The Blog Posts That Never Were

Oh how many times there have been where I wanted to blog about some interesting trademark story or legal development . . . only to have client needs get in the way.  So many blog posts started, and so few ever finished.  But that doesn’t mean I still can’t post a long list of them here – with links to articles and/or other blog postings that cover the topics as eloquently as I could have. 

Let’s call it my Top 10 Missed Trademark Blog Opportunities. 

10.  Who Doesn’t Love Boobies!

Foundation which owns the I (Heart) Boobies trademark sues company for selling unauthorized I (Heart) Boobies bracelets.  Complaint here.   San Diego Reader Article. 

9.  The Platters Trademark Lawsuits Keeps Going and Going. 

VegasInc Article Here.  Amazing that the name still generates enough revenue to make these kinds of actions worthwhile.

(Scene from The Hangover Part II)

8.  Louis Vuitton Sues Warner Brothers for Scene in the Hangover Part II.

Paid Content Article.  Hollywood Reporter Article

Really, Louis Vuitton?  How would anybody in the world know if the bag that Zach Galifianakis’ character references as a  “Louis Vuitton” were fake or real? (frankly, you can barely even see it in the scene).  More importantly, who would care even if they knew? (It doesn’t change the humor in the particular scene which is more about his mispronunciation of Louis as “loo-is”).

7.  Pepsi and Frito Lay Sue Vegas Company for Creating “Diversionary Concealment Devices” Using Pepsi and Frito Lay Cans

Pepsi and Frito Lay accuse company of using their soft drink and food cans to create containers marketed to hide  “illicit narcotics”  and weapons.  Complaint here.   Courthousenews Article.  Well of course such canister safes have to be created from Pepsi and Frito Lay’s original packaging bearing their trademarks – the police won’t be fooled by cans that says “Cola” or “Tortilla Chips.”  Uh, duh!

6.  Hasbro Files Section 1071(b) Action of PTO Opposition of “Motown Metal” trademark

After failing to overcome the trademark opposition to its application for register Motown Metal at the PTO (TTAB Decision here), Hasbro decides to pursue a Section 1071(b) action rather than appealing to the Federal Circuit.  Complaint here.  TTABlog Post on TTAB Decision here and Hasbro’s action here.

5.  Petronas Towers Comes Crashing Down In Bid To Go After GoDaddy For Contributory Cybersquatting

Owner of the Petronas Towers in Kuala Lumpur, Malaysia, was not content to win control of the two domain names – petronastower.net and petronastowers.net – through in rem actions (previous blog post here); it just had to keep pushing to try to make GoDaddy liable in some way . . . and failed big time.  Berhad v. GoDaddy, 09-5939 (N.D. Cal. Jan. 3, 2012).  Technology & Marketing Law Blog Post (Post by Venkat Balasubramani).  Of course, if the company was bold enough to have even maintained this action, it’s likely to be bold enough to appeal to the Ninth Circuit. 

4.  The Return of the Sliding Scale Test for Preliminary Injunctive Relief in the Ninth Circuit

The Ninth Circuit Court of Appeals explains how its old “sliding scale” approach to preliminary injunctive relief remains viable following the U.S. Supreme Court’s decision on the standard for preliminary injunctions in Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008).  See Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).   Seattle Trademark Lawyer Blog Post.

3.  Cupcakery Determined to Be Generic

The PTO finds CUPCAKERY to be generic and refuses registration:

The applicant’s mark is THE CUPCAKERY for, “Retail and online retail bakery shops.”  CUPCAKERY is defined as, “A bakery which only sells cupcakes”.  Please see the attached dictionary definition.  THE CUPCAKERY immediately describes a feature or characteristic of the applicant’s services, specifically, the applicant is a bakery that sells cupcakes.  Please see the attached evidence from the applicant’s website which shows that the applicant’s bakery sells cupcakes.  Further, please see the attached third party Internet website evidence from www.frostedcupcakery.com, www.sibbyscupcakery.com,www.carolinacupcakery.com,  www.ourcupcakery.com, www.batchcupcakery.com, www.buttercreamcupcakery.com, www.kumquatcupcakery.com, www.sugarcupcakery.com, sivadascupcakery.com, and sugarbabiescupcakery.com which shows that in the applicant’s industry a cupcakery is a bakery specializing in cupcakes and is commonly used by cupcake bakeries.

