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Foreign Language Considerations for Prepaids.
By Thomas K. Crowe, Esq.
Marketing to consumers through effective branding increasingly requires many prepaid calling card providers to offer products in languages other than English. Many of these companies could be marketing themselves into a legal and regulatory hailstorm without realizing it.
Companies which sell prepaid calling card products should be careful to understand the specific telecommunications and consumer protection issues that could apply to their businesses as well as important trademark matters that should be considered when developing their brand.
Foreign Language Requirements
Prepaid calling card providers should carefully consider applicable telecommunications and consumer protection laws and regulations for each state in which they intend to offer their product to ensure they are complying with disclosure requirements, especially those which specifically include a multilingual provision.
That often means, for example, that prepaid calling cards where Spanish appears on the face of the card (or in related marketing materials) must comply with these disclosure requirements in both Spanish and English. Such multilingual requirements for prepaid calling cards targeting non-English speaking populations add an additional burden to providers who offer card products in languages other than English.
In many states these specific and burdensome requirements are a composite of separate telecommunications and consumer protection laws. For example, California's rules, which include specific point-of-sale disclosure and customer service requirements that must be met in all languages that appear on the card, are found in its telecommunications consumer protection rules. Conversely, Texas has adopted similar regulations, encompassed in its telecommunications rules, to specifically address prepaid calling services.
As examples of how burdensome these multilingual requirements can be, both California and Texas impose disclosure requirements for fees and charges, and set limitations on prepaid calling card providers as to how the information is conveyed. Multilingual disclosure requirements include, either on point-of-sale displays or on the card or card packaging, descriptions of rates, instructions as to the use of the card, and certain other policies such as expiration dates or recharge policies.
Brand Protection
Especially in immigrant markets where English is not the principally spoken language, an effective brand that is easily recognizable to a prepaid provider's target consumer is essential. Immigrants may more readily identify with brands that they associate with their home countries, especially brands that they trusted before coming to the U.S. Critical competitive advantages can be built based on branding alone as competition increases for specific niche immigrant markets.
Effective branding makes use of trademark law in order to help ensure that the brand, particularly any unique mark, is protected from competitors. However, both registering and enforcing trademarks can be complicated when the marks are comprised of foreign language words.
Many people do not realize that under a principle known as the "foreign equivalents doctrine" a mark's translated meaning may determine the level of protection a registered mark is to be afforded or whether the mark infringes, or is infringed, by a mark using a different language.
Under the foreign equivalents doctrine, foreign words are analyzed under what would be their common English usage to determine the level of protection the mark receives. The doctrine attempts to account for the diverse nature of the United States marketplace by assuming that there are consumers who recognize and understand the native meaning of foreign words. In doing so, the foreign equivalents doctrine seeks to prohibit merchants from obtaining exclusive rights to a foreign language word which would be unavailable in the word's English equivalent.
For example, a court deciding a trademark dispute recently held that the Spanish word "Chupa" in the popular lollipop brand "Chupa Chups" is a generic word for "lollipop" even though English speakers would not recognize the word as having any particular meaning. Thus, under the doctrine of foreign equivalents, the word "Chupa" as merely descriptive of the product is to be afforded no protection under trademark law.
In the prepaid card industry, the foreign equivalents doctrine could be used to prevent a company from claiming rights to a term such as "Tarjeta Prepagado" or "Prepaid Card" as the term is merely descriptive in nature. Translated meanings of foreign words may also play an important role in determining if a mark infringes not only a similar foreign language mark, but also a mark in another language (English, for example). Such cross-language issues would appear to grow more commonplace in the United States as marketing and commerce continues to expand beyond just the English language.
Careful review of all foreign language marketing materials used in the sale and promotion of prepaid cards should be conducted by prepaid providers, in order to avoid costly trademark disputes as well as state-level telecommunications and consumer protection enforcement problems.