The World Intellectual Property Organization recently released its 2017 IP report entitled “Intangible Capital in Global Value Chains.”

The report tackles several questions about the types, roles, and importance of intangible assets in global value chains.  One key question is what role intellectual property plays in generating a return on these assets.

Although much of the report deals with traditional consumer products such as coffee and smartphones, of interest to readers of this blog is the chapter on innovation in the solar photovoltaic (PV) industry and, particularly, the section on PV related patent filings.

The report notes that the number of patent filing increased from less than 2,500 in the early 2000s to over 16,000 in 2011, a reflection of the growing market demand for PV installations.  Most of those technologies originated in Japan and US until 2008, but by 2010 China had surged ahead to become the top PV patent filing economy.

The report addresses the question of China’s technological catch-up, positing that China enjoyed technology transfer by purchasing production equipment from international suppliers and cultivating skilled executives educated abroad to work for Chinese companies and teach at Chinese universities.

Another finding is that China, in particular, patents minor inventions or incremental improvements while maintaining critical innovations focusing on process as trade secrets.  From this the report concludes that process innovations “are instrumental for introducing new PV products into the market and maintaining existing ones.”

According to the report, a more detailed look at the patent filings reveals that about two thirds of patenting activity relates to cell and module technologies; silicon, ingots and wafers constituted under 10% of patent filings, and the remainder is equipment.

The report finds that the growth in PV patenting activity has reversed recently; between 2011 and 2015, the number of PV-related patent filings fell by 44 percent.  This fall has occurred in all major PV innovating countries except China.

The decrease is a result of two forces, the report concludes.  The first is a decline in the number of applicants (though the number of applications per applicant has increased), particularly in the US, Germany, Japan and Korea.  This is because many players have exited the market, and market entry is difficult.

The remaining players, however, seem to be filing more patent applications and increasing their R&D intensity.  This focus on the next generation of technologies “suggests that IP-protected knowledge assets may become more valuable in this time of sectoral recomposition.”

The second reason for the decrease is a reduction of the internationalization of PV patents.  In other words, applicants are filing in fewer countries outside their home country, opting out of international patent protection.  The report finds that in the mid-2000s, each PV invention was filed on average in three different patent offices, but by 2015, the average was only 1.5.

The report notes that PV patent applicants typically file in only a few countries/jurisdictions (China, US, Japan, Korea and Europe) and rarely file in, e.g., Australia, Russia, Latin America, Africa, and the Middle East, or anywhere else.

While most innovation studies focus exclusively on patent data, the report has an interesting section on “reputational assets” such as trademarks and brand-related activities.

The report finds that trademark protection for PV products and services has grown in the last decade.  Data from the US and international trademark application databases show that PV-related trademark filings were four to six times higher in 2016 than they were in 2005.

In the conclusion to the PV IP chapter, the report states that because PV panels and systems are now “mostly commodities rather than differentiated goods . . . the dynamics of the industry have been profoundly driven by strategies to reduce production costs, rather than by product innovation.”  In addition, the solar PV market is “saturated with an incumbent technology whose depressed prices provide tight profit margins for companies.”  Accordingly:

Firms can dedicate their R&D efforts either to high-level process innovations that will reduce production costs in the dominant technology, or to new solar PV product innovations whose production prices are below those for the incumbent technology.

With respect to China, the report calls the PV industry “a case study of a compelete form of technology transfer to an emerging economy.”

Previous posts (e.g., here and here) have discussed trademarks that are “merely descriptive” of the goods or services.  Although the registration process can be an uphill battle, some descriptive marks can be protected.

Generic marks, which refer to the class or category of goods or services, are never protectable.

In November 2014, LG Electronics filed a federal trademark application for the mark QLED.  U.S. Trademark Application No. 86/472,855 listed a variety of goods in Class 9, including mobile phones, software, wearable computers, computer monitors, DVD players, touch panels, LED panels, and LED displays for televisions.

During examination of the application, the Trademark Examining Attorney refused registration on the ground that QLED is generic as an acronym for the generic term “quantum dot light emitting diode.”  LG appealed to the Trademark Trial and Appeal Board (Board), which affirmed the genericness refusal in a non-precedential opinion.

