Monday, June 30, 2008

On remand, Johnson & Johnson wins injunction against Heartland Sweeteners in Splenda® trade dress infringement lawsuit

Rebecca Tushnet’s 43(B)log writes about the latest development in the ongoing trade dress dispute between McNeil Nutritionals, LLC (“McNeil”), the Johnson & Johnson division that makes Splenda® artificial sweetener (a brand of the artificial sweetener, sucralose), and Heartland Sweeteners LLC (“Heartland”), which produces and distributes store-brand sucralose in a similar looking yellow packaging for big-chain supermarkets.

After the Third Circuit Court of Appeals reversed-in-part the district court’s prior decision in favor of Heartland (see prior blog post on the Third Circuit's decision here), the district court, on remand, conducted the necessary additional evaluation to determine if injunctive relief was appropriate for the packaging which the Third Circuit found the likelihood of confusion factors favored McNeil Nutritionals, specifically, packaging used by Heartland for sucralose sold at Royal Ahold NV’s Giant Supermarket. See McNeil Nutritionals, LLC v. Heartland Sweeteners LLC, Case No. 06-cv-05336 (E.D. Pa. June 26, 2008).
The court, upon remand and applying the remaining factors of the four factor test for issuing injunctive relief, determined that an injunction should issue with respect to approximately $340,000 of Heartland’s remaining inventory of the infringing box (Heartland notably redesigned its product packaging to be different than McNeil’s Splenda packaging).

Thursday, June 26, 2008

Hearts on Fire Sues Blue Nile in another sponsored link “adword” trademark dispute

On June 20, 2008, Hearts on Fire Company, LLC (“HOF”), the company behind the “Hearts On Fire” diamond (a/k/a The World's Most Perfectly Cut Diamond) (pictured above), filed a trademark infringement lawsuit against Blue Nile, Inc. (“Blue Nile”), an online retailer of certified diamonds and jewelry, in the U.S. District Court for the District of Massachusetts. See Hearts on Fire Company, LLC v. Blue Nile, Inc., Case No. 08-cv-11053 (D. Mass. June 20, 2008). A copy of the complaint can be viewed here (HT: Marty Schwimmer’s Trademark Blog). News stories on the lawsuit can be found here and here.

HOF holds numerous federal trademark registrations for the HEARTS ON FIRE mark (the “HOF Mark”) on goods ranging from cut diamonds and jewelry to golf towels and bottled drinking water. At issue in HOF’s complaint is Blue Nile’s purchase of the HOF Mark as a “keyword” term so that a link to Blue Nile’s website appears as a Sponsored Link when an internet user does a search for the term “hearts on fire.” HOF argues that such use of HOF’s Mark by Blue Nile improperly diverts “potential consumers of HOF diamonds and jewelry to the Blue Nile website.”

According to HOF’s complaint, Blue Nile purchased the HOF Mark keyword from such that when a search is done for the term “hearts on fire,” one of the search results’ top ranked links is Blue Nile’s sponsored link stating: “Idea Cut Diamonds at Blue Nile. Find hearts on fire diamonds at Forbes Favorite Online Jeweler.” HOF also claims that when a user types in “Hearts on Fire” in Blue Nile’s own website search engine, the user is “directed to links to web pages selling diamonds and jewelry containing diamonds, none of which are HOF diamonds or jewelry.”

Because Blue Nile is not an authorized "Hearts on Fire" retailer, HOF claims that Blue Nile’s use of the HOF Mark is likely to cause confusion, mistake and deception among the general public as to the origin of Blue Nile's goods and/or as to sponsorship by, affiliation with, and/or connection to HOF. HOF’s causes of action are for federal trademark infringement under 15 U.S.C. § 1114, federal unfair competition under 15 U.S.C. § 1125(a), common law unfair competition, and deceptive trade practices under Massachusetts state law (Mass. Gen. Law Ch. 93A). HOF is seeking injunctive relief, unspecified damages, treble damages, and costs.

