Integrating Intel: trademarks as key ingredients

A microprocessor is an important piece of technology. A computer’s processing power and its size used to be in proportion; the 1946 Electronic Numerical Integrator and Computer, which was used to calculate artillery firing tables, weighed 30 tonnes. The invention of the microprocessor—a single integrated circuit—meant that the functions of a computer’s central processing could be handled by a tiny chip, rather than an array of vacuum tubes, crystal diodes, relays, resistors, capacitors and hand-soldered joints.

Intel Corporation manufactures microprocessors and distributes them globally. The company reported revenues of $43.6 billion for 2010—an $8.5 billion increase on its 2009 figure. Intel’s brand is worth over $32 billion and ranks seventh in the world behind the likes of Coca Cola and McDonalds, according to Interbrand’s 2010 rankings.

Ruby Zefo is Intel’s chief trademark counsel and is responsible for around 7,000 registrations and marks across the world. She leads a team of 18 trademark professionals who handle all of Intel’s trademark work, including clearance, prosecution, licensing, enforcement, counselling and litigation.

The Intel Inside programme significantly adds to the strength of Intel’s brand. The trademark licensing and marketing programme is aimed at large computer manufacturers and system integrators to market their products and those of Intel to end users. In the 1980s, Intel used numerical schemes to brand its processors. It believed that its 386 and 486 processors were protected trademarks, but a US court ruled otherwise, allowing Intel’s competitors to use them at will.

Zefo says: “We had to decide what we were going to do after that. We wanted more end user demand, but when you’re an ingredient, that’s hard to do. How do you get people to care about what’s inside what they’re buying, because they can’t see it. The creation of the Intel Inside programme was about getting people to care about what’s inside their computers.”

Indeed, an early incarnation of the ‘Intel Inside’ tagline read ‘Intel. The computer inside’. In 1991, the licensing and marketing programme launched. “The programme requires computer manufacturers and system integrators who use our processors to put Intel logos on the outside of their devices,” Zefo says. “When the consumer goes to buy a computer, the Intel name can be seen on there, and it also allows licensees to use our logos in their adverts.”

She adds: “In return for that, a certain portion of the money from their purchase of our processors gets put into a marketing fund for them. Then when they advertise, they can draw from the marketing fund to help reimburse them for some of the money they spent on the advert with our logos in it.”

The Intel Inside programme allows the company’s brands to be immediately recognisable to ordinary consumers.

Zefo says: “We end up getting our logos in a tonne of advertisements, which we otherwise wouldn’t be able to do. We also do direct advertising, so consumers can do their research and decide what they want. That’s how we’ve been able to turn our brand into one of the biggest and most famous in the world.”

She adds: “We’ve also expanded to allow licensees to use our marks in advertising to a much broader base of companies. There is a huge number of IT product distributors who can use our logos in their advertisements well beyond the Intel Inside programme. We have channel licence programmes and other types of programmes that have well over 100,000 licensees in them.”

Attitude adjustment

Intel’s trademark portfolio is mostly made up of traditional word marks, according to Zefo, yet one of its most famous marks is considered nontraditional by many regimes. She says: “We have the sound mark for the famous Intel bong. That’s our other big brand that people are pretty aware of and it’s a nontraditional mark. We also have a motion mark that we’ve licensed to DreamWorks. It’s called InTru 3D and it’s for 3D movies.”

Non-traditional marks have been around for a long time, says Zefo, but there are still jurisdictions that do not accept applications for them. “When they do accept an application for a non-traditional mark, you have to figure out what kind of specimen they will accept and that differs by jurisdiction,” she says. “When you get into even more innovative things like motion marks, it’s completely hit or miss whether the application will be accepted.”

She adds: “It’s changing all the time. As the world advances, trademark offices start opening up to these things, so you have to keep your eye on them for the opportunity to apply for something that you couldn’t before.”

