TM and Unfair Competition
Unit 1: Concepts of Trademarks and Unfair Competition
Top Tobacco, L.P v. North Atlantic Operating Company, Inc.
International News Service v. Associated Press USSC 1918– Rule: The right to
exclusively sell newsone has gathered through its own time, labor, and money is a
quasiproperty right, and interference with this right (appropriating the published news
without putting in the same level of time, money, and production skill, for further
commercial purposes) constitutes actionable unfair competition.
Cheney Brothers v. Doris Silk Corp. 1929– Cheney Brothers made seasonal silks with
various patterns (impractical for copyright registration). Doris Silk copied some patterns
and sold for half price. Rule: copyright laws do not grant the relief CB sought, no broad
common law patent or copyright, otherwise would conflict with copyright mechanisms
established by Congress. The patterns are free to be copiedand further distributed, no
monopoly.
Sears, Roebuck & Co. v. Stiffel Co. USSC 1964 – Stiffel designed and made a pole lamp,
was issued mechanical and design patents, Sears later sold almost identical lamp for
much lower price. Rule: Article I, Section 8, Clause 8 of the U.S. Constitution authorizes
Congress to grant patent protection to inventors for novel inventions. When Congress
passed the first patent laws, those laws became the supreme law of the land in the field of
patents. As a result, any state laws that conflict with the execution or purpose of the
federal patent laws are preempted. Congress established a patent system that provides
protection only to truly novel inventions and only for a limited time. (here,
Stiffel pole lamp ineligible for patent protection, previous patents invalid)
Compco Corp. v. Day-Brite Lighting, Inc. USSC 1964 – DB made lighting fixture, had a
design patent, Compco started selling very similar design fixture. Rule: A state law may
not prohibit or punish the copying and selling of an article that is unprotected by patent
or copyright. States are still free to establish laws that require labeling or other
precautions to prevent customer confusion over the source of copied goods. (here, prior
design patent invalid, no patent or copyright protection, others free to copy for profit)
Bonito Boats, Inc. v. Thunder Craft Boats, Inc. USSC 1989 – Rule: Under the Patent
Clause (Article I, § 8, cl. 8.) of the Constitution, Congress has the power to grant limited
monopolies for new and useful inventions. Today these inventions must be novel and not
obvious. Further, even if the invention is novel, useful and not obvious, the inventor
bears the burden of disclosing to the public the best mode for carrying out the invention.
In exchange for this disclosure, the Federal government grants a limited monopoly to the
inventor.
National Basketball Association v. Motorola, Inc. 1997 – Motorola and STATS make
paging device, provided real-time update on basketball games administered by NBA.
NBA brought misappropriation of “hot news” claim based on INS (1918). Rule: “Hot
news” claims under INS are not federally-preempted under the Copyright Act of 1976
and may exist when (1) P generates or gathers information at a cost, (2) the information
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is time-sensitive, (3) a D’s use of the information constitutes free-riding on P’s efforts,
(4) D is in direct competition with a product or service offered by P, and (5) the ability of
other parties to free-ride on the efforts of P or others would so reduce the incentive to
produce the product or service that its existence or quality would be substantially
threatened. In contrast, misappropriation claims which do not include these five elements
but are based on amorphous concepts such as “commercial immorality” or society’s
“ethics” are preempted by the Copyright Act. (real-time update on pager is different
product from what NBA makes, Ds are putting in their own time, effort, and money to
gather and distribute unique factual updates) real-time sports updates do not constitute
protected “hot news.”
Barclays Capital Inc. v. Theflyonthewall.com 2011 – Barclays with banks invest much to
create market research report and make recommendations, sell to brokerage clients
before stock opens. FLY gets Barclay’s recos and disseminated them to the public before
market opening, attribute all recos to Barclays. Rule: A party cannot maintain a hot-news
misappropriation claim(5 element above) against a defendant if the defendant is not
freeriding on the party’s work but rather is disseminating factual information. Free riding
occurs when the defendant exploits the plaintiff’s investment of time, labor, and skill by
passing off the plaintiff’s product as the defendant’s own product(here FLY gives
Barclay full credit, does not constitute free-riding, missing one element; also two
businesses do not compete directly, different customers)
The Trade-Mark Cases USSC 1879 – Rule: A Trademark Is Not a Copyright or a
PatentTrademarks are fundamentally different from patented and copyrighted materials
because they are not the product of invention or intellectual labor. The power to legislate
on patents and copyrights (through Article I, Section 8, Clause 8) is granted to Congress
to protect and facilitate discovery and writings, and does not extend to trademarks, which
are neither. Commerce Clause doesn’t authorize either, as it could be within a single state
instead of interstate.
Hanover Star Milling Company v. Metcalf USSC 1916 – Hanover started selling flour in
Alabama under distinctive logo and brand name “Tea Rose.” Allen & Wheeler been
using Tea Rose mark since 1872, not in Alabama. Neither had registered mark. Rule: A
party is permitted to use a mark in a specific geographic area, even if that mark has been
previously used by another party in a different geographic area. The primary function of
a trademark is to identify the origin of the itemon which the trademark is placed.
Trademarks allow purchasers to identify the producer of a product and ensure that
producers are able to benefit from the goodwill of their name. When two parties are
competing in the same market using the same mark, prior application decides the rightful
user. If there is no overlap in the competing markets, however, prior application does not
apply.(here, Hanover is not unfairly benefiting from Allen & Wheeler’s name, acted in
good faith, without knowledge of P’s use. Allowed to use in Alabama).
Stork Restaurant, Inc. v. Sahati 1948 –NYC “Stork Club” one of most known in the
country, against small humble San Francisco “Stork Club” bar. Rule: Direct business
competition is not a prerequisite for a trademark dilution claim. Trademark
dilutionoccurs if goods or services that are not made or offered by a trademark owner are
nonetheless attributed to or associated with that owner. To establish a trademark dilution
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claim, another use’s purpose need not necessarily be to take business away from the
trademark owner; rather, it is sufficient that the other use takes some of the owner’s
goodwill associated with the product. Courts have referred to trademark dilution as
“riding the coattails” of the trademark owner. P need not show actual loss
Champion Spark Plug Co. v. Sanders USSC 1947 – Sanders repaired and resold
Champion spark plugs with champion on the boxes and note inside box saying it’s been
renewed. Rule: A secondhand seller may use the original trademark of a repaired product
so long as the repairs and secondhand nature of the product are communicated to the
consumer. If the product is merely secondhand or repaired, the general design remains
the same as to when the product was originally brand new. Therefore, the identifying
trademark should still be the original trademark. Even though the quality of the item
might be slightly inferioras to when it was new, this is to be expected by consumers who
purchase a product secondhand. This is why the price is usually less when buying a
product secondhand. So long as the consumer is aware that the product is used and was
repaired by the seller (e.g., clear label as repaired/used)
Kellogg Co. v. National Biscuit Co. USSC 1938 – NB made and sold pillow-shaped
“Shredded Wheat”, 10 yrs after its paten on process for making expired, Kellogg started
selling the same under “Shredded Wheat”. Rule: Any party is entitled to share in the
goodwill of an article unprotected by patent or trademark. A term is unprotected if it is
generic: if it is generally used by the public to describe the article. Once a patent has
expired, its use is available to the public. (here, “shredded wheat” is generic, used by the
public to describe the pillow-shaped food)
Coca-Cola Co. v. Koke Co. of America USSC 1920 – Coca-Cola used to contain cocaine,
no longer does (heavily advertised change) but still uses coca leaves. Koke tried to
imitate recipe and name, counterargued false representation regarding cocaine. Rule: A
brand name that has acquired a secondary meaning is entitled to trademark protection. A
secondary meaning is developed when a mark associated with a product becomes in the
public’s perception automatically associated with the producer of the product. (here
consumer no longer associate coca-cola with cocaine, only with the company)
Peaceable Planet, Inc. v. Ty Inc. 2004 – Peaceable started celling first camel stuffed
animal (bean like stuffing) “Niles”, then Ty sold stuffed camels under same name. Rule:
A personal name without a secondary meaning is not always barred from registration as a
trademark. Descriptive terms are normally not protected by trademark law, unless the
terms have acquired secondary meaning. Protecting descriptive terms would prevent
competing companies from marketing or describing their own, similar products using
terms designating the products’ inherent characteristics. This is not the same reason that
personal names should not be granted trademark protection. Personal names are not
inherently descriptive like other descriptive terms. Rather, people should not be banned
from using their own personal names (for business) simply because another person with
the same name has already trademarked that name. Furthermore, some names are so
common that consumers know that products with that name are not necessarily from the
same source simply because the name is the same or similar. Finally, preventing an
individual from using his or her own name to market his or her products may prevent that
individual from conveying important or useful information to the consumer. Therefore, if
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none of these 3 concerns are present, then a personal name should not be barredfrom
registration as a trademark. The ban on trademarking personal names is not explicitly
stated in the Lanham Act; only the registration of a mark that is primarily merely a
surname is barred. Also, “Niles” is a suggestive markwhen it refers to a camel and would
be protected
TrafFix Devices, Inc. v. Marketing Displays, Inc. USSC 2001 – MD held utility patents
for a device with dual-spring design to keep temporary road signs from blowing over in
the wind, after patent expired, TrafFix sold same. Rule: Trade dress applies to any
distinctive feature of a product’s design or packaging that identifies the product with its
manufacturer or source. There is a presumption against trade dress, and trade dress never
applies to product characteristics that are functional. Prior utility patent strong indicator
that feature is functional.
Abercrombie & Fitch Co. v. Hunting World, Inc. 1976 – AF used “SAFARI” for specific
types of clothing. HW used same for various things. Rule: has become commonly used to
refer to a particular class of products is a generic term, cannot be trademarked. Lanham
Act four categoriesin an order reflecting the terms’ registerability as trademarks and the
degree of protection afforded. Generic, may not be trademarked. “A generic term is one
that refers, or has come to be understood as referring, to the genus of which the particular
product is a species.” Descriptive, may be trademarked ifit comes to be seen as
distinctive of the manufacturer’s goods (secondary meaning). Suggestive, requires some
reflection to connect the term to the nature of the good. Fanciful or arbitrary term,
inherently distinctive, enjoys full trademark rights.
Zobmondo Entertainment, LLC v. Falls Media, LLC 2010 – FM used “WOULD YOU
RATHER” for books, Zobmondo then used for board games, later FM also used for
board games. Rule: merely descriptive w/o secondary meaning is not protected. 2 tests on
suggestive, Neither is determinative, both used as factors in their analyses. The
imagination test, whether a consumer must use some sort of mental leap to connect the
mark to the product. The competitors’ needs test: whether competitors need the mark to
describe competing products. If a competitor cannot describe a competing product
without using the mark, then likely descriptive. If can describe a competing product
without using the mark, then likely suggestive. (here, there is not sufficient evidence in
the record to determine that the phrase “WOULD YOU RATHER…?” is descriptive as a
matter of law, SM reversed, remanded for trial)
In re Vertex Group LLC 2009 – Vertex used sound of certain and frequency for
children’s alarm, a utility patent for alarm but not sound. Rule: functional feature is not
registrable as a trademark. A feature is functional if it is essential to the use or purpose of
the product, or if it affects the cost or quality of the product in that exclusive use of the
feature would harm competition. Four relevant factors: (1) whether a utility patent exists
for the feature; (2) whether the applicant’s ad highlights the feature’s utilitarian benefits;
(3) whether competitors have other, similar features available to them; and (4) whether
the feature gives the applicant a simple or inexpensive method to manufacture the
product.
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Rock and Roll Hall of Fame and Museum v. Gentile, 134 F.3d 749 (6th Cir. 1998).
Wal-Mart Stores, Inc. v. Samara Brothers, Inc. USSC 2000 – Wal-Mart copied a line of
Samara’s children’s closing. Rule: (Scalia) In an action for infringement of unregistered
trade dress, a product’s design is distinctive, and therefore protectable, only upon a
showing of secondary meaning. Product-design can thus never be inherently distinctive.
Two Pesos established that trade dress (only referring to product-packaging!) can be
inherently distinctive and thus cannot be infringed upon without first obtaining a
secondary meaning. Samara’s trade dress is not product-packaging, but product-design.
RULE: Product-packaging trade dress can be inherently distinctive w/o first obtaining
secondary meaning; Product-design trade dress can never be inherently distinctive, and
must show secondary meaning. NOT ALL TRADE DRESSES ARE EQUAL!
American Waltham Watch Co. v. United States Watch Co. 1899 – American Waltham
Watch first to make watches in Waltham and acquired secondary meaning over time. US
started using “Waltham Watch”. Rule: A geographic term may be protected as a
trademark if it has acquired a secondary meaning and become associated with a specific
user’s products. Although a sole user cannot register a geographic name or term, the term
may be registered if it has acquired a secondary meaning and its use by a competitor
would likely mislead the consumer.
Board of Supervisors for Louisiana State University Agricultural and Mechanical College
v. Smack Apparel Co. 2008 – Univ. used color combination of purple and gold, w/o
registered, to represent the university over 100 yrs. Smack Apparel used same color co
for T-shirts for college sports fans. Rule: A color scheme can be protected as a trademark
if it has acquired secondary meaning and is nonfunctional. Secondary meaning is
achieved when the public automatically perceives a mark to be from a single source.
Factors for determining secondary meaning(1) the length of time the mark has been used
and the manner in which it has been used, (2) the amount of sales of the product, (3) the
amount of advertising using the mark, (4) use of the mark in newspapers or magazines,
(5) relevant consumer survey results, (6) consumer testimony, and (7) the alleged
infringer’s intent.
Adidas America, Inc. v. Skechers USA, Inc. 2018 – Adidas sued Skechers on two claims,
one trade dress infringement and the other trademark infringement (two things). Rule: A
motion for a preliminary injunction in a trademark infringement dispute rests upon a twoprong test that P must establish. (1) P must show evidence establishing a likelihood that
he will prevail upon the merits of the claim. (2) evidence that, absent a preliminary
injunction, P will suffer irreparable harm as a result of the alleged infringement. (Here,
trade dress claim satisfied both)
Chrysler Group LLC v. Moda Group LLC 2011 – Chrysler’s Super Bowl ad
“IMPORTED FROM DETROIT”, and began selling T-shirts with the slogan. Moda in
Detroit started selling t-shirts with that slogan day after Chrysler’s Super Bowl ad. Rule:
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Secondary meaning cannot be established instantaneously. Used 7 factor analysis, like
Adidas, except (6) whether mark has established standing in the market (not use in
newpapers/magazines) (here, “IMPORTED FROM DETROIT” is not inherently
distinctive, but rather geographically descriptive. As a result, in order to be protectable,
the mark must have acquired a secondary meaning.)
Unit 2: Trademark Use, Ownership and Registration
Thoroughbred Legends, LLC v. Walt Disney Co. 2008 – Thoroughbred took steps to
make movie after a horse named “RUFFIAN”, but never used the mark in commerce.
Disney began production on movie about same horse using same name. Rule: A
trademark owner must use the trademark as a trademark in commerce to maintain a suit
for trademark infringement. A person cannot own a trademark without actually using it.