Vegas™Esq. Comments:
First of all, it’s not entirely clear that Blue Nile purchased the “adword” from WebCrawler as HOF maintains. WebCrawler is known for being a search engine that searches other search engines. When I first began writing this blog post, the WebCrawler search results clearly reflected that the sponsored link was found on Ads by Google. When I went back later in the day, it later reflected that the sponsored link was found on Internet Picks. Why doesn’t HOF sue WebCrawler for placing sponsored links at the top of its search results? Second, when I did a search using the Google search engine, HOF’s website was the highest ranked link – with Blue Nile’s website being a sponsored link listed on the side (interestingly, when I searched later in the day, Blue Nile’s sponsored link no longer appeared on Google.) Third, when I did a WebCrawler search for “hearts on fire,” the link that appeared has been changed to read “Find the Perfect Diamond. Shop Signature Ideal Cut Diamonds at Forbes Favorite Online Jeweler.” And when I went back again later on, the link was completely different. Any reference to “hearts on fire” had been removed (if it ever existed).

HOF’s case had a modicum of merit when (and if) Blue Nile’s sponsored link indeed read “Find hearts on fire diamonds at Forbes Favorite Online Jeweler.” That case scenario is much like the Storus v. Aroa Marketing “Smart Money Clip” case (previously blogged here) which found infringement (“initial interest confusion”) under similar circumstances. However, as noted above, Blue Nile appears to have changed already the text of its sponsored links – and might even be removing them altogether if the disappearance of the Google Adword sponsored link is any indication.

The real 800 lb “trademark” gorilla, however, is whether Blue Nile’s purchase and continued use of HOF’s mark as a keyword for a sponsored link evenconstitutes “trademark use” (a hot issue in the trademark world these days -- and one that has yet to be definitively resolved.) But again, Blue Nile may be removing its sponsored links altogether making the issue moot going forward.

As for HOF’s ridiculous allegations regarding Blue Nile’s own website search engine results, the complaint fails to mention that the website search results for “hearts on fire” lead to such jewelry as a “heart” pendant and a ring design that will add even more “fire” to a white gold wedding set. None of the search result in the products reflected therein state anything about “hearts on fire” or make any suggestion of connection or affiliation. HOF apparently wants to hold Blue Nile liable for the fact that its search engine returned any kind of search results when a user happens to put in the words “hearts on fire” – even though the search engine would likely return the same kind of results for almost any search using the words “fire” and/or “heart.”

Wednesday, June 25, 2008

Partial Victory for The Naked Cowboy in lawsuit over M&M cartoon ad

I’m a few days late on the district court decision (news reports here, here, and here) by Judge Denny Chin of the U.S. District Court for the Southern District of New York dismissing in part the lawsuit filed by Robert Burck (a/k/a “The Naked Cowboy”) against Mars Incorporated, the maker of M&Ms candies, over an M&M ad featuring a cartoon M&M guitar-playing street performer wearing a cowboy hat, boots, and underwear – all reminiscent of Burck’s alter ego. See Burck v. Mars, Incorporated et al, Case No. 08 Civ. 01330 (S.D.N.Y. June 23, 2008); see also my previous posting on the filing of Burck’s complaint here.

The court dismissed Burck’s state law right of privacy claim (i.e. right of publicity claim) on the basis that the M&M Cowboy character depicted in M&M’s ads were merely personifications that do not fall within the literal meaning of "portrait" or "picture" of a person as required by New York’s right of privacy statutes (N.Y. Civ. Rights Law § 50 and 51) which protect against the "nonconsensual commercial appropriations of the name, portrait or picture of a living person”:

Here, there was no attempt to create a portrait or picture of Burck himself. Rather, the purportedly infringing images were M&M characters wearing Burck's signature outfit. The images were not portraits or pictures of Burck as The Naked Cowboy, but of M&Ms dressed as The Naked Cowboy. Thus, they do not violate sections 50 and 51, and accordingly, Burck's right of privacy claim is dismissed.

