Wednesday, 13 October 2010

Keep your hands off my word!

It was a wonderful little gift for a Mac lover, a friend who works with a Macbook and iPhone. It was just a postcard showing a saucepan containing water and an egg. The egg was being boiled, and the text in German called the saucepan an “Ei-Pott”. The German word "Ei" means egg, and "Pott" is used in northern German dialects to refer to a variety of containers such as coffee mugs, saucepans - and even ships. And in combination, of course, the result is a beautiful parody on a portable music player produced by the maker of the Macbook.
I was equally amused when I heard that another company had produced an egg cup with the same title. Another perfect gift for Mac lovers.

Perfect gift no more. I will not be able to buy the egg cup. The "Ei-Pott" egg cup has been forbidden in a German trademark case. Selling it - or even possessing it - can be punished by a massive fine or by a few months in prison. A company called Apple took the egg cup manufacturers to court and won a judgement against them. Perhaps the people at Apple are not Mac lovers. Or at least, they are not amused.

I have a copy of the court ruling (in German) from the Hanseatisches Oberlandesgericht Hamburg, reference 5 W 84/10, of 9th August 2010. The main reason given in the ruling is that the “Ei-Pott” could be confused with Apple's registered trademark “iPod”. Apparently, Apple has also registered the name “iPod” for kitchen utensils, so I suppose the court had no real alternative to its ruling. The court nevertheless discusses other cases in which well-known trademarks were parodied and this use was judged to be artistic freedom (the purple cow of the “Milka” chocolate bars, and a German jingle for AOL). But it did not give me the chance to buy the “Ei-Pott” egg cup. That's a pity - my Mac loving friend will just have to do without this brand-enhancing gift.

The "iPod" features in another current case. Another U.S. company, Sector Labs, produced a projector and gave it the name “Video Pod”. This is of course closer to the technological nature of Apple's “iPod”, although the name doesn't rely on the linguistic device of adding a small “i” before a word. Sector Labs argues that “pod” is a normal English word, so it should not be taken out of free circulation by way of a trademark. There is a certain plausibility on both sides of this case, so it will be interesting to see how the judgment goes.

Another interesting trademark issue a few years ago was when Google threatened court action in an attempt to forbid the use of the verb “to google” as a generic term for using a search engine to search the Internet. The issue is summarised on Wikipedia, which quotes dictionary definitions stating that “to google” means to search the Internet with the Google search engine. The article does not discuss the possible next step in generic use. It is conceivable that the verb could also be used for searching the Internet with other search engines.

This would not be the first time that such a trademark falls into general use. In popular UK English usage you can “hoover” with a vacuum cleaner manufactured by Siemens or Electrolux. The word “Kleenex” is often used for paper handkerchiefs of any brand (just like the brand name “Tempo” in Germany). Transparent adhesive tape is popularly referred to as “Sellotape” (or in German, “Tesa-Film”), irrespective of who actually made it. Even familiar words such as “Aspirin”, “escalator”, “yo-yo” or the “Thermos flask” were originally trademarks (see here).

There are other familiar trademarks which are generalised or parodied. One is the oval shape containing the words "Intel inside". I have seen this spoofed on T-shirts or bumper stickers with religious claims (Jesus inside), plain parody (Idiot inside) or personal statements (a pregnant Mum wearing a T-shirt "Jakob inside"). The soft drink slogan "It's the real thing" has also been pressed into a religious mould as "Jesus Christ - he's the real thing" (set in the typical Coca Cola typeface with the characteristic flourish above and below the text). There are plenty more such cases.

I find it amazing that mere words can cause such a fuss. Just a sequence of sounds or a series of marks on paper can cause expenditure amounting to millions of pounds (or euros, dollars or whatever), and sometimes they keep courts and lawyers occupied for days or even weeks on end. The miracle of language has enormous power, and language creativity is often inseparably linked with financial reward.

Dear reader, I am sure you could add more examples of the power of brand names, advertising slogans, and perhaps stories of legal and illegal parodies. Any comments?

Thursday, 7 October 2010

The dance of the lawyers

Once upon a time there were two companies. Company A had a product which company B needed for its business. The company owners met and agreed a deal. The price was paid, the goods were delivered, and everyone lived happily ever after.