Mere assertion of ownership is not sufficient.
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American Express Co. v. Goetz, 515 F.3d 156 (2d Cir. 2008).
"my life my card", Amex owns the mark same holding as Crystal Ent.
Crystal Entertainment & Filmworks, Inc. v. Jurado 2011 – Crystal’s predecessor started a
girl dance band “Expose” in 1984, not successful. In 1986, current members replaced
original, became “face of Expose since 1986”. Current members licensed from Crystal
which exerted little to no control. Members later stopped paying license and plan to
register mark for themselves. Rule: the true owner of the mark is the entity that controls
the nature and quality of the services performed under the mark.(Here, current members
control nature and quality of singing/dancing, Crystal had little to no control, and didn’t
establish prior ownership of the mark. All goodwill associated with the mark belongs to
the current members)
• Larry Harmon Pictures Corp. v. Williams Restaurant Corp., (Fed. Cir. 1991).
Foreign Commerce
The Lanham Act, §45, defines “commerce” as “all commerce which may lawfully be
regulated by Congress.” Congress's power extends to commerce between the United
States and a foreign country, but “Unless the ‘foreign commerce’ involves the United
States, Congress does not have the power to regulate it. Use of a mark in a foreign
country does not give rise to rights in the United States if the goods or services are not
sold or rendered in the United States.”
Grupo Gigante SA de CV v. Dallo & Co., Inc. 2004 – GG ran grocery store chain in
Mexico, w/ Mexican. GG expanded to US border and had over 100 stores by 1991. Dallo
opened store in San Diego under Giante in 1991. At first, two agreed to coexist, until GG
expanded to LA. Rule: If a foreign trademark holder has acquired sufficient fame within
US, that holder will have priority of trademark rights in US. Normally, the territoriality
principle states that a trademark registered in a foreign country does not grant that holder
priority trademark rights for use within US. However, this famous-mark exception is
necessary to prevent consumer confusion because of cross-border communication. This
prevents later users in US from palming off or using the foreign trademark holder’s
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goodwill and reputation to succeed US. A foreign trademark will be considered to have
gained sufficient fame if it has acquired secondary meaning. This secondary meaning can
be shown if a substantial percentage of consumers in the relevant American market are
familiar with the foreign trademark. Courts look to the knowledge of consumers in the
geographic area in which the later user attempted to use the infringing trademark as the
relevant American market. Another factor: whether infringer intentionally copied the
foreign trademark.
ITC Limited and ITC Hotels Limited v. Punchgini, Inc. 2007 – ITC owned hotel in
India w/ restaurant “Bukhara” since 1977, gained some international fame. ITC opened
Bukhara restaurants in NYC and Chicago in 1987 and registered mark in US. Both closed
by 1997. Punchgini opened “Bukhara Grill” in NYC 1999. ITC sued, federal unfair
competition under Lanham Act. Rule: Foreign trademark holders will not have priority of
trademark rights in US through the famous-marks doctrine for federal unfair competition
claims. There is no federal-law basis for the famous-marks doctrine.
Aktieselskabet AF 21. November 2001 v. Fame Jeans, Inc. 2008 – Aktieselskabet Danish
company successful Jeans brand “Jack & Jones” 46 countries, not in US. In 2003,
planned to expand to US, did research and marketing. Jan 2004, Fames sough to register
the mark in US, Dec 2004 Aktieselskabet also filed app. Rule: A party may not itself be
able to register the trademark, but the analogous use is sufficient to defeat another
entity’s attempted registration. Generally, use of a mark in commerce is required to assert
any sort of trademark rights. However, if sales have not yet begun, and thus a party has
not yet used a mark in commerce, the party may establish an analogous use through proof
of other related activities, such as marketing, research, and regular commercial contacts.
To defeat a registration, the party’s analogous use must make the public aware of the
connection between the party and the mark.
Blue Bell, Inc. v. Farah Manufacturing Co. 1975 – Farah used “Time Out” for new line
of clothing, shipping samples to regional managers, but only to consumers in Sep 1973.
BB first attached “Time Out” to pants of another line “Mr. Hicks”, then ship new line to
consumers in Oct 1973. Rule: Trademark rights are established only after a bona fide use
of the mark in commerce. Trademark rights vest only after a mark has been associated
with specific goods or services and actually used in the intended market. Preliminary
steps, even substantial ones, are not enough to establish trademark rights. Additionally,
the use of a mark as a mere placeholder to secure trademark rights is considered bad faith
Hana Financial, Inc. v. Hana Bank USSC (2015) – Hana bank incorporated in Korea,
1994 started offering financial services to Koreans in US, “Hana Overseas Korean Club”
with reference in Korean to “Hanna Bank,” and began operating a bank in US under
“Hana Bank”. Hana Financial US company using “Hana Financial” in 1995. Rule: Under
trademark law, the availability of tacking is a factual determination that should be made
by a jury. A person who first uses a mark will have priority over later users of the same
mark. Under the tacking doctrine, a trademark user may alter his mark and still retain
priority as long as the user’s older and newer marks are considered legal equivalents.
Two marks are legal equivalents if they create the same, continuing commercial
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impression despite modifications. The commercial impression created by a mark is the
impression made on a consumer.
*Concurrent Use Cases
United Drug Co. v. Theodore Rectanus Co. USSC (1918) – Regis started “Rex” drug in
New England, 1877, registered mark in MA 1898. United Drug bought it and began
selling “Rex” in Louisiana, Kentucky in 1912. Theodore started selling drug under “Rex”
since 1883 in Louisiana. Both in good faith, didn’t know activities of each other before
1912. Rule: A trademark owner does not have territorial rights for a mark in geographic
areas where the owner does not yet do business. Generally, priority of use determines
who has ownership rights in a mark: the first one to use the mark gets the ownership
rights. However, if a similar mark has been used in good faith in different geographic
areas, then the later-user of the mark may still assert ownership rights to the mark for use
in his own geographic area.
Thrifty Rent-a-Car System v. Thrift Cars, Inc. 1987 – Thrifty Rent-a-Car started in 1958,
got federal registration on July 26, 1964, opened branch in MA in 1967, became 5th
largest car rental in the world with 23 MA locations. Thrift Cars started operating in East
Taunton, MA 1962, remained largely local. Rule: A junior trademark user has a right to
continued use of an otherwise infringing mark in a remote geographical location if the
use was established prior to the senior user’s federal registration of the mark. To qualify
for this “limited area” defense, the junior use of the mark must have been continuous in
the location from prior to the federal registration of the other mark up until trial. The use
also must have been in good faithwithout initial notice of the other mark. This is a type of
common law trademark protection. The junior user has the burden to prove the defense.
** See also
Dudley Chiropractor
Dawn Donut https://www.quimbee.com/cases/dawn-donut-company-inc-v-hart-sfoodstores-inc
** see the flip side case Guthrie Healthcare System v. ContextMedia, Inc.
https://www.quimbee.com/cases/guthrie-healthcare-system-v-contextmedia-inc
M.Z. Berger & Co., Inc. v. Swatch AG 2015 – Berger made watches and clocks, filed
Intent-to-use trademark application for “iWatch” for watches, clocks and related
accessories. Swatch direct competitor objected Berger’s application challenging intent.
Rule: An intent-to-use (ITU) trademark application will only be granted if the applicant
at the time of the application has a bona fide, firm intent to use the mark in commerce
and such intent can be demonstrated through objective evidence. Under §1(b) and (d) of
the Lanham Act (15 U.S.C. §1051) applicants may file applications for trademarks not
yet in actual use in commerce based upon a bona fide intent to use the mark in
commerce, subject to a showing of actual use within a specified time frame. There is no
statutory definition of “bona fide” in the Lanham Act, but legislative history establishes
that the term should be assessed objectively. In order to establish a bona fide intent, the
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applicant must demonstrate through a totality of the circumstances a firm intent, based on
objective evidence, to use the mark in commerce and not merely retain the right to use
the mark for some potential future use.
Larami Corp. v. Talk To Me Programs, Inc. 1995 – TTMP makes water guns, filed ITU
for “THE TOTALLY RAD SOAKER.” After TTMP’s ITU app, Larami began using
“SUPER SOAKER” for his water guns. Larami opposed TTMP’s app, TTMP sued
Larami for trademark infringement, alleging that Larami’s first use of its mark was after
TTMP’s constructive-use date based on its ITU application. Rule: A trademark may
receive the priority benefits of a constructive-use date as of the date of an ITU, even if
the mark acquired a secondary meaning after the application was filed. An applicant may
rely on its ITU filing date to defend against a common-law-based opposition to its
registration application, and may do so prior to actual registration of its mark. A party
may use the ITU filing date both offensively and defensively.(here, TTMP’s mark was
merely descriptive, a merely descriptive mark may obtain trademark registration if it
achieves secondary meaning. And a mark that achieves secondary meaning after an ITU
application may still permit the applicant to rely on the constructive-use date.) This is
distinguishable from an infringement lawsuit, in which a mark is not entitled to priority
over another mark absent any use in commerce. An infringement suit and a registration
proceeding apply different standards. ???
QUESTION: can P’s ITU application date (as constructive-use date) establish priority in
infringement suit against D (D with actual use) before P’s actual use in commerce?
Compagnie Gervais Danone v. Precision Formulations, LLC 2009 – February 21, 2007,
Precision filed an intent-to-use (“ITU”) application beginning the process of registering
the mark “FRUITOLOGY” for various products. December 6, 2006, Danone filed an
application in France for the mark. May 11, 2007, the application was granted. May 22,
2007, Danone’s mark received international registration. Same day, Danone filed an
application with US PTO to extend the protection of its international registration to US.
Rule: an international registration may claim a date of priority for constructive use of its
mark in US as of the date of its initial application in the foreign jurisdiction. To qualify
for this priority, (1) the applicant must hold an international registration, (2) the applicant
must apply to extend that registration to the United States, (3) the extension application
must be based on the Paris Convention for the Protection of Industrial Property, and (4)
the date of the mark’s international registration must be within six months of the initial
foreign application giving rise to that international registration.
Unit 3 Bars to Registration and Abandonment
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Immoral, Scandalous or Disparaging Marks
In Re Fox -- “Cock Sucker” lollipop case. Rule: A trademark that invokes a vulgar
meaning to a substantial composite of the general public is unregistrable (a trademark that
consists of or comprises scandalous matter is unregistrable)
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Blackhorse v. Pro-Football, Inc. – “Redskins” football team (PFT) with Native American
imagery. Rule: A trademark that may disparage a substantial composite of the group the
mark references is not registrable. Three types of evidence to determine disparage: (1)
dictionary definitions; (2) other written works, including scholarly works and media
references; and (3) statements of the group referenced or individuals in the group. A
“substantial composite” is not necessarily a majority. And when determining whether a
mark may disparage, the court views the mark from the perspective of the referenced
group, not the general public.
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In re Tam – “Slants” for band to highlight racial issues. Rule: The Lanham Act’s
prohibition on registering disparaging trademarks (Section 2(a)) is unconstitutional.
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Deceptive Terms
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Section 2(a) of the Lanham Act bars registration of any mark which “comprises ...
deceptive... matter....” This is an absolute bar and cannot be rescued under section 2(f) of
the Lanham Act by showing that a mark “has become distinctive” through a showing of
secondary meaning. Marks which are considered “merely deceptively misdescriptive” of
the goods or services of an applicant are also barred from registration under section
2(e)(1) of the Lanham Act. Such marks are registrable, however, if secondary meaning
under section 2(f) can be demonstrated. The distinction between deceptive marks and
merely deceptively misdescriptive marks thus can be significant.
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If the answers to the first two questions in the In re Budge test (see “organic Aspirin”
case above) are affirmative (that is that the mark is misdescriptive of the goods/services
and prospective purchases are likely to believe the misdescription), but the answer to the
third question is negative (that the misdescription is not material to the purchasing
decision), then the mark is deceptively misdescriptive. If only the first question is
answered in the affirmative, then the mark may be arbitrary or suggestive since belief in
the misdescription is key to a finding of deceptiveness.
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False Suggestions of a Connection
Bayer Aktiengesellschaft v. Stamatios Mouratidis – “Organic Aspirin” (not containing
aspirin, both deceptively misdescriptive and deceptive). Rule: A deceptive trademark may
not be registered. This is true even if the mark has obtained a secondary meaning.
Relatedly, a trademark that is deceptively misdescriptive cannot be registered, unless that
mark has achieved a secondary meaning. In determining whether a mark is deceptive or
deceptively misdescriptive, courts consider whether (1) the mark misdescribes the good
or use of the good (B.U.D.G.E. TEST), (2) consumers are likely to believe that such
misdescription actually describes the good, and (3) the misdescription is likely to
significantly affect the consumer’s decision to buy the product. If the mark meets the first
two criteria, it is deceptively misdescriptive (under Section 2(e)(1)). If the mark also
meets the third criterion, it is deceptive (Section 2(a)).
Hornby v. TJX Companies, Inc. – “Twiggy” a world-famous model with lines of
products/clothing/fashion (trade name used for over 30 years), sufficiently well known,
used by TJX for clothing line. Rule: To prove false suggestion of a connection, a plaintiff
must show that the mark or trade name in question is unmistakably associated with the
plaintiff’s persona or company. It is a violation of an owner’s trademark for a competitor
to falsely suggest a connection between the competitor’s products and the owner’s
products or company through the use a similar trademark or trade name. A plaintiff must
show that: (1) the competitor’s mark is the same or very similar to the plaintiff’s persona
10
or name, (2) the mark is recognizable as associated with the plaintiff, (3) the plaintiff is
not connected with the competitor’s activities, and (4) a consumer would presume a
connection between the competitor’s products and the plaintiff because of the plaintiff’s
fame or reputation at the time of the mark’s use by the competitor.
•
Stone Lion Capital Partners, L.P. v. Lion Capital LP – “Lion/Lion Capital” by two
investment management companies, Stone Lion’s mark likely to cause confusion. Rule:
A trademark is not registrable if it is likely to cause consumer confusionwith another.
Courts looks to several factors make this determination, including: (1) the similarity of
the marks; (2) the similarity of the goods or services connected to the marks; (3) the
similarity of purchasers and trade channels used; (4) the degree of care likely to be
exercised by purchasers (i.e., impulse versus sophisticated purchasing); (5) the fame of
the registered mark; (6) the existence of other, similar marks for similar goods; (7)
evidence of actual confusion; and (8) the extent of potential confusion.Regarding factor
(3), the registration analysis should not go beyond what is contained in Lion Capital’s
registration and Stone Lion’s application.
•
B & B Hardware, Inc. v. Hargis Industries, Inc. – “Seal Tite” vs “Seal Tight”, TTAB held
for one party in on likelihood-of-confusion, district court found for the other on
trademark infringement. USSC applied collateral estoppel-TTAB decision settled the
issue. Rule: The doctrine of collateral estoppel (???)applies to judicial-related decisions
of an administrative agency so long as the facts before the agency and a federal court are
materially the same and the other requirements of issue preclusion are satisfied.