The test for determining whether a term is generic is its primary significance to the relevant public.

The Board reviewed evidence gathered by the Examining Attorney consisting of several internet excerpts including explanatory text from QLED-Info.com, press releases from various companies, content from product and trade news sites, and articles from science and technology journals.

LG objected that the evidence was from industry publications and press releases and related to as yet unreleased products.  Although the evidence may be “forward-looking,” the Board said, it is nevertheless probative of consumers’ understanding of the term QLED, especially with respect to TVs, smartphones, and other goods in the application:

Obviously, some members of the relevant consuming public would research the types of TVs, smartphones, etc. that currently are available, and the expected next generation of these items, and would encounter materials like those cited above, some of which are consumer-focused….Sony is selling QLED smartphones, and companies such as Samsung, LG Display and QD Visions have been developing products with QLED displays for at least the last six or seven years.

LG also argued that there is no consensus as to the meaning or understanding of QLED and the term “is not a designation for a key aspect for a designation of the goods.”  The Board disagreed:

The bulk of the evidence discussed above uses the terms “quantum dot light emitting diodes” and QLED” interchangeably to refer to a particular type of display technology, and as an alternative to LCD and OLED display technology, for TVs, computer screens, monitors, smartphones, and the other disputed goods, all of which have displays.  The evidence clearly demonstrates that the type of display technology is a key aspect of the disputed goods.

So QLED is generic for several goods relating to LED panels, displays, and related products.  But there was some good news for LG:  it was able to register the QLED trademark for a number of other goods in the application  (see the last page of the decision for the list of protected goods).

In an interesting case at the intersection of patent and trademark law, as well as that of functionality and branding, Change Wind Corporation (Change) has lost its bid to register its turbine design as a federal trademark.

Change filed U.S. Trademark Application No. 86046590 (‘590 Application) in August of 2013 seeking registration of the following design mark for wind turbines and wind-powered electricity generators:

The application described the design as consisting of “four vertically extending turbine blades . . . obliquely curved in a twisting manner” and extending above and blow the “truncated cone” of a tapered “cylindrical base.”

The Trademark Examining Attorney refused registration under Section 2(e)(5) of the Trademark Act, which prohibits registration of a mark that is functional.

Change appealed the refusal of the applied-for design and, in a recent decision, the Trademark Trial and Appeal Board (Board) of the U.S. Patent and Trademark Office affirmed.

Prevailing case law holds that a product design or feature is functional if it is “essential to the use or purpose of the article” or if it “affects the cost or quality of the article.”

There are four categories of evidence the courts use to determine whether a design is functional.  Those include evidence of a utility patent disclosing utilitarian advantages of the design, advertising materials touting the design’s utilitarian advantages, the availability to competitors of functionally equivalent designs, and facts indicating the design results in simpler or cheaper manufacturing.

The most damaging evidence for Change was its U.S. Patent No. 9,103,321 (‘321 Patent), which not only showed the applied-for design in the patent drawings, but also recited features of the design in its claims.  Here’s FIG. 1A (almost identical to the design in the trademark application):

Here’s an excerpt from claim 1 of the ‘321 Patent:

A wind turbine comprising:

a frame structure;

a housing enclosing said frame structure;

a rotary, wing assembly supported by said frame structure, said rotary wing assembly including rotating eccentric cams and including asymmetric, helical swept wings that rotate to capture wind throughout a circumference of the rotary wing assembly from both windward and leeward sides so that a torque input spreads evenly to mitigate damaging harmonic pulsations that would otherwise arise without the torque input spreading evenly;

It clearly recites the curved blades / helical swept wings and their function.  Thus, the Board found that the ‘321 Patent showed that the applied-for design features are functional:

The patent thus plainly discloses the functional role of the three components disclosed and claimed in Applicant’s drawing of the mark: the conical tower, the helical wings, and the boundary fences affixed to the helical wings. These features are necessary elements of the invention and are essential to the functioning of Applicant’s wind turbine.

The Board went on to find the evidence of record on advertising to be inconclusive, and also found that the design alternatives were “merely variations of a single basic” turbine design.

The Board found that the evidence, viewed as a whole, establishes that the design was functional because it was essential to the use or purpose of the product.

