Does iPod nano Infringe on Creative's Zen Nano Plus?
TMO Reports - Does iPod nano Infringe on Creative's Zen Nano Plus?
by , 2:50 PM EDT, September 9th, 2005
Just a week after Creative said it was "looking at all its alternatives" in defending what it calls the "Zen Patent," which covers the company's MP3 player interface and is said to be similar to the iPod's interface, Apple seems to have infringed on Creative's territory when it announced the iPod nano on Wednesday. Creative launched its Zen Nano Plus earlier this year, beating Apple to the market with the word "nano" on an MP3 player by several months.
An article at The Register's Web site said that a Creative spokesperson confirmed his company's legal department "is aware of the matter," but he would not state what legal action will be taken, if any. Both the iPod nano and the Zen Nano Plus are flash-based players, although Creative's product is comparable to the iPod shuffle in terms of capacity. Both are also available in black or white, but Creative also offers eight other colors.
Applying a Multi-Factored Test
While Apple's use of the word "nano" after Creative had already established it in the marketplace may seem like infringement, Louis D. Brandeis School of Law professor Lars Smith told The Mac Observer that such a claim requires a multi-factored test by a court, which includes comparing the marks' look ("Zen" is much more prominent on Creative's page than "Nano," he pointed out), typical consumer knowledge, the junior user's intent (which would be Apple's intent, in this case) and more.
Simply stating that the word is the same is not enough, although Mr. Smith did express surprise that Apple chose to use it when it almost certainly knew that "nano" was already part of another MP3 player's name. "The best bet for Apple was to not use the same term," he said. "That's what I would have done."
"But at the end of the day, it's about whether or not the consumer is confused," he explained. "If you can't prove confusion, you can't win the case, even though it's the same word." As an example, he cited Delta Faucets and Delta Airlines -- neither can sue the other over the use of the word "Delta" because no consumer is going to accidentally buy an airline ticket when they meant to purchase a sink faucet.
However, because the iPod nano and Zen Nano Plus are both MP3 players sold in many of the same online and brick-and-mortar retail outlets, Creative could claim that it is losing sales due to consumer confusion. "For example, if you type in 'nano' at Amazon and both come up, that could be a problem," Mr. Smith said.
The Mac Observer determined that both MP3 players do appear in the list of search results at Amazon.com when "nano" is entered in the search engine for electronics. Entering the term in Google brings back several links for the iPod nano, along with completely unrelated links, but none for Creative's product, at least on the first couple pages of results.
Part of the test of consumer confusion is the price of a product. The cheaper it is, explained Mr. Smith, the more likely a consumer may be confused while making a purchase. On the other end of the spectrum, a very expensive item will likely require enough forethought on the part of the buyer that he will understand what he is purchasing and how it differs from the competition. In this case, MP3 players currently occupy a space that doesn't qualify as a casual purchase but is not a major buying decision either.
Apple's Options
Apple would have several options, though, if Creative did indeed initiate legal action, according to Mr. Smith. One is the legal concept of famous trademarks, such as Disney or Coca-Cola, that are so prominent their owners can claim dilution if others use them in any context. "If the Zeno Nano didn't sell many units," he explained, "that may not be dilution [of Creative's mark]."
Dilution might also work in Apple's favor because the company could claim that the entire product names should be considered. "If you take the entirety of the marks," Mr. Smith said, "they could be different enough [to limit customer confusion]. The court may say that iPod and Zen are the dominant terms, not 'nano.'"
In addition, "nano" is a commonly used term that describes a one-billionth unit of measurement, such as a nanosecond. It's also part of the word "nanotechnology," which is commonly recognized as the creation of electronic circuits and devices on an atomic level.
"Nano is a descriptive word that conveys the impression of size," Mr. Smith noted, "so Apple could argue that it's more descriptive, especially if it's used a lot in the technology field." In that case, terms in common use typically can't get trademark protection.
Just the Start
In the end, Mr. Smith said, it all comes down to proving consumer confusion, "and trying to divine the mind of the typical consumer is a guessing game. Weighing in Creative's favor is the fact that they used the term 'nano' first and that both products are the same thing. The overall packaging is not dissimilar."
