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Anthony Verna sat down with John Eastwood of Eiger Law in Taipei, Taiwan to talk about some of the effects of the COVID pandemic. Some of the topics covered are intellectual property, especially in relationship to bankruptcy, and employment law across borders and oceans. Supply chains are affected, also.
Anthony Verna: (00:02)
And welcome to the Law and Business podcast. On this episode is the most frequent guest, John Eastwood. How are you doing, John?
John Eastwood:
Doing well, doing well. I’m here in Taipei. My colleagues in Shanghai have apparently weathered quite a bit of the storm in the sense that Shanghai has not been so heavily affected. Taiwan, in the midst of this Corona virus situation is actually doing really well. It’s become a bit of a model for… and it’s been getting plaudits from different ends of the political spectrum of the United States. You get like the Wall Street Journal recently from kind of, an editorial perspective. It was lauding that Taiwan could be a model for what other countries could do. And then on the other side of the spectrum, I think we just got a shout out from Barbara Streisand on Twitter.
The entertaining thing for that. The Taiwan government. I mean, I love the job of doing on Corona virus and it was currently, we’re still living in the three hundreds at this point. We hear on as we recorded this in early April. But in terms of number of in fact the event, the administrative foreign affairs and Taiwan retweeted Barbara Streisand, so a tweet and said, Oh, you know, you’re just basically, you’re so awesome. Thank you for saying this. And one can only just look at how exactly the same concept of cooperation to reach great heights together in a mutually working mutually between scientists and government are exactly mirrored in the story for A Star is Born and you haven’t seen A Star is Born. Kris Kristofferson does not come out on the ending of A Star is Born.
Anthony Verna:
Well at least that version of it, John. This is what the fourth version of that story?
John Eastwood:
I was just talking with my wife and kids about that this morning. We’re up to four versions of A Star is Born.
Anthony Verna:
Actually, I think it’s five.
John Eastwood: (02:37)
Any of them end well? Well, they’re not happy stories, but you know, it’s helpful idea. Like a star rises and one falls and you know, so that’s not the point of the story is not that two stars rise together and reach their greatest heights and happiness anyway. Any hoo anyhoo yeah, no. See these are things that are the Chinese famous. He said these are interesting times.
Anthony Verna: (03:04)
What’s it like going in and out of buildings in Taipei? Like are you… I mean, we’re stuck at home. We’re on an order that if it’s not essential, and of course the definition of essential I think is constitutionally problematic because you’ve got states like New York that says that say that alcohol is not a problem. Pennsylvania says we’re shutting down all the alcohol stores cause they’re state run. And Massachusetts has said that alcohol is essential. Medical marijuana is not essential. So there might be a little vagueness here as to what, what essential might be, but we’re not going out unless it’s the grocery store and even then, I hope we stocked up long enough to keep us interested in dinner for a while. That gigantic pack of chicken thighs is not exactly exciting, but you know, it’s in the freezer.
John Eastwood: (04:13)
We do approach the trips to Costco like it’s a military operation, like, you know, in and out and got the masks and don’t touch it other than what we’re buying. And we do have like for example, right now I’m in the office, but we’re in fact coming up this next week, we’re implementing, even though Taiwan is in a very fortunate situation that could change at any time. And so we aligned with that. We are implementing a lot of… it’s the new acronym for me. W F H – work from home and it’s the first time I’ve had an acronym, middle of all the time that had F in it, that didn’t stand up for something more Korean.
Anthony Verna: (04:47)
I’m used to that in the copyright standpoint. Work for hire.
John Eastwood: (04:54)
Yeah. So we get like the, the, yeah. So, Oh man, the IP lawyers and the employment lawyers, you know, are going to have to fight the, you don’t have that like a, you know, a dance off because he can’t be close enough to actually fight. You can’t touch someone, so you have to have a dance off. Right. It’d probably recorded from the home studio, but in Taiwan, in our office in Shanghai, fortunately we have a lot of people working from home. We’ve also been staggering know commute times so that people who take mass transit don’t happen to be in a car filled with people. And we’ve also been looking at just sort of the essential lines of what people could do from home and how many of our operations can be done fully from home and which things like collecting court notices sent by mail, receiving phone calls, what things have to be done in person without damaging the ability to represent clients. And we could actually do a lot, we can do a lot from home and it’s very fortunate as I look at sort of what’s going on the United States. I mean, I think that there’s some good signs that things might be changing. Of course, my mom would very clearly say it’s like, “Hey, people should have been washing their hands anyway.”
