ATTN: All Designers Who Were Interested in “Designers Wanted” Article
Lots of designers have been asking what’s going on regarding the new venture proposed by Donna (of Stitch A Painting), Karen (of The Art of Stitching), and Rick (of Rick’s Chart’s), which I highlighted in my earlier post, Designers Wanted, while it was up very briefly on January 7, 2008. (That post is now back up — with some necessary corrections as required for truth in reporting/advertising — and as a point of reference for this post.)
Donna, Karen, and Rick, who will be referred to from here on in this post as DKR, opened this promising new venture which they intended to call “Designs on Demand” (but which they then briefly named “DesignsOnDemand.Org” before soon switching to its current title of “Designs On Demand.Org”), on January 15th, 2008. However, the designers involved with this venture or contemplating becoming a part of it may not be aware of the important behind-the-scenes events which have been the reason for those name changes — or, more importantly, that those name changes may continue.
Before I write any further, I want to make it clear I really do believe DKR’s new venture IS a VERY promising one — I am not using my words lightly here. They have many good ideas, and I believe this venture has a terrific chance to bring a large number of independent designers to the attention of stitchers worldwide — and that is a very good thing for both the stitchers and the designers (as well as the three masterminds behind this venture 
). However, DKR have run into a very significant problem right at the start of their new venture. It is a problem which came to my attention shortly after I wrote “Designers Wanted“; it is a problem which could negatively impact any and all of the designers who are signed up with DKR’s venture; and it is a problem which DKR are, so far, either compounding, or attempting to ignore — or both.
I am still working on a more detailed post than this one (the one which you are reading right now, that is), but I would be negligent if I waited any longer to inform the designers who are already working with DKR, and any designers who are considering working with DKR, of the central issues in this situation.
DESIGNS ON DEMAND IS ALREADY TRADEMARKED BY SOMEONE ELSE!
The main problem is that DKR’s venture named “Designs on Demand” may not be in business all that long — or, I should clarify, not under that name, and possibly not at that dot-org website URL (http://designsondemand.org).
That’s because there is already another business named Designs on Demand — and THAT company has been in existence for nearly ten years. The LEGITIMATE Designs on Demand is a home-based, family-owned business whose focus is providing all kinds of promotional products (mugs, tote bags, calendars, ornaments, mouse pads, magnets, etc.), available in quantities from one to one thousand (or more!), with the artwork or photographs of their customers reproduced on those items for personal or advertising purposes.
One of their most popular products is the yellow ribbon magnet which includes a picture of an individual soldier. In fact, Designs on Demand customers have been followed by other people who wanted to learn where they could have their own personalized yellow ribbon magnets made!
Designs on Demand provides full-time employment for owners Margaret and Darrel Scheperle and supports both them and their four children, two of whom are in college. The Scheperles, who developed their business from the ground up, have not only filed US income taxes under this business name, but they have also filed for and received a certificate of organization for Designs on Demand from the state of Missouri. It is the Scheperles’ company who owns the PayPal name “Designs on Demand,” and the Scheperles have owned and used that PayPal account since 2000. Designs on Demand has been in business since 1998, and the Scheperles have held the dot-com website address http://designsondemand.com since 1999.
Even if the Scheperles were not already in the process of registering “Designs on Demand” as a registered US trademark (which no company HAS to do in order to still receive FULL legal protection under trademark laws; registration simply makes the results of that same legal protection easier to accomplish more quickly), they have certainly been around long enough that they definitely have more than adequate legal basis for “Designs on Demand” to be considered SOLELY their intellectual property as a COMMON LAW TRADEMARK — and all the applicable processes and laws to force DKR to choose another name are absolutely in favor of the Scheperles (which is only fair, of course — and isn’t it great that something in life is actually fair? ).
So, to sum it up, NO ONE ELSE can use the name, “Designs on Demand” at all — certainly not without a lot of legal wrangling — which takes a great deal of time and a whole lot more money, and it’s also obviously a tremendous hassle (which no new business owners in their right minds would want to undertake).
Oddly enough, though, DKR seem set on undertaking this hassle, perhaps because they don’t understand what a trademark actually is.
DEFINITION OF A TRADEMARK
The actual trademark is the NAME OF THE BUSINESS; in this case, that trademark IS “Designs on Demand.”
