Wednesday, January 30, 2008

The TTAB’s insane decision to uphold Vanity Fair’s opposition against Vanity Insanity

John Welch’s write-up on The TTABlog reminds us that when it comes to dealing with the TTAB, “We're not dealing with the real world here.”

He summarizes the "insanity" behind the decision by the Trademark Trial and Appeal Board ("TTAB") to sustain oppositions filed by Vanity Fair magazine against pro se applicant Kelly C. Hainline seeking to register the marks VANITY & SANITY, VANITY INSANITY, and VANITY N SANITY (for various clothing items) on the basis of Section 2(d). See Vanity Fair, Inc. v. Hainline, Oppositions Nos. 91163354, 91166973, and 91166975 (TTAB January 15, 2008).

I think the decision highlights the importance of hiring experienced trademark counsel who might have been able to fashion a more persuasive argument that there is no likelihood of confusion between Vanity Fair (as used on some clothing items) and her proposed marks. The Board seemed so blinded by the fame of the Vanity Fair mark that all reason went out the window – or at least the part where the marks are not to be dissected, but rather are to be considered as whole in a likelihood of confusion analysis or the part about commercial impressions of the marks, especially given the common definition of the word “Vanity” as it relates to the world of fashion.

It’s a shame too because Ms. Hainline had a difficult prosecution even before reaching the TTAB – apparently even filing petition to revive in two of her applications after she failed to respond to office action that she never recieved. Not that it carries any weight, but the trademark examining attorney did not find her marks to be similar to any registered or pending mark which would bar registration under Section 2(d).

If there was any registrant that might wish to oppose registration of this mark, it would be Vanity Shop of Grand Forks, Inc., which holds registrations for the mark VANITY (word mark and stylized) for women’s and juniors clothing. I can see a much better case for likelihood of confusion with this mark then VANITY FAIR.

I think John has his first contender for his famed "Ten Worst TTAB Decisions of 2008".

Tuesday, January 29, 2008

Trivia game maker sues Sony over Buzz! video game

The internet was buzzing (pun intended) today about the news of a trademark infringement lawsuit filed by a Carlsbad, California-based electronic trivia game company against Sony, the maker of a series of trivia video games for the Sony PlayStation 2 under the name “Buzz!” Nearly all of the news reports of the lawsuit cite back to an article from (link here).

On January 23, 2008, Buzztime Entertainment Inc. and NTN Buzztime Inc. (together “Buzztime”) filed a lawsuit in the U.S. District Court for the Southern District of California against Sony Computer Entertainment Europe Limited (“Sony”). See Buzztime Entertainment Inc et al v. Sony Computer Entertainment Europe Limited, Case No. 08-cv-00122 (S.D. Cal.).

Buzztime, founded in 1985, produces a line of electronic trivia game machines found in many restaurants and bars (although probably not in Vegas, where the video poker machine reigns supreme). Buzztime claims that approx. 13 million players play at its machines each month. Buzztime also provides quiz game services over mobile phones, digital cable and satellite systems and also offers a home version that hooks-up to a television.

Buzztime alleges that Sony’s “Buzz!” line of video games as well as the tagline “It's time to get buzzing” infringe on Buzztime’s trademarks. Buzztime argues that Sony’s sale of a similar product to similar consumers through similar marketing channels is likely to cause consumer confusion or to deceive consumers as the source, origin, sponsorship, or approval of Sony’s goods and services by Buzztime. In addition to seeking injunctive relief (including having all infringing products recalled and destroyed), actual damages, punitive damages (for Sony’s alleged “malicious, fraudulent, knowing, willful and deliberate” trademark infringement), and legal fees, Buzztime also seeks an order from the court ordering the USPTO to deny registration to Sony’s pending trademarks.

While Buzztime has not registered the mark BUZZ for its goods and services, it does hold registrations for BUZZTIME (for card games and video game machines), BUZZHEAD (for an on-line computer game), SHARE THE BUZZ (for interactive game with electronic rewards and points program played over radio, television, cable, telephone, and a global computer network), and BUZZKIDS (for providing interactive games via a global computer network).

Meanwhile, Sony currently has three trademark applications pending for the mark BUZZ – none of which were opposed by Buzztime when they were published for opposition.

Sony filed its first Section 1(b) intent-to-use application for the mark BUZZ on December 1, 2004 for three classes of goods and services (computer video games, handheld electronic games, providing online computer games). The mark was published for opposition on March 3, 2006, and, with no opposition filed, the notice of allowance was issued on September 5, 2006. A second request for an extension of time to file a statement of use was granted back on August 15, 2007.

Sony filed a second Section 1(b) intent-to-use application for the mark BUZZ on May 9, 2005 for a single class of goods (instructional manuals, video game strategy guides, and trivia books). The mark was published for opposition on September 12, 2006, and, with no opposition filed, the notice of allowance was issued on December 5, 2006. A second request for an extension of time to file a statement of use was granted back on November 26, 2007. However, on December 26, 2007, Sony filed a petition to the Director of the U.S. Patent & Trademark Office (“USPTO”) seeking to amend the application after the notice of allowance to change the basis of the application from Section 1(b) to Section 44(e) on the basis of Sony’s European Union trademark registration (European Community Trade Marks Certificate of Registration No. 004266706, registered February 2, 2006) and seeking republication on this basis. The petition was granted on January 8, 2008, and the application was sent back to the examining attorney for consideration of the amendment.

Sony filed a third Section 1(b) intent-to-use application for the mark BUZZ! (and design) (see picture above) on May 26, 2006 for three classes of goods and services (computer video games, hardware, and peripherals; instructional manuals, video game strategy guides, and trivia books; and handheld units for playing electronic games). The mark was published for opposition on July 17, 2007, and, with no opposition filed, the notice of allowance was issued on October 9, 2007. The application is awaiting Sony’s statement of use.

Monday, January 28, 2008

Vegas Condo-Hotel Management Company Sues Donald Trump for $1 Billion

On January 26, 2008, Nights at Vegas, Inc. (“NAV”), a Vegas-based real estate property management company, filed a lawsuit against Donald Trump, Trump Ruffin LLC, and Trump Ruffin Tower I LLC (together “Trump”) seeking declaratory relief of non-infringement of trademarks as well as $1 billion in damages for alleged anti-trust violations, false promotion, and unfair competition. See Nights at Vegas, Inc. v. Trump Ruffin LLC et al, Case No. 08-cv-00122 (D. Nev.). A copy of the complaint can be downloaded here (courtesy of me).

NAV is in the business of helping owners of Las Vegas’ many high-rise condo hotels rent their units, including owners of condo-hotel units at the Trump International Hotel & Tower (the “Trump Tower”).

The Trump International Hotel & Tower
in Las Vegas

Billionaire Donald Trump needs no introduction, except to say that he is the owner of numerous trademark registrations and applications containing his famous moniker, including TRUMP INTERNATIONAL HOTEL & TOWER (for, among other goods and services, real estate services, namely, listing, leasing, and managing commercial and residential property) as well as a pending application for TRUMP (for real estate services, namely, listing, leasing, financing, and managing commercial, residential, and hotel properties). Trump Ruffin LLC is the joint venture owned by Trump and Phil G. Ruffin – the owner of the land where the Trump Tower now stands. Trump Ruffin Tower I LLC is the official owner of Tower 1 of the Trump International Hotel & Tower in Las Vegas (with Tower 2 now accepting reservations for any interested readers).

The "Donald"

Declaratory Relief
NAV’s first cause of action is for a declaratory judgment of non-infringement. NAV claims that it has received letters from Trump demanding that NAV cease and desist using the trademarks “Trump,” “Trump International,” and “Trump International Hotel and & Tower” in advertising its services or else face a lawsuit. NAV claims that such use is fair use and not likely to cause confusion because the marks serve to describe the public identity and location of the residential units. NAV’s website even has the following disclaimer: “Nights at Vegas, Inc. is an independent property management company which acts directly with and on behalf of the owners of units in condominium hotels, so that it may act independently to bring you better service and rates. None of its partners, agents, employees, or the company itself, are directly affiliated with any one hotel, casino, or condominium hotel.” Under this threat of lawsuit, NAV seeks a declaration that its use of the aforementioned Trump Marks is not trademark infringement.