Anthony Verna: (06:23)
Yeah, that’s true.
John Eastwood:
We may come out of this either like physically safer and more mentally damaged. Cause probably for the rest of my life I’m going to be like washing my hands until they’re like, until they’re chapped, something like that, I might start exhibiting some of the OCD tendencies.
Anthony Verna: (06:48)
I was going to say, you get to have those Howie Mandel hands is what you’re going to have.
John Eastwood: (06:52)
Oh geez. Yeah, yeah, yeah. That’s like you see people working and you know, the doors at these places and where the alcohol sprays and everything like that. And you see their hands and it’s like, wow, you should really have gloves because the palms of their hands are just falling apart with the dry skin and everything else from just the way too much exposure to alcohol.
Anthony Verna: (07:21)
So, how is your clientele handling the economic effects? Because I’m certainly seeing economic effects. We’ve had four previous episodes in the last two weeks of this podcast talking about economic and mental health effects for the pandemic. So, what are your clients like in Taipei? How are they handling the economic changes?
John Eastwood: (07:53)
Right. So, there are some things… I mean, one thing is that our employment team has been getting a ton of questions about furloughs, layoffs, when they can ask employees to give up on, what things have to be done on a consensual basis, what changes they can enforce. And so people talk about, of course, reduction of hours. They don’t want to lay people off. They know that there’ll be a recovery eventually. This is a temporary situation, but they really don’t want to but they just can’t justify it. I mean, especially depending on the sector, like retail and manufacturing and things like that, you can’t get by too easily if you’ve got a thousand workers in the factory. And everybody’s waiting for that widget to come from Wuhan or some other places that are under lockdown. And so the Wu Han situation isn’t just Wu Han’s lockdown, which they’ve been relaxing. I’m using certain technologies to keep track of people who now can venture out of and venture into Wu Han. But if you’re a factory in Shen Gen or if you’re a factory someplace else and you’re waiting for that widget, you can come up with an alternative, especially under these situations where there’s lockdowns and there’s also molds and tooling and things like that that enter into it. So on the economic basis, one of the key problems is that in terms of the PRC, a lot of people think of it very model in a very monolithic sense. They think of China. But it’s actually the small and medium sized enterprises account for about 60% of the Chinese economy and about 80% of jobs.
And in a recent survey from the Chinese association of SMEs found that about a third of the respondents expected that they could cover fixed expenses for about a month. And another third would be able to cover maybe two months expenses and only about 10% if they could get it out to the hold on until the second half of 2020
Anthony Verna:
One month is not that bad, honestly.
John Eastwood:
Yeah. Yeah. I think that’s, that’s a big thing for them is that it’s put them under stress. So if you start from that standpoint, how do people behave when they’re under stress and how have Chinese companies behaved already when they weren’t under stress and making money hand over fist. But of course when I say hand over fist, of course it’s like Japan in the 1980s they’re just cranking out stuff.
We had very high volumes but not necessarily really high margins. Right. So I think…
Anthony Verna:
I was going to joke, you asked me about stress, ask me about any client whose patent or trademark gets an office action.
John Eastwood:
I think in the PRC, there over the years there’s been a few good trends. I mean we’ve talked about some of these in the previous podcasts is that in China there’s some good trends where in famous marks have gotten better protections and some of the more ridiculous aspects of how local companies would be able to register what in the entire rest of the world was a very famous mark. And you know, these kind of trademark squatters would get away with that. And so in one sense, China had been moving in a very positive direction, but from a standpoint of if you are licensing tech to Chinese companies or if you’re licensing a brand or if you’re licensing… there are always, people have always put up with a certain amount of cheating and a certain amount of under reporting.
People’s worst inclinations when their company is on the line, from a mental standpoint, companies think, well, who do I really have to pay? I think, you know, in the US there’s been some development on this as well. With regards to bankruptcy or with regards to how these things are treated with a distressed company. And maybe that could be an interesting thing. I mean from the US standpoint.
