Fluke Gives Sparkfun A Bunch Of Multimeters In Response To Trademark Mess

from the good-response-to-a-bad-situation dept

Well, that was fast. We just had our post about the unfortunate trademark situation that Sparkfun found itself in, with 2,000 multimeters held by US Customs at the border because they happened to have a yellow outside, and multimeter king Fluke happened to trademark an aspect of that look. Fluke, of course, had no direct hand in stopping this particular shipment, but had (a) gotten that trademark and (b) years ago gone to the ITC to get an injunction against other multimeter makers.

That said, it appears that Fluke's management recognizes how this kind of situation can spiral out of control, and after spending about a day understanding the details, made a public offer to Sparkfun: giving the company a pile of Fluke multimeters and letting Sparkfun do what they want with them (sell them, donate them, burn them in a pyre, whatever). As Fluke notes, the value of the equipment it's giving Sparkfun exceeds the lost shipment:

Earlier today we contacted SparkFun and offered to provide a shipment of genuine Fluke equipment, free of charge for them to sell on their site or donate. The value of the equipment exceeds the value of the Customs-held shipment. SparkFun can resell the Fluke gear, recouping the cost of their impounded shipment, or donate it into the Maker community.

While we will continue to enforce our trademark, we are taking this one-time action because we believe in the work of SparkFun supporting the Maker and education communities. This is important to us. We have been supporters of the Maker community for years through the donation of over half a million dollars worth of tools and employee time to organizations like First Robotics.

Sparkfun accepted and has announced it will be donating the multimeters to educational institutions and schools. Given the situation and potential PR headache for Fluke, this was probably the best solution.

It's not perfect however. There is still a shipment of 2,000 perfectly good hobbyist-level multimeters that are about to be destroyed for no good reason thanks to trademark law (what was that people were saying about trademarks being about "protecting" property rights? Seems like the opposite here...). Also, Fluke insists that it's going to continue to be aggressive about its trademarks in a somewhat misleading way:

Like any organization that designs and manufactures electronics, we actively work to stop lookalike products from making it to the marketplace. We do this to protect our company and the jobs of our employees. We also do so because it is a matter of safety for our customers. Our tools are used in high-energy industrial environments, where precision and safety is an absolute necessity.

I mention this because we firmly believe that we must be – and will continue to be – vigilant in protecting Fluke and our customers. One step in doing that was registering a trademark protecting the look and feel of our devices so our customers know that if it looks like a Fluke it’s a Fluke.

While it is true that trademark law, when used properly, should be about consumer protection, it seems to be going a bit far to suggest that a broad trademark on multimeters with a yellow and gray outer coating should give one company exclusivity over such a look. There is no indication that people were somehow confusing hobbyist-level multimeters like Sparkfun's with Fluke's high-end versions, nor any indication that anyone was using the cheap multimeters in a manner that put people at risk.

All in all, it's good to see Fluke quickly respond and try to make the best of the situation, but the underlying setup is still problematic.

Filed Under: itc, multimeters, pr, trademark
Companies: fluke, sparkfun

Trademark Insanity: Sparkfun Has To Destroy $30,000 Worth Of Multimeters Because They're Yellow [Updated]

from the this-is-stupid dept

As pretty much all of you have been sending in, our favorite open source electronics firm, Sparkfun, has found itself in the middle of yet another unfortunate intellectual property issue that highlights how broken intellectual property law continues to be. In short, SparkFun needs to pay to have $30,000 worth of multimeters (2,000 of them) destroyed because they're yellow and because trademark law is stupid. Basically, electronics maker Fluke holds trademark 2796480, which is described thusly:

The mark consists of the colors dark gray and yellow as applied to the goods. The dotted outline of the goods is intended to show the position of the mark and is not a part of the mark.

The trademark makes clear that it is not claiming a trademark on the color yellow, but rather dark gray and yellow applied to something that looks like this: Now, here's Sparkfun's multimeter: And, apparently, while having these 2,000 multimeters shipped from China to the US, they were stopped by Customs because of an ITC ruling (warning: big pdf file behind that link) that blocks the import of:

digital multimeters and products with multimeter functionality that have a contrasting color combination of a dark-colored body or face and a contrasting yellow border, frame, molding, overlay, holster or perimeter.

