IP Law Chat : IP Law Chat -- Hendricks & Lewis, intellectual property, trademark, copyright and technology attorneys

Fortune Dynamic has been designing and selling footwear for young women branded with the DELICIOUS trademark since 1997.  In 1999, Fortune registered the DELICIOUS mark for footwear.

In 2007, Victoria's Secret launched a personal care product line under the trademark BEAUTY RUSH.  As part of a promotion for that product line, Victoria's Secret gave away and sold a pink tank top with the word "Delicious" written across the chest in silver typescript.  "Yum" was written in much smaller lettering on the back of the top and "beauty rush" appeared in the back collar.

Fortune sued Victoria's Secret, claiming that Victoria's Secret's use of "Delicious" on the tank top infringed Fortune's rights in its DELICIOUS trademark.  The District Court denied Fortune's motion for a preliminary injunction and granted Victoria's Secret's motion for summary judgment concluding that the likelihood of confusion factors weighed in favor of Victoria's Secret and that Fortune's claims were barred by the fair use defense.

Setting the theme for its analysis, the Ninth Circuit started its discussion off with the "well-established" principle that summary judgment is generally disfavored in trademark cases.  In light of that principle, the Ninth Circuit reversed the grant of summary judgment, concluding that both questions answered by the District Court should have been answered by a jury:

We are far from certain that consumers were likely to be confused as to the source of Victoria's Secret's pink tank top, but we are confident that the question is close enough that it should be answered as a matter of fact by a jury, not as a matter of law by a court.

. . . .

The same is true of Victoria's Secret's reliance on the Lanham Act's fair use defense.  Although it is possible that Victoria's Secret used the term "Delicious" fairly--that is, in its "primary, descriptive sense"--we think that a jury is better positioned to make that determination.

As to the likelihood of confusion factors, the Ninth Circuit disagreed with the District Court and concluded that a reasonable jury could find that most of the factors weighed in favor of Fortune rather than Victoria's Secret.  The Ninth Circuit also held that the District Court abused its discretion in excluding survey evidence offered by Fortune, noting that its shortcomings went to the weight of the survey not its admissibility.

The Ninth Circuit then addressed Victoria's Secret's fair use defense, acknowledging its merit but ultimately leaving it for the jury to decide:

[I]n light of evidence suggesting that Victoria's Secret used the term "Delicious" as a trademark and suggestively rather than descriptively, together with Victoria's Secret's failure to investigate the possibility that DELICIOUS was already being used as a trademark, there remains a genuine issue of material fact as to whether Victoria's Secret used "Delicious" unfairly.

The Ninth Circuit opinion offers a thoughtful, well-written discussion of the fair use defense, hitting the high points of the defense, including how to determine whether a term is being used as a mark and whether a term is being used only to describe goods or services.

The case cite is Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., Inc., No. 08-56291 (9th Cir. Aug. 19, 2010).

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The General Conference Corporation of Seventh-day Adventists is a corporation formed in 1863, marking the official organization of the Seventh-day Adventist Church.  The corporation holds title to various registered marks including "Seventh-day Adventist," "Adventist," and "General Conference of Seventh-day Adventists."  It also used "SDA" as an acronym for "Seventh-day Adventist" but has not registered the acronym.

The defendant, Walter McGill, was originally baptized in a Seventh Day Adventist church affiliated with the plaintiffs.  McGill later separated from the church due to a theological dispute and formed his own church called "A Creation Seventh Day & Adventist Church," which name he said came from a divine revelation.  He apparently was aware that plaintiffs had trademarked "Seventh Day Adventist" but used the name anyway, believing he was divinely mandated to do so.

Plaintiffs sued McGill alleging a number of federal and state law claims including trademark infringement, unfair competition and dilution under the Lanham Act.

McGill filed a motion to dismiss arguing that (1) the District Court lacked subject matter jurisdiction because it could not decide the trademark question without resolving an underlying religious doctrine dispute; (2) the Religious Freedom Restoration Act rendered trademark law inapplicable to him; and (3) Seventh-Day Adventism is a religion and therefore generic and not capable of being trademarked.  The District Court concluded that trademark law did apply, that McGill had waived the RFRA defense, and the issue of whether the trademark term was generic was a factual issue that could not be resolved on a motion to dismiss.

The plaintiffs later moved for summary judgment, which the District Court granted with respect to the infringement claim relating to "Seventh-day Adventist" but denied as to "Adventist" and "SDA."

As to McGill's claim that the District Court lacked subject matter jurisdiction because it could not apply neutral principles of trademark law without resolving an underlying doctrinal dispute (i.e., "who are the 'true' Seventh-day Adventists"), the Sixth Circuit disagreed.  It concluded that "[t]rademark law will not turn on whether the plaintiffs' members or McGill and his congregants are the true believers" and therefore affirmed the District Court's (and its own) subject matter jurisdiction over the case.

The Sixth Circuit noted that McGill's RFRA defense had merit as a factual matter but ultimately concluded that he could not claim the benefit of RFRA because it did not apply in suits between private parties.  The court thus sided with the Seventh and Ninth Circuits, which had reached a similar conclusion.

The Sixth Circuit also appeared to acknowledge the merit of McGill's genericness argument, noting that "well-known terms that society understands to refer to a particular faith in general are generic, and no single party can prevent others from using them."  But because whether a name is generic is a question of fact, the Sixth Circuit concluded that "[i]t would be inappropriate to conclude as a matter of law, regardless of the evidence that could be adduced . . . that the public considers 'Seventh-day Adventist' to refer generically to a religion."

Finally, the Sixth Circuit affirmed the grant of summary judgment on the trademark infringement claim relating to the mark "Seventh-day Adventist," specifically addressing only McGill's assertion that the District Court misjudged the relevant factors in light of the relevant public:

McGill argues that the relevant public--those who believe in the imminence of Christ's return and that the Sabbath should be observed on Saturday--are so discerning that there is a genuine issue of material fact about the likelihood that they would confuse McGill's church for the plaintiffs' church.  But while it may indeed be hard to envision a person mistakenly joining the wrong church, it is not at all difficult to imagine a person consuming McGill's published materials and ascribing his teachings to the General Conference, especially in light of the relatedness of the parties' services and similarity of the marks.

The case cite is Gen. Conference Corp. of Seventh-Day Adventists v. McGill, No. 09-5723 (6th Cir. Aug. 10, 2010).

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AOL owns trademark registrations for stylized representations of the mark ADVERTISING.COM.  The parties agreed that the genus of the services AOL offered under these marks is online or Internet advertising.  AOL sued Advertise.com claiming that it infringed AOL's trademark rights by using ADVERTISE.COM and a stylized version of that mark that was confusingly similar to AOL's stylized ADVERTISING.COM marks.

AOL moved for a preliminary injunction, which the District Court granted, enjoining Advertise.com from using any design mark that is confusingly similar to AOL's stylized ADVERTISING.COM marks and from using ADVERTISE.COM or any other name confusingly similar to ADVERTISING.COM.  The District Court concluded that AOL was likely to show that the ADVERTISING.COM marks--including the standard text mark--are descriptive and therefore protectable.

Advertise.com appealed to the Ninth Circuit, arguing generally that the standard text mark ADVERTISING.COM is generic and therefore not protectable.  It did not appeal the part of the preliminary injunction enjoining Advertise.com from using any design mark that was confusingly similar to AOL's stylized ADVERTISING.COM marks.

The Ninth Circuit disagreed with the District Court's conclusion that AOL was likely to prevail on the merits and found (after a somewhat lengthy analysis) that the record demonstrated that Advertise.com was likely to rebut the presumption of validity afforded AOL's ADVERTISING.COM mark and prevail on its claim that the mark was generic.  The Ninth Circuit thus reversed and vacated that portion of the preliminary injunction that enjoined Advertise.com from using the name ADVERTISE.COM or any other name confusingly similar to AOL's ADVERTISING.COM marks.

The case cite is Advertise.com, Inc. v. AOL Advertising, Inc., Nos. 10-55069, 10-55071 (9th Cir. Aug. 3, 2010).

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Despite years of litigation, that still appears to be an open question.

In an as always entertaining opinion written by Chief Judge Kozinski, the Ninth Circuit handed a big win to MGA Entertainment in its long-running battle with Mattel over the Bratz line of dolls.

The dispute has its origins in the idea of Carter Bryant for the line of Bratz dolls, which he pitched to MGA while still employed by Mattel, designing fashion and hair styles in the "Barbie Collectibles" department.  MGA liked the idea and Bryant signed a consulting agreement with MGA.  Bryant gave Mattel notice but before his employment ended, he provided preliminary sketches and prepared a preliminary sculpt for the Bratz to MGA.  MGA subsequently released the Bratz dolls, which apparently were a huge success.

When Mattel learned of Bryant's involvement with the Bratz, the lawsuits began.  Those consolidated proceedings were ultimately divided into two phases with phase 1 addressing ownership claims relating to the Bratz.  The present appeal dealt with equitable orders entered by the District Court at the conclusion of phase 1.  (Phase 2 was pending and would deal with the remaining claims.)

In phase 1, the jury found that Bryant thought of the "Bratz" and "Jade" names and created the preliminary sketches and sculpt while employed by Mattel.  Along with a finding that MGA committed three state-law violations relating to Bryant's involvement with the Bratz, the jury found MGA liable for copyright infringement and awarded Mattel $10 million in damages (compared to the more than $1 billion Mattel apparently had sought).

Based on these jury findings, the District Court entered equitable orders.  With respect to the state-law violations, the court imposed a constructive trust over all the trademarks, effectively transferring MGA's Bratz trademark portfolio to Mattel.  And with respect to the copyright claim, the court enjoined MGA from producing or marketing essentially all Bratz female dolls and any future dolls substantially similar to the copyrighted Bratz works.  "In effect, Barbie captured the Bratz."

The Ninth Circuit vacated the constructive trust imposed over all Bratz-related trademarks finding that it was overbroad.  The Ninth Circuit questioned whether Bryant assigned his "ideas" for the Bratz to Mattel under his employment agreement.  The agreement assigned "inventions" to Mattel which were defined to include a number of items but not specifically "ideas."  Although the agreement could be interpreted to include ideas, the Ninth Circuit concluded that the District Court erred in finding that it clearly covered ideas.  But the Ninth Circuit left the issue to be addressed by the trial court on remand because it vacated the constructive trust on other grounds.

The Ninth Circuit ultimately vacated the constructive trust on the ground that it was overbroad because it transferred the entire Bratz trademark portfolio to Mattel despite the fact that the value of the brand had been significantly increased by MGA's own efforts:

It is not equitable to transfer this billion dollar brand--the value of which is overwhelmingly the result of MGA's legitimate efforts--because it may have started with two misappropriated names.  The district court's imposition of a constructive trust forcing MGA to hand over its sweat equity was an abuse of discretion and must be vacated.

The Ninth Circuit also vacated the District Court's injunction on the copyright claim, which enjoined MGA from producing the Bratz dolls or any other substantially similar dolls.  The Ninth Circuit concluded that the District Court had erred in holding that Bryant's employment agreement with Mattel clearly assigned works made outside the scope of Bryant's employment.  Rather, because the agreement was ambiguous (stating that he assigned inventions created "at any time during my employment by the Company"), the issue should have been submitted to the jury.  That error was sufficient to require vacating the copyright injunction.