PTO File Wrapper for one of the four applications here.  Of course, the applications were filed in September 2008 and one wonders if the mark, while possibly distinctive at the time of filing, became generic during their pendency.

2.  Cavern Club files Section 1071(b) Action in Nevada District Court

Filed around the same time as the Hasbro case above – making TTAB appeals via Section 1071(b) appear to be growing in popularity.  Not happy with the results it obtain at the TTAB (decision here), owner of the UK club that was popular venue for The Beatles sues Hard Rock to cancel CAVERN CLUB registration.  Trademark Blog Post.  Complaint here.

And Las Vegas Trademark Attorney's #1 Missed Blog Opportunity . . .

1.  Ninth Circuit Determines that Renewal of Domain is Not Re-Registration

Or as I liked to say when the decision was issued . . . “I told you so!” (those who know me and my previous involvement in a cybersquatting dispute that involved this precise issue will understand what I mean). GoPets Ltd. v. Hise, Appeal No. 08-56110 (9th Cir. 2011).  Technically, there was a blog post about this case on this blog (link here), but it was written by fellow local trademark attorney Mark Borghese (who was kind enough to contribute some blog content during a period of time last year that was particularly busy).  Finnegan’s Incontestable Article.

The more interesting question, however, is does this now give cybersquatting immunity to domainers who purchase a domain name from another owner who happened to originally register the domain name at a time when no distinctive mark existed, but who then begin using such domain name in a way that would constitutes cybersquatting had the domainer’s purchase been considered a “registration” under the statute?

Honorable Mention -- The AIRFX Reverse Domain Name Hijacking Case

AirFX LLC won a UDRP decision over the domain name airfx.com (AirFX, LLC v. ATTN AIRFX.COM, Claim Number FA1104001384655 (NAF May 16, 2011)), and so the domain name owner, Mark Laurie, sought relief by filing a reverse domain name hijacking lawsuit.  See Airfx.com et al v. AirFX LLC, Case No. 11-01064 (D. Ariz.).   Not only did the court deny AirFX, LLC’s motion to dismiss, the Court also awarded Plaintiff $4086 in costs and fees for AirFX’s failure to waive service of process.  Decision here.    Technology & Marketing Law Blog Post.

A Real Dog of a Trademark Case

People take their pets very seriously . . . and apparently the same is true with respect to their pet store trademarks.

On January 13, 2012, Puparazzi Industries of America LLC (“PIA”) filed a trademark infringement lawsuit in the U.S. District Court of the District of Arizona against Puparazzi Pet Spa LLC (“PPS”).  See Puparazzi Industries of America LLC v. Puparazzi Pet Spa LLC, Case No. 12-cv-00084 (D. Ariz.).  A copy of the complaint can be downloaded here.

According to the complaint, PIA is a mobile pet grooming van that provides its pet grooming services throughout the Phoenix, Arizona area using the marks PUPARAZZI MOBILE PET SPAW and WHERE YOUR PET’S THE STAR (which it claims to have been using in the area since May 10, 2010) and with bright pink and purple colors on its grooming van. 

PIA only recently filed to register the mark PUPARAZZI MOBILE PET SPAW (which contains the odd concurrent use information “Regional and National).  [Sidenote: The application does not appear to have been filed by an attorney, but instead by the company’s managing member].    The same company had an application on file for PUPARAZZI INDUSTRIES OF AMERICA (filed March 2010), but when it came time to show use of the mark, all that it could muster up was its specimen showing the mark PUPARAZZI MOBILE PET SPAW.  The PTO rejected both the specimen of use (since it did not show the mark as applied in use) as well as the applicant’s attempt to alter the “drawing” of the mark from PUPARAZZI INDUSTRIES OF AMERICA to PUPARAZZI MOBILE PET SPAW (a material alteration). 

PIA claims that defendant PPS began operating a pet grooming store in Phoenix, Arizona, using the marks PUPARAZZI PET SPA and EVERY DOG IS A STAR! (and the color pink on its website and facebook account) around September 2011.  PIA’s causes of action are for federal trademark infringement and unfair competition. 

This looks more like an example of a local “pet grooming store” name battle between two local business competitors (not as uncommon as you might think), rather than a company beginning to exert trademark rights to the word PUPARAZZI.  I suspect that PIA’s “concurrent use” claim in its trademark application is a recognition by the owner of the company that there are other companies out there using the PUPARAZZI mark in connection with similar services including Puparazzi Dog Spa (in North Aurora, Illinois) and Puparazzi Pet Grooming (in Green Bay, Wisconsin).  There is also a pet photographer using the name Puparazzi Portraits.  And one man owns the registered trademark for PUPARAZZI in connection with pet clothing.  

