Business

Lead Generation: How Companies Mine for Your Data

Posted on by Stephanie Martinez

Most internet users today recognize that internet searching and website visits lead to data collection and targeted advertising. For example, a search for coffee makers on Amazon is likely to lead to coffee maker advertisements on Facebook. What may be surprising, however, is the value companies place on your information, and the many ways data collectors mine for consumer data.  Data collection, or lead generation, is estimated to be a multi-billion dollar industry,[1] with the largest industry player claiming to have, “on average, 1,500 pieces of information on more than 200 million Americans.”[2]

Lead generators obtain your information through a variety of sources. Perhaps the most well-known source is cookies, bits of information that are downloaded to your browser and can be used to determine when and where you saw an advertisement or what your interests might be based on the sites you visit. Lead generators also use less obvious sources, such as online fillable forms, including mortgage pre-qualification forms and online dating questionnaires, as well as “fun” surveys.[3] For example, the Huffington Post recently reported that a Google search for “McDonalds Jobs” resulted in an advertisement for the website <everyjobforme.com>, which linked to a form promising the user that it would “find McDonald Jobs near you” and requested the user’s name, zip code, and mobile number.[4] Once the personal information was entered, a recruiter for for-profit colleges would call regarding “educational opportunities.”[5] In addition, legitimate companies often grant third parties behind-the-scenes access to their websites, allowing these third parties to observe a visitor’s movement within the site.[6] A 60 Minutes report revealed that popular sites such as the New York Times’ website, among others, allow third party observers.[7] Finally, many retailers sell the data collected on consumers’ purchases, allowing lead generators to better understand what goods consumers are seeking and how to more effectively market those goods to individual consumers.

Currently, lead generation is a relatively unregulated industry, with little oversight from federal and state governments. In a 2013 review, the U.S. Government Accountability Office found there was no overarching federal law governing the collection of data or consumer privacy rights.[8] Instead, lead generation companies are governed through a patchwork of federal and state laws, as well as agency enforcement and self-regulation within the industry. One agency active in monitoring the lead generation industry is the Federal Trade Commission (FTC), which works to protect consumers from deceptive business practices. The FTC has used its administrative authority to fine lead generation companies for deceptive advertising, including a recent multi-million dollar settlement with multiple companies accused of unlawfully selling data obtained from payday loan applications, including social security numbers.[9] Some in the lead generation industry, however, believe that current FTC marketing guidelines are not being applied effectively and in some cases may even encourage misconduct.[10] The FTC is likely to update its guidelines soon to address these concerns. We will report further developments as they occur. — Stephanie Martinez


[1] Federal Trade Commission, Follow The Lead, An FTC Workshop on Lead Generation (Oct. 30, 2015), https://www.ftc.gov/system/files/documents/public_events/684511/leadgeneration-presentationslides_0.pdf.

[2] Steve Kroft, The Data Brokers: Selling Your Personal Information (Mar. 9, 2014), http://www.cbsnews.com/news/the-data-brokers-selling-your-personal-information/.

[3] Id.

[4] David Halperin, For-Profit College Recruiter Hides Behind McDonalds Arches, Huffington Post (Mar. 1, 2016, 4:54 PM), http://www.huffingtonpost.com/davidhalperin/for-profit-college-recrui_b_9359434.html.

[5] Id.

[6] Kroft, supra note 2.

[7] Id.

[8] U.S. Government Accountability Office, Information Resellers: Consumer Privacy Framework Needs to Reflect Changes in Technology and the Marketplace (Sept. 25, 2013), http://www.gao.gov/products/GAO-13-663.