In light of its decision vacating the equitable orders and remanding for essentially a do-over, the Ninth Circuit also addressed MGA's appeal of the District Court's copyright rulings.  Specifically, the Ninth Circuit discussed the trial court's decision with respect to the scope of copyright protection afforded the Bratz sketches and sculpt created by Bryant (assuming for purposes of the discussion that Mattel owned those works).  In particular, the court focused on the distinction between an idea and a particular expression of an idea; the latter is protected by copyright while the former is not.

As to the doll sculpt, the Ninth Circuit concluded that the District Court had erred in affording broad protection to it and instead held that it was entitled to only "thin" protection against virtually identical copying.

As to the sketches, although the Ninth Circuit agreed with the District Court's conclusion that they were entitled to broad copyright protection against substantially similar works, it held that the trial court erred in failing to filter out all of the unprotectable elements of the sketches.  Specifically, the Ninth Circuit held that "Mattel can't claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing--these are all unprotectable ideas."

Chief Judge Kozinski concluded the opinion with another Barbie reference:  "America thrives on competition; Barbie, the all-American girl, will too."

The case cite is Mattel, Inc. v. MGA Entm't, Inc., No. 09-55673 (9th Cir. July 22, 2010).

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The Third Circuit had little positive to say about a District Court's analysis of the likelihood of confusion question in this trademark battle between the owners of the marks ForsLean and Forsthin.

The plaintiff, Sabinsa Corporation, an ingredient supplier for "nutraceutical" manufacturers, markets a product derived from the plant Coleus forskohlii, which is apparently intended to promote lean body mass.  Sabinsa marketed its ForsLean product to nutraceutical manufacturers and directly to the public.

The defendant, Creative Compounds, also supplies ingredients to the nutraceutical industry.  In 2004, it began selling its forskohlin product under the name Forsthin, which prompted a cease-and-desist letter from Sabinsa.

The matter ultimately ended up in litigation in federal district court in New Jersey and, following a bench trial, the District Court found in favor of Creative Compounds, concluding that there was no likelihood of confusion.

The Third Circuit strongly disagreed with the District Court's assessment of the likelihood of confusion.

Near the beginning of its analysis, the Third Circuit noted that it had reversed the same district court judge's likelihood of confusion analysis in an earlier case for similar errors made here.  The Third Circuit then proceeded to reject almost all of the District Court's conclusions on the likelihood of confusion factors, often making rather pointed remarks about the court's analysis.

On the similarity of the marks factor, the Third Circuit concluded that the District Court's reasoning contained "clear errors" in that the court focused on "minute differences" in the logos while "ignoring evidence" that the marks were often used in plain text without graphics.  It also took issue with the court's finding that the words "lean" and "thin" would convey different mental impressions to consumers notwithstanding its recognition that the terms are interchangeable to consumers.  In the end, the Third Circuit concluded that this factor favored Sabinsa.

The Third Circuit similarly took issue with the District Court's analysis of the strength of the mark factor, finding that the court had failed to analyze the conceptual or commercial strength of the ForsLean mark and had conflated the factors by referring to actual confusion and consumer sophistication in connection with the strength factor.  Again, the Third Circuit concluded that this factor actually favored Sabinsa.

With respect to Creative Compounds' intent in adopting the Forsthin mark, the Third Circuit noted that the District Court "ignored whole swaths of evidence and failed to make any subordinate findings regarding intent" and therefore it was "impossible to determine whether it appropriately comprehended the standard."  But, because this factor involved disputed factual issues, it could not conclude that the factor favored either party.

Ultimately, the Third Circuit concluded that six of the nine factors favored Sabinsa as a matter of law.  Concluding that remand to re-weigh the factors under the "proper legal standards" would serve no useful purpose and would waste judicial resources, the Third Circuit reversed and remanded for entry of judgment in favor of Sabinsa.

The case cite is Sabinsa Corp. v. Creative Compounds, LLC, No. 08-3255 (3d Cir. July 9, 2010).

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The defendants, Farzad and Lisa Tabari, are auto brokers, specializing in Lexus vehicles, who contacted authorized dealers, solicited bids and arranged for customers to buy from the dealers.  They offered these services at buy-a-lexus.com and buyorleaselexus.com.

Toyota objected to, among other things, the Tabaris' use of the Lexus mark in their domain names, claiming that such use was likely to cause confusion as to the source of their website.  After a bench trial, the District Court found infringement, ordered the Tabaris (who represented themselves both at trial and on appeal) to stop using their domain names and enjoined them from using the Lexus mark in any other domain name.

The Ninth Circuit vacated the injunction, concluding that it was overbroad based on the nominative fair use doctrine.

The Ninth Circuit, Chief Judge Kozinski writing, first noted that the District Court erroneously applied the Sleekcraft likelihood of confusion test and concluded that the domain names infringed the Lexus trademark.  But that test does not apply when nominative fair use is at issue (e.g., where the defendant uses the mark to refer to the trademarked product itself).  Instead, in nominative fair use cases, the court asks whether "(1) the product was 'readily identifiable' without use of the mark; (2) defendant used more of the mark than necessary; or (3) defendant falsely suggested he was sponsored or endorsed by the trademark holder."  If the nominative use satisfies all of these factors, it does not infringe; if it does not, the court may order the defendant to modify use of the mark so that all of the factors are satisfied but "it may not enjoin nominative use of the mark altogether."

The breadth of the injunction, which precluded the use of Lexus in any domain name, troubled the Ninth Circuit:

A trademark injunction, particularly one involving nominative fair use, can raise serious First Amendment concerns because it can interfere with truthful communication between buyers and sellers in the marketplace. . . .  To uphold the broad injunction entered in this case, we would have to be convinced that consumers are likely to believe a site is sponsored or endorsed by a trademark holder whenever the domain name contains the string of letters that make up the trademark.

But the Ninth Circuit was clearly not convinced that consumers were likely to have that belief.  Instead, it concluded that the Tabaris needed to communicate that they specialized in Lexus vehicles and using the Lexus mark in their domain names accomplished that, even if that wasn't the only way to communicate the nature of their business.  "One way or the other, the Tabaris need to let their consumers know that they are brokers of Lexus cars, and that's nearly impossible to do without mentioning Lexus, . . . be it via domain name, metatag, radio jingle, telephone solicitation or blimp."

On a procedural point, the Ninth Circuit also clarified the burden of proof on a nominative fair use defense:

A defendant seeking to assert nominative fair use as a defense need only show that it used the mark to refer to the trademarked good, as the Tabaris undoubtedly have here.  The burden then reverts to the plaintiff to show a likelihood of confusion.

The Ninth Circuit thus vacated and remanded for "[a]t the very least," modification of the junction to allow some use of the Lexus mark in domain names by the Tabaris, noting that "[t]rademarks are part of our common language, and we all have some right to use them to communicate in truthful, non-misleading ways."

Notably, the Ninth Circuit (or at least Chief Judge Kozinski) had quite a bit to say about consumer understanding and expectations with respect to domain names and websites:

When a domain name making nominative use of a mark does not actively suggest sponsorship or endorsement, the worst that can happen is that some consumers may arrive at the site uncertain as to what they will find.  But in the age of FIOS, cable modems, DSL and T1 lines, reasonable, prudent and experienced internet consumers are accustomed to such exploration by trial and error. . . .  They skip from site to site, ready to hit the back button whenever they're not satisfied with a site's contents.  They fully expect to find some sites that aren't what they imagine based on a glance at the domain name or search engine summary.  Outside the special case of trademark.com, or domains that actively claim affiliation with the trademark holder, consumers don't form any firm expectations about the sponsorship of a website until they've seen the landing page--if then.  This is sensible agnosticism, not consumer confusion. . . .  So long as the site as a whole does not suggest sponsorship or endorsement by the trademark holder, such momentary uncertainty does not preclude a finding of nominative fair use.

In his concurring opinion, Judge Fernandez  felt "compelled to disassociate" himself from statements such as these because he could not "concur in essentially factual statements whose provenance is our musings rather than the record and determinations by trier of fact."

As a somewhat interesting side note, the Ninth Circuit concluded its opinion with a comment regarding the Tabaris' pro se status:

Many of the district court's errors seem to be the result of unevenly-matched lawyering, as Toyota appears to have taken advantage of the fact that the Tabaris appeared pro se. . . .  To avoid similar problems on remand, the district court might consider contacting members of the bar to determine if any would be willing to represent the Tabaris at a reduced rate or on a volunteer basis.

The concurring opinion specifically stated that he did not join in that portion of the majority's opinion, stating that "[t]o the extent that the majority sees [the Tabaris'] activities as especially socially worthy and above reproach, I do not agree."  Nonetheless, he concurred that the District Court had erred in its handling of the nominative fair use defense.

The case cite is Toyota Motor Sales, U.S.A., Inc. v. Tabari, No. 07-55344 (9th Cir. July 8, 2010).

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Joseph Orr runs eVisa, a multilingual education and information business that operates exclusively on the Internet at www.evisa.com.  The name eVisa came from an English language tutoring service called "Eikaiwa Visa" that Orr ran while living in Japan.

Visa sued JSL Corporation (through which eVisa operated) claiming that eVisa was likely to dilute the Visa trademark.  The District Court granted summary judgment in favor of Visa and JSL appealed.

In a brief opinion, authored by Chief Judge Kozinski, the Ninth Circuit affirmed, readily concluding that summary judgment was appropriate on Visa's claim of dilution by blurring as the marks were "effectively identical" and Visa is a strong trademark.  The Ninth Circuit also rejected JSL's arguments regarding the use of the word "visa" for its common English definition noting that for trademark purposes, the significant factor is the way the word is used in a particular context:

In the context of anti-dilution law, the "particular context" that matters is use of the word in commerce to identify a good or service.  There are, for instance, many camels, but just one Camel; many tides, but just one Tide.  Camel cupcakes and Tide calculators would dilute the value of those marks.  Likewise, despite widespread use of the word visa for its common English meaning, the introduction of the eVisa mark to the marketplace means that there are now two products, and not just one, competing for association with that word.  This is the quintessential harm addressed by anti-dilution law.

The case cite is Visa Int'l Serv. Ass'n v. JSL Corp., No. 08-15206 (9th Cir. June 28, 2010).

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In a unanimous opinion, the Supreme Court held that the licensing activities of the NFL and a corporate entity the 32 NFL teams formed to manage their intellectual property constituted "concerted action" that is not "categorically beyond" the coverage of Section 1 of the Sherman Act, which prohibits a "contract, combination . . . or, conspiracy" in restraint of trade.

The case arose after National Football League Properties--the entity the NFL teams formed to develop, license and market their intellectual property--declined to renew the plaintiff's non-exclusive license and granted Reebok an exclusive 10-year license to manufacture and sell trademarked headwear for all 32 NFL teams.

Although the Supreme Court concluded that the NFL's IP licensing activities were not beyond the coverage of Section 1, it remanded for consideration of the legality of the "concerted action" under the Rule of Reason.

The case cite is American Needle, Inc. v . National Football League, No. 08-661 (S.Ct. May 24, 2010).