The trademark is NOT the URL website address, a point which confuses many people. The argument here is NOT simply over the fact that DKR registered http://designsondemand.ORG, but that DKR are trying to use as their own the trademarked name “Designs on Demand” — which I’ve already explained belongs solely to Margaret and Darrel Scheperle. Even now that DKR are using “DesignsOnDemand.org,” they are still using the trademarked “Designs on Demand” as the essential portion of their name, and what’s more important is that they are doing so illegally.
Wikipedia explains trademark issues very well. Basically, although these two companies are dealing mostly (see the next paragraph) in very different merchandise, the trademark issue exists simply because right now they are both using essentially the same name. The different merchandise they deal in is completely irrelevant to the issue of trademark.
(Although the products offered are entirely irrelevant to the trademark issue, there is actually some potential competitive overlap product-wise between DKR’s venture and the Scheperles’ Designs on Demand which is a tertiary concern to the Scheperles. Because the Scheperles offer personalized sew-on fabric patches which they specifically market in competition with similar products that are embroidered. This product has done so well the Scheperles have given it its own website at http://colorpatch.com. Please note the first words on that site say, “ColorPatch by Designs on Demand”; this is specifically to indicate the Scheperles are marketing their ColorPatch product under their already trademarked name, “Designs on Demand.” Unlike embroidered patches, the Scheperles’ patches are permanently dyed onto the fabric background — providing less chance — than with an embroidered patch — for a patch to catch on something and become damaged or torn. The potential problem relative to this product is that if DKR were ever to market cross stitch patterns for a designer who also markets machine embroidery patterns — even if those machine embroidery patterns are never marketed through DKR’s venture — DKR would still be marketing for a designer who is in direct competition with the Scheperles’ company. While DKR can guarantee none of their designers are currently machine embroidery designers, DKR cannot guarantee this situation won’t ever change. At any time, any one of its designers might start creating machine embroidery designs. DKR simply does not have and cannot demand this kind of control over anyone else.)
To help explain both the issue of trademark as well as the separate issue of website URLs further, let’s look at a company I used to work for myself: AT&T. AT&T is the abbreviation for American Telephone & Telegraph. AT&T, as we all know, is a registered trademark, as is American Telephone & Telegraph. Even though all three words (”American,” “Telephone,” and “Telegraph”) are — individually — common English words, when those words are used in that particular string of words — “American Telephone & Telegraph” — they are an extremely well-known registered trademark.
You could bet your last penny that if I tried to call a new company “American Telephone & Telegraph,” or “AT&T,” I’d have AT&T lawyers on my butt faster than I can say, “Oops! Sorry!” You can also bet absolutely everything you hold dear that I’d be saying, “Sorry!” repeatedly and backing down immediately — but I wouldn’t be doing so just because AT&T has a whole bunch of money and could break me financially … I would be doing so because it would be the RIGHT thing to do … because stealing someone else’s trademarked name is just plain WRONG … because stealing someone else’s trademarked name is just that: STEALING.
The trademark — the NAME OF THE BUSINESS — is a very different concept than the URL website address. AT&T owns the dot-com website http://att.com as well as the dot-net website http://att.net. However, AT&T peacefully coexists with the dot-org website http://att.org, which is owned by a Jewish organization called the Associated Talmud Torahs of Chicago. The reason AT&T allows the Associated Talmud Torahs of Chicago to use http://att.org is because the Associated Talmud Torahs of Chicago is not in any way attempting to infringe upon AT&T’s trademark, i.e., nowhere on their site does the Associated Talmud Torahs of Chicago claim to be the phone company or in any way to have any link to the AT&T we all recognize as one of the most famous brand names in existence.
Another reason AT&T allows the Associated Talmud Torahs of Chicago to use http://att.org is because it is next to impossible for ANY company — no matter how large or how prosperous — to purchase and own every conceivable URL address which might resemble their trademarked name. Asking a small business owner — whose financial resources are much more limited — to buy every single URL address which might ever be used to refer to her trademarked business name is something the courts have already agreed is an unreasonable and ludicrous proposition. It’s that simple.