And to the extent PIA is able to prove both that it is the prior user of the mark the Phoenix, Arizona area as well as the scope of its reputation in the Phoenix, Arizona area, then it may very well likely be able to get PPS to change its name.    

AMEX Wins Cancellation of BLACKCARD Trademark Registration

American Express (“Amex”), the issuer of the ultra-exclusive “Centurion Card” credit card (which is black in color and thus better known among the public as the “Black Card” -- pictured above), won a victory in the U.S. District Court for the Southern District of New York against Black Card, LLC (“BC”), a company that obtained a trademark registration for the mark BLACKCARD (for credit and debit card services). The Court granted summary judgment in favor of Amex on its claim that BC’s trademark registration for BLACKCARD should be canceled on the grounds that it is merely descriptive and BC had not demonstrated acquired distinctiveness. See American Express Marketing and Development Corp, et al. v. Black Card, LLC, 2011 U.S. Dist. LEXIS 133151 (S.D.N.Y. November 17, 2011)

In 1998, Amex, following its long history of color-based credit cards reflecting a hierarchy of credit card prestige (i.e., green, gold, platinum), developed a black colored credit card which it called the Centurion Card and which was available by invitation only. While Amex never formally refers to the Centurion Card as the “Black Card,” Amex executives recognized that the public referred to its Centurion Card as the “Black Card” and thus often informally referred to the card as Amex’s “black card.” While Amex applied to register BLACK FROM AMERICAN EXPRESS, it never filed a Statement of Use and the application went abandoned.

(The other "Black Card")

In 2008, BC began issuing its own card (in connection with Barclays Bank Delaware and Visa) which was black in color and which had the words “BLACK CARD” emblazoned theron (pictured above). BC’s CEO Scott Blum, who founded Internet retailer Buy.com and who was a Centurion cardholder since Amex first introduced the card, began developing his black-colored premium credit card back in 2005 when he was CEO of Internet company called Yub, Inc. Blum, apparently frustrated with Amex’s Centurion services, sought to build a “better Black Card.” Yub applied for the BLACKCARD on September 20, 2005. The mark was published for opposition in May 2006 and, when no oppositions were filed, the PTO issued a Notice of Allowance in 2006. Yub later assigned all of its rights to the as-yet-unregistered mark to BC. [Query: Was this assignment of an intent-to-use application even valid under 15 U.S.C. § 1060? – see actual recorded assignment]

BC (and its predecessor) filed thirteen applications total between 2005 and 2009 for various BLACK CARD marks. Some were refused on the grounds that the mark was merely descriptive; in others, Examining Attorneys requested information from BC about whether consumers would associate the mark with a different provider of credit card services. Nonetheless, the PTO did issue the aforementioned trademark registration on April 29, 2009. However, for reasons not entirely clear, even though BC’s attorney had filed a preliminary amendment which inserted a disclaimer of the term BLACK apart from the mark as shown, the registration certificate did not reflect the disclaimer when it issued.

On May 13, 2009, Amex filed a petition to cancel with the Trademark Trial and Appeal Board. See American Express Marketing & Development Corp. et al v. Black Card, LLC, Cancellation No. 92050968 (TTAB). On February 16, 2010, BC filed an action in Wyoming that sought a declaratory judgment regarding Amex’s rights to “Black Card” as well as other trademark and unfair competition claims. On February 26, 2010, Amex filed the instant action in New York District Court alleging its own trademark and unfair competition claims as well as seeking to cancel BC’s registration under §2(e) of the Lanham Act. The TTAB’s proceeding was suspended on May 7, 2010, pending the outcome of the lawsuits. Moreover, Amex was able to get BC’s Wyoming complaint dismissed as an anticipatory filing. BC later refiled its counterclaims in the New York action. The parties later stipulated to have Amex's claims for monetary damages and BC's federal and state trademark infringement and unfair competition claims dismissed with prejudice. Upon close of discovery, the parties filed cross motions for summary judgment, with Amex moving for partial summary judgment on its §2(e) cancellation claim.