[9] Lexology, FTC Settles Charges with Data Brokers for Misuse of Consumer Data (Feb. 24, 2016), http://www.lexology.com/library/detail.aspx?g=2fa892c5-e828-4c28-8822-9505dc779005. The FTC has previously gone after other bad actors in the lead generation industry. In 2014 the FTC fined a mortgage lead generator $500,000 after it found that the company deceived potential borrowers with ads falsely claiming that borrowers could refinance their mortgages for free. Federal Trade Commission, Mortgage Lead Generator Will Pay $500,000 to Settle FTC Charges That It Deceptively Advertised Mortgage Refinancing (Sept. 12, 2014), https://www.ftc.gov/news-events/press-releases/2014/09/mortgage-lead-generator-will-pay-500000-settle-ftc-charges-it.

[10] Lexology, FTC Focuses on Lead Generation Practices In Higher Education and Ed Tech (Nov. 10, 2015), http://www.lexology.com/library/detail.aspx?g=5bd60940-c267-43f7-98cd-d712704d751b.

How Does Intellectual Property Add Value to Your Business?

Posted on by Noah Downs

Recently at a networking event, I was asked the simple question: “What do you do?” After responding that I am an “intellectual property attorney,” I received a brief look of confusion, and then the question: “Yes, but what does that mean?” This exchange (which is a frequent occurrence, I might add) illustrates a common issue — many business owners are missing out on the value of their intellectual property, often until it is too late to capture and exploit that value.

Studies referenced by the World Intellectual Property Organization say that 80-90% of a business’s potential value lies in its intellectual property.[1] Imagine being a business owner, earning $100 dollars from a sale of goods, and then leaving $80.00 on the table as you leave. If your business is not identifying, protecting, and maintaining its intellectual property rights, then you are one of those owners.

With this is mind, allow me to illustrate some ways to recapture that value. There are numerous types of intellectual property to protect and exploit, and in the following paragraphs we will deal with three of the most prominent types: 1) Trademarks, 2) Copyrights, and 3) Trade Secrets.

Trademarks

Trademarks are the most obvious aspect of intellectual property, and the most widely known. You see and interact with trademarks every day, whether it be through names (Google, Yahoo), logos (Nike’s “Swoosh”), slogans (McDonald’s “I’m lovin’ it”), or even sounds (Windows’ startup tune). Trademarks serve as an indication of source and quality for the consumer.

Trademarks allow consumers to act on strong preferences on where they shop and what they buy. For example, some people prefer to buy groceries at Kroger, others Food Lion, and still others prefer Wal-Mart. Notice — when you read each of those names, you first recognized the name and then immediately had varying impressions of each pop into your mind, ultimately providing a conclusion of whether or not you would choose to shop there. This all happens in a split second. Each trademark leaves an imprint as to the quality and cost of groceries and the experience of shopping.

Not only do trademarks serve as a source and quality indicator, but they serve as a marker for the brand. This marker is extremely important if you want to sell your business for a profit.

For example, the executives at Facebook (another well-known trademark) probably never said “We want to purchase Evan Spiegel’s smartphone app for $3 billion dollars.” More likely, they sat down and said “We want to buy Snapchat for $3 billion dollars.” The reason Facebook values Snapchat at $3 billion dollars is because Snapchat developed its brand under a now widely-known trademark, and that trademark contains the goodwill of millions of consumers. Anyone can make an app that sends temporary pictures (see Mark Cuban’s CyberDust and Facebook’s Poke), but the value lies in the quality, experience, and goodwill already associated with the Snapchat trademark. Although Snapchat is an international brand, it began as a small app and as a small business. Building a brand begins somewhere — and protecting your trademark from the beginning can be key to building up your $3 billion dollar idea.

Copyright

Copyright is another facet of intellectual property that can easily add value to your business. Many people hear the word “copyright” and think of artistic creations such as books, visual art, or music. But consider how copyright translates into your marketing materials. Many businesses have valuable copyrightable interests in photography, product packaging, websites, commercials, or informational videos, to name a few. Establishing control of these assets through copyright protection allows you to harness the value of your business’s creative marketing approaches.