POTENTIAL LEGAL IMPLICATIONS
I am not a lawyer, so I don’t know all of the legalities of this situation. However, I do have a B.A. and an M.S. in criminal justice, as well as eight years of experience doing investigations, which included working closely with lawyers on a variety of legal issues. Because of all that experience, I DO know that if DKR has not informed its current designers in some detail about this trademark infringement case heading their way, and if they aren’t informing any of the designers signing up with them AS they sign up, then DKR may be guilty of something known as failure to disclose. (In fact, the failure to disclose issue is one reason I am publishing this article — because I have knowledge about this case which I am obligated to disclose!)
If this case actually goes forward to court, or even just to the point of a letter of demand (the first step in almost any legal proceeding, and the step at which many legal proceedings end because the recipient will often comply with the letter of demand upon receiving it — realizing at that point that the sending party is absolutely serious about the issue at hand), all those contracts will be deemed null and void if DKR didn’t inform the designers about this situation already and/or upfront. It’s kind of like trying to sell a house that’s got something really major wrong with it and not disclosing that information to potential buyers. The buyers have the right to know what they’re getting into BEFORE they get into it, so when a seller doesn’t tell potential buyers about a known problem, that seller can get into heaps of trouble.
So because of the initial — and illegal — failure to disclose, any deals which resulted from it are not considered valid. Any deals which extend further out from there are also not considered valid, such as if a current designer talks two more into signing up with DKR’s venture; not only would the initial designer’s contract be invalid, but so would those other two designers’ contracts. That’s fruit of the poisonous tree sort of stuff.
And you designers actually WANT your contracts to be invalid in this case. The reason for that is because, should this situation actually go as far as a courtroom, you can be certain the Scheperles’ attorney will most likely name every single designer participating in DKR’s venture as being complicit in the trademark infringement case — and none of you want to be in that position, do you? None of you want the hassle, the expense, or the effect it could have on your reputation — even though you had no idea any of this was going on … It wouldn’t be at all fair to you, would it? So that’s why your contracts would be considered null and void — because DKR didn’t inform you, and therefore, you couldn’t make an informed decision about doing business with them before they got this matter straightened out.
But, now that I’ve posted THIS article (the one you’re reading now, titled, “ATTN: All Designers Who Were Interested in ‘Designers Wanted,’ ” that is), and now that I’ve emailed you and advised you to read this article, each of you designers has another issue to think about: Now YOU know about the trademark infringement situation, which means now you ARE informed. So you have to decide if you can continue doing business with DKR while they are still using the name Designs On Demand.Org. That’s your decision, of course, but the Scheperles ARE scheduling a meeting with an attorney (they’ve already consulted with two others, and this third one is the one they have chosen to handle the case for them). That attorney will be starting the legal process, as usual, with a letter of demand. When the chips start to fall, where do you want to be?
I would certainly think you’d not only want to protect yourself, but that you’d also want to stand with the Scheperles because trademark infringement is very similar to copyright infringement. In fact, this is actually what surprises me most about this entire situation: designers, shop owners, and anyone trying to keep a business going in the needlework world is usually so vocal about the importance of respecting copyright issues that I really have a hard time understanding why DKR aren’t respecting the Scheperles’ trademark. If the tables were turned, I’m certain DKR would be just as angry as the Scheperles are — maybe even more so. In any event, I am hoping that you designers will beseech DKR to remedy their error in this situation immediately — for your sake, for their sake, and for the Scheperles’ sake … and simply because it’s the right thing to do!
AGAIN, DKR’S IDEA IS A GOOD ONE!
As I’ve heard from my designer connections who made inquiries with DKR, there are some very good reasons, some of which I already mentioned in “Designers Wanted,” to market your designs through a company like this, and perhaps even through this particular company. For instance, I’ve learned the percentage of profits a designer will receive for the sales on his or her own designs if marketed through DKR’s venture is 80%, which I understand is significantly higher than anywhere else with a similar marketing plan — and keeping more of your own profits is always good thing, especially for an individual designer.
WHAT HAPPENS NOW?
All this means DKR are still in need of a name — and perhaps a corresponding URL for their website address, of course.