However, the judge denied Mars’ motion to dismiss Burck’s “false endorsement” claim under Section 43(a) of the Lanham Act because consumers may mistakenly believe that The Naked Cowboy himself endorsed the copying of his "trademarked likeness" because the M&M Cowboy characters appear in a commercial setting (i.e., on the video billboard and inside the M&M World store).

The court added that the issue of whether M&M’s ads would be viewed as parodies, and thereby negating any likelihood of confusion or constitute a First Amendment fair use affirmative defense, raises factual questions that are inappropriate for deciding on a motion to dismiss.

I think Ron Coleman’s post on the decision on his Likelihood of Confusion® blog summarizes the situation most appropriately:

This case will settle, in all probability. It is hard to understand, however, how any rational fact finder could consider this use of the “concept” of the Naked Cowboy, and what he does, to cause likelihood of confusion here, as opposed to merely alluding to it, having fun with it — an homage. Again, we ask: Is a mere reference to a cultural phenomenon likely to make the average viewer think that phenomenon is the origin, sponsors, or “approver” of the referencer?

Asked another way -- doesn't anybody have a sense of humor anymore? There was a time when this type of “homage” would have been appreciated by the referencee because it served to reinforce that person's pop culture stature.

Monday, June 23, 2008

Court denies Texas International Property Associates' motion to dismiss Full Sail University’s lawsuit over the former's web directory website

On June 17, 2008, United States District Judge Joe Fish of the Northern District of Texas refused to dismiss a trademark infringement lawsuit brought by Full Sail, Inc. (“FSI”) against Dauben, Inc. (d/b/a Texas International Property Associates) (“TIPA” or “Dauben”) arising from Dauben’s registration of the domain name FULLSAILUNIVERSITY.COM and using it to feature a web directory page with multiple click-through links to other education institutions. See Full Sail Inc v. Dauben Inc et al, 2008 U.S. Dist. LEXIS 47278, Case No. 08-cv-00446 (N.D. Tex. June 17, 2008). For some background on Texas International Property Associates (a name that many large company’s dealing with cybersquatters and typosquatters readily recognize), read this article here (from The Dallas Morning News). For a previous post on the growing trademark infringement litigation over “click-through web directories,” click here.

FSI operates an educational institution in Winter Park, Florida, that specializes in careers in music, film, video games, design, animation, and the entertainment business. Since 1979, FSI has used the mark FULL SAIL in connection with its education services. FSI has registered the FULL SAIL mark for various goods and services including educational services; retail store services; film related textbooks, newspapers, newsletters and magazines; clothing items; and prerecorded films dealing with the operation of audio, video and digital media equipment. FSI has also filed several intent-to-use applications for the mark FULL SAIL UNIVERSITY for Retail store services and instructional manuals; Clothing items; Film related textbooks, newspapers, newsletters and magazines; and Motion pictures, video games, etc. On June 10, 2008, the PTO registered the mark FULL SAIL UNIVERSITY for educational services (although this was still a pending application for purposes of the court’s decision).

FSI filed its complaint against Dauben alleging federal trademark infringement under 15 U.S.C. § 1114, federal unfair competition under 15 U.S.C. § 1125(a), trademark dilution under 15 U.S.C. § 1125(c), cybersquatting under 15 U.S.C. § 1125(d), and related state law claims. FSI claims that consumers looking for FSI are misdirected to TIPA’s website and that TIPA is unfairly profiting from FSI’s name and reputation by using a name intended to cause confusion.

TIPA filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted pursuant to Federal Rules of Civil Procedure 12(b)(1) and (b)(6). The court denied TIPA’s motion to dismiss on both grounds.

First, because determining the issue of federal question jurisdiction would require an investigation into the merits of FSI’s complaint of trademark infringement, unfair competition, dilution, and anti-cybersquatting provisions under the Lanham Act, the court assumed jurisdiction, turned its focus to whether FSI had stated a claim upon which relief can be granted, and denied TIPA’s motion to dismiss for lack of subject matter jurisdiction. See Montez v. Department of the Navy, 392 F.3d 147, 150 (5th Cir. 2004); Dell, Inc. v. This Old Store, Inc., 2007 U.S. Dist. LEXIS 73952, 2007 WL 2903845 at *1-2 (S.D. Tex. Oct. 3, 2007) (assuming subject matter jurisdiction in trademark dispute to decide the pending motion to dismiss for failure to state a claim).