Additionally, some of the most valuable copyrightable materials include software code and data compilations. Copyrights on software code protect your proprietary information from direct copying and allow your company to stake out a claim in the market. Once your company harnesses control of that share of the market, then you are able to control the dissemination of your software through the marketplace. Because copyrights typically have a long duration, having a copyright for a useful piece of software may be extremely valuable when negotiating with potential customers or business partners.

Trade Secrets

One of the least understood areas of intellectual property lies in trade secrets. Most commonly, trade secrets are secret techniques or devices used by a company in manufacturing its products. You establish a trade secret by guarding a proprietary concept that has economic value simply because it’s not generally known and by taking measures to protect it (for example, through contracts). Many businesses have trade secrets but do not realize that the information they have constitutes a trade secret. If you have developed a unique and efficient way of producing results, you may have a trade secret. Alternatively, if the methods of producing a particular product are known only to your company, you may have a trade secret.

Coca-Cola provides one of the greatest trade secret examples. Coca-Cola tightly protects the formula that gives the distinctive and crisp taste associated with their leading beverage. If they did not protect their formula as a trade secret, then the Coca-Cola brand would not have the notoriety it has now. Other soda producers would be able to precisely replicate and recreate the Coca-Cola taste, thereby eliminating Coca-Cola’s uniqueness. By protecting their trade secret, Coca-Cola retains their exclusive market share which is extremely valuable. Although Coca-Cola is a famous example, every company has something that sets them apart in what they do. What you do to set yourself apart may be a valuable trade secret that you can protect.

Protecting your business’ intellectual property requires more than filing for trademarks, copyrights, and protecting trade secrets. Intellectual property protection requires marking your territory in the marketplace, making sure you have the biggest share you can have, and creating a clear impression of what your company offers to the consuming public. In the modern world, the primary value of a business no longer lies solely in the tangible assets it holds. The true value lies in growing and monetizing the intangible assets, which your company can protect as intellectual property. This turns intangibles into value, which then increases the overall value of your business. — Noah Downs

 

(This is not intended as legal advice. Contact a lawyer for assistance in your particular situation.)

 

[1] Building and Enforcing Intellectual Property Value, An International Guide for the Boardroom, 2003 PriceWaterhouseCoopers.

 

Common Mistakes to Avoid When Naming a Business

Posted on by Stephanie Martinez

Starting a business is exciting, as is picking out a name (or, in legal terms, a trademark) for your new startup. The possibilities may seem endless, or you may have one specific name that you have your heart set on. In picking a name, entrepreneurs may seize upon a certain theme or pun or just wait for a name to pop into their head. If you plan to offer products or services under your new business name, it is essential to carefully consider your options before you dive into branding. These same principles apply to choosing a trademark for a new product or service as well. No matter how you pick your new name, here are some common mistakes to avoid:

1. Descriptive Names. 

New business owners often want their business names to tell people exactly what products or services they are selling. Own a coffee shop? You might name it Beans and Brews. A convenience store? You might name it In-and-Out. The problem here is that such names are likely to be in use by many other coffee shops and convenience stores, meaning that consumers will find it more difficult to remember your name (because it is not catchy or distinctive) or to find you (and not a competitor) in an online search. Perhaps more importantly, you are more likely to receive a nasty cease and desist letter from a similarly-named company demanding that you stop using the name. Instead of having to completely re-brand later or face potentially substantial legal fees to fight such opposition, try to think of a unique and distinctive name — one that stands out from the crowd from the beginning. Then, if you want to include something descriptive, simply add a tagline.

2. “Borrowing” Names.

Whether intentional or not, entrepreneurs sometimes pick business names that are incredibly similar to the name of a previous employer, a business across the street, or a company that caught their attention in the past. Searching for name inspiration on the Internet may lead to clever results, but it can also be risky if someone else is using the same or similar name. Not only might this be trademark infringement, but if proven, such “borrowing” could result in a willfulness finding, significantly increasing the amount of damages the other party can seek in a lawsuit. When thinking about a business name, do not emulate others. Instead, brainstorm distinctive names that will help your business cultivate its own individual brand.

