Lisa: You're listening to Canadian IP Voices, a podcast where we talk intellectual property with a range of professionals and stakeholders across Canada and abroad.
Whether you are an entrepreneur, artist, inventor or just curious, you will learn about some of the real problems, and get real solutions for how trademarks, patents, copyrights, industrial designs and trade secrets work in real life. I'm Lisa Desjardins, and I'm your host.
The views and opinions expressed in this podcast are those of the individual podcasters, and do not necessarily reflect the official policy or position of the Canadian Intellectual Property Office.
In this episode, we meet with Julie MacDonell, who is a senior level lawyer specializing in trademarks. Julie has over a decade of experience from helping entrepreneurs and large companies registering their trademarks both in Canada and abroad. From these years of experience, Julie also had to share the sometimes very painful lesson and process of companies losing their brand or entire business overnight because the brand they used wasn't protected.
As a lawyer and trademark agent, Julie also has a formal training and knowledge that it takes to register trademarks. She knows the process can be complex. In recent years, Julie has built Haloo, a new company based on her experience and expertise paired with artificial intelligence to carry out parts of the work. In some models, an AI system can carry out task in a fraction of the time it would take a real person. Some call it a disruption to the trademark and legal industry.
Julie, we're going to talk a lot about trademarks today, but before we do, I'd like to hear more about you and your company, because not only do you have a different idea and approach to solving some real IP problems, your entire company is a little bit different. Why?
Julie: I think I understand exactly what you're getting at with this question because we're really, really loud and proud in certain ways. One of the ways is about how we build our whole company around diversity. We really fundamentally believe that there's a way to do business that builds the world we want to be part of. Every single action that we take in business, we believe can be an action that either contributes to positive change, or on the flip side, reinforces unfair systems. Haloo's mission, on the whole, is to bring the barrier to access down in terms of economic participation, which we believe is core to so many of our problems that we face in society.
There are many, many angles to our mission and what we believe around diversity. I think all women have experienced bias in some ways. One example. I have many, many friends in tech who would talk to me about the bias that they faced, often being the only one in the room. For example, we very intentionally built a company and a tech team that was led by women. We have a woman CTO, which is extremely rare for a tech startup. We also have a woman leading our AI scientist. 90% of our product team are underrepresented. There's more to this from a strategy standpoint. I really strongly believe that this diversity allows us to build better products for more people. I want to explain exactly what I mean by this. I'm going to use a real life trademark example.
We have a tool that helps people create fail-safe trademark applications, and we do this by auto-suggesting the correct goods and services descriptions. Hopefully most of your audience generally knows what a goods and service description is. As you probably know, some of the manual IDs are gendered. Clothing, for example. There are goods description for women's clothing, and then there are also gender neutral descriptions for clothing. That's what our tool prioritizes. It's our diverse team that brought this to our attention and said, "We want to create a really more inclusive tool, and so we're going to deprioritize these gendered descriptions, and instead, prioritize the more inclusive descriptions."
Really every choice that we make, whether it's hiring or product design, contributes to our specific very special, and I think very different way of building a company.
Lisa: It's great to hear about the different approach and how that actually is built into your service offering. You have significant experience in helping entrepreneurs securing formal rights for their logos and brands and slogan. As part of this experience, I imagine you've probably seen, at firsthand, the effects of not quite understanding these rights and the process to secure them. In your experience, why is formal protection of IP so important?
Julie: It really is so important because brand is so important to a company. It's really what will make your company ultimately successful, or lead you down a path where, unfortunately, you might even fail. Where we have the passion around this topic that you're raising, is infringement. We saw way too many small business owners lose everything overnight in many cases because they had just not registered a trademark.
It was entirely preventable. That was just so heartbreaking to see. I had many people, especially small business owners, come to me with this crisis, facing this infringement. Many of them were crying tears on the phone with me because they were about to lose all of the work, the time, the money they'd invested in their brands. There was really nothing I could do to help them because they hadn't gone through this formal registration process.
There's one story that really sticks with me. I think about it so often as we're building our tools to help people, which is a story of a single mother. She had put her life savings into an eyelash company. She had a brick and mortar storefront, as well as branded eyelash products, which she was selling online on Amazon, for example. Her brand name was too similar to a name that was already registered by a major cosmetics company. There was really no way around it, she had to give it up. The cease and desist demand that she'd gotten from this company meant that she could no longer continue using the brand in any way at all. She had just spent all of her remaining money. I think it was something in the range of $30,000 that she had spent on branded inventory, and because of the infringement, she couldn't sell it. She couldn't recover that cost. It meant that she lost everything, because there was just no way to rebrand and reset. Financially, she couldn't afford it.
At the time, she said something that struck me deeply. She complained, "Why don't they tell you about trademarks when you buy a domain? Because the domain was available. I thought it meant that the name was available. When I registered my domain, I thought it meant that I owned my brand." This just was alarm bills to me [laughs] It's really what got me thinking that AI had the potential to remove the cost and complexity from the trademarking process. We said, let's try to build a Go Daddy, but for trademark registration, so that when you go to start a business, you think domain registration, of course, because everybody needs to be selling online, but you also think of brand registration, and actually owning what you're building.