I’m hoping DKR read this and come to their senses, whether from reading this article or through any other means because, aside from their problems coming up with a business name they can legally use, they have some terrific ideas and plans for their new venture. Literally, every problem I’ve listed above completely disappears as soon as DKR chooses a business name they can legally trademark for themselves. I love the idea that the designers who sign up to market their designs through them will keep 80% of their own profits — and I’m sure the designers will love the idea, too. With an offer like that, more and more designers will sign up with them, and they’ll stick around, too. (Who knows … maybe it will even encourage some people who’ve been teetering on the edge to try designing! 
) We stitchers will find it easier to obtain those wonderfully imaginative, but hard-to-find patterns by the new, independent designers — and we DO love the thrill of discovering a new designer! And, of course, DKR stand to make decent money themselves, so it’s a win-win-win … Almost all of the work (minus a few minor corrections here and there, such as correcting the email link for the support address on this page, updating everything which needs updating with new logos in connection with a new company name, and so on) is already done — and done well, too … They just need a name — a great one they will be proud to trademark for themselves.
Maybe “Design Emergency Room”? No, I don’t think so; clearly, I’ve been spending too much time in hospitals lately. How about “On Call Designers”? Hmmm. Still too medicinal, and perhaps too provocative. “The Pattern Palette”? Oh, I LIKE that one! But, although the URL is available no matter what extension is chosen, a Google search comes up with 15,500 hits for “The Pattern Palette,” so a significant amount of research would need to be done to confirm this isn’t already someone else’s trademarked name — and since it’s not my business venture, I’m going to stop now …
However, you can feel free to post here suggesting names for DKR’s venture; I assure you, they’re reading! 
Technorati Tags: Cross Stitch Expo, Stitch A Painting, Rick’s Charts, Rick Abbott, Art of Stitching, Deanna’s Designs, trademark, copyright, infringement, needlework, cross stitch, intellectual property, Margaret Scheperle, Darrel Scheperle, Designs on Demand, DesignsOnDemand.org, Designs On Demand.org, common law trademark, TM
January 21st, 2008 at 6:55 pm
[…] be sure to read “ATTN: All Designers Whose Interest Was Peaked by “Designers Wanted” Article” which is an important follow-up to this […]
January 21st, 2008 at 11:50 pm
How about “The Stash Heaven”?
I was considering DOD, but after getting to know this I wait and see what happens.
As a small designer I’d like to have more coverage, but in ways which apply to my moral code - i.e. I hope they come along with new name soon.
January 22nd, 2008 at 3:20 pm
Heather you claim to be a good reporter. You should check the facts of your stories before you release them!
The fact of this domain name are as follows.
The .org domain was for sale, we purchased it in good faith without any deception in mind whatsoever!
Margaret’s initial contacted us was a very angry email. We replied in a polite manner and she calmed down enough to talk with us. We wanted to work with her and coincide in peace. We changed our name to .org for her benefit. We are not obliged to make any changes for her benefit because legally we own that domain name.
We bent over backwards to try and work with Margaret. She asked us to make lots of changes, which we did just to be left alone to get on with our new site. Margaret kept pushing for more and more changes. In pure frustration I contacted a lawyer and showed him all our correspondence. He told me legally she can’t do anything about our site
I have suggested she contact ICANN to have this problem sorted out. Instead Margaret choose to contact our host in the hopes she could get them to shut us down.
Basically, having a common law trademark cannot prevent another company from doing business using the same name, not even in the same state. Where it does help is in the case of the original company taking the other company to court because they’ve caused damages, such as loss of business or customer confusion. Basically the same thing that applies to the Internet.
Rick
January 22nd, 2008 at 6:26 pm
fact 1: designsondemand.org was for sale.
fact 2: the cross stitching company bought it, legally
opinion 1: the cross stitching company is therefore legally allowed to use it, else it wouldn’t legally be for sale. duh. or else it would come with the stipulation, you can buy it but not use it. duh.
opinion 2: if designsondemand.com were truly serious they would have bought multiple domains, including the dot org and dot net along with hyphenated versions
opinion 3: reciprocating links in a non-obtrusive yet obvious place would benefit both companies and would be the better way to go about this rather than lawsuits and other shenanigans.
fact 3: neither this site nor either of the either two validate. tsk.
fact 4: only lawyers will benefit from a lawsuit if filed.
opinion 4: playing nice brings better karma that playing foul. therefore, why not reciprocate a link or banner directing misdirected traffic to the correct place. i doubt anyone wanting cross stitching stuff would confuse it with a mug of soldier magnet thingamabob, nor vica versa.
cheers
~KM
P.S. designsondemand.com would be better suited going thru ICANN for this dispute, from what i gather.
