Wednesday, November 14, 2007

A Cookie Controversy Sure to Make You Smile

In a day when the hot story in the trademark universe was the first day of the trial of the Tiffany-eBay spat over counterfeit Tiffany merchandise sold on eBay (see stories by AP and Wall Street Journal), here is a trademark infringement lawsuit story about which one can actually smile.

On November 12, 2007, Eat ‘N Park Hospitality Group, Inc. and EPR Investments, Inc. (“Eat 'n Park”) filed a lawsuit in the U.S. District Court for the Western District of Pennsylvania against The Clever Cookie Corp. (“Clever Cookie”) for trademark infringement and trademark dilution. See Eat ‘N Park Hospitality Group, Inc. v The Clever Cookie Corp., Case No. 2:2007cv01534 (W.D. Penn.).

The Smiley® Cookie

Eat ‘N Park, a franchise restaurant chain with nearly 100 locations in Pennsylvania, Ohio, and West Virginia, holds a registered trademark for a smiley face design for cookies (see above). Eat ‘N Park filed for the design mark on August 18, 1992, but claimed first use in commerce going back to November 1985. Eat ‘N Park had to argue acquired distinctiveness under §2(f) in order to overcome the PTO’s rejection that the mark was merely ornamental on such goods (cookies) and not an indicator of source. In addition to arguing that the smiley cookie had been used as a mark continuously for the five years preceding the application, Eat ‘N Park submitted evidence showing its advertising expenditures for the smiley cookie in connection with the Eat ‘N Park restaurant chain. The mark was registered on the Principal Register under §2(f) on December 7, 1993. Eat ‘N Park filed a §15 Declaration of Incontestability on April 19, 1999.

Clever Cookie is a Plainview, New York cookie company specializing in selling certified kosher cookies for unique events, holidays, birthdays and other special occasions (e.g. logo cookies, press release cookies, etc.) online and through catalog sales.

Eat ‘N Park claims in its lawsuit that Clever Cookie is selling a cookie that is “confusingly similar” to Eat 'n Park’s smiley face cookie. Click here to see the likely “infringing article” (pictured below) -- Clever Cookie’s “Smiley Face Planter” with “five delicious, smiley face cookies."

Eat ‘N Park’s case does seem compelling at first. The only difference between Clever Cookie’s smiley cookies and Eat ‘N Park’s smiley cookies is the additional dot of frosting in the middle of the cookie to make the smiley’s nose (not a significant difference).

However, if you look at Clever Cookie’s smiley cookie, it actually seems more to resemble the famed “Have a happy day" Smiley (pictured below) than Eat ‘N Park’s smiley. In addition, bakeries across the United States bake and sell similar “smiley face” cookies – is Eat ‘N Park’s going to start sending cease and desist letters to them all? Perhaps the fact that Clever Cookie is selling these online and through catalogs may have something to do with Eat ‘N Park’s enforcement efforts.

Have a Happy Day!

Still you have to wonder whether most consumers who see Clever Cookie’s smiley cookies will be confused into thinking that they are Eat ‘N Park’s smiley cookies – or will they simply bring to mind the “Have a happy day" Smiley.

Analyzing the likelihood of confusion factors, most of the factors tend to favor Eat ‘N Park – related goods, similar marketing channels, similar marks, consumers not likely to exercise a high degree of care with respect to cookies. It was probably not Clever Cookie’s intent to pass off its cookies as Eat ‘N Park’s smiley cookies, but rather to sell cookies invoking the Have a happy day" Smiley. So it all comes down to the strength of Eat ‘N Park’s smiley mark, which I think is drawn in to question given the fame of the other smiley logo.

While the uncertainty surrounding likelihood of confusion may be why Eat ‘N Park is also pursuing trademark dilution as well, such claim has its own uncertainties. Under the current Trademark Dilution Revision Act (“TDRA”), Eat ‘N Park’s mark would not be deemed “famous” because it is not “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” Although the district court is in the Third Circuit, the court is likely to follow the Second Circuit's lead, which applied the TDRA to a claim for injunctive relief by Eat ‘N Park. See Starbucks Corp. v. Wolfe's Borough Coffee, Inc., 477 F.3d 765 (2nd Cir. 2007). However, to the extent that Eat ‘N Park seeks damages for cookies first sold by Clever Cookie before October 6, 2006 (the effective date of the TDRA), the court is likely to apply the standards of the Federal Trademark Dilution Act (FTDA), which requires Eat ‘N Park to prove actual dilution, but also may allow Eat ‘N Park to get away with showing that its smiley mark is famous within its “niche market” (which it probably is pretty certain given Eat ‘N Park’s regional notoriety in the Ohio, Pennsylvania, and West Virginia area). So Eat ‘N Park finds itself in an unusual situation. The Company will not likely be able to get an injunction on dilution grounds under the TDRA, but may be able to get damages under the FTDA (if actual dilution is shown).

I must add that all this talk about the “smiley face” logo reminded me of Franklin Loufrani, owner of SmileyWorld (based in London), and owner of the rights to the yellow-smiley logo in over 80 countries. But not in the United States, where he has been embroiled in controversy over the logo since June 3, 1997, when he filed two Section 1(b) applications for “Smiley” (here and here) for a wide range of good and services, although interestingly enough, not cookies.

One of his applications is currently part of an opposition ongoing since 2003. See America Online, Inc. v. Loufrani, Opposition No. 91156646. In addition, Loufrani himself has filed several oppositions against other applicants seeking to register either the word SMILEY or a logo similar to smiley (see list of pending TTAB cases here). Most notably is Loufrani’s opposition to an application by Wal-Mart’s to register its smiley face logo for retail department services, which was widely publicizing in many newspapers and blogs (see articles in NYTimes and Forbes). See Loufrani v. Wal-Mart Stores, Inc., Opposition No. 91152145 (Filed July 23, 2002). Both oppositions are ongoing and any TTAB decision will certainly be appealed to the Federal Circuit.

What's left to say ? Have a Happy Day !!

[Note: This post was subsequently edited to clarify comments in the trademark dilution paragraph.]


Anonymous said...


Anonymous said...

hi again

Anonymous said...

This is a great example of corporate American greed. Eat'n Park is an aggressive company that has no right to do what they're doing. The smiley face is an image that must be licensed. I don't know if they have a license for it, but I'll let the trademark holder of that image know for sure. I'm sick of this litigious society we live in.

Anonymous said...

You have know idea what you are talking about. This is a trademark that is protected by law. The way the trademark law works is you defend it legally, or you lose it. For a company that has crafted, and invested in a brand for over 30 years it would make no sense to walk away from it, or lose their trademark.