It should be noted, however, that in arguing that Trump demanded that NAV cease and desist use of the Trump trademarks, NAV attaches a letter from Trump’s attorneys, Snell & Wilmer (with offices, I might add, in the nice, shiny new building in the Howard Hughes complex). However, the demands made by Trump’s attorneys were a) to correct misleading information about NAV’s 80/20 split (which counsel argued was misleading because it was not made clear that such split occurs after certain expenses are deducted); b) to stop contacting purchasers of Trump Tower through proprietary information that may have been misappropriated; and c) remove references on NAV’s website to references to a business relationship with Expedia, Travelocity, and Orbitz. There was no demand made regarding the use of Trump’s trademarks.

Anti-Trust Violations
NAV’s second cause of action is that Trump is engaging in certain monopolitistic practices to prevent NAV from offering its managerial services to owners of condo units at the Trump Tower. First, Trump has exclusive agreements with online travel sites such as Expedia, Travelocity, and Orbitz, which NAV argues prevents it from being able to list and rent units on such sites. Second, Trump is preventing NAV from using the aforementioned Trump trademarks to market its services. Third, NAV claims that Trump is using its own managerial company to offer services similar to NAV while refusing to agree to protocols and administrative procedures with NAV to allow the check-in/check-out of transient guests and the cleaning of the units that NAV manages. Fourth, NAV alleges that Trump has instituted certain fees against companies like NAV that it does not charge its own management company. Finally, NAV argues that Trump has been providing inaccurate information to unit owners who inquire about NAV’s services, in particular, the staff at the Tower tell inquiring customers that NAV is not allowed to market units of the building and is not allowed to rent such units.

NAV seeks injunctive relief, but also requests damages. According to NAV, but for Trump’s anti-competitive actions, at least 50% of the unit owners in the Trump Tower would engage NAV’s services because of NAV’s far more profitable 80/20 split versus the 50/50 split offered by Trump’s in-house management. NAV believes the amount of lost revenue from the many hundreds of units owners who have no alternative but to use Trump’s in-house management services is approx. $250 million. And because of alleged difficulties in switching property management companies, mandatory notice requirements, and mandatory term lengths, Trump has secured such revenue stream for an average of 4 years, and thus NAV seeks damages in excess of $1 billion. In addition, NAV asks for $3 billion in treble damages as well as court costs and attorney’s fees.

False Promotion
NAV’s third cause of action is for false promotion (i.e. false or misleading description or representation of fact in commercial advertising or promotion under 15 U.S.C. §1125(a)(1)(B)). According to NAV, the covenants, conditions & restrictions (CC&R’s) that buyers of the Trump Tower’s residential units must comply state the following:


NAV maintains that this statement has harmed it because the statement leads unit owners to believe that any other management service outside of Trump will jeopardize the owner’s ability to use the unit – a statement that NAV claims is false.

Unfair Competition
NAV’s final cause of action is for unfair competition, without any further elaboration.

1 billlllllion dollars !

Sunday, January 27, 2008

Lulu dismisses trademark infringement lawsuit against Hulu

As expected, the trademark infringement lawsuit between Lulu and Hulu (previously blogged here and here) has apparently been settled with no monetary compensation changing hands.

Bob Young, the outspoken founder of Lulu, apparently decided last month to dismiss the lawsuit voluntarily after Hulu representatives indicated to the court that it would not compete in the same arena as Lulu (namely, the business of distributing self-published works online). This apparently convinced Young that Hulu would not compete with Lulu's online self-publishing business.

Young was quoted saying on Friday:

"It was a worthwhile process," Young said Friday. During court proceedings, "the Hulu guys stood up and gave assurances to the judge that they were not going to (compete) in some of the things they had listed on their trademark application."

"They are going to concentrate on first-run TV programs," Young said. "They gave us some assurances that they would not be working with self-generated content."

"If they're not going to do that, there's no point in pursuing the suit," Young said. "If at some point they do do that, we'll reinstate the lawsuit with the judge's support."

Young said the lawsuit was an attempt by Lulu to "avoid confusion in the marketplace. Now, he said, "We feel we can all get along."

News articles on the dismissal can be read here and here.

Friday, January 25, 2008

Fashion Maven Diane von Furstenberg Sues Target for Copyright and Trademark Infringement Over “Spotted Frog” Design

The media was abuzz today about the lawsuit filed against Target Corp. (“Target”) by Diane von Furstenberg Studio, L.P. (“DVF”), the limited partnership established by Diane von Furstenberg in 1997 to sell her “signature” line of dresses, over alleged copies of her famed “wrap dresses” being sold at Target stores. The news stories on the lawsuit in Reuters and Associated Press were picked up by numerous news outlets.

DVF has a history of filing similar lawsuits against retailers that sell dresses and other products that copy her “signature” designs. While most of the press about DVF’s lawsuits have focused on the allegations of “copyright infringement” (because most of DVF’s designs are copyrighted), the complaints typically include some trademark infringement allegations – specifically, false designation of origin and unfair competition.

Although I haven’t seen the actual complaint against Target, it is likely to be similar to the lawsuit DVF filed last year against Forever 21, which involved allegations that Forever 21 was selling dresses and blouses with nearly identical print designs (the same scale and colorway) as those copyrighted by DVF in several copyright registrations (“Small Dentelle,” “Flower Lace Band,” “Mimosa,” and “Scattered Stones”). See Diane Von Furstenberg Studio, LP v. Forever 21, Inc. et al, Case No. 07-cv-02413 (S.D.N.Y.). A copy of the first amended complaint in that case can be downloaded here. A good blog posting on this particular case (with pictures) can be found here.

In the instant complaint, DVF is going after Target for dresses which copy the “scale, pattern, and colorways” of DVF’s copyrighted “Spotted Frog” Design that DVF registered with the U.S. Copyright Office on September 13, 2006. See Copyright Registration No. VAu-704-976.

"Spotted Frog"

The design was apparently introduced at Furstenberg's Spring 2007 fashion show during New York Fashion Week in September 2006 – and appears on dresses, luggage, handbags and other items.

While DVF sent a letter to Target last Friday notifying Target about the allegedly infringing dress, and Target subsequently removed the dress from its website, the complaint alleges that the dress is still being sold at Target’s retail stores.

Vegas™Esq. Comments:
Given DVF’s past success with these types of lawsuits, I see no reason to believe this case will be any different. The parties will reach some kind of settlement.

I will leave the copyright issues raised by DVF's lawsuits to others (i.e., DVF’s use of its design copyrights to essentially stop the sale of a dress style that clothing manufacturers are typically free to imitate).

As for the false designation of origin and unfair competition claims, DVF’s complaint in Forever 21 described its “products” as high-quality and superb design that have achieved outstanding reputation among customers, especially fashion conscious women. In addition, the complain bragged how DVF’s products are sold in high-end department stores such as Barney’s, Neiman Marcus, and Saks Fifth Avenue as well as on DVF’s website.

However, given the worldwide renown and high-end reputation garnered by DVF’s products, can the company really argue that consumers are likely to be confused with respect to the origin of similar looking dresses sold at Target? Without sounding too condescending to Target customers (after all, I’m a Target shopper myself), most Target customers seeing a dress on the racks with a pattern resembling the above “frog” pattern on it (or anything similar) are not likely to remotely associate it with DVF (much less be confused as to its source or origin). And those fashion conscious shoppers who know enough about fashion to recognize a DVF design when they see one are also savvy enough to know that a genuine DVF dress would never be sold at a not-so-high-end store like Target, and therefore, they are not likely to be confused as to source or origin or believe that the dress is somehow approved by DVF.

Thursday, January 24, 2008

Company refiles trademark infringement lawsuits against two companies over Bob Marley name and likeness

While I’m not really a fan of the late reggae musician Robert Nesta Marley (aka Bob Marley), a lot of people are and this fame has made the late musician’s name and likeness very valuable to his heirs.

A company named Fifty-Six Hope Road Music, Ltd. (“Fifty-Six Hope Road”), a Bahamas International Business Company which is owned and operated by Marley’s 12 children, owns the intellectual property rights to Bob Marley’s name and likeness.