Lisa: It's a story that we hear all too often. It is complex. Although anyone can apply for a trademark on the CIPO website, for example, the majority of applications are actually filed with the help of an agent, just like yourself, who knows the rules for what anyone can and cannot register. It's not straightforward. Can you explain to our listeners that actually when it comes to trademarks, apples are, well, oranges, in a way?
Julie: Yes. I'm going to take one little step back on this question, because it's something that I find is really helpful to explain to people. That's that the CIPO's mission fundamentally is to uphold the system that protects consumers. To do that, it applies a number of really fundamentally logical rules for what can and cannot be owned as a trademark.
As a consumer, we can all relate to this. You want to know that the product you're buying is the quality that you're expecting of that product. Trademarks literally mark a product or service with a brand that sends signals to you about quality and various other things. When you see a shoe marked with the word Nike, it gives you the information about that shoe, and that's what helps you make a good decision about buying it. There are all sorts of other rules that protect consumers in a similar way, rules around offensive or obscene trademarks, rules around descriptive terms. Nobody wants to see Starbucks being the only company to own the word coffee, as an example, because then we would lose competition. Other traders in the coffee market might not be able to describe that they offer coffee. These rules make so much sense when you think of it from a consumer protection lens.
The Nike example that I gave you goes to the reason for one of the biggest rules, one of the most important rules, that you can't register a mark that's similar to someone else's trademark. This is relating to the previous question about infringement as well. It would be confusing to consumers to see two similar brands for the same product or service, which is why companies will enforce and defend their trademarks through CNDs [Cease and Desist letters] and why the trademarks office is wanting to create these rules to disallow trademarks that are too similar on their trademark register.
They're all, again, deeply logical rules, but they're complicated to assess before filing a trademark, and far too many people try to file their trademarks without really understanding how to assess these rules, and fail with their application. That's really what we're on a mission to solve, is to make that advisory part, the help to understand the system and the rules, which traditionally you would get from trademark agents, and that's still a really good option that I know the CIPO encourages, but Haloo is creating a different option, to give that help to self-filing applicants.
Lisa: That's good, and thanks for explaining that the rules are really meant to protect the consumer. It's in everyone's interest to issue the owner a quality right at the end of the day when they apply for a trademark. As we have discussed and that you had explained very well, the rules of getting this formal protection can be complex to navigate, and so we have trademark agents and the trademark examiners, they go through significant training before they can file and examine these rights.
You're talking about your tech solution that can help with this process. I'm very curious to hear, what is the solution, and how has it kind of evolved over time?
Julie: You're absolutely right, that the rules are incredibly complex, and that the people who really understand them to be able to be successful with an application go through significant training, and really should have years of experience. What we do at Haloo, in terms of our tools, is that we want to help people who might have difficulty navigating this system, especially these rules, but we also want to help people who might have barriers. These can be financial barriers to accessing trademark agents, for example. These often are Amazon sellers and young entrepreneurs. In the past little bit, we've been getting a really extraordinary number of very, very young entrepreneurs, someone under the age of 18. They're way more accustomed to using online tools than they are to the process of engaging with legal services, as an example.
There can be language barriers. We have a high number of new immigrants, for example, to Canada, who find it easier to use a website because they can use translation tools, and they can get friends to help them understand. We also have people who might just need to operate outside of regular work hours. This can be working parents, for example, which is a common scenario. They are businesses they're trying to get off the ground in their off-hours, or again, they're selling on e-commerce platforms.
Essentially what we did was we put the brain of a trademark expert into an online tool, we run conflict, which is that Nike example that I explained, but all of the other rules around offensive or obscene trademarks, descriptive trademarks, official marks or other prohibitions and rules around what can and cannot be registered. In addition to that, we built a fail-safe application tool. What it does is it helps you to not make any mistakes in your application, which is another problem, so you can really be set up for success while not facing all of those barriers which some people legitimately struggle with. The overall thing that we want is for people to protect trademarks, right when they start a business. If the quality help is easy and convenient and cheap, it's our moonshot that we think we can make it as easy and affordable as registering a domain, so we believe people actually will protect trademarks when they should and need to protect them, which is from day one.
Lisa: You too are a user of the IP system. You've got a few trademarks, and now you have this AI solution. I was thinking about the example you mentioned before, about someone who's invested a lot of time, the need of protecting, and the importance of protecting intellectual property. From a CEO's perspective, how are your IP assets aligned with your company goals?
Julie: Yes, for sure. There's this wonderful quote from Steven Forbes, which is, “your brand is the single most important investment you can make in your business”. That's something we really believe at Haloo. It underlines the tools that we offer in our mission, of course, but this is something that has served us in our own business in many, many ways. Just like any business owner, we are putting time and money thought imagination into our brand constantly. It's really how people will engage with and understand our business. Our own brand really needs to be as accessible and intelligent as possible so that they are inspired to book care into theirs, and they also get those signals and information and messages that our tools are accessible and intelligent. Because we took that time to be thoughtful and to protect our brand, we can also build the brand awareness that we need to grow bigger and bigger.
