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.

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