#squarejive

---COAL IN MY STOCKING---

Fast forward to the end of December 2012 three days after Christmas I received an email and letter from a Silicon Valley based law firm, Fenwick & West, which would qualify as the equivalent to receiving coal in one’s stocking. The letter was on behalf of the mobile payment-processing giant "Square Inc." Enclosed was a cease and desist message warning us to withdraw our trademark application and phase out our marks.

Square Inc. Cease Desist Letter by Charles E. Kelly

After the initial shock faded away, I forwarded the message onto my attorney who then itemized the reasons we were not infringing upon their mark "Square." Apparently, having a different name, color scheme, service description, and operating in a different realm of software was not enough in the minds of Square's attorneys.

We kindly replied to their letter informing them that our events app is in Indianapolis only, does not offer payment-processing services, and we see little to no likelihood of confusion being caused by our mark; therefore, we strongly disagree with their claims of infringement. We then continued the application process to get our trademark published by the U.S. Patent and Trademark Office.

---THREATS CONTINUED---

On February 18th I learned that Square Inc.’s attorneys at Fenwick & West called my attorney to reiterate their intentions to oppose our trademark. Fenwick & West demanded we cease using our name, and rebrand our application immediately.

I'm not sure how familiar you are with the trademark process, but under the Lanham Act, any party who feels they may be damaged by the actual or proposed registration of a mark is entitled to challenge its registration. This is accomplished by filing a Notice of Opposition with the Trademark Trial and Appeal Board (TTAB).

The TTAB is the administrative tribunal that hears and decides oppositions and cancellations and appeals of final refusals issued by examining attorneys. Thus an opposition initiates a Federal proceeding in which the TTAB reviews evidence from both sides and determines whether to prevent a pending application for a mark from being granted registration. –Learn More About Trademarks http://www.uspto.gov

My initial reaction to this news was much like you'd expect... "Fuck Them, lets go to court, we'll win this case." To my surprise, my attorney adamantly agreed. He said we would win the case, it would take a long time and we would ultimately win. However, he then proceeded to tell me that while we are being unfairly picked on, and stand a great chance at winning the case, the case will never happen...  It was at this point that he advised me that the cost associated with fighting their opposition would be roughly $75,000 dollars if the case reaches the trial stage. He knew I struggled to pay the few thousand dollars I'd already paid him, and would not be able to afford a long and expensive paperwork trial.

Infuriated, I then asked him if I could raise the $75k to cover the trial, and we win the case, would Square Inc. be required to pay restitution to cover the cost of our legal fees? “Unfortunately, No,” he replied. “In only 10-15% of cases where a company’s trademark is opposed and goes to trial only to be vindicated, are they reimbursed for their legal expenses.” [A company must prove an opposition was filed with malicious intent in order to receive restitution for their legal expenses]

---COST OF DOING BUSINESS---

After a few more phone calls, February came and went and I started to think Square maybe bluffing about their intentions to file against us. After all, we’re a tiny company operating in a completely different market, targeting different customers, nowhere near their 2 Million + users and $3.25 Billion dollar valuation (Sept. 2012).

On April 23rd, 2013, the USPTO published our trademark, giving Square Inc. a 30 day window to oppose and stop our mark from reaching the final registration phase. Unfortunately, another tactic that trademark opponents use to their advantage is TIME. They slow down the process to make the trademark filer spend more money on legal fees, while creating a state of uncertainty, and diverting their attention away from conducting their business. After all, who would want to spend money on marketing while not knowing whether their name will be theirs in a few months?

After our mark was published on April 23rd, Square Inc. filed a written request to extend the amount of time they'd have to file their opposition. The maximum allowable period of time for an opposition extension is 120 days, which Square was ultimately granted. This gave Square until August 21st, 2013, to scheme as to why we should not be allowed to register Squarejive, and file their opposition. Additionally, the 120 day extension made it really hard for us to continue with business as usual.

On April 30th when my attorney informed me that Square had been granted the 120 day extension, I froze spending on marketing across the board. No more Facebook advertisements, no more event sponsorships, and absolutely no more promoted Tweets on Twitter; especially since Square Inc’s Founder & CEO, Jack Dorsey, is also "The Founder of Twitter" (*Suggested Reading: Hatching Twitter, A True Story of Money, Power, Friendship, & Betrayal).  As a social events application, this crippled our engagement tremendously; however, I couldn't justify spending funds to market a brand that might not exist in the near future.

---DOES SQUARE INC.’s CASE HAVE MERIT?---

After Square’s extension period ended on August 21st, 2013, the attorneys at Fenwick & West formally filed an opposition against us viewable online here: http://ttabvue.uspto.gov/ttabvue/v?qs=91212122

In order to oppose a trademark, one must give grounds for their opposition. Typically, they try show how the publication of a mark causes confusion for their pre-existing mark. In our case Square Inc. filed under grounds of “Deceptiveness,” “False suggestion of a connection,” “Priority and likelihood of confusion,” and “Dilution.” Furthermore, they opposed all of the goods and services descriptions for our trademark.