Thirsty work

The nature of Intel’s business means that it doesn’t suffer from the same kind of counterfeiting problems as other technology companies. The process of making microprocessors requires a complex manufacturing environment, so a fake microprocessor with an Intel mark on it isn’t a regular occurrence, according to Zefo.

She says: “What you do see is an authentic processor getting packaged with another fake component—a cooling fan for example. That will be bundled with an Intel mark. The fan may be a very bad product that causes the computer to overheat, then the processor fails and the purchaser comes looking to Intel for warranty coverage.”

“The nature of Intel’s business means that it doesn’t suffer from the same kind of counterfeiting problems as other technology companies. The process of making microprocessors requires a complex manufacturing environment, so a fake microprocess or with an Intel mark on it isn’t a regular occurrence.”

Intel’s trademark team spends more of its time preserving the company’s brand as new companies threaten to dilute its trademarks. “It’s a problem because dilution is known as death by a thousand cuts,” says Zefo. “One person will want to get away with it, but there has to be one rule for everyone to prevent lots of people getting away with it, otherwise we will have this wonderful, singular brand that later becomes heavily diluted.” A company will usually dilute an Intel trademark in an obvious way, because dilution is not a commonly understood area of the law. Names such as Intel Food Services, Intelshoes and IntellStereo could all dilute the Intel brand. “[The offending names are] usually identical with some kind of generic tack-on,” Zefo says.

“The problem is that lay people don’t even understand infringement very well. With the advent of the Internet, you constantly have people starting their own businesses. They don’t obtain any legal advice, don’t do any searching and don’t understand the law. They just put up some kind of website, practically overnight, and they’re shipping goods or offering services all over the country or the world—and they just don’t understand what they’re doing wrong.”

Trademark smarts

Zefo and her team are aware that specialist knowledge is required to understand trademark law, so they take it upon themselves to educate diluters, rather than threaten them.

She says: “We will typically send a nice, educational letter that our mark is being misused by these entities, this is how it works, so please stop it. We have a lot of success with that because we don’t want to go around suing people if we don’t have to. An initial approach is usually friendly and educational. We try to resolve our disputes amicably whenever we can.”

The amicable route is always preferred because it’s efficient and cheaper than litigation, but there are times when it won’t achieve the desired result. “[Dilution] is an area of the law where people can get very emotional,” says Zefo. “It’s almost like you’re trying to take away their surname. Sometimes you end up with people who just can’t be reasoned with, no matter how hard you try.”

Official action needs to be taken in these cases. “We’ll do whatever we have to do depending on what’s traditional in the country,” she says. “In the US, we will often try to mediate, although we may have to file suit before the person will be convinced to mediate. This is a good way of getting a neutral third party to explain that what we’ve been saying is true—there’s this cause of action, we have very strong rights, and so on. That helps a lot—we really like mediation and we use it as often as we can.”

She adds: “Eventually, you have a small handful of cases where you have to continue with the official action, whether it is trademark administrative action or some kind of court action, and you follow it through.”

The effectiveness of litigation may depend on where the action is being taken. Zefo says that cultural attitudes towards intellectual property vary greatly. “There may be laws that you can’t quite get the judiciary to follow,” she explains. “Or there may be judiciaries ready and willing to help you protect your IP, but they are [in the process of] crafting the right laws to do it.”

She concludes: “For the most part, litigation is very successful for us. We’re very careful about how we enforce and what we’re enforcing against, and we’re always educating. By the time we reach the litigation stage, we’re in it to win.”

Making a microprocessor manufacturer’s brand so recognisable is no mean feat. It’s largely thanks to a strict trademark policy that enables Intel’s marks to be robustly exploited and protected. But Intel doesn’t sue for the sake of it. The company tries to explain the effects of trademark infringement to infringers before it involves the courts.

This can be doubly beneficial to new and emerging companies. They can learn how best to avoid potentially costly infringement, and they can learn to develop well-protected and easily recognisable brands of their own.