OEM / Rebadging and trademark issues

[Brandt Wilson]

Hi,

Hopefully, this has a straightforward answer.

I have a JVC camcorder that is nearly identical to an RCA camcorder that a friend of mine has. The chassis is the only difference. Buttons, menus, optics...all the same.

This leads me to question whose camera this really is. I mean, with all of the electronics being the same, can one company claim intellectual ownership of the camera.

Further, if someone takes a camera and significantly modifies it, is it still the intellectual property of the original manufacturer, or does it become a collection of parts from various OEMs?

Thanks to anyone who is familiar with this stuff.

[Peter Moore]

There's really two issues here: patens and trademarks.

The patents on any individual components always remain property of whoever owns the patents, despite who makes or sells the components. The patent is on the invention, not the individual physical component. The patent owners have licensed the manufacturer (I guess JVC) to create and sell all those components.

RCA then buys the physical camera from JVC and repackages it with their own trademark. They then own the physical camera, but not the patents. They put their trademark on it, as the trademark is only relevant when the product is sold in the market.

Does that answer your question?

[Brandt Wilson]

We're closing in on it. What if RCA buys the camcorder from lens to battery from JVC, puts a badge on it, but someone else comes along and makes alterations and removes the RCA badge? Is that camera still a trademarked property of RCA, or does it become simply a sum of its components?

[Peter Moore]

To my knowledge there's nothing wrong with taking a product you buy legally, removing the logos, altering it, and reselling it. As long as you're not violating any patents in your alterations, it is your property to do with as you please. What you are not allowed to do is put someone else's logo on your own product.

And it's done all the time. OEM hardware is made by all different companies and marketed under different labels. Inside the Dell computer with the Dell logo there's dozens of different products by different manufacturers - Intel, Maxtor, Kingston, etc. Same with cameras.

Is it the trademarked property of RCA? No, the item is the property of whoever has title to the physical object. You just can't use RCA's trademark without their permission. But you can take off RCA's trademark and sell it under your own label. You can't lie and say "I made this camera" though, but a trademark doesn't necessarily mean that's the manufacturer anyway.

The trademark, patent, and physical object are all separate things. You own the rights to the physical object when you buy it.

[Jeff Donald]

You would have to investigate the trademark. Coca Cola has a trademark on the shape of the bottle. If you bought the bottle, emptied it, then refilled it with your own product, it would still violate the trademark. I doubt the shape of the camera is trademarked, but it may extend beyond the logo.

Some technology also carries fees in the form of licenses etc. that are paid by the manufacture. The reselling of the item may violate the license agreement and additional fees etc. may be due.

The end user can make almost any modification (unless it violates FCC rules) but may run into problems if he intends to resell the modified item.

[Peter Moore]

"Some technology also carries fees in the form of licenses etc. that are paid by the manufacture. The reselling of the item may violate the license agreement and additional fees etc. may be due."

No, there's something called patent exhaustion which limits the rights of the patent holder after the item has been first sold. Almost any attemt by patent holders to prohibit or restrict resale is going to fail. It's not like with software where supposedly the software is "licensed" and not "sold" to you. You own the camera; you don't rent it. Once you possess the invention, you can basically do what you want with it, including reselling it. You can do so under any label you want, but like I said, you can't lie (i.e. pass off goods as manufactured by you when they aren't). And of course you're limited in your ability to use thier trademarks when marketing.

The Coke bottle thing is an interesting exception, of course, but most cameras don't have any trademark-able aspects to their physical form (all generic).

[Jeff Donald]

I'm not talking patents, I'm referring to licenses. Cameras that incorporate noise reduction technology, compression technology, and video enhancement technology may have license agreements covering the use of the technology. Some of the licenses may cover hardware and software to perform their function. Modifying certain components, both hardware and software, may violate and void the licenses and prohibit the resale of the device.

If all your talking is removing some stickers and plastic badges, you're probably won't have any problems. But modifications to internal components and the resale of modified components may be in violation of trademarks, license agreements and FCC regulations.

[Peter Moore]

But you are talking about patents, actually. The licenses you speak of are for patent rights (the right to make, sell, etc.) The only things that protects said noise reduction technology, etc, are patents. Well, in some cases the software is copyrighted, but do you see any end user license agreements that say "This software is licensed, not sold" etc. on your camera? I don't on mine, and if there were, I doubt they'd be enforceable, because it'd be an attempt to skirt the first sale doctrine. Sure, the manufacturer had to pay the owner of the patent on said technologies, but that's the only point in the chain the patent owner gets a royalty.

And if the camera does contain public domain technology that is not patented, there is absolutely nothing the manufacturer can do to control its making, use, or sale, by anyone.

The only license you might void if you modify your camera is a warranty. :)

By the way, I am a lawyer and I work in this field. But having said that I am not advising anyone to do anything or not related to this topic; just stating my academic opinion.

[Jeff Donald]

but do you see any end user license agreements that say "This software is licensed, not sold" etc. on your camera?

I believe the cameras that incorporate MPEG 2 technology do have software disclaimers in the instruction manuals. This may become more commonplace as we move towards more compressed recording methods.

[Paul Tauger]

Okay, there are a couple of issues here.

As other posters have mentioned, there are two kinds of intellectual property rights that are implicated in re-badging. One is patents, which cover use of technology that is exclusive to the patent owner. In order to manufacture goods that utilize someone else's patented technology, I'd have to obtain a license. However, patents are not infringed if I buy an item containing patented technology and re-sell it.

The trademark issues are more complicated (and, I think, more interesting). First, some basic information (sorry if people are already familiar with this).

A trademark, by definition, is a word, phrase or design that functions as an identifier of source. The appearance of a product and/or it's packaging can, in some circumstances, function as a trademark. This particular kind of trademark is called "trade dress."

