Dell and Intel Challenge Psion's trademark "netbook"

One of the fastest growing elements of the personal computing industry is the "netbook" category. See http://www.notebookreview.com/default.asp?newsID=4877

These are small, very portable laptops that are not nearly as powerful as their larger notebook cousins but still do a good job at basic computing tasks and web surfing.

Apparently, a company, Psion, has a Federally registered trademark for the term "netbook" with a filing date of 1998. Due to the widespread adoption of "netbook" for these little laptops, Psion began filing cease and desist letters to other companies and even websites demanding that their use of the term stop if not in connection with Psion's products.

In response, Dell and now Intel have filed petitions in U.S. District Court to cancel Psion's "netbook" trademark. They have challenged that Psion's netbook trademark has become generic due to widespread use. They also assert that the mark has become abandoned by Psion.

I believe that Dell and Intel have valid arguments on both counts and that Psion was foolish to institute its cease and desist campaign because it is now probably going to lose its trademark.

First the abandonment claim. 15 USC 1127 of the Lanham act defines abandonment occuring when a trademark holder ceases to use to use the mark with the intent not to resume use of the mark. Since proving intent is obviously difficult the Lanham Act states that three years of non use will constitute a prima facie case of abandonment. It doesn't appear that Psion used the mark "netbook" in bone fide commerce since 2003. As a result, unless Psion can come up with an argument to rebut the prima facie case, they appear to have abandoned their mark.

But in any event, I think it likely that "netbook" will be found to be a generic term at this point which would destroy Psion's trademark. A mark becomes generic when it ceases to become associated with the source or origin of a product and instead becomes associated with the good itself. Two famous examples of trademarks that became generic are Aspiren and Thermos. "Netbook" fits right in line and seems poised to join these two marks on the pantheon of generic marks.

This situation illustrates why trademark holders are sometimes so aggressive in their cease and desist letters and trademark protection policies. If a company sleeps on their rights, they risk their trademark becoming a generic term which cannot ever be used as a trademark. This situation also is a good example that one should be fairly certain and secure about the rights to their own mark before sending cease and desist letters challenging others use of the mark. Because, as Psion will probably soon learn, your tactics may actually end up costing you your trademark.

Categories: Trademark Law

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