companies used to be nonprofit (some still are) I'd say there's enough of a chance of confusion that a medical-related nonprofit whose logo is a blue cross is somehow affiliated with Blue Cross for some BCBS entity to have a case.

anseljh• 12 years ago

I disagree with the recommendation on not filing for trademark registration. Sure, actually finalize your branding first. But once you do, the filing is comparatively cheap (a few hundred bucks total), and provides remedies against copycats that common law trademarks don't have. Even a letter based on a registered trademark is often enough to get people to change behavior. This is actually a case in point.

[In general. I am not YOUR lawyer.]

larrys• 12 years ago

"And don't waste money (as an early startup) on filing for trademark protection - because US trademark law respects common law use (ie, if you used it first, you are protected, even if you didn't file for protection). Registering your trademark does nothing if someone else (with more expensive lawyers) was using it first and can demonstrate that use."

Agree with most of what you are saying.

But with respect to the above paragraph doesn't incorporate the strategy of why you might want to register a trademark even if protected by common law. Some animals are more equal than others.

First, the cost. This can be done without a lawyer by just paying the USPTO fees. So we are talking about $375 (or $325 in the case of certain marks) per category. I've both hired lawyers and I've done this myself as well.

Anyway back to strategy. It gives you a leg to stand on. That's very important in terms of how the other side views you. You have taken the time to register and therefore the other attorneys will give that some thought when they are confering with their client as far as how to proceed. [2] Enough that, in my opinion, and from my experience [1], it is worth the trademark filing fees. (There are attorneys that will do this for $1000 all in by the say if you don't want to diy.)

[1] The leg to stand on principle is something that I have used before several times. In one case I was able to hold off the NCAA (they have big lawyers, right?) and in another case a billion dollar defense contractor. And in lots of small cases. Now this doesn't mean that you will execute as well as I do when doing this but I'd like to point out that it is certainly possible. (My expertise is strategy to the point where I can usually get lawyers that are working for me to agree with my way of doing things that contradicts even with legal precedent.)

[2] Meaning you could potentially extract a pound of flesh or concessions (see NCAA in [1]) just from that leg you lean on.

tomphoolery• 12 years ago

Low-cost medical care? For people in need?

Nah, doesn't sound like Blue Cross at all.

Not sarcastic. Completely serious. IBX costs a fuckton, but is really great insurance.

devinmontgomery• 12 years ago

The only question is whether Watsi and BCBS operate within similar enough markets for their use to be considered infringement - I'm less sure of that.

Even if they're in different markets, Blue Cross is well-known enough that they may also have a colorable "dilution" claim.

Bottom line, if you're a startup and you get sued, you've already lost. Good on them for not wasting time fighting this too hard and getting on with their work.

mrmch• 12 years ago

Title had me worried for a moment! The whole team wanted shirts, so we loaded up -- we're going to wear that blue contraband with pride.

gracegarey4• 12 years ago

Thanks, Matt!

atonse• 12 years ago

Same here. Ordered one and will wear it with pride.

ChuckMcM• 12 years ago

Well played Watsi, well played. Hope it goes viral.

grageth• 12 years ago

AWESOME! I was running out of reasons to dislike the American health insurance industry.

bullcity• 12 years ago

I hope they aren't planning on changing it to red. I remember in 2005, the Red Cross was going after video game companies that used a red cross on their health/medpack items in-game.

sp332• 12 years ago

A green cross also has other meanings :)

alexnking• 12 years ago

Not knowing what Watsi was, this is ridiculous. Finding out they're an organization that gets donations for medical treatments, being threatened by an insurance company? Beyond ridiculous.

smtddr• 12 years ago

In America healthcare is a serious, for-profit business! Heaven forbid that bluecross(I'm assuming) loses revenue to Watsi.

timjahn• 12 years ago

Health insurance companies in the United States don't exist to help people with medical problems. They exist to make as much money as possible.

josefresco• 12 years ago

Everybody's got to make a living ... even your doctor.

gabemart• 12 years ago

When you say "invited to a bonfire at Ocean Beach", that doesn't mean you're going to burn a big heap of branded trash on the beach, right? Or am I just being a spoil-sport?

gracegarey4• 12 years ago

No trash burning, just a little party to send off our blue logo in style :)

thomasjudge• 12 years ago

You should burn an effigy of a man as an informal protest against "the man"...you could call him the "burning guy" or something like that..

runewell• 12 years ago

I remember when looking for a new company domain feeling like this SNL comedy skit: http://vimeo.com/82393638

Medical companies are ruthless here. I ran an e-commerce store that sold medical equipment, it was nearly impossible to buy any .com domain name related to the medical industry. We ended up settling with JazzMed because one of our founders liked Jazz and we figured it was a unique brand. We ran the company for about 6 months slowly getting to a point where we had roughly 10 orders a day. Needless to say, once we started ranking well in Google a health care company called Jazz Pharmaceuticals threatened legal action, even went through the trouble of sending a certified letter from their lawyer. After reviewing our options and after receiving a formal complaint to the court from the company we decided to shut down and comply with their demands which was to transfer the domain ownership to them. We just didn't have the resources to hire a lawyer and keep the company going. The sad part is that there are so many businesses in that space it's nearly impossible to create a company name that doesn't sound like an existing one.

GFischer• 12 years ago

Naming is such a problem in the medical space, there are special provisions for trademarking medicines (class 5 marks), where they can be similar as long as they are used for very different ailments and there's no risk of confusion.

It's still extremely hard, see this PDF:

http://pubs.acs.org/subscribe/archive/mdd/v05/i08/pdf/802pat...