•
Person’s Co., Ltd. V. Christman – Japanese company using “Person’s” logo for clothing
line in JP, American took it and registered in US. Rule: Trademark law exists
independently in each particular country according to that country’s trademark laws. This
concept of territoriality is central to trademark law and its application. Foreign use of a
mark, without any entry into commerce in the United States, has no effect on U.S.
trademark law and will not provide the foreign user with any priority for use of the mark.
It is not bad faith for a domestic user to adopt a mark that is used in a foreign market but
is unknown in this country, because the foreign user has no goodwill or reputation to be
protected here.
Sections §1052(e)(2) and (e)(3)prohibit the registration of marks that are primarily geographically
descriptive and marks that are primarily geographically deceptively mis-descriptive
•
In re The Newbridge Cutlery Co. – company based in Newbridge, Ireland using
“Newbridge Home” in mark. FCCA found this case not meeting 1st prong of the test, as
evidence does not support that Newbridge is well known in US as geographic region and
it has other meanings, “Newbridge Home” is therefore not primarily geographically
descriptive of the goods. Rule: Sections §1052(e)(2) and (e)(3) of the Lanham Act (15
U.S.C. §§ 1051–1127) prohibit the registration of marks that are primarily geographically
descriptive and marks that are primarily geographically deceptively mis-descriptive. The
rationale for this restriction is to avoid allowing one manufacturer to prevent others from
identifying the place of origin of their goods.(REGISTRABLE OR NOT???)The
restriction only extends to marks for which the relevant public perceives the geographic
11
meaning as the primary meaning of the mark and if that geographic meaning is used in
connection with the goods themselves. The courts have devised a three-pronged test to
determine if a particular mark falls within this framework: 1) whether the geographic
place name included in the mark is well-known to the general public, 2) whether the
general public would make an association between the place name and the goods
themselves, and 3) whether the goods actually originate from the named geographic
region.
•
In re Miracle Tuesday, LLC – application of “JPK PARIS 75 and design”, for fashion
accessories such as belts and handbags, not designed or made in Paris. Rule: A trademark
that is primarily geographically deceptively misdescriptive is not registrable. A trademark
is primarily geographically deceptively misdescriptive if (1) the primary significance of
the mark is a geographic location, (2) consumers are likely to believe that that location
indicates the origin of the product, (3) the product does not in fact originate from that
location, and (4) this misrepresentation is a material factor in the consumer’s purchasing
decision. Origin can be shown by place of manufacture, place of design, or even if the
goods contain a component or ingredient from the location. DIFFERENT FROM RULE
IN BAYER ABOVE???
Section 2(e)(4), a term that is primarily merely a surname is not registrable
•
In re Quadrillion Publishing Ltd. – application for “Bramley”, found 433 entries in a
surname database search. Rule: A trademark that is primarily merely a surname is not
registrable. The key inquiry in making such a determination is the mark’s primary
significance in the public’s perception. Several factors are relevant to this inquiry,
including: (1) the rarity of the surname, (2) whether the applicant has the surname (this is
not determinative. In fact, this factor can rarely hold significant weight in favor of the
applicant), (3) whether the word has any other recognized meaning, and (4) the structure
and pronunciation of the word.The trademark examiner bears the initial burden to
establish a prima facie case that a proposed mark is primarily a surname.
•
In re Joint-Stock Company “Baik” – application for “Baik” (a surname) for vodka. Rule:
Under 15 U.S.C. § 1052(f), a term that is “primarily merely a surname” cannot be
registered, unless it has acquired distinctiveness. There are five factors that that Board
uses to identify whether a mark is primarily merely a surname: (1) the surname’s
rareness, (2) whether anyone with that surname is connected to the applicant, (3) whether
the term has another meaning, (4) whether the mark looks and feels like a surname, and
(5) whether the way the mark is displayed will make it appear less like a surname. (Here,
Baik is extremely rare in US, a Russian-sounding name, looks and feels more like
Russian term. Ok to register.)
12
1052(e)(5) Functional
•
In re Becton, Dickinson and Company – application to register its design for a closure cap
for blood-collection tubes as a trademark. The design included both functional and
nonfunctional features. Rule: In determining whether a proposed trademark will be
nonregisterable due to functionality, the critical question is the degree of utility present in
the overall designof the trademark. Under the doctrine of functionality, only
nonfunctional features of a product or designs may be claimed as a trademark. If a feature
or design includes both functional and nonfunctional elements, the court must weigh the
overall degree of utilityin determining whether if fails the functionality test. In addition to
the overall quantityof functional elements versus nonfunctional elements, the significance
of the elementsto the structure and purpose of the design must be weighed. In In re
MortonNorwich Products, Inc., 671 F.2d 1332 (1982), the United States Court of
Customs and Patents Appeals (C.C.P.A.) outlined four factors of evidence that could be
used to weigh the degree of utility.1) whether the design was the subject of a utility
patent, which would weigh toward functionality, or a design patent, which would weigh
toward nonfunctionality. 2) whether the producer’s advertisements promoted the
functional features of the design. If both of these features supported a finding of
functionality, the third and fourth factors,namely 3) whether alternative designs were
available and 4) whether the design in question reflected the simplest or most costeffective manufacturing method,
did not need to be considered.(In this case, the board held that the prominent elements of
the design were functional elements, and that the nonfunctional features were secondary
to the design overall. It relied on evidence that the utility patent had been issued for some
of the prominent features, and that Becton’s own advertising highlight the functionality of
the design.)
•
In re Vertex Group LLC – application to register a sound pulse of certain frequency used
for children security alarm, with a utility patent for the alarm not specifically for the
sound. Rule: A product feature that is functional is not registrable as a trademark. A
feature is functional if it is essential to the use or purpose of the product, or if it affects
the cost or quality of the product in that exclusive use of the feature would harm
competition. 4 factors in determining whether a feature would affect the cost or quality of
the product: (1) whether a utility patent exists for the feature; (2) whether the applicant’s
advertising highlights the feature’s utilitarian benefits; (3) whether the applicant’s
competitors have other, similar features available to them; and (4) whether the feature
gives the applicant a simple or inexpensive method to manufacture the product. (Here, the
sound is functional under factor 1 and 2, thus unregistrable)
Generic Term, when you start off, or mark that has become generic, not registrable, can’t stop
others (competitors) from using it
•
Bayer Co. v. United Drug Co. – Bayer manufactured drug under name “Aspirin”, sold to
directly to manufacturing chemists, physicians, and retail pharmacies (so they know
Bayer was the manufacturer), only to consumers from 1904, without Bayer’s name;
13
began putting Bayer on bottles to consumers in 1915, 2 years before patent expiration.
United Drug began selling using “Aspirin” after patent expiration. Rule: A trademark
holder may lose trademark rights if the mark becomes generic. A mark becomes generic
if, in the consuming public’s perception, the mark becomes synonymous with the product
as opposed to the manufacturer. (In this case, Bayer is entitled to trademark protection in
sales to manufacturing chemists, physicians, and retail pharmacies, but not sales to the
general public.) How do we know it’s generic? if people use the term as a noun to
describe a product, then it’s indication that it’s generic. Gold standard is taking a survey.
•
King-Seeley Thermos Co. v. Aladdin Industries, Inc. – King-Seeley Thermos used
“Thermos” to describe its vacuum-insulated bottle for food and beverages, no initial
attempt to designate the term of indicator of source of product, term became generic.
Rule: The purpose of granting trademark protection is to prevent customer confusion as
to the source of goods or services. If a trademark term comes to represent a type or
category of good, then allowing the trademark owner to police the mark would effectively
grant the owner a monopoly by excluding competitors from describing competing goods
in a way that the consuming public would understand. In the past, trademarks for
products like Aspirinand Cellophanebecame generic terms for the goods that they
represented, in part because there were no available generic terms to describe the
products. Nevertheless, a determination that a term is generic does not require that no
other generic term be available to describe the relevant product. All that matters is
whether the term has become synonymous in the eyes of the public with a type or
category of good.(Aladdin can use “thermos” but not with “T” to describe this type of
product)
•
E.I. DuPont de Nemours & Co. v. Yoshida International, Inc. – “TEFLON” non-stick
pots and pans. Rule: Consumer surveys may be determinative on the issue of whether a
trademark has become generic. (Yoshida’s surveys are not probative of the consumers’
view of the primary significance of the mark, by asking only for a name; while DuPont’s
survey focused on the primary significance of the name, by asking if consumers viewed it
as a brand name or common name)—so DuPont survey is probative of whether the mark
is generic because it focuses on the primary significance of the word in the eyes of the
respondent.
Genericism and Confusion
•
America Online, Inc. v. AT&T Corp. – AOL used “Buddy List” (got service mark
registration from PTO), “You Have Mail,” and “IM”. Rule: A functional use of words
within the heartland of their common meaning and usage is not protectable as a
trademark.This is true even if the public may be aware that the phrase comes from a
single source.This is known as the de facto secondary meaning doctrine. (Here, should
give deference to PTO decision, and not decide on “Buddy List” by SJ. “You Have Mail”
is generic, other companies used and still use it; the meaning of the phrase is no more
than the three words’ common meaning; no added significance to the phrasethat would
warrant trademark protection: mark “falls within the heartland of common meaning and
14
usage” thus not protectable. AOL offered no evidence to support IM is not generic, not
entitled to protection based on record)
•
Harley Davidson v. Grottanelli – “HOG” claimed by Harley Davidson but in dictionary
as a large motorcycle and media used to describe motorcycles not necessarily made by
HD (generic term for motorcycle). Rule: A generic word that the public begins
associating with a specific product source may not acquire trademark significance if that
product is of the same type as the term’s generic use. However, a generic word may
acquire trademark significance if it is applied to a new and different category of product
than its generic use.
Abandonment, Section 45
Non-use for 3 consecutive years, prima facie evidence for intent – abandonment through non-use
•
Silverman v. CBS, Inc.— “Amos ‘n’ Andy” show on the radio and TV, didn’t use for 15
years later. Rule: A mark shall be deemed to be abandoned if its use has been
discontinued with intent not to resume. There are two elements of abandonment: nonuse
and intent not to resume use.Two years of non-use creates a rebuttable presumption
of abandonment.For the mark to be deemed abandoned, a mark owner need not intend
never to resume use. To prevent abandonment, the owner of the mark must intend to
resume use of the mark within the reasonably foreseeable future. If the mark has not been
used for two years, an owner may rebut the presumption of abandonment by showing
reasonable grounds for the suspension and an intent to resume within the reasonably
foreseeable future. A bald assertion of possible future use is insufficient. Intent is thus
evaluated objectively, although subjective intent may also be considered. Challenging
infringing use by others and sporadic licensing of a mark for essentially non-commercial
uses do not constitute use and are not enough to establish an intent to resume.
•
ITC Limited and ITC Hotels Limited v. Punchgini, Inc. – Indian hotel operated restaurant
under ““Bukhara,” gained some international fame, opened restaurants in NY and
Chicago but later both closed (2 years before Punchgini use). American opened restaurant
under same name later. Rule: under the Lanham Act’s territoriality doctrine, a trademark
holder will only have priority of trademark rights in the United States based upon priority
use in the United States and not based on the trademark holder’s use in foreign countries.
A possible exception to this rule is the famous-marks doctrine, which states that if a
foreign mark has obtained sufficient fame in the United States, the trademark holder will
have acquired priority of trademark rights over later American users. The famous-marks
doctrine has no basis in federal law.
•
Specht v. Google, Inc. – “Android Data” original company shut down with no intent to
resume operations in 2002, attempted to sell business later, attempting to sell a business
that uses a mark does not quality as use in commerce; although websitewas operational
until 2005, it did not offer any goods or services for sale and thus does not constitute use
of the mark in commerce; Finally, although Specht sought to revive the mark in 2007,
this was more than three years after the abandonment. There is no evidence that Specht’s
15
intent to revive use of the mark arose within the three-year window after abandonment.
Google later became the senior user. Rule: A trademark is abandoned if its use in
commerce is discontinued with no intent to resume. Nonuse of a mark for three
consecutive years is prima facie evidence of abandonment. To rebut this showing, there
must be an intent to use the mark within that three-year timeframe. When a trademark
owner abandons a mark, the mark reverts to the public domain.
•
Clark & Freeman Corp. v. Heartland Co. Ltd. – “Heartland” assigned from Sears for
women’s pixie boots to Plaintiff selling men’s footwear. Rule: An assignment of a
trademark is invalid if the assignee’s product is not substantially similar to the assignor’s
product using the mark. This is known as an assignment in gross. Generally, an
assignment of a trademark permits the assignee to step into the shoes of the assignor,
including regarding the first date of priority. But that is not the case with an assignment in
gross, which does not also transfer the assignor’s goodwill. The key inquiry in
determining substantial similarity is whether a customer would be deceived by the
transfer. If an assignment is invalid, the assignee must rely on its own use in commerce
and cannot rely on the assignor’s. (Here, women’s pixie boots are not similar to men’s
footwear, different markets, assignment invalid)
•
Eva’s Bridal Ltd. v. Halanick Enterprises, Inc. – “Eva’s Bridal” licensed to
relative without any control over nature or quality. Rule: A grant of a license to
use a trademark, without exercising reasonable control over the nature and quality
of the goods, services, or business on which the mark is used by the licensee
constitutes abandonment of the trademark. This is known as a naked license.
Section 2(e)(1), merely descriptive
• §1052 Trademarks registrable on principal register; concurrent registration No
trademark by which the goods of the applicant may be distinguished from the
goods of others shall be refused registration on the principal register on account of
its nature unless it—
(a) Consists of or comprises immoral, deceptive, or scandalous matter; or matter which
may disparage or falsely suggest a connection with persons, living or dead,
institutions, beliefs, or national symbols, or bring them into contempt, or disrepute; or
a geographical indication which, when used on or in connection with wines or spirits,
identifies a place other than the origin of the goods and is first used on or in
connection with wines or spirits by the applicant on or after one year after the date on
which the WTO Agreement (as defined in section 3501(9)of title 19) enters into force
with respect to the United States. NOTE: In re Tam, stricken parts are
unconstitutional. Government shouldn’t get to decide what’s immoral, scandalous,
disparaging or brining a group into contempt.
Lanham Act is to protect against deception and false connection.
(b) Consists of or comprises the flag or coat of arms or other insignia of the United
States, or of any State or municipality, or of any foreign nation, or any simulation
thereof. (c) Consists of or comprises a name, portrait, or signature identifying a particular
living individualexcept by his written consent, or the name, signature, or portrait of a
16
deceased President of the United States during the life of his widow, if any, except by the
written consent of the widow.
