Was SyFy Portal Ripped Off By NBCU?
Jul 15, 2009 by Bruce SimmonsWith more details now out in the open, it seems that NBCU might have had a serious bluff going on with the hand they were …
With more details now out in the open, it seems that NBCU might have had a serious bluff going on with the hand they were dealt while they were out looking for a new name for The Sci Fi Channel. In the end, a small, fan-run website seems to have received the short end of the stick.
Read on, you’ll see why I say that.
Back on March 16th, I reported that The Sci Fi Channel was changing its name to Syfy. I came out of the gate slinging from the hip questioning this name change. The name change gave them the umbrella brand they were looking for and could expand on, not to mention copyright.
The other facts that were being revealed that day were that they were using a consultant company called Landor Associates and that they had 300 possible names to choose from.
Amongst all the fanfare and angst that was starting to rise up from the seething lines of the Internet, I had noticed that a website I had been reading, called SyFy Portal, had changed its name to Airlock Alpha during this same time frame.
Further digging revealed that SyFy Portal had indeed sold their SyFy brand name to an undisclosed entity.
I also questioned whether they made a buck or two off the this brand name sale?
In short, yes. They made $250,000 to sell their “brand” name to what eventually turned out to be NBC Universal. Sound like a lot of money? Read on.
Michael Hinman, the creator of SyFy Portal, has written an open letter to Michael Engleman, President of NBC Universal, the parent company of the Syfy Channel, and it’s not a glowing congratulatory letter either.
Micheal calls out a quote by Engleman for saying that “with a ballpoint pen and a piece of scrap paper, Syfy was born.“ Huh?
He calls him out because, in fact Michael Himman coined the name 10 years ago for his own website.
He made mention that NBC didn’t approach them directly, but used a shell company called New Fizz Corp to buy the domain name. New Fizz also ponied up for all branding references related to the domain name, such as SyFy, Sy and even Sy.
He’s also miffed that they got away with him selling his long-owned name for only $250K when the real buyer behind the process made $16.9 BILLION in revenue. I’m thinking that he may not have sold for only $250k if NBCU wasn’t hiding behind a shell company. At least I would have tried for more income.
But the idea that NBC hid behind a false front to make this transaction with Himman seems sneaky to me.
Despite being short changed, Michael did say this in his open letter:
“And we are big fans of what SciFi Channel and now Syfy does. We like Warehouse 13. We like Caprica. We can’t wait for Stargate: Universe.”
“And to be honest, we even like you for taking the chance with such a different name, and weathering the short-lived, if not heavy, typhoon of criticism that hit you.”
“But what we don’t like is when you try to drown out the fans. When you try to stomp us out. When you take from us for next to nothing, and then do what you can to make sure we can’t even get our voices heard above the media machine you have created. How are fans supposed to take that?”
He finishes off by saying:
“But to those of us who are struggling to do the things we do … it’s yet another example of how mega-corporations do whatever it takes to make money, even at the expense of the little guy.”
If I were in his shoes, I’d feel ripped off too. Shame on you NBC/U, shame on you.
Source: Michael Hinman’s open letter (I recommend you head over there for a lot more detail on this.)
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Look out for yourself in business deals is very valid and obvious.
Money isn’t the root of all evil, it’s a way to value things. Greedy people tend to want more than their value.
I don’t think this guy was bait at all. I think he got a very good price. He could have got more if he new the real seller, but that doesn’t change the fact that he thought the price was right.
The only contempt is for whining about not getting more money after the fact as if he were somehow taken advantage of. That makes legitimate claims less powerful.
I’m thrilled he got the deal he got and if he got a million I’d be thrilled for him as well.
Good for him, he just shouldn’t be trying to make a big deal out of this.
@Evie
Did you ASK THEM what they were going to do with the name? I mean, if some company called ‘News Fizz’ came to me and negotiations went all the way up to a quarter of a million dollars… I know I’d be suspicious of their motivations and would have dug into it a little more.
We were definitely suspicious of their intention, and despite what we asked, we were not told what the purpose was, and to them, it was not germane to the negotiations.
In fact, close to the end of the negotiation, convinced they were using the name to start a similar news site with an established name, offered to sell the brand for a reduced price if they signed a seven-year non-compete. They took the higher price instead.
So yes, we made a considerable effort to find out their motivation. And were unsuccessful, and left only with suspicions until the Syfy rebranding was announced a few weeks later.
You said there was a contract that went to legal. Was it stipulated in there that you were to be given credit for creation of the name?
Such a thing would not have to be stipulated. Without going into specifics of the agreement, I can say that there were certain “historical” claims that were made to our benefit, but the language was a bit muddy unfortunately, and would be hard to enforce.
Also, we never sought from legally enjoining them from excluding us on a creation credit, and probably wouldn’t have the grounds to do so. Good reporters who know how to research would be able to get to the bottom of it and provide the truth on their own anyway (or I’ll be there to remind them after the fact, lol)
BTW, thanks for bringing Airlock Alpha (formerly SyFy Portal) to my attention. It is now in my daily bookmark of places to go to read my entertainment news (as I am partial to SciFi entertainment).
Evie, that is very sweet. Thank you! And thanks to Screen Rant for helping to bring it to your attention.
@Vic Thanks for the nice words … and I hope you’re looking to sign with Gorilla Nation. =P
@jack Please note that we did not just sell a domain name. We sold a brand.
@Evie
For all I know Mr. Hinman DID his due diligence as far as investigating who News Fizz was prior to signing the contract, but from what I have read so far, he hasn’t communicated that fact. Additionally, I don’t see how you have to be a lawyer to do investigative research.
Well, I don’t need a lawyer to do investigative work, since I am an investigative reporter in my day job. But I can tell you that all the searching between my lawyer and I was over who New Fizz was and if they had the financial ability to pay what they offered.
To be honest, most of our focus was on whether or not they had the financial means to pay rather than who they may have represented, if not themselves.
Was it something I should’ve paid more attention to in hindsight? You bet. But it was the first time someone came and offered to buy my actual brand, and was willing to put their money where their mouth was.
And I also maintain that he simply could have included in the contract itself the caveat that he would be given credit for coining the term ‘Syfy’.