The court’s decision goes into a lengthy (but informative) discussion of its power to determine the right to registration of a mark, the standard for refusing registration of marks which are “merely descriptive” when used on or in connection with the goods/services of the applicant, the spectrum of distinctiveness with respect to protection of a mark (i.e., generic, descriptive, suggestive, arbitrary, and fanciful), and the rebuttable presumption which arises a mark that is registered by the PTO.

Regarding the rebuttable presumption, the court stated:

When the PTO issues a certificate of registration for a mark, a rebuttable presumption arises that the mark is protectable. Papercutter, 900 F.2d at 562-63. "Registration by the PTO without proof of secondary meaning creates the presumption that the mark is more than merely descriptive, and, thus, that the mark is inherently distinctive." Lane Capital, 192 F.3d at 345. The fact of registration, however, "shall not preclude another person from proving any legal or equitable defense or defect . . . which might have been asserted if such mark had not been registered." 15 U.S.C. § 1115(a). The party challenging the registration "bears the burden to rebut the presumption of [the] mark's protectability by a preponderance of the evidence." Lane Capital, 192 F.3d at 345. "The presumption may be rebutted by a showing that the mark is descriptive, not suggestive." Papercutter, 900 F.2d at 563.

The presumption, in short, is a "procedural advantage" to the registrant and nothing else. Lane Capital, 192 F.3d at 345. It is not "itself evidence of how the public actually views the mark." Id. "The presumption of validity that federal registration confers evaporates as soon as evidence of invalidity is presented. Its only function is to incite such evidence, and when the function has been performed the presumption drops out of the case." Id. (citation omitted).

So while the court gave BC’s BLACKCARD registration its appropriate rebuttable presumption of protectability by virtue of its 2009 PTO registration, the court found that Amex had demonstrated by a preponderance of the evidence that the mark is descriptive was descriptive, and thus not protectable absent secondary meaning. The court also found that “No reasonable factfinder could find that a prospective consumer would consider the mark to be suggestive rather than descriptive.” The court first noted that BC’s mark BLACKCARD appears on a black-colored credit card. “As with other credit cards, it enables its holders to make purchases on credit. The black color of the card is an essential feature or characteristic of the card. BC's advertising emphasizes the color, underscoring this point.” The court further noted that the word BLACK is descriptive in a second sense within the credit card industry:

Within the credit card industry, the word "black" is descriptive in a second sense as well. Largely through the efforts of Amex, the word "black", when used in connection with credit cards is understood to describe access to premium credit card services. Indeed, this was the very reason that Blum chose the mark "BLACKCARD" for his credit card. The term "BLACKCARD" immediately calls to mind an important aspect or characteristic of the product and describes the product's principal features and qualities. It is, in essence, communicating the grade of credit card offered by BC. The black-colored credit card marketed by BC is central enough to the overall product, however defined, to render "BLACKCARD" a descriptive mark.

Finally, following its determination that BC’s mark was descriptive, the court further found that BC had offerred no evidence of secondary meaning accruing to the mark BLACKCARD in order to support an argument of acquired distinctiveness.

BC attempted to argue that Amex lacked standing to seek to cancel BC’s mark, but the court rejected such arguments finding that Amex had “a significant, concrete, and real interest in proceedings to challenge the registration” based on its own use of the term “black card” in communications to prospective customers about the Centurion card (and noting that BC sued Amex for infringement).

BC also attempted to argue that its mark is not descriptive, but instead is suggestive of high-end financial services (citing cases where the color RED was held to be a protectable mark in connection with perfume and scotch whiskey). However, with respect to the Red Label mark on scotch whiskey, the mark did not serve as a grade designation; and with respect to RED on perfume, such reference suggested romance and passion to the prospective purchasers. In the instance case, the court found that BLACKCARD “merely describes the color of the card and the category of credit card services into which BC's card falls.”

As such, the court granted ary judgment for Amex on its cancellation claim under § 2(e) of the Lanham Act.

Recent Developments in Various Pending Trademark Cases

Back in the good ole days of 2009-2010 when I actually had time to blog, I posted about three particular lawsuits filed in the District of Nevada – each of which had significant developments this week (all reported on by VegasInc’s Steve Green).