In addition, Mr. Smith noted, when one company comes along and infringes on an established trademark, a hefty damage award can result. But it will take years for Creative to get to that point, if it initiates legal action. Meanwhile, Apple, by virtue of its dominant position in the MP3 player market, could easily usurp the term "nano" and render it worthless to Creative.
"Creative has a real problem," Mr. Smith said. "All the goodwill they created with the term 'Nano' is now gone."
Observer Comments
Fri Sep 09, 2005 3:17 pm Subject: Customer confusion
So would Apple be able to stop othger MP3 players using "Mini" or "Photo" in their product names?
I doubt it. Shuffle might be a bit trickier... but since since nano is a concept of size, I doubt Creative can claim exclusive rights to use "Nano". I doubt they have a trademark on just "nano" either (just like Tiger vs TigerDepot).
Imagine a car maker trying to keep other car makers from using "V8" in a car name.
So I concider this "Zen nano" vs. "iPod nano" the same as "Mustang V8" vs "Corvete V8" (for example).
Why would you add the word "Plus" after Nano, anyway? It's like an atomic brick!
Personally, I think they should have replaced the mini line with a new mini offering (e.g. nano). The tagline could have been "the mini just got mini-er"!!!
It's not like we call the 1G iPods the iPod Buttons.
I'm not sure how I feel about the new commercial either, yet...
QuoteGuest wrote:
Eh? Goodwill? Like, I'm supposed to be grateful to Creative that they used a standard scientific term in a commercial product?
Â
It must be some lawyer thing... Sheesh!
Â
Actually, "goodwill" is not so much a legal term as an accounting one, basically meaning "Intrinsic Value".
QuoteGuest wrote:
I don't know what the answer is, but I'll bet that if Creative did *not* already have a Nano, and tomorrow they announced it, the same people shrugging this off now would instead be up in arms.
You're probably right, and rightly so! In just a few days Apple has already built tremendous "goodwill" (intrinsic value) in the term "nano". When people hear the word "nano" today, they think Apple. If Creative began using the name after Apple, they may confuse some customers and this may result in lost sales to Apple, which would give them grounds to sue for damanges.
The reverse does not seem to be true, so it's not likely Apple will have an trouble.
--
Jason Wood
QuoteGuest wrote:
I don't know what the answer is, but I'll bet that if Creative did *not* already have a Nano, and tomorrow they announced it, the same people shrugging this off now would instead be up in arms.
Your pal,
George Bailey
I think you're right George, but at the same time, you have to remember that the Apple Nano will, without a doubt, hugely outsell Creative's Nano Plus. So while Apple will not benefit from the use of the Nano name, if the positions were reversed, you could definitely see how Creative would benefit from mimicking the name of an Apple product.
Fri Sep 09, 2005 5:17 pm Subject: Zen nano plus? What? Come again?
Fri Sep 09, 2005 11:26 pm Subject: Trademarks versus generic terms
Microsoft can't stop people using Excel (except for spreadsheets): there's a local company called Excel Systems; nor can they stop people referring to windows on GUI OSs as windows, despite having an OS of that name. The trademark issue really is over iPod/Zen.
Now if it were the iPod Kodak, it'd be a different thing. But give it a few weeks and I'll be proved completely wrong. Ah well.
So would Apple be able to stop othger MP3 players using "Mini" or "Photo" in their product names?
>Imagine a car maker trying to keep other car makers from >using "V8" in a car name.
>So I concider this "Zen nano" vs. "iPod nano" the same as >"Mustang V8" vs "Corvete V8" (for example).
V8 refers to a classification of the Engine while nano is more of a descriptive catchy term. Think for a second...Instead of Mustang V8 as you suggest, think of Mustang Cobra and Camaro Cobra.
