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Can Dell Hold Its 'Cloud Computing' Trademark? - InternetNews.
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Can Dell Hold Its 'Cloud Computing' Trademark?

Dell's newly-acquired trademark for the term "cloud computing" may have all the durability of a glass hammer, meaning it will shatter the first time they try to use it. The law is not exactly on the company's side in this argument.

For a trademark to stick, say legal experts, it has to have a unique source of origin. It must mean when you hear this term, you think of that company. PowerEdge, for example, is a Dell trademark because that is its line of servers, just as ProLiant is a HP trademark and Windows is a Microsoft trademark.

The problem for a "cloud computing" trademark is that the term has become generic, widely adopted by the industry at large in the 18 months since Dell (NASDAQ: DELL) first applied for the trademark. As it turns out, if the public adopts a term, it's no longer yours.

"Your trademark is subject to cancellation. It gives you a property right in a brand name, but if it enters the language as the name for something, there's not a lot you can do about it," explained Jessica Litman, professor of Law and Information at the University of Michigan.

"By now everybody's using [the term 'cloud computing'], and the law is quite clear that even though it's not Dell's fault, if the phrase is now a generic phrase for that kind of computing, nobody can own a trademark for it, because people need to be able to describe the generic product," she added.

Dell released the Cloud Computing Solution, a series of hardware and services, specifically for firms looking to offer outsourced compute services, in March 2007. At the time, according to spokesman Jess Blackburn, the term "cloud computing" was not a common one and Dell wanted to protect it as it applied to its offering.

When the application was made to the U.S. Patent and Trademark Office, notice of Dell's application went out in The Official Gazette, a weekly publication from the PTO of all applications for a patent or trademark. So none of this was secret. Whether IBM (NYSE: IBM) and HP (NYSE: HPQ), among other enterprise vendors, were actively scanning The Gazette was another matter; it's huge. The current issue weighs in at 1,800 pages, and that's only one week's activity.

"A registered trademark on this term would not give Dell the exclusive use of it," Blackburn wrote in an e-mail to InternetNews.com. "It would protect us from others using the term specifically as it relates to our solution."

But it could be too late, said Litman. "Dell was unfortunate to pick a phrase that was too close to the kind of phrase everybody was going to use," she said.

Just because a phrase wasn't generic initially doesn't mean it doesn't become generic. Aspirin, cellophane, and escalator, were all registered trademarks that became generic and lost their mark, notes Frank Duffin, a trademark attorney with the firm of Wiggin and Dana LLP, in New Haven, Conn.

Duffin felt the mark was "a very narrow right, so if someone was to do what they are doing with this designation, [Dell] could go against them."

It all depends on how Dell enforces the mark, and Blackburn said the company hasn't decided how it will be used. In that case, what good is the mark if they aren't going to stop other people from using it, Duffin argued?

"You pay all this money for a mark so you can exclusively appropriate it. If they sit back and do nothing and everybody uses it generically, the argument could be made they've abandoned their rights through failure to police their mark," Duffin told InternetNews.com.

So does it pass the smell test? When you see the term "cloud computing," do you automatically think Dell? "If it does not indicate origin with Dell and could apply to HP or IBM, then it doesn't serve as an indicator of origin and it does not serve as a trademark," said Duffin.

In which case IBM, HP, and probably Sun, Amazon and anyone else using the term "cloud computing" to sell a product or service will gang up on Dell, and Litman said its chances aren't good.

"If they try to enforce the trademark, they may not be able to," she told InternetNews.com. "Their trademark lawyer may say yes, procedurally you have rights here but as a practical matter this is not going to work as a trademark because too many people use cloud computing in a non-trademark way. Dell may decide it's not worth it."