One thing to note is that we were convinced it was going to be the name of another site that would be trying to cash in on the success we have had in branding. The LAST thing I wanted was my name associated with it and creating market confusion.
In terms of science-fiction, my years in the business and stirring the hornet’s nest has made me hated or loved, but either way, enough to where many sci-fi fans would be confused if my name was attached to something that I had no control of.
@Dan Zee
One point that hasn’t been made is that there were probably other names on NBC/U’s list, and if Michael Hinman hadn’t sold or tried to play hardball with the price, they may have moved onto the next name and someone else would have gotten the money.
For the record, I would’ve been fine if they had moved on to another name.
We were not actively trying to sell our brand, and had JUST redesigned our site. The last thing we wanted to do was compress a typical 12-month rebranding process into two weeks.
We were upping the price not because I was some amazing negotiator, but because I was trying to get them to stop bothering me. I thought if we went high enough, they would go away. They didn’t.
Another point is that the SyFy “brand” would only be worth millions of dollars if it was one of the most visited sites on the Web.
Value is set by the buyer, not the seller. And you are confusing “brand” with “domain.” Those are two different things.
Without the promotion, SyFy Portal was just an obscure Website that only sci-fi fans knew about.
True, and to some extent, we still are. =P
The only time the domain name, or the “brand name,”
These terms are not interchangeable.
All of your examples are domain name examples. This was not a domain name sale.
@ Mr. Hinman: First, let me thank you very much for addressing all these things personally. It is pretty cool to me, as this is the first time I’ve experienced chatter (pardon the term) with the subject.
And it seems you did as much due diligence as you could have done given the circumstances. As they say, hindsight is 20/20 and unfortunately…
@S Edwards
First, NBC didn’t buy a brand. The brand was worth relatively nothing. I know this because my own website is many times bigger than his and makes more money and MY brand isn’t worth that much. His brand isn’t worth very much.
I can’t comment on this as I don’t know what your site is.
Value is set by the buyer, not the seller. If you cannot understand this most simplistic business concept, then I cannot help you (nor will I continue to repeat this point).
NBC didn’t buy his brand, they bought a NAME that they could transfer their branding on to and own.
You have read the purchase agreement? You need to do some research on what brand/trademarks are and then let’s talk about it again.
NBC bought a name, not a brand.
You should have seen SyFy Portal when it existed. We branded everything. You should look up what the definition of a brand is: A brand, in the most simplistic terms, is something that uniquely identifies you.
It’s safe to say that the SyFy name uniquely identified us, and thus by definition (both grammatically AND legally) we owned a brand.
If you want to believe otherwise, then that’s fine. But sorry, your statements lack little validity.
This guy actually got to keep his brand and make it more valuable.
Huh? I didn’t keep the SyFy name. It’s gone. Do you see me using it? We rebranded our sci-fi news site operation to Airlock Alpha. So I don’t know where you are coming up with this.
Companies with deep pocket always use fronts so that they aren’t gouged based on their name and can negotiate at relative market rates.
I don’t know where you’ve been, but that’s already been stipulated. But you can’t make that claim without following up that companies with deep pockets use fronts so that they can UNDERPAY.
This isn’t underhanded. The seller still got to pick a price he was comfortable with. He negotiated back and forth and came to a price he thought was fair… and… far above anything he’d been previously offered.
Really? Remind me when I want to buy your “more successful” site to use a front company, completely underpay you the value that I had set for it, and see how long it takes for you to complain.
Sure if he knew NBC needed the name he could have held them hostage for more money, but NBC rightly took that out of the equation.
Held hostage? Is that how you describe negotiations?
1. He assumes NBC bough a brand… they didn’t.
It’s not an assumption. Please research what a brand is. Then come back and talk.
NBC could generate 100-times the brand equity he built in an hour with one announcement.
Just because someone can build equity off a brand more than someone else, doesn’t make it any more or any less of a brand. That would be like someone telling you that you aren’t a person because they are wealthier than you.
I don’t think it’s my logic failing here.
NBC is not using his brand equity. He had no brand equity that NBC cared about.
Oh but they are, and there WAS brand equity. Was it anywhere near the level that NBCU can create with it? Of course not. But that doesn’t mean no equity exists.
If I have $500,000 equity in my house and you have $5,000 equity in your house, does that mean you have no equity? Does that mean you don’t even have a house?
Sorry, but your logic is falling apart before you even have a chance to put it together.
2. He believes he’s entitled to more than fair market value because it’s NBC. Look, if I’m selling my house and a rich buyer comes in and outbids everyone by a huge amount, I’m happy.
I’m sorry, but where have I asked for more money? Please point that out.
And that’s what happened here.
Only a jerk thinks, “Oh, I could have got so much more money out of them.”
Wow. Another personal attack. Is there a reason why such attacks are allowed to continue? This is ad hominem, but it is still an attack, and I have been nothing but respectful as a guest on these boards, despite some of the nasty attitude and falsehoods I have had to try and sort through.
I don’t have time to write long speeches about other people and their work on sites that are not mine. I just got home from a long day of work at my day job, and have to do some work on my current sites, do more prep for Comic-Con, try to put a podcast together, and still try and find some time to spend with my better half who is staring at me typing away on my laptop on my couch rather than spending time with him.
So if you want to have a REAL conversation about this, great. But the LEAST you can do before spouting what you are calling facts is to educate yourself on exactly what you’re talking about. I don’t have the time, energy or desire to discuss this with those who choose not to educate themselves on such matters.
@amy
It is possible that Sci Fi came up with the name, then realized someone else owned it. So they hired a branding firm to create something else, didn’t like any of them and then decided to buy Syfy.
It’s always possible. But we have worked with NBCU for a long time. It’s highly unlikely they (meaning their creative) didn’t know who we were ahead of time.
@nowhereman Thanks for the nice note!
@Evie
@ Mr. Hinman: First, let me thank you very much for addressing all these things personally. It is pretty cool to me, as this is the first time I’ve experienced chatter (pardon the term) with the subject.
And it seems you did as much due diligence as you could have done given the circumstances. As they say, hindsight is 20/20 and unfortunately…
I do what I can, and appreciate your nice comments and being a new member of our readership family.
It’s clear why you’re upset. You have no idea.