Anthony Verna: (12:33)
Well, I think from the US standpoint, when you’re looking at a trademark license, what’s new is we have a Supreme Court decision from October that I think a lot of people were still kind of trying to figure out, as a new year comes along, what the ramifications for it are and to just set this up for you and then give you some background. There’s a section of the bankruptcy code called 11 USC 365 N that was implemented in the 90s. And it basically states that for intellectual property and specifically defined as patents, copyrights and trade dress but not trademarks. The licensees could choose to either treat a license agreement as terminated because of the bankruptcy or to retain their rights and therefore their obligations under the license agreements.
So now that the Supreme Court ruling came true, the Supreme court said, “Well, if the trademark license still exists, then we’re going to treat it like every other contract under bankruptcy. And therefore it can either be rejected and then therefore treated as a breach of the licensing contract or not.” And so now you have this case where patents, copyrights, and trade dress are treated one way, cause it’s specifically mentioned in the statute and since Congress never wrote the word trademark when rewriting the bankruptcy code in the 90s, well now we’re treating intellectual property that is still registered at the patent and trademark office, very different under a license or licensee agreement if the license or it goes bankrupt.
John Eastwood:
Well, the other tendency for some time has definitely been, and this has been a big struggle for all sorts of European and American companies dealing with situations out here, is that in general, how bankruptcy administrators in Asia have tended to and everyone is really hunkered down… And so it’s almost impossible to get a court to reassess situations where to try to change behavior when an administrator decides to only pay salaries, electric bills and rent.
Anthony Verna: (15:14)
That I find to be interesting because at some point if there’s a license agreement there, like the royalties have to be paid because the factory obviously has to have the ability to make something and get those plans from somewhere. So whichever way the money flows, if the licensor’s declaring bankruptcy , you have to pay more than just that.
John Eastwood: (15:45)
Yeah. Yeah. Especially when a company finally like shuts down and it’s like, companies can slide along in under bankruptcy reorganization for quite a long time. And it’s hard when somebody’s just cranking out tons of widgets, trying to stay alive but I’m not getting any paychecks, not a single royalty payment. That’s not right. So, you know, it’s probably important to hope that people don’t go into bankruptcy because, … the companies out in Asia don’t go into bankruptcy necessarily because, from a stand point, it’s like you want them to actually have a reason to want to survive and pay you. I guess if you have a company that you know, that slipped to the point where they filed for bankruptcy protection and you have an administrator appointed then you have maybe less leverage in terms of using the courts. There’s also a problem internally too, to some companies. Some companies of course really get it. Like a lot of the software companies of course, really get it. They understand the importance of intellectual property, but when it comes to trademark, that’s another thing and it’s a whole other issue where we have also noticed that, you know, through the Corona virus, a lot of the fashion clients that we’ve represented, luxury goods clients, they simply have no budget.
Anthony Verna: (17:21)
I was going to say that it had to be the first market to start dipping.
John Eastwood: (17:25)
Yeah. Well, there’s a fashion house located in Northern Italy. There’s quite a few of those. And that’s the thing is I think, s we found with 2007 to 2009, with the huge upheaval, economic upheaval we had back then, the key is to do everything possible to try to accommodate, find a way to help with the client, adapt to the change circumstances. So if their budget gets cut in half or it gets cut down to nothing other than they have to do things is not to be angry about it, but just to realize the reality that these people are facing. Cause the fashion industry is as massive ups and downs. And despite there being like supermodels and people coated with diamonds at their shows and it seemingly like every single one of them…
Anthony Verna: (18:18)
That’s the everyday part of fashion.
John Eastwood: (18:22)
No. And there’s huge costs that go behind that. I mean, it’s all like a, you know, that is the tip of the spear. There’s like just so much that has to be spent on, they can spend a long the way for luxury goods. And so these companies are always quite a bit tighter in their margins are not what people would suspect.
Anthony Verna: (18:42)
No. Yeah, no. And, as somebody who has not just prosecuted trademarks in the fashion industry, but also as has handled infringement suits as well. The thing is the margins go with the quality. Like you do pay for the quality of the actual material, the sewing, the design. There’s, there’s a whole lot that actually does go into that.