Fifty-Six Hope Road obtained a federal trademark registration for the mark BOB MARLEY on May 16, 2000 for eleven classes of goods, including T-shirts, jewelry, greeting cards, wallets, mugs, and smoking pipes. Fifty-Six Hope Road entered into a licensing agreement with Zion Rootswear LLC (“Zion”), a Florida corporation, granting Zion an exclusive worldwide license to use the Bob Marley intellectual property on various goods.

The companies have a history of rigorously enforcing these trademark rights. See article here about one past trademark infringement lawsuit and here about the well-publicized dispute with Verizon over Marley-based ringtones.

In the last week, the companies have filed two new trademark infringement lawsuits in the U.S. District Court for the District of Nevada going after a Canadian jeans company and a movie poster company.

The first suit was filed on January 18, 2008 by Fifty-Six Hope Road and Zion against Fame Jeans, Inc. and Charles Freidman . See Fifty-Six Hope Road Music, Ltd. et al v. Fame Jeans, Inc. et al, Case No. 08-CV-00082 (D. Nev.). The second suit was filed on January 23, 2008, by Fifty-Six Hope Road and Zion against A.V.E.L.A., Inc. (the Art and Vintage Entertainment Licensing Agency) and Leo Valencia. See Fifty-Six Hope Road Music, Ltd. et al v. A.V.E.L.A., Inc. et al, Case No. 08-CV-00105 (D. Nev.).

Without reading the complaints, the lawsuits most likely allege registered trademark infringement (15 U.S.C. §1114), federal trademark infringement and unfair competition (15 U.S.C. §1125(a)), and common law trademark infringement arising from defendants' sale of clothing and posters displaying Marley’s name (a registered trademark), picture, or some other likeness.

One strange aspect about these new lawsuits is that the defendants in these two lawsuits are the same named defendants from a previous trademark infringement lawsuit filed by Fifty-Six Hope Road and Zion on February 14, 2007. See Fifty-Six Hope Road Music, Ltd. et al v. Fame Jeans et al, Case No. 07-CV-00194 (D. Nev.). That case, however, was voluntarily dismissed by Fifty-Six Hope Road and Zion on November 29, 2007. I'm sure the companies had their reasons for dismissing the prior suits and refiling them separately.

Wednesday, January 23, 2008

Ninth Circuit gives copier companies second shot at Ikon/GE in complaint alleging false statements, antitrust violations, and racketeering

The Ninth Circuit today reversed a district court decision to grant a motion to dismiss a complaint brought by Newcal Industries, Inc., Pinnacle Document Systems, Inc. and Kearns Business Solution, Inc. (together “Newcal”) against Ikon Office Solution and General Electric Corporation (together “IKON”). See Newcal Industries Inc. v. Ikon Office Solution, No. 05-16208 (9th Cir. January 23, 2008). The decision can be downloaded here.

Newcal and IKON compete to lease name-brand copier equipment to commercial customers and to provide service contracts for the maintenance of such equipment during the lease term. Newcal alleged in its complaint that IKON was engaging in a scheme to defraud IKON customers by amending their customers’ lease agreements and service contracts without disclosing that the amendments would lengthen the term of the original agreement. By extending such agreements, IKON made it more difficult for Newcal to compete for the business of IKON’s customers at such time as the original lease or service contract expires would normally expire. Newcal alleged antitrust violations under the Sherman Act, false advertising under the Lanham Act, and racketeering under RICO. Newcal also sought a declaratory judgment that IKON’s fraudulently procured contracts were invalid.

The district court dismissed without leave to amend Newcal’s declaratory judgment cause of action, but did allow leave to amend the other claims. Newcal later filed a first amended complaint; however, on motion to dismiss brought by IKON under Rule 12(b)(6) for failure to state a claim, the district court concluded that Newcal had failed to allege a legally cognizable “relevant market” under the Sherman Act, that it had failed to allege any false statement of fact under the Lanham Act, and that it had failed to meet RICO standing requirements, and dismissed the complaint with prejudice.

On appeal, the Ninth Circuit reversed the district court’s dismissal and remanded the case. The court found that Newcal, assuming all facts alleged in the complaint are true (as the court must done in deciding an appeal from a Rule 12(b)(6) dismissal), had pled sufficient allegations to support its asserted claims.

Focusing just on the court’s discussion of Newcal’s Lanham Act claim for allegedly false and misleading statements, Newcal alleged that five particular statements were false or misleading. The district court found all five statements insufficient to support a Lanham Act claim. On appeal, however, the court reversed finding that four of the five statements rested on factual findings rather than legal conclusions, and therefore could not be dismissed under Rule 12(b)(6).

The court began by setting forth the elements necessary to state a prima facie case of false or misleading description or representation of fact in commercial advertising or promotion which misrepresents the nature, characteristics, qualities of the person’s goods, services, or commercial activities under the Section 43(a)(1)(B) of the Lanham Act (15 U.S.C. §1125(a)(1)(B)):

Under the Lanham Act, a “prima facie case requires a showing that (1) the defendant made a false statement either about the plaintiff’s or its own product; (2) the statement was made in commercial advertisement or promotion; (3) the statement actually deceived or had the tendency to deceive a substantial segment of its audience; (4) the deception is material; (5) the defendant caused its false statement to enter interstate commerce; and (6) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to the defendant, or by a lessening of goodwill associated with the plaintiff’s product.” Jarrow Formulas, Inc. v. Nutrition Now, Inc., 304 F.3d 829 (9th Cir. 2000).

Slip op. at 987.

Newcal set forth in its complaint five particular statements that it alleged were false or misleading statements of fact:

(a) that IKON [ ] would deliver “flexibility” in their “cost-per-copy” contracts and that they would lower copying costs for consumers; (b) that IKON [ ] would deliver 95% up-time service in their IKON Contracts; (c) that original IKON Contracts were intended by IKON to be for a fixed term of sixty (60) months and would expire at the end of that term; (d) that IKON Amendments for sixty (60) months applied only to the changes on the Amendment, not to the entire fleet of IKON [ ] Copier Equipment of the consumer; and (e) that IKON’s “flexing” practices had been declared legal by [the District] Court in its opinion of December 23, 2004.

Slip op. at 987-88 (alterations in original)

The district court had concluded that statement (a) constituted “puffery” and the Ninth Circuit agreed. Citing Cook, Perkiss, & Liehe v. Northern California Collection Service, Inc., 911 F.2d 242, 245-46 (9th Cir. 1990), the court noted that determining whether an alleged misrepresentation is a statement of fact or is instead “mere puffery” is a legal question that may be resolved on a Rule 12(b)(6) motion. The court further noted that a statement is considered puffery if the claim is extremely unlikely to induce consumer reliance and that ultimately, the difference between a statement of fact and mere puffery rests in the specificity or generality of the claim (i.e., consumer reliance will be induced by specific rather than general assertions). A statement that is quantifiable, that makes a claim as to the specific or absolute characteristics of a product may be an actionable statement of fact while a general, subjective claim about a product is non-actionable puffery. The court held that statement (a) was not a quantifiable claim and does not describe any specific or absolute characteristic of IKON’s service, but instead is a general assertion that IKON provides its customers with low costs and flexibility.

As for statement (b), the court noted that whether IKON does or does not actually “deliver 95% up-time service in their IKON Contracts” is a factual question – Newcal’s allegation that this was a false statement at the time it was made is sufficient to survive a 12(b)(6) motion to dismiss.

With respect to statement (c), the court found that this statement could be proved false or possibly true but misleading. In either case, Newcal’s allegation that IKON’s assurance of a 60 month limitation on the contract was misleading since IKON fraudulently extended those contracts will depend on whether IKON knew at the time that it made the statement that it would fraudulently extend the contracts beyond their 60 month terms. IKON’s knowledge and intent at the time and whether the statement was intentionally misleading at the time it was made are factual questions.

As for statements (d) and (e), the issue was whether those statements could reasonably be said to have been made in “a commercial advertisement or promotion.”

