Contract Consideration – FAQ

WhatQuestion for Trademark lawyer does it mean for a contract to be not enforceable because of a lack of consideration?

Answer: In order for a contract to be enforceable, the mutual promises of the parties must be supported by “consideration.” Considerations means each party gives something of value to the other.  The reason that the courts and legislatures generally require some form of consideration is to insure that the promises being made are not merely a casual statement, and accident, or gratuitous – in short – to make sure the people making the agreement really mean it. Consideration looks at whether the parties have assumed an obligation on the condition of an act or forbearance of another. Except in cases of employment matters, Minnesota courts generally do not look at the adequacy of the consideration being offered – only whether some consideration has been exchanged. For written agreements, the court presumes valid consideration. While adequacy of consideration is not usually analyzed, vague or indefinite terms of consideration (including other conditions of the agreement) may invalidate an agreement, unless it is clear from the subsequent actions.

In contracts related to copyrights and trademarks, this mean that things like royalties might be subject to discontinuance if the only thing that it does is to grant a right to use the IP and it turns out the licensor in fact does not have the rights in the first place (assuming the licensor did not know that the rights were invalid). However, if the contract also goes on to provide that the licensor will discontinue use of the rights for their own use, this forbearance may be enough to be deemed adequate consideration to enforce the contract.

Consideration is important as a part of any contract.   When setting up a licensing arrangement it’s important that you evaluate what the parties are exchanging.

Benefits of a Federal Trademark Registration – FAQ

Question for Trademark lawyerWhat are the benefits of a federal trademark registration?

Answer: There are many benefits of a federal trademark registration, both direct and indirect.  Direct benefits are numerous and include:

  • National protection of the mark;
  • Ability to obtain injunctions stopping infringers;
  • Ability to use the registration to apply for foreign trademark registrations;
  • Greater access to the  federal court system;
  • Assistance from the United States Custom in stopping counterfeit and infringing goods from importation; and
  • Attorneys fees when proper notice has been attached to the goods or services. I

In addition to these considerations, trademark registration provides indirect benefits in the form of being able to point to it when protecting marks used for social media accounts, protect against improper use in search engines, ability to obtain new domains in sunrise periods, and providing great leverage in UDRP and URS disputes against cyber-squatters.

Why Provide these Benefits

Providing these benefits serve two primary functions.  By granting these rights to trademark owners the government helps to incentivise business owners by helping to protect the goodwill embodied in their brands.  This in turn helps protect consumers by letting them know that when they buy a product, that  the product originated from the brand owner and not an impostor.  This ability to build a portfolio of valuable business assets has obvious benefits to any business owner.

 

Call 612-414-3113 to discuss how I can help you with your trademark and copyright related matters.

Common Law Trademarks – FAQ

Am I protected with a common law trademark – without federal registration?Q&A: Common Law Trademarks

Q: I recently started professionally my photographs in the US.  I registered the copyright for photos and have decided on new name for my company.   I think the name is pretty distinctive and I am not aware of anyone else selling a similar product by the same name.   Do I have to register my company name as a trademark to prevent others from using it or can I rely on the laws concerning common law trademarks?

A: Kenneth’s answer:  Since your mark is not registered you are limited to the common law trademark rights. Common Law Trademarks are generally limited in scope to the geographic area where the mark is known (think of a restaurant where everyone has heard of it in one town, but is unknown in another). Common law trademarks can be enforced (but not as well and as easily as registered marks) in both state and federal courts. In short, it depends on your long term business objectives.  While registration may not be required for everyone, deciding what’s right requires actual consultation with people knowledgeable about trademarks.

Links for Common Law Trademarks