John Eastwood: (19:14)
Oh, absolutely. Absolutely. I mean, you know, there’s a huge difference between like… I mean some of these companies, they really cut their teeth in mass production once upon a time in the sense that … say you take Hermes. Hermes, they were famous with… they kind of grew from was they made all the French armies horse bridals and other things like that because the army in World War One was a horse drawn army. Or you’d take the Burberry, the trench coats. Literally. Maybe people will think, why is it called a trench coat? Cause people for giving the trenches, just trying to stay dry. So all of this stuff kind of comes around to like, you know, these things of their products were tested in some very unforgiving conditions and then maybe it’s fancier, but in terms of the actual commitment to quality, you almost have something sort of like a,… when you hear, in the electrical engineering world or there’s electronic products and people will say, “Oh, our switches are military grade.” or something like that will occur in these is sorta like the kind of their leather goods and things like that.
That’s the origins, you know.
Anthony Verna: (20:36)
Sure. The talk about the fashion houses and the fact that we mentioned the US bankruptcy code earlier, just really, it popped in my head. One of the real confusing aspects of the Supreme Court’s ruling, and it’s not necessarily the Supreme Court’s ruling because the word trademarks is not in the statute. But for example, in apparel, a factory can be making products with trademarks and that have registered trade dress, other factories and other industries can be making products that are patented or were copyrighted and also being made with the trademark on it. And you know, what happens if the licensor goes bankrupt and you’ve got a contract that that has one type of intellectual property in one section and another type of intellectual property in another section of the same agreement.
How do we treat that agreement? Because obviously trademark law does isn’t just sitting there all by itself. I mean it, it goes along with a product. And so, and so we’re going to be able to say, the patent part is terminated but now we’re going to treat the patent license as terminated, but the trademark license is still going to somehow exist and survive and therefore, you’ll then be in breach for not for, not file following through with the trademark license. I mean, it’s really odd and bizarre when you think about it. I mean, it’s Congress’ fault for not writing it correctly, but, it really is a bizarre, logical result.
John Eastwood: (22:34)
Well, we also see some really weird behavior out here in Asia. I mean a one, one trend that we’ve been seeing recently, which I think is only going to be exacerbated by the current economic stress is going to be pushing off infringing activities to affiliated entities, claiming that just because a controlled subsidiaries, technically is a separate legal person, it’s behavior can’t be imputed to its parents. And yeah, the legal concept of piercing the corporate veil and you know, for example, in if I want to try and it can be difficult. So, when we write to companies there’ll be a subsidiary , like a massive, massive manufacturer that has hundreds of thousands or a million workers or so and, and so on behalf of a US or European client, we may write to them and say, “Hey, you’re using their IP, you should pay up.”
And the infringing subsidiary comes back with like, “Whoa, Whoa, wait a second, I gotta talk to my parent company because, I don’t do anything without…” This is how they actually talk on the phone. They’re like, Oh, well we can’t do anything without talking to our parent company. And we come back to him a couple of days later. So what do they say? Yeah, the fringing subsidiaries spew out a whole bunch of like, time wasting, you know, nonsense that will, how’d you do this calculation? Why do you think this? And we’re like, you know, sometimes we’re coming back from this as well. Your own website actually has like almost like a countdown clock of the number of downloads.
And you’ve got 20,000 of them on your website. Your website has this like little counter clock that tells us how many have done. That’s really cute. Thank you. Thank you for helping us. And our client charges this much for each copy of it. So badaboom, but as he tried to waste our time, we always go can eventually contact the parent company and a parent company, even if they’ve been a long trial, a licensee. They had the reaction who would, could be charitably characterized as um, new phone who dis, so we always tell him, it’s like your sub owes a ton of money and they say that you’re the one instructing them not to pay. And the parent is only are, they’re totally different from us. And we’re like, well, both companies have the same CEO, same board of directors, same address.
And they’re like, well, if you, if you like, I could see if I can reach the people that are infringing subsidiary. I’ll see if I can reach them and see if they’d be willing to negotiate. And I’m like, you’re going to ask yourself if you can pay. Well, I’ll try to reach them. And I’m like, well, are you going to walk down the hallway? I mean, that’s where they are. They’re in the same building as you. I mean, you can ride the elevator to their headquarters there. It’s absurd. But that’s absurd. Yeah, it is. It is actually the way it comes around though. I mean a very typical thing for, for companies to do when they’re dealing with like this nonsense though, it’s like eventually the parent, you know, the something slips and so you have like the parents license comes up or a business opportunity in which they’re like, Oh, well we have a chance to build a kabillion widgets for kind of one of the big American companies or something like that. And they’re sitting there … they come back with hat in hand at all, be like we need to see about you approving us to do this other product. And then we’re, that’s when it comes around, it’s like, Oh, you know, you’re kind of, it’s your class time. So they went, you walk down the hallway and get your little subsidiary to come back.