Sat Sep 10, 2005 6:38 pm Subject:
Creative should just be happy that Apple gave them some free publicity by using a similar name. They can parlay that into some free media attention for the Zen Nano Plus, a 'me-too' player that otherwise would be lucky to sell 1/10th as much as the Apple Nano. Creative must be ecstatic, now they're going to get to sell 1/8th as much as Apple.
Creative seems to have lost the MP3 race, especially not only it has Apple as the leader in this area, but highly cash-rich and powerful and innovative Korean and Japanese companies in the running. IMHO, Creative should give up trying to be "creative", but rather, become the exclusive OEM for one of these MP3 leaders, even for Apple. So by manufacturing MP3 players for say, Apple, Creative would ensure its own sustainability for a long time. Why not? It makes good sense for shareholders as a positive constructive action.
QuoteOsaka wrote:
What is Zen nano plus? Seriously just the name Zen is hard enough to register. This creative company has to make 3 difficult words into one name?
Creative Zen and Nano arent really that hard to say. As for the conern about using Zen PLUS, well lots of companies do this to amke the product sound better. Ex: Windows xp PRO, adding a "plus" or "pro" kind of makes the product seem better.
Apple should have considered a better name anyway, such as iPod MINIplus or teenymini or something creative....
Then came nanocasting and the plot thickened:
What Separates Podcasters From Nanocasters? You'll Know It When You Hear It.
By: Errol Smith
Business Reporter, KTLA Los Angeles
Wondering what all this Nanocasting talk is about, and what separates podcasters from Nanocasters? Well...let me first offer a definition, and then draw a stark line in cyberspace.
"Nano" means very small and Nanocasting refers to the programming produced for the most narrowly but clearly defined target audience. This is the audience that is most interested in the type of programming, and from a marketing standpoint, the audience that is most likely to buy related products. Where the term podcasting casually evolved from vanity internet radio delivered via iPods, Nanocasting is an established model for commercial podcasting based on media and marketing science. Those interested in the marketing science behind nanocasting should read the TCI white paper.
http://www.nanocasting.org/mediasavvy20.htm
QuoteGuest wrote:
This is a benefit for creative. I never even heard of the zen nano before this article.
If Creative decides to pursue legal action it would create even more awarness of the product and the company.
Yes, but in the end, no one will still care about the Creative Zen Nano.
First of all...who cares? It's just a name. If a consumer cannot distinguish between Creative and Apple, they don't deserve the gadget anyway. And what is Nano Plus? Nano Plus what? Such a silly name. Creative is suing because they feel the need to be compensated for being stupid. Keep it short people. Call it Zen or Nano. Not Creative Zen Nano Plus.
Second of all, I would have liked to see Apple come up with a crazier name anyway. I bought the Nano (the IPOD NANO) last week and it's awesome. They should have called it the IPOD Biscuit. It's so tiny. It's like one of those square Ritz crackers. 
QuoteGuest wrote:
Isn't it obvious that Creative chose to use "Nano" to one up Apple's choice of mini?
Wouldn't it follow that Apple had planned all along to use nano after the mini?
Since mini is a descriptive, as compared to micro and nano which are units of measure it would be easier for Creative to prove they planned on following this line, than it would be for Apple. Zen Micro was followed by the Zen Nano, will assumably be followed one day by the Zen Pico.
Fri Sep 30, 2005 3:36 pm Subject: Do i care?, Apple is like any other big corpo scrap
Fri Sep 30, 2005 4:55 pm Subject: Re: Do i care?, Apple is like any other big corpo scrap
Sat Oct 01, 2005 7:11 am Subject: Re: Do i care?, Apple is like any other big corpo scrap
Goodwill, as it relates to trademarks, is a legal term, not an accounting term. Balance sheet good will has nothing to do with the good will created by a company in its trademark. The trademark law, the good will that a company has in its marks is literally that, the good feelings that consumers associate with the products sold by a company under a particular trademark. This type of good will is created by a company through selling products of a particular quality, and through marketing, and represents the likelihood that a consumer will continue to buy a particular company's products or services sold under a given trademark.
If Creative has not developed consumer association between the term "nano" and their mp3 player, then Creative does not have any good will to protect in the term "nano."
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