(d)
Consists of or comprises a mark which so resembles a mark registered in the
Patent and Trademark Office, or a mark or trade name previously used in the United
States by another and not abandoned, as to be likely, when used on or in connection with
the goods of the applicant, to cause confusion, or to cause mistake, or to deceive:
Provided, That if the Director determines that confusion, mistake, or deception is not
likely to result from the continued use by more than one person of the same or similar
marks under conditions and limitations as to the mode or place of use of the marks or the
goods on or in connection with which such marks are used, concurrent registrations may
be issuedto such persons when they have become entitled to use such marks as a result of
their concurrent lawful use in commerce prior to (1) the earliest of the filing datesof the
applications pending or of any registration issued under this chapter; (2) July 5, 1947, in
the case of registrations previously issued under the Act of March 3, 1881, or February
20, 1905, and continuing in full force and effect on that date; or (3) July 5, 1947, in the
case of applications filed under the Act of February 20, 1905, and registered after July 5,
1947. Use prior to the filing date of any pending application or a registration shall not be
required when the owner of such application or registration consentsto the grant of a
concurrent registration to the applicant. Concurrent registrations may also be issued by
the Director when a court of competent jurisdiction has finally determined that more than
one person is entitled to use the same or similar marks in commerce. In issuing
concurrent registrations, the Director shall prescribe conditions and limitations as to the
mode or place of use of the mark or the goods on or in connection with which such mark
is registered to the respective persons.
(e)
Consists of a mark which (1) when used on or in connection with the goods of the
applicant is merely descriptiveor deceptively misdescriptiveof them, (2) when used on or
in connection with the goods of the applicant is primarily geographically descriptive of
them, exceptas indications of regional origin may be registrable under section 1054of this
title, (3) when used on or in connection with the goods of the applicant is primarily
geographically deceptivelymisdescriptiveof them, (4) is primarily merely a surname, or
(5) comprises any matter that, as a whole, is functional.
(f)
Except as expressly excluded in subsections (a), (b), (c), (d), (e)(3), and (e)(5) of
this section, nothing in this chapter shall prevent the registration of a mark used by the
applicant which has become distinctiveof the applicant's goods in commerce. The
Director may accept as prima facie evidence that the mark has become distinctive, as
used on or in connection with the applicant's goods in commerce, proof of substantially
exclusive and continuous use thereof as a mark by the applicant in commerce for the five
years before the date on which the claim of distinctiveness is made.Nothing in this
section shall prevent the registration of a mark which, when used on or in connection
with the goods of the applicant, is primarily geographically deceptively misdescriptive
of them, and which became distinctive of the applicant's goods in commerce before
December 8, 1993. (AFTER THIS DATE, IT’S BARD ABSOLUTELY)
A mark which would be likely to cause dilution by blurring or dilution by
tarnishmentunder section 1125(c)of this title, may be refused registrationonly pursuant to
a proceeding brought under section 1063of this title. A registration for a mark which
would be likely to cause dilution by blurring or dilution by tarnishment under section
17
1125(c)of this title, may be canceledpursuant to a proceeding brought under either
section 1064of this title or section 1092of this title.
Unit 4
Infringement
15 U.S.C. §1114 [Lanham Act §32(1)]
A. Defendant’s Use in Commerce
•
Naked Cowboy v. CBS – CBS did not place the name “naked cowboy” on any
goods or services or seek to attach it to its own name as the source in the eyes of
the public. CBS episode didn’t not use term “naked cowboy”, purchase from
YouTube “featured video” when consumers search the term is not use in
commerce, tagging with “naked” and “cowboy” not use in commerce either; CBS
used the term in clip title, otherwise than as a mark, to describe its video in good
faith—an exception to the infringement statute. Rule: To constitute trademark
infringement, the plaintiff must show that the defendant used the mark in
commerce without the plaintiff’s consent and in connection with the sale or
advertising of goods or services. The plaintiff must also show a likelihood of
confusion.
•
•
Born to Rock Design, Inc. v. CafePress.com, Inc.
1-800 Contacts, Inc. v. Lens.com, Inc.– Lense.com’s affiliates bought Google
AdWords keywords similar to1-800’s mark, the impressions themselves didn’t
use 1-800’s trademark. 1-800’s evidence of actual initial-interest confusion was
minimal (7.4% confusion rate and one report of actual customer confusion) and
not enough.Rule: An initial-interest-confusion claimis a claim that a defendant
improperly used a plaintiff’s mark to confuse and draw in customers, even if the
confusion is resolved prior to the actual sale. Essentially, the non-owner is using
the mark as a bait-and-switch tactic to steal customers from the mark’s
owner.Often, the same factors that are used to evaluate the likelihood of
confusionat the point of sale are also used to analyze the likelihood of
initialinterest confusion.
•
Rescuecom Corp. v. Google, Inc.– Google’s use of Rescuecom’s trademark as the
trigger to pop-up advertising for competitors is a use in commerce— essentially
selling use of Rescuecom’s trademark to Rescuecom’s competitors. Consumer
confusion here is an issue to be determined. Rule: A mark shall be deemed to be
in use in commerce on services when it is used or displayed in the sale or
advertising of services and the services are rendered in commerce.
Note: Use in Commerce and the Debate over “Trademark Use”
•
Steele v. Bulova Watch Co.USSC – Steele a US Citizen selling watches in
Mexico using a US company’s mark “Bulova” with purpose to deceive. Bought
some parts (procuring supplies) in US and some of the fake watches get across
18
boarder back to US. Rule: Federal courts have jurisdiction over violations of the
Lanham Act that are undertaken by US citizens in foreign jurisdictions.
•
McBee v. Delica– McBee a renowned US jazz musician, Delica a JP company
sells clothing line under “Cecil McBee.” Delica intentionally refrains from selling
in US, though website accessible in US (but almost entirely in JP-inaccessible for
average US consumer), therefore no substantial effect on US commerce. Rule:
The Lanham Act may be applied extraterritorially to foreign conduct by foreign
actors only if the conduct has a substantial effect on United States commerce—
depends on the context of the conduct.
B. Likelihood of Confusion
Restatement of the Law (Third), Unfair Competition
Factors for Assessing Likelihood of Confusion (“2d refusal”) –du
Pont factors used by Trademark Office
•
•
The similarity or dissimilarity of the marks in their entireties as to appearance,
sound, connotation and commercial impression.
The relatedness of the goods or services as described in the application and
registration(s).
Polaroid Corp. v. Polarad Elects. Corp. – 2nd circuit, a standard case to talk
about
Restatement of the Law (Third), Unfair Competition
•
Likelihood of Confusion in the Courts
•
E. & J. Gallo Winery v. Consorzio del Gallo Nero – “Gallo” largest wine
company in US, used mark over 50 yrs, “Gallo Nero” Italian association,
promoting wine from Chianti region, aware of Gallo’s mark (therefore court’s
presumption of intent to copy), planned to sell in US. Two names sufficiently
similar, despite combo with other words. Rule: confusion as to the association of
the parties or the origin of the goods or services. Courts consider several factors
when analyzing likelihood of confusion: (1) strength of the mark, (2) similarity of
the marks, (3) similarity of the goods, (4) similarity of marketing channels, (5)
sophistication of purchasers, (6) evidence of actual confusion, and (7) the
defendant’s intent regarding the use of the mark
•
Banfi Products Corp. v. Kendall-Jackson Winery Ltd.– Banfi wine COLDISASSO marked as blend everyday wine ($8-10), mark with landscape and
stated produced in Italy, KJ wine ROBERT PEPI COLLINE DI SASSI marketed
as Sangiovese high-end wine and stated from CA ($20-25). No likelihood of
confusion here. Rule: factors court considered: (1) strength of the senior mark, (2)
similarity of the marks, (3) whether the marks compete in the same market, (4)
whether the party alleging infringement will “bridge the gap” and enter the other
market, (5) evidence of actual confusion, (6) the alleged infringer’s intent, (7) the
19
quality of the alleged infringer’s mark, and (8) the sophistication of purchasers. In
this case, there is no likelihood of confusion between the wines.
Leelanau Wine Cellars, Ltd v. Black & Red, Inc.
Kraft Foods Group Brands LLC v. Cracker Barrel Old Country Store, Inc.
•
Maker’s Mark Distillery, Inc. v. Diageo North America, Inc. – Maker’s Mark
famous unique red dripping wax seal for bourbon (Business Week called it ““one
of the most recognizable branding symbols in the world.”). Diageo used the same
seal for tequila. Rule: Court used factors: (1) strength of the senior mark, (2)
similarity of the goods, (3) similarity of the marks, (4) evidence of actual
confusion, (5) whether the marks compete in the same market, (6) the
sophistication of purchasers, (7) the alleged infringer’s intent, and (8) the
likelihood that the parties expand production of the products. Factors (1) and (3)
are the most significant.
•
Different Varieties of Confusion
•
Initial Interest Confusion
•
Mobil Oil Corp. v. Pegasus Petroleum Corp.– Mobil has well-known Pegasus red
flying horse logo, oil trading a part of its business. Pegasus started an oil-trading
business, using similar flying horse mark. Industry hallmark of using cold call,
relying on reputation. Likelihood of initial interest confusion exists. Rule: (1)
strength of the senior mark, (2) similarity of the marks, (3) whether the marks
compete in the same market, (4) the alleged infringer’s intent, (5) evidence of
actual confusion, (6) whether the party alleging infringement will “bridge the
gap” and enter the other market, (7) the quality of the alleged infringing product,
and (8) the sophistication of purchasers. Initial-interest confusion may be relevant
to factors (5) and (8).
Blockbuster Entertainment Group v. Laylco, Inc.
Initial Interest Confusion and Internet Advertising
•
Network Automation, Inc. v. Advanced Systems Concepts, Inc.– Systems been
using “ActiveBatch” for its job-scheduling-and-management software, Network
purchased this term from Google AdWordsso Network’s links will return in such
search. Rule: this court say, in a trademark-infringement case involving Internet
commerce, the factors in a likelihood-of-confusion test should be considered
flexibly. (Here, court say consumers are more sophisticated these days, and
Network’s ads are separated from genuine search results and labeled as sponsored
links, therefore reducing likelihood of confusion. Case remanded as D court
applied factors too rigidly.) Q: how is this different from 1-800 Contacts and
Rescuecom Corp?
20
•
Multi Time Machine, Inc. v. Amazon.com– “MTM Special Ops.” exclusively
sold directly and through selected retailors, for several hundred dollars. Amazon
search returns other military style watches, and list includes brand and picture of
each available watch. D Court grant SJ, affirmed on appeal, for lack of likelihood
of initial confusion due to Amazon clear labeling, large price difference, and more
sophisticated online shoppers. Rule: Often, same factors used to evaluate the
likelihood of confusion at the point of sale are also used to analyze the likelihood
of initial-interest confusion. However, some courts found certain factors not
relevant in the context of online sales. The Ninth Circuit has said key factors for
online-sale confusion are: (1) identifying the relevant consumer, and (2)
determining what that consumer would believe based on what he saw on the
screen. (Here, Dissent: Whether Amazon’s search results create initial-interest
confusion is a question of fact for a jury to determine.)
•
Post-Sale Confusion
•
Mastercrafters Clock & Radio Co. v. Vacheron & Constantin-Le Coultre
Watches, Inc.(1955) – Atmos clock imported from Swiss, prestigious cordless
selling for $175, Mastercrafters’ “Model 308” similar look with electronic cord
(with mastercrafters’ name on it) selling $30-40. Consumer statement “could get a
clock for $30 or $40 just like the Atmos.”. Rule: A likelihood that a third party
such as a purchaser’s friend will confuse the sources of a product is sufficient to
render a manufacturer’s copying actionable. This is true even if the purchaser is
aware that the product does not originate from the source with which the third
party would be confused.This is known as post-sale confusion.
Jeremy N. Sheff, Veblen Brands
•
Munsingwear, Inc. v. Jockey International – Munsingwear started selling men’s
horizontal fly underwear 1946, Jockey started selling such in 1992 with different
packaging with its own name on it. Jockey wan on SJ. Rule: The point of
reference for post-sale confusion is the general public, not the purchaser of the
product. If the general public does not regularly encounter the product after it is
sold, risk of confusion is reduced. In such cases, a court’s analysis on likelihood
of confusion should be based on the products pre-sale. (Here, general public not
going to see the underwear after its purchase, so the analysis should be pre-sale
confusion which didn’t exist due to packaging, clear labeling, good faith intention
and no actual consumer confusion.)
•
Reverse Confusion
•
Dreamwerks Production, Inc. v. SKG Studio – Dreamwerks small company
organizing conventions around Star Trek, created in 1984, obtained trademark in
1992. Dream Works created 1994, much more well known. Dreamwerks argued
that its reputation would suffer if people bought a ticket to a Dreamwerks
convention thinking they were going to a DreamWorks convention. Rule: The
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standard for trademark infringement does not change if the company that owns
the junior mark is more well-known than the company that owns the senior mark.
This is known as reverse confusion or reverse infringement. The test is whether
consumers purchasing a product from the senior user would be likely to
mistakenly think that they were purchasing a product from the junior user. Fortres
Grand Corp. V. Warner Brothers Entertainment
•
Approval Confusion
Medic Alert Foundation v. Corel Corp.
•
Anheuser-Busch, Inc. v. Balducci Publications– Balducci Snicker magazine used
Anheuser-Busch’s product image and similar phrases to the protected trademarks
in a parody ad (to comment on environmental pollution). Consumer study showed
confusion of the fake ad with a real ad and assumption that Busch had some role
in creating the ad.Rule: The Lanham Act protects trademark holders from any use
of their trademarks that will like be “likely to cause confusion, or to cause
mistake, or to deceive” consumers as to the origin of a product. 15 U.S.C. §
1114(1). Factors to determine likelihood of confusion include strength of the
original trademark, similarities between the two trademarks, whether the parties’
products are in direct competition, whether the alleged infringer intends to
mislead the consumer, any actual consumer confusion that has occurred, and what
degree of care can reasonably be expected to be taken by the potential consumers.
Secondary Liability for Trademark Infringement
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Inwood Labs., Inc. v. Ives Labs., Inc. (USSC 1982) – Ives made and sold drug
under ““Cyclospasmol” in certain dosage-color themes, once its patent expired,
Inwood and other generic manufacturers started making the drug using same
dosage-color themes without labeling. Pharmacists sold the generic capsules
using Ives’ label. Ives sued manufacturers for vicarious liabilityfor inducing and
supporting pharmacists’ infringement. All the way to USSC, held weight and
import of evidence lies with fact finder, remanded. Rule: A manufacturer may be
liable for a subsequent seller’s trademark infringement if the manufacturer
induces the seller to infringe the trademark, or continues to supply its products to
a seller that it knows or has reason to know is infringing (knowing support).
Life Alert Emergency Response, Inc. v. LifeWatch, Inc.
•
Tiffany and Company v. eBay, Inc. – lots of Tiffany counterfeit sold on
eBay. eBay took many measures to reduce fraud and took immediate
action once notified any specific potential infringement. Rule: A party that
intentionally induces another to infringe a trademark may be held liable
for contributory trademark infringement. Secondary liability for trademark
infringement also applies to a party who supplies its products or services
to someone who it knows or has reason to know is engaging in trademark
infringement. General knowledge of infringing activity is insufficient to
trigger secondary liability. Rather, for secondary infringement liability, the
alleged infringer must have known or have had reason to know of specific
instances of actual infringement and failed to act. However, a party may
not avoid knowing about specific infringing activities by shielding itself
from, or being willfully blind to, the infringing actions of others.