One lesson is to choose either the patent or trademark route for a technological design and go with it; often it’s not feasible to do both.

Green bonds are important because public initiatives such as the UN’s Green Climate Fund can provide only a small portion of the financing needed for climate-related projects.

Issued by municipalities and development banks, these bonds tie the proceeds of bond issues to environmentally friendly investments.

But which projects count as green, and how can investors be sure the investments are legitimate?

A recent article in the Economist about standards for green bonds notes that one option is a second opinion from an environmental consultancy or auditor like KPMG.

Certification is another option.  Here’s where eco-marks com in.  The Climate Bonds Initiative (CBI) offers certification of green bonds.

CBI owns certification mark Registration No. 4,682,352 (‘352 Registration) for CLIMATE BOND CERTIFIED (see the mark above) for:

Analyzing, evaluating and inspecting environmental projects associated with the issuance of financial bonds by governments and corporations to raise finance for investment in emission reduction, climate change adaptation or other climate change related solutions

The certification statement in the ‘352 Registration says the following:

The certification mark, as intended to be used by authorized persons, is intended to certify that a climate bond issuer had obtained full certification by the Climate Bond Standards Body following successful completion of a Climate Bonds Registration Application and having provided evidence that a full verification had been conducted by a Climate Bonds approved verification body.

According to the Economist piece, CBI estimates that 85% of green bonds issued in 2017 have undergone an external review.

Certification marks, and the processes that underlie them, perform critical verification functions and, in this case, reduce greenwashing.

Certification marks differ from ordinary trademarks and service marks in that, instead of indicating the commercial source of a product or service, they communicate that goods or services meet certain quality or manufacturing standards.  They are owned not by the individual businesses, but by the organizations that set the standards.

For further discussion of certification marks see my previous posts here, here, and here.

In a previous post, in reaction to Apple’s game of branding hide-and-seek, I introduced the idea of a delay in initial publication of new U.S. trademark applications.

As brief background, in March 2014 Apple filed a trademark application for the APPLE WATCH mark in Trinidad and Tobago.  Subsequently, Apple filed at least one U.S. application for APPLE WATCH claiming priority to the Trinidad and Tobago application (Application No 86389945).

This circuitous route to U.S. trademark protection kept Apple’s new watch phone brand name under wraps in the months preceding the product launch while preserving the company’s right to protect the trademark in the United States before the launch (U.S. trademark applications are immediately publicly available after filing, and tech blogs, etc. review U.S. trademark filings to glean companies’ branding plans).

I think this need to play branding hide-and-seek – the tension between getting a trademark application on file and controlling the public revelation of a new brand – should be eliminated.

My proposed solution is a simple one:  U.S. trademark law (or rules) should provide for a delay in initial publication of newly-filed U.S. trademark applications, i.e., a “blackout” period to maintain applicants’ confidentiality.

Instead of immediately making new trademark application data available on the U.S. Patent and Trademark Office (USPTO) web site, publication of the data would be delayed for a period of time.

I propose that the default confidentiality period be six months; the new trademark application data would become available and searchable in the USPTO trademark records six months after the filing date of the application.

That is a reasonable period of time that matches the Paris Convention priority period for trademark applications.  It would obviate the need for applicants seeking to maintain the confidentiality of their new brands and control the timing of their public release to find obscure IP offices in distant corners of the world in which to file their applications six months before their product launch date.

Of course, a couple of nuances and potential objections should be addressed.

First, there is the issue of the publication for opposition of U.S. trademark applications.  The USPTO provides the general public the opportunity to review trademark applications before they register and, if anyone believes they would be damaged by registration of a particular trademark application, to temporarily pause the process and file a Notice of Opposition to oppose registration of that application.

An essential step in offering this opposition opportunity is that, prior to registration, every application is published for opposition.  This includes a preliminary Notice of Publication, which alerts the applicant, and anyone else monitoring the status of the application, of the date of publication for opposition.

Any delay in initial publication of trademark applications cannot disrupt the opposition process, in particular, publication for opposition.  Accordingly, my proposal takes that into account and would provide that, if a Notice of Publication is to be issued for a U.S. trademark application prior to the default six-month initial publication date, then the application would initially publish, and its full data become available on the USPTO web site, the same date as the Notice of Publication is issued.