Yeah. It’s kinda, it’s kinda silly. Cause they don’t really, I mean there’s so much, I mean, I think in your career, in my career, we’ve seen this, there’s law firms, there’s counterparties that we can actually chalk up in our career as having been pleasurable, good counter parties because there were companies that reacted appropriately and responsibly. I’ve seen things where they said parties who come out and they’ve immediately said, “Oh my God, you know. Yes, yes. The software that was included with this product. Apparently one of our engineers took a short cut. We are ashamed and sorry about this. That was only a prototype. We are completely canceling that line of product. That was a mistake and that’s one of our staff did this. It’s not a company policy. We appreciate this and we are tremendously sorry and we’re going to incur a pretty massive loss on this, but …”
Anthony Verna: (27:47)
I hear you very well. And you know, the one thing I will say is that I find that happening less and less as my career goes on. But, I certainly have dealt with plenty of situations where the other side does say that. And then there are plenty of times where I had a copyright infringement case where you looked at my client’s product and then you looked at the defendant’s product and basically this was my complaint was exhibit. You know, whenever we start, you know, whenever we started with the exhibits and it’s like exhibit a says, here’s this. And then he looked at exhibit eight and I called it a prime so that you can see the defendant’s version of it, and it has all the exact same words. And you also look, is that the exact same typo as well? Yup. It’s the exact same typo of the same couple spelling mistakes, not that they were done on purpose, you know, like Rand McNally used to do with maps, but like the same spelling mistakes in the same typo are there too. And it’s like, your honor, can we just like move on please? And, and opposing counsel was just a brick wall on everything in that particular case. I had a settlement conference in December and I’m not very happy going into it, but, basically the first thing that the defendants did in that particular case and there was a trademark infringement case, was they finally gave me a a piece of paper that was the order of all of the units of that product line from the factory. Now why they couldn’t have given it to me six months prior. Why they couldn’t have given it to me a year prior when I, when we first met and sat in front of a judge, I don’t know, but you know, all they need to do is give me the one document said here’s the number that was that was ordered and why don’t we just figure this out cause it’ll be cheaper if we figure and hammer it out then if we then if we
drag it out.
John Eastwood:
Yeah. Yeah. I always enjoy the ones who are willing to engage in an efficient way. Like the ones who realize that this is sort of like…especially for clients that are like brand license owners or clients that are big people. They understand. They’re trying to do business. They don’t want to chase. You know, they don’t want to spend a lot of time on litigation and things like that, but they will, if you really force it, if you really just take it to an absolute unreasonable length, they will finally sue. And that’s the thing. It’s like when you’ve given somebody a chance to do like everything, like, look, I’m actually… in many cases I feel, as an attorney, we’re trying to save these people who owe royalties.
We’re throwing them a lifeline. It’s like, look, you can actually solve this. Like we’re not actually, … if we took this to litigation, your behavior would be so egregious that we can probably get trouble damages and we could get all sorts of other stuff. And, we could hammer you until you fall into pieces or something. But that takes time and a lot of money and a lot of trouble. But if you’re willing to just engage with us like normal human beings and on a business level, just cut a check.
Anthony Verna: (31:28)
I’m telling you as much as I 100% agree with you, the longer I’m practicing law, the less that happens.
John Eastwood: (31:35)
Yeah, yeah, that’s true. That’s true.
Anthony Verna: (31:37)
You know, I have counseled quite a few clients recently about drafting a cease and desist letter and I certainly have a new client where I said, look, I think a cease and desist letter is necessary for you, but I also think that you should expect absolutely no response whatsoever from it. And, a lot of people are shocked and surprised to hear that. But I certainly think, especially in today’s economic environment where there are a lot of questions, I think that a lot of people are going to say, you know what? I don’t even want to spend money on that. I’m going to ignore it because maybe, maybe the party sending that just wants to rattle a saber. And that’s about it.