(Standard disclaimer - IANAL)

hoggle• 12 years ago

Wow, this really made my evening :)

I just donated two hours worth of my consulting time for two fellow human beings in need somewhere else in the world and it will have serious impact. I'm in total bliss <3 nothing feels like helping others - you should try donating!

The only thing I would like to see watsi doing is to offer donations with bitcoin! Integration with bitpay is really easy too. If watsi is rails based (seems so) they would have support for bitpay out of the box with active merchant!

Go spread some love folks, it feels great!

http://watsi.org

Edit:

https://bitpay.com (they offer immediate conversion to local currencies too!)

https://github.com/Shopify/active_merchant/tree/13e0ab52727b...

gracegarey4• 12 years ago

Thanks so much for donating! Appreciate the bitpay info -- will look into it.

argumentum• 12 years ago

I'm guessing part of the agreement is that Watsi doesn't publicly "out" the insurance company. Well, we have lots of good writers here, some with an audience, but without any legal association to Watsi.

Let's make this so costly that no mega-corporation dares to bully non-profits in this way again.

evan_• 12 years ago

Let's make this so costly that no mega-corporation dares to bully non-profits in this way again.

Why?

vinceguidry• 12 years ago

I wonder if a more measured reaction rather than simply caving would have done them better.

They could have had their lawyers draw up a reasoned defense, then used that to wrangle a settlement offer whereby Watsi takes a large-ish donation in return for changing their logo.

Reason being a big battle would hit the larger plaintiff much harder in terms of public opinion. A little brinksmanship could do them a world of good.

Thoughts? Any legal eagles want to weigh in on whether this be a feasible course of action?

lauradhamilton• 12 years ago

Yours is not so much a legal question as it is a negotiation question.

I think you're probably right, but brinkmanship would be incredibly time-consuming, stressful, and distracting. They have more important things to worry about right now.

If your question is, who would win the battle in the court of public opinion? For sure Watsi would win. No doubt in my mind.

qq66• 12 years ago

How relevant is the court of public opinion in a matter like this? Seems like Watsi realized they had more to lose than gain.

akcreek• 12 years ago

I appreciate what Watsi does, but I'm mostly buying a shirt because of the great speech Chase gave at Startup School [1]. It was of the most value to me at that event. Thanks.

[1] http://www.youtube.com/watch?v=WlT3UhC7NwQ

rafeed• 12 years ago

I ordered one not just to stick it to BCBS, but also because it's great knowing all of this is going directly to the patients at Watsi. Well played.

baldajan• 12 years ago

It's a shame. I do think they look somewhat look a like, and there are solid reasons why it would or wouldn't cause confusion in trade.

But if the plaintiff is indeed BCBS, then Watsi would have definitely lost. Since BCBS will probably be regarded as a famous mark, and any similarity would cause an issue for Watsi.

It's unfortunate and sad nonetheless.

GigabyteCoin• 12 years ago

So <insert big corporation here> wants watsi to stop using their logo by date X, and watsi proceeds to print that logo on t-shirts and sell that logo-laden t-shirt.

Isn't this akin to waving a stack of cash right in front of <insert big corporation here> lawyer's nose?

Is watsi's only saving grace the fact that they are not directly profiting from these t-shirt sales?

Seems kindof risky, no?

zeckalpha2• 12 years ago

My guess is they need to get rid of the shirts soon, or else they can no longer use them.

masonhensley• 12 years ago

From my understanding of the tee shirt company they are using, all these shirts are going to be custom made per the amount of orders made.

endersshadow• 12 years ago

This seems to me like another case of the all-too-common, "We don't understand basic trademark law, so we're going to be petulant children about it." This attitude has also run amok in the craft beer world, too. It's rather disheartening.

pearjuice• 12 years ago

Am I the only one who has serious question marks with Watsi? Portraying itself as a non-profit hocus-pocus third-world-helper, why does it have so many investors and such a big riced crew?

I can't help but think how it is non-profit, but ONLY after investors and founders are paid good sums of money. Not that there is anything wrong with that, I am just saying it is shady.

simantel• 12 years ago

They have "investors" (which are actually just donors and potentially board members) to fund their operations. And, in fact, they an operations fund that's separate from donations made for patients. All donations being made towards patients are used exclusively for patient care.

bluedino• 12 years ago

We had the same problem with one of our logos and BCBS. We had a green '+' symbol as one of our letter 'T'. We're in the wellness industry. That was enough to get them to send a letter and it was cheaper to have a designer and developer go through and change everything (3-4 days of designer time and 1 day of developer time) than it was to have a lawyer draft up a response.

growthhack• 12 years ago

Kudos to turning a bad situation, with a positive attitude and a sense of humor, into traffic!

qnaal• 12 years ago

Childish.

Oh well, sounds like money will be coming in, and free advertising, so mission success, right?

ChrisCinelli• 12 years ago

+1 for the bonfire... See you there

ldubinets• 12 years ago

They have now changed

"a multi-billion dollar health insurance company threatened to take us to court for trademark infringement"

"a multi-billion dollar health insurance company threatened to oppose our trademark application"

Was that because of careful consideration and consulting or again because of said health insurance company?

hawkharris• 12 years ago

Similar industries. Very similar logo. Unfortunate, but it makes sense.

I give credit to Watsi for its response, though. This is a cool and creative way to deal with a forced change in brand.

chunsaker• 12 years ago

The tone of this post is yet another reason to love team Watsi. Really fun for an early stage company (for-profit or non) to be spending time and money on this instead of on more interesting things like building their business.

zbruhnke• 12 years ago

Thanks Watsi for having a sense oh humor about it. I bought a shirt because I love your mission as a whole and the post have me a much needed smile yesterday. I wish more people were light hearted like this/ took themselves less seriously faced with situations like these!

An Early Retirement

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