In other words, the initial publication date of a U.S. trademark application would be the earlier of (a) the date that is six months after its initial filing date; or (b) the date the Notice of Publication is issued.

Another objection is that a confidentiality “blackout” period would hinder trademark searching.  That is, pre-filing clearance for determining whether a putative applicant is able to freely use and protect a proposed mark would be less certain because a problematic trademark application could be missed during its “blackout” period and might later become public after the applicant files the new application based upon incomplete search results.

That would be a problem, but patent practitioners have been dealing with a similar problem for years.  This is because there is an analogue to my trademark proposal in patent law.  A U.S. patent application typically publishes 18 months after its initial filing date.

As any IP practitioner will tell you, the only certainty in IP practice is uncertainty.  Lawyers and their clients have to make decisions and execute on incomplete information all the time.  In my view, this is not a substantial drawback and the merits of this proposal outweigh its downsides.

The period of confidentiality in patent procedure is thought to be necessary because patent applications provide detailed disclosures of cutting edge technology, which may be of enhanced value to applicants when kept secret for a while.

It’s time to recognize that many brands are also of great value, and brand owners would benefit from a period of secrecy.  It’s time to bring trademark procedure in line with patent procedure to provide confidentiality for brand owners.

About a year ago, Tesla filed two new trademark applications in the U.S. Patent and Trademark Office (USPTO) – Application Serial Nos. 86/960,133 and 86/960,138 – the first for its three bars design and the second for the mark MODEL 3 with three bars:

Last month, Adidas filed an opposition proceeding in the USPTO opposing registration of the two applications.  The problem was that Tesla’s trademark applications were not for electric vehicles, but for clothing.

In its , Adidas argued that it would be damaged if Tesla were to obtain these registrations because consumers would be confused by the similar trademarks used on related products and such use would dilute the distinctiveness of Adidas 3-bar brand:

Tesla decided not to fight, instead withdrawing its trademark applications, which led the USPTO Trademark Trial and Appeal Board to .

According to a few recent articles (e.g., on and ), Tesla has changed its logo from three bars to the number 3.

From a quick scan of the federal trademark records, it doesn’t look like Tesla has filed any new trademark applications since giving up on the bars.  However, the automaker has a pending application for MODEL 3 for clothing – Application Serial No. 86/301,896 – filed back in 2014.

A while back, I published a couple of posts (here and here) about Chevrolet’s trademark applications for BOLT and CHEVROLET BOLT (Application Nos. 86357513 and 86357523).  The automaker had previously filed trademark applications for the same marks in Brazil, and the U.S. applications claimed priority to the Brazilian ones.

At the time, there was much speculation in the blogosphere about Chevy’s intentions:  was the company really planning a new vehicle called the BOLT or was it trying to preclude others from using the name?

Given that question, my posts focused on the use requirement for registration of most U.S. trademarks and explained that, for a U.S. trademark application claiming priority to an application filed in another country, the applicant can obtain a U.S. registration based on registration of the priority application in that country.

This is an exception to the general rule that the applicant must use the mark in the U.S. for the goods and/or services listed in the application to get a registration and must prove such use by submitting a specimen showing such use.

So filing a U.S. trademark application based on a foreign or international registration gets around the use requirement (in the United States and potentially anywhere in the world), at least for the purpose of obtaining a U.S. trademark registration.  I concluded, therefore, that perhaps Chevy’s motivation was to skirt the use requirement in the United States.

That explanation probably was wrong because, as it turned out, Chevy did unveil a concept car call the BOLT at the Detroit Auto Show in January 2015 and indicated it would start production in 2017.

Nevertheless, that might have been the end of the matter for me if I hadn’t caught another notable news item from around the same time about the intricacies of trademark filing.

As reported by the Wall Street Journal’s law blog and the Trinidad Express, among others, before filing its U.S. trademark application for APPLE WATCH Apple filed an application for the mark in the Caribbean twin island nation of Trinidad and Tobago.

As technology reporters, bloggers, and consumers wondered what Apple would call its new smartwatch, the company had already taken the critical step in securing its trademark rights to the name several months before launching the product.  And it did so way off the radar so as to keep it under wraps.