And this is based on claims that other companies were violating that Fluke trademark we discussed above. As the folks at Sparkfun point out, this is all kinds of ridiculous and immensely damaging to them:

Yellow is awfully broad: In my mind, multimeters have always been yellow. I’ve never had the opportunity to own a Fluke-branded DMM so I’m not sure where my brain picked up this association. I can respect trademarks and company branding and I respect Fluke’s reputation for high-quality multimeters. If Fluke wants to own a color I would expect the USPTO to require them to assign an exact color just like Tiffany’s did with Tiffany Blue. But allowing a company to trademark ‘yellow’ seems broad.

Wicked burden on small business: Trademark law is heavily skewed towards large business. Small business does not have the resources to stay abreast of all trademarks for all the products they don’t carry. If you’re going to put the onus on the little guy to avoid infringing IP then you shouldn’t need an army of consultants or attorneys to find this information. We will lose $30,000 on this shipment. But the cost of the legal legwork and manpower to make sure we don’t violate a future color seems unreasonable and simply not feasible.

No recourse: Our multimeters are actually kind of orange, not Fluke yellow. The document from the Department of Homeland Security is matter of fact. Where is the opportunity for recourse? What is the appeals process? Because of a $150 per day warehousing fee we are forced to decide quickly with limited legal guidance and mounting penalty costs.

Decide between bad and worse: So we really only have two options, ship them back or have them destroyed. Having them destroyed costs $150 per hour with no indication of how much time it will take to destroy 2,000 units. Returning them has been ruled out by the manufacturer in China because the import taxes in China are so steep (yay free trade) that bringing them back into the country to have them modified would be more expensive than paying for the return shipping and taxes. Between bad and worse, we have to have them destroyed. Sorry Earth.

To be fair, the first point is slightly misleading. This isn't a color trademark like Tiffany Blue or the variety of other trademarks that have issued in the past (though many of those are ridiculous in their own right), but a specific trademark about how the color is used on a specific product. It's still ridiculous and makes no sense, but it's not directly comparable to color trademarks (which, again, are also ridiculous).

Sparkfun is using the publicity around the blog post in the hopes that Fluke might grant them a brief license to save these multimeters, but admits that's unlikely. The company is also changing the color of its multimeters, but likely going to need to eat the cost of the ones about to be destroyed. Because trademark law is, yet again, pretty ridiculous.

Update: And Fluke is apparently going to give Sparkfun a bunch of its multimeters to do what they want with them.

Filed Under: destruction, itc, multimeters, trademark, yellow
Companies: fluke, sparkfun

Sparkfun CEO Explains IP Obesity: Companies Who Rely Too Much On IP Flop

from the a-primer dept

A few folks sent over a great blog post by Sparkfun CEO Nathan Seidle about a recent TEDx presentation he did on the topic of "IP Obesity," in which he argues that companies that focus on patents tend to get fat and lazy while others out-innovate them. He provides the following example, showing this chart:

Here's an interesting example. Kodak is an amazing company that has been in operation for over 130 years. In 1978 Kodak filed for a patent for an electronic still camera, the precursor to the digital photography industry. They had a 25 year head start on the industry. What did Kodak do? They licensed their patent and filed suit against other companies that possibly infringed upon it. A graph showing the stock value changes of two companies over the past 25 years. I'll let you guess who is Canon and who is Kodak. What happened? Kodak relied too much on their patents. They rested on their laurels and become intellectually unfit. They were afflicted by IP Obesity.

Of course, that's just a single example, but we've noticed it in other cases as well. When we see bigger companies getting more aggressive with patents, it almost always seems to signal a decline in prospects for the company -- because they've become fat and happy resting on their laurels and government-granted monopoly privileges, rather than continuing to innovate in the market place. It's the exact opposite of what we're told patents are for.

