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The Morton Memo - January 2014

The two articles in this issue are written by our attorneys Mike Ritter and Anna Burnett.  Mike's article concerns the every changing field of cell phone site leasing.  Anna's article addresses what is a trademark. 

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>> Top Three Trends in Cell Phone Site Leasing   

>> Trademarks: What is in a name?

 

Top three trends in cell phone site leasing 

By Michael H. Ritter, Attorney

Data Lock

Cell site leasing is a unique blend of legal, real estate, and technical disciplines.  Almost any property owner qualifies to be a landlord if a cell site is needed in close proximity.  However, the majority of property owners are not equipped to manage the process of becoming a cell site landlord.  The cell companies, tower companies, and the various vendors deploying new sites, taking down old sites, and upgrading existing sites prefer the uninformed landlord.  This gives them the upper hand in a lucrative, long term lease negotiation.

Attorneys with cell site landlord clients should be aware of the seemingly constant changes in the telecom industry impacting leases.  Lately, the whirlwind of activity has kept even the closest observer busy.

In recent months, three important trends have emerged in cell site leasing.

  1. Mergers and Acquisitions.  A flurry of M&A activity in the telecommunications industry has impacted nearly every cell site lease nationwide.  For example, Japan’s Softbank acquired control of Sprint and has announced aggressive plans to build a network to compete with Verizon and AT&T.  T-Mobile’s acquisition of Metro PCS will result in the termination of hundreds of leases as the two networks merge. In addition, T-Mobile and AT&T sold their cell tower assets to tower companies thereby becoming the tenant in thousands of leases.  Lastly, AT&T bought the parent company of Cricket Wireless, taking down yet another regional cell company.

     
    Many sites now have new tenants while the original occupant remains.  Since leases will be changing hands, landlords will be challenged to stay on top of the tenant’s identity, rent payment handoffs, and site modifications undertaken by the occupant.

  2. 4G Site Upgrades.  Cell companies continue to spend billions improving their networks to compete and keep up with consumer demand.  All domestic companies have now deployed the fourth generation (4G) Long Term Evolution (LTE) technology.  Tens of thousands of cell sites are being upgraded to LTE requiring replacement of old equipment and installation of additional components.  Such upgrades may significantly modify the design of the site and alter the lease premises.  In some cases, tenants are not notifying their landlords prior to commencing upgrades.

    The site upgrade process continues to raise important concerns such as tenants’ giving prior notice, obtaining landlord consent, access restrictions and modified lease premises.  With all the current activity at cell sites, landlords are wise to visit and inspect their sites frequently.

  3. New sites.  The four major cell companies, Verizon, AT&T, Sprint and T-Mobile, have all announced aggressive plans to bolster their networks.  This is requiring many new sites to be deployed mainly to handle the explosion in data.  Expanding network capacity takes precedence over covering un- or underserved areas.  Most new sites are designed similar to those that have been deployed for the past 25 years.   An array of antennas is placed about 50 feet high on a tower or structure connected to cabinets placed nearby.  As the ability to deploy such sites becomes more difficult due to space constraints and zoning restrictions, companies are looking to small cells for the answer.  Lightweight and easy to install, small cells are being installed in stadium and campus venues.  AT&T has announced plans to deploy 40,000 small cells in the coming months.

    The new traditional sites will bring familiar leases.  Small cell sites will bring changes in every aspect of the process including lease terms.  In either case, landlords armed with the right information and tools will make the most of a cell site lease opportunity.

 Mike Ritter is an attorney with the firm and works in the area of real estate and cell phone site leases in particular.  He can be reached at mritter@ericmortonlaw.com.  His direct number is (760) 917-1123.

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IP circle

TRADEMARKs: wHAT IS IN A NAME?

By Anna L. Burnett, Attorney

Jennifer Johnson is a handbag designer and manufacturer based in Southern California.  Jennifer has been in business for about two years, using the name Johnson Bag Company for her business.  Each of her handbags contains a small tag with "J. Johnson" on it.  Jennifer now wants to expand her business to other markets outside of California and would like to protect her brand by applying for a trademark.  She submitted a trademark application for the mark "J. Johnson" to the United States Patent and Trademark Office (USPTO) and prepared to expand her business on the assumption that her mark would register; however, the USPTO rejected her application.  Why?  To better understand, a few definitions and background information may be helpful.

            What is a trademark?  A trademark is a word, phrase, symbol, and/or design, or any combination thereof, that identifies and distinguishes the source of the goods of one party from those of others.  A trademark is a brand name.  Examples of trademarks include: "MacBook" for Apple computers, "Chuck Taylor" for Converse shoes, and "Camry" for Toyota automobiles.  A trademark identifies a product as coming from one source, even if that source is anonymous.  The public doesn't need to know the name of the trademark owner so long as consumers associate the mark with a single source.  A trademark also gives some assurance of consistency of quality.  Consumers expect that every product sold under a trademark is of like quality.

            On the other hand, if a business does not manufacture or distribute goods, but is in the service industry, it may apply for a service mark.  A service mark is any word, name, symbol, device, or combination thereof, adopted and used, or intended for use, in commerce to identify and distinguish the services of one party from the services of others.  Examples of a service mark: "Double-Double" for In-N-Out Burgers Corporation's style of a specially prepared sandwiches and FedEx Kinko's Office and Print Center for printing retail store services.  Commonly, the term trademark refers to both trademarks and service marks.

            Trademark rights are acquired through use of a mark in the normal course of commerce. For example, by using a brand name or logo on a product or its retail packaging.  Rights acquired in this manner arise under the common law, and the first user of the mark has the right to prevent others from using the same mark or name in any manner which is likely to cause confusion among consumers, users, or customers of the first user.

            In addition to common law rights, a mark may be registered on the federal level.  In 1946, Congress passed the Lanham Act, which defines federal trademark protection and trademark registration rules.  The Lanham Act grants the USPTO administrative authority over trademark registration.  Federal registration of a mark with the USPTO is not mandatory; however, doing so has several advantages, including notice to the public of the registrants' claim of ownership of the mark, a legal presumption of ownership nationwide, and the exclusive right to use the mark on or in connection with the goods and/or services listed in the registration.  The trademark symbol TM or service mark symbol SM may be used to alert the public that the name or symbol is claimed as a mark.  The federal registration symbol ®, however, may be used only after the USPTO registers a mark, and not while registration is pending.

            Some trademarks are stronger and more protectable than others. To determine what makes a mark stronger than another mark, the USPTO analyzes marks based on distinctiveness.  Trademarks are often separated into four categories of distinctiveness: (1) arbitrary and fanciful (strongest); (2) suggestive (medium); (3) descriptive (weak); and (4) generic (no protection).  The closer the relationship between the mark and the goods, the weaker the mark.  An example of a weak mark is "Quality" for cleaning services, because it is possible the USPTO would claim it is merely descriptive of the services offered by the applicant.  Alternatively, the more arbitrary and fanciful the mark, the stronger it is.  An example of a strong mark would be "Apple" for computers.

A company's trademarks are among its most valuable assets. Trademarks are linked to a company's identity and goodwill. Developing and protecting those trademarks can be critical to the success and value of a business. Failing to protect those trademarks can be devastating to a company.

Anna L. Burnett is an attorney with the firm and works in the area of intellectual property and trademarks in particular.  She can be reached at aburnett@ericmortonlaw.com.  Her direct number is (314) 808-3508.

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