Second, in arguing that FSI did not state a claim upon which relief could be granted, TIPA argued that FSI had not registered the FULL SAIL UNIVERSITY mark, but merely filed intent-to-use applications, which does not result in a vested property right that could be infringed upon and that TIPA’s prior use gave it priority over FSI’s later filed applications. The court rejected this argument noting that FSI’s claims of trademark infringement were also grounded in its federal registrations for the FULL SAIL mark.

TIPA attempted to argue that this mark alone would be insufficient to support a Lanham Act claim; however, the court noted that likelihood of confusion was the real issue and that “It is not a stretch for the court to envision a likelihood of confusion among consumers between the defendant's FULLSAILUNIVERSITY.COM website, which contains the plaintiff's mark, and the plaintiff's mark as it relates to educational services, and that is sufficient for the claim to survive at the 12(b)(6) stage.” The court also noted that arguments concerning the likelihood of confusion are premature because the necessary factual determination is inappropriate at the motion to dismiss stage.

The remainder of FSI’s were claims were found to have been properly pled with sufficient factual allegations that, if true, would support each of the claims, and therefore TIPA’s motion to dismiss such claims were denied.

Thursday, June 19, 2008

First Circuit Reverses Lower Court Injunction in the Boston “Duck Tours” Battle

In a lengthy opinion by the First Circuit Court of Appeals, the court of appeals reversed a district court’s decision granting a preliminary injunction in favor of Boston Duck Tours LP (“Boston Duck”) enjoining Super Duck Tours, LLC (“Super Duck”) from using the term “duck tour” in its name and using a logo of a duck after finding that the district court committed clear error in finding the phrase “duck tour” to be non-generic for such sightseeing tours, and thereby according it too much weight in its likelihood of confusion analysis. See Boston Duck Tours, LP v. Super Duck Tours, LLC, Case Nos. 07-2078, 07-2246 (1st Cir. June 18, 2008). For a copy of the lower court decision, see Boston Duck Tours, LP v. Super Duck Tours, LLC, Civil Action No. 07-11222-NMG (D. Mass. July 13, 2007) (courtesy of The TTABlog®, which has a write-up on the district court decision here).
Boston Duck and Super Duck both offer sightseeing tours via land and water in the Boston area, using amphibious vehicles commonly referred to as “ducks” (DUKWs are amphibious army vehicles which function as both trucks and boats). Similar amphibious vehicle land/water tours are found in many other cities throughout the U.S. and many use the phrase “duck tour” and have various logos featuring a cartoon duck.

Boston Duck has been offering its sightseeing tour since 1994 using old World War II DUKWs painted with a rainbow of colors and marked with the Boston Duck logo.

Boston Duck's "Duck Tour" Vehicle

Super Duck began offering similar services in 2001 in the Portland, Maine area using custom-made, modern amphibious vehicles called Hydra-Terras. The company adopted the name Super Duck Tours to play on the fact that its vehicles were bigger, stronger and newer than old DUKWs and adopted a logo of a white cartoon duck with an orange bill, muscular arms, and a cape parodying Superman and the slogan “It's a bus. It's a boat. It's a Super Duck!” Super Duck entered the Boston market after purchasing an existing tour company. The company began offering its tours in May 2007 – concentrating on the Boston waterfront area and avoiding the Back Bay area which is the focuse of Boston Duck’s tours.

Super Duck's "Duck Tour" Vehicle

On July 2, 2007, Boston Duck filed a complaint against Super Duck, alleging federal trademark infringement in violation of Section 32 of the Lanham Act, 15 U.S.C. § 1114, federal and state unfair competition, tortious interference with prospective business relationships, and a other state and federal claims. Boston Duck also sought to enjoin Super Duck from using its name and logo, or any similar mark confusingly similar to Boston Duck’s marks.