Functional features, i.e. aspects of a product that make it work better or make it cheaper or more efficient to manufacture cannot be protected as trade dress. However, a combination of functional features can constitute protectable trade dress if the combination itself is non-functional.

Product configuration is a specific kind of trade dress. In some circumstances, the appearance of the _non-functional_ features comprising the product configuration (or the non-functional combination of functional features) can be protected as trade dress.

To complicate matters, the Supreme Court recently held that only inherently distinctive product configurations are protectable as trade dress. "Inherently distinctive," in this context, means that consumers associate a specific product configuration with a specific source. The term of art for this is "secondary meaning."

So, as a matter of law, an inherently distinctive product configuration, meaning the appearance of non-functional features, or the non-functional combination of features, of a product may, if consumers associate that appearance with a specific source, be protectable as a trademark.

Now, to apply that background to re-badging of electronic gear. Taking camcorders as an example, some have what I would consider protectable product configurations, others do not. The Canon XL1 has a unique, _probably_ non-functional configuration (and a distinctive color as well). Most consumers in the targetted demographic would recognize an XL1 as the Canon product that it is. The combination of non-functional features and secondary meaning would preclude anyone from manufacturing a camera that looked substantially like an XL1. If Walmart (to pick a bizarre example) were to buy XL1s in bulk and rebrand them as "Walmart Pros" they could only do so under license from Canon. Note, too, that licenses for trademark use cannot be "naked," meaning that the licensee is not free to do whatever they want with the mark. The licensor _must_ exercise control over the use of the mark and the quality of goods to which it's applied. If not, the license is invalid and the trademark is weakened or even destroyed.

If I buy XL1s and modify them, I could not sell them under my own brand unless the modifications were so extensive that the product configuration no longer looked like a Canon-brand XL1. Otherwise, I would have committed "palming off," which is a particular form of trademark infringement consisting of passing off the goods of another manufacturer as my own.

Trademark law can be pretty dense stuff. I hope this helps.

[Peter Moore]

"I believe the cameras that incorporate MPEG 2 technology do have software disclaimers in the instruction manuals. This may become more commonplace as we move towards more compressed recording methods."

In that case I'd say that if your modifications had something to do with MPEG-2, then you might be practicing the patents on MPEG-2 and might be infringing. But if your mods had absolutely nothing to do with any patented technology, in that they didn't implicate the MPEG-2 patents but fell squarely under a first sale doctrine, then I don't think they can prevent you from selling the camera, any license notwithstanding.

As Paul said it's possible the XL1s might get trade dress protection because it is so unique looking, but even then I think it'd be an uphill battle for Canon, and even moreso if you're buying an XL1s, modding it, and reselling it, than if you're manufacturing brand new cameras that look like an XL1s. But in any case, no one could stop you from selling property you've bought. Don't use Canon's logo though!

[Brandt Wilson]

Okay, then let's pursue the functional features line of thought. Specifically the DVX100.

Externally, I think a lot of people would be hard pressed to know the differnece between it and the PD150, unless they owned one or both already.

But, the DVX is the only camera in a non-ENG form factor that has the 24P and Cine Gamma features. Would this alone be enough to make its usage conspicuous, even if the chassis were changed in some significant way?

[Peter Moore]

I highly doubt it, at least as far as trademark/dress is concerned, but if you want to do something specific you'd better get a formal opinion.

[Paul Tauger]

But, the DVX is the only camera in a non-ENG form factor that has the 24P and Cine Gamma features. Would this alone be enough to make its usage conspicuous, even if the chassis were changed in some significant way?

"Functional features" refers to appearance, only. I used the XL1 as an example because it has a fairly unique profile -- it's silhouette is sufficiently distinctive that I think it would be protectable. A better example of an unprotectable feature would be the handle on my VX2000. Aside from the fact that any number of other manufacturers' cameras have a top-mount carrying handle, the handle itself is purely functional -- it's purpose is to provide a means of holding the camera. A top-mounted handle offers benefits over a side or bottom mounted handle, or over top-mount handles that are attached at only one, instead of two, points. This feature is purely functional and, as such, could not constitute protectable trade dress.

The internal features of the camera, e.g. 24p, HD, etc., are irrelevant to trade dress. The purpose of trademark protection is to benefit consumers, not manufacturers. It does this by reducing search costs, i.e. you can select a product based on the reputation of the manufacturer -- if you like and trust Canon, and you see a camera labeled "Canon," or that has a distinctive appearance that is associated with Canon products, you can buy it without worrying that it's really made by another company. However, the purpose of trademark is not to hinder competition between manufacturers. No manufacturer can get a monopoly on, for example, 24 fps progressive scan by including the feature and then attempting to gain trademark protection for it. The manner in which it is implemented _may_ result in technology that can be protected by patent, but the actual feature itself can be included by any other manufacturer. That's why manufacturers market these features with catchy phrases which are protectable by trademark. For example, Sony calls their optical image stabilization feature "Super Steady Shot" (which, by the way, is a fairly weak trademark in my opinon). No other manufacturer can use "Super Steady Shot" to describe a feature of their camera, but any of them are free to include (and in fact most do include) comparable optical image stabilization technology. I'm unfamiliar with Cine Gamma -- from the name, I'd guess that it's something that adjusts the dynamic range of the image to approximate film. Cine Gamma may be a trademark though, again, my guess is that, if protectable at all, it's a very weak trademark. Assuming it is a mark, no other camera manufacturer could use the term itself. However, any of them could include a feature which provides the same function.

[Peter Moore]

Hey Paul, are you a trademark lawyer? It's nice to find fellow attorney/videophiles here. :)