Arrow Productions Ltd. v. V.C.X., Ltd. et al, Case No. 09-cv-00737 (D. Nev.) (previous blog post here)

The copyright and trademark dispute over “Deep Throat.” As reported by VegasInc., the parties reached a settlement whereby VCX agreed to stop selling “Deep Throat” (the copyright to which Arrow claimed) and Arrow agreed to stop selling “Debbie Does Dallas” (the copyright to which VCX claimed). As part of the court’s order and judgment (copy here), there are stipulated facts regarding the chain of title for the copyright to the film “Deep Throat” (including addressing the issue of how copies of the film were distributed without a copyright notice, and yet how that did not put the film in the public domain because the copyright owner technically leased the theaters when the film was shown (so-called “four walling”) and retained control over the prints – with any other copies being unauthorized prints).

Mine O'Mine, Inc. v. Michael Calmese, True Fan Logo, Inc. and Dan Mortense, Case No. 10-cv-00043 (D. Nev.) (previous blog post here)

The trademark lawsuit filed by Shaquille O’Neal over Defendants’ use of the mark SHAQTUS. As reported by VegasInc., the court issued a detailed summary judgment ruling earlier this year (copy here) that found the Defendants only started using the mark SHAQTUS after sportswriters gave O’Neal that name when he began playing for the Phoenix Suns and that there was a likelihood of consumer confusion arising between shirts sold by O’Neal’s company and SHAQTUS shirts sold by Defendants. This week, the court entered judgment against the Defendants (copy here) which terminated the litigation because of O’Neal’s willingness to drop the cybersquatting and dilution claims that remained following the court’s summary judgment order.

Caesars World, Inc. v. July et al, Case No. 11-cv-00536 (D. Nev.) (previous blog post here)

The cybersquatting action filed by Caesars Palace against Marcel July and his use of the mark OCTAVIUS TOWER. As reported by VegasInc., the court denied July’s motion for preliminary injunction (copy here) finding that July failed to meet the necessary burden to merit injunctive relief. July’s only argument was his PTO registration for the name OCTAVIUS TOWER for entertainment services (along with some state registrations). The court noted that while the registration served as prima facie evidence of July’s exclusive rights to use the mark for entertainment services, such evidence can be rebutted – and in this case, the court found that Caesars had made “strong arguments” against July’s use of the mark that “extinguishes” July’s prima facie case. July did not respond to Caesar’s arguments. Moreover, July also failed to demonstrate irreparable harm, balance of hardships favoring him, or that that injunction would be in the public interest.

GoPets v. Hise, Does Transferring a Domain Name Create a New "Registration" under the ACPA?

[Post by Mark Borghese]

The Anticybersquatting Consumer Protection Act ("ACPA") provides that a person is liable to a trademark owner when the person (1) registers a domain name, (2) in bad faith, (3) that at the time of registration was “identical or confusingly similar to” a distinctive trademark. See 15 U.S.C. § 1125(d)(1).

When analyzing claims under the ACPA, timing is critical. Often an entity will acquire trademark rights long after a domain name is first registered. When a domain name is registered and continuously maintained by a single individual or entity, what is meant by the "time of registration" of the domain name is clear. It is the date the domain name was first registered.

The question courts have grappled with is whether transfers of a domain name from one registrar to another constitutes a "new registration" or whether transfers from one entity to another constitutes a "new registration." If these transfer are "new registrations" then the registration date of the domain name may be reset to a point after the trademark owner acquired rights in a trademark. In those instances, the trademark owner has an opportunity to use the ACPA to acquire domains which were originally registered before it had any trademark rights.

The underlying legal question really boils down to this: is the ownership of a domain name a property right or a contractual right? If a domain name is a property right then rights acquired when a domain name is first registered are freely transferable to a subsequent owner. If a domain name is merely a contractual right, then the rights may change every time a new agreement is signed with a registrar and every time a new owner signs an agreement with a registrar.

On September 22, 2011 the United States Court of Appeals for the Ninth Circuit issued a ruling in GoPets v. Hise, __ F.3d __, (9th Cir. 2011) that ownership of a domain name is a property right. Specifically, the Ninth Circuit held that that the term "registration" under the ACPA applies to the very first time a domain name is registered. Rights which existed at the time a domain name was registered (e.g. that the registration was not in "bad faith" and was not "identical or confusingly similar" to an existing trademark) are not lost simply because the domain name was transferred to a new entity.

In GoPets, the defendant Edward Hise registered the domain name gopets.com in 1999. Hise had a few ides for a site he might develop with the domain name, but never did much with it. In 2004 a Korean company, GoPets Ltd. developed a virtual pet game called GoPets which involved creating and customizing a virtual pet that would live on your computer's desktop.

