Save the Netbooks: Newsflash: Intel responds to Psion's netbook counter-suit
Newsflash: Intel responds to Psion's netbook counter-suit
A lot has happened since we revealed that Psion has counter-sued Intel. For a start we have a judge - Saundra Brown Armstrong who's apparently a 60-something African American ex-policewoman and a kick-off time: June 17, 2009, at 3:45 p.m with the Initial Case Management Conference (PDF), as well as some routine filings such pro hac vice orders (e.g. PDF).
Not wanting to waste any time, on March 9 Intel filed a Motion to Shorten Time (PDF) and a Motion to Expedite (PDF), pushing to get Psion to cough up key information "including its sales and marketing efforts to promote products in connection with the netbook term, consumer awareness of Psion’s purported rights in netbook, and its efforts to police use of the term by third parties, all of which are pertinent to whether Psion has any rights in the mark" which they argue would "confirm that Psion does not have any rights in the term". The idea is that by getting hold of inside information regarding Psion's netbook sales and enforcement (if any) of the trademark they can attack the trademark itself, thereby undermining much of the case. This information will likely surface eventually (Psion have already divulged some high level sales figures and details about trademark enforcement prior to December 2008 are conspicuously absent) but the sooner the better.
Psion didn't like this (likely because the information would have undermined their case, exactly as Intel had intended) and argued strenuously against it (PDF). They particularly didn't like the "ex parte" claim (PDF) which Intel justified on the basis that "irreparable harm suffered by Intel as a result of Psion’s claims that it owns the generic term “netbook” increases each day. Accordingly, Intel cannot afford to wait and follow the normal notice procedure in connection with this motion". Unfortunately the judge sided with Psion on this one and denied (PDF) the motions on 18 March saying Intel "failed to
demonstrate good cause for its request", even considering Intel's colourful reply (PDF). Unfortunately it seems we're going to have to wait for due process - this could well have seen the case scuttled within days rather than months.
The real news though is Intel's response to Psion's counterclaim (PDF) which was filed on Thursday. The essentially deny everything contentious, but the highlights are as follows:
Our opinion is that while Psion may have had a valid trademark on the term "netbook" previously, this has not been the case for the last year due to abandonment and genericide. The term itself can no longer function as a source identifier and is thus unable to be used as a trademark by Psion, Intel, Dell or any other entity. That's good news for consumers because it means that all vendors can participate in the marketplace on a level playing field - at least once the trademark confusion is cleared up. We're fairly confident that Intel's court case, Dell's TTAB filing or both will see the registration cancelled by mid-year.
We don't take a position on whether Intel should be held accountable for hijacking the trademark, though it is believable that they didn't do a trademark search on this obvious descriptive (or at worst, suggestive) term before using it. The fact that it was mentioned at an event and appeared in an Intel technical blog long before they obtained netbook.com, etc. would suggest that the term did not go through the normal product development process (that is it wasn't deliberate - besides, they could just as easy have chosen another less sensible term like ULCPC or UMPC). It helps that to the best of our knowledge Intel doesn't currently and has never offered a netbook product. In any case the netbook brand appears to have been relatively worthless before Intel got to it so the damages should be limited accordingly (perhaps tied to Psion's dismal sales).
Another interesting point is that less than a month after Psion filed their trademark #75215401, a Mountain View company called NETschools Corporation (which has been merged out into an Atlanta company by the same name and apparently subsequently acquired by PLATO Learning, Inc.) filed trademark #75224985 for a netbook "portable personal computer for K-12 students". Given the time it usually takes from inception to trademark application and the absence of USPTO tools like TDR and TESS it seems that these two applications "crossed in the post" and that Psion only managed to secure the mark by a handful of days. The fact that two companies came up with the same term separately is also quite telling of its descriptive (and therefore impossible to protect) nature.
Finally, we strongly object to Psion's claim that "Intel and computer manufacturers and retailers have numerous other options of descriptive terms to describe small, easily-portable notebook computers – such as “ultraportable” notebook (the term previously adopted by the industry to describe these devices before Intel’s proliferation of “netbook”), “sub-notebook,” or “mini sub-notebook.” In fact, the industry already uses some of these same terms for keyword advertising.". An ultraportable aka ubnotebook is not a netbook; the former pertains to size ("a class of laptop computers that are smaller and lighter than typical notebooks") while the latter pertains to Internet connectivity - an "internet notebook" ("a class of laptop computer designed for wireless communication and access to the Internet"). These are discrete categories and Psion's claim that the terms are interchangeable is patently false - with any luck Intel will summarily dispense with this weak argument, for example by referring to the corresponding Wikipedia articles.
A netbook is a netbook is a netbook - consumers know what to expect when they ask for one (and in almost all cases it's not an overpriced Psion device, that's for sure).
Not wanting to waste any time, on March 9 Intel filed a Motion to Shorten Time (PDF) and a Motion to Expedite (PDF), pushing to get Psion to cough up key information "including its sales and marketing efforts to promote products in connection with the netbook term, consumer awareness of Psion’s purported rights in netbook, and its efforts to police use of the term by third parties, all of which are pertinent to whether Psion has any rights in the mark" which they argue would "confirm that Psion does not have any rights in the term". The idea is that by getting hold of inside information regarding Psion's netbook sales and enforcement (if any) of the trademark they can attack the trademark itself, thereby undermining much of the case. This information will likely surface eventually (Psion have already divulged some high level sales figures and details about trademark enforcement prior to December 2008 are conspicuously absent) but the sooner the better.
