Intel and Dell sue Canadian company for netbook trademark

Intel Corp. (Nasdaq: INTC) and Dell Inc. are seeking from the U.S. District Court and the United States Patent and Trademark Office (USPTO), a trademark cancellation over the term “netbook,” held by rugged mobile computing solutions vendor, Psion Teklogix, Inc.Now, the Mississauga, Ont.-based vendor is affirming its trademark rights over the term by filing last Friday a counterclaim against Intel.

The string of lawsuits began last month when Intel filed to the United States District Court for the Northern District of California, a complaint for injunctive relief, declaratory judgment and cancellation of trademark from federal register over the term ”netbook”.

To put things into perspective, Psion filed for an application to the USPTO for registration of its trademark term “netbook” on December 18, 1996. It was awarded the “netbook” mark almost a year later, on September 25, 2000. On its corporate Web site, Psion declares the company launched its first “netbook” ultra-portable computer back in 1999 and since then, Psion maintains it has been using the “netbook” trademark continuously since then.

In the February 13, 2009 court filing involving Intel versus Psion, Intel states it believes Psion discontinued its offering of laptop computers under the “netbook” name in 2003. The document goes on to read that “on information and belief, Psion no longer offers laptop computers under the mark Netbook, or even Netbook Pro.”

However, on Psion’s Web site, it stated: “We feel we have a very good brand in ‘netbook’ and we also feel strongly that we should be free to develop that brand further in the future. We continued to make sales of ‘netbook’ ultra-portables in 2007, 2008 and even 2009. We had to discontinue manufacture prematurely because we were unable to secure supplies of a specific controller chip…(but) we…still sell inventory to this day. We also continue to actively supply accessories for our ‘netbook’ ultra-portables and are also providing maintenance and support to existing users of ‘netbook’ ultra-portables.’

On February 27, Psion filed a counterclaim against Intel over its alleged use of the term “netbook” without Psion’s permission. In the document, Psion also includes a year by year breakdown of its U.S. “netbook” mark laptop sales where the year 1999 saw sales of US$62,800, up until 2009, where sales now sit at $13,650.

In Intel’s filing against Psion, Intel states that “in or before 2008, in light of recent technological innovations, the computer industry (including manufacturers and retailers) and the media began to use the term netbook to describe a class of compact computers that were small, inexpensive and optimal for connecting to the Internet.” Intel also writes that the term “netbook” is not brand specific, nor is it tied to a specific PC manufacturer, but rather it’s a term used industry-wide to describe this particular class of computers.

In this most recent filing to the court, Psion is countersuing Intel over the alleged infringement of its “netbook” trademark. The court document states that “Intel, without Psion’s permission, has adopted, used, and continues to use the term ‘netbook,’ which is identical and confusingly similar to the ‘netbook’ mark.” In doing so, Psion says Intel has and is still causing “severe and irreparable harm” by using the “netbook” term in a generic sense to see profits by “confusing and deceiving” customers.

Intel maintains in the February 13, 2009 filing that it “has not infringed and does not infringe directly, or indirectly, the ‘netbook’ registration or any other purported trademark rights owned by Psion.” Intel is asking the U.S. Court to cancel Psion’s trademark rights and is also looking to recover its attorneys’ fees and other costs associated with the court case.

On Psion’s side, the company is looking to recover all the damages as a result of Intel’s alleged infringement, unfair competition and unfair trade practices by using the “netbook” term. In addition, Psion is seeking “an accounting…to determine Intel’s profits resulting from its infringement, unfair competition and unfair trade policies, and that such profits be paid over to Psion.” The company also wants the court to award it reasonable attorney fees, punitive damages and further relief from the court against Intel.

And to add fuel to the fire, just four days after Intel’s February 13, 2009 filing to the court, Dell, too, filed a petition for a trademark cancellation over Psion’s ownership of the term “netbook.” Luckily for Dell though, there hasn’t been any news yet on whether or not Psion will take further action against the company.

In the February 17, 2009 petition, Dell outlines three bases for trademark cancellation against Psion, stating abandonment, fraud and generic-ness.

According to Dell in the document, Psion has “abandoned” the “netbook” mark and also produced false statements to the USPTO in order to gain continued registration of the “netbook” mark in 2006. Lastly, Dell asks the court for a trademark cancellation based on the generic-ness of the “netbook” term. In the petition, Dell writes the term “netbook” has “become generic in that the primary significance of the term to the relevant public is as the name for small and inexpensive laptop computers,” and therefore Psion’s trademark over the term should be revoked.

When approached by CDN , both Dell and Intel stated they were unable to comment on the lawsuit or on any pending litigation. Calls to Psion were not returned.

Stated on the Psion Web site, the company says, “Litigation is always a last resort. But we’ll certainly defend against the cancellation actions filed against our ‘netbook’ registrations.”

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Maxine Cheung
Maxine Cheung
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