Psion Teklogix Inc, which describes itself as a company that "specializes in making mobile workers more productive" faces the prospect of being a victim of its own success on the one hand and its failure to take steps to protect that success on the other.

The situation concerns Psion's trade mark for the word "netbook". Dell Inc. has raised a petition with the US Patents and Trademarks Office (USPTO) to have Psion's "netbook" trade mark cancelled.

Psion first introduced "netbook" computers back in the 1990s, but the line was discontinued in 2003. Psion filed for a US trade mark in 1996 and the mark was granted in 2000.

Dell's argument for cancellation of the "netbook" trade mark is three fold. Dell asserts that:

  1. Psion has abandoned the mark;
  2. sworn statements made by Psion to the USPTO regarding use of the mark were false at the time they were made; and
  3. the mark has become generic.

Dell's claim of abandonment centres on the fact that Psion is not currently offering laptop computers under the "netbook" name and does not intend to resume use of the mark.

The statements made by Psion that Dell claims were false were that Psion was using the "netbook" trade mark in connection with the goods listed in the application and that it had done so for 5 consecutive years after the date of registration (21 November 2000). These sworn statements were included in a Combined Declaration of Use and Incontestability that Psion filed with the USPTO in November 2006. As noted above, Psion discontinued making "netbooks" in 2003, but have continued to provide support services for existing machines.

A trade mark may be deemed to have become generic where the mark has become the term which is commonly used in the particular trade as the name of a type of product rather than identifying only the specific product of the proprietor of the mark. "Aspirin" is perhaps the best example of a mark that has become generic.

In its petition for cancellation, Dell claims that "the term "netbook" has been widely used by computer manufacturers, retailers, the media and consumers to refer to a particular subset of "notebook" computers which are small and inexpensive" and goes on to list Hewlett-Packard, Sony, Samsung and itself among a list of manufacturers who make "netbooks".

There are certain differences in trade mark law and practice between the United States and the UK and other worldwide territories, but the size of the US market and its prominent role in technology industries mean that a successful outcome for Dell would likely have serious consequences for Psion's trade marks in other territories.

In the UK, the test of whether a trade mark has become generic has a second element to it. This second element is that the trade mark must not only have become generic, but that this must have been as a result of the inaction of the proprietor of the mark.

Following a period during which Psion failed to take any action to protect the use of its trade mark, it has recently started taking action to assert its rights. This may give Psion an argument in defence of any cancellation action that it may face in the UK.

Irrespective of the differences between trade mark law and practice in the UK and US, Psion would likely have been able to avoid its current situation if it had taken a more pro-active approach to monitoring the use of its trade marks by third parties and taking steps to help maintain the link in the minds of consumers and other industry players between its trade marks and the products for which they are registered.