Section 43(a) of the Lanham Act
15 U.S.C. §1125(a)(1)(A) [Lanham Act §43(a)(1)(A)]
Under section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), a common-law trademark
is entitled to the same protection as a registered trademark.
•
Unregistered Marks
Note: The Expanding Scope of Section 43(a)
•
Application to Traditional Trademark and Trade Dress Cases
•
DC Comics v. Powers—DC Comics owned Superman franchise and “Daily
Planet” for the newspaper in Superman, used it consistently and on licensed
products; Powers took for publishing his newspaper sporadically and let it lapse
by 1973, wanted to use it again when DC planned for movie release. Rule: Under
section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), a common-law trademark
is entitled to the same protection as a registered trademark. Apply the same
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likelihood-of-confusion test: whether the defendant’s use of the trademark is
likely to cause confusion as to the association of the parties or the origin of the
goods.
Two Pesos, Inc. v. Taco Cabana, Inc.(USSC 1992) –Taco Cabana had festive
architectural and aesthetic themes for its Mexican fast food restaurants, Two
Pesos used similar themes. Rule: Proof of secondary meaning is not required to
prevail on a trade-dress-infringement claim if the trade dress at issue is inherently
distinctive. In general, trade dress is protectable under § 43 of the Lanham Act if
it is not functional and is either inherently distinctive or has acquired a secondary
meaning. Trade dress is inherently distinctive if it is able to identify something as
coming from a particular source, regardless of whether the general public would
make the connection. To achieve secondary meaning, general public’s association
is critical.
•
•
Hammerton, Inc. v. Heisterman
Louis Vuitton Malletier v. Dooney & Bourke, Inc. – LV started 1896 using
entwined LV initials and registered mark, 2002 new design with bright color LV
on black or white background. DB also used colorful interlocking DB letters on
white and later black and other colored backgrounds. D court said no
infringement since when compared side-by-side they were easy to differentiate.
Rule: In analyzing likelihood of consumer confusion, no single factor is
dispositive.Further, the list of enumerated factors is not exhaustive.This holds
true whether the mark is registered or unregistered. (Here, side-by-side
comparison only one consideration, remanded)
Conopco, Inc. v. May Dept. Stores Co.– Conopco large national brand making
Vaseline lotion, May sells private label lotion in similar bottle but clearly marked
with its own brand on label. Rule: monetary relief requires actual confusion,
while injunctive relief only requires likelihood of consumer confusion. (Here,
court thinks it’s common practice for private-label manufacturers to compete with
national brands, clearly marked as private label, thus no presumption of intent to
deceive, therefore no presumption of actual confusion or likelihood of confusion.)
McNeil Nutritionals, LLC v Heartland Sweeteners, LLC
•
Marketing Concepts and Techniques
Original Appalachian Artworks, Inc v. The Toy Loft, Inc. (Cabbage Patch
Kids Doll case - TM protection is not the idea)
•
Jeffrey Milstein, Inc. v. Greger, Lawlor, Roth, Inc.– Jeffery M made die-cut
greeting card, Greger started making similar cards. Rule: Trade-dress law does
not protect an idea, a concept, or a generalized type of appearance. In this way,
trade-dress law is similar to copyright law. To maintain a trade-dress
infringement claim, the plaintiff must show that its dress is distinctive and that
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there is a likelihood that consumers would be confused as to the origin of its
product and the alleged infringing product. If a trade dress is generic, it is not
distinctive. (Here, the design is generic and not distinctive.)
•
Use in Commerce
Belmora LLC v. Bayer Consumer Care AG – Bayer owned “FLANAX” in
Mexico since 1970, Belmora owned “FLANAX” in US since 2004, both selling
pain relievers. Belmora marketed to Mexican Americans claiming “Flanax is now
made in the U.S.” False advertising claim. Rule: for false-advertising under
section 43(a) of the Lanham Act, defendant’s use in commerce is relevant, not
plaintiff’s as prerequisite for a trademark infringement action. Plaintiff must
demonstrate (1) defendant’s use in commerce, (2) the claim is within the zone of
interests aimed to be protected by the Lanham Act, and (3) plaintiff is likely to be
damaged by the use in that the injury is a proximate cause of a statutory
violation(WHAT???). (Here, Belmora’s use of Flanax in the U.S. was misleading
– it insinuated an association with Bayer that did not exist. Second, Bayer has
sufficiently pleaded that it is likely to be damaged by the use due to decreased
sales, and that this injury is a proximate cause of Belmora’s statutory violation.)
•
False Endorsement
Note: Rights of Publicity and Section 43(a)
•
Allen v. National Video, Inc. – Woody Allen famous celebrity, National Video
used Boroff who looked like Allen in ad. Rule: Unauthorized use of a person’s
name or likeness in a manner that creates the false impression that the person has
endorsed a product or service violates the Lanham Act. The value a celebrity
holds with respect to his likeness is akin to a trademark right under the Lanham
Act. A trademark is not actually required to demonstrate a violation. In
falseendorsement claim, the key inquiry is whether the defendant’s use of the
likeness creates a likelihood of consumer confusion over whether the person
actually endorsed the product. The analysis is similar to that of a likelihood-ofconfusion analysis for traditional trademark infringement. Factors (1) strength of
the mark, (2) similarity of the marks, (3) similarity of the products, (4) evidence
of actual confusion, (5) sophistication of purchasers, and (6) whether the
defendant acted in good or bad faith.
•
Tom Waits v. Frito-Lay, Inc. – Waits famous singer with distinctive voice against
product endorsements, Frito-Lay and ad agency used someone to mimic Waits’
voice in radio ad. Rule: The Lanham Act protects a person from false
representations that there is an association between that person and a product,
also called a false-endorsement claim. False-endorsement claims are similar to
state-law causes of action for the misappropriation of a person’s right of
publicity. Voice misappropriation is one type of violation of the right of publicity.
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Finally, a false-endorsement claim does not require that both parties compete in
the same market.Rather, to have standing to bring a false-endorsement claim, a
plaintiff needs to show that the false endorsement could cause commercial harm.
White v. Samsung Electronics America, Inc. – Samsung used a robot in ad with a
dress and pearls, turning tiles on a game show—evoking image of While on
“Wheel of fortune”. Rule: The common-law right of publicity can protect a
celebrity's identity from unauthorized commercial exploitation.Celebrities have a
commercial interest in their identities, which the law must protect.Plaintiff may
allege that (1)
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the defendant used the plaintiff's identity, (2) the defendant appropriated the
plaintiff's name or likeness to the defendant's advantage, (3) the plaintiff did not
consent, and (4) the plaintiff was injured.Although pleading appropriation of a
name or likeness is one way to allege a violation, it is not the only way. What
constitutes a celebrity's identity will depend on the nature of the celebrity
involved.E.g., a racecar driver's identity may be appropriated by the unauthorized
depiction of the driver's racecar, even if the driver himself is not visible. Similarly,
Bette Midler had an actionable claim for violation of the right of publicity when the
defendant used a sound-alike to mimic her voice, and Johnny Carson had an
actionable claim based on the use of the phrase, "Here's Johnny." A court may
consider the surrounding circumstances in determining whether a celebrity’s
identity has been used.
•
False Designation of Origin
•
America Online v. LCGM, Inc. – LCGM sent millions of pornography ads
through AOL’s email system forging “@aol.com”. Rule: The Lanham Act
prohibits falsely designating the origin of goods or services. P can demonstrate
false designation of origin by showing: (1) that D used a designation (2) in
interstate commerce (3) in connection with goods and services, (4) that the
designation is likely to cause confusion as to the origin of D’s product, and (5)
that P has been or is likely to be damaged as a result.
Note: Authors’ and Performers’ Moral Rights
•
Dastar Corporation v. Twentieth Century Fox Film Corp.(USSC 2003) – Fox had
copyright over “Crusade in Europe” but neglected to renew before expiration in
1977, the TV series entered public domain. Dastar then copied and repackaged
portions of the video and listed itself as producer and distributor. Rule: A
previously copyrighted work that enters the public domain may be used freely
without attribution to the author or producer of the work. Section 43(a) of the
Lanham Actprovides a federal right of action against a party who uses a false
designation of originin relation to goods or services in commerce. This provision
has been interpreted as encompassing the origin of source or manufacture of the
physical goods made available in commerce. However, the provision cannot be
expanded to include the creator or author of any underlying work encompassed
within the physical goods.The Lanham Act was established to prevent trademark
and geography-related consumer deception and was never intended to extend or
bolster the rights granted to copyright holders. If the authors of works unprotected
by copyright could bring a claim under the Lanham Act for the use of those works
without attribution, the effect would be a lingering form of copyright protection
inconsistent with federal copyright policy.
•
Bretford Mfg., Inc. v. Smith System Mfg. Corp. – Bretford used V-shape brace
for table leg, Smith gave the Dallas school system a sample made with Smith
tabletop and Bretford leg brace. Rule: Reverse passing off, or selling a product
under someone else’s trademark, may violate the Lanham Act if a misdescription
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of a good’s origin causes commercial injury. The injury must be related to the
trademark to be actionable; mere loss of sales due to competition is not sufficient.
And the fact that a competing product incorporated an existing product made by
another company is not determinative. “No one makes a product from scratch.”
The key inquiry is whether the consumer knows who made the final
product.(Here, Smith made the sample, responsible for any issues to Dallas
school system. No violation of Lanham Act).
•
Phoenix Entertainment Partners, LLC v. Rumsey – Slep-Tone Entertainment (P)
made karaoke tapes and CDs with prerecorded music and corresponding lyrics
and graphics containing Slep-Tone trademark and trade dress. Rumsey made
unauthorized copy of the tapes and used in its pub. Rule: To maintain a claim for
reverse passing off, P must allege that the passing off results in consumer
confusion as to the source of the goods sold in the marketplace. D must be guilty
of passing off the goods in the marketplace as the plaintiff’s goods. (Here, might
be copyright infringement but not trademark infringement, the source is clear in
the graphics and the goods are not sold in market place.)
Unit 5:
Defenses to Infringement
Previously covered defenses: basis for rejecting an application for trademark
registration; section 14 as bases for cancelling a mark including fraud, abandonment,
genericism and functionality
Statutory Defenses/Incontestability
Section 33 of the Lanham Act
•
Incontestability 15 U.S.C. §1065 [Lanham Act §15]
Park ‘n Fly, Inc. v. Dollar Park and Fly, Inc. (1985) – PNF obtained service
mark “Park ‘n Fly” in 1971 for airport parking, filed affidavit and obtained
incontestable status 6 yrs later. Dollar Park operated similar business. Rule:
To obtain incontestable status for a mark, the owner must file an affidavitwith
the PTO stating that the mark has been registered and in continuous use for at
least five years, that there has been no final decision questioning the owner’s
claim of ownership, and that there are no pending proceedings questioning
such ownership. An action to enjoin the infringement of an incontestable trade
or service mark may be defended on the grounds that the mark has become
generic, has been abandoned, or is used for misrepresentation or fraud. Such
an action may not be defended, however, on the grounds that the mark is
merely descriptive. This defense is not enumerated as a defense in the
Lanham Act. Indeed, marks that are merely descriptive may not even be
registered unless they achieve a secondary meaning.
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Note: Incontestable Registration and Strength of the Mark
•
Particular Section 33(b) Defenses
An incontestable registration is “conclusive” of the owner's exclusive right to use of
the marks, but incontestability only applies to the goods/services covered by the
incontestable registration.
1. Fraudulent acquisitionof trademark registration or of incontestable right to use
mark.
2. Abandonmentof the mark.
3. Use of the mark to misrepresent source
4. Use of mark in a descriptive sense other than as a trademark (the so-called “fair
use”defense) – probably most important (2 types: statutory fair use, nominative
fair use– judge-made defense, not statutory defense, used mark through
comparative advertising and only way you can describe what you are comparing
to)
5. Limited territory defense
6. Prior registration by defendant
7. Use of mark to violate anti-trust laws
8. Functionality
9. Equitable principles (Added in 1988, §33(b)(9))
1. Fraud on the Trademark Office -- Bose test.
IN Re Bose Corp. (2009) – Bose owned “WAVE” for products including
audiotape recorders and tapes, renewed the mark knowing no longer selling
audiotape recorders and tapes, believing repair and return constituted use in
commerce, but no evidence to show intent to deceive PTO. Rule: A trademark
is obtained fraudulently under the Lanham Act if the applicant or registrant
knowinglymakes a false, material representation with the intent to deceivethe
PTO. Intent is determined by the party’s objective manifestations of intent. It
is not sufficient that the party should have known of the statement’s falseness;
the party must have actually known. Fraud must be proven with clear and
convincing evidence.
Nationstar Mortgage v. Ahmad
Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes
and of Malta v. Florida Priory of the Knights Hospitallers of the Sovereign
Order of Saint John of Jerusalem, Knights of Malta, The Ecumenical Order
29
2. Fair Use: §33(b)(4) – used most often use in a non-trademark sense (e.g.,
fragment of a sentence, small print)
United States Shoe Corp. v. Brown Group Inc. (1990) – Shoe Corp “Looks
Like a Pump, Feels Like a Sneaker.”, Brown “Think Of It As A Sneaker With
No Strings Attached.” w/ fine print “And when we say it feels like a sneaker,
we’re not just stringing you along.” Rule: Under the fair-use doctrine in the
Lanham Act, a party’s use of a word or phrase is not trademark infringement
if it is a use, otherwise than as a trademark, which is descriptive of and used in
good faith only to describe the party’s goods to consumers.[competitors fairly
describing their products.] Even if a term describing a product has acquired
secondary meaning, a competitor may not use the term as an identifier but still
may use the term as a descriptor.
Car refresher SC Johnson case in book – Pinetree shape, likelihood of
confusion? Johnson didn’t use it as a mark, it’s for the xmas season, therefore
is descriptive. Applies to more than just words, applies to designs too.
See also Kelly-Brown v. Winfrey (2013)
https://www.quimbee.com/cases/kelly-brown-v-winfrey
Rule of Law
The Lanham Act’s fair-use exception is an affirmative defense requiring the
defendant to prove that the term (“Own Your Power”) was used in good faith
and in a descriptive manner for a purpose other than as a mark.
Pinterest, Inc. v. Pintrips, Inc.
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc.(USSC 2004) – KP
started using “microcolor” in 1990, Lasting registered the mark 1993 and
achieved incontestable status in 1999. KP seeking declaratory judgement on
non-infringement, Lasting countered with infringement, KP defended on
grounds of fair use. Rule: A party owning an incontestable trademark
registration has a burden to show likelihood of consumer confusion to prove
infringement of the mark. A party raising the defense of fair use does not have
a burden to negate any likelihood of confusion– fair use can still exist even if
there is some degree of consumer confusion. A little confusion is okay as long
as you meet the elements of the defense.
c. Functionality §33(b)(8)
Jay Franco & Sons, Inc. v. Franek (2010) – Franco trademarked his round
beach towel that allowed sunbathers to reposition towards changing angle of
sun without moving the towel (in its ad). Others held patents for round beach
30
towel with same functionality. Jay Franco sold same design, Franco sued two
retailers, Target & Walmart for infringement. JF counter sued for invalid
mark. Rule: A design that produces a benefit other than source identification
is functional, making the design ineligible for trademark protection. An
expired utility-patent claim describing the trademarked design or feature can
be one way to show that the design is functional.