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In a divided opinion, the Sixth Circuit decided the question of whether:

the plaintiff, an international lingerie company that uses the trade name designation "Victoria's Secret" has a valid suit for injunctive relief against the use of the name "Victor's Little Secret" or "Victor's Secret" by the defendants, a small retail store in a mall in Elizabethtown, Kentucky, that sells assorted merchandise, including "sex toys" and other sexually oriented products.

The District Court issued the injunction, concluding that even though the parties do not compete in the same market, the junior mark, "Victor's Little Secret," because it is "sex related," disparages and tends to reduce the positive associations and selling power of the "Victoria's Secret" mark.

The question on appeal was whether the plaintiff's request for injunctive relief satisfied the standards of the Trademark Dilution Revision Act of 2006 (TDRA), which had been intended to overrule the Supreme Court's interpretation of the earlier version of the Act in the same case (e.g., Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003)).

In that earlier decision, the Supreme Court concluded that the statutory language at the time required a showing of "actual dilution" rather than merely a "likelihood of dilution."  Congress, however, rejected the conclusion and passed the TDRA providing for injunctive relief in connection with a junior mark "that is likely to cause dilution by blurring or dilution by tarnishment[.]"

 Applying this "likelihood of dilution by tarnishment" standard, the Sixth Circuit concluded that there "appears to be a clearly emerging consensus in the case law . . . that the creation of an 'association' between a famous mark and lewd or bawdy sexual activity disparages and defiles the famous mark and reduces the commercial value of its selling power."  This "consensus" apparently was based on eight federal cases that concluded, according to the Sixth Circuit, that "a famous mark is tarnished when its mark is semantically associated with a new mark that is used to sell sex-related products" and the Sixth Circuit found "no exceptions in the case law that allow such a new mark associated with sex to stand."

The Sixth Circuit also relied upon the fact that, according to the House Judiciary Committee Report, the TDRA intended to reduce the burden of evidentiary production on the holder of the famous mark.  Thus, in light of what the Sixth Circuit called the "burden-of-proof problem," the Sixth Circuit concluded that the TDRA created "a kind of rebuttable presumption, or at least a very strong inference, that a new mark used to sell sex-related products is likely to tarnish a famous mark if there is a clear semantic association between the two."  In somewhat broader statements, the Sixth Circuit stated that the

new law seems designed to protect trademarks from any unfavorable sexual associations.  Thus, any new mark with a lewd or offensive-to-some sexual association raises a strong inference of tarnishment.  The inference must be overcome by evidence that rebuts the probability that some consumers will find the new mark both offensive and harmful to the reputation and the favorable symbolism of the famous mark.

As applied to the case before it, the Sixth Circuit concluded that the defendants had failed to offer evidence "that there is no real probability of tarnishment."  Therefore, although the court agreed that the tarnishing effect on the senior mark was "somewhat speculative," there was "no evidence to overcome the strong inference" that the Sixth Circuit concluded applied to the case.

Circuit Judge Moore wrote a dissenting opinion arguing that the plaintiff had failed to meet its burden to show that the junior mark is likely to dilute the senior mark and taking issue with the majority's adoption of the rebuttable presumption (or strong inference):

With its conclusion that there is sufficient evidence of harm to the reputation of the VICTORIA'S SECRET mark based solely on the sexual nature of the junior mark, the majority sanctions an almost non-existent evidentiary standard and, in the process, essentially eliminates the requirement that a plaintiff provide some semblance of proof of likelihood of reputational harm in order to prevail on a tarnishment claim, despite the plain language of [the TDRA].

The dissent pointed to the limited evidence of tarnishment proffered by the plaintiff (consisting of an affidavit from an Army Colonel indicating that an association was made between the two marks and a statement from an officer of plaintiff regarding the "sexy and playful" image that plaintiff strove to maintain while avoiding "sexually explicit or graphic imagery").

Perhaps more notably, the dissent highlighted an issue that went unaddressed in the majority opinion, namely, the character of the senior mark when applying the "sex-related" rule it appeared to adopt.  Specifically, the dissent noted that the plaintiff admitted that "its own mark is already associated with sex, albeit not with sex novelties."  Therefore, the senior mark was "not entirely separate from the sexual context within which the junior mark . . . operates."  This issue flagged a potential problem in applying the "sex-related" rule adopted by the majority:

The potential problem with simply assuming tarnishment when the junior mark places the senior mark in a sexual context becomes apparent if one considers a different case.  What if the holder of a sex-related senior mark levied a claim of dilution by tarnishment against the holder of a junior mark that was similarly associated with sex?  Would the court be willing to assume without further proof that despite their similar sexual origins the junior mark necessarily tarnishes the senior mark?  Under the majority's reasoning, such an assumption would be appropriate.  This cannot be the law.

Thus, the dissent concluded that under the plain language of the TDRA, "evidence that the junior mark is likely to undermine or alter the positive associations of the senior mark--i.e., evidence that the junior mark is likely to harm the reputation of the senior mark--is precisely the showing required[.]"

The case cite is V Secret Catalogue, Inc. v. Moseley, No. 08-5793 (6th Cir. May 19, 2010).

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Fred Beverages, Inc. initially filed a petition to cancel Fred's Capital Management Co.'s trademark registration in a single class and submitted the requisite $300 fee with the petition to cancel.  During the cancellation proceeding, Fred Beverages filed a motion for leave to amend its petition to seek cancellation with respect to four additional classes.  The motion was fulling briefed and Fred Beverages did not submit any additional fee in connection with the motion.

The TTAB denied the motion for leave to amend solely on the basis that it was not accompanied by the fee required under Trademark Rules 2.111(c)(1) and 2.112(b) for filing petitions to cancel.

On appeal, the Federal Circuit reversed.  There is no TTAB rule requiring that the statutory fee accompany a motion for leave to amend a pending petition for cancellation nor is there any such established practice.  In addition, prior TTAB cases suggested that the statutorily required filing fee is not a ground for denying a motion for leave to amend.  Consequently, having departed from established precedent "without a reasoned explanation," the TTAB's decision was reversed as arbitrary and capricious.

The case cite is Fred Beverages, Inc. v. Fred's Capital Mgmt. Co., No. 2010-1007 (Fed. Cir. May 12, 2010).

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On the case's second appeal, the Ninth Circuit addressed the "first sale" defense of Au-Tomotive Gold in connection with its sale of marquee license plates bearing Volkswagen badges purchased from Volkswagen.

As relevant to the "first sale" defense, Au-Tomotive purchased Volkswagen badges from a Volkswagen dealer, altered them by removing prongs and sometimes gold-plating them, and mounted them on marquee plates, which were packaged with labels explaining that the plates were not produced or sponsored by Volkswagen.

On the first appeal from summary judgment in favor of Au-Tomotive on all claims, the Ninth Circuit concluded that Au-Tomotive's production and sale of auto accessories bearing Volkswagen's trademarks created a sufficient likelihood of confusion to constitute trademark infringement.  But the Ninth Circuit remanded to the trial court to consider Au-Tomotive's "first sale" and other defenses.  On that remand, the District Court granted summary judgment and a permanent injunction to Volkswagen and Au-Tomotive appealed.

With respect to Au-Tomotive's "first sale" defense, the Ninth Circuit considered both cases addressing that doctrine as well as cases not specifically applying that doctrine but which recognized the relevance of "post-purchase" confusion among purchasers and non-purchasers.  In doing so, the Ninth Circuit held that the "first sale" doctrine did not provide a defense to Au-Tomotive because, as the Court had held in the first appeal, the license plates created a likelihood of "post-purchase confusion."  But the Ninth Circuit was careful to characterize the specific type of confusion its holding was based on:

We do not base our holding on a likelihood of confusion among purchasers of the plates.  Rather, we base it on the likelihood of post-purchase confusion among observers who see the plates on purchasers' cars.

The Ninth Circuit thus affirmed the District Court's grant of summary judgment to Volkswagen on its trademark infringement claim.

The cite is Au-Tomotive Gold Inc. v. Volkswagen of Am., Inc., No. 08-16005 (9th Cir. May 6, 2010).

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Plaintiff Daniel Jurin sued Google alleging violations of state and federal law in connection with the inclusion of Jurin's trademark "Styrotrim" as a suggested keyword in Google's AdWords program.  Consistent with other such lawsuits against Google, Jurin claimed that Google's use of Jurin's trademark "Styrotrim" as a suggested keyword that competitors could bid on as part of the AdWords program misappropriated Jurin's trademark and facilitated Jurin's competitors in infringing on his trademark.

Google moved to dismiss Jurin's claims for violations of the Lanham Act and for Negligent Interference with Contractual Relations and Prospective Economic Advantage, Intentional Interference with Contractual Relations and Prospective Economic Advantage, Fraud and Unjust Enrichment.  The District Court agreed with Google as to each of the claims and dismissed them with leave to amend.

With respect to Jurin's Lanham Act claims, the District Court rejected the false designation of origin claim finding that Google "in no way directly represented that it is the producer of the Styrotrim product," a necessary showing for such a claim under Dastar.  The District Court also went on to comment on any claim that Google facilitated confusion by use of Jurin's trademark as a suggested keyword:

To the extent Plaintiff may contend that Defendant has helped "facilitate" confusion of the product with others, such is a highly attenuated argument.  Even if one accept[s] as true the allegation that a "Sponsored link" might confuse a consumer, it is hardly likely that with several different sponsored links appearing on a page that a consumer might believe each one is the true "producer" or "origin" of the Styrotrim product.  As such, Plaintiff fails to properly plead a false designation of origin claim.

And the District Court readily disposed of Jurin's Lanham Act false advertising claim because Jurin could not show that he and Google were direct competitors in the building materials market.

As to the other claims raised in Google's motion to dismiss, the District Court found that Google was a protected interactive computer service and was therefore immunized from liability under the Communications Decency Act, 47 U.S.C. 230:

Defendant does not provide the content of the "Sponsored Link" advertisements.  It provides a space and a service and thereafter charges for its service.  By suggesting keywords to competing advertisers Defendant merely helps third parties to refine their content.  This is tantamount to the editorial process protected by the CDA.  Defendant's keyword suggestion tool hardly amounts to the participation necessary to disqualify it of CDA immunity.  Rather it is a "neutral tool," that does nothing more than provide options that advertisers could adopt or reject at their discretion, thus entitling the operator to immunity.

Google also successfully moved for an order requiring Jurin to pay $6,030.52 in costs in connection with a previously-filed "almost identical" complaint that was filed in June 2009 and voluntarily dismissed in July 2009.

The District Court's Memorandum and Order in Jurin v. Google Inc., No. 2:09-cv-03065-MCE-KJM (E.D. Cal. March 1, 2010) can be found here (PDF, 13 pgs).

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Checking back in with the happenings in the Western District of Washington, following are brief descriptions of a few of the recent trademark-related claims filed in the Court:

Deloitte Touche Tohmatsu v. Anselmi, No. CV10-00220 RSL, filed Feb. 5, 2010

Deloitte Touche Tohmatsu, a Swiss Verein, alleges that Roberto Anselmi's registration of the domain name rsudeloitte.org and posting of a website at that address violated Deloitte's rights in its "DELOITTE" and "DELOITTE & TOUCHE" marks.  Anselmi, an individual alleged to have a mailing address in Italy, was alleged to have registered the domain name with eNom, Inc., a Washington corporation with a principal place of business in Bellevue, Washington.  Deloitte alleges a single cause of action for violation of the Anticybersquatting Consumer Protection Act, Section 43(d) of the Lanham Act.