Boston Duck owns several federal trademark registrations for the word mark BOSTON DUCK TOURS as well as the design mark pictured above (duck and tour disclaimed) for “conducting sightseeing tours.” Super Duck has one federal registration for the word mark SUPER DUCK TOURS on the Supplemental Register in connection with its tour services.

In granting Boston Duck’s motion for a preliminary injunction, the district court found the term “duck tours” to be non-generic for amphibious sightseeing tours in the Boston area, and therefore capable of trademark protection. The district court further determined that Boston Duck had established a likelihood of success on the merits of its trademark infringement claim and enjoined Super Duck from using the term “Duck Tours” or a “cartoon duck” in association with sightseeing tour services in the greater Boston area.

Interestingly, on appeal, Super Duck conceded that that the BOSTON DUCK TOURS mark was entitled to trademark protection. Instead, Super Duck challenged the district court's conclusion that Super Duck's use of its mark SUPER DUCK TOURS is likely to cause confusion among the relevant consumer public with Boston Duck's use of its mark BOSTON DUCK TOURS. As such, the court, in addressing the generic arguments, focused on the likelihood of confusion analysis instead of whether the was entitled to trademark protection in the first place.

In coming to a contrary conclusion, the court, citing the eight factor test used by the First Circuit for determining likelihood of confusion set forth in Pignons S.A. de Mecanique de Precision v. Polaroid Corp., 657 F.2d 482, 487 (1st Cir. 1981), focused primarily on the first factor, the strength of the mark, because the claims of genericism directly implicate the strength of Boston Duck's mark and the ultimate scope of protection afforded the mark.

The court concluded that the district court committed clear error in finding that the phrase “duck tours” was non-generic by relying solely on one dictionary definition of the word “duck” without considering any other evidence for how the public perceives the term and for focusing on the separate terms “duck” and “tours,” and not the unified phrase.

The court stated that the district court failed to consider certain evidence showing that the phrase “duck tours” had become generic (i.e. commonly used with no effective alternative), including media and third party use, use by other companies within the sightseeing industry, and use by Boston Duck itself which provided strong evidence against its claim that the term was primarily associated with its company rather than the services it provides.

The court, noting that trademark law is designed to prevent consumer confusion between inherently distinctive marks or descriptive marks that have acquired secondary meaning and not between two similar, but generic marks, dismissed Boston Duck’s evidence of actual consumer confusion as suggesting little about whether the term is generic.

In light of the fact that the phrase “duck tours” is generic for the parties' services, the court concluded that BOSTON DUCK TOURS is highly descriptive of the services Boston Duck offers. Nonetheless, the court noted that Boston Duck’s use of the mark had made it a strong identifier of Boston Duck's tour services in the Boston area, even though part of the mark (“duck tours”) was not entitled to trademark protection at all.

As for similarity of the marks, with the “duck tours” part of the marks no longer a factor, the similarity came down to BOSTON vs. SUPER, which the court found reasonably dissimilar. There was no challenge by Super Duck regarding similarity of the goods and similar channels of trade. For the reasons stated above, the evidence of actual confusion was not weighted as heavily. As for Super Duck’s intent in adopting the mark, Super Duck’s use of a generic phrase “duck tours” for its sightseeing tours cannot be faulted.

In the end, the court, finding no likelihood of confusion, concluded that the district court was clearly erroneous in finding that Boston Duck was likely to succeed on the merits of its trademark infringement claim.

Regarding the likelihood of confusion between Boston Duck’s composite design mark and Super Duck’s logo, the court again applied the Pignons factors. In analyzing strength of the Boston Duck’s mark, while the court did not go so far as to accept Super Duck’s argument that the image of a duck splashing in water was generic for duck tour services, the court did conclude that such an image was highly descriptive of such services, and thus would be a weak source identifier, even though Boston Duck’s overall design mark was reasonably strong. As for similarity of the marks, the court found the designs as a whole -- while both contained a cartoon duck in water -- to be significantly different in overall appearance, especially when the marks other elements used in conjunction with the duck are substantially dissimilar. The court dismissed any evidence of actual confusion, finding that it could not be traceable specifically to the parties' logos. In the end, the court, finding no likelihood of confusion with respect to the parties’ logos, concluded that the district court was clearly erroneous in finding that Boston Duck was likely to succeed on the merits of its trademark infringement claim.