You should check out the rest of the post, but Seidle goes on to talk about how ideas get copied all the time, and why that shouldn't concern you. He explains why it makes much more sense to focus on just building your business -- and he's got Sparkfun to prove it. If you don't know (and you should) it's an open source hardware company that has done over $75 million in business since its inception and is apparently on pace to do $25 million alone this year. Seems like you really can build a pretty good business while still being pretty open and not worrying about others copying you.

Filed Under: ip obesity, open source hardware, patents
Companies: sparkfun

Sparkfun Explains Why It Provided Customer Info In Response To Subpoena

from the tough-situations dept

When you receive an official law enforcement document/request, like a subpoena, it can actually be pretty scary. An official-looking document from a court in association with law enforcement may leave many people with the impression that they absolutely have to comply. While there are circumstances in which you do need to comply, you can often fight back. Tragically, many companies don't. They just roll over and hand over the info, even if it violates their own policies (and sense of right and wrong). There are (unfortunately few and far between) cases like Twitter, who has shown a willingness to fight for user privacy, but it's still a tough issue for many companies.

Shawn Sims points us to the interesting story of how the popular electronics company Sparkfun publicly explained how it dealt with a very broad subpoena demanding all sales information on sales made to addresses in Georgia over a six month period. The reasoning was that a Sparkfun device was found as a part of a credit card skimmer device.
Sparkfun CEO Nate Seidle explains that the subpoena came after an initial call requesting the same info, where the company politely refused to provide the info, noting its support of the privacy rights of its consumers. As Seidle noted, no one supports card skimming, but there are issues of principle here:

I want to be very clear: creating devices that steal credit card numbers are illegal and cause pain for a lot of people. We know our parts can be used for good or for evil. We have zero tolerance for those who use them for evil. I will offer our technical services to any law enforcement that may need help reverse engineering a device. It is obvious the law enforcement agency is requesting this information to put a stop to this activity. However, I also believe strongly in the right to privacy and the protection of personal data.

After talking to their lawyers, and realizing that you don't have to fully comply with a subpoena -- but also that a subpoena can turn into a warrant which you do have to comply with -- the company worked with the law enforcement to try to limit the type of information requested, and eventually came to a compromise:

Please read the subpoena carefully. The request for 'all orders' seemed like they were casting a very wide net without cause. Discussing this issue with our counsel and working with the law enforcement agency, we agreed to obtain the orders that had the product on it, not all orders as required by the subpoena. This ended up being about 20 orders. In my opinion, one order is too much information. While I believe this legal process protects us all from wrong doing, turning over any piece of data goes against every fiber in my being. But without any further legal options, I made the decision to turn over the sub set of data.

I want everyone to know that we take your data and privacy extremely seriously. We guard it with the highest levels of security and confidentiality. If we are legally forced to turn over data, we promise you we will work with the law enforcement agency to do everything in our power to limit the amount of information released.

This is a tough position to be in -- and you can certainly argue that the company could have (or perhaps should have) continued to fight the subpoena. But in the end, it's likely that it would have to turn over the info eventually no matter what. At the very least, you have to respect the company for being totally transparent and open about what happened and why (and how Seidle personally felt). Plenty of other companies would hand over the data and then never discuss the issue publicly ever.

Filed Under: nate seidle, privacy, subpoena, transparency
Companies: sparkfun

SPARC No Fun At All; Threatens SparkFun

from the spark-up-the-lawyers dept

John Fenderson was the first of a few of you to send in a link (via Slashdot) to the story of how SPARC, the computer architecture company owned by Sun, is threatening SparkFun over trademark infringement claims. SparkFun is an electronics shop, which sells components and kits and the like. The two are pretty different. This whole situation apparently was "sparked" (heh heh) when SparkFun applied for its own trademark, at which point SPARC sought to block the trademark application. From there, they went on to sending a cease & desist. The folks at SparkFun do a nice job breaking down why the two marks are entirely different, and why even Sun employees seem to have no trouble understanding the difference between the two. This seems like yet another case of overly aggressive trademark enforcement, just because some lawyers feel the need to oppose anything that might conceivably be considered even close to similar.

Filed Under: electronics, sparc, trademark
Companies: sparc, sparkfun, sun