American Intellectual Property Law Association
RECENT CASES IN US TRADEMARK LAW
GEORGE W. LEWIS
JACOBSON HOLMAN PLLC
AIPLA Mid-Winter Institute
IP Practice in Japan Committee Pre-Meeting Seminar
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Tampa, FL
January 29, 2013
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TRADE DRESS
• National Football Scouting, Inc. v. Rang, Case
No. 11-cv-5762-RBL (W.D. Wash., Dec. 13, 2012
• PROTECTION OF AN EXPERT’S PREDICTION
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FACTS
• The member teams of the National Football League jointly subscribe to
the National Football Scouting author’s biographical annual reports on
several hundred graduating senior football players for use in the player
draft. The reports are several hundred pages and include multiple page
reports on each college pro-player prospect. The reports are sold for
$75,000 to 21 NFL teams. Every subject receives a numeric grade
reflecting the reports subjective opinion of the players likelihood of
success in the NFL. The reports were shared only with the teams and a
computer consultant all of whom signed confidentiality agreements —
and the extent to which the grades had economic value by reason of not
being generally known.
• The Defendant publication obtained copies of the reports and published
in an article the numeric grades for 18 players. No other information
from the report was included in the published article. This material was
accompanied
by other information available in the public domain
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concerning the players.
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PARTIES CLAIMS
• Plaintiff sued for violation of its Trade Secret rights
(and copyright infringement).
• The Defendant argued that only facts can constitute
trade secrets and that the numeric grades are subjective
opinions, not facts.
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APLPICABLE LAW AND HOLDING
• “[I]nformation . . . that (a) Derives independent
economic value, actual or potential, from not being
generally known to, and not being readily ascertainable
by proper means, by other persons who can obtain
economic value from its disclosure or use, and (b) Is the
subject of efforts that are reasonable under the
circumstances to maintain its secrecy.”
• The court held that the assignment of specific grades to
particular
prospects are facts with independent
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significance that could be trade secrets.
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COVENANTS NOT TO SUE
• ALREADY, LLC, DBA YUMS v. NIKE, INC.
CERTIORARI TO THE UNITED STATES COURT
OF APPEALS FOR THE SECOND CIRCUIT No. 11–
982. Argued November 7, 2012—Decided January 9,
2013
• whether a covenant not to enforce a trademark against a
competitor’s existing products and any future “colorable
imitations” moots the competitor’s action to have the
trademark
declared invalid.
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PROCURDAL BACKGROUND
• Nike filed suit, alleging that Already’s athletic shoes violated Nike’s Air Force
1 trademark. Already denied the allegations and filed a counterclaim
challenging the validity of Nike’s Air Force 1trademark.
• Nike issued a “Covenant Not to Sue,” promising not to raise any trademark or
unfair competition claims against Already or any affiliated entity based on
Already’s existing footwear designs, or any future Already designs that
constituted a “colorable imitation” of Already’s current products. The
covenant is (1) unconditional and irrevocable; (2) prohibits Nike from filing
suit or making any claim or demand; (3) protects Already and Already’s
distributors and customers; (4) and covers current and previous designs, and
colorable imitations thereof.
•
• Nike moved; (1) to dismiss its claims with prejudice: and (2) to dismiss
Already’s counterclaim without prejudice on the ground that the covenant had
extinguished the case or controversy. Already opposed dismissal of its
counterclaim, contending that Nike had not established that its covenant had
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mootedFirm
the case.
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HOLDING OF THE COURT
• Court held that as a consequence of the covenant-not-tosue, Already lacked standing to maintain an action to
cancel the Nike’s registration and to invalidate Nike’s
alleged rights. Since the covenant encompasses all of
Already’s allegedly unlawful conduct, it Already
demonstrate that it engages in or has sufficiently
concrete plans to engage in activities that would
arguably infringe Nike’s trademark that are not covered
by the Nike’s asserted trademark.
