Over the last several days, I have been reading the "discussion" of trademark law that has been taking place in a blog neighborhood near you. As some of you may know, in a past life I was an Intellectual Property attorney -- as they say, once an IP attorney, always an IP attorney. I actually find the intersection of law and business a really interesting, thorny discipline, with very real world implications. Three things fall out of my background and this interest: 1) I am probably slightly more "helpful" (aka, annoying) than your average VC when it comes to discussing IP issues at board meetings; 2) I have the fun of teaching a class called "Intellectual Property and its Impact on Business" at Stanford Business School (the primary objective of which is to help future entrepreneurs know when they should call a lawyer); and 3) I can't help myself, I have to comment on the controversy brewing over CMP's attempt to protect the "Web 2.0" service mark.
For those of you who haven't been following the controversy, here's the Cliff's Notes version:
In 2003, O'Reilly Media executive Dale Dougherty coined the phrase "Web 2.0" and the O'Reilly organization adopted it as a moniker for stuff that isn't Web 1.0.
In 2003, Tim O'Reilly and John Battelle decided to create a conference to talk about this new web stuff and dubbed it the "Web 2.0 Conference." They partnered with CMP Media, a big conference organization, to run the event.
In 2003, CMP Media filed for a service mark in the name "Web 2.0" with respect to conferences and live events.
In 2004, all this Web 2.0 stuff got big.
In 2005, all this Web 2.0 stuff got bigger.
By 2006, I think it is safe to say that the Web 2.0 Conference had become one of the premier events of the year. It was named Conference of the Year in 2005 by the smart folks at Conferenza. It was packed. It was sold out. It was a great conference.
In February 2006, it@cork, a non-profit technology networking organization in Ireland, announced its "it@cork Web 2.0 half day Conference" to be held on June 8, 2006. They invited Tim O'Reilly to speak at the conference, which he politely declined.
May 24, 2006, CMP sent it@cork a Cease and Desist letter informing them that CMP had a pending service mark application in the name "Web 2.0" with respect to conferences and live events. The letter concluded, "CMP hereby demands that you immediately cease and desist from utilizing Web 2.0 as the title of your event and from making any further use of our mark, or any mark that is confusingly similar to it."
On May 25th, Tom Raftery, one of the organizers of the "it@cork Web 2.0 half day Conference" blogged about the Cease and Desist letter and asked his readers for advice on how to deal with the demand from CMP.
By mid-day May 25th the CMP assertion of a servicemark in the name "Web 2.0" had spread like wildfire around the blogsphere.
Between May 25th and May 30th, numerous bloggers chimed in on the controversy, many lashing out at Tim O'Reilly personally. The overwhelming tenor of the discussion was extremely negative. Tim, unfortunately, was on vacation and out of touch -- he did not learn of the issue until he returned at the end of the week.
On May 30th, Tim O'Reilly posted a long and thoughtful response to the "Web 2.0 Service Mark Controversy" in which he stated (and I am vastly oversimplifying) that while he believed that the communications with the it@cork organization had been botched (and he apologized to Tom Raftery for the miscommunication), it was appropriate to assert rights in the service mark "Web 2.0" with respect to conferences and that CMP Media legitimately owned that service mark.
I fear that this post is sounding a little like an exam question (take note future b-school students of mine -- this would make an excellent exam question) and in many ways it is. There are very complicated trademark issues at stake. And, unfortunately, trademark law is a fuzzy discipline. If you were to survey 100 trademark attorneys on this question (and I think I will), you would likely get 100 different answers. There is nothing black and white about trademark law. Some trademarks are stronger than others (e.g., Fandango vs. Tickets.com), different companies can own the same marks in different goods and services (e.g, Monster.com vs. Monster Cable), and some marks gets such wide adoption that they are deemed generic over time and are no longer protected at all (e.g., thermos, aspirin, etc.).
Before I dismiss the trademark question as unanswerable with any certainty -- at least by me, a former-attorney who never specialized in trademark law -- let me just add one more important foundational concept around which all trademark law is built. Trademark law is all about attribution. A trademark is intended to be an identifier of source. In other words, when you go drink a Diet Coke, you can make basic assumptions about the likely taste, quality, safety of the product because you "know" the company that is responsible for producing it (The Coca-Cola Company). And if you were to drink a Lemon Coke, you would make similar assumptions about the taste, quality and safety of the soda because you would assume that it too came from the same source (The Coca-Cola Company). If it turns out that Lemon Coke is not produced by The Coca-Cola Company, that is a breach of Coca-Cola's trademark because 1) Lemon Coke sales are assisted by the false association with Coca-Cola's good reputation, and/or 2) The Coca-Cola Company's reputation is harmed by the assumed association with an inferior product.
Given that trademark law primarily concerns identification of source, the question for me is to what extent the term "Web 2.0" has appropriately become associated with CMP Media or, more specifically, the CMP Media event "The Web 2.0 Conference"? I believe that the answer to that question is that "Web 2.0" when used in the context of a conference or live event is very much associated with Tim O'Reilly and John Battelle's "Web 2.0 Conference" that is run by CMP Media. Given that, and assuming that the "Web 2.0" service mark has been appropriately granted to CMP Media, they certainly have the right to assert their mark against other conferences or live events attempting to use the moniker. Nothing that CMP has done or Tim O'Reilly has said suggests that they are attempting to assert the "Web 2.0" mark more broadly. That would undoubtedly be a different calculus. But, to my mind, there is nothing sinister, nor anti-competitive about registering a service mark for your conference and then attempting to protect that mark and maintain the purity of the association.
Even if my legal analysis is correct, that does not ultimately answer the question of whether or not CMP Media should have sent it@cork a Cease and Desist letter. The reason my course at Stanford B-School is entitled "Intellectual Property and its Effect on Business" rather than the simpler "Intellectual Property" is that I believe Intellectual Property needs to inform business decisions, not dictate them. Entrepreneurs should never take on risks that they don't understand and appreciate fully. But that is not to say that entrepreneurs should never take on risk -- they should just choose to take on that risk after fully exploring its scope. In some cases that risk is Intellectual Property risk (will my ability to enforce my trademark be diminished by my failure to enforce it in this instance?). In other cases that risk is pure business risk (will my long-time supporters turn on me if I enforce my trademark in this instance?). Or perhaps a mixture of the two.
I am quite certain that had CMP fully appreciated the potential business risk of sending a Cease and Desist letter to it@cork, they would not have done so. More importantly, I am certain that if Tim O'Reilly had had the opportunity to consider and comment upon the risks of such aggressive trademark enforcement by CMP, he would have urged them to think better of it. But, alas, whoever ultimately made the decision to crack down on the use of the "Web 2.0" service mark (I suspect it was a lawyer, not a business person) did not fully consider the ramifications of doing so and the result of that action have reverberated throughout the blogsphere.
Despite the incredible vitriol that has been spewed as a result of CMP's actions (and Tim O'Reilly's guilt by association), it is hard for me to believe that this is a hanging offense. Perhaps the communication was handled less delicately than was appropriate, but I believe that CMP Media has every right to enforce its interest in "Web 2.0" when it comes to conferences. In this instance, however, what I believe is less important that what a very vocal community of influencers has to say and they have no doubt spoken. I hope that they will at least take Tim O'Reilly at his word -- those of us who know Tim appreciate him for his unflinching honesty and forthrightness -- and consider his well reasoned apology and response to this controversy. For good or bad, this has been yet another reminder of the incredible power of digital media -- entrepreneurs and VCs alike should take note and take care. I know that I will.