Value is set by a market place of buyers and sellers. You agreed to a value.
You took the highest offer, that’s the value.
NBC did not buy your brand, they bought your name. Your brand was worth very little in the market place as noted by the offers you received.
SciFi transferred their brand equity into the SyFy name. That’s it, that’s what it’s about. Finding a place they can own to park their brand. If the name of your company was Alpha Whatever and you had the same exact audience, they would not have paid you 250k. It’s a name.
I disagree about using fronts to underpay, they do it so they’re not extorted because they’re a big company. They didn’t underpay or you wouldn’t have sold it to them. No one put a gun to your head. The value of SyFy in the open market wasn’t 250k. You’re talking about strategic value to SciFi which is something you couldn’t know and should complain about.
You didn’t ask for more money, you’re complaining because you
would have asked for more money.
And yes, when people have something of value that’s part of a bigger deal they often extort more money. I have a friend with a property who’s holding up a huge deal that would benefit the community because he knows they can’t do it without him. His value was 200k two years ago, now he wants 2 million.
What idiot developer would tell him ahead of time if he didn’t already know.
You’re ignoring the fact that you offered the deal at a higher price in exchange for the non-compete.
Look, you can argue to you’re blue in the face. The bottom line is that you got a deal you were happy with and now you’re complaining because you didn’t have market information.
I can’t see how anyone would feel sorry for you for a second.
Best of luck with your new site. Hopefully this has all upped the value of it.
Maybe this will help you out. If I go to the store to buy tissues, I pay X more for Kleenex. It’s brand equity. I’m aware of it and I value it. Syfy was unknown to most of the population. No one perceived a greater value in it… UNTIL SciFi brought their brand equity to the table. You didn’t have brand equity, you had a name that someone else wanted and you got a good price. Be happy. If SciFi didn’t pick your name, you’d be a lot poorer.
@ S Edwards
As I said before, when you wish to actually research what branding is and come to the table a little more educated, we will chat.
Otherwise, all your providing is noise, and baiting. And I don’t have the time or desire for either one.
@S Edwards:
This should help you out. I wouldn’t depend on Wikipedia for everything, but in this case, they are correct.
The definition of brand equity:
Brand equity refers to the marketing effects or outcomes that accrue to a product with its brand name compared with those that would accrue if the same product did not have the brand name. And, at the root of these marketing effects is consumers’ knowledge. In other words, consumers’ knowledge about a brand makes manufacturers/advertisers respond differently or adopt appropriately adept measures for the marketing of the brand. The study of brand equity is increasingly popular as some marketing researchers have concluded that brands are one of the most valuable assets that a company has.
Now, let’s take a look at how this definition works with SyFy Portal.
If we were called “Sci-Fi Portal,” how would we do? It’s hard to tell because we would simply be guessing. But I think it would be safe to say that we may have been able to gain market share in what we do, but nowhere near the same visibility we had before.
Granted, we were a niche site, and I am referring to the niche market. But there was really nothing identifiable with our name that would make us stand out any more than anyone else.
If I were to start an online radio show, for instance, I would’ve probably called it “Sci-Fi Radio,” or maybe I would’ve come up with something different called “Alien Voices” or something (this is all hypothetical, I know “Alien Voices” is not available.”
Yes, I could’ve created a brand unique to the radio, but it would not be branded with the Web site. If you were to see an ad for Alien Voices or hear about it from a friend, you would not immediately associate it with Sci-Fi Portal, because there’s nothing in the brand that is linking the two together.
However, using the “SyFy” mark, I call my site SyFy Portal, which creates a unique identifier (a “brand”) for the product, and then I call my radio show SyFy Radio. Guess what … the two brands suddenly tie together.
Some people I highly respect in the online radio/podcast business who have been doing it for years and have some amazing guests were always expressing how they wish they could’ve got guests like I did on SyFy Radio. I can tell you that if my radio show was called Sci-Fi Radio, or even Alien Voices, I would’ve struggled far more to get guests than I did.
But because I used the “SyFy” mark to tie the branding together, I was able to call up agents and even celebs themselves and say the name, and instantly get their commitment, because they were familiar with the brand, and familiar with what came with that brand.
That is what we call “brand equity.” Now did I have the resources to plaster the name all over television, in the New York Times, on bust stop posters, and the like? No. But that doesn’t mean there was no equity. Sure, NBCU put more equity into it. Just like when you buy a house — chances are you are going to want to BUILD equity in it, and may have the resources to do it.
When I bought my condo, it was worth more than it is now. And it might be worth similar to other condos in my complex. However, I am able to build equity in it by doing an extensive renovation project, because I have the financial resources to do it, where some of my neighbors may not. That doesn’t mean they don’t have any equity or that their equity doesn’t matter. I have the resources to increase my equity, and that’s the only difference.
The brand equity we had in the “SyFy” mark was something that was strong in our niche. We were a Web site that despite our stumbles over the years, had consistently grown in traffic for more than a decade. We saw many sites who tried to be like us come and go, and we built branding into everything.
We had SyFy Radio, The SyUniverse Group was our corporate parent, I wrote a column called SyFriday, our multimedia options were called SyPod, and I can go on and on. The point was that we had something that we could use to brand other activities, and people would be able to immediately tie it back to the SyFy brand if they were previously aware of it.
Yes, there are a lot of differences in the branding strategy that NBCU is doing with the Syfy mark, but in some ways, there are similarities, too. NBCU is looking to be able to tie many of its services and offerings together using a primary brand, just as we did. There’s is at a much larger scale, but the general idea is intact.
And I didn’t invent this type of brand strategy. It’s been around probably longer than capitalism itself.
Syfy was unknown to most of the population. No one perceived a greater value in it… UNTIL SciFi brought their brand equity to the table. You didn’t have brand equity, you had a name that someone else wanted and you got a good price. Be happy. If SciFi didn’t pick your name, you’d be a lot poorer.
But your lack of knowledge in how branding and marketing works is showing here.
We weren’t servicing a majority of the population. We were a NICHE site. We served a NICHE audience, and that was our goal.
NBCU, with its SciFi Channel property, served a similar niche, although it had a larger reach because they had the resources (and the cable channel) to do it.