** Chair case example question ** If there is a declaratory judgment you can flip the
tables; eg if there is a threat of suit and file first for a dec judgment you can choose
forum, initial filings, and now they are the P not D in case. .etc. See Specialized Seating,
Inc. v. Greenwich Industries, L.P, 616 F.3d 722 (7th Cir. 2010); cf. Pinterest v. Pintrips,
140 F. Supp. 3d 997 (N.D. Cal. 2015), supra this Chapter, section [A][2][b].
Christian Louboutin, S.A. v. Yves St. Laurent America Holding, Inc.(2012) –
Louboutin’s lacquered, bright red outsoles in shoes with contrasting colors for
uppers and soles, after 15 yrs of recognition, trademarked its Red Sole Mark.
YSL selling monochrome shoes in colors including red. Louboutine sued YSL
for infringement, YSL countered with invalid mark on grounds of either
ornamental rather than distinctive, or functional. Rule: Courts have expanded
the functionality doctrine to include design features that are aesthetically
functional. A mark is aesthetically functional if protecting the mark would
significantly undermine competition because competitors are denied the use
of a function that is unrelated to the trademark owner’s reputation. Also, mark
must be distinctive to be trademarked. However, a feature that is not
inherently distinctive, like a color, may acquire distinctiveness by developing
a secondary meaning that causes consumers to associate an otherwise
nondistinctive feature or mark with the source of a product. (Here, Red Sole
Red developed secondary meaning, only with contrasting color theme, not
enforceable against YSL’s monochrome color design with no contrast)
Cartier expensive watches case in book – a much cheaper brand has
indistinguishable design and shape but do not have Cartier mark, claim of
infringes trade dress; defense the design is functional. Court: here the trade
dress is not functional, don’t need it to compete (Dismissed case)
Au-Tomotive Gold, Inc., v. Volkswagen of America, Inc.(2006) – Auto Gold
used Volkswagen and Audi’s logos on its auto accessories (e.g., key chains,
license-plate covers) w/o license, suing for declaratory judgment of
noninfringement on ground of aesthetic functionality. Rule: A mark’s
aesthetic functionality makes it unprotectable under trademark law only if the
mark serves an aesthetic purpose that has nothing to do with identifying the
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source of a product.If the marks do not have aesthetic purpose independent of
identifying the source of a product, they do not have aesthetic functionality.
d. Lashes §33(b)(9) – proof of delay and cause of prejudice?? (what did prof say?)
Pro Football, Inc. v. Harjo(2009) – PFI registered 5 marks including Redkins
< 1978, the 6th mark in 1990 “Redskinnettes”, seven native Americans
petitioned to cancel the marks as disparaging in 1992. Former Redkins’
president died during the eight years before the suit, met with native
American leaders to get their views and continued investment in marks. Rule:
The equitable doctrine of laches will bar a party’s claim if that party has
unreasonably delayed bringing the claim and the delay has caused the other
party prejudice. As the delay increases, the level of prejudice required is
reduced, as evidence of prejudice may be lost during the delay. (Here, Pl
waited too long, at least 29 months since the latest mark, claims bard by
laches.) can no longer use “disparaging”
Oriental Fin. Group, Inc. v. Cooperativa de Ahorro y Credito Oriental –
confusingly similar mark and logo, claim was not barred by laches because of doctrine of
progressive encroachment(look up in book) P reasonably believed no need to bring suit,
D materially changes creeping up (e.g., change the goods, greater infringing activities,
redirects to compete by getting closer and closer), P finds out and brings suit. Court holds
the elements are present. Dawn donut doctrine case in book –
Dawn Donut Company, Inc. v. Hart’s Food Stores, Inc. (1959) – Dawn Donut
sold doughnut mix wholesale w/ trademark “Dawn,” licensed to retail
bakeries. Hart’s sold doughnuts retail around Rochester, NY, using “Dawn”
subsequent to P’s registration (under constructive notice), not actually
knowing Dawn’s mark. Dawn didn’t do business in Rochester for 30 yrs.
Rule: owner of a trademark registered may not enjoin another’s unauthorized
use of the mark in a geographically separate market where there is no
likelihood of public confusion. If P starts operating in the area, it can obtain
an injunction.
Judge-Made Defenses
1. Nominative Fair Use – not a statutory defense, many courts adopted it, used to
refer to the trademark owner and their associated goods/services, not in a
descriptive way
New Kids On The Block v. News America Publishing (1992) – New Kids
used its mark for portfolio including paid phone service allowing fans to call
in and listen to members. New America took polls charging caller to answer
questions about members of New Kids. Rule: Under 15 U.S.C. § 1115(b)(4),
if a trademark is used only to describe the associated goods or services, the
user of the trademark has a fair-use defense against trademark infringement.
The descriptive use of a term is called nominative use and does not invoke
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liability for trademark infringement if these three conditions are met: (1) the
product or service is difficult to describe or identify without using the
trademark, (2) the use of the trademark is limited to the amount necessary to
identify the product or service, and (3) nothing about the use of the trademark
can suggest endorsement or sponsorship by the holder of the trademark.(#3 is
likelihood of confusion)
Kassbaum v. Steppenwolf Productions, Inc. – Kassbaum was a member of the
group “original member” – true statement and nominative use
International Info. Sys. Sec. Certification Consortium v. Security Univ.,
LLC
WCVB v. Boston Athletic Association (1991) – BAA had “Boston Marathon”
and licensed to WBZ-TV to telecast the race. WCVB broadcasted the race
referring to it by its mark, without license. Rule: Fair use of a trademark will
not incur liability under trademark law so long as the use does not confuse the
public. The inquiry is whether “likelihood of confusion”, e.g., sponsorship or
approval. If used only in a descriptive way— “fair use”, without causing
confusion, then no liability
Toyota Motor Sales U.S.A., Inc. v. Tabari (2010) – the Tabaris (auto brokers)
had websites “buy-a-lexus.com” and “buyorleaselexus.com” letting
consumers buy the best combo of location, availability and price from
authorized Lexus dealers. Rule: types of fair use, one is nominative fair use, 3
factors from New Kids on the Blockabove. The 3rd factor is sometimes
referred to as the likelihood of confusion test (burden on mark holder to
prove). If a purportedly nominative use of a trademark does not meet all three
requirements for a nominative fair use defense, a court may only order the
user to modify the use to satisfy all the requirements. The user cannot be
completely enjoined from using the trademark.
Note: Failed Nominative Fair Use Defenses
2. Comparative Advertising – 2 elements: has to be truthful, done in a way that’s not
likely to cause confusion
Smith v. Chanel, Inc. (1968) – Smith copied unpatented Chanel No.5 formula
and sold under “Second Chance” with note on packaging stating the famous
fragrance it’s duplicating. Rule: A manufacturer who has copied an
unpatented but trademarked product can use that trademark in advertising to
identify the product that has been copied. so long as the advertisement
truthfully indicates the compared trademarkedproduct and does not cause
consumer confusion, it is legal. Furthermore, it does not constitute unfair
competition so long as the copied product is in the public domain and so long
as there is no consumer confusion that may cause dilutionof the mark.
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TAKEAWAY: No one has absolute right to the mark – others can refer to
your mark
ISN’T THE USE IN COMPARATIVE ADVERTISING A NOMINATIVE
USE???
3. First Sale
Au-Tomotive Gold Inc. v. Volkswagen of America, Inc. ?? (prof mentioned a
couple of words)
Champion spakl… (in book)
4. Sovereign Immunity – (ignore P… P639, in SC review)
College Savings Bank v. Florida Prepaid Postsecondary Education Expense
Board (USSC 1999) – CS Bank sued D an arm of FL state government for
false advertising (Trademark Remedy Clarification Act, TRCA permitted
suing states under Lanham Act). Rule: A state is immune from
falseadvertising suits under the Lanham Act.A business does not have a
property interest in being free from a competitor’s false advertising. A single
business does not have exclusive dominion over that right, because it cannot
exclude others.
Other Limitations on Trademark Protection: Expressive Use of Trademarks
1. Re-Weighing Likelihood of Confusion
Rogers v. Grimaldi (1989) – Ginger and Fred famous duos in show business,
Grimaldi made film titled “Ginger and Fred” a fictional satire. Ps claiming
title falsely intimating involvement or sponsorship, essentially false
advertising claim. Rule: If a title to an artistic work that uses a trademark has
at least some artistic relevance to the work and is not explicitly misleading as
to the source or content of the work, it is not false advertising under the
LanhamAct. In other words, expressive speech may be protected from claims
of trademark infringement. Titles generally both constitute artistic expression
and seek to commercially promote the underlying art. Because of this artistic
expression, titles warrant more protection than a standard commercial
product. Courts analyzing titles under the Lanham Act seek to balance the
public interest in free expression with the public’s interest in freedom from
consumer confusion.Thus, a title that misleads consumers but does not have
any artistic relevance is not immune from a Lanham Act claim.
Louis Vuitton Malletier S.A. v. Warner Brothers Entertainment Inc. (2012) –
Warner’s movie “The Hangover: Part II” featured Alan as snobbish, socially
inept and comically misinformed British, made a comment referring to a
Diophy bag, “Careful that is… that is a Lewis Vuitton.” Rule: Analysis of
whether an artistic work’s use of a trademark is explicitly misleadingis limited
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to confusion as to the source or content of the defendant’s work.See twoprong
analysis in Rogers above: artistic relevance + not explicitly misleading
E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc. (2008) – Rock Star
made a video game depicting LA streets, including a strip club “Pig Pen” with
photos of LA streets to influence the imagery of the club. ESS runs strip club
“Play Pen”. Rule: An artistic work using another’s trademark will not be
protected by the First Amendment if the public interest of avoiding consumer
confusion outweighs the public interest of free expression. Lanham Act only
applies to artistic works if no artistic relevance, or, if there is artistic
relevance, if explicitly misleads as to the source or content of the work. the
test is whether the trademark’s use has no artistic relevance at all, (here, no
evidence that zero artistic relevance exists, also no indication of explicit
misleading)
2. Parody
Dr. Seuss Enterprises, L.P., v. Penguin Books USA, Inc.(1997) – Penguin
published a book “The Cat NOT in the Hat! A Parody by Dr. Juice”, a satire
of OJ Simpson murder trial, similar illustrations as Dr. Seuss’ famous “The
Cat in the Hat”. Rule: A claim that a work is a parody is not a separate
defense but is merely a claim that consumers are not likely to be confused as
to the source of the work.In analyzing whether a parody infringes on a
trademark, courts apply the eight likelihood-of-confusion factors. (here, many
factors still indeterminate – need to go through each)
Mattel, Inc. v. Universal Music International
3. Trademarks as Speech
Rochelle Dreyfuss, Reconciling Tradeark Rights and Expressive Values: How
to Stop Worrying and Learn to Love Ambiguity
Mattel Inc. v. Walking Mountain Productions
Radiance Foundation v. NAACP
Gerlich v. Leath
Unit 6: Dilution
A. The Concept of Dilution
Ty Inc. v. Perryman (2002) – Ty makes plush toys under “Beanie Babies”. Perryman
sells second-hand Beanie Babies on bargainbeanies.com, also sold plush toys not made
by Ty through link labeled “Other Beanies”. Rule: Anti-dilution statutes do not extend to
prohibit commercial uses that may accelerate the transition from trademarks to generic
names. (here, There is no basis for prohibiting Perryman from using Ty’s marks for any
business name or domain name. However, Perryman’s use of the term “Other Beanies”
to market non-Ty products is false advertising)
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B. Federal Dilution
1. Evolution of the Statutory Standards
1. Fame
National Pork Board v. Supreme Lobster and Seafood Co. (2010) – NPB owns famous
mark “THE OTHER WHITE MEAT” for selling pork, $500 million (1987-2007) in ads,
appears in pop culture and academic literature, with over 100k visits of websites daily,
other phrases “The Other Stir-Fry” and “The Other Backyard Barbecue.” Survey shows
85% recognition (also tracking data). SLS applied to trademark the phrase “THE
OTHER RED MEAT” for salmon. Rule: To be the subject of trademark dilution, a
trademark must be famous. Factors for famous: the extent of the marketing of the mark,
consumer surveys, and references in pop culture and other media. (here, likely to blur
NPB’s mark by dilution)
Likelihood of dilution could exist regardless of likelihood of confusion
Famous: widely recognized by the general consuming public… (read book)factors
including (non exclusive): duration extend and geographic reach of … sales… actual
recognition of the mark (survey), whether the mark was registered,
Pinterest, Inc. v. Pintrips, Inc. – didn’t develop fame by Sep 2012 (the filing
the case)
2. Blurring (courts are very skeptical of surveys and especially surveys to show
blurring)
Visa International Service Association v. JSL Corp. (2010) – JSL runs business called
“eVisa.” EVisa refers to “Eikaiwa Visa,” an English tutoring service in Japan. Visa owns
“Visa” mark. Rule: If a trademark includes a common word, it must be distinctive for the
trademark holder to claim that another’s use of the same common word has diluted its
trademark. There are two types of trademark dilution: blurring and tarnishment. Blurring:
occurs when a trademark, previously associated with one product, comes to be associated
with a second product not made by the trademark owner. As a result, the trademark does
not evoke the first product as strongly as it did before the dilution. If a trademark is
merely a common word, it may be more difficult to show the mark’s distinctiveness.
However, a trademark’s distinctiveness may be established by analyzing the particular
context of how the word is used in commerce. Additionally, a trademark’s distinctiveness
may be shown using market surveys and expert testimony, but such methods are not
required. Finally, it does not matter if the later user is using a similar trademark in a
different industry or market. Trademark dilution occurs when the trademark, after being
used in two different contexts, no longer brings to consumer’s minds the original product
because it is associated with a second product. (here, “Visa” is strongly distinctive, and
famous, JSL providing other services under the mark, decreasing the association btw
“visa” and Visa’s product.)
2-pron test for blurring: 1) an association, 2) impairment of the distinctiveness of the
famous mark
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Starbucks Corp. v. Wolfe’s Borough Coffee, Inc. (2009) –Starbucks found in 1971,
trademarked logo and “Starbucks” in 1985, spent $136 million in ads 2000-2003.