This is because, unlike patent applications, U.S. trademark applications are immediately publicly available after filing (it may take a day or two for processing, but there is no publication delay in the system).

So while those tech observers certainly thought to search the U.S. trademark application records to glean Apple’s branding intentions, it would have occurred to no one to attempt a review of Trinidad and Tobago trademark filings.

Within six months, Apple filed at least one U.S. application for APPLE WATCH claiming priority to the Trinidad and Tobago application (Application No 86389945).

Since the Chevrolet Bolt posts and the Apple Watch news, my mind has drifted back these trademark filing curiosities many times.

For some reason, they bother me, and I find myself posing this question:  why should a U.S. trademark applicant that wants to take that crucial first step of securing its rights with a trademark filing while maintaining control of a new brand launch have to file an application in an intellectual property office in some obscure corner of the planet?

My idea, which has been percolating for a while, is this:  perhaps there should be a delay in initial publication of new trademark applications, a brief “blackout” period to maintain applicants’ confidentiality.  I’ll explain this proposal in detail in Part 2 of this post.

A new green certification has been added to the eclectic mix of independent third-party indicators of environmentally beneficial products, systems, buildings, etc.

Administered by the Green Building Certification Institute (GBCI), which also runs the LEED certification for green buildings, the PEER certification (for Performance Excellence in Electricity Renewal) measures power system performance.

More particularly, according to the PEER overview page:

PEER evaluates power generation, transmission, and distribution systems across desired outcomes of optimal efficiency, quality, reliability, and resiliency, and with minimized impact to the environment…PEER addresses power generation, transmission, and distribution–from the time it leaves the generator until it reaches the customer.

PEER includes a screening process to provide independent assessments of power system projects and a rating system for potential certification.

The rating system has four outcome-based credit categories and 68 credits.  Reliability & Resilience credits address power quality, supply availability, interruptions, risk mitigation, restoration, redundancy and microgrid capabilities.

Energy Efficiency & Environment credits address energy efficiency of power delivery, air emissions, resource use, renewable energy credits and power delivery impacts.

Operational Effectiveness credits address electricity costs, asset utilization, load shaping, general operation expenses, capital spending or investment, corrective maintenance and indirect costs.

Customer Contribution credits address customer grid service capability, meter data access, tools, choice, incentives and dynamic pricing.

According to the PEER web site, the new certification is important because of the environmental costs of relying on traditional energy sources and the costs of poor power quality:

Electricity is lost through conversion and waste, which has a negative impact on the environment as well as the economy. Reliance on non-renewable energy sources threatens our environment. Poor power quality can damage electrical devices. Power outages, usually as a result of severe weather, costs the economy billions of dollars a year and poses risks to critical infrastructure.

A search of the federal trademark records shows that GBCI owns U.S. Service Mark Registration No. 4,683,005 for the mark PERFORMANCE EXCELLENCE IN ELECTRICITY RENEWAL for the following services in Class 41:

Education services, namely, providing courses and classes for teaching professionals in the fields of achieving a standard level of performance in terms of electricity sustainability including: reliability, power, quality, safety, energy efficiency, environment, cost efficiency, and customer engagement

While educational services are important, given the central focus on independent certification, it seems odd that GBCI hasn’t applied for a certification mark registration for the word PEER, the full phrase, and/or the PEER logo shown above.

Certification marks differ from ordinary trademarks and service marks in that, instead of indicating the commercial source of a product or service, they communicate that goods or services meet certain quality or manufacturing standards.  They are owned not by the individual businesses, but by the organizations that set the standards.

For further discussion of certification marks see my previous posts here, here, and here.

Regardless of its trademark protection strategy, GBCI remains a force in green certifications and the new PEER certification has the potential to have a major positive impact on power generation, transmission, and distribution.

In yet another example of eco-mark applicants struggling with descriptiveness, a trademark application for CARBON ELIMINATOR for a “non-chemical enzyme fuel additive” recently went down as merely descriptive of the goods.

After the Examining Attorney refused registration of the mark, Star-Brite Distributing, Inc. (Star-Brite) appealed to the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (Board).

Under U.S. trademark law, a mark that is merely descriptive of the goods or services it is being used to market or sell is not registrable on the Principal Register because that would restrict competitors from conveying information about their goods or services.  A merely descriptive mark is one that immediately conveys to consumers the nature of the goods or services.