A copy of the complaint, including exhibits, here (PDF, 22 pgs).

 

S.H. Inc. v. The Law Society, No. CV10-00248 MJP, filed Feb. 9, 2010

S.H. Inc., a Belize corporation, alleges a claim for "reverse hi-jacking" under the Anticybersquatting Consumer Protection Act of the Lanham Act against The Law Society, an entity located in London, in connection with the domain name lawsociety.org.  S.H. Inc. seeks, in part, an order enjoining transfer of the domain name (which appears to have been ordered following a UDRP claim filed by The Law Society) and a declaration that S.H. Inc. is the lawful registrant of the domain name.

A copy of the complaint here (PDF, 6 pgs).

 

Ball & Chain LLC v. Random House, Inc., No. CV10-00235 MJP, filed Feb. 10, 2010

Ball & Chain LLC, a Washington limited liability company, alleges that Random House, Inc. has infringed its trademarks "BEDROOM BUCKS" and "IOU" by using identical marks in connection with competing coupon books.  Ball & Chain alleges claims for federal trademark infringement, false designation of origin, and state law unfair competition.

A copy of the complaint here (PDF, 9 pgs).

 

Choice Advisory Servs., Inc. v. Choice Connections, Inc., No. CV10-00311 TSZ, filed Feb. 22, 2010

Choice Advisory Services, Inc., a Washington corporation that provides retirement-related services, alleges that Choice Connections, Inc., a Michigan corporation and related defendants that provide a senior housing advisory service, infringed its rights in the "CHOICE" mark by using that mark in connection with identical and closely related products and services and by incorporating the mark in domain names.  Choice Advisory alleges claims for federal trademark infringement and for infringement and unfair competition under state law.

A copy of the complaint here (PDF, 9 pgs).

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In a collegiate battle over trademarks, the University of South Carolina suffered defeat at the hands of both the TTAB and the Federal Circuit while the University of Southern California walked away the victor.

The University of South Carolina sought registration of its Carolina Baseball Logo mark (pictured in the opinion linked below) composed of the interlocked letters "S" and "C" for "clothing, namely, hats, baseball uniforms, T-shirts and shorts."  The University of Southern California opposed the registration, claiming in part that it would create a likelihood of confusion with its registrations for the letters "SC" in standard character form and for a design mark composed of the interlocked letters "S" and "C" (also pictured in the opinion).

Showing that fighting spirit, South Carolina counterclaimed for cancellation of SoCal's registration of the letters "SC" in standard character form, claiming that the letters falsely suggested an association with the State of South Carolina.

The TTAB disagreed, concluding first that South Carolina lacked standing to bring the cancellation counterclaim and that even if it did have standing, summary judgment would still be granted in favor of SoCal because South Carolina failed to establish a genuine issue of fact as to whether the letters "SC" are "uniquely and unmistakably associated with the State of South Carolina.  In another defeat, the TTAB refused registration of South Carolina's mark, finding that it would create a likelihood of confusion with SoCal's registrations.

On appeal, South Carolina challenged the TTAB's likelihood of confusion conclusion only with respect to three factors:  the similarity of trade channels; the care exercised by consumers in purchasing the goods; and the absence of evidence of actual confusion.

Although the Federal Circuit did not agree with the TTAB's decision on all three of these factors (specifically with respect to the degree of care differing classes of consumers would exercise in making purchases), it ultimately concluded any error was harmless because the conclusion that the marks were legally identical and would appear on the same classes of goods in the same trade channels was sufficient to support a likelihood of confusion finding.

On the issue of standing, the Federal Circuit agreed with South Carolina that the TTAB had taken an unnecessarily limited view of standing because South Carolina only needed to show that it had a reasonable belief that it would be damaged by SoCal's registration and that it had a direct and personal stake in cancellation.  The Federal Circuit had no problem concluding that South Carolina could make that showing.

Victory was short-lived, however, because the Federal Circuit concluded that, although South Carolina had standing to assert its cancellation claim, the claim still failed because South Carolina had failed to show that there was a genuine issue for trial as to whether the letters "SC" uniquely pointed to the State of South Carolina.  Although South Carolina pointed to evidence demonstrating that the public associates the letters with the State, SoCal countered with evidence showing that "SC" refers to many other entities.  And South Carolina itself had, in the context of another issue, submitted evidence showing that at least 16 other universities and colleges represent themselves as "SC."

The cite is The University of South Carolina v. University of Southern California, No. 2009-1064 (Fed. Cir. Jan. 19, 2010) (non-precedential).

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SafeWorks, LLC, based in Tukwila, Washington, is the owner of several registered SPIDER marks for hoisting and suspended staging and scaffolding equipment.  Spydercrane.com, LLC, based in Arizona, is a crane distribution business that sells truck-mounted cranes.  SafeWorks has manufactured, sold and rented equipment under the SPIDER marks since 1947; Spydercrane began selling cranes under the Spydercrane name in 1999.

SafeWorks learned of Spydercrane after Spydercrane applied to register SPYDERCRANE with the PTO in 2008.  Thereafter, SafeWorks sued Spydercrane for trademark infringement and unfair competition under the Lanham Act and for a related claim under Washington state law.  Following an apparently unsuccessful summary judgment motion by SafeWorks, the matter was tried to the Court.

In its Memorandum Opinion finding for Spydercrane on all of SafeWorks' claims, the District Court concluded that the "most important [Sleekcraft] factors" for judging the likelihood of confusion between the parties' marks favored Spydercrane.

In SafeWorks' favor, the Court found that the SPIDER marks were suggestive and were very strong with respect to lifting, hoisting, safety and suspended access equipment.  Nevertheless, the Court found that the "strength of the mark" factor favored Spydercrane.  The Court found that the parties' goods were sold in separate and distinct markets to divergent classes of customers despite the fact that their goods could be broadly described as "products that are used to lift things."  In addition, the Court noted the prevalence of the use of the terms "spider" and "spyder" in "the commercial world," although it is not clear that the Court took into consideration the specific goods or services with which these marks were used.

Also in SafeWorks' favor, the Court concluded, with some hesitation, that the similarity of marks favored a likelihood of confusion finding given "some parallels" between the parties' products and the use of Spider/Spyder in the names.

The Court found that the remaining factors favored Spydercrane or were neutral.  The Court found that the parties' products, when considered more particularly than merely items used to lift things, were functionally different and were sold to different classes of purchasers (again when examined more precisely than merely those customers affiliated with the construction industry).  Thus, the proximity of the goods factor favored a finding of no likelihood of confusion.  For somewhat similar reasons, the Court also found that the parties' marketing channels were not convergent and therefore did not support a finding of a likelihood of confusion.  Lastly, the Court found that both the degree of care that customers would take with respect to purchase (or rental) of the parties' products and the lack of evidence supporting the existence of an intent to deceive weighed against a finding of a likelihood of confusion.

Thus, taken together, the weight of the factors supported a finding that there was no likelihood of confusion in the marketplace between SafeWorks' SPIDER marks and Spydercrane's SPYDERCRANE mark and the Court found in favor of Defendant Spydercrane.

The cite is SafeWorks, LLC v. Spydercrane.com, LLC, No. 08-00922 (W.D. Wash. Dec. 7, 2009).

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Michael Sones filed an intent-to-use application for the mark "ONE NATION UNDER GOD" for charity bracelets.  After the PTO issued a notice of allowance, Sones submitted his Statement of Use along with a specimen of use consisting of two pages from a website bearing the title "Beaches Chapel School Store."  Under this title, there appeared a listing for "ONE NATION UNDER GOD™ CHARITY BRACELET" followed by further text stating "ONE NATION UNDER GOD™ CHARITY BRACELET CHOICE OF BLUE OR RED $2.00 EACH."  Next to the description appeared a shaded box that stated "Photo not availble [sic]."  The specimen further showed a "shopping cart" functionality for online ordering.

The PTO rejected Sones' Statement of Use stating that the specimen did "not show a picture of the goods in close proximity to the mark."  Sones submitted argument in rebuttal but did not submit a picture of the charity bracelets or any new textual description.  The PTO then issued a final office action affirming the rejection.  The TTAB affirmed the decision stating that "it is readily apparent that [the webpages] do not include a picture of the goods."

On the same day that the TTAB's decision affirming the rejection was mailed, Sones filed a use-based application to register the same mark for charity bracelets.  He submitted a website specimen showing a picture of the bracelet but the alleged use in commerce date was later than that of Sones' original intent-to-use application.

On appeal, the Federal Circuit first disposed of any claim by the PTO that it was not proposing a bright-line rule requiring a picture for every website specimen of use, concluding that "the PTO's position has been consistent from prosecution up to oral argument in this appeal: a website specimen of use must have a picture of the goods."

The Federal Circuit then examined the origin of the PTO's "rule" from the case of Lands' End, Inc. v. Manbeck, 797 F. Supp. 511 (E.D. Va. 1992).  That case involved a specimen of use from a mail order catalog for the mark "KETCH" for purses.  The submitted specimen consisted of a catalog page showing a picture of a purse, a description and the term "KETCH."  The court in Lands' End concluded that the use of the term with the picture of the purse and the corresponding description was a sufficient display associated with the goods.

The PTO interpreted Lands' End to require that a catalog specimen include a picture of the relevant goods (among other requirements) and created a new section addressing that requirement in the trademark examining manual for "catalogs as specimens."  In addition, the Federal Circuit examined the cases demonstrating that the PTO had applied this interpretation of Lands' End to website specimens, including "a rigid requirement for a picture."

The Federal Circuit read Lands' End differently, however, concluding that the case did not state that a picture is mandatory or that such a requirement applied to website specimens.  Nor could the Federal Circuit find any basis for a picture requirement in trademark law or policy.  Thus, the Court concluded that

a picture is not a mandatory requirement for a website-based specimen of use, and that the test for an acceptable website-based specimen, just as any other specimen, is simply that it must in some way evince that the mark is "associated" with the goods and services as an indicator of source.

The Federal Circuit therefore remanded the case for the PTO to consider Sones' specimen of use in light of the appropriate standard.

Circuit Judge Newman dissented from the decision contending that Sones had rendered the issue moot by filing the second, use-based application for the same mark for the same goods and submitting a specimen that included a picture.

The cite is In re Michael Sones, No. 2009-1140 (Fed. Cir. Dec. 23, 2009) and includes a photo of the website specimen submitted by Sones.

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A recent trademark decision from the Federal Circuit emphasizes the sometimes critical role procedural issues can play in the outcome of a case.

In 2004, Francis Gary Powers, Jr. obtained registration of the mark THE COLD WAR MUSEUM for museum services based on acquired distinctiveness of the mark under Section 2(f) of the Lanham Act (15 U.S.C. 1052(f)).  Mr. Powers later assigned the rights to the mark to The Cold War Museum, Inc.  During the initial prosecution of the mark after the examining attorney had refused registration, Mr. Powers submitted more than 200 pages of material supporting his contention that the mark had acquired distinctiveness.