But sometimes things are not that easy. Perhaps company A has difficulty paying for the goods, or company B has problems delivering them. Or there are quality problems, and before long company A wants its money back, or at least wants company B to repair or replace the products. Or a number of other things can go wrong, and both companies want to find some way to protect themselves.

So they call in the lawyers, and the lawyers write a document called the “Terms and Conditions”. The aim of these terms and conditions is often to make the other company responsible for as much as possible, and to keep the obligations of the company which defines the terms and conditions to a minimum. Sometimes the terms and conditions are fair and reasonable, but sometimes they appear rather biased.

There is one clause in particular which I always find intriguing. In German terms and conditions, for example, we often find something like this:
These General Terms of Business shall apply to all business transactions between us and our clients, even if they are not explicitly confirmed by the other party. Any general terms of business which deviate from, contradict or supplement these terms of business shall not become part of the contract, even if we are aware of them, unless their validity is explicitly confirmed by us in writing. This shall also apply even if the other party to the contract makes reference to its general terms of business and we do not contradict this.”

Terms and conditions in the UK often contain a similar provision:
These conditions shall prevail over any terms or conditions contained in the customer's order, acceptance or other communication and shall be deemed to have been accepted by the customer in preference to such other terms or conditions. Any provision, stipulation or condition in the customer's conditions of order or otherwise which conflicts with or in any way qualifies or negates any of these terms and conditions shall have no effect and these terms and conditions shall prevail. No variation of these terms and conditions shall be valid unless it has been specifically agreed in writing and signed by a director of the company.”

In B2B dealings (“business-to-business”), often both parties will have their own terms and conditions. If we examine them closely, we will find a number of conflicting provisions, and usually a clause excluding the other party's terms and conditions.

So how do they get any business done at all? If company A says “We will deliver the goods, but only after you have confirmed our terms and conditions”, and company B says “We want the goods and we are willing to pay for them, but only after you have confirmed our terms and conditions”, where do they go from there? If both parties insist on receiving a confirmation, they will be on a perpetual merry-go-round that leads them nowhere. Neither of them will get any goods, and neither will receive any payment. Business will come to a standstill.

In practice, the companies usually include their terms and conditions in their paperwork, but otherwise ignore them and hope for the best. In most cases this actually works – business transactions are completed as if there were no terms and conditions, and many companies do, in fact, live happily ever after.

But what happens if things go wrong and the matter goes to court? Naturally, this creates work for the lawyers. But apart from that, the outcome will depend on the specific circumstances of each case. I have come across various scenarios in my reading on this subject and in conversations with legal experts:
  • The doctrine of offer and acceptance. Contracts under the laws of England and Wales generally involve an offer by one party and an acceptance by the other party. The “offer” normally includes the terms and conditions, so by accepting the offer, the other party could be said to accept the terms and conditions. But there are a number of factors that make this more complicated. For example, the concepts “offer” and “acceptance” have very specific definitions, and there are other concepts such as “counter-offer” and “invitation to treat” which could change the character of the individual case.
  • Cancel everything that is not explicitly agreed. I have heard of cases both in Germany and in the UK in which the court examined the terms and conditions of both parties and compared them with the requirements of the law. The court cancelled all provisions which went beyond the requirements of the law, unless both parties agreed on individual provisions in their terms and conditions. In one case that I read about, both parties had their own terms and conditions, including a provision excluding the terms of the other party, but they conducted their business largely over the phone without reference to the paperwork. The court suggested that each party knew about the terms of the other party, but that they had not even tried to agree on which terms should apply. It concluded that the parties did not intend to apply either set of terms and conditions, so their business relationship would be governed mainly by the general requirements of the law.

A question for my readers: have you come across any other strange provisions in general terms and conditions? Have you noticed differences between different jurisdictions? Have you seen the tendency to ignore the legal terms and conditions and simply get on with business as if nothing could ever go wrong?

Important note: I am not a lawyer, and this article is mere opinion, not legal advice. If you have any legal business related to the content of this article, you will need to consult a lawyer. However, please feel free to contact me if you need any legal translations from German to (UK) English.