The court, citing Coastal Abstract Service, Inc. v. First American Title Insurance Co., 173 F.3d 725, 735 (9th Cir. 1999), stated that in order for a statement of fact to constitute commercial advertising or promotion, it must be (1) commercial speech; (2) by the defendant who is in commercial competition with the plaintiff; (3) for the purpose of influencing consumers to buy defendant’s goods or services; and (4) disseminated sufficiently to the relevant purchasing public to constitute “advertising” or “promotion” within that industry (i.e., the representations need not be made in a “classic advertising campaign” and can include informal types of “promotion”).

The court again notes that whether the statements were disseminated sufficiently to the relevant purchasing public is a factual question, but that Newcal’s allegation that IKON made its allegedly false statements in commercial advertising and promotion of its goods and services through the dissemination of promotional literature to thousands of representatives and employees is sufficient to withstand dismissal at this stage.

As such, the court reversed and remanded Newcal’s Lanham Act claim, finding that the complaint sufficiently alleges all of the elements of a Lanham Act violation, including several false statements of fact that were allegedly disseminated to the relevant market’s consumers.

Tuesday, January 22, 2008

Clint Eastwood files lawsuit over “The Eastwood” home theater chairs

On January 16, 2008, Clint Eastwood filed a lawsuit in the U.S. District Court for the Central District of California against Palliser Furniture, Ltd, Palliser Furniture Corp. and several John Does (together “Palliser”) over a line of home theater chairs manufactured and sold by Palliser under the name “The Eastwood.” See Clint Eastwood v. Palliser Furniture, Ltd et al, Case No., 08-CV-00266 (C.D. Cal.). A copy of the complaint (courtesy of TMZ) can be downloaded here.

Eastwood’s lawsuit follows a similar lawsuit against Palliser filed in the same court on November 20, 2007, by the Executors of the Estate of Marlin Brando. See Morris Medavoy, et al v. Palliser Furniture Ltd., et al, Case No. 07-CV-07595 (C.D. Cal. November 20, 2007). At issue in that case is a similar line of home theater chairs made by Palliser named “The Brando” (apparently now renamed Sequelle). A press release from the Marlon Brando Estate regarding the dispute can be read here (although it should be noted that the press release discusses the filing of a lawsuit dated March 23, 2007, and may be referring to an earlier court action that apparently was unsuccessful because otherwise, why would the Marlon Brando Estate be pursuing a similar action in federal court eight month s later).

The Eastwood

According to Eastwood’s complaint, Palliser, a Canadian-based major manufacturer of home furnishings distributed throughout the Western Hemisphere, has been willfully manufacturing and selling “The Eastwood” home theater chair without Eastwood’s permission. Much of the complaint focuses on describing Eastwood’s film background and fame. The complaint notes that Eastwood has a long history of rejecting solicitations from third parties to license his name, image and likeness for commercial purposes so that he can use his publicity rights and goodwill associated therewith for his own motion picture and entertainment projects as well as his own personal ventures. Some of Palliser’s other home theater chairs named after celebrities noted in the complaint include “The Cagney,” “The Cooper,” “The Bronson,” and “The Connery.”

The complaint sets forth three causes of action: 1) false designation of origin and false description under Section 43(a) of the Lanham Act (15 U.S.C. §1125(a)); 2) violation of Eastwood’s right of publicity in his name in violation of California Civil Code §3344; and 3) common law violation of Eastwood’s right of publicity in his name. Eastwood claims that Palliser’s use of the name “Eastwood” on its chairs will create a false impression that “The Eastwood” home theater chairs are endorsed or associated with Eastwood and constitutes a misleading description of Palliser’s goods. Eastwood also alleges that Palliser committed such actions willfully in order to trade off of Eastwood’s reputation and goodwill. Eastwood further claims that Palliser’s intentional use of the name Eastwood is causing harm to his name by being falsely associated with Palliser’s home theater chairs.

In addition to injunctive relief, Eastwood seeks the usual damages under 15 U.S.C. §1117(a) (Palliser’s profits, damages, and costs) and also maintains that Palliser’s willful conduct makes the case exceptional entitling Eastwood to treble damages and attorney’s fees. Eastwood also requests damages, attorney’s fees, and punitive damages under California law.

Vegas™Esq. Comments:

Eastwood unquestionably has a strong mark in his own last name, especially with goods and services that are related to the movie industry (although one should note that there are many registrations for the mark EASTWOODfor other goods and services such as guitars and insurance brokerage services as well as a multitude of goods and services across four registrations held by Easthill Group, Inc.).

In addition, the goods are related albeit tenuously – Eastwood’s name is commonly associated with the movies and the goods at issue are for home theater chairs (no doubt purchased by movie fans). And to the extent that Palliser named its chairs “The Eastwood,” then the marks are similar – although if you click on the above links, you will note that Palliser appears to be changing the name of its various lines of chairs and moving away from “The …” celebrity names (see also here).

I do question whether the relevant consumers in this case – wealthy homeowners with home theater systems – would honestly believe that these goods (home theater chairs) are truly endorsed by the individuals after which they are named. In addition, home theaters are not cheap – consumers purchasing these chairs are likely to exercise a high degree of care. They will select a chair based on its features – and not because of the “movie actor” after which it is named. The names of these chairs would be recognized by such movie-fan consumers as playful references to famous movie actors – not as an endorsement by those stars. In addition, I doubt that either Eastwood or Brando’s estate is going to be branching out into home theater furnishings anytime soon (although Brando’s estate does have a trademark application for THE BRANDO pending for towels, spa products, and clothing, which was recently published for opposition).

While Eastwood may be able to unearth evidence to the contrary, it would seem that Palliser’s intent in choosing to name its movie theater seats after famous movies stars was not to take advantage of the goodwill in Eastwood’s name, but rather to appeal to the interests of movie aficionados (Palliser’s primary customers for such seats) who are likely to be fans of such great actors as Marlon Brando, Clint Eastwood, James Cagney, and Sean Connery, but who are not likely to buy a particular theater chair simply because a particular celebrities name is tied to it.

So while I would like to believe that the factors tend to favor a finding of no likelihood of confusion, I recognize that Eastwood asked for a jury trial for a good reason, namely so that Eastwood can make such arguments before a group of jurors who will certainly have heard of Eastwood and who may be more easily swayed into finding a likelihood of confusion under the circumstances.

As for Eastwood’s right of publicity claim, Palliser did knowingly use Eastwood’s name on its products without Eastwood’s permission and did so in part to take advantage of the Eastwood's movie actor, which doesn’t bode well for Palliser. However, California Civil Code §3344(e) does provide an exception for the use of a person’s name without such person’s consent even though the use is commercially sponsored. Of course, it becomes a question of fact (for the jury in this case) whether or not Palliser’s use of the name “Eastwood” was “so directly connected with the commercial sponsorship” as to create a use for which consent is required.

Of course, the above assumes that this case even goes to trial, which I can’t imagine to be the case given the steps Palliser is taking to move away from such allegedly infringing use actors’ names for its chairs. More than likely, the parties reach a confidential settlement whereby Palliser agrees to stop using the name and possibly pays some monetary compensation for past infringing use (perhaps a donation to Eastwood's favorite charity).

“A man’s got to know his limitations.”
- Clint Eastwood as Dirty Harry Callahan in “Magnum Force”

Monday, January 21, 2008

A Registered Trademark on CYBERLAW?

Eric Goldman’s Technology & Marketing Law Blog had a good post last Friday (link here) on the recent trademark application filed by a District of Columbia intellectual property attorney named Eric Menhart to register the mark CYBERLAW for legal services. The application was filed on December 1, 2007, but first use in commerce is claimed as February 22, 2007.

Prof. Goldman’s research uncovered compelling evidence for why Mr. Menhart’s application is very likely to be rejected under §2(e)(1) as merely descriptive. Indeed, Prof. Goldman may have done a great service to Mr. Menhart’s future assigned examining attorney by providing all the evidence he or she will need to support a descriptiveness rejection.