In 2007, Cold War Air Museum Inc. filed a petition to cancel the registration arguing that the mark was merely descriptive for museum services related to the Cold War.  In support of this claim, it submitted search engine results evidencing the public's understanding of the term "cold war" and excerpts from the mark owner's website and brochure to demonstrate that the museum's contents all related to the Cold War.

The mark owner responded by arguing that even if the mark was descriptive it had become distinctive and was therefore eligible for registration under Section 2(f), that the PTO had accepted evidence submitted during prosecution as sufficient proof of distinctiveness and thus the mark was now presumed valid.  It also argued that the challenger had not presented any evidence showing that the mark should not have been registered under Section 2(f).  The mark owner did not resubmit the evidence of acquired distinctiveness that had been submitted during prosecution.

The TTAB granted the cancellation petition finding that the challenger had proven that the mark was "highly descriptive" and had not acquired distinctiveness.  The TTAB then shifted the burden to the mark owner to show to the contrary.  Although the TTAB acknowledged that evidence of acquired distinctiveness had been submitted during prosecution, it concluded that it could not consider the evidence because the evidence had not been resubmitted in the cancellation proceeding.

The Federal Circuit held that this conclusion was in error and fatal to the TTAB's decision granting the petition for cancellation.  Emphasizing that registration of the mark under Section 2(f) afforded it both a presumption of validity as well as a presumption that the mark had acquired distinctiveness, the Federal Circuit stated that the challenger to the registration must therefore produce sufficient evidence to rebut these presumptions.

First, the Federal Circuit concluded that the TTAB had erred in concluding that it could not consider the evidence of acquired distinctiveness submitted during prosecution as the applicable regulation, 37 C.F.R. 2.122(b), unambiguously states that the entire registration file is automatically part of the record in a cancellation proceeding.  As a result, the challenger must rebut evidence of acquired distinctiveness in the registration file in order to satisfy its burden of proof.

Second, the Federal Circuit held that the challenger had failed to satisfy this burden.  To the contrary, the challenger's arguments in the cancellation proceeding related exclusively to the descriptive nature of the mark, which is irrelevant to the validity of a Section 2(f) registration.  The challenger presented no evidence relating to the acquired distinctiveness of the mark and therefore failed to rebut the presumption of validity.  And, given that failure, the Federal Circuit also concluded that the TTAB had erred in shifting the burden to the mark owner.

The Federal Circuit therefore reversed the TTAB's decision granting the petition for cancellation.

The cite is The Cold War Museum, Inc. v. Cold War Air Museum, Inc., No. 2009-1172 (Fed. Cir. Nov. 5, 2009).

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1800Mattress.com IP, LLC appealed from the TTAB's decision finding that the mark MATTRESS.COM was generic for the services identified in its application for registration, namely, "online retail store services in the field of mattresses, beds, and bedding."  1800Mattress.com challenged the decision arguing that (1) the only generic term for such services is "online mattress stores," (2) businesses outside the genus of online retail store services use "mattress.com" as part of their domain names, (3) the TTAB improperly looked to the components of the mark rather than the mark as a whole, and (4) the TTAB improperly disregarded the nature of the mark as a mnemonic and "as being capable of evoking the quality of comfort in mattresses."  None of these arguments swayed the Federal Circuit.

The Federal Circuit readily agreed with the TTAB's finding that the relevant public understands MATTRESS.COM to be no more than the sum of its constituent parts (the parties did not dispute the genericness of the components), specifically, "an online provider of mattresses."  Nor was it relevant whether the public referred to online mattress retailers as "mattress.com" as the inquiry is what the relevant public would understand upon hearing the term.  And on a related argument, the Federal Circuit rejected 1800Mattress.com's assertion that there could be only one generic term, "online mattress stores."

 Finally, the Federal Circuit agreed with the TTAB's finding that the ".com" "tail" of the mark did not "evoke the quality of comfort in mattresses" and that the mark is not a mnemonic, noting that 1800Mattress.com had failed to prevent any evidence to support such an argument.

The cite is In re 1800Mattress.com IP, LLC, No. 2009-1188 (Fed. Cir. Nov. 6, 2009).

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The Federal Circuit succinctly and decisively rejected a lower standard of proof for proving fraud on the PTO in obtaining or renewing a trademark registration in In re Bose Corp., Opposition No. 91/157,315 (Fed. Cir. Aug. 31, 2009).

In the opposition proceeding before the TTAB, the trademark applicant--Hexawave--counterclaimed for cancellation of Bose's WAVE mark on the ground that Bose had committed fraud in connection with its combined Section 8 affidavit of continued use and Section 9 renewal application, which was signed by Bose's general counsel.  In this filing, Bose stated that the WAVE mark was still in use in commerce on, among other things, audio tape recorders and players but the TTAB found that Bose had stopped manufacturing and selling those particular goods between 1996 and 1997 and that Bose's general counsel knew that when he signed the filing.

Bose's general counsel testified that, at the time he signed the filing, Bose continued to repair previously sold audio tape recorders and players and he believed that the WAVE mark was still in use in commerce because "in the process of repairs, the product was being transported back to customers."  The TTAB concluded that such repair and shipment back did not constitute sufficient continued use of the mark and found that the belief of Bose's general counsel to the contrary was not reasonable.  Apparently following the standard that a trademark owner commits fraud on the PTO in procuring or renewing a registration when it makes material representations of fact which it knows "or should know" to be false or misleading, the TTAB found that Bose had committed fraud and ordered cancellation of its registration for the mark.

 The Federal Circuit reiterated the heavy burden of proof the party claiming fraud on the PTO bears, requiring that such fraud be proven "to the hilt" by clear and convincing evidence.  The Federal Circuit then painted a brief history of the cases recognizing a "material legal distinction" between a "false" representation and a "fraudulent" one, in that the latter requires an intent to deceive.  The Court thus rejected the TTAB's decision in Medinol Ltd. v. Neuro Vasx Inc., 67 U.S.P.Q.2d 1205 (TTAB 2003), to the extent it adopted a negligence standard for fraud by approving of a "knew or should have known" test.  In rejecting the "should have known" standard, the Federal Circuit held that "a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO."

As applied to the facts of the case, the Federal Circuit found that Bose had made a material misrepresentation to the PTO but that the challenger had not pointed to clear and convincing evidence to support an inference of deceptive intent in light of the testimony of Bose's general counsel that he believed the statement in the filing was true at the time he signed it.  Notably, the Federal Circuit rejected the relevance of the TTAB's conclusion that Bose's counsel's belief as to the sufficiency of use of the mark in commerce was not reasonable, stating that reasonableness was "not part of the analysis" because there "is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive."

The Federal Circuit thus concluded that Bose had not committed fraud in renewing its registration for the WAVE mark and that the TTAB had erred in canceling the registration in its entirety (although the Court did acknowledge that the registration needed to be restricted to "reflect commercial reality").

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Xtreme Lashes, LLC and Xtended Beauty, Inc. both market kits used by professional cosmetologists to lengthen and accent clients' eyelashes.

Xtreme, the plaintiff, has used the marks XTREME LASHES and EXTEND YOUR BEAUTY since September 2005 and obtained registration of the marks in April 2008 and October 2007, respectively.  The XTREME LASHES mark features a large X, part of which is formed by a stylized eyelash.  The mark EXTEND YOUR BEAUTY is typewritten and always appears in conjunction with the XTREME LASHES mark.  Each of Xtreme's kits come in a silver carrying case bearing the XTREME LASHES mark.

Xtended, the defendant, has used the mark XTENDED BEAUTY since July 2006.  Xtended's mark features a large, type-written X and its kits come in a silver carrying case featuring the XTENDED BEAUTY mark.

Xtreme alleged that Xtended had infringed and diluted its marks.  Xtended, in turn, counterclaimed, seeking cancellation of Xtreme's EXTEND YOUR BEAUTY mark.

Xtended moved for summary judgment on all of the claims before the parties conducted discovery.  The District Court concluded that no reasonable person would likely confuse the parties' marks because they were so dissimilar and therefore entered judgment in favor of Xtended on Xtreme's trademark infringement and dilution claims.  The District Court then later found that EXTEND YOUR BEAUTY was descriptive as a matter of law and therefore ordered Xtreme's mark cancelled.

On appeal, the Fifth Circuit reversed each of the District Court's conclusions.  Although the Fifth Circuit could not say with certainty whether Xtreme's XTREME LASHES mark was strong or weak, it found that the mark at least had the indicia of a suggestive mark and, for purposes of summary judgment, was entitled to protection.  Examining the other "digits of confusion" relating to the parties' XTREME LASHES and XTENDED BEAUTY marks, the Fifth Circuit found that each of the factors either favored Xtreme or were neutral; no factors favored Xtended.

Similarly, the Fifth Circuit found that the District Court had erred in finding no likelihood of confusion between the parties' EXTEND YOUR BEAUTY and XTENDED BEAUTY marks.  As an initial matter, the Fifth Circuit rejected the District Court's finding that Xtreme's EXTEND YOUR BEAUTY mark was descriptive as a matter of law, concluding that "consumers must use 'imagination, thought and perception' to conclude that an exhortation to 'extend your beauty' markets eyelash extensions, as opposed to another cosmetically enhanced feature."  The Fifth Circuit thus reversed the District Court's order cancelling Xtreme's registration of its EXTEND YOUR BEAUTY mark.

The Fifth Circuit then went on to conclude that there were issues of fact demonstrating a likelihood of confusion between the EXTEND YOUR BEAUTY and EXTENDED BEAUTY marks that precluded summary judgment and therefore reversed the District Court's order and remanded the case for further proceedings.

The Fifth Circuit's decision in Xtreme Lashes, LLC v. Xtended Beauty, Inc., No. 08-20578 (5th Cir. July 15, 2009), can be found here (PDF, 18 pgs).

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In an opinion issued today, the Ninth Circuit adopted the Third Circuit's standard for determining the propriety of a preliminary injunction directing recall of a product in a trademark infringement case.  Specifically, in addition to the traditional standard for a prohibitory preliminary injunction, the district court must consider three other factors in cases involving a requested product recall:

(1) the willful or intentional infringement by the defendant; (2) whether the risk of confusion to the public and injury to the trademark owner is greater than the burden of the recall to the defendant; and (3) substantial risk of danger to the public due to the defendant's infringing activity.

The Ninth Circuit's opinion in Marlyn Nutraceuticals, Inc. v. Mucos Pharma GMBH & Co., No. 08-15101, can be found here (PDF, 14 pgs).

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Plaintiff Zino Davidoff SA ("Davidoff"), the creator of high-end luxury goods including  the COOL WATER branded cologne and fragrance, sued CVS Corporation, a retail drugstore chain, for federal trademark infringement, unfair competition, and trademark dilution, among other things.  Originally, Davidoff sought relief only in connection with CVS's alleged marketing of counterfeit Davidoff products.

However, during a court-authorized inspection of undistributed Davidoff products in CVS's inventory, Davidoff discovered 16,600 items on which the UPCs on the packages and labels had been removed.  The UPCs had been removed by, among other things, cutting the portion of the box or label on which the UPC appeared, using chemicals to wipe the UPC away and grinding the bottom of the bottles to remove the UPC.

