- Published: 02 May 2020
Thomas W. Brooke, Holland & Knight LLP, Washington D.C., USA,
Rodrigo V. Bermeo-Andrade, Bermeo & Bermeo Law Firm, Quito, Ecuador
The recent COVID-19 outbreak caused the stock markets to take deep plunges and people to juggle among house chores, home schooling, and home office. Meanwhile, investors noted that a favorite tool keeps coming up in discussions about how businesses continue to operate, so they rallied to buy stocks from ZOOM, just to realize it was the wrong stock!
It is common to see consumers mistakenly purchase the wrong product or service because of confusion over its commercial source, but we rarely see investor confusion over a company’s stock marked by financial tickers’ abbreviations. These are unique symbols that help investors find information about a publicly traded company or security.
The “ticker symbol” was the code used to represent companies on stock tickers or ticker-tape machines. In the United States, ticker symbols are allocated directly by the different stock exchanges, which are self-regulated by the National Market System Plan for the Selection and Reservation of Securities Symbols, which is approved by the U.S. Securities and Exchange Commission. This Plan provides a first-to-claim ticker allocation procedure, with very little regulation on disputes, and no mention of prior intellectual property rights.
Companies try to tie the goodwill of their most famous brands to their financial ticker to attract more investors. A simple first-to-file system can quickly lead to confusion, as occurred with Zoom Technologies Inc. (OTC:ZOOM), a nearly $30 million market value Delaware corporation with its principal offices in China, and Zoom Video Communications, Inc. (NASDAQ:ZM), famous for the Zoom video platform with a market value of about $40 billion.
Courts have held that investors are generally sophisticated customers that conduct proper due diligence before buying into a company. However, trademark infringement may be found when there is evidence of investor confusion, and a ticker can be deemed as an extension of a company’s trademark.
Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.
© 2020 International Trademark Association
“This article first appeared here in the INTA Bulletin and was reprinted with permission from the International Trademark Association (INTA).”