John Eastwood: (32:24)
Some people have almost got like a certain level of immunity built up against attorney letters because they’ve gotten a lot of BS letters from people who are like, Oh…I’ve also had clients working out here – Taiwanese companies, Chinese companies. Especially with somebody who’s got like some sort of Chinese medicine salve or ointment or something like that that has been their family secret for 50, 60 years. They don’t need some moron writing to them and saying, “Oh, we think that you’re Chinese medicine ointment infringes.” The the patent that we have on… It’s like, no, it doesn’t. This thing is like 70 years old. And likewise, you know, there’s some of these Taiwanese companies, they actually are the world leader in their technology. So the idea like, they’ve spent so much on R&D okay, that coming over to him and saying like, you know, well your facial recognition, bloddy blah blah, blah, like, you know, is violating our patent. And it’s like, well, no, no. When you start digging deeply. So people get a lot of nonsense and especially like, I guess, there’s so much of the patent troll thing. I mean, and I’m careful about that because I’ve had clients who were university professors and inventors who have been called patent trolls, they’re not patent trolls. They’re just an inventor. They’re like somebody who had a good idea, but they’re not like… there’s other people who they accumulate big piles of patents and just try to use that to crap on the world.
And I can even respect that a little bit. I mean, I understand, I understand it. Like somebody owns it, right? And they spent money to obtain a right. But the idea of just shooting out like in a shotgun method without really paying attention and just hoping of collecting in a tiny fraction, I guess. I guess it is one pathway to becoming wealthy, but, it’s also caused a problem for legitimate rights holders. And I’m not saying they’re not, I may have stepped in when there, but I mean, well that’s okay. But I think that it causes a problem when you have a company that has a long established leadership and in a technological field and is legitimate as can be. And then when they write to a company about an infringement situation on a very legitimate basis and they’ve got good concerns about it and then letting you know the company completely, the company completely ignores it, which is not a good position to be in. And I think maybe, in Asia coming up, especially with the Corona virus related disruptions, which a lot of companies are going to be scratching for their lives, the last people they want to pay is going to be some foreign licensor.
Anthony Verna: (35:48)
I understand that completely. I do. I mean, we don’t necessarily have the same same situation here with our clientele, but when a client comes to us and says, look, we think our patent is being infringed, I would say that the first thought that we really have is let’s dig into the claims. We’ve got to dig into the claims and take a look at the embodiment of the other product. And, I really struggle with the IP troll firms and I’ve had to deal with a couple of those also in my time. Like, Hey, this one photograph is up on your website. That’ll be $50,000. No, no, no, it won’t.
John Eastwood: (36:47)
That’s, yeah. And this has been some interesting examples of people who’ve basically turned their entire forever around for just doing patent troll work. And it’s, uh, I mean, it’s not my practice. As I’ve said, I’ve worked for some individual inventors, university professors, people who have had little businesses and then they just saw that they’re the little guy and I do feel that there’s good justice in that and fighting for those guys who they’ve got a company that’s starting up in the, almost the stereotypical way coming out of their garage or something. And, the world’s a better place if innovation gets encouraged.
It’s also really terrible when people go and they set up. I think if they try to trust a factory in China or elsewhere, they are like, okay, you’re going to be my manufacturing buddy. And it’s a bit pathetic. But I’ve been getting a few of these things where clients will come to me and they’ll be like, Oh, well, you know, what do I really need you for? I shouldn’t say clients, more like prospective clients, but people who are like, I just got attorney in a box, you know, so I’ve got like a whole bunch of forms including license things and this and that. And, d I’m looking at him and I’m like none of that stuff keeps in mind, for example, like what jurisdiction, and how are you going to do your dispute resolution at some of these agreements that they come up with because they try to throw in their own dispute resolution.
They’ll cite two arbitration tribunals that simply don’t exist. They don’t understand the terminology that would be used for court or they’ll simply say, well, the other side insists that the court should be the local district courts over in far off a stand where they’re at and it’s like, Oh man, it’s not good way to go. We’ll also see these things where they don’t keep in mind like…a lot of times when you think about enforcement, if a deal falls apart and some of these do quite rapidly. We had a guy that he came to us and he’s like, he wanted to, he had no idea that he had, was about to sign an assignment of all of his trademarks and that the assignment was not a license because he was a lay person in this area. And I saw, I explained that to him. You realize that this agreement is a draft or idea that you are transferring all of your trademarks in your home country and in China to this Chinese counterparty and that when you sign this, you’ll be giving that away to them basically forever because good luck getting it back. You will not get it back. And the guy was like, what?