A major problem for Star-Brite was that the product packaging states that CARBON ELIMINATOR “removes tough carbon deposits” (see below).

In addition, a product description submitted as a specimen in the application said the product “uses enzyme technology to remove carbon, gum and varnish deposits.”

Based on the packaging and description, the Board found the mark descriptive of what the product actually does:

[A]s Applicant’s specimen and product packaging make clear, Applicant’s enzyme fuel additive eliminates carbon engine deposits.

Star-Brite argued that the term “carbon” does not describe an enzyme fuel additive and the associated chemical reaction and that CARBON ELIMINATOR is a double entendre because the product reduces carbon dioxide emissions of hydrocarbon fuel-burning engines.

The Board disagreed, explaining that CARBON ELIMINATOR is descriptive of the “purpose and and result of that biochemical reaction” and noting that all meanings of the alleged “double entendre” are nonetheless merely descriptive.

The Board concluded that the mark as a whole does not convey “any distinctive source-identifying impression contrary to the descriptiveness of the individual parts.”

Finally, the Board stated that consumers would view the mark as simply signaling what the product does and, re-stating a principal policy of descriptiveness law, noted that competitors ought to be able to use the terms to describe similar products:

On this record, it is clear that consumers familiar with Applicant’s goods would immediately understand, upon seeing Applicant’s proposed mark, that the fuel additive removes carbon deposits.  Furthermore, Applicant’s competitors who also offer products which remove deposits should, like Applicant, have the opportunity to use the term “carbon eliminator” or variations thereof to explain the purpose of their products.

I’ve written extensively before about eco-mark descriptiveness problems (see, e.g., and ) and some strategies for avoiding and overcoming descriptiveness rejections.

Under U.S. trademark law, a mark that is merely descriptive of the goods or services it is being used to market or sell is not registrable on the Principal Register without demonstrating secondary meaning, i.e., that consumers have come to associate the mark with the source of the goods or services.

One strategy I haven’t written about before, which marketers like to use for general purposes but also can occasionally help with descriptiveness problems, is to slightly alter a known term.  This could consist of changing the spelling of a word (e.g., NU-ENAMEL and QUIK-PRINT) or dropping a letter from a word (e.g., SNO-RAKE).

This is the approach SFS Intec (SFS) took for its SOL-R solar fastening system.

SFS filed a U.S. trademark application for SOL-R for goods including “flashing panels, and tiles incorporating metal frames for solar panels,” “metal cantilevered brackets for solar panels,” “ground supports of metal for solar panels,” “non-metal roof cladding and roofing elements for photovoltaic elements,” and “roofing…incorporating solar cells.”

The trademark examining attorney found that SOL-R is simply a novel spelling of the word “solar” and refused registration for being merely descriptive of the goods.  SFS appealed to the U.S. Patent and Trademark Office Trademark Trial and Appeal Board (Board).

In a recent decision, the Board affirmed the refusal and held the SOL-R trademark merely descriptive.

As it starting point, the Board agreed that SOL-R is an alternative spelling of the word “solar” and would be perceived as such by consumers (and pronounced the same way).

The Board found, based on the goods listed in the application and some third-party websites in the record that also used “Sol-r” for solar-related goods, that the trademark is descriptive:

Based on the identification of goods and the excerpts from the third-party websites mentioned above, we find that the proposed mark SOL-R is merely descriptive of a significant feature or characteristic of Applicant’s identified goods.  No imagination is required by a purchaser or user to discern that the mark, when applied to the identified goods, describes products that are used on or in connection with solar panels and installations, and roofing that incorporates solar cells.

The Board gave no weight to the argument that the intentional misspelling of the word “solar” should save the mark and render it distinctive:

A slight misspelling of a merely descriptive word, such as “sol-r,” generally does not turn the descriptive word into an inherently distinctive trademark….Thus, Applicant’s proposed mark SOL-R does not become an inherently distinctive mark by the slight misspelling of the commonly used and understood descriptive term “solar.”

So, if considering a descriptive term as a trademark, better to spell it right and use another strategy.  Or just choose a different mark altogether.