And no matter how many times you say we didn’t have brand equity, read the definition I provided at the beginning of this, and you will see how wrong you are.
Now, instead of wasting both of our times arguing a point that you obviously are failing to do, why not instead educate yourself on marketing strategies, brands, trademarks, and the business of it. It’s a great opportunity to expand your horizons and obtain knowledge you didn’t have previously, and then I would be happy to argue the finer points of brand strategy.
Hello Mr Hinman. I appreciate your valiant efforts, but people have different opinions about things. We all start with different perspectives and reach our own conclusions. I think it’s fair to say that a significant number of people will think you are being greedy despite what your intentions are.
I hope this is all a ruse to generate publicity for your new site. Airlock Alpha is great and I’m a big fan. Otherwise, I think the open letter is a big mistake.
@Forrester
Please, call me Mike. And yes, people have different opinions, but that doesn’t change facts.
FACT: We never, ever asked for any additional money.
FACT: We only talked about the price and such to make it clear that we had every room to ask for credit for the name, which is what we ended up succeeding in getting.
FACT: The open letter was very clear in its intentions. It was not a mistake in any way. And if it WERE a mistake, it is my mistake to make.
Well aware, I work with companies on branding in my day job and they have to account for it on their balance sheets. What did you value your brand at previously?
clearly you didn’t value it at more than 250k or you would have never accepted it. It’s that simple and paragraphs of runaround don’t change that.
I’m done here. I wish you sincere good luck.
@S Edwards
::eyes shocked::
You know, the real estate example is good since it’s kind of like digital real-estate.
If you sold your home that was worth $250k on the market for $500k, then you find out it was part of Disney’s plan to build a new theme park in your area and you COULD have gotten more money from Disney but since they used a private firm or another name to purchase it you didn’t think of it, is that REALLY “wrong” of Disney (although I hate Disney, lol)? No it’s not, you sold your house for fair market value or at least what YOU thought was fair. It shouldn’t matter how much money the buyer has, if a rich guy wants to buy a house he shouldn’t have to pay more than a poor person has to pay for the same house.
If he really wanted to see how much they were willing to pay, he should have refused the offer (even as a bluff) and say he demands more and see what they say. That’s one way to see how much it’s worth to the buyer without hiring a consulting firm. Although for $250k, hiring a consulting firm wouldn’t be that bad of an investment if he can get more than $250k as a result.
I think knowing domain names should go for $10k, and someone offers $250 as a first offer, you should probably look into it to see if there’s more to it than what’s at first presented. If not, then you get $250k, not too shabby, if so, then you get more. Win-win.
I mean, it’s the person’s right to complain shoulda coulda woulda, we all look back and complain about things we should have done differently, but it’s a whole different story to say that it’s someone else’s fault or that someone “robbed” you… Then you would have to show that somehow another party made it so that you had no other choice but to accept the deal or that you were somehow coerced into it, and neither of that occurred here, so oh well.
@Ken J
It shouldn’t matter how much money the buyer has, if a rich guy wants to buy a house he shouldn’t have to pay more than a poor person has to pay for the same house.
It’s not a matter of how much money the buyer has, but instead what value the buyer finds. As I’ve said 100 times here already: The buyer sets value, not the seller. Period. A seller has the right to at least be able to consider something close to realized value. That’s not an invitation for the seller to gouge, but it’s also not an invitation for the buyer to under purchase.
If he really wanted to see how much they were willing to pay, he should have refused the offer (even as a bluff) and say he demands more and see what they say.
Funny, that’s what we did the first two times we rejected their offer. But our research showed this to be a firm that didn’t have a lot of capital on hand, but who really wanted this brand for one reason or another. It got to a point that we realized they would likely be willing to give us as much as we wanted, and it seemed wrong to push a small company to that point, as I would never want someone to do that to me.
I think knowing domain names should go for $10k, and someone offers $250 as a first offer, you should probably look into it to see if there’s more to it than what’s at first presented. If not, then you get $250k, not too shabby, if so, then you get more. Win-win.
For the last time, this was NOT A DOMAIN SALE. Please stop comparing it to that. It’s not comparable. At all.
I mean, it’s the person’s right to complain shoulda coulda woulda, we all look back and complain about things we should have done differently, but it’s a whole different story to say that it’s someone else’s fault or that someone “robbed” you…
Where do I say I was robbed?
Then you would have to show that somehow another party made it so that you had no other choice but to accept the deal or that you were somehow coerced into it, and neither of that occurred here, so oh well.
Where did I say I was coerced?
Are you even bothering to read what I am taking the time to write here? If not, then don’t expect me to continue responding.
LOL, buyers set price I assume you’re talking about demand, but it’s up to the suppliers to act on that demand, if you didn’t set your price higher, there’s no reason for the buyer to offer to pay more than you’re willing to sell it for…
I don’t go to Taco Bell and offer to pay $5 for a $0.29 taco because I’m starving… I might be willing to pay it, it might be worth $1000 because I’m just about to starve to death and that taco will save my life, but if they’re willing to sell it for $0.29 then I don’t see anything wrong with me buying it for that. Should I have identified myself as a starving person with $1000 that I’m willing to spend before placing my order?
I use this dumber analogy since you obviously don’t want to reply to the real-estate example, that’s why you skipped it, so I invite you to an easier food-based one.
And I don’t know, which economics class taught you about “under purchase?”
As someone who was irked by the “re-brand” and has written extensively about how misguided it was on my own blog, props must go out to Hinman for getting what he did — because he was fortunate NBCU threw any offer at him. From a legal perspective, they really didn’t have to give him anything.
I understand and respect that he feels a close connection to his previous website “SyFy Portal” — and that he sold them the brand, but that wasn’t the brand NBCU launched.
The brand they launched is “Syfy” — no intercaps and no “portal.” That trademark was in no way contingent on buying Hinman’s site. They had already purchased “syfy.com” (although, at the time, not the .net or .org) which matched their intended usage.
Even still, months after the purchase, SyFyPortal.com forwards to the Airlock Alpha site.
In truth, Michael didn’t really have a trademark on “Syfy” — he used the combination name “SyFy Portal” for a Web site address and activities related to it, but that was the extent of usage. Nor did he have any variant of “Syfy” registered with the USPTO, which precluded any legal claims.