It was like, yeah, this is an assignment clause. And they thought like, well if I sign them then well maybe that makes sense. Cause then if I sign all the trademarks, the counterparty will feel like they’re actively engaged with my business. I’m like, no, they’ll feel like you just gave him the keys to the car. I mean, exactly. They’re going to be Ferris Bueler driving your dad’s Ferrari. Right.
That’s right. Don’t, don’t, don’t, don’t do this. And you know, but then of course they’ll turn it on. These guys are the ones, same ones. It’ll turn right around and be like, you know, I got an attorney in the box. And there’s so much that is so specific to this part of the region. I mean, I guess that’s part of the reason I’m not really afraid with him is he’s lost seven. And I was talking about how AI is gonna replace every one of us. And I realized it’s just, so many of these things don’t work. There’s so much of the world, you have to know about local situations and local practices and local problems.
Anthony Verna: (41:05)
Sure, sure. Agreed. Completely. Which is why even philosophically from my standpoint, I don’t like the Madrid protocol and for everybody listening who doesn’t know the Madrid protocol, that’s the steps that one can take to take a home trademark registration into other jurisdictions. But like I’m not a lawyer in France. I’m not a lawyer in the UK. I’m not a lawyer in PRC. I’m not a lawyer in Taiwan. I like, like there are locally, there’s local history, local customs and of course the local statutes and while trademark law tends to be harmonized. The keyword there is, tends to be harmonize. Canada’s very different. India is very different. Oh God. India is very different, you know, so…
John Eastwood: (42:00)
Well that’s a thing is that like all of these places, there’s enough difference across borders that there’s no, there isn’t one system that purely works in with in regards to the grid guards to Madrid protocol filings. We all the time run across issues where the PRC that’s where it goes through smoothly. Certain products will go through really smoothly and a lot of the countries, but they don’t necessarily go through so, so well in China and they consider that and like does a vast amount of products that are exciting, fun stuff for people to have in say, America or England. I’ll give an example. Like guitar amplifiers or stomp boxes. Stomp boxes as being the thing that changes the sound, creates more distortion or creates certain kinds of effects, sound changes, the sound of the guitar of the single use that goes from the electric guitar to the amplifier. And so we do quite a bit of work in that sector and, and I can tell you that trademark examiners in China,
did not grow up with garage bands and with electric guitars and when they were growing up in China, getting an electric guitar and an app was not the dream of their parents, definitely not their parents. The parents are like no, you can have a pencil. That’s what you can have. You can have a pencil and you can have this abacus. And maybe if you do well, I’m going to get you a calculator. Like you know, you’re going to become a doctor, you’re going to feel things like their dreams for their children is definitely not to grow long hair. I mean, I can say probably the 1950s. So if you, if you actually, I’m not trying to say like, if you go back to the 1940s or 1950s, there was probably the same mentality for American fans. I don’t want my kid growing up and being a hippie, one of those beatniks.
Anthony Verna: (44:05)
Does everybody want to look like a K pop star?
John Eastwood:
Yeah, so there’s a whole lot of devices that like when you try to describe it using the existing approved terminology in in the Chinese, in class 9 or class 15, I mean, you have a greater latitude in class 15 for musical instruments that the class that handles music instrument understood in class nine. Suddenly you’re like, you’re trying to get into certain things and it’s really dangerous sometimes to listen to what the examiner tells you. Cause the examiner will sometimes say, I’ve got an issue with this term and I want you to change it. And then they’re suggesting you change it towards something and you can’t be complacent because they may actually push you towards something that will create a conflict like a few weeks later. And so now your trademark is clashing up against and you’re like, Oh crap, you mean I’ve got to drop the term that you told me to totally use.
Anthony Verna: (45:06)
On that particular thought. And then we’re going to have to wrap it up here. I was recently speaking to a potential client and I said, “Look, you’ve got a downloadable materials for … downloadable educational materials, but you also have stuff that on your website that you’re not really able to download.” So I went through everything. I’m like, you’ve got like a three class application there. And they’re kinda like, uh, can we think about that? And, of course I’m like, yes, absolutely. You can think about, you know, if you, if you want to cover all three or just one or, you know, whatever you’d like to do there. But I’m telling you for full coverage, you really should do all three. And I know it sounds silly that for educational materials, there’s a difference between downloadable and not downloadable, but that’s the system we got.
