A netbook by any other name, or how Psion is going discover you have to use it or lose it.

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It was reported earlier this week that lawyers acting for Psion were writing out to those using the term "netbook" to describe mini-laptops optimised for web/internet use. They were politely - indeed curiously politely - inviting people to 'transition' to using another name.

Transition? Politely? Since when do commercial IP lawyers behave like that? 

[Declaration of interest: I'm a commercial lawyer, and IP, especially trademark law, is a significant part of what I do.]

There's something going on here which could prove very interesting if Psion proceeds to do anything silly. Like actually trying to enforce the rights they're asserting.

Some basics (skip this if you're familiar with trademark law):
  • A trademark is sign (normally but not exclusively words or images) which indicate the origin of goods or services. 
  • In general (and specifically in the EU) they acquire protection in one of two ways; by being used - acquiring reputation and goodwill, i.e. people knowing the trademark and there being sufficient economic activity associated with it - or by being registered with the state.
  • An unregistered trademark has to be used to come into existance. A registered trademark doesn't have to be used, but if it is ever unused for a continuous period of five years it can be revoked for non-use.
  • Generally, trademarks give the owner a exclusive right to use the trademark for specific goods, and a right to prevent people using similar marks for the same goods or the same mark for similar goods.
  • The goods and services for trademarks are classified into one of 45 classes. Class 9, for example, covers electronic equipment and includes computers. 

Way back when, when laptops were expensive, slow, and heavy, Psion was knocking out a successful range of palmtops. In the late nineties they obtained trademark registrations for the word NETBOOK covering electronics and printed goods, and  used the brand for a device called the Psion Netbook (more familiar in it's consumer version, the Psion 7). 

Several years ago - as they generally moved to an enterprise focus - they stopped producing the Psion Netbook, and Psion's lawyers now admit that these days all they do in connection with that product is produce accessories for extant equipment.

Psion still has valid trademark registrations. In the EU, for example, Community Trademark 428050 for the mark NETBOOK, covering a variety of electronic equipment and printed materials, is still in full force, was last renewed by Psion in December 2006, and will stay in force until 2016. 

Unless, that is, it gets cancelled.

Anyone can apply to cancel a registered trademark on grounds of non-use, but as they'll only succeed if they can demonstrate that the mark hasn't been used for specific goods for 5 years.

Game over? Maybe. Whilst the same document states that the last maintenance coverage from Psion will not be until 31 December 2008, maintenance services are not goods in Class 9. Psion might be able to argue their maintenance services were branded as "Netbook", or involved the supply of parts under the mark NETBOOK but from my experience of IT service provision I'd be surprised if that was the case.

The accessories point (as noted above, their lawyers admit this is the only extant business) could be interesting as most accessories (bags, styli, etc.) wouldn't be necessarily be goods in Class 9, and it's questionable whether they will have been sold by reference to the trademark NETBOOK. Describing a stylus as being suitable for use with a Netbook Pro is not the same as selling it by reference to the mark NETBOOK. Personally, I would wager that on a factual basis many of the sales of accessories would turn out to be by reference to the mark PSION, not the mark NETBOOK.

All of this is, however, a little academic - it only matters if someone wanted to start branding their own mini-laptops as "netbooks". Psion's lawyers, in their correspondence with the blog jkontherun.com admit this isn't what's happening. Instead, journalists and some resellers are using the term "netbook" as a generic term for mini-laptops.

Essentially, netbook and mini-laptops are on their way to a relationship akin to the trademark HOOVER and vacuum cleaners. Since the purpose of a trademark is to indicate the origin of goods, becoming a generic term for goods of that type is well nigh fatal.

So why are Psion's lawyer's being so polite? Why this talk of transition? Because at root, there's nothing that they can do by means of legal threats to stop journalists (or bloggers) and the general public appropriating their trademark as a generic term. Using - or abusing - a trademark in that way isn't illegal, and it's not trademark infringement. It's not technically "using" the trademark, which from a legal point of view means applying it to goods and services.

Psion's lawyers have pointed to some resellers using the term, and that is a potential trademark infringement. But the same is not true if, for example, Zdnet chooses to use netbook as a generic term for mini-laptops. 

No doubt Psion hope that by sending the letters they've sent people will go "Oh god, I better stop using this term!", but if people don't react that way Psion are a bit stuffed as they have no further options. 

That 'transition' Psion's lawyers would like to see, if it happens at all, will be voluntary or because people misunderstand what Psion is actually able to do. It certainly won't be by means of legal force.

There are things Psion could do to try and reclaim the word netbook, but I don't rate any of them, and I'm not surprised they don't seem to be trying them.

They could try a massive - and I do mean massive - advertising campaign to promote themselves as being the owner of NETBOOK, but since they don't even sell devices branded NETBOOK it's difficult to see the commercial merit of doing that, particularly in a downturn. 

They could launch their own netbook, but it's pretty difficult to do that from a standing start, and Psion (or Psion Teklogix as they call themselves today) is now almost entirely focused on selling handheld terminals to enterprise clients.

A better move would be licensing the trademark to someone who is selling mini-laptops, but who would pay? Any licensee is going to have exactly the same problem as Psion, and the NETBOOK trademark is pretty impaired IP by any measure.

Personally, I wonder why Psion are bothering at all. I'm sure they've been advised by their external lawyers that they are entitled to do this, and morally entitled to protect their IP. With my lawyer's hat on I tend to agree, but realistically don't rate their chances of success very highly. However, with my commercial hat on I'm not sure what the game plan is; the legal position may be clear, but the commerciality of this approach is another matter.

From a commercial point of view - and Psion is a after all a commercial business - where's the margin? There'll be some minimal publicity, most of it bad, and a nice bill from their lawyers at the end of it (since they are using external lawyers, every one of those letters likely involves a nice little fee to the law firm concerned). Even if they succeeded in stopping the term being used, what benefit does that bring them? There is nothing analogous to the pot of gold at the end of the SCO rainbow (even if that did turn out to be fairy gold!).

Personally, this kind of legal posturing annoys me. I mean to use the term netbook as much as I can - the Streisand Effect in action - and to encourage other people to do so!

Credit to @jackschofield for inspiring this post by tweeting jkontherun.com's update on the story earlier today.

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Thanks for this great summary of the situation, and for your professional contribution to the discussion, under a CC license no less! Rest assured that this thankless work is appreciated by the community.

I have updated Wikipedia's Netbook article accordingly.


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This page contains a single entry by Matthew Taylor published on December 28, 2008 6:31 PM.

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