Wolfe’s small company in New England, selling a blend of coffee it called “Charbucks
Blend” and “Mister Charbucks” in 1997. Rule: The similarity between a famous
trademark and an allegedly diluting trademark is not the determinative factor when
establishing whether dilution by blurring has occurred. Under the Trademark Dilution
Revision Act of 2005 (TDRA), dilution by blurring is an “association arising from the
similarity between a mark . . . and a famous mark that impairs the distinctiveness of the
famous mark.”15 U.S.C. § 1125(c)(2)(B). The statute also defines six non-exhaustive
factorswhen determining if dilution by blurring has occurred. (1) the degree of similarity
between the two marks in question, (2) the degree of distinctiveness (inherent or
acquired) of the famous mark, (3) the exclusiveness of the famous mark’s owner’s use of
the mark (e.g., go on internet and find many other uses of the mark), (4) the degree to
which the famous mark is recognizable, (5) the intention of the alleged diluter to
associate his mark with the famous mark, and (6) the actual association(through
consumer survey) between the two marks in question. Doesn’t require a famous mark’s
holder to show that the two trademarks are substantially similar. Instead, the degree of
similarity between the two marks is simply one factor. (Profs main takeaway: one does
not have exclusive total right to use that mark, there are limitations on that right)
Here, can’t show likely impairment of the distinctiveness of the mark, only weakly
associated –minimally similar marks and weak survey results (Plaintiff has failed to carry
its burden of proving that Defendant's use of its marks, as evidenced on the record before
the Court, is likely to cause dilution by blurring)
Plaintiffs have very heavy burdens
c. Tarnishment
Read definition of Dilution by Tarnishment
Nordstrom, Inc. v. Nomorerack Retail Group, Inc. – Nomorerack had bad
services, difficult to prove harm factor,…
Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.
d. Parody
Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC 2007 —LVM luxury handbags,
w/ trademarks for “LOUIS VUITTON,” monogrammed “LV,” monogrammed design
consisting of several the “LV” marks. HDD made and sold inexpensive, plush dog toys
that parodied famous luxury brands, including one mimicking the shape and design of an
LVM handbag, labeled “Chewy Vuiton” and imitated LVM’s “LV” mark with a “CV.”
Rule: To state a trademark dilution claim, P must show(1) it owns a famousand
distinctivemark, (2) D has commenced usinga mark that is allegedly diluting the famous
mark, (3) a similaritybetween the marks gives rise to an association between the marks,
and (4) the association is likely to impair the distinctiveness or harm the reputationof the
famous mark. Under the 4th prong, distinctiveness: consumers’ ability to recognize that
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the product comes from a particular source. In evaluating the 4th prong, dilution by
blurring, courts look to some or all of six factors in Starbucks case.
The Hershey Co. v. Art Van Furniture, Inc. – image of delivery truck like
Hershey bar being unwrapped, trade dress dilution claim. D claims parody
defense. Prof doesn’t see this as dilutive— clearly no likelihood of confusion
and can’t see this being dilutive either.
New York Yankees Partnership v. IET Products and Services, Inc. – Yankees
and logo, IET uses the logo trying to register the mark, IET claims fair use
which is de jure non-dilutive. Court disagree, IET tries to apply for
registration which is commercial use.
Parodic use is non commercial.??
2. Use of a Famous Mark Other than as a Mark for Defendant’s Goods or Services
MasterCard International Inc. v. Nader 2000 Primary Committee, Inc. (2004) —
MasterCard ran a series of ads listing a number of purchased items and their costs, and
ending with an intangible item that cannot actually be purchased and the word
“Priceless.” A voiceover then stated: “There are some things money can’t buy, for
everything else there’s MasterCard.” Nader ran for president in 2000, ran a political
campaign ad referencing alleged prices of dinners at fundraisers, campaign ads “filled
with half-truths,” and promises to special interest groups. The ad ended by stating:
“finding out the truth: priceless. There are some things that money can’t buy.” Rule:
Noncommercial uses of a trademark are exempt from the Federal Trademark Dilution
Act. The political commentary/speech (despite some commercial component to it),
expressing political view point, is protected.
Another Hershey case… similarity of the campaign and Hershey’s trade dress – D uses
protected political speech as defense, not stating political viewpoint, just stating his
name. Court found no dilution, but D lost on likelihood of confusion – Hershey
endorsement or sponsorship. (watch out for likelihood of confusion in terms of
endorsement of sponsorship)
Mattel, Inc. v. Universal Music International— Barbie girl, protected speech? Non
commercial. Song “Barbie Girl” mocking the fake lifestyle, music video, popular,
protected speech as parody? Court holding: it is parody, because mocking the image
and values that Barbie represented in the song.
Louis Vuitton Malletier, S.A. v. My Other Bag, Inc. (2016) — MOB manufactured
handbags that on one side stated “My Other Bag…” and on the other side contained
graphics designed to evoke the famous “LV” mark belonging to LVM. MOB’s bags were
a play on the classic “My other car is a [luxury car]” bumper stickers. MOB’s design
used the letters “MOB” instead of “LV.” MOB branded its bag as utilitarian and able to
get dirty, for use at the grocery store or the gym. Rule: A company’s evocation of a
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trademark that communicates to a consumer that the company is distinct from the
trademark owner and is poking fun at the trademark does not constitute trademark
dilution. Such an evocation is a parody and is fair use.
Parody, you can use it as a mark (read very bottom of P737 and top of 738), you can
disregard whether it’s used as a mark or not, if it’s used as parody – read the statute. If
it’s not used as a mark it’s probably easier to prove parody. It could include normative
use.
On False Advertising
Syllabus next class
Section 43(a) of the Act – any false designation of origin
You can use a mark in commerce and bring a claim under 43(a) – cause of action
We’ll focus on the other side of 43(a) –false and misleading statements used in
advertisements
If someone makes a claim under 43(a), in order to have defense to it: the statement must
be true; and it’s unlikely to cause confusion
Unit 7:
False Advertising
Lanham Act section 43(a)(1)(B) (no need for registration, can bring under common law rights
into federal court)
(1) Any person who, on or in connection with any goods or services, or any container for goods,
uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any
false designation of origin, false or misleading description of fact, or false or misleading
representation of fact, which— .... (B) in commercial advertising or promotion, misrepresents the
nature, characteristics, qualities, or geographic origin of his or her or another person's goods,
services, or commercial activities, shall be liable in a civil action by any person who believes that
he or she is or is likely to be damaged by such act.
A. Commercial Advertising or Promotion
Gordon and Breach Science Publishers S.A., STBS, Ltd. v. American Institute of
Physics (1994) – G&B for-profit publisher, AIP non-profit. AIP published articles
ranking G&B low on “cost/impact ratio” while ranking AIP near top. AIP
circulated publication to librarians at conference, press release, letter to editor of
CBE Views, meetings/emails to librarians and quotes to media. Rule: new §43
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(a)(1)(B) claims for product disparagement should not impinge on free speech. In
order for representations to constitute “commercial advertising or promotion” under
Section 43(a)(1)(B), they must be: (1) commercial speech; (2) by a D who is in
commercial competition with P; (3) for the purpose of influencing consumers to
buy D's goods or services. While the representations need not be made in a “classic
advertising campaign,” but may consist instead of more informal types of
“promotion,” the representations (4) must be disseminated sufficiently to the
relevant purchasing publicto constitute “advertising” or “promotion” within that
industry. (here, AIP's publication of articles, press release and letter to the editor
constituted protected speech, but its dissemination of preprints and alleged
campaign of sending emails to and meeting with librarians are commercial
promotion?)
Neuros Co., Ltd. v. Kturbo, Inc. – both make blowers for wastewater treatment
plants, Neuro won a bid representing its blowers could achieve a total efficiency.
Kturbo made ppt presentation at a road show (accusing Neuros false claim about
total efficiency) to engineers advising plants on which blower to buy. Neuro sued
for false advertising. Rule: Advertising and promotion under the Lanham Act
include any information disseminated to the relevant purchasing class of
individualsfor purposes of persuading them to buy a product. Advertising and
promotion are not limited to documents or messages that are widely published or
broadcast, and are not limited to messages presented to the general public.
B. Literal Falsehood
Coca-Cola Co. v. Tropicana Prods., Inc.– two leading competitors in orange juice
market, Tropicana commercial showing Bruce Jenner (athlete) squeezing fresh
juice from orange to Tropicana carton (false), stating “the only leading brand not
made with concentrate and water”, ad also described product as “pasteurized juice
as it comes from the orange.” (false) In fact, T’s OJ was not fresh-squeezed and
was pasteurized and frozen. Rule: A false-advertising plaintiff is entitled to a
preliminary injunction if the plaintiff demonstrates irreparable harm in connection
with the alleged wrong, as well as a likelihood of success on the merits. False
advertising refers to a product description that falsely represents goods placed in
commerce. An advertisement stating incorrect factual information is likely to cause
consumers to switch to a different brand. Therefore, a company is likely to suffer
irreparable harm by a competitor’s false advertising when the two companies are
head-to-head competitors.On the issue of falsity, an advertisement can be either
explicitly or implicitly false. An explicitly false statement violates the Lanham Act
regardless of the statement’s effect on the buying public. An implicitly false
statement violates the Lanham Act only if the statement tends to mislead, confuse,
or deceive consumers.
Clorox Co., Puerto Rico v. Proctor & Gamble Commercial Co. – two competitors
on detergent market, P&G promoted Ace using tagline “whiter is not possible”
calling the product Ace con Blanqueador (Ace with Whitener), shot commercials
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and issued promo mailings comparing Ace’s whitening power against bleach and
other detergents, later change to compared to detergents. In fact, Ace doesn’t
contain whitener (color enhancers instead), falsely claimed superior whitener to
bleach. Clorox provided survey showing consumer confusion (e.., superior or equal
to bleach in whitening power). Rule: A literally false advertisement violates the
Lanham Act without reference to consumer reaction, but statements that are NOT
literally false require a showing of public reaction. The public reaction is usually
based on survey data, but survey data cannot be used to attack a statement that is
clear and unequivocal on its face. Puffery, which refers to exaggerated or boastful
advertising, is not actionable if no reasonable consumer would rely on the statement
at issue.
Autodesk, Inc. v. Dassault Systemes Solidworks Corp.(2009) – competitors of
CAD software (computer aided design). Solidworks advertised its DWGgateway as
fully compatible with Autodesk’s AutoCAD, Autodesk used comic strip to warn
other brands (purportedly compatible) won’t work. Rule: general, vague and
unmeasurable (not quantifiable) claim of superiority constitute non-actionable
puffery.
Church & Dwight Co. v. The Clorox Company – competing in cat litter market. CD
used baking soda (only company using it then), Clorox used carbon. Clorox
commercial showing two lab beakers, green gas added which evaporated in the
carbon beaker while remained unchanged in baking soda beaker. CD sued for false
advertisement. Clorox ran a “jar” study to support, used sealed jars and evaluated
24 hours later by 11 trained panelists with the experiment repeated 4 times, each
panelist reported 0 odor after each trial. CD argued results were highly implausible.
Rule: A company’s advertisement that makes claims about particular aspects of its
product may necessarily imply broader claims about that product that constitute
false advertisingunder the Lanham Act. In determining whether an advertisement
makes a broader implied claim, courts analyze the advertisement in its full context
to determine whether the advertisement necessarily implies a false claim. (Here,
Clorox ad implied claim, about its superior effectiveness as used by consumers,
broader than the studies could support, therefore is false)
Chobani, LLC v. Dannon Co. (2016) – both make “light” zero calorie Greek style
yogurt. Chobani ad with woman by pool, reading Dannon’s ingredient label,
voiceover about it using sucralose artificial sweetener has “chlorine added to it”,
woman tossed it to trash bin. In fact, sucralose is safe and chemically different from
chlorine used in pool; then women picked up Chobani, showing pool on
background, hashtag #NOBADSTUFF. Rule: literally false by necessary
implication. Courts regularly recognize that even where “no combination of words”
found in the advertisement is untrue, the message conveyed by the advertisement
may still be “literally false” if its clear meaning, considered in context, is
false(factfinder may concludead unambiguously convey the literally false message)
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C. Misleading Representations
Innovation Ventures, LLC v. N.V.E., Inc. – Innovation sold “5-hour ENERGY”
drink, wan a suit against another party (N2G) over trademark infringement suit
(“6hour ENERGY”), told retailors and distributors (titled “RECALL of ‘6 HOUR’
SHOT ORDERED.” in notice) “If you have any of the ‘6 Hour’ energy shots in
your store(s) or warehouse(s) contact the product’s manufacturer or your distributor
to return the product immediately.” NVE “6-hour power” NVE had countless calls
from confused retailors. Rule: An advertisement that is literally true, but
misleading, must actually deceive consumers to be actionable. In contrast, an
advertisement that is literally false is actionable absent evidence of actual
confusion. (here, notice is ambiguous, though not literally false, could be
misleading and actually deceptive, evidence of actual confusion should be
admitted)
Coors Brewing Co. v. Anheuser-Busch Co. – Coors Light sold to Northeast was
transported before adding water to Virginia where water was added to dilute the
“high gravity” brew made in Colorado. Anheuser Busch made Natural Light and
made ad comparing to Coors Light informing the public that a concentrated form of
Coors Light left Colorado in a railroad car and traveled to Virginia. The
commercial then stated that “local water dilutes the Rockies concentrate before it’s
sent to you.” Finally, the commercial invited viewers to choose Natural Light,
which left Anheuser breweries “fresh and ready to drink.” Coors’s surveyasked free
recall and main theme, insignificant percentage said the beers were made
differently, but some leading questionsgot 32% saying Coors Light was
diluted/watered down (two Qs combined) and 67% saying the beers were made
differently. Rule: Reliable extrinsic evidence of consumer confusion is needed for
false advertisement based
on implied falsehood. (here, Coors’ survey results unreliable, combining two Qs,
leading questions)
Lanham Act Liability of Advertising Agencies
Nestle Purina Petcare Co. v. Blue Buffalo Co. Ltd. (2015) – Purina alleged Blue
Buffalo falsely claim their dog food as “grain free” and “no chicken byproduct”,
issued press releases and launched website (petfood honesty website), using ad
agencies. Rule: liability of advertising and PR agencies for Lanham Act false
advertising violations: The language of the Act creates a cause of action against any
person who engages in false advertising, those who work with competitors to
produce false advertisements may also be liable under the Lanham Act. Elements of
a false advertising claimunder the current Act: (1) a false statement of factby D in a
commercial advertisement about its own or another's product; (2) the statement
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actually deceived or has the tendency to deceivea substantial segmentof its
audience; (3) the deception is material, in that it is likely to influence the
purchasingdecision; (4) the defendant caused its false statement to enter interstate
commerce; and (5) P has been or is likely to be injured as a resultof the false
statement, either by direct diversion of salesfrom itself to defendant or by a loss of
goodwillassociated with its products. Actual knowledge of falsity (“knowing”) is
not required in actions against advertising agencies.