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SIGNIFICANCE
• Plaintiffs can safely assert infringement claims on
questionable trademarks with the knowledge that any
challenges to the trademarks can be mooted by
abandoning the claims thereafter
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TRADEMARK LICENSES IN BANKRUPTCY
• Sunbeam Products, Inc. v. Chicago American
Manufacturing, LLC. The Seventh Circuit’s opinion is
published at 686 F.3d 372 (7th Cir. 2012), and the
bankruptcy court’s opinion is published as 459 B.R. 306
(Bankr. N.D. Ill. 2011)
• Whether rejection of a trademark license in bankruptcy
deprives the licensee of the right to use the licensed
mark
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FACTS
• Lakewood Engineering & Manufacturing
(“Lakewood”), was forced into an involuntary chapter 7
proceeding. The bankruptcy trustee rejected a supply
contract between Lakewood and Chicago American
Manufacturing, LLC (“CAM”), a provision of which
permitted CAM to use Lakewood’s trademark.
Lakewood’s assets, including its trademark, to Jarden
Consumer Solutions (“Jarden”) were sold to another
party. CAM continued to sell products bearing
Lakewood’s trademark despite the bankruptcy trustee’s
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rejection
of CAM’s contract with Lakewood.
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PLAINTIFFS/BANKRUPTCY
TRUSTEE’S STANCE
• The bankruptcy trustee and a secured creditor
(subsequently replaced by Jarden) sued CAM for
trademark violations. The bankruptcy court determined
that CAM’s license to use Lakewood’s trademark
survived the rejection of the supply contract.
• Jurisdictions are split on this, but Supreme Court denied
a petition for certiorari requesting that the Court
determine such rights. As a consequence the Decision
of theFirm
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Circuit is continued and the Jurisdictions
remain split.
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HOLDING
• The Seventh Circuit affirmed, holding that § 365 of the
Bankruptcy Code does not provide a means to terminate a
licensee’s existing right to use a trademark. Under Section
365(g) of the Bankruptcy Code, rejection constitutes a
breach of the contract, not a termination. The debtor's
unfulfilled obligations are converted to damages, but
nothing about this process implies that any rights of the
other contracting party have been vaporized.
• (The Fourth Circuit case that reached the opposite
conclusion regarding rejected intellectual property licenses
is Lubrizol
Enterprises, Inc. v. Richmond Metal Finishers,
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Inc., 756 F.2d 1043 (4th Cir. 1985).)
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LACK OF A BONA FIDE INTENT TO USE
• SMITHKLINE BEECHAM CORP. V. OMNISOURCE
DDS, LLC, 97 U.S.P.Q.2d 1300 (T.T.A.B. 2010)
(PRECEDENTIAL)
• Whether a showing of bad faith is required to prove a
lack of bona fide intent.
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BACKGROUND AND HOLDING
• Applicant filed an intent-to-use application to register the
mark AQUAJETT for “dental instruments, namely, oral
irrigators.” The Board found for the Opposer on the ground
that the application was void ab initio because the Applicant
lacked a bona fide intent to use the mark.
• According to the TTAB the record was “devoid of any
evidence such as manufacturing efforts licensing efforts, test
marketing, correspondence with prospective licenses [sic],
preparation of marketing plans or business plans, creation of
labels,Firm
marketing
or promotional materials, and the like.”
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ADDITIONAL FACTORS
• In so ruling, the TTAB also noted that the record
showed that:
– (1) the Applicant’s principal owned two patents for dental
irrigators owned by its principal (although the patents did not
mention the AQUAJETT mark);
– (2) Applicant attends trade shows where oral irrigators are
marketed by others;
– (3) Applicant’s statements that he contemplated how and to
whom the goods would be marketed;
– (4) although the minutes of Applicant’s annual meeting
included
references to business plans and research and
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development in the relevant field.
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LACK OF USE AT TIME OF FILING
• Shutemdown Sports, Inc. v. Lacy, 102 U.S.P.Q.2d 1036
(T.T.A.B. 2012) [Precedential]
• In the absence of use at the time that a used based
application is filed, the application the application is
void ab initio. IT IS NOT NECESSARY TO SHOW
FRAUD.
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• Pro se applicant sought registration for the mark SHUT
IT DOWN for 113 clothing items. Applicant had not
used the mark for 109 of the goods at the time of filing
and there was no evidence of use of the mark for the
remaining goods subsequent to the date of
registration/
• In the absence of use at the time that a used-based
application is filed, the application is void ab initio for
the goods that were not in use and abandoned for
other goods since the registrant failed to establish
sales prior to the issuance of the registrations and
therefore failed to rebut the presumption on
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abandonment.
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THANK YOU
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