Without going too deep into US & International trademark classes or filing requirements, allow me to demonstrate how feeble this opposition really is; when Square Inc. filed their trademark, they did so with the following Goods & Services description:

Mark: Square (LINK) US Serial Number: 77798169 Registration Date: Feb. 08, 2011 Goods & Services Description: Hardware and software for processing credit card, debit card, and gift card transactions via mobile devices.

Also they filed again in May of 2011 with a slightly different Goods & Services description:

Mark: Square (LINK) US Serial Number: 77798170 Registration Date: May 17, 2011 Goods & Services Description: Reconciling credit card, debit card, and gift card accounts transactions via a global computer network

When we filed the mark “Squarejive” in October of 2012, we did so with the following Goods & Services description:

Mark: Squarejive (LINK) US Serial Number: 85755677 & 85755628 Registration Date: OPPOSED PRIOR TO REGISTRATION Goods & Services Description: Computer application software for mobile phones, portable media players and handheld computers, namely, software for accessing, submitting and searching information about current entertainment events, restaurants and food markets.

---HOW GIANTS STOP INNOVATION---

In the previous paragraphs I outlined one tactic giant companies use to prevent competition: oppose a competitor’s trademark to stop it from being registered from the get-go. With a conservative estimate at $75,000 – the legal fees associated with fighting an opposition through trial are daunting. Even worse, spending the money to successfully fight an opposition and be vindicated, doesn't mean you'll be reimbursed for your legal expenses and time. In fact, there is a very low probability you will be able to prove the party opposing your mark did so with malicious intent. Thus, you'll be responsible for the extravagant fees associated with your defense.

As we all know, the real advantage large companies have over small companies is resources. Large organizations have the funds and skilled on-call legal teams available to block competitors they deem to be threats. They do this by filing oppositions and blocking the applicant from ever getting registered with Federal rights to the mark. The evidence in support of their opposition is usually shaky at best, but that doesn't really matter. When facing a weaker opponent, large companies simply need to follow the proper procedure and file the correct documents on the correct dates, and then let time and financial strain take hold.

While the number of oppositions filed each year is quite small compared to the number of trademarks published, Square Inc. is no stranger to filing them. Since June 1st, 2012 Square Inc. has filed a dozen oppositions: SQUAREUP, SQUARECHIC, SQUARESPOT, SQUARE TABLE, SQUARECARD, SQUARE UP, SPOTSQUARE, ESQUARE, FAIR SQUARE COM, and of course SQUAREJIVE. (See for yourself)

As I mentioned earlier, using extensions to drag out the process also behooves large companies. Often times the mere threat of a Silicon Valley-based law firm can be enough to provoke a trademark applicant to abandon their mark. However, when that doesn’t work, trademark opponents will file an extension and let the long, slow, process start to sap the applicant’s financial resources. Sending frequent emails and setting up times to chat with an applicant’s counsel also are also effective ways to invoke financial strain.

While Square Inc. is valued well over $3 Billion dollars, as a startup company, every dollar we have is needed. When we started to spend dollars that would be going towards marketing, on legal expenses, our growth stalled and customer engagement dwindled.

The motivations behind filing an opposition to a trademark differ greatly, but there is one common motivation and reward. Each opposition sets a precedent for future proceedings. As large companies file oppositions and crush opponents with even meagerly similar marks, they strengthen their own marks in doing so.

---WHERE WE’RE HEADED---

So there you have it, that's all I got for you. Just a classic example of how a giant company who processed $10 billion in payments last year can take a startup to court and financially crush them. It doesn't matter that our trademark was published by the USPTO, that we took all the necessary preemptive steps to ensure we were not infringing upon another mark, or that many other companies’ names in software include the word "Square" (i.e. Foursquare, Squarespace, Square Enix, ect.), justice isn't given a chance unless you have at minimum $75,000 worth of throw away money to go to trial and seek it.

During the past 6 months many people have asked me “Why don't you just change your name?” The honest answer is we can't afford it. The cost & time associated with rebranding and remarketing everything from our automated emails, website, marketing swag, redirecting all of our 10,000+ “Squarejive.com” URL’s, and once again branding/resubmitting our mobile app to Apple is not something we can afford financially or from a time perspective.

While the majority of this post has been negative, I am excited about one thing, the birth of FindJive. As a result of Square’s opposition, over the past few weeks we've started to create a strategic design consultancy and web development company. What really makes us unique is we don't have a fixed pricing model for our work: true to our startup roots, we provide assistance to small companies at a fraction of the cost we charge larger companies. In some cases, we'll even build applications pro bono (See IndyCollegeMentors.com currently under construction).

Some people compare starting a company to having a child because of all the time, energy, and financial strain associated. I think this is an accurate analogy and probably explains what drove me to write over 2,000 words about the death of my child. However, I also hope that in sharing my experience, I'll encourage others to do the same, and ultimately provoke the system to change. By allowing unnecessary oppositions that require small fortunes to defend, the current process is intrinsically inhibitive to innovation.

While I remain driven to build creative software products, I'll now do so under the name FindJive. If you have questions about trademarks, or curiosities about what we're working on today, feel free to contact us at [email protected] or send me a personal email at [email protected].

If you feel compelled to help reform the current trademark process, we'd appreciate it if you'd join our campaign here: http://chn.ge/17pEe8M

Sincerely,