In addition to the plethora of convincing reasons provided by Prof. Goldman (not to mention some of his fun facts about Mr. Menhart), I would add the fact that several other trademark applicants have sought registration of a similar mark in the past – none with any success:
  • CYBERLAW (for development and dissemination of legal educational materials) – §1(a) application filed April 2, 1996, abandoned December 26, 2000.
  • A CYBER LAW OFFICE (for legal services provided licensed attorneys by global computer network) – §1(b) application filed June 9, 1999, abandoned March 16, 2000.
  • CYBERLAWZ (for legal services) -- §1(b) application filed October 13, 1999, abandoned August 29, 2000.
  • CYBERLAW ADVISOR (for legal advice and services related to the law of computers, the Internet and electronic commerce) – 1(b) filed February 7, 2000, abandoned February 15, 2001.

Granted, we don’t know the exact grounds of rejection in each application because the PTO’s TDR system does not have the complete file available online for these older applications. Nonetheless, the single §1(a) application went abandoned after a final refusal and the other three §1(b) applications went abandoned after the initial non-final action.

However, there may be another explanation for the above applications being rejected, and the explanation may actually may bode well for Mr. Menhart. The above applications may not have been rejected for descriptiveness, but instead rejected based on §2(d) as likely to be confused with the registered mark CYBERLAWYER (for attorney referrals and providing legal information), which was registered October 15, 1996, but subsequently cancelled July 19, 2003, for failure to file a Section 8 declaration of continued use. Perhaps, there is now an opening for Mr. Menhart to receive a registration for his mark.

Mr. Menhart attempts to defend his application in his own blog post (link here) responding to a blog post by Corynne McSherry of the Electronic Frontier Foundation (link here) in which she was critical of Mr. Menhart’s attempt to claim trademark rights to the term.

Notably, in defense of his application, Mr. Menhart states: “The mark [CyberLaw] was granted to Attorney Jonathan Rosenoer of Greenbrae, California in 1996. Mr. Rosenoer let his protection expire in 2000. All such information is publicly available to Ms. McSherry or anyone else at the USPTO web site.” However, this particular application cited by Menhart is among the list of application cited above that were not registered. If you click on the link for CYBERLAW, one can see that Mr. Rosenoer was never granted a registration for this mark. The application was suspended for sometime and then a final refusal was issued (with no appeal filed).

So Mr. Menhart is incorrect in his assertion regarding any prior grant of a registration on the mark “CyberLaw.” If anything, Mr. Menhart should have cited to the CYBERLAWYER mark, which seems more supportive of his position that the PTO has shown willingness in the past to allow such a mark to be registered. Of course, one big difference is that CYBERLAWYER was registered in 1996 – when the Internet was still in its infancy and the use of the prefix “Cyber-” was not as much a part of the mainstream lexicon as it is today. Twelve years have passed, and the term has become much more prevalent since that time.

As most trademark practitioners will tell you, you never know how the PTO is going to respond to an application. Perhaps the past registration of CYBERLAWYER may provide Mr. Menhart with enough of an opening to argue that his mark is at least suggestive.

Most likely, however, Mr. Menhart’s only chance at obtaining a registration on the Principal Register is to argue acquired distinctiveness under §2(f). But given the ubiquitous use of the term CyberLaw, it would seem nearly impossible to argue convincingly that the consuming public has come to associate the mark CYBERLAW with Menhart’s services – especially after less than one year in use.

Perhaps Mr. Menhart will settle for a registration on the Supplemental Register. If the mark is refused registration based on descriptiveness, Mr. Menhart can try to argue that the mark is still capable of distinguishing his services. It’s still an uphill battle given the widespread use of the term (i.e., if its used by so many others to describe an area of the law, how can is possibly distinguish Mr. Menhart’s services). But if the PTO is willing to allow supplemental registration, it may be better than nothing – at least if he can’t have a registration on the Principal Register, he can be assured no one else can (at least not for related goods and services).

Friday, January 18, 2008

Play N Trade Franchisor Sues Former Franchisee for Trademark and Trade Dress Infringement

On January 17, 2008, Play N Trade Franchise, Inc. (“PNT”) filed a lawsuit in the U.S. District Court for the District of Nevada against Henry Mangio ("Mangio") and Henrob Inc.(d/b/a Trade n Play). See Play N Trade Franchise, Inc. v. Mangio et al, Case No. 08-CV-00067 (D. Nev.). A copy of the complaint can be downloaded here (courtesy of me). At issue is Mangio’s alleged use of PNT’s trademark and trade dress after Mangio’s franchise agreement with PNT was terminated.

PNT is in the business of franchising retail stores under the name Play N Trade that sell video and computer games and DVDs throughout the United States. PNT hold several service mark registrations containing the PLAY N TRADE (all for retail stores services featuring electronic video and computer games and DVDs for purchase, sale, or trade), including PLAY N TRADE, PLAY N TRADE BUY-SELL-TRADE VIDEO GAMES & DVDS (and Design), and PLAY N TRADE VIDEO GAMES (and Design).

According to the complaint, PNT also has developed unique standards, specifications and proprietary methods for the physical layout, design and d├ęcor for the interior and exterior of its franchised retail stores, which PNT claims is a distinctive trade dress that PNT’s customers have come to associate with PNT’s stores and goodwill.

Play N Trade Exterior

Play N Trade Interior

In June 2003, Defendant Henry Mangio entered into a Franchise Agreement with FNT to open a PLAY N TRADE franchise retail store. The Franchise Agreement created the typical franchisor-franchisee relationship – Mangio acknowledged PNT’s ownership of the PLAY N TRADE service marks and trade dress., Mangio could use the PLAY N TRADE service marks and trade dress in return for the payment of a franchise royalty payment, and upon termination of the Franchise Agreement, Mangio could not use the marks and trade dress or any other confusingly similar mark or trade dress. Mangio also agreed that, upon termination of the Franchise Agreement, he would not directly or indirectly compete with PNT franchises for a period of two years and that he would turn over to PNT all materials received from PNT as well as telephone numbers used by PNT’s franchises.

PNT asserts that the Franchise Agreement was terminated for Mangio’s failure to pay royalties and refusal to comply with other terms of the Franchise Agreement. PNT maintains that Mangio (through Henrob, Inc.), despite the termination of the Franchise Agreement, has continued operating his computer game store under the name “Trade N Play,” continues to use the PLAY N TRADE trade dress, and continues to use PNT’s confidential business materials.

PNT states the following causes of action: 1) Section 32 registered trademark infringement (15 U.S.C. §1114); 2) Section 43(a) trademark infringement (15 U.S.C. §1125(a)); 3) Section 43(a) trade dress infringement/unfair competition (15 U.S.C. §1125(a)); 4) Common law trademark and trade dress infringement; 5) Trade secret misappropriation under Nev. Rev. Stat. §§600A.010 et seq. (Nevada Uniform Trade Secrets Act); and 6) Breach of contract.

PNT argues that Mangio’s continued use of a name which is confusingly similar to PNT’s registered service marks and Mangio’s continued use of PNT’s trade dress is likely to cause confusion among the consuming public as to the source, origin, or association of the parties and/or likely to induce prospective purchasers into believe that Mangio’s goods and services are endorsed or approved, or connected to PNT. PNT also claims that Mangio’s continued possession and use of PNT’s confidential trade secrets in conducting Mangio’s business constitutes trade secret misappropriation under Nevada Uniform Trade Secrets Act. Finally, PNT’s breach of contract claim is based on Mangio’s alleged actions in violation of the terms of the Franchise Agreement, including refusing to pay the agreed-upon royalty, refusing to return confidential materials and to turn over phone numbers after the Franchise Agreement was terminated, operating a competing business in violation of the Franchise Agreement’s covenant not to compete, and using a confusingly similar trademark and trade dress.

PNT seeks injunctive relief to stop Mangio from using a confusingly similar name, the PLAY N TRADE trade dress, PNT’s confidential business materials, and from operating a competing retail store selling video and computer games and DVDs. PNT also requests 15 U.S.C. §1117(a) damages (defendant’s profits from the date the Franchise Agreement was terminated, any damages sustained by the PNT, and the costs of the action.), 15 U.S.C. §1117(b) treble damages, attorney’s fees (for Mangio’s “exceptional” infringement), punitive damages from Mangio’s willful and wanton disregard for PNT’s rights, damages from Mangio’s bad faith misappropriation and unjust enrichment (doubled since Mangio’s misappropriation was willful and malicious), and breach of contract damages (Mangio’s profits and attorney’s fees).