NBCU could have easily launched “Syfy.com” without having to deal with SyFy Portal. The only reason they may have bothered was for the lawyers to cover themselves against possible “trademark dilution” and to prevent any claims that “Syfy” might be a generic term.
But it really wasn’t necessary, as there can be many similar marks in use by multiple companies, so long as the design/appearance/usage “distinguishes the source of the goods of one party from those of others.”
For example, his new company name is “Quantum Global Media” — had he checked, he’d have discovered that there are scores of other “Quantum Global” companies:
http://www.quantumglobalaero.com/
http://www.quantumglobaladvisors.com/
http://www.quantumglobalsolutions.com/
http://www.quantumglobal.in/
(And while they could, none have registered their trademarks with the USPTO.)
So in short, while he deserves admiration for building up Syfy Portal to its relatively high standing in a particular niche, as he readily admits, it was only making $40k a year. Getting more than six times its yearly revenue is a coup indeed. Writing screeds about how the new Syfy doesn’t mention his former site… well, that just makes for entertaining controversy and free publicity.
Hmmm .. not sure of this posted. If I just double posted, could the mods please remove this one?
Thanks!
As someone who was irked by the “re-brand” and has written extensively about how misguided it was on my own blog, props must go out to Hinman for getting what he did — because he was fortunate NBCU threw any offer at him. From a legal perspective, they really didn’t have to give him anything.
Really?
I understand and respect that he feels a close connection to his previous website “SyFy Portal” — and that he sold them the brand, but that wasn’t the brand NBCU launched.
The brand that was sold was “SyFy,” not “SyFy Portal.” Why is everyone assuming they know what was sold? When did you read the purchase agreement?
That’s right, you didn’t. The purchase agreement has never been released, so please don’t assume you know what was sold.
As what was PREVIOUSLY explained more than once, the following usages were sold: “SyFy,” “Sy” and “SFY.” One of them was a mark, the other two were variations of the mark, but linked to the mark.
The brand they launched is “Syfy” — no intercaps and no “portal.”
Hate to break it to you, but whether they spelled it SYFY, syfy, or sYfY, the mark would not change. I could not launch a new soda and call it cocA-cOla. So whatever you are trying to show does not work.
Also, the mark that we owned was “SyFy,” not just “SyFy Portal.” “Portal” was a word that was used with the brand, but if you had started something called “SyFy” anything, or just “SyFy” itself, we would have every right to sue for infringement in the state court system.
That trademark was in no way contingent on buying Hinman’s site.
That is actually correct, only because NBCU didn’t buy the site. I still own the site and all the assets to it. The only thing that was sold was the brand.
They had already purchased “syfy.com” (although, at the time, not the .net or .org) which matched their intended usage.
That was a domain name purchase, a domain that allowed to continue use by indirect license. This is rather complex, I know. But there’s no better way to simplify it.
Even still, months after the purchase, SyFyPortal.com forwards to the Airlock Alpha site.
Yes, based on a purchase agreement that you have no idea what it says. Yet you continue to assume you have all the answers, although the one person in this discussion who has SEEN the agreement, who TOOK PART in the negotiations, is telling you otherwise.
Why is it that people insist they have all the answers and have to try and prove someone wrong when they don’t even have close to all the information the person they are trying to prove wrong has.
It would be like playing a game of poker with me, and telling me that I don’t have a flush, even though you can’t see my hand, and I can see five hearts right in front of my eyes.
In truth, Michael didn’t really have a trademark on “Syfy” — he used the combination name “SyFy Portal” for a Web site address and activities related to it, but that was the extent of usage. Nor did he have any variant of “Syfy” registered with the USPTO, which precluded any legal claims.
Really? I named my corporation SyFy Portal Universe? I named my radio show SyFy Portal Radio? The virtual awards we did were called the SyFy Portal Genre Awards? Our multimedia operations were SyFy Portal Pod? The original name of the site was SyFy Portal World?
And you said I only used it for a Web site address, so the operation itself was not called SyFy Portal? That was just the name used in the URL?
I am saying all that facetiously. We utilized the brand in a number of ways. The name of the company was The SyUniverse Group Inc. The name of my online radio show was SyFy Radio. The virtual awards we hosted were called the SyFy Genre Awards. Our multimedia operations were done under the moniker of SyPod. The name of the original site was SyFy World.
We also utilized the name or a variant in a couple of columns. My weekly column, for instance, was known as SyFriday. A column written by Dan Compora was known as SyFy 101.
So how does your statement work with this again? Oh, it doesn’t.
On another blog, someone continued to challenge how I defined trademark usage. I asked my attorney to point me to something on the Web, like a white paper or something, that would give details about how trademark works.
I shared this on that blog, and now I will share this here, so that we can all move on to much more important things than continuing claims that I don’t know what I’m talking about when it comes to trademark.
And just in case you wish to dispute this, it comes from Harvard Law.
Here is the link: http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm so that you can follow along.
A trademark is a word, symbol, or phrase, used to identify a particular manufacturer or seller’s products and distinguish them from the products of another. 15 U.S.C. � 1127.
The SyFy mark was used to distinguish us from the products of others, in this case other news sites in the same niche as us. If you had five sites, say Sci-Fi Pulse, Sci-Fi Stream, SciFi Wire, SyFy Portal and Sci-Fi Portal, which one is able to distinguish itself from another without using a common, descriptive word?
The Syfy mark meets this definition of the Lanham Act. But it doesn’t end there.
Assuming that a trademark qualifies for protection, rights to a trademark can be acquired in one of two ways: (1) by being the first to use the mark in commerce; or (2) by being the first to register the mark with the U.S. Patent and Trademark Office (“PTO”). 15 U.S.C. � 1127(a).
This is an interesting passage — something that I have repeated many times here. Let’s read it out loud … SyFy qualifies for protection, as the Lanham Act defines how trademarks are qualified and proven by NBCU’s publicized interest in the mark.
After that, there are two ways to get rights of a trademark. Either I register it with the PTO, or I must be the first to use the mark in commerce.
SyFy World, the first usage of the name (which to this day remains uncontested), launched Aug. 13, 1998 on the Internet. If someone else challenges our rights to the mark, all we have to prove that our usage predates theirs. If they say they created it on April 1, 2001, all we have to do is show that we were using it as of March 31, 2001.