A lot of entrepreneurs miss this point. You want a really, really unique brand, not a descriptive brand, but you want a brand that's going to resonate, that is going to be tip of the tongue, that is going to have all of the potential for growth into a giant household name. You have to be thinking about how you're going to achieve that with brand. One of the biggest pieces to that is making sure you actually own it exclusively. That allows you to partner and to license, for example, and for us, it's meant that we've been able to achieve partnerships with some other very, very big brands, brands that we aspire to be. Our tools will be embedded in their platforms powered by Haloo. It gives us these big distribution channels to reach so many more SMBs and entrepreneurs, but they will all start to learn the Haloo name and brand, and associate it with this thoughtfulness that we put into making sure our tools and our brand was accessible and intelligent.
Lisa: Thanks for explaining, and thanks for sharing some of the strategies that you have in mind. I think that's very useful for anyone who's considering actually starting a business, and these low-hanging fruit brands, some come to mind, but it's not necessarily those that can be protected.
Canada has joined international treaties, so it's easier to both receive and file applications in other countries. It's an interesting time to work with trademarks, as the trade of goods, obviously, globally is increasing, and globally we're seeing an almost 6% annual increase in the trademark filings. We're also seeing other forms of intangible assets, like non-fangible tokens that have relations to blockchain and so on. I know that you have a high-tech platform and a view into the future. I'd love to hear your thoughts about the future of IP.
Julie: Yes, this somewhat ties into the last question that you asked. I mentioned that integrating our technology into some of the biggest platforms, the biggest domain registrars, the biggest e-commerce marketplaces, but we're also partnering and tying our technology into Web3 focus companies, specifically NFT marketplaces. Let me explain why. At a very high-level Web 1, the first iteration of the web, was only about reading. You could read off the web. Web 2 is reading and writing. You could post content to the web. That's social media, for example. Web 3 is reading, writing, and also owning, and fundamentally, owning means IP. You own IP. From my perspective, the future will look like everyday people owning, on some level, intellectual property in the way that everyday people own physical property.
What it means in terms of business is really interesting, because I believe Web 3 brings the barrier taxes in terms of starting a business, becoming an entrepreneur, all the way to the ground. Literally, anyone with an internet connection and some kind of device will be able to put up what I'm calling a digital lemonade stand. There are limitations to this in the physical world. To put up your lemonade stand in the current Web 2 world, you're selling physical goods often, or services that have to be delivered, and that costs money. You have to create the infrastructure for that. You have to design product or have product manufactured and labeled and branded and shipped, and things like that.
What Web 3 economy allows is for digital assets. That's why NFTs have taken off at the rate that they have. Anybody with a computer and an internet connection can create a digital asset, and that's what we've seen. We've seen creators start a collection of NFTs, the NFTs build community around them, they become very well known, they become coveted. The NFTs themselves are sort of digital goods. Then in Web 3, there's licensing of these digital goods or digital assets. You will see famous collections like Bored Ape Yacht Club.
If you haven't heard of that, you can Google it. Bored Ape Yacht Club actually has 38 trademarks filed in association with that collection. That's an extraordinary number of trademarks. The most biggest famous brands, if you compare the number of trademarks filed with a giant company like L'Oreal, they search a ton of trademarks every year, but they only file a very small number relative to the number of searches that they will conduct. They might file, let's say, around 140 trademarks, I'm guessing. Bored Ape Yacht Club is a creator that has filed about a third of that volume of trademarks.
What this indicates to me as an IP expert and practitioner, is that IP ownership, the formal registration, is fundamentally important to the type of economic activity, the commercialization that we see with NFTs, some NFTs. In this case, as an example, Bored Ape Yacht Club are able to license to Disney, potentially, so that these NFT ape characters can appear in movies. They are collaborating with Adidas. We've seen this with a collection called RTFKT, and that's been acquired by Nike.
Individual creators have this very, very low barrier to entrepreneurship, to building brand. Anybody with an internet connection is on a level playing field, in a sense, to any of the big brands. All they have to do is create it, mint it, and then build the hype. Once that's done, it's all about IP licensing. Web 3, for me, is just absolutely exciting.
Lisa: Thank you, Julie. You're saying that as we're recording it, obviously online, as most people are working online. It's been a real pleasure to listen to you, and thank you so much for sharing our journey in educating people on how to use IP more effectively, and also some of your own insights. Thank you, Julie.
Julie: It's a total pleasure. Thank you for inviting me.
Lisa: You're listening to Canadian IP Voices where we talk intellectual property. In this episode, you met with Julie MacDonell, who is a lawyer, trademark agent, and CEO of Haloo, a trademark registration services company powered by AI. If you're curious to learn more about trademarks and what the rules are concerning what can and cannot be registered, visit cipo.gc.ca/tm-guide to learn more.