Vegas™Esq. Comments:
A pretty straightforward case with respect to the trademark infringement. As for the trade dress allegations, based on the pictures above, PNT may have an uphill battle in arguing that its store layout and design constitutes distinctive trade dress. However, given that Mangio probably made very few changes (if any) to the exterior or interior of the retail store location where he ran his franchise before it was terminated, a jury may be sympathetic to PNT’s argument (assuming the court doesn’t otherwise dismiss the cause of action on summary judgment).

As for misappropriation of PNT’s trade secrets, the jury can decide if indeed the information at issue was both a trade secret and was misappropriated. I am always skeptical of such allegations given the strict definition of “trade secret” under the statute (information that derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by the public or any other persons who can obtain commercial or economic value from its disclosure or use and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy) as well as the precise definition of misappropriation and improper means.

And with respect to the breach of contract cause of action, to the extent Mangio puts up a defense, I would suspect that some of the blame for the termination will be put on PNT.

Thursday, January 17, 2008

Car Sticker Parody of famous INTEL INSIDE logo

Here is my pick for favorite trademark parody of the year (so far, anyway). I spotted it on the back of car today and it made me laugh (and definitely made me think of Intel’s famous INTEL INSIDE trademark – although for the record I was not confused by it).

For those of you who may be unfamiliar with the above slang term preceding INSIDE, I direct you to the Urban Dictionary for a proper explanation . . . or you could just do a Google search of the term, but make sure the kids aren’t around.

Unfortunately, I was unable to see the occupant of the car in order determine if the mark as applied in this instance was arbitrary and fanciful, suggestive, or merely descriptive.

Wednesday, January 16, 2008

SCRABBLE makers want to scrabble "Scrabulous"

The hot trademark story du jour was the news that the two toy companies that own the rights to the SCRABBLE game have sent a letter to Facebook, the popular online social networking website, requesting that it remove a popular online application named Scrabulous that resembles the famed board game. Scrabulous was developed by brothers Jayant and Rajat Agarwalla of Calcutta, India. The application is apparently so popular that it reportedly draws more than half a million Facebook users every day.

Scrabulous Screenshot

The intellectual property rights in and to the SCRABBLE game are owned in the U.S.A and Canada by Hasbro Inc. and throughout the rest of the world by J.W. Spear & Sons Limited of Maidenhead, Berkshire, England, a subsidiary of Mattel Inc. In addition, the online rights to SCRABBLE are currently licensed to Electronic Arts (although it appears that Yahoo! currently offers an "authorized" online SCRABBLE game).

SCRABBLE online at Yahoo!

How the rights to SCRABBLE became split and owned by such arch-rivals as Hasbro and Mattel is an interesting story of its own. The home page requires web users to select which country they reside leading either to or Hasbro’s history of SCRABBLE can be read here while Mattel’s version is here, but what follows is an amalgamation of the two.

SCRABBLE logo outside the U.S. and Canada

SCRABBLE logo in the U.S. & Canada

The game was invented by Alfred Mosher Butts, an out-of-work architect from Poughkeepsie, New York – a cross between anagram puzzles and crossword puzzles that was initially named LEXIKO and later called CRISS CROSS WORDS. Butts supposedly studied the front page of The New York Times in order to calculate letter frequency in order to determine tile letter distribution.

After encountering many rejections, Butts found an interested entrepreneur named James Brunot. They made some changes to the game, including naming it SCRABBLE (which actually has a meaning beyond the famed game). In exchange for the right to manufacture the game, Brunot agreed to pay a royalty to Butts. Brunot, through the Production and Marketing Corporation, applied to register the mark SCRABBLE on December 16, 1948; the mark was ultimately registered on April 25, 1950. Brunot, with the help of his wife, initially started manufacturing the game in the living room of his home in Newtown, Connecticut, at a pace of about 18 games per day – hand stamping letters on wooden tiles one at a time. Brunot later moved to an abandoned schoolhouse in Dodgington, Connecticut, where, with the help of friends, production increased to about 12 games per hour. Brunot later outsourced the manufacturing of the board and tiles, but with assembly remaining their main factory.

According to SCRABBLE lore, in 1952, Jack Strauss, the Chairman of Macy's at the time, played a game of SCRABBLE while on vacation and enjoyed it so much that when he returned to New York, he contacted the Games Department at his store to send one to him. Supposedly, the Games Department did not have the game in stock, but soon after did. With the help of a Macy’s-backed promotional campaign, SCRABBLE so became the must-have game.

Unable to keep up with demand, Brunot licensed the rights to make and distribute the game in the U.S. and Canada to Selchow & Righter Company, a well-known game manufacturer at the time that apparently had earlier rejected the SCRABBLE game.

By 1953, the SCRABBLE craze apparently hit both Australia and the United Kingdom. J.W. Spear & Sons launched the game in the U.K. in 1953. (Note: it’s not clear from the online histories how J.W. Spear initially acquired the rights to manufacture the games in the U.K.).

Brunot eventually sold off the rights to SCRABBLE. Around 1968, J.W. Spear & Sons acquired the rights outside of the USA, Canada and Australia (although eventually picked up Australia as well). In 1971, Selchow & Righter acquired the U.S. and Canada rights. In 1986, Selchow & Righter was sold to COLECO Industries; but when COLECO declared bankruptcy three years later, the rights to SCRABBLE were purchased by Hasbro Inc., through the Milton Bradley Company. In 1994, J.W. Spear and Sons was acquired by Mattel Inc. – apparently much to the chagrin of arch-rival Hasbro (see this NYT article from 1994).

Getting back to Scrabulous, at first glance, Hasbro/Mattel have a pretty strong case. While the marks are not identical in appearance or even sound, the “Scrab-” prefix is similar, the goods are similar (games – Hasbro also holds a SCRABBLE registration for computer game programs), and there is no doubt that the SCRABBLE mark is strong. Under normal circumstances, these factors alone would be enough for Hasbro/Mattel to win the day.

However, in this case, the letter was directed to Facebook, where the infringing game is being hosted, and not the Agarwalla brothers, the developers of the game. Facebook may argue that it is the Agarwalla brothers who are directly infringing the SCRABBLE mark, not Facebook. If Hasbro/Mattel try to argue contributory infringement or vicarious infringement, Facebook will maintain that it does not have any direct control or exercise any direct supervision of Facebook users who may be infringing nor does it have any financial interest in such infringing activity.

Since Facebook probably has some way that it can prevent Scrabulous from being part of social networking website, I would be surpirsed if Facebook does not simply remove the application and avoid any possible lawsuit. But removing it from Facebook may not remove the application – and if Hasbro/Mattel want to stop the direct infringers from any further use of Scrabulous (through Facebook or online in any other way), then the companies may have to go to India where the Agarwalla brothers reside.

The SCRABBLE Board and Tiles

Tuesday, January 15, 2008

Tobacco company ordered to pay attorney's fees for vexatious trademark infringement lawsuit

I’ve written before (link here) about the aggressiveness of tobacco companies in wielding their valuable trademarks to stop the sale of counterfeit cigarettes.

The Rocky Mountain News ran a story yesterday by John Ensslin (link here) about one such action brought by one tobacco company against an Ethiopian immigrant. What began as a trademark infringement lawsuit based on the sale of two packs of counterfeit Newport cigarettes turned into a two-year ordeal that forced the man to sell his liquor store business and turn to driving an airport shuttle bus to make a living.

The story is a sober reminder of how aggressive big companies can be with respect to their trademarks, but at the same time, it illustrates that justice can prevail (but then again, one must ask, at what price). The court awarded the defendant attorney’s fees because of the tobacco company’s conduct, which the court described as “vexatious, oppressive, lacking foundation, and intended to harass and intimidate the defendant.” But it’s a bittersweet victory given the personal cost to this defendant.

Monday, January 14, 2008

Nathan's Famous Hot Dogs in Hot Water Over Over “NOT DOGS”

On January 4, 2008, Northern Soy, Inc. (“Northern Soy”) filed a trademark infringement lawsuit against Nathan's Famous, Inc. (“Nathan’s”) in the U.S. District Court for the Eastern District of New York. See Northern Soy, Inc. v. Nathan's Famous, Inc., Case No. 08-CV-00048 (E.D.N.Y). A copy of the complaint can be downloaded here.