In October 2004, GoPets Ltd. first approached Hise about buying the GoPets Ltd. domain name. GoPets Ltd. offered a paltry $750 to Hise. This offer was first ignored by Hise and later rejected. Seven months later in May 2005 GoPets Ltd. tried again. Instead of raising its offer, however, it threatened Hise with an ICANN domain dispute claim and lowered its offer to $100.

GoPets Ltd. attempt at intimidating and insulting Hise was fruitless and a dispute before the Internet Corporation for Assigned Names and Numbers ("ICANN") was commenced a year later in May 2006. In July 2006 a WIPO arbitrator decided in favor of Hise. The ruling was simple-- Hise had registered the domain name in 1999 well before the GoPets game was developed in 2004. Hise clearly did not have a bad faith intent to register the domain name at the time he registered it.

A few months after the WIPO decision, GoPets Ltd. increased its offer to $5,000 and then to $40,000. Instead of negotiating, Hise got greedy. In response, Hise sent a four page letter to GoPets Ltd. demanding a ridiculous $5 Million for the domain. Two days after sending this letter, Hise transferred gopets.com from himself to his brother's corporation Digital Overture. This transfer was a critical error by Hise as under prior court rulings this type of transfer was a "new registration" of the domain name which re-set the date of registration from 1999 to 2006.

GoPets Ltd. immediately pounced on this mistake and filed an action in federal court in the Central District of California. The district court granted summary judgment in favor of GoPets Ltd. finding that Digital Overture's "registration" of the gopets.com domain name in 2006 was done after GoPets Ltd. had acquired its trademark rights and was therefore in "bad faith." Hise appealed to the Ninth Circuit.

The Ninth Circuit reversed the District Court's ruling and held that "registration" under the ACPA refers to the first registration of a domain name. The court found that ownership of a domain name is a property right and rights acquired in a domain name when it is first registered are not lost when that domain name is transferred to a new entity. The court held,

Looking at ACPA in light of traditional property law, however, we conclude that Congress meant “registration” to refer only to the initial registration. It is undisputed that Edward Hise could have retained all of his rights to gopets.com indefinitely if he had maintained the registration of the domain name in his own name. We see no basis in ACPA to conclude that a right that belongs to an initial registrant of a currently registered domain name is lost when that name is transferred to another owner. The general rule is that a property owner may sell all of the rights he holds in property. GoPets Ltd.’s proposed rule would make rights to many domain names effectively inalienable, whether the alienation is by gift, inheritance, sale, or other form of transfer. Nothing in the text or structure of the statute indicates that Congress intended that rights in domain names should be inalienable.

In making this ruling, The Ninth Circuit specifically disagreed with the Third Circuit's decision in Schmidheiny v. Weber, 319 F.3d 581 (3d Cir. 2003). The Ninth Circuit held that the ACPA applies to domain names registered both before and after the ACPA became law in November 1999 which would allay the concerns the Third Circuit expressed in that case. The Ninth Circuit held,

The Third Circuit assumed that Weber’s initial registration of schmidheiny.com was not covered by § 8131(1)(A) because it had been made before the passage of ACPA. See id. at 581-82. Based on that assumption, the Third Circuit was concerned that holding that re-registration was not “registration” within the meaning of ACPA would “permit the domain names of living persons to be sold and purchased without the living persons’ consent, ad infinitum, so long as the name was first registered before the effective date of the Act.” Id. However, we believe that the Third Circuit erred in assuming that Weber’s initial registration was not covered by ACPA. We agree with the holding of the Second Circuit in Sporty’s Farm that § 1125(d)(1)—and, by extension, § 8131(1)(A)—apply to registrations made before the passage of ACPA. See Sporty’s Farm, 202 F.3d at 496-97. If Weber’s initial registration violated § 8131(1)(A), as we would hold it did, the Third Circuit’s concern evaporates.

So will other circuits adopt the Ninth Circuit's reasoning and find that domain names are property rights? The law does seem to be moving in that direction, but there are always exceptions and exceptional cases which may warrant a different view.

EPILOGUE

So Hise won. Or did he? Perhaps the bigger lesson in this case is how the value of the gopets.com domain name plummeted during the appeal. While today, in 2011 Hise retains his ownership interest in gopets.com, the brand "GoPets" was abandoned in late 2009 when Zynga purchased GoPets Ltd.'s assets. Zynga immediately shut down "GoPets" and launched a revamped service, PetVille.