Davidoff then amended its complaint to claim relief based upon CVS's sale of Davidoff products on which the UPC had been removed and moved for a preliminary injunction forbidding the sale of such products.  The District Court granted Davidoff's motion for a preliminary injunction, concluding that Davidoff was likely to succeed on the merits of its trademark infringement claims on the theory that CVS's sale of Davidoff branded products with the UPCs removed constituted trademark infringement.

The Second Circuit affirmed the District Court's decision, finding that the injunction was justified on the ground that removal of the UPCs from Davidoff's trademarked products unlawfully interfered with Davidoff's trademark rights, specifically, its ability to control the quality of its products.  The Second Circuit relied on an earlier case holding that

a trademark holder is entitled to an injunction against one who would subvert its quality control measures upon a showing that (i) the asserted quality control procedures are established, legitimate, substantial, and nonpretextual, (ii) it abides by these procedures, and (iii) sales of products that fail to conform to these procedures will diminsh the value of the mark.

The Second Circuit agreed with the District Court that Davidoff had satisfied each of these requirements.  Davidoff demonstrated adequately that the affixation of the UPC was a legitimate procedure to detect counterfeits, identify defective products and faciliate effective recalls.  In addition, the Second Circuit concluded that CVS was selling under Davidoff's mark goods that were materially different from Davidoff's genuine trademarked products.  Specifically, the Court concluded that the damage to the packaging caused by the removal of the UPCs--the cutting of the packaging, the application of chemicals to wipe away the UPC, and the grinding of the bottles to remove the UPC--made the goods sold by CVS materially different from Davidoff's genuine trademarked products.

The Second Circuit thus affirmed the District Court's grant of a preliminary injunction to Davidoff.

The Court's opinion in Zino Davidoff SA v. CVS Corp., No. 07-2872, can be found here (PDF, 16 pgs).

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Keeping with the theme of the previous post, here are brief descriptions of some of the recent trademark claims filed in the Western District of Washington:

adidas America, Inc., et al. v. The Topline Corp., No. CV09-00646 RSM, filed May 11, 2009

adidas alleges that The Topline Corporation imported, sold or offered for sale a variety of footwear that infringed adidas' registered trademarks, namely, its "three-stripe mark" and its corporate logo, as well as adidas' trade dress which adidas refers to as the "SUPERSTAR", "MEI" and "PRAJNA" trade dress.  In total, adidas asserts nine claims against The Topline Corporation including federal trademark infringement, unfair competition, and dilution, common law trademark infringement and unfair competition, and state trademark and trade dress dilution and unfair and deceptive trade practices pursuant to the statutes of a number of states.

A copy of the complaint, including photos of the respective products, here (PDF, 32 pgs).

 

 Soaring Helmet Corp. v. Bill Me, Inc., et al., No. CV09-00789 JLR, filed June 9, 2009

Soaring Helmet Corp., a Washington corporation and owner of the registered trademark "VEGA" for motorcycle helmets, alleges that Defendant Google sold Soaring Helmet's "VEGA" trademark to Defendant Leatherup.com as a keyword such that a sponsored link for Leatherup.com appears alongside the search results for "VEGA helmets".  Specifically, Soaring Helmet alleges that when the query "VEGA helmets" is searched via Google's search engine, an advertisement appears under the sponsored listings stating that Leatherup.com offers "50% off Vega Helmets" when it does not in fact sell any of Soaring Helmet's VEGA products.  Soaring Helmet alleges claims for federal trademark infringement and unfair competition, state unfair competition and tortious interference with prospective economic advantage.

A copy of the complaint, including exhibits, here (PDF, 25 pgs).

 

Kona USA, Inc. v. DBM Nutrition, et al., No. CV09-00822 MJP, filed June 15, 2009

Kona, the owner of the registered "KONA" mark for bicycles, alleges that DBM Nutrition infringed on Kona's rights in the "KONA" mark by marketing and selling goods and services, including cycling clothing products and cycling related goods and services, under the confusingly similar "KONA ENDURANCE" mark.  Kona alleges claims for federal trademark infringement and false designation of origin and state unfair competition.

A copy of the complaint, including exhibits, here (PDF, 49 pgs).

 

 

 

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In the late 1940s, William Aycock conceived of and began developing a service that would allow solo passengers to arrange flights on chartered aircraft because at the time, the common practice was for air taxi companies to lease entire airplanes rather than individual seats.  Aycock's service would act as the communication link between customers and the air taxi service operators he contracted with to provide flights on an individual seat basis.  Aycock planned to advertise his service under the mark AIRFLITE and have those interested in the service call a toll-free number to schedule reservations.

Aycock believed that in order for the AIRFLITE service to become operational, he would need at least 300 air taxi operators in the United States to participate in his air taxi operator network.  In March 1970, Aycock distributed fliers containing in-depth information about his AIRFLITE service to virtually all air taxi operators certified by the FAA and invited them to join his service.  Some of these air taxi operators agreed to participate in the AIRFLITE service and entered into contracts with Aycock, paying "modest initiation fees" to him.

In August 1970, Aycock filed an application to register the AIRFLITE service mark.  Although there apparently was significant back-and-forth between Aycock and the examining attorney, the final description of services approved by the PTO for the AIRFLITE mark was "[a]rranging for individual reservations for flights on airplanes."  The AIRFLITE mark was registered on April 30, 1974, on the Supplemental Register and his application to renew the mark was granted by the PTO in April 1994.

In 2001, Airflite, Inc. filed a petition for cancellation of Aycock's AIRFLITE service mark registration alleging in part that Aycock did not use the mark prior to registration in connection with the services identified in the registration.  The TTAB agreed with the petitioner and issued an opinion in October 2007 canceling the AIRFLITE registration.

The Federal Circuit, with one judge dissenting, affirmed the TTAB's decision, concluding that Aycock's AIRFLITE service mark application (and therefore the resulting registration) was "void ab initio" because it did not meet the use requirement when he filed it more than 30 years ago in 1970.  Specifically, the Court concluded that, given the description of services in the registration (characterized by the Court as "the arranging of flights between an air taxi operator and a passenger"), Aycock's use of the mark in contracting with the air taxi operators was not sufficient "use in commerce" to support the registration.  Rather, the Court concluded that such actions were merely "preparations to use" the mark in commerce.  In order to establish the necessary "use in commerce," the Court stated that he "had to develop his company to the point where he made an open and notorious public offering of his AIRFLITE service to intended customers" but the evidence did not support such a finding.

In a sympathetic dissent, Federal Circuit Judge Newman characterized the cancellation of the registration after 35 years as "seriously flawed" and "seriously unjust."  The dissent argued in part that--given the prosecution history, which involved extensive exchanges between Aycock and the examiner regarding the description of services--it would be "unfair to penalize the applicant for flaws for which there was at least a shared responsibility."  Rather, the dissent argued that the appropriate remedy should be clarification and correction of any perceived flaw in the registration not cancellation after 35 years.

The Federal Circuit's opinion, including dissent, in Aycock Engineering, Inc. v. Airflite, Inc., can be found here (PDF, 29 pages).  You can also find the TTAB's opinion in the case here (PDF, 18 pages).

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Internet Specialties West and Milon-Digiorgio Enterprises, Inc. are both internet service providers offering substantially similar services.  Internet Specialties uses the domain name "ISWest.com" and it registered that domain name in May 1996.  MDE uses the domain name "ISPWest.com", which it registered in July 1998.  Internet Specialties learned of ISPWest's existence in late 1998 but took no action against it because the company was not concerned about competition from ISPWest at that time.

After 1998, ISPWest continued to expand, including offering nation-wide service in 2002 and DSL in mid-2004.  In 2005, Internet Specialties took action, sending ISPWest a cease-and-desist letter and filing a lawsuit alleging that the use of the "ISPWest.com" domain name constituted trademark infringement under the Lanham Act.  In a bifurcated trial, the jury found that ISPWest had infringed on Internet Specialties' trademark but found no damages.  The district court in turn denied ISPWest's laches defense and issued an injunction against its use of the name "ISPWest".

The Ninth Circuit panel split on the primary issue on review--the analysis of ISPWest's laches defense to Internet Specialties' trademark infringement claim.

Both the majority and the dissent agreed on certain aspects of ISPWest's laches defense.  For example, both agreed that the laches period began in 1998, when Internet Specialties first learned of ISPWest's existence.  Because Internet Specialties did not file suit within the applicable four-year statute of limitations period starting from 1998, there was a presumption that laches applied.

But the majority and the dissent parted ways on the question of prejudice to ISPWest resulting from Internet Specialties' unreasonable delay in bringing suit for approximately six years.  The majority concluded that ISPWest could not show prejudice simply by demonstrating that it had spent money expanding its business but rather must show that during the delay, it developed "brand recognition of its mark."  Thus, although the majority expressed sympathy for ISPWest's position--during Internet Specialties' delay in bringing suit, ISPWest expanded from 2,000 to 13,000 customers and grew from $518,848 in sales to $2,422,463 in sales--it concluded that ISPWest had failed to show "that its identity had much at all to do with the mark ISPWest, inasmuch as [it] did not rely on its mark to attract customers."

Judge Kleinfeld, writing in dissent, disagreed with the majority's view of the type of prejudice that must be proven and asserted that the practical effect of what he characterized as a new rule in the Ninth Circuit "is to eviscerate the defense of laches in trademark law."  Relying on an earlier Ninth Circuit case, Grupo Gigante S.A. de C.V. v. Dallo & Co., 391 F.3d 1088 (authored by Judge Kleinfeld), the dissent argued that the rule had long been that for purposes of laches, prejudice is established if the party asserting the defense proves "it has continued to build a valuable business around its trademark during the time that the plaintiff delayed the exercise of its legal rights."  Based on ISPWest's "five or sixfold" expansion of its business during Internet Specialties' delay, the dissent concluded that ISPWest had met its burden of proving such prejudice.

The dissent also rejected the majority's attempt to distinguish Grupo Gigante.  The majority argued that there "is a significant difference between the public association of a grocery store [at issue in Grupo Gigante] and its name, versus the public association of MDE and ISPWest" and that "[a] grocery store's very identity rests in its name."  Indeed, the discussion of prejudice in Grupo Gigante does not appear to support whatever distinction the majority was attempting to articulate between a grocery store name and a domain name.  To the contrary, the Ninth Circuit in Grupo Gigante merely stated that by opening a second grocery store after the senior user learned of the alleged infringement and "by operating both stores for an additional four years after that use was discovered," the junior user was prejudiced by the delay.

You can find a copy of the Ninth Circuit's decision in Internet Specialties West, Inc. v. Milon-DiGiorgio Enterprises, Inc., including the dissent, here (PDF, 25 pages).

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In a fairly straight forward yet interesting trademark case involving rights to the mark "OBX", the Fourth Circuit affirmed the grant of summary judgment to the defendant, finding that OBX is a geographically descriptive abbreviation referring to the Outer Banks of North Carolina that had not acquired secondary meaning and therefore was not a valid trademark.  Nonetheless, the Fourth Circuit also affirmed the District Court's exercise of its discretion not to order the cancellation of the registrations the plaintiff had obtained for the OBX mark.

In 1994, James Douglas, the founder of the plaintiff OBX-Stock, Inc., "cleverly invented 'OBX' as an abbreviation for the 'Outer Banks' of North Carolina."  The plaintiff then enjoyed considerable success selling a variety of products with the OBX letters affixed to them.  Unfortunately for the plaintiff, however, the abbreviation caught on and, as the Court noted, entered the "linguistic commons" such that businesses and residents of the Outer Banks used the abbreviation "on a daily basis to refer to the Outer Banks."