Although registration with the PTO is not required for a trademark to be protected, registration does confer a number of benefits to the registering party. 15 U.S.C. � 1051.
As you can see, registration is NOT REQUIRED. By registering, you get added protections you would not get otherwise, including having a bona fide record of when the trademark was created, and being allowed to sue in federal court for infringement, instead of state court.
I have a hard time believing that NBCU would make a mistake of paying me $250,000 if they had absolutely no reason to do it. Would you do that? If you were offered a free lunch, would you pay for it anyway? If you won a car on the Price is Right, would you get your checkbook out to pay the full listing price?
No. If NBCU felt that I had no real rights to the SyFy mark, they would’ve just ignored me, and then when they registered the name — based on your statements — could’ve sued me for the usage, because they were the first to use it.
Something like that would be an open and shut case if the main qualifier was simply who registered it first like a patent. Just because trademarks and patents are run out of the same office doesn’t mean that they are governed by the same laws. They are not.
It would’ve been far cheaper for NBCU to simply sue to enjoin us from using the mark that they, under your claims, would have full rights to because they registered it first.
I dealt with the attorney that represented NBCU in this, and I can tell you he’s VERY good at what he does, and he’s no slouch. I would have a hard time believing he would sign off on NBCU spending money like this on something they wouldn’t need to do. And that would be a tough sell to make to shareholders, too, even if the purchase is not material enough to be reported — they knew it was bound to get out sooner or later, especially since they had no NDAs signed.
NBCU could have easily launched “Syfy.com” without having to deal with SyFy Portal.
If that was the case, then they would’ve just launched it, and either sued me for infringement, or waited for my lawsuit to be filed. We’re a small operation, and they would be able to determine that pretty quickly, so I’m sure if nothing else, they new they could probably outspend me by the first $10,000 in legal fees, and force me to drop the case.
The only reason they may have bothered was for the lawyers to cover themselves against possible “trademark dilution” and to prevent any claims that “Syfy” might be a generic term.
That is not what trademark dilution is. Trademark dilution claims can only be brought on by the owner of a mark, who can establish himself as the owner of the mark, against those who might be attempting to dilute the brand by having similar qualities.
For instance, NBCU goes ahead and launches Syfy without ever talking to me, under your scenario that I never had a trademark because it wasn’t registered (of course, this is hypothetical, because I already proved above that registration is not required under the Lanham Act). They wait a little bit, say a few months or even a year, and decide that they don’t like the fact that I am gaining traction with SyFy Portal because it utilizes a similar mark, and is creating market confusion, because what I’m doing appears to be officially associated with their brand.
They could then sue me for trademark dilution. Under federal law, they would have to show that the mark is “famous” using definitions as established by the Lanham Act and associated laws. Then they could argue that my use of the brand is blurring the lines. Also, they would have to be able to show that my use of the mark is being used in a different way than they are using (which might be enough since I name a Web-based news operation on it, and they are using it to name a television network and related properties, otherwise it would simply be infringement).
Let’s go back to the Harvard piece. Emphasis mine.
In addition to bringing an action for infringement, OWNERS OF TRADEMARKS can also bring an action for trademark dilution under either federal or state law. Under federal law, a dilution claim can be brought only if the mark is “famous.” In deciding whether a mark is famous, the courts will look to the following factors: (1) the degree of inherent or acquired distinctiveness; (2) the duration and extent of use; (3) the amount of advertising and publicity; (4) the geographic extent of the market; (5) the channels of trade; (6) the degree of recognition in trading areas; (7) any use of similar marks by third parties; (8) whether the mark is registered. 15 U.S.C. � 1125(c). Kodak, Exxon, and Xerox are all examples of famous marks. Under state law, a mark need not be famous in order to give rise to a dilution claim. Instead, dilution is available if: (1) the mark has “selling power” or, in other words, a distinctive quality; and (2) the two marks are substantially similar. Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026 (2d Cir. 1989).
Once the prerequisites for a dilution claim are satisfied, the OWNER OF A MARK can bring an action against any use of that mark that DILUTES THE DISTINCTIVE QUALITY OF THAT MARK, either through “blurring” or “tarnishment” of that mark; unlike an infringement claim, likelihood of confusion is not necessary. Blurring occurs when the power of the mark is weakened through its identification with dissimilar goods. For example, Kodak brand bicycles or Xerox brand cigarettes. Although neither example is likely to cause confusion among consumers, each dilutes the distinctive quality of the mark. Tarnishment occurs when the mark is cast in an unflattering light, typically through its association with inferior or unseemly products or services. So, for example, in a recent case, ToysRUs successfully brought a tarnishment claim against adultsrus.com, a pornographic web-site. Toys “R” Us v. Akkaoui, 40 U.S.P.Q.2d (BNA) 1836 (N.D. Cal. Oct. 29, 1996).
But it really wasn’t necessary, as there can be many similar marks in use by multiple companies, so long as the design/appearance/usage “distinguishes the source of the goods of one party from those of others.”
Only as long as the trademark owner doesn’t feel like there is trademark dilution — an area of trademark law YOU brought up, not me. If they can show dilution, then no matter what is done, courts could enjoin other usages of a trademark, even if it’s not technically an infringement.
For example, his new company name is “Quantum Global Media” — had he checked, he’d have discovered that there are scores of other “Quantum Global” companies:
http://www.quantumglobalaero.com/
http://www.quantumglobaladvisors.com/
http://www.quantumglobalsolutions.com/
http://www.quantumglobal.in/
However, in the case of Quantum Global Media, we are not claiming the terms “Quantum Global” as an implied trademark, but instead, “Quantum Global Media.” We don’t utilize just “Quantum Global” in any of our utilization of the mark, unlike “SyFy” which we did use either by itself or in conjunction with other words.
Yep, it’s complicated. And it’s impossible to simplify, which is why when someone attempts to do it, they end up being dead wrong.
(And while they could, none have registered their trademarks with the USPTO.)
So you have identified what they have as trademarks despite being unregistered. You have me confused … are you claiming it IS a trademark if unregistered, or not?