The value of gopets.com is now far less than it was before the GoPets brand was abandoned by Zynga. In retrospect, both parties should have negotiated in good faith. Back in October 2006 Hise should have negotiated with GoPets Ltd. in good faith when it offered $40,000 for the domain name instead making a ridiculous counter-demand for $5 Million. Likewise GoPets Ltd.'s initial offer of $750 and its subsequent offer of $100 were equally ridiculous, if not more so.

The lesson here is two-fold. Failing to negotiate in good faith can lead to unnecessary lawsuits and lawsuits often last longer than internet companies or their brands.

--
About the author
Mark Borghese is a Las Vegas trademark attorney with the law firm of Borghese Legal, Ltd.

Battle of the "Bays": Tradebay vs. eBay

[Post by Mark Borghese]

Does an intent-to-use trademark applicant, faced with a trademark office opposition proceeding, have the right to seek declaratory relief in federal court? Or, does the fact that the applicant has not yet used the mark in commerce prevent a federal court from exercising jurisdiction?

Those are the legal question a federal court in the District of Nevada will have to answer in Tradebay v. eBay, Case No. Case 2:11-cv-00702-ECR -PAL.

This dispute began almost two years ago when, on January 6, 2009, Tradebay filed a trademark application with the United States Patent and Trademark Office for the mark TRADEBAY for various services including "computerized online ordering" and "operating online marketplaces for seller and buyers of goods and/or services."

When Tradebay's trademark was approved by the trademark office and published for opposition, eBay immediately opposed the mark claiming that consumers would confuse Tradebay and eBay. In support of this opposition, eBay cites Perfumebay.com Inc. v. eBay Inc., 506 F3d 1165 (9th Cir., Nove. 5, 2007) where the Ninth Circuit Court of Appeals stated that the term "BAY" was the dominant portion of the eBay mark. From this ruling, eBay argues that any "generic" + BAY mark in the internet marketplace space is likely to cause confusion and dilute eBay's distinctive mark.

After the opposition was filed, on May 3, 2011, Tradebay filed a declaratory relief action in the United States District Court, District of Nevada. Tradebay wanted a federal court to make the determination as to whether its mark, Tradebay, was likely to be confused with the famous eBay mark. The Trademark Trial and Appeal Board proceeding was thereafter stayed in light of the District Court lawsuit.

On June 28, 2011, eBay filed a motion to dismiss Tradebay's District Court lawsuit alleging that no case or controversy existed for the court to decide. The motion argues that dismissal pursuant to Fed. R. Civ. P. 12(b)(6) is the appropriate remedy as no trademark infringement can exist when Tradebay has not yet used the Tradebay mark in commerce.

Courts enforcing Rule 12(b)(6) curtail this risk by weeding out complaints that fail to give rise to a plausible inference of harm to the plaintiff. Neither eBay nor the Court should be required to expend the resources necessary to litigate the merits of claims of trademark infringement and dilution and unfair competition based on nothing more than vague and conclusory allegations that fail to evince the specific and concrete steps to use the mark that might give rise to a controversy of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Dismissal is the appropriate remedy here.

Tradebay filed an opposition to the motion on August 2, 2011, arguing that the "case or controversy" standard has been met and pointing out that as early as January 30, 2009 Tradebay received a cease and desist letter from eBay accusing it of infringing and diluting eBay's trademark rights.

Tradebay’s complaint presents an "actual controversy" within the meaning of the caselaw. Specifically, almost immediately after Tradebay filed its trademark application, eBay sent a cease and desist letter. If Tradebay refused eBay's demands, eBay threatened to "take whatever actions eBay deems necessary to protect its rights." Exhibit 2-A. eBay reaffirmed the identical threat a few days later. Exhibit 2-B. Once Tradebay’s application was accepted for publication, eBay opposed it in the USPTO. Exhibit 3-A.

In its reply brief filed August 25, 2011, eBay argues again that no case or controversy exists as Tradebay has not taken any concrete steps to actually use its Tradebay mark, such as developing a product line, conducting market research, or creating packaging and advertising.

Tradebay makes no attempt to show that it has alleged, let alone actually undertaken, any concrete steps to actually use the TRADEBAY mark in connection with any goods or services. At best, Tradebay has alleged nothing more than a vague and indefinite desire to use the TRADEBAY mark at some future date. That does not come close to showing a real and immediate controversy. Tradebay's utter failure to allege the requisite concrete steps can only lead to the conclusion that it has not engaged in any such activity. Under these circumstances, it would be a waste of the Court's (and eBay's) time and resources to render what would amount to an impermissible advisory opinion as to whether activities Tradebay may or may not undertake in the future would infringe or dilute eBay's trademarks.