At issue is Northern Soy’s registered trademark NOT DOGS (for meatless links made from tofu) registered on August 4, 1987, but which Northern Soy claims first use in commerce on November 30, 1978.

In the complaint, Northern Soy alleges that Nathan’s is using the NOT DOGS mark in connection with the sale of the “hotdog-like products featuring clam, lobster, chicken, and steak” on banners at its restaurants (see ad above), on the radio, and on coupons for its products (see below).

Sometime in early November 2007, Nathan’s President and CEO, Wayne Norbitz, apparently spoke with Northern Soy’s President, Norman Holland, about Nathan’s use of the term NOT DOGS on its product and discussed working an agreement to use the mark. Northern Soy’s attorney wrote back to Norbitz on November 19, 2007, advising Norbitz to stop using the mark until such time as an agreement could be reached allowing Nathan’s to use the mark on reasonable, non-discriminatory terms.

Norbitz subsequently had several phone conversations with Holland, apparently offering Northern Soy a one-time cash payment for unlimited use of NOT DOG. Holland declined this offer and no other agreement was reached. Northern Soy’s attorney again wrote to Norbitz on December 12, 2007, asking for confirmation that Nathan’s has discontinued use of the NOT DOGS mark in advertising and on products.

Northern Soy alleges that Nathan’s is continuing to market, advertise, and promote food products using the NOT DOGS mark without Northern Soy’s consent or license. Northern Soy’s causes of action are for registered trademark infringement under Section 32 of the Lanham Act (15 U.S.C. §1114), trademark infringement under Section 43(a) of the Lanham Act (15 U.S.C. §1125(a)), dilution under New York law (NY Gen. Business Law §360-1), common law unfair competition, and deceptive trade practices under New York law (NY Gen. Business Law §133).

Northern Soy seeks injunctive relief, an accounting of sales and earnings and a constructive trust on such earnings, an accounting of advertising expenditures, unspecified compensatory damages, treble damages, Nathan’s profits, and costs and attorney’s fees.

Vegas™Esq. Comments:
Northern Soy may have a decent case here, but it is by no means clear cut. The Second Circuit applies the following eight factors known as the Polaroid factors in determining whether a likelihood of confusion exists: (1) strength of the trademark;(2) similarity of the marks;(3) proximity of the products and their competitiveness with one another;(4) evidence that the senior user may “bridge the gap” by developing a product for sale in the market of the alleged infringer’s product;(5) evidence of actual consumer confusion;(6) evidence that the imitative mark was adopted in bad faith;(7) respective quality of the products; and(8) sophistication of consumers in the relevant market. Polaroid Corp. v. Polarad Electronics, Corp., 287 F.2d 492 (2d Cir. 1961); see also Nora Beverages, Inc. v. Perrier Group of Am., Inc., 269 F.3d 114, 119 (2d Cir. 2001).

In this case, the marks are identical and the products are similar (non-hot dogs) although Nathan’s will try to argue that Northern Soy’s meatless hot dogs are different than Nathan’s non-hot dogs which contain crab meat, steak, lobster, and chicken. I give these factors to Northern Soy.

As for the strength of Northern Soy’s mark, it has been in use since 1978 and is incontestable under §15. However, as evidenced by Nathan’s use, the mark is also suggestive (i.e. a food product like a hot dog that is not a hot dog). Northern Soy may need to come up with some advertising or sales figures to make a case that its mark is strong. This factor is inconclusive at this stage, but leaning in Northern Soy’s favor.

There is probably no evidence of actual confusion and it is doubtful that Northern Soy, with its obvious vegan market, will bridge the gap and develop a product similar to Nathan’s, which contain very non-vegan crab meat, steak, lobster, and chick. These two factors are inconclusive.

The same is true for bad faith imitation. I doubt that Nathan’s was intentionally trying to imitate Northern Soy’s product, but instead, wanted a suggestive name to describe its non-traditional “hot dogs.” As for product quality, Nathan’s, which has been around since 1916, has a good reputation for its hot dogs, and as such, the quality of the products is not dramatically different. These two factors are also inconclusive.

The sophistication of consumers in the relevant market could actually go against Northern Soy. After all, its primary consumers are likely to be vegetarians/vegans, who are very cautious about buying food products that are consistent with their vegetarian/vegan lifestyle. If they see NOT DOGS advertised that contain crab meat, steak, lobster, or chicken, they will likely recognize right away that it is not the Northern Soy tofu NOT DOGS that they know and love. On the other hand, Northern Soy could argue that a potential likelihood of confusion among its vegan customers could hurt Northern Soy’s goodwill in its mark because its vegan customers might be upset if they think that Northern Soy is now producing or somehow endorsing food products with meat.

I would think, for this last reason alone, that Northern Soy would not want to license its NOT DOGS mark to a restaurant chain that will associate it with a different type of non-vegan fare with which Northern Soy’s customers have come to associate the mark.

On balance, Northern Soy has a slight edge, but it’s by no means certain and there is enough room for Nathan’s to make a decent argument for no likelihood of confusion.

Sunday, January 13, 2008

An "ALASKA GROWN" trademark dispute

An Alaska Superior Court judge has ruled against an Alaskan farm organization in a dispute between the State of Alaska and the organization over the right to print the ALASKA GROWN logo (the “Logo”) on T-shirts and other clothing items. See State of Alaska, Dept. Of Natural Resources, Div. of Agriculture vs. Mat-Su Chapter-Alaska Farm Bureau Inc., Case 3AN-06-05292CI (Alak. Sup. Ct.). Most news outlets reported the AP story (link here) which seemed to gloss over some of the interesting (from a lawyer’s perspective) details in the case.

The lawsuit was brought by State of Alaska, Dept. Of Natural Resources, Div. of Agriculture (the “Division”) to stop Mat-Su Chapter-Alaska Farm Bureau, Inc. (“Mat-Su”) from continuing to print the logo on T-shirts and to squash Mat-Su’s pending trademark application for the mark ALASKA GROWN.

The story goes back to the mid-1980s, when the State of Alaska, Dept. Of Natural Resources, Div. of Agriculture first developed the Logo as part of its ALASKA GROWN program established in 1985 with the purpose of promoting locally-grown Alaska farm products.

According to Mat-Su, its predecessor organization – the Alaska Farmers and Stockgrowers Association (“AFSA”) – helped push for the adoption of a logo to help promote Alaska’s agriculture. AFSA had been using a circular logo around a silhouette of the State of Alaska with the slogan “Alaska Farmers and Stockgrowers Feeding Alaskans” since the early 1980s. According to Mat-Su, the idea of an ALASKA GROWN label was first proposed in a funding request from AFSA to the state – a proposal that was ultimately non funded.

AFSA later asked the Division for help in classifying their products so that consumers could easily identify them. The Division rose to the challenge, and eventually adopted the current ALASKA GROWN logo (the “Logo”) after a vote was taken by 385 farmers and agriculturalists among six proposed drawings.

The Logo was first used on December 20, 1985, but formally unveiled to the public in on January 16, 1986. Around this same time, the Division filed three Alaska state trademark registrations for the Logo – one on January 14, 1986 (for foods and ingredients in foods), one on April 18, 1986 (for merchandise not otherwise classified), one on May 22, 1986 (for thread and yarn). All of the registrations have been continuously maintained.

According to the Division, as part of the program, the Division grants non-exclusive, no-fee licenses to authorized Alaska growers to use the Logo as a certification mark on locally-grown farm products meeting the Division’s standards. The Division has around 283 authorized users of the Logo for certification of Alaska grown products.

The Division also promoted the program with various promotional items, including clothing items such as T-shirts and sweatshirts. The Division granted non-exclusive, no-fee licenses to authorized non-profit entities affiliated with Alaska’s agricultural industry to use the Logo on promotional clothing. One such licensee was Mat-Su, which had been authorized since 1986 to make and sell clothing with the Logo. Mat-Su, in its filings related to the lawsuit and opposition, contested the Division’s position about granting non-exclusive no-fee licenses to users of the Logo.