Psion didn't like this (likely because the information would have undermined their case, exactly as Intel had intended) and argued strenuously against it (PDF). They particularly didn't like the "ex parte" claim (PDF) which Intel justified on the basis that "irreparable harm suffered by Intel as a result of Psion’s claims that it owns the generic term “netbook” increases each day. Accordingly, Intel cannot afford to wait and follow the normal notice procedure in connection with this motion". Unfortunately the judge sided with Psion on this one and denied (PDF) the motions on 18 March saying Intel "failed to
demonstrate good cause for its request", even considering Intel's colourful reply (PDF). Unfortunately it seems we're going to have to wait for due process - this could well have seen the case scuttled within days rather than months.
The real news though is Intel's response to Psion's counterclaim (PDF) which was filed on Thursday. The essentially deny everything contentious, but the highlights are as follows:
- Intel "denies that Psion offered any Netbook laptop computers in the United States after 2003, as confirmed by Psion’s website"
- "Intel denies that Psion has advertised its Netbook laptop on its website or otherwise since 2003, after Psion’s website listed that model as discontinued"
- "Intel admits that it has used the term “netbook” in its generic sense. Intel denies that it uses the term netbook as a trademark or as an indicator of a sole source to offer any of its products or services."
- "Intel denies that it commenced use of the term “netbook” with any knowledge of Psion’s claim of existing rights in the term."
- "Intel denies that Psion has any rights in the term “netbook”"
- Psion "fail to state a claim upon which relief may be granted"
- "The term “netbook” is generic, i.e. a relevant portion of consumers do not associate the term “netbook” as originating from, or being approved by or affiliated with, a single source."
- "Psion has no trademark rights in the term “netbook”"
- "U.S. Registration No. 2,404,976 for NETBOOK was obtained or maintained through fraud upon the United States Patent and Trademark Office"
- "Psion abandoned any rights that it may have once had in the term “netbook” or U.S. Registration No. 2,404,976."
- "Intel does not use the term “netbook” to identify a source of any products or services"
- "A relevant portion of consumers do not associate the term “netbook” with the source of any products or services offered by Psion."
Our opinion is that while Psion may have had a valid trademark on the term "netbook" previously, this has not been the case for the last year due to abandonment and genericide. The term itself can no longer function as a source identifier and is thus unable to be used as a trademark by Psion, Intel, Dell or any other entity. That's good news for consumers because it means that all vendors can participate in the marketplace on a level playing field - at least once the trademark confusion is cleared up. We're fairly confident that Intel's court case, Dell's TTAB filing or both will see the registration cancelled by mid-year.
We don't take a position on whether Intel should be held accountable for hijacking the trademark, though it is believable that they didn't do a trademark search on this obvious descriptive (or at worst, suggestive) term before using it. The fact that it was mentioned at an event and appeared in an Intel technical blog long before they obtained netbook.com, etc. would suggest that the term did not go through the normal product development process (that is it wasn't deliberate - besides, they could just as easy have chosen another less sensible term like ULCPC or UMPC). It helps that to the best of our knowledge Intel doesn't currently and has never offered a netbook product. In any case the netbook brand appears to have been relatively worthless before Intel got to it so the damages should be limited accordingly (perhaps tied to Psion's dismal sales).
Another interesting point is that less than a month after Psion filed their trademark #75215401, a Mountain View company called NETschools Corporation (which has been merged out into an Atlanta company by the same name and apparently subsequently acquired by PLATO Learning, Inc.) filed trademark #75224985 for a netbook "portable personal computer for K-12 students". Given the time it usually takes from inception to trademark application and the absence of USPTO tools like TDR and TESS it seems that these two applications "crossed in the post" and that Psion only managed to secure the mark by a handful of days. The fact that two companies came up with the same term separately is also quite telling of its descriptive (and therefore impossible to protect) nature.
Finally, we strongly object to Psion's claim that "Intel and computer manufacturers and retailers have numerous other options of descriptive terms to describe small, easily-portable notebook computers – such as “ultraportable” notebook (the term previously adopted by the industry to describe these devices before Intel’s proliferation of “netbook”), “sub-notebook,” or “mini sub-notebook.” In fact, the industry already uses some of these same terms for keyword advertising.". An ultraportable aka ubnotebook is not a netbook; the former pertains to size ("a class of laptop computers that are smaller and lighter than typical notebooks") while the latter pertains to Internet connectivity - an "internet notebook" ("a class of laptop computer designed for wireless communication and access to the Internet"). These are discrete categories and Psion's claim that the terms are interchangeable is patently false - with any luck Intel will summarily dispense with this weak argument, for example by referring to the corresponding Wikipedia articles.
A netbook is a netbook is a netbook - consumers know what to expect when they ask for one (and in almost all cases it's not an overpriced Psion device, that's for sure).