So in short, while he deserves admiration for building up Syfy Portal to its relatively high standing in a particular niche, as he readily admits, it was only making $40k a year.
Yes, such a pittance. Considering that SyFy was operated as a non-revenue-generating site for years, and only a few years ago did the cost to operate finally get to the point where we HAD to generate revenue, I’d say that’s not bad especially since I’m sure we frustrate our ad company because we only allow them to sell a small portion of their total inventory on our site.
Getting more than six times its yearly revenue is a coup indeed. Writing screeds about how the new Syfy doesn’t mention his former site… well, that just makes for entertaining controversy and free publicity.
Yep, but one thing I also don’t do is make myself look kind of uneducated by just making assumptions on how someone else’s agreements work, and challenging them on laws and such that I didn’t take the time to consult an attorney on, or simply do some research on my own. You may have come across this white paper on your own, and learned quite a bit about the process, and made it far less easy, if not outright impossible, to pick your argument apart point by point by point by point.
But thanks for the discussion!
I did want to take a minute and say something here.
I feel bad that how I phrased my opinion piece was misconstrued. Communication is a two-way act, thus if you can put responsibility on one end, you have to be willing to put responsibility on the other.
Although I still feel that my intentions were explicit — I simply wanted to make sure that I got the credit I deserved for creating a word — I still may have muddied it in other discussions as a way to be pre-emptive in what would be said to me by some.
Intention is a lot, but it’s not everything, and I need to make sure that I properly execute things like that.
I have to say that some of the discussion here and on some domain reseller blog that is interested in this for whatever reason, can be a little frustrating. I know I am not a lawyer, but why would anyone continue to believe — after I refute what they say — that I would go on as long as I did without educating myself on various laws.
When we talk 1998, we’re talking a long, long time ago (and maybe in galaxy far, far away). When SyFy World started, studios and networks were shutting down fan sites left and right, claiming copyright violations from everything from using a publicity image, to even mentioning their property.
I watched this, and realized that none of these attempts were ever challenged in court, mostly because of lack of financial resources of the fan site, but also because people didn’t educate themselves on the law.
I was already partially familiar with copyright law because of my then six years experience as a journalist. But I decided to fully engross myself in understanding the intracacies of the law in both copyright and trademark.
I didn’t want to use something like “Star Trek” or “Spaceballs” in my name, but I also wanted to create something that was unique.
I learned every nuance of copyright law there was, and how Fair Use operates and protects you. I learned every nuance of trademark law there was, and what I needed to do to establish my trademark.
I knew in 2000 when a company purchased Syfy.com on how to handle it. I didn’t have the funds to challenge them in court, but I knew if I simply let them go, it might be harder to prove my claim on the trademark in the future.
So I contacted them and asked them to cease and desist. When I got their attention, we talked things through, and decided that as long as they disclaimed their association with us, and linked to us — thus establishing us as the dominant party — they could continue using the mark.
That’s a de facto license, and perfectly within my rights as a trademark owner to do.
I know how the law works, and I know exactly how to protect us. When other sites were being shut down arbitrarily, we were able to not even get touched. Tribune Entertainment made a weak attempt to get us to shut down after we became a spoiler site focused on one of their shows, but it never got them anywhere, because I fought back, and both sides knew which side of the law we were on.
Just like I’m sure Van and Bruce will tell you, in order to run something like a Web site to the extent that we do it, you have to know what the heck you’re talking about. You have to know what you’re doing, or you’ll be eaten alive.
I come off as a Mr. Smartiepants not because I pretend to know everything, but because we are talking about my very livelihood here. If I didn’t know this stuff, I could lose everything I have if someone tried to exploit that.
Look at Bruce and Van … they don’t know me. They only knew of me (although I’m having some nice conversations with Bruce online), yet they are defending me, because they have to retain the same type of knowledge.
I am not a slouch when it comes to all this. I know what I am doing, and I know where the law stands. If I come off as arrogant about it, I don’t mean to. But at the same time, people forget that I am a person, with feelings, and some of the things that have been said on here have been harsh, if not vicious.
I can take the harsh and viciousness, but I cannot take myths being perpetuated as fact, so you understand why I — using my inherent nature as a journalist — must make sure that what is being disseminated, even in comment sections from readers, is the truth.
Thanks everyone for a great discussion!
As the Bard said, brevity is the soul of wit, so I shall try to be brief*:
Michael, the weight of your argument doesn’t rest on the (excessive) length of your diatribes. Neither does it impress your potential readers when you insult, attack and condescend to others (particularly those who have written positively on your accomplishments) touting your supposed knowledge of the law, when it is clearly lacking.
Yes, you come off as arrogant; but worse than that, you come off as defensive and self-justifying.
Of course you want to claim to have held an unregistered trademark on “Syfy” — even though you did not. Your previous site was called “SyFy Portal” while your earlier (1998) Geocities site was “SyFy World” until the merger with Star Trek Portal in May 2001. The “informal” and later company name you used was “SyUniverse Group,” while a podcast you produced was called “SyPod.” Yet, at no time in the last decade, did you use “Syfy” as a distinct, unique identifier, nor indicated your intention to claim it as a mark with a “TM.”
The Lanham Act has no bearing on your claims. 15 USC 1125(a) — which originates from Section 43(a)) — is clear that *famous* marks are only protected against intentionally deceptive or potentially confusing usage, or misrepresentation of origin, which is not the case here. Sorry. Unless your impression is that “SyFy Portal” was so well-known, that the general public would be deceived and confused if NBCU’s started using “Syfy” as a brand, your arguments about having an unregistered trademark don’t hold water.
But the point is moot, now. The deal with NBCU is done. You’ve gotten paid, handsomely. You should be kicking back and focusing on developing your new identity, instead of straining your own and everyone else’s patience, spitefully defending your place as a footnote in genre media history.
Continuing to hash this out just makes you look bad.
(*With apologies to Shakespeare; I have failed him.)
As the Bard said, brevity is the soul of wit, so I shall try to be brief*:
Except he wasn’t.
Michael, the weight of your argument doesn’t rest on the (excessive) length of your diatribes.
Nor do I depend them to be. The weight of my arguments rest on the actual facts I can provide. Which I have.