On April 24, 2004, Mat-Su sent a letter to the Division requesting that it be made the sole distributor and exclusive licensee for the manufacture and sale of clothing items with the Logo on it. According to its letter, Mat-Su felt that there were some retailers who were placing the Logo on inferior products, and so Mat-Su set forth its position why it was the best company to be the sole authorized manufacturer and seller of clothing using the Logo. As the Division points out, however, this same letter also has Mat-Su acknowledging the Division’s rights over the Logo.

The Division never responded to the letter. On March 1, 2005, Mat-Su sent a second letter to the Division once again making its case (this time in much greater detail) for why it should be the sole distributor and exclusive licensee for the manufacture and sale of clothing items with the Logo on it. From Mat-Su’s perspective, AFSA entered into an “informal” agreement with the Division soon after the Logo was introduced to use the Logo on clothing items to promote the Division’s agriculture promotion efforts. The AFSA promised that all proceeds would go into Alaska agriculture promotion. Mat-Su also stated that AFSA discontinued using its own logo on clothing in favor the “new, cooperatively generated, label.”

Mat-Su apparently felt that it deserved to the be the exclusive maker of clothes sporting the Logo because of the great deal of time and money it had invested to help promote the ALASKA GROWN logo through its sale of promotional clothing. “It is extremely unfair that our carefully nurtured clothing promotion is threatened with extinction or dilution now that Alaska Grown shirts are finally popular.” Mat-Su also believed that its longtime use of the Logo on clothing with the Division’s approval constituted a “legal claim.” Mat-Su was the first to do so and the only one for ten years. The remainder of its March 1st letter addresses the importance of the ALASKA GROWN logo and the need to ensure its integrity.

What this March 1st letter did not divulge, however, is that on January 3, 2005, Mat-Su filed a Section 1(a) use-in-commerce application with the United States Patent & Trademark Office to register the mark ALASKA GROWN (and Design) for “Clothing, namely, hooded sweatshirts, adult short-sleeved T-shirts, adult long-sleeved T-shirts, youth T-shirts, infant T-shirts, aprons, baseball-style caps, women's tank tops, men's tank tops, work shirts and shorts.” The drawing of the mark submitted with the application was identical to the Logo. The date of first use claimed was February 15, 1986 and the date of first use in commerce was August 15, 1986. Mat-Su is an Alaska non-profit corporation that was formed in 2002, although as previously stated, Mat-Su claims to be the predecessor organization of AFSA.

Mat-Su filed a second application on October 19, 2005 to register the mark ALASKA GROWN (and Design) for “fresh vegetables”; however, this application was later expressly abandoned on March 22, 2006, for reasons unclear.

Meanwhile, in mid-November 2005, Mat-Su supposedly announced its attention to form a new corporation to take over ownership of the ALASKA GROWN program and Logo. On December 21, 2005, Mat-Su followed through by incorporating Alaska Farmers and Stockgrowers, Inc.

Whether in response to Mat-Su’s trademark applications or public threats to take over the ALASKA GROWN program and Logo, the Division, on November 18, 2005, wrote a letter notifying Mat-Su that its actions amounted to trademark infringement, that its license to use the Logo was being terminated, and that Mat-Su was to cease and desist from any further use of the Logo. In early December 2005, a representative of Mat-Su supposedly contacted the Division to indicate that Mat-Su would comply with the Division’s letter and would not sell any more clothing with the Logo on it until the trademark dispute was resolved.

According to the Division, however, Mat-Su continued to sell clothing with the Logo. The Division filed a lawsuit seeking injunctive relief on February 16, 2006. A first amended complaint was later filed on July 21, 2006, setting forth some additional alleged sales in 2006 by Mat-Su of clothing using the Logo. The counts of the complaint include state and common law trademark infringement, unfair trade practices, breach of implied covenant of good faith and fair dealing, and declaratory relief regarding the trademark rights to the Logo given Mat-Su’s pending application.

Mat-Su’s first trademark application was published for opposition on December 7, 2005. After several extensions of time, the Division, on June 23, 2006, filed its opposition to Mat-Su’s application. See State of Alaska, Dept. Of Natural Resources, Div. of Agriculture vs. Mat-Su Chapter-Alaska Farm Bureau Inc., Opposition No. 91172432 (TTAB). The opposition resembled the complaint that the Division had already filed in Alaska Superior Court. The Division argued that Mat-Su’s application be denied on the grounds of the Division’s prior use, licensee estoppel, that Mat-Su is not a valid owner of the mark, that the application was not signed by a proper signatory, and fraud (i.e. knowingly false statements including that Mat-Su is the owner of the mark, the dates of first use given that Mat-Su was formed in 2002, that Mat-Su has exclusive right to use the mark).

As reported by the AP, Anchorage Superior Court Judge Jack Smith ruled last week that the Division owns the Logo and the licensing rights to the Logo. It’s not clear the extent to which the injunction also enjoined Mat-Su from using the Logo in any way, but one can probably assume that if the Divison was found to own the rights to the Logo, the court also enjoined Mat-Su from any infringing activity.

The judge also ordered an injunction against Mat-Su enjoining them from "threatening, intimidating, harassing, coercing, or otherwise interfering with the sale of Alaska Grown apparel." This is apparently in response to accusations that Mat-Su had made against Alaska Future Farmers of America of stealing sales from Mat-Su by selling its own line of clothing with the Logo. Mat-Su apparently feels that such other organizations do not adequate support Alaska’s agricultural industry. The Division maintains that Mat-Su was interfering with an authorized licensor’s sale of "Alaska Grown" clothing.

A hearing has been set for May to determine damages the Division may be entitled to based on Mat-Su’s infringing use.

Vegas™Esq. Comments:
What I found most surprising about this whole case was that Mat-Su was able to get its application published in the first place. In particular, I am surprised that Mat-Su was able to get around an “ornamental” refusal for its mark. Apparently, the Examiner may have thought that the speciments and other evidence submitted (namely an explanatory card handed out with each shirt describing the spirit of the Alaska Grown program) showed that the mark would be recognized by the public as a trademark through applicant’s use of the mark with goods or services other than those identified in the application (i.e., the mark is an indicator of secondary source or sponsorship). However, Mat-Su admitted in its correspondence that it only produces the clothing and not the farm products itself. With Mat-Su admitting that it is not using the mark on any other goods or services other than what it identifies in the application, how was it able to get around an ornamental refusal?

Also, I find it somewhat surprising that the Examiner did not raise any Section 2(e)(2) “primarily geographically descriptive” rejection. The mark names a geographic location, purchasers are likely to believe the goods originate in Alaska, and the goods do originate in Alaska.

It’s not clear whether Mat-Su was really concerned about the goodwill behind the Logo or whether its concern was about its own financial bottom-line in the face of competition from other clothing manufacturers producing clothes using the Logo. Regardless, Mat-Su felt entitled to be the exclusive producer of clothing bearing the Logo based on its good intentions and long-time involvement with the ALASKA GROWN program.

Mat-Su either misunderstood its trademark rights or may have been misled by someone into believe that it had legitimate rights to the Logo simply by its long-time involvement. Notably, the trademark applications were filed by officers of Mat-Su, and not a trademark attorney, who undoubtedly (after doing even a modicum of due diligence) would have informed Mat-Su of its tenuous legal position.

Finally, Mat-Su seems to feel that the Division is not properly running the program, which serves to harm the goodwill behind the Logo. However, to the extent Mat-Su believes that the Division is doing harm to the Logo by allowing cheaper clothing to be produced bearing the Logo, then Mat-Su should create and invest time and money into creating its own certification mark. A few off the top of my head suggestions: “ALASKA FOOD …From Alaska For Alaska.” “Alaska Preferred,” and “A Taste of Alaska” (which worked for Iowa). Before doing so, however, Mat-Su should also keep in mind that one issue which typically arises with respect to geographic region certification marks is the authority of the owner to control the use of the mark. The USPTO will normally look for the applicant to be a government agency or quasi-governmental organization with power and authority in the named geographic region because such governmental bodies are perceived as being in the best position to fulfill the duties of ensuring the right of all persons in the region to use the term and preventing improper uses of the mark by those not entitled to do so.