Moreover, in the course of the case, Douglas testified that the company's product "was actually the OBX in general since it had not been used before."  Nonetheless, after PTO examiners rejected the plaintiff's application to register the OBX mark five times, OBX-Stock was ultimately successful in obtaining registration but only after "intervention" by North Carolina's congressional delegation (the opinion does not describe the nature of this "intervention" but the Fourth Circuit stated that it undermined any support the registrations may have offered).

After obtaining registrations for the OBX mark, OBX-Stock began efforts to police the mark, including suing the defendant, Bicast, Inc., in connection with its sale of oval stickers bearing "OB Xtreme".  OBX lost on summary judgment, however,as the District Court found that the OBX mark had become generic or was geographically descriptive without secondary meaning.  Based on what appears to be substantial evidence--particularly the testimony of Douglas that OBX stood for the Outer Banks--and the lack of evidence establishing any secondary meaning, the Fourth Circuit readily agreed with the District Court.

The Fourth Circuit's opinion in OBX-Stock, Inc. v. Bicast, Inc., Nos. 06-1769, 06-1887 (4th Cir., Feb. 27, 2009), can be found here (PDF, 13 pages).

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The First Circuit's opinion in Visible Systems Corp. v. Unisys Corp. is almost more interesting for the question it didn't answer than for the questions it did, at least for me.

In this trademark case, Visible Systems obtained a jury verdict of $250,000 against Unisys Corporation on a reverse confusion theory in connection with Unisys' use of the marks 3D VISIBLE ENTERPRISE, 3D-VE, and VISIBLE in the "enterprise modeling" or "enterprise architecture" fields (described as "the diagraming of an entity's business to demonstrate relationships between information flow and business processes and to allow decisionmakers to identify errors or redundancies").  Visible Systems also received injunctive relief but the trial court denied its request for attorneys' fees.  On Visible Systems' request for a jury instruction on the remedy of an accounting of Unisys' profits, the trial court concluded that it was an issue for the court, not the jury, and that in any event, the evidence was insufficient to support the remedy.

Both parties appealed on various grounds, all of which the First Circuit rejected, upholding the jury verdict and affirming the trial court's challenged rulings.

On the issue of the requested accounting of Unisys' profits, Visible Systems argued that it was entitled to a jury trial on the issue under both the Lanham Act and the Seventh Amendment.  The First Circuit noted that the "question of what role a jury plays as to the remedy of an accounting in a Lanham Act case is complicated" and that no "federal court of appeals decision which extensively discusses the [Seventh Amendment] issue has been called to our attention by the parties."  Nevertheless, the First Circuit avoided answering the question (following the general rule of avoiding constitutional questions when possible) by agreeing with the trial court that the evidence was insufficient to justify an accounting, thereby rendering the question of whether there is a Seventh Amendment jury trial right to an accounting "academic."

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In E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., the Ninth Circuit addressed the question of whether the producer of the video game "Grand Theft Auto: San Andreas" had a defense under the First Amendment to the claim of trademark infringement brought by the operator of a strip club in downtown Los Angeles called the Play Pen Gentlemen's Club.

In "Grand Theft Auto:  San Andreas," the game depicts, in the words of the Ninth Circuit, "one or more dystopic, cartoonish cities" modeled after American urban areas including, as relevant to this case, Los Angeles.  The game's version of Los Angeles, called "Los Santos," depicts various businesses such as liquor stores, ammunition dealers, bars and strip clubs, which were inspired, at least in part, from photographs of actual businesses in Los Angeles, including the Play Pen.  The strip club in the game, however, was named the "Pig Pen" and lacked some of the characteristics of the Play Pen building.

Nonetheless, the operator of the Play Pen sued the producer of the game for trade dress infringement, unfair competition and trademark infringement under the Lanham Act and unfair competition under California state law claiming that the game "used Play Pen's distinctive logo and trade dress without its authorization and has created a likelihood of confusion among consumers as to whether [the plaintiff] has endorsed, or is associated with, the video depiction."

The producer of the game moved for summary judgment arguing the affirmative defenses of nominative fair use and the First Amendment.  The District Court (Judge Margaret M. Morrow, who wrote a very thorough 55-page opinion containing a wealth of authority) rejected the nominative fair use defense but granted summary judgment to the game producer based on the First Amendment defense.

The Ninth Circuit agreed with the District Court, concluding that because the game's "Pig Pen" strip club did not use the actual trademarked Play Pen logo, the nominative fair use defense did not apply.

Applying the Second Circuit's test from Rogers v. Grimaldi, the Ninth Circuit also upheld the defendants' First Amendment defense to the strip club's trademark claims.  Although traditionally, the test had been applied to uses of a trademark in the title of an artistic work (such as the song "Barbie Girl" in the Mattel, Inc. v. MCA Records, Inc. case), the Ninth Circuit concluded that it should also apply to the use of a mark in the body of the work, such as the "Pig Pen" strip club in the video game.  Other than this clarification, the Ninth Circuit's application of the Rogers test was straightforward:  the use of the mark had some artistic relevance to the work ("some" meaning the level of relevance must merely be more than zero); and the use of the mark did not explicitly mislead as to the source or content of the work.  As to the latter point, the Ninth Circuit described its conclusion in creative fashion:

Both San Andreas and the Play Pen offer a form of low-brow entertainment; besides this general similarity, they have nothing in common.  The San Andreas Game is not complementary to the Play Pen; video games and strip clubs do not go together like a horse and carriage or, perish the thought, love and marriage.

You can read the Ninth Circuit's opinion here (PDF, 11 pages).

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John Facenda won national acclaim for his work on various NFL Films becoming known to some football fans as "the Voice of God" because of the special qualities of his voice.  For decades, Mr. Facenda did worked on these films under an oral agreement, receiving a per-program fee.  But not long before he died of cancer in 1984, Mr. Facenda signed a standard release contract that stated that NFL Films enjoys "the unequivocal rights to use the audio and visual film sequences recorded of me, or any part of them . . . in perpetuity and by whatever media or manner NFL Films . . . sees fit, provided, however, such use does not constitute an endorsement of any product or service."

In 2005, NFL Films produced "The Making of Madden NFL 06," a 22-minute long production that was shown on the NFL Network eight times in a three-day span leading up to the release of the video game.  The program included three sentences read by Mr. Facenda that were taken from earlier NFL Films' productions (although they were apparently digitally altered to make them sound more like the synthesized speech from a computer) that totaled 13 seconds of the program.

Mr. Facenda's estate sued the NFL for false endorsement under Section 43(a) of the Lanham Act and for unauthorized use of name or likeness under Pennsylvania state law.  Specifically, as to the former claim, the Estate alleged that the use of the sound recordings of Mr. Facenda's voice falsely implied that the Estate had agreed to endorse the video game.  The case was split into liability and damages phases and, upon cross-motions for summary judgment on liability, the District Court granted summary judgment to the Estate on both claims.

 In a 60-page opinion, the Third Circuit reversed the grant of summary judgment on the Lanham Act false endorsement claim and remanded for trial but affirmed the grant of summary judgment to the Estate on the state law right of publicity claim.

As to the Lanham Act claim, the Third Circuit first rejected the NFL's First Amendment defense, concluding that the production was commercial speech and therefore declining to reach the issue of whether the Court would adopt the Rogers balancing test that weighs the public interest in avoiding consumer confusion against the public interest in free expression (in other words, it addresses the collision of the Lanham Act with the First Amendment).

Turning to the substance of the Lanham Act claim, the only prong at issue was the "likely to cause confusion" prong as the NFL did not contest that Mr. Facenda's voice could be protected as an unregistered mark and that the Estate owned the "mark." 

The Third Circuit, however, was exploring new territory as it had yet to announce the legal standard applying to false endorsement claims under Section 43(a).  The District Court had used the traditional 10-factor test from Section 43(a)(1)(A) cases as modified for false endorsement cases used by the Ninth Circuit.  With some modifications, the Third Circuit agreed with the District Court's use of these modified factors in false endorsement cases.  The Third Circuit also rejected the NFL's contention that claims under Section 43(a)(1)(A) required proof of actual confusion distinguishing between claims brought under that section versus those brought under Section 43(a)(1)(B) for false advertising.  Ultimately, the Third Circuit concluded that there were issues of fact (such as whether the NFL intended to profit unjustly from the use of Mr. Facenda's voice in the program) that precluded summary judgment.

As to the state law right of publicity claim, the Third Circuit readily agreed with the District Court's grant of summary judgment to the Estate.  The Court then turned to what appears to have been the NFL's primary argument, namely, that copyright law preempts the Estate's right of publicity claim.

The Third Circuit found no express preemption under Section 301(a) of the Copyright Act, in part because Pennsylvania's right of publicity statute required an additional element beyond what is required for a copyright infringement claim, specifically, that Mr. Facenda's voice have "commercial value."

The Court then went on to discuss--at some length--whether the right of publicity claim was impliedly preempted by copyright law because it clashed with the NFL's right to exploit its copyright.  As with the NFL's First Amendment argument, the commercial nature of the program was its downfall.  Relying on the premise that rights of publicity claims involving use of the work "for the purposes of trade" such as in an advertisement should not be preempted (as compared to claims involving expressive works), the Third Circuit concluded that the nature of the NFL program (which it characterized as a promotional piece) suggested that implied preemption was inappropriate.

The Third Circuit next turned to the release Mr. Facenda signed concluding that it did not support a finding of preemption.  The question in cases involving a contract and advertising was whether the plaintiff collaborated in the creation of a copyrighted advertising product.  If the plaintiff did, allowing the plaintiff to assert a right of publicity claim for use of its likeness in advertising would conflict with the copyright holder's rights.  But such was not the case here, the Third Circuit concluded.  To the contrary, Mr. Facenda participated in creating films documenting NFL games (presumably expressive works), not an advertisement for a football video game and the release he signed specifically preserved his right of publicity with respect to endorsements.  Thus, no implied preemption and summary judgment on this claim was affirmed.

 

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In a remarkably lengthy decision, the First Circuit reversed the grant of a preliminary injunction in a trademark case concluding that the phrase "duck tour" was generic for the parties' services and that the District Court's conclusion to the contrary was clear error.

The case pitted the plaintiff--Boston Duck Tours--against its competitor Super Duck Tours.  On Boston Duck Tours' motion for a preliminary injunction, the District Court concluded that the phrase "duck tours" was non-generic based entirely on a dictionary definition of "duck" that did not include any reference to DUKWs (amphibious army vehicles used in World War II) or amphibious vehicles.  The District Court thus enjoined Super Duck Tours from using the phrase "duck tours" or a cartoon duck (both parties used a cartoon duck in water as part of their design marks) as a trademark in connection with its tour service in the greater Boston area.

The First Circuit reversed the grant of a preliminary injunction based largely on its conclusion that the District Court erred in finding the phrase "duck tours" to be non-generic.  In reaching this conclusion, the First Circuit looked to evidence overlooked by the District Court, including third-party sources that used the phrase "duck tours" generically to refer to amphibious sightseeing tours and Boston Duck Tours' own generic use of the phrase "duck tour."  The First Circuit also considered the widespread use of "duck" and "duck tours" by companies around the country that provide the same amphibious sight-seeing services (32 of the 36 tours described in the record used the term "duck" and more than 10 used both "duck" and "tour(s)").