3. Failing To Fully Research a Name.

A preclearance search is the foundation on which to build your brand. Performed by trademark clearance experts, a preclearance search scours the marketplace (and not just Google) to find other businesses and products that use the same or similar names as your intended business name. An intellectual property attorney then reviews the report and assesses the risk associated with using your desired trademark. That way you will know up front whether to proceed with the name you have chosen or to avoid major conflicts and go back to the drawing board. Pre-clearing lets you rest easy, knowing that your brand is yours to build into an empire. — Stephanie Martinez

Popularity of gTLDs

Posted on by Gavin Law Offices

The volume of registrations in new gTLDs indicates that they are generating sustained interest on the part of consumers and brand owners. A review of the ten most-registered gTLDs to date provides some insight into the popularity of gTLDs:[1]

.xyz, with a current total of 864,685 domain registrations

.网址, with a current total of 342,087 domain registrations

.club, with a current total of 197,025 domain registrations

.berlin, with a current total of 153,414 domain registrations

.wang, with a current total of 139,287 domain registrations

.science, with a current total of 114,657 domain registrations

.link, with a current total of 104,869 domain registrations[2]

.realtor, with a current total of 95,934 domain registrations[3]

.top, with a current total of 83,270 domain registrations[4]

.nyc, with a current total of 74,839 domain registrations[5]

 

Visible growth is also occurring across subject categories. For example, the ten most popular city-specific gTLDs are:[6]

.berlin, with a current total of 153,414 domain registrations

.nyc, with a current total of 74,839 domain registrations

.london, with a current total of 58,901 domain registrations

.tokyo, with a current total of 35,855 domain registrations

.koeln, with a current total of 22,139 domain registrations

.hamburg, with a current total of 21,475 domain registrations

.moscow, with a current total of 17,322 domain registrations

.москва (Moscow), with a current total of 16,651 domain registrations

.paris, with a current total of 16,606 domain registrations

.vegas, with a current total of 13,951 domain registrations

The fifty-thousand foot view is also encouraging. As of April 16, 2015, there have been a total of 4,921,364 domain registrations for gTLDs, with an average of 14,662 new registrations per day over the last four weeks.[7]


[1] NameStat, https://namestat.org/ (last visited Apr. 16, 2015).

[2] An increase of 50,869 since December 2014. See Liam Andrew, The New gTLDs are Here! WooHoo!, Future Of News and Participatory Media (Apr. 7, 2015), http://partnews.brownbag.me/2015/04/07/the-new-gtlds-are-here-woohoo/.

[3] An increase of 6,934 since December 2014. See id.

[4] An increase of 47,270 since December 2014. See id.

[5] An increase of 12,839 since December 2014. See id.

[6] Top 10 Biggest Selling City TLDs, NameStat, https://namestat.org/s/top-city-tlds (last visited Apr. 16, 2015).

[7] New gTLD Summary, NameStat, https://namestat.org/s/newgtld-summary (last visited Apr. 16, 2015).

U.S. Trade Representative’s 2014 Notorious Markets Report Includes Domain Name Registrars

Posted on by Mary Witzel

The U.S. Trade Representative recently released its 2014 Notorious Markets report identifying offline and online markets that deal in infringing goods or sustain global piracy and counterfeiting. For the first time, the Notorious Markets report identifies Internet domain name registrars as sources of piracy and counterfeiting.

Domain registrars are commercial entities which oversee the registration of Internet domain names. The 2014 Notorious Markets report notes that the industry as a whole requires greater scrutiny, and expressly names one of the largest members of the industry, Tucows, as a Notorious Market due to its inaction when notified of registrants’ infringing activity.  Inclusion of domain name registrars in the Notorious Markets report indicates that they could face increased pressure to adequately respond to infringing activity in the future. — Mary Witzel

For more information, see the U.S. Trade Representative’s 2014 Notorious Markets report:

2014 Out-of-Cycle Review of Notorious Markets