January 22nd, 2008 at 11:53 pm
Thank you Murphtall for your support, it’s much appreciated. Lately it seems like all we’ve been getting is e-mails yelling at us and threatening us. I must admit that eventually we finally gave in and stooped low enough to do the same. But it’s very hard to stand up straight when someone is beating you in the head.
We tried our best to come to a compromise with Margaret and we did offer to add a link on our site advertising theirs but they turned us down.
All three of us have worked hard for many years to develope our sites. We came together to offer a place for other designers to sell their patterns at a decent profit. It’s not like we’re trying to sell adult toys or downloadable porn. If this were the case, I could understand Margaret’s outrage. As it is, I truly believe that working together we could have driven some traffic to their site and it would have benefited them. They couldn’t see it this way, however. It is sad, too.
Thank you, Heather, for letting me comment and explain my thoughts on the situation.
Karen
January 23rd, 2008 at 5:39 am
I think it is a bit strange the new company went for a .org name of an existing .com business. Whilst I cannot comment on the intentions of the new (.org) company in this individual case, occurrences of this sort of issue where traffic from an existing and established site is ‘hijacked’ by setting up a very similar domain name is not uncommon.
Why the .org extension???? The definition of a .org is :
.ORG: Short for .organization. Originally designated for non-profit firms and any other organizations that did not fit under the .com or .net extension, any individual or business may now register a .org domain name
Whilst, as the description says, these are now available to individuals and companies these were originally for non-profit making organisations and still have an inference that this is the case. Why not .biz or .net as a more suitable extension? I can only assume from looking at their site they are a profit making company?
Finally, if they are brand new and truly genuine, it would not impact on them to change the name to something markedly different. They will not have any deep linking or search engine indexing that will be affected - I checked on Google and they only have a total of 5 back links logged.
Why all the fuss??? I would change my name to something completely different and then the existing company and I could get on with our respective businesses rather than engaging in a playground type squabble.
January 24th, 2008 at 10:20 am
I have couple of comments to make about this post, and to one of the replies. I am a designer who has chosen to join Designs On Demand.org. First, in reply to John Williams, I have to say that the brouhaha is not over the web extension used, but over the NAME of the company, so using a .biz or .net, I have to assume, would not be any different to the owners of Designs On Demand.com.
Citing the Harvard Law School website, trademark infringement occurs when: “If a party owns the rights to a particular trademark, that party can sue subsequent parties for trademark infringement. 15 U.S.C. §§ 1114, 1125. The standard is “likelihood of confusion.” To be more specific, the use of a trademark in connection with the sale of a good constitutes infringement if it is likely to cause consumer confusion as to the source of those goods or as to the sponsorship or approval of such goods. In deciding whether consumers are likely to be confused, the courts will typically look to a number of factors, including: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the typical purchaser; (7) the defendant’s intent. Polaroid Corp. v. Polarad Elect. Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820 (1961).” http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm#7
The company “Designs On Demand” the dot com business cannot even claim trademark dilution, because, also citing Harvard, to meet the standard for dilution: “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).”
This is a situation that has not only been blown WAY out of proportion, it’s one that should have been h andled between parties.
January 24th, 2008 at 7:23 pm
I never said the ‘brouhaha’ was over the extension, but thank you for explaining it is the NAME - its always usefull to use capitals when explaining things to foreigners or stupid people, I have also heard it can be used when you wish to be condescending but i believe this is only a rumour.
I merely asked why .org - if you look carefully you can see it is is question and not a staement by the use of the questions marks. I did put 4 of them so I didn’t have to quote the Harvard Law school definition of what is admissable as a question.
The point I was making was (and wont bore everyone by making it again in depth) is that the inference of a .org site is that it is non-profit making.
I hope the parties can now h andle it and stop fighting
January 31st, 2008 at 6:42 am
[…] for all parties involved if DKR would have simply taken these steps in the first place — as John Williams summarizes very intelligently and very succinctly (his succinctness is proof he is not me, despite what Rick thinks! ). Had DKR not been so […]