McNeil-PPC, Inc. v. Pfizer Inc. – Pfizer Listerine mouthwash ad “Listerine’s as
effective as floss at fighting plaque and gingivitis. Clinical studies prove it.”,
visually showing blue stream tracking a string of floss through teeth, consumer
study with two groups one using floss one Listerine for 6mon, on mild-moderate
gingivitis, Listerine group found fewer symptoms of gingivitis. McNeil-PPC’s
survey should ~30% thought ad says “you can replace floss with Listerine.” Floss
also provides many other benefits than fighting plaque and gingivitis. Rule: In
analyzing a claim of implied falsity, courts determine the message that consumers
take away from the advertisement and whether that message is false.(here, both
literal falsity—not as effective & implied falsity—can’t replace floss)
Eastman Chem. Co. v. PlastiPure, Inc. – both make plastic for use in bottles and
food containers without BPA or EA, thought to be harmful to health. PlastiPure
associated with CertiChem which conducted a study on various plastics including
Eastman’s. PlastiPure later made and passed out at tradeshow brochure stating
Eastman’s plastics contained EA. Rule: The Lanham Act prohibits false
commercial speech even if the speech makes claims that are open to scientific or
public debate. In other words, the First Amendment does not protect against false
advertising. (here, PlasticPure’s brochure was an ad, subject to false advertising
claim).
Pom Wonderful LLC v. Coca Cola Co. – POM made pomegranate-based products
incl. a pomegranate-blueberry juice. Coca Cola made a Minute Maid juice (99.4%
apple and grape juice, 0.3% pomegranate juice, 0.2% blueberry juice), but used
large letters “Pomegranate Blueberry” in label and small font “flavored blend of 5
juices”, also a photo of a halved pomegranate, a halved apple, blueberries, grapes,
raspberries, with FDA approval. Rule: The Lanham Act’s prohibition on
misleading consumers applies to food and beverage labels. This is true even if a
label is regulated and approved by FDA.
D. Standing to Assert a section 43(a) Claim
Lexmark International, Inc. v. Static Control Components, Inc. – Lexmark made
printers and cartridges. Static made parts necessary to refurbish and resell Lexmark
cartridges. Lexmark wanted consumers to return empty cartridges directly to them,
offered discount, and sent remanufacturers letter stating it was illegal to use Static’s
parts to refurbish and resell. Rule: A plaintiff has standing to sue for false
advertising under the Lanham Act if P’s zone of interestsis within those protected
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by the Lanham Act and P’s injuries are proximately caused(cannot be tenuous) by
D’s violation of the statute. A P is within the Lanham Act’s zone of interests if P is
engaged in commerce and suffers damages in the form of lost sales or harmed
reputation. (here, Static’s clients, cartridge remanufacturers are direct competitors
of L)
Unit 8: Remedies
A. Injunctive Relief --- the rules have changed (ebay case, there was a troll): parties
seeking it must show irreparable harm(which used to be presumed); reasons for
seeking injunctive relief instead of monetary: concern of loss of controlover
goodwill, damage in goodwill+ interference with brand value or image(how it’s
marketed, luxe or low end positioning, customer care, etc.). It is difficult to get
damages. Most Plaintiffs want injunctions, especially preliminary injunctions
(takes time to go to trial, pending the litigation, P wants to stop D right away –
preliminary injunction, freezes everything in time while trial is going on). TRO
(temporary restrictive order) is even more immediatethan preliminary injunction
(applies to everything, not just trademark), for some irreparable harm that’s
imminent (you go to the judge ex parte, before you can put something together for
preliminary injunction), very very hard to get.
A. Injunctions
Herb Reed Enterprises, LLC v. Florida Entertainment Management, Inc. 2013 –
Involving several transfers of rights in the name of “The Platters” a famous singing
group, settlement btw parties giving rights to Reed if a final court order found
Defendant didn’t have such rights. P later sued D for infringement, D didn’t show,
P got default judgement. P also sought preliminary injunction. Rule: To obtain a
preliminary injunction, P must show that: (1) likelihood of success on the merits (P
owns valid protected mark + confusing similarity), (2) likelihood of irreparable
harm (if the preliminary injunction is not granted), (3) the balance of the equities
(hardship) favors P (consider the damages that would be inflicted on the D), and (4)
an injunction is in the public interest. A likelihood of irreparable harm cannot be
just assumed from a finding of a likelihood of success on the merits. Rather, P must
separately demonstrate a likelihood of irreparable harm. (actual evidence regarding
irreparable harm that P likely to suffer)
Note: Presumption of Irreparable Harm (Prof talked about the cases)
Note: the “Safe Distance” Rule(P might not have won by going after the altered mark
without first winning an injunction of prior infringement – move for contempt as D didn’t
get far enough away—didn’t make a really telling difference in the mark/trade dress, not a
“safe distance”)
Guthrie Healthcare Sys. v. ContextMedia, Inc. 2016 – Cuthrie big non-profit
healthcare corp in SW NY and NW Pennsylvania. ContextMedia placed televisions
displaying health-related content in physicians’ offices, used nearly identical logo
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as Cuthries, operates in both a related subject-matter sphere and the same
geographic area as Guthrie. Rule: An injured senior user who demonstrates likely
confusionwith the use of a similar trademarkby a junior user may be entitled to an
injunction beyond the senior user’s geographic region, if a broader injunction is
necessary to provide the senior user with reasonable protection(depends on what’s
necessary and equitable).
Note: Centrality of Injunctive Relief and Use of Alternate Dispute Resolution (the remedy
of choice for trademark infringement and unfair competitions)
*The flip side case to Dawn Donut
B. Disclaimers
Home Box Office v. Showtime 1987 – Showtime ad complain using slogan
“SHOWTIME & HBO. It’s Not Either/Or Anymore.” Some of its advertising, but
not all, contained disclaimers clarifying that HBO and Showtime were separate
companies. Rule: A disclaimer that clarifies the source of a product may safeguard
the user of a mark from a trademark infringement claim if the disclaimer
significantly reduces the likelihoodof consumer confusion. The user bears the
burden of showing that the disclaimer is actually effective at reducing confusion.
Generally, to be effective, any such disclaimer must be in close proximityto the
infringement use.
Soltex Polymer Corp. v. Fortex Industries, Inc. 1987 – both use “FORTIFLEX”, P
on raw materials sold to manufactures that make plastic products (milk jugs,
industrial containers), D on containers. District Ct found likelihood of confusion
buy didn’t enjoin D’s use but ordered use of disclaimeron certain containers. Rule:
A basic principle of the law of equitable remedies is that the relief granted should
be no broader than necessary to cure the effects of the harm caused(rejected an
“allor-nothing” or per se rule mandating the use of an absolute injunction.) (here, D
used in good faith, efforts to use mark only with own stylized logo, legitimate
interest in preserving rights in “FORT” family of marks used for yrs, sophisticated
buyers—minimal/moderate potential confusion)
3. Recalls and Destruction
Perfect Fit Indus. v. Acme Quilting Co. 1981 – mattress cover trade dress
infringement. Rule: In a trademark action, DC has the discretion to order a recall
and destruction of the infringing product. Should take into account the burden on D
and the expense of a recall.
Nikon, Inc. v. Ikon Corp. 1993 – IPC used IKON infringing on Nikon’s NIKON
mark on cameras. D Ct ordered recall, based on evidence of IPC’s bad faith and
IPC can still remove the mark and sell again. Rule: The district court has broad
discretion as to recall orders which are part of permanent injunctions (citing Perfect
Fit above)
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Gucci America, Inc. v. Daffy’s Inc. 2003 – Daffy sold Gucci bags without knowing
they were counterfeits – “innocent infringer”, such high quality though Gucci
employees couldn’t tell the difference (undermines any claim of confusion),
voluntary policy to not sell Gucci anymore. Rule: balancing of hardships: A court
generally will not order a recallof an infringing product if the risk of confusion to
the public and injury to the trademark owneris less than the burden of the recall to
D(financial and goodwill). Other factors courts consider are the intent of the
infringerand any substantial risk of danger to the publicon account of the infringer’s
conduct.
Maker’s ark Distillery, Inc. v. Diageo North America, Inc.– the red dripping wax
seal
The Voluntary Cessation Doctrine
Already, LLC, d/b/a Yums v. Nike, Inc. 2013 – both make shoes, Nike claimed
Already's Sugars and Soulja Boys shoe lines infringed and diluted Nike's Air Force
1 trademark. Already counterclaimed that Nike's Air Force 1 trademark was
invalid. Nike later issued a “Covenant Not to Sue,” would not file trademark or
unfair competition claims against Already or its affiliates based on Already's
existing designs or “colorable imitation[s]” thereof. Rule: SC on effect of voluntary
cessationsin the context of a P facing a counterclaim. 2nd Ct looked at (1) the
language of the covenant, (2) whether the covenant covers future, as well as past,
activity and products, and (3) evidence of intention ... on the part of the party
asserting jurisdiction of a desire to engage in activities not covered by the covenant.
SC: a defendant claiming that its voluntary compliance moots a case bears the
formidable burden of showingthat it is absolutely clear the allegedly wrongful
behavior could not reasonably be expected to recur
4. Declaratory Relief: Defendants’ Counterpart to Injunctive Relief
Classic Liquor Importers, Ltd. v. Spirits Int’l B.V. 2015 – Spirits sell vodkas called
Stolichnaya, Elit by Stolichnaya, and Elit. Classic new liquor distributor seeking to
sell vodka and register mark Royal Elite. Spirits sent cease-and-desist letter, staying
it’d vigorously protect its mark. Classic started selling Sep 2015, sued Spirits Aug
2015 seeking declaratory relief. Spirits Oct 2015 stating no intent to sue but
reserving such right. Rule: In a trademark case, courts should apply the Declaratory
Judgment Act liberallyto find an actual controversy. Generally, a declaratory
judgment is appropriate if there is a substantial controversy between parties with
adverse legal interests “of sufficient immediacy and reality.”
B. Monetary Relief (very difficult to get)
1. Assessing Profits and/or Damages
Taco Cabana Int’l, Inc. v. Two Pesos, Inc. 1991 – Taco Cabana distinctive festival
architectural and aesthetic design of its fast food Mexican restaurants, started in San
Antonio then expanded to new cities. Two Pesos intentionally used similar design
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and opened restaurants in Huston where Taco Cabana had not expanded. Rule: P
that establishes trademark infringement may recover D’s profits, any damages P
sustained, and the costs of the infringement action.Further, depending on the
specific circumstances of the case, including whether the infringement was willful,
a court may award additional compensation up to three times the amount of actual
damages. Under the “headstart” theory of damages, P may be entitled to damages
for lost profits if D began operations in a market to which P had not yet expanded.
In other words, P may be entitled to profits it could have made had D not entered a
previously untapped market in an infringing way. DC has significant discretion to
determine damages. (here, awarded Taco Cabana lost profits/income, doubled due
to intentional infringement, plus attorney’s fees)
Banjo Buddies, Inc. v. Renosky 2005 – BBI sold successful fishing lure “Banjo
Minnow”. Renosky on BBI’s board, sold Banjo Minnow through its own company
RLI; he then came up with “new and innovative” Banjo Minnow that he called
Bionic Minnow. After BBI board not acting on the new idea, he started selling
Bionic Minnow independently. Court found for BBI and awarded it the net profit of
Bionic Minnow. Rule: Willful infringement is not a prerequisite to disgorging a
trademark infringer’s profitsfactors for recovery of profits. Rather, willful
infringement is merely an important equitable factor, + (1) whether the
infringement diverted salesfrom P; (2) whether other remediesare adequate to
redress the injury; (3) whether there was an unreasonable delay in P bringing the
claim; (4) the public interestin deterring infringement; and (5) whether the
infringement was a case of palming off (counterfeit).
Romag Fasteners, Inc v. Fossil, Inc. 2016 – Fed Ct took different approach from
3rd Ct in Banjo Buddies, affirmed a finding that P could not recover profits based
on finding of no willfulness in an infringement case. Rule: split in circuits
concerning the willfulness requirement both before and after 1999 amendment.
2. Corrective Advertising
Big O Tire Dealers, Inc. v. Goodyear Tire & Rubber Co. 1997 – Big O sold tires
under “the Big O Big Foots”, Goodyear started nationwide campaign using
“Bigfoot” for tires, whole campaign cost $9,690,029, Big O only had business in 14
or 28% of states. Rule: A dollar-for-dollar expenditure for corrective advertising is
unnecessary to dispel the effect of confusing and misleading advertising. Generally
speaking, following the Federal Trade Commission’s (FTC) guidelines, spending
25%of the original advertising budget on corrective advertising is appropriate
compensatory damages. (here, appropriate damage: $9,690,029 X 28% X 25% =
$678,302)
U-Haul International, Inc. v. Jartran, Inc. 1986 – Jartran ran comparative ad against
U-Haul in 1979, ad worked, Jartran revenues went $7 mil to $80 mil, and UHaul
revenues decreased for the first time ever. U-Haul run corrective ad to correct
public’s perception after Jartran’s false ad. Court calculated the award by cost of
Jartran’s ad ($6 mil) + cost of U-Haul’s corrective-ad campaign ($13.6 mil), then
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doubled this amount under its discretion under Lanham Act. Rule: The cost of a
corrective-advertising campaign is part of an appropriate remedy for false
comparative advertising. The remedy is not limited to the cost of D’s actual
advertising campaign but can be in the amount of the actual expenditures on the
corrective advertising campaign. The award can then be multiplied under the
Lanham Act, up to three times the amount of actual damages. WHAT ABOUT P’s
LOST OF REVENUES AND D’s PROFITS?? (hard to show nexus between the
infringing activity and P’s loss of revenues)
3. Attorney’s Fees
Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC 2010 – following a
price dispute, Nightingale filed frivolous Lanham suit with no merits against
Anodyne, to coerce a price reduction. Court granted SJ and granted Anodyne’s
request for attorney’s fees. Rule: The Lanham Act (15 U.S.C. §§ 1051–1127)
provides in § 1117(a) that attorneys’ fees may be awarded to a prevailing party, but
only in exceptional cases. For determining whether particular cases arise to levels
of exceptionality sufficient to trigger an attorneys’ fees award, a reasonable test that
may be applied to both prevailing Ps and prevailing Ds is to find that an award of
attorneys’ fees is warranted if the conduct of the losing party has been
oppressive.For losing P, oppressive conductwould typically entail abuse of process,
such as using the litigation for an improper purpose, and oppressive conductby a
losing Dmight include predatory resistance to valid claims.
Prof didn’t go over remaining cases
Trafficschool.com Inc. v. Edriver Inc. –2007 analyzed whether Ct should award
attorney’s fees to P who was granted injunctive relief but no damages. Rule: Court
may take P's failure to recover damages into account when exercising its discretion
to award fees, it must also consider substantial benefits of enjoining D (e.g.,
ameliorating a serious public harm) and D' unlawful bad acts (e.g., willful
deception in determining whether to award attorney's fees
Georgia-Pacific Consumer Products LP v. von Drehle Corp. 2015 -- D distributed
paper towels designed to fit within P’s enMOTION towel dispensers, a jury found
contributory trademark infringement. Rule: Section 1117(a) provides, “The court in
exceptional cases may award reasonable attorney fees to the prevailing party.”(here,
D Ct erroneously relied on its purposeful conduct in distributing towels for use in
Georgia-Pacific's enMotion machines, conflating willful and intentional conduct
with willful and intentional infringement, especially D reasonably believed that its
conduct was lawful)
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