Building Your IP Strategy With A Comprehensive Approach

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This article was originally published in the April 2021 issue of XBiz World.

Establishing a comprehensive intellectual property strategy is extremely important to long-term success of your adult business.  The term, “intellectual property” describes intangible assets, such as inventive technologies, original content, and proprietary brand names and taglines.  These items can be protected by patents, copyright registrations, and trademark registrations, respectively.  It is critical to develop a plan, for filing for protection, early on that is sustainable, profitable, and basically, just makes sense.  Let’s take a look at some of the factors that should be weighed in creating such a strategy.

We’ll begin by looking at trademarks.  A trademark registration basically reserves a brand or tagline for a (rightful) applicant.  It can serve to strengthen the basis for an infringement suit, and therefore, helps to deter third parties from unlawfully using the brand or tagline for the same or similar products or services.  A registration is also very helpful in the process of removing an interloper from squatting on a domain name that wrongfully includes the trademark. 

Trademarks are typically national in scope (although you can file regionally in the EU).  If you would like protection in multiple jurisdictions, you can file directly in those places, or file a single application under the “Madrid System.”  Regardless of whether you file directly in different countries or use the Madrid System, you’ll want to evaluate a few things when deciding in which jurisdictions to apply for protection. 

  • Geography – Assess where your major markets are currently, and which markets you expect to target in the future.  Then consider the costs of filing an application, obtaining the trademark, and maintenance of a trademark in those places.  Costs include an application fee, maintenance fees, attorney fees, and fees for various things that come up along the way.  Concentrate your dollars on the most lucrative jurisdictions, of course.
  • Potential return on investment – Think about how important each particular trademark is to your bottom line.  If you have to prioritize, obviously, you’ll want to look at how much money a trademark will mean to your business compared to other brands you have.  You’ll want to focus your dollars on the ones most likely to bring in the most dollars.
  • Strength of the mark – Appraise the strength of the mark.  A trademark’s strength falls on one of a scale of five levels: fanciful, arbitrary, suggestive, descriptive, and generic.  Fanciful terms are completely made-up terms with no meaning in the language (think, e.g., EXXON).  These are the strongest types of marks.  Following them are arbitrary marks, where the mark has a meaning in the language, but not with regards to the goods or services (think, e.g., GREY GOOSE for vodka).  In the middle of the spectrum falls suggestive terms, which suggest something about the goods or services (think, CRAYOLA for crayons).  All of the above types of trademarks are registerable.  Descriptive marks are weak marks, but can in some cases be registerable.  Descriptive marks describe a property of the goods or services, (think “CLEAN RIGHT” for dry cleaning services).  Generic marks name the goods, and are never registerable (e.g., you cannot register APPLE for apples).  As you can see, the higher up the rank here, the better the chance of strong protection.  You’ll want to prioritize your dollars for strong marks over weak ones.

Turning now to patents, patents protect novel and proprietary tech.  Patents, like trademarks, are national or sometimes regional (e.g., in Europe), in scope.  This means that you must file separately in various countries or regions in order to be protected in multiple places if that is desired.  Similarly to trademarks, patents can serve as the basis for an infringement suit, and therefore, may deter third parties from willfully stealing.

As a way to keep costs lower initially, you can file an “international stage” patent application under the Patent Cooperation Treaty (PCT) guidelines.  This will basically hold your place in line for up to 31 months to then file “national stage” in the countries or regions you then choose.  So, you only have to pay for the filing of one application early on, and then later can pursue multiple applications when you’ll hopefully be in a better financial position since you’ll be further along in your business.

Regardless of whether you file under the PCT or directly, like trademarks, consider geographic scope of your current and future business, and the potential return on investment.  In addition, for each invention, you’ll also want to take a look at how broad the possible protection can be.  Although your idea may be inventive and qualify for a patent, if it will still likely be easy for a third party to “design around,” i.e. work around, a resulting patent, then the investment may be precarious.

Relating to both patents and trademarks, being in adult industry, consider whether the laws of the particular jurisdictions you are considering allow protection for sexuality-related marks.  For example, in China, although it is a fast-growing economy, patents cannot be obtained for sex toys.  So, if your invention encompasses or closes relates to sex toys, it may be an uphill battle.  In some countries, sexual trademarks are similarly not allowed registration.

Finally, let’s discuss copyright.  For studios, cam sites, clip sites, models, content creators, etc., I cannot stress enough how essential it is to file for copyright registrations on your videos and images.  A federal registration, for example, in the United States, will help in DMCA take-down proceedings, enable you to sue in federal court (if needed), and generally deter thieves. 

Copyright registrations are relatively inexpensive to obtain, though the costs do add up if you have to file hundreds or even thousands of them.  In some cases, you can reduce the number by filing for groups or collections of items in a single application.  I do recommend though filing your most important images, clips, etc. in their own applications, one at a time (rather than in a group or collection).  Like for trademarks and patents, spend your dollars on the most critical ones to your business, and file in groups or collections those less vital.

Copyrights are national in scope, but according to Berne Convention, a copyright obtained in jurisdiction 1 is still afforded the same rights and protections in jurisdiction 2 as it would have had it been obtained in jurisdiction 2.  This is great because, unlike for patents and trademarks, you don’t have to file multiple applications for the same item of property in different jurisdictions.

There is a lot here to digest, I know.  Strategize with your team and your lawyers to set an IP budget, and fit what you can into that budget, earmarking money for patent, trademark, and copyright filings, and drilling down to various brands, tech, and content.  As your business grows, you can increase your yearly budget accordingly.  With intellectual property, like any investment, set yourself up early, and reap the rewards later. 

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