The court reversed the district court’s injunction and remanded the case for further proceedings.

A concurring opinion was filed by Judge Diclerico, who felt that the majority’s use of a genericism analysis in ascertaining the strength of Boston Duck’s mark “conflated the first and second elements of the trademark infringement standard, which in my opinion should be treated separately.”

Tuesday, June 17, 2008

Las Vegas’ Cosmopolitan Resort & Casino gets a taste of its own trademark medicine

I’ve previously written on the flurry of trademark infringement lawsuits filed by 3700 Associates, LLC (“3700 Associates”) – the developer of the troubled Cosmopolitan Resort & Casino in Las Vegas – against various named defendants (link here), including one prior post (link here) discussing reverse cybersquatting claims against 3700 Associates arising from one of its first cybersquatting lawsuits filed in Nevada which was dismissed for lack of jurisdiction, but subsequently refiled in Florida.

Earlier this year, 3700 Associates found itself in some financial troubles with respect to its $3 billion project (part of the Las Vegas condo-hotel craze that has fallen victim to the nationwide downturn in the housing marker along with rising construction costs and tighter credit markets). See articles here and here regarding the notice of loan default delivered by Deutsche Bank AG on January 16, 2008, on the bank’s $760 million construction loan to 3700 Associates, the construction developer of the Cosmopolitan Resort & Casino, and the attempts by 3700 Associates to find new investors in a credit market that has become incredibly tight.

Even before 3700 Associates’ default, most observers knew that the Cosmopolitan project was on shaky ground, which is why I often wondered why 3700 Associates was putting so much time and money into aggressively pursuing these trademark infringement lawsuits (mostly over domain names incorporating the word cosmopolitan) when it would seem to need every single penny it can get.

Well, 3700 Associates now finds itself on the defensive side of a trademark infringement lawsuit filed by Hearst Communications, Inc. (“HCI”), the publisher of the Cosmopolitan magazine and holder of several registrations for the mark COSMOPOLITAN.

Reuters reported yesterday (link here) that HCI had filed a $500,000 trademark infringement lawsuit against 3700 Associates and Cosmo Senior Borrower LLC (likely the special purpose entity formed to be the actual owner of the Cosmopolitan Resort & Casino being developed by 3700 Associates) over the use of the name Cosmopolitan, which HCI claims is likely to cause consumers to believe that HCI is involved in developing or had licensed the Cosmopolitan name for the resort and is likely to dilute the distinctive quality of HCI’s famous Cosmopolitan mark.

While the lawsuit may seem new, it appears to be a carryover of the Trademark Trial and Appeal Board oppositions that HCI filed against 3700 Associates over a year ago. See Hearst Communications, Inc. v. 3700 Associates, LLC, Opposition No. 91177407 (T.T.A.B. Filed May 21, 2007). In the consolidated opposition, HCI opposed several pending applications filed by 3700 Associates which contain the word COSMOPOLITAN, including THE COSMOPOLITAN BEACH CLUB and COSMO BEACH CLUB – all on the basis that registration of such marks will cause confusion in violation of Section 2(d) of the Trademark Act (15 USC §1052(d)) and will cause dilution of HCI’s famous marks under 43(c) of the Trademark Act (15 USC §1125(c)).

HCI is seeking injunctive relief as well as an order to the PTO to deny 3700 Associates’ pending applications and to cancel any registered marks, including apparently the registrations that 3700 Associates currently has for THE COSMOPOLITAN RESORT & CASINO word mark and stylized variation thereof covering real estate services featuring condominiums and likely the still pending applications for THE COSMOPOLITAN RESORT & CASINO word mark and stylized variation thereof covering vacation time shares, casino services, and resort hotels (which have received notices of allowance and are awaiting Statements of Use).