Under the facts in this case, eBay argues that Tradebay is simply requesting that the court issue an improper advisory opinion rather than settle an actual trademark infringement dispute involving two competing marks being used in commerce.

The briefing on this issue is now closed and an order from the court is expected within the next ninety days. This ruling will be an interesting one to watch.

About the author
Mark Borghese is a Las Vegas internet attorney with the law firm of Borghese Legal, Ltd.

Another Epic Trademark Battle Prematurely Ends With Amicable, Reasonable Settlement

Tropicana Las Vegas

In one of my longer blog posts last year (link here), I detailed the convoluted and complicated history of the TROPICANA Hotel/Casino trademark – a fascinating look at how trademark rights are handled in the course of multiple large scale corporate transactions (including bankruptcy proceedings) and how certain things can (and indeed do) fall through the cracks.

What started out as a simple declaratory judgment action in Nevada state court by the new owners of the Tropicana Hotel & Casino in Las Vegas regarding their long-time right to use the name Tropicana in connection with that specific hotel/casino located at the intersection of Las Vegas Blvd. and Tropicana Avenue blew up into an epic lawsuit filed in Delaware Bankruptcy Court by a group of companies lead by Carl Icahn's Tropicana Entertainment Inc. The matters had been fully briefed by both sides and were awaiting a court hearing.

But alas, now we’ll never know how exactly the bankruptcy court would’ve unraveled the convoluted trademark issues raised by Tropicana Entertainment’s adversary proceeding (we know how the Clark County District Court decided those issues, but that is in part what led to Tropicana Entertainment to file the adversary proceeding it did in bankruptcy court).

As reported by VegasInc’s Steve Green (link here), the parties announced in mid-August that they had reached a Settlement that resolves the outstanding trademark disputes and which provides for an agreement regarding concurrent use by both parties of the mark TROPICANA. A copy of the Settlement Agreement, with all of its provisions regarding concurrent use of the Tropicana name by the respective parties, can be viewed here.

In short, Tropicana Las Vegas can continue to use the mark TROPICANA LAS VEGAS (or TROP LAS VEGAS) or TROPICANA LV (or TROP LV) in the city of Las Vegas, Nevada and within a 50 mile radius from the present location of the Tropicana Las Vegas Hotel and Casino. Tropicana Las Vegas can promote itself worldwide so long as it always mentions the property location. Tropicana Las Vegas does not get any other rights to use the mark TROPICANA, TROP, or any variation thereof apart from its rights to use the mark in reference to its Las Vegas property (although a small exception is made for on-property signage and certain marketing campaigns such as “Trop ‘Til You Drop” and “Trop Party Pass” so long as there is also a reference to the Las Vegas location). The agreement expressly consents to Tropicana Las Vegas’s use of the following logo

and clarifies that in any other logos used by Tropicana Las Vegas, the Las Vegas (or LV) portion of the mark shall not be smaller or less prominent in proportion to TROPICANA or TROP than as reflected in the above logo.

As for what Tropicana Entertainment gets out the deal, it gets the exclusive rights to use TROPICANA and TROP, but provided that it also is accompanied by some other mark indicating either a geographic location (other than Las Vegas obviously) or some other mark to identify services currently offered by Tropicana Entertainment (e.g., Tropicana Advantage).

The Agreement also deals with how the parties will handle present and future trademark registrations for marks using TROPICANA, use of their respective marks on the Internet, and issues relating to enforcement of rights in their respective territories.

By entering into this Settlement Agreement (with concurrent use provision regarding the trademark rights), the parties certainly ended up doing the smart thing in reaching an amicable settlement – bringing to a halt a dispute that had likely cost the parties millions of dollars in attorney fees and costs (fees that would have continued to be incurred given the high stakes) and doing so in a way that brings certainty to the rights of the parties moving forward. And it was probably the fair outcome given the long-time association that the world does have with the name Tropicana in connection with that particular hotel in Las Vegas while at the same time recognizing Tropicana Entertainment's investment in the name outside of Las Vegas.

Of course, at the same time, it would’ve been interesting to see which way the bankruptcy court would have sided in this dispute (and the legal rationale for such decision).