Neither does it impress your potential readers when you insult, attack and condescend to others (particularly those who have written positively on your accomplishments) touting your supposed knowledge of the law, when it is clearly lacking.
Well, prove it. I’m not here to “impress” my “potential readers.” I am here to discuss trademark law, which people here seem to be so greatly interested in.
What’s insulting are these continuing claims about my “lacking” knowledge of the law, but yet, I have provided a ton of literature not created by me to back it up, and I have yet to see anything contrary.
I am still reading through your post, so let’s see if you continue the trend.
Yes, you come off as arrogant; but worse than that, you come off as defensive and self-justifying.
I also come off as someone who seems to be able to prove his points. So all the character observations in the world isn’t going to top that.
Of course you want to claim to have held an unregistered trademark on “Syfy” — even though you did not.
OK, let’s see you prove it. I’m waiting.
Your previous site was called “SyFy Portal” while your earlier (1998) Geocities site was “SyFy World” until the merger with Star Trek Portal in May 2001. The “informal” and later company name you used was “SyUniverse Group,” while a podcast you produced was called “SyPod.”
I never produced a podcast called “SyPod.” That was a general name to all of our multimedia activities.
Yet, at no time in the last decade, did you use “Syfy” as a distinct, unique identifier, nor indicated your intention to claim it as a mark with a “TM.”
I don’t have to use the “TM.” There is absolutely nothing in the Lanham Act that says I have to use such a marker. If it’s there, show it to me.
Just like if I publish a story, I do not have to put a copyright notice on every story, or even on the site at all. It is implied that the copyright exists. So it’s not my argument that is weak.
Also, we DID make an effort to make sure that “SyFy” was a distinct, unique identifier.
You can take a look at this archived page here: http://web.archive.org/web/20080214072403/www.syfyportal.com/copyright.php
Here is the paragraph you should take a peek at:
“SyFy Portal” (2001), “SyFy World” (1998), “The SyUniverse Group” (2002), “SyPod” (2005), “SyBlog” (2006), “The SyFy Genre Awards” (1999), “Syfyman” (1998), “SyClopedia” (2006) and “SyFy” (1998) are under U.S. and international implied trademark protections, and are owned by The SyUniverse Group.
That is our copyright page, and if you look back further, you will notice that we maintained “SyFy” as a separate entity for a long time. Even in this simple paragraph, which by the way was published a YEAR before NBCU contacted me (at least on the example I am showing you), we made efforts to identify “SyFy” as a separate identifier.
I could not start a new drink called Coca-Cola Portal. Because based on your reasoning, I could … because I am not separating one trademark as part of an overall trademark, you feel that I can’t have either.
Well, in that case, Coca-Cola has lost “Coca-Cola.” For years, more than 20 actually, they distributed their products under a variety of names: “Coca-Cola Classic,” “Diet Coke,” “Cherry Coke,” “Vanilla Coke,” but not just plain ol’ “Coca-Cola.” even the name of the company was not “Coca-Cola,” but instead, “The Coca-Cola Company.”
So if your argument is that because the trademark was used as an adjective or part of a compound word, and we never just called anything “SyFy” and that was it … then Coca-Cola is in big trouble.
The Lanham Act has no bearing on your claims. 15 USC 1125(a) — which originates from Section 43(a)) — is clear that *famous* marks are only protected against intentionally deceptive or potentially confusing usage, or misrepresentation of origin, which is not the case here.
Really? Please quote it, and show me where the only trademarks that can be registered has to be “famous.” You are quoting the section on trademark dilution, which is something completely different, and not even part of this argument.
You are quoting from Section 43, which FYI, is titled “False designations of origin, false descriptions, and dilution forbidden.” This section, just so you know, deals with someone who has created a trademark, and who might be dealing with an outside entity that has what could be a confusing mark, but not one that necessarily is considered infringement.
For example, let’s say my last name is Appel, and I build computers, so I start creating computers under the trademark Appel Computers. Because the name is specifically tied into me (as I have the right to use my last night), and it’s otherwise a trademark that can exist, under the law, I am technically NOT infringing on any other trademark.
However, I start to grow, and Apple Computers sees some issues of confusion where people were told they were buying an Apple, but in reality, were buying an Appel.
Under Section 43, Apple Computers (well, now they’re called Apple Inc. actually) could seek to enjoin me from using Appel Computers, not because I am infringing on their copyright, but because I am using a mark that is creating confusion and possible dilution of their brand and trademark.
In order for Apple to be successful, THEY have to prove that the brand they are using is “famous,” and the reason why they have that threshold is because technically, Appel Computers is NOT infringing.
I tried to keep that brief, so I hope that worked. By the way, you can read the updated Lanham Act, at least through 2005, here: http://www.bitlaw.com/source/15usc/
Sorry. Unless your impression is that “SyFy Portal” was so well-known, that the general public would be deceived and confused if NBCU’s started using “Syfy” as a brand, your arguments about having an unregistered trademark don’t hold water.
But you’re quoting trademark dilution, which is not the same thing. “Dilution” is a claim outside of infringement. It’s a way to go if infringement options don’t exist, as would be the case between Apple Computers and Appel Computers.
However, if I started a company called Apple Computers, even if my name was Mike Apple, it would be infringement. Your mark does not have to be “famous” to have that option because infringement is much more straightforward.
Wow … for me being so “weak” when it comes to trademark law, I seem to know exactly what I am talking about, and seem to be able to comprehend these laws a bit better.
Oh, was that arrogant? I’m not the one taking one piece of a law out of context and completely misrepresenting it. THAT is arrogance.
But the point is moot, now. The deal with NBCU is done. You’ve gotten paid, handsomely. You should be kicking back and focusing on developing your new identity, instead of straining your own and everyone else’s patience, spitefully defending your place as a footnote in genre media history.
I think I can do whatever I want. Just as you can. And I never asked Screen Rant to cover this. So if you have an issue with such a thing being discussed here, you should probably take it up with them.
But I’m sure Vic and Bruce know what they are doing, and can tell you that you are just one of many readers, and they are trying their best to serve all their readers, not just Simon.
Continuing to hash this out just makes you look bad.
(*With apologies to Shakespeare; I have failed him.)
Really? You’re the last one standing. I think it makes me look right.