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Dell Attempts To Trademark Cloud Computing

Dell has filed with the USPTO in order to try and win a trademark on the phrase 'cloud computing.'

But that doesn't mean that it will be easy for them to keep, according to Keith Toms, an attorney with Bromberg and Sunstein LLP, a Boston-based intellectual property firm.

In order for a word or term to be granted a trademark it needs to pass through the US Patent and Trademark office. The first step is to file an application for the term. That application is passed to an examiner who tries to find reason why the trademark shouldn't be given. Once the issues unearthed by the examiner are resolved, the potential trademark is published in the official gazette. Once published, anyone who has a stake in fighting the potential mark has 30 days to file an opposition -- this is called the Opposition Stage. After the 30-day-period has expired, the pending trademark enters the Allowance Stage, where the party filing has up to three years to demonstrate use of the trademark.

The phrase 'cloud computing' as filed by Dell published on April 15, 2008 and was not opposed.

"Dell pretty much has this through the USPTO," said Toms. "Whether or not they can defend it remains to be seen -- and I'm skeptical about that. But the bottom line is: Dell will probably get this trademark."

That doesn't mean that a company like Sun or IBM or HP will have to start coughing up a nickel every time they use the phrase, however.

"As soon as a trademark is registered, and#91;another companyand#93; can make a move to cancel," said Toms. "There is a period of time where a competitor can enter a sort of litigation to cancel. It's like an opposition but procedurally different."

Additionally, not all trademarks are created equal, said Toms, some have different strengths. The strength of the trademark, so to speak, is dependent on the company with which it is associated. A brand like Nike has a strong trademark because all the goods and services bearing that name come from a single source. "If you're selling apples, you can't trademark the phrase 'apple' because competitors have a right to use it," said Toms. "But if your company is named Apple and you sell computers, you'll have a very strong trademark."

Where companies seeking trademarks will run into problems is with a word that is already part of the lexicon or is deemed to be "too generic."

There are several good examples of, what Toms called, "genericide" -- the nickname for the phenomenon when no one recognizes a trademark and it becomes a generic thing.

Think of the moving staircase that takes you from one floor of a building to another. It's called an escalator, but originally started out as Escalator, a trademarked term by the company. The cylinder that keeps coffee warm on road trips started off as a trademarked term, Thermos. But over time, the public took hold of these words and made the meaning of them generic. Now, you travel up and escalator and can't believe you left the thermos at home.

Dell is running the same risk by putting a trademark on cloud computing. It's been part of the lexicon for some time now and trying to swoop in and claim it as its own could be difficult for the vendor.

"You can't steal a generic term from the lexicon and make it your own," said Toms.

In fact, this isn't the first time a company has tried to trademark the phrase. In 1998, a company called NetCentric owned the phrase cloud computing. The notice of allowance was mailed to NetCentric on October 20, 1998. The trademark was then abandoned on June 19, 1999.

"You don't have an unlimited amount of time to start using a trademark," said Toms. "After notice of allowance, you have three years to use it. If you don't use it, the trademark is abandoned."

NetCentric lost its trademark after only six months because it chose not to file an extension request.

If winning a trademark on cloud computing was important and defensible, it would seem that Dell would be fighting NetCentric to get rights to use it. As it is, they aren't.

Another factor that could be detrimental to Dell defending the trademark -- assuming it is granted -- comes from the company itself. Writing on the official Dell Cloud Computing blog, the company seems to use the phrase in a generic sense.

"On Dell's blog they use the phrase 'cloud computing' in a generic sense which is trademark law no-no number one," said Toms. "If it's a generic thing, no one will recognize the trademark."

So if a company like IBM or Sun or anyone else wants to make a legal run at Dell for getting the trademark, they'll likely be in a good position. Just because Dell is granted a monopoly on the word doesn't mean they are protected from claims that cloud computing is a generic term.

"The reason for intellectual property law is to assert it against other people as a sword. There is not much value in sitting back on a trademark and not enforcing them," said Toms. "But in this case, I'd prefer to be council for the defense."

Dell did not respond to requests to comment.

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