John Eastwood: (46:08)
Yeah. It’s what it’s, it’s where we’re at, and we find it with some clients that…We have a client that does a real estate development and everything else. And that’s one of the things I actually use a little bit as a cautionary tale, cause I love him to death. But in the early days they were so worried about every aspect about where their future business might go and where they might do. And they also started kind of a bit overthinking and we tried to get them away from doing this. But they were thinking model, we build buildings. Why don’t we go and register for like all the stuff that goes into a building? So they started thinking windows, doors, tiles, iron working for the staircase and there’s the Whoa, Whoa, Whoa, Whoa, hold off again. Cause it’s like, yes, you’re building contains these things, but that’s not, you’re not a dealer in windows. You’re not a dealer in, you’re not selling that. You’re selling a building. Maybe yes, it contains these things, but you’re not, you know, you’d be like, if Gibson guitars were like to go for like, Oh, we gotta get rid of your for knobs and, register in the class for wood.
Anthony Verna: (47:29)
Exactly.
Well, you know what, you know what actually this talk to me makes me hopeful to be honest with you because look, you’ve got clients that they’re weathering the storm. I’ve been in, there’s economic activity happening on and I know there’s economic activity happening because my phone has never been busier than it has been the last three weeks. So knowing that and hearing it from you, it does make me hopeful that this is just a storm and that it might be difficult to weather, but I think we could, I think, I think our clients are going to be able to weather it for the most part.
John Eastwood:
Well, and that’s the thing. I mean we’ve been crazy busy ourselves and the good news is that’s also led to greater efficiency for helping out clients.
Cause now that we’ve dealt with 50 times of different clients asking us, it’s the same questions. The on average clients are not having to spend very much cause it is, there’s some very universal worries coming out of the coronavirus situation and so people ask us what direction you think we think things are going. I think actually things will be back to … I want to be optimistic and I do realize that there’s an awful lot of manufacturing that is going to get back to normal now that the latest news today of course is that Wu Han, the city that was like the center of the worst part of it has now been released from lockdown to a significant extent. So I think that we’re going to start seeing and I guess I think the main thing is for people to communicate. If you have a supply partner out there that you know, their, their production has been down, to be understanding and not lead to fears, Oh, not too lots of threats, but to talk with them because they’re probably under stress. And there’s, there’s good and bad ways to communicate with companies that are under stress. If you give a business or like a manufacturing partner, a chance… I mean some of them we just talked about like the ones who are going to take advantage of this time to cheat, but there’s going to be other companies out there that will, you know, if you engage with them as human beings and you talk with them and say, look, I understand things are not been good. I hope you and your family is okay. And, uh, you know, I understand that you’ve gotten my molds and tooling, can you get manufacturing back up online and if not can we have the molds and tooling our molds and tooling, can we have that back cause can we just, when you need to do it someplace else, but we do want to return to you as a partner in the future. I mean, trying to find ways to work things out for a long-term relationship.
Anthony Verna: (50:27)
Yeah. You will not hear me disagree with a word that you just said, which is why we’re friends.
John Eastwood:
Yes, yes. There’s going to be just constant updates. I mean that’s one other thing is that it seems that the authorities are releasing constant tweaks and so we’ve also had our hands really busy here just trying to keep up. We have spreadsheets. Literally, we’re like filling out spreadsheets as information changes constantly about whether you need to wear a mask, where you don’t need to wear a mask. What are the conditions for home warranty and what are … so my colleagues across a wide variety of practice areas are working from home or working in the office. We’re all busy.
Anthony Verna: (51:26)
Excellent. John. All right, well, thank you so much for hopping on the call and I certainly hope I can see you later this year at one of our two conferences that may or may not happen.
John Eastwood: (51:43)
Wonderful. I’m hoping that like, you know, I had big plans to go the United States this summer and those have been scrapped, but I’m alright. But I’m very hopeful that I know you’re a big baseball fan and it would be great if we can catch like some kind of sporting event or do something where we could actually shake hands and toast with a drink or two in a place that I hope is crowded.
Anthony Verna: (52:08)
I’m with you completely on that 100%. Thank you, John, and remember everyone to subscribe to the Law and Business podcast and also don’t forget to rate and I hope that you’ll rate us five stars. Thanks very much for listening and we’ll see you again soon. Thanks, John.
John Eastwood: (52:24)
Terrific. All the best take care.