You can find the First Circuit's opinion, including concurring opinion, here (PDF, 74 pages).

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When is an opinion about insurance coverage interesting?  Answer:  When it involves The Doors.

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Many times, I find cases more interesting for the stories they tell than the thorny legal issues they may (or may not) present.  American Express Co. v. Goetz out of the Second Circuit is one of those cases and it tells a story of remarkable coincidence.

In the summer of 2004, the defendant, Stephen Goetz developed the idea of allowing credit card customers to personalize their cards by choosing a photo to be printed on the card.  As part of his pitch for this idea, Goetz used the slogan "My Life, My Card" because he thought the phrase "would perfectly embody what card consumers sought."  On July 30, 2004, Goetz mailed a proposal to American Express that included the slogan.  He also created an Internet-based demonstration of his concept which prominently displayed the slogan.  And on September 7, 2004, he registered the domain name www.mylife-mycard.com and filed a trademark registration application for the slogan with the PTO the next day.

As it happens, also in the summer of 2004, American Express hired an advertising agency to develop a new global campaign for its products.  On July 22, 2004, the agency proposed a campaign to American Express featuring the MY LIFE.  MY CARD. slogan.  After American Express expressed interest in the campaign, the agency's outside counsel conducted a preliminary trademark search for the availability of the slogan as a service mark on July 29, followed by a full trademark search on July 31, which was two days before the scheduled delivery date of Goetz's proposal to American Express.  American Express decided to proceed with the MY LIFE.  MY CARD. campaign and therefore registered the domain name www.mylifemycard.com on September 1, 2004, and filed an ITU application with the PTO on September 15.

As I said, remarkable coincidence.

As for the legal issue--this is after all a legal blog--American Express won on summary judgment and Goetz's counterclaims were dismissed because both the District Court and the Second Circuit concluded that he did not use the slogan as a trademark.

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In a pure statutory interpretation opinion, the Ninth Circuit concluded that a plaintiff's election of statutory damages in lieu of actual damages for trademark counterfeiting under 15 U.S.C. 1117(c) precludes that party from also recovering an award of attorneys' fees under 15 U.S.C. 1117(b).  Not a positive result for the plaintiff, K and N Engineering, Inc., which had been awarded $100,000 in attorneys' fees by the trial court.  The Ninth Circuit's opinion in K and N Engineering, Inc. v. Bulat, No. 06-55393, can be found here.

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Apparently, for the Seventh Circuit, a picture is indeed worth a thousand words--at least in the absence of any evidence contradicting that picture.

Top Tobacco--the plaintiff in this trademark case--started off with a difficult position, claiming that it had exclusive rights to the common word "top" in the cigarette tobacco market.  Top Tobacco, which uses the mark TOP above a drawing of a spinning top, sought to stop North Atlantic from using the phrase "Fresh-Top Canister" on its cigarette tobacco cans.

The district court granted summary judgment for North Atlantic and the Seventh Circuit affirmed concluding that "[o]ne glance" at the pictures of the canisters "side by side" was "enough to decide the appeal."  Based on these pictures, the Seventh Circuit concluded that it was "next to impossible" to believe that even the most careless consumer would confuse the products.  And although the Court acknowledged that "next to impossible" was not "absolutely impossible," the pictures were all the Court had because Top Tobacco did not conduct a survey or produce any affidavits from consumers or merchants demonstrating confusion.

To see the pictures that decided the appeal and read the Seventh Circuit's opinion in Top Tobacco, L.P. v. North Atlantic Operating Co., No. 07-1244, see here.

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The Fourth Circuit readily disposed of the trademark infringement, dilution/tarnishment, trade dress and copyright claims of high-fashion icon Louis Vuitton against Haute Diggity Dog, a Nevada company that manufactures and sells a line of pet chew toys and beds whose names parody elegant high-end brands including "Chewy Vuiton," a dog chew toy.

In the end, the fact that the "Chewy Vuiton" dog chew toy was obviously a parody of the LOUIS VUITTON handbag--with both obvious similarities and dissimilarities--led to the District Court's and the Fourth Circuit's rejection of Louis Vuitton's claims on summary judgment:  "The dog toy irreverently presents haute couture as an object for casual canine destruction.  The satire is unmistakable.  The dog toy is a comment on the rich and famous, on the LOUIS VUITTON name and related marks, and on conspicuous consumption in general."

And in something of an ironic twist, the strength and distinctiveness of the LOUIS VUITTON mark worked against Louis Vuitton in the context of its dilution by blurring claim, making it more likely that a parody (at least an obvious one) will not impair the distinctiveness of the famous mark.

The Fourth Circuit's opinion in Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, can be found here.

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Can one talk about the Hummer without mentioning Arnold Schwarzenegger?  Apparently not.  In General Motors Corp. v. Urban Gorilla, LLC, No. 06-4128, the Tenth Circuit affirmed the denial of a preliminary injunction to GM in its trade dress and dilution claims against a company that sells steel "body kits."  These body kits, which GM claims are a knock-off of the Hummer, allow customers to install a new body on top of an existing truck chassis for about $10,000.

However, back in 1998 (Urban Gorilla's predecessor had been selling the steel body kits since 1997), GM's predecessor in interest sent a cease and desist letter to Urban Gorilla's predecessor claiming that the body kits infringed its Hummer trademarks.  In response, Urban Gorilla's predecessor made changes to the body kit design and GM's predecessor did not pursue the matter further.  But in February 2006, GM filed a complaint against Urban Gorilla claiming, among other things, trade dress infringement and dilution and sought preliminary injunctive relief.  But the District Court denied GM's request for a preliminary injunction, concluding that GM had not marshaled sufficient evidence to justify the relief.

The Tenth Circuit agreed, affirming the District Court's decision and also suggesting that GM may need the Hummer to navigate the possibly rough terrain ahead of it in pursuing its claims.  Interestingly, both the District Court and the Tenth Circuit appeared to have doubts about the strength of GM's trade dress claim.  Indeed, the Tenth Circuit noted that the District Court appeared to be "skeptical as to whether the allegedly unique features of the Hummer were not actually shared by all military-style vehicles."  In addition, although not addressed on appeal, Urban Gorilla raised several seemingly meritorious defenses including laches, acquiescence and estoppel.

And for the record, the mention of Arnold Schwarzenegger came in the Tenth Circuit's recitation of the Hummer's history, noting that the civilian version of the Humvee (the Hummer) came about "[a]t the urging of then-actor and now Governor Arnold Schwarzenegger."

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The news on the Trademark Protection Act passed by the Utah Legislature earlier this year is that it likely will not be enforced when it goes into effect today.  This news came after Utah lawmakers met, one might argue rather belatedly, with high-tech execs who aired their concerns about the law.  Eric Goldman at the Technology & Marketing Law Blog weighs in on the news here.  Hat tip to Techdirt.

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John Welch at The TTABlog discusses another victory by Google, Inc. at the TTAB, this time against the mark BLOGLE.  As he points out, the numbers that Google offered up in support of the "fame" factor are "staggering."  I don't know which is more amazing, the 300 million visitors per day or the explosive growth in revenue over just four years.

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I highly recommend checking out Eric Goldman's March 2007 Quick Links, Google Edition and March 2007 Quick Links Part 2 at the Technology & Marketing Law Blog.  As usual, well worth the read.

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With the Second Circuit's recent decision in ITC Ltd. v. Punchgini, Inc., No. 05-0933-cv, the Ninth Circuit (some might argue unsurprisingly) stands alone among the federal appeals courts in recognizing the so-called "famous marks doctrine" under federal trademark law.  The famous mark doctrine provides an exception to the territoriality principle that a trademark has a separate legal existence under each country's laws and that ownership of a mark (even a famous one) in one country does not automatically confer the exclusive right to use that mark in another country.  But the famous marks doctrine recognizes an exception to this principle "for those foreign marks that, even if not used in the United States by their owners, have achieved a certain measure of fame within this country."

ITC held a federal registration for the mark "BUKHARA" for restaurant services that it used in connection with two restaurants in New York and Chicago.  But ITC closed the New York BUKHARA restaurant in 1991, followed by the cancellation of the franchise BUKHARA restaurant in Chicago in 1997.  Since that time, ITC admittedly has not owned, operated or licensed any restaurant in the United States using the BUKHARA mark.

Meanwhile, in 1999, the defendants decide to open an Indian restaurant in New York City and apparently thought "Bukhara Grill" seemed like a fine name.  Notably, each of the individual defendants had previously worked at ITC's New York Bukhara restaurant or the Bukhara restaurant in New Delhi.  ITC, however, wasn't particularly pleased about the defendants' name choice or the decor of their restaurant and sued them for, among other things, federal trademark infringement, unfair competition and false advertisement as well as parallel claims under New York common law.

As to the claims asserted under federal law, the Second Circuit had no good news for ITC.  It first affirmed the District Court's conclusion that ITC had abandoned its registered BUKHARA mark for restaurant services as well as its corresponding order that the registration be canceled.  Then, in a detailed discussion, the Second Circuit declined to join with the Ninth Circuit in recognizing the famous mark doctrine noting that although a "persuasive policy argument" could be advanced for recognizing the doctrine, that alone "is not a sufficient ground for its judicial recognition, particularly in an area regulated by statute."  And finally, the Second Circuit affirmed the District Court's conclusion that ITC lacked standing to assert a false advertising claim under the Lanham Act.

Happily for ITC though this isn't baseball and despite three strikes, all may not be lost for ITC.  The Second Circuit concluded that it could not determine the propriety of the District Court's dismissal of ITC's parallel state unfair competition claim because that determination depended on whether New York recognized the famous mark doctrine as a matter of state law.  Therefore, the Second Circuit chose to certify the following question to the New York Court of Appeals:  "Does New York common law permit the owner of a famous mark or trade dress to assert property rights therein by virtue of the owner's prior use of the mark or dress in a foreign country?"  If New York does recognize the famous mark doctrine, the Second Circuit also asked the New York Court of Appeals to indicate the scope of that doctrine.

Rebecca Tushnet also has a good synopsis of the case at the ever thorough 43(B)log.

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Much has already been said (mostly bad but some good) about the Trademark Protection Act recently adopted by the Utah Legislature, which, according to the Act's general description, "establishes a new type of mark, called an electronic registration mark, that may not be used to trigger advertising for a competitor and creates a database for use in administering marks."

Whatever the merits of the legislation, the debate over the pros and cons of the Act has demonstrated the power and reach of blogs (if that still needed to be demonstrated) with even the Act's sponsor, Utah Senator Dan Eastman, taking to the blogosphere to defend the Act from its critics (or "the fringes" as he rather uncharitably characterizes them).  See here for an interesting critique of the Senator's defense from Eric Goldman of the Technology & Marketing Law Blog.

Check back for more on the Utah Trademark Protection Act as events unfold but for now, see here for the letter from the Electronic Frontier Foundation, Professor Eric Goldman and others to the Utah Attorney General asking him to stay implementation of the Act pending further investigation (hat tip to Martin Schwimmer at The Trademark Blog).

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