While one could characterize this is a case of 3700 Associates getting a taste of its own trademark infringement medicine, one does question why HCI waited so long to file this action. Where was HCI back in November 2004 when 3700 Associates first announced its intent to use the name? It is interesting (although perhaps coincidental) that HCI only sought to stop the use of the name Cosmopolitan after the project became financially unstable. Or perhaps HCI, seeing blood, decided to take this opportunity to kill 3700 Associates’ use of the name entirely – recognizing that it might not have a better opportunity to do so given that it had allowed 3700 Associates to use the name in promoting its project for so long.

[Update: On Saturday, June 21st, the Las Vegas Review Journal ran its own article on the lawsuit (link here)]

Monday, June 16, 2008

Eleventh Circuit Decision Highlights Importance of Expeditious Prosecution of Trademark Applications

Rebecca Tushnet’s 43(B)log has a good summary (link here) of the Eleventh Circuit Court of Appeals decision in Natural Answers, Inc. v. SmithKline Beecham Corp., Case No. 06-15084 (11th Cir. June 13, 2008) affirming a lower court’s decision granting summary judgment in favor of SmithKline Beecham, the maker of a stop-smoking lozenge named Commit Lozenges, and rejecting trademark infringement and false advertising claims brought by Natural Answers, which at one time sold a stop-smoking lozenge under the name HERBAQUIT.

The case demonstrates once again the importance of obtaining federal registration for trademarks and service marks early and expeditiously. Here, Natural Answers’ case was hurt in part because it had not followed through with its two trademark applications for the marks HERBAQUIT and HERBAQUIT LOZENGES (both for dietary supplements). The court’s opinion notes that neither of these federal trademark applications were approved, which left Natural Answers with the uphill task of having to prove common law trademark rights

What is strange is that if you look more closely at the actual prosecution history of the applications, both of the applications did receive notices of allowances from the PTO. However, because both were filed as Section 1(b) intent-to-use applications, the marks could not be registered until Natural Answers submitted specimens of use.

The HERBAQUIT mark was allowed February 29, 2000. Natural Answers filed a statement of use on August 29, 2000 (the last day without requesting an extension of time). Unfortunately, the statement of use was defective and the case went abandoned because Natural Answers did not file an extension of time to file a statement of use, which it could have done even though a statement of use was filed (lesson to be learned -- better safe than sorry).

According to the court’s decision, HerbaQuit Lozenges entered the market in January 2000 and were sold by Natural Answers in drugstores, supermarkets, convenience stores, and over the Internet. If this indeed was the case, one wonders how come Natural Answers was unable to provide a specimen of use in March 2000 promptly after the notice of allowance was issued.

A similar question is raised for the HERBAQUIT LOZENGES mark, which was allowed September 5, 2000. The application was abandoned about a year later when no statement of use was ever filed. However, according to the court’s decision, Natural Answers did not discontinue selling its HerbaQuit Lozenges until March 2002. Again, one wonders why Natural Answers was unable to provide a specimen of use in September 2000 promptly after the notice of allowance was issued.

Would having registrations had made a difference in the outcome of the case? Probably not given the evidence of abandonment, which would have been just as relevant had Natural Answers actually obtained registrations for its marks. Nonetheless, the court does suggest in dicta that actual registrations might have been an additional factor which would have favored Natural Answers (“On this record, it is undisputed that the HERBAQUIT LOZENGES mark (which has never been registered) has not been used in commerce since, at the latest, March 2002.”). Instead, the fact that Natural Answers allowed both applications to go abandoned only reinforced the notion that Natural Answers intended to abandon use of the marks.

Thursday, June 12, 2008

Apple and Podfitness settle trademark infringement dispute over POD marks

Looks like Podfitness, Inc. (“Podfitness”) wasn’t fit enough to continue to battle with the almighty Apple, Inc. (“Apple”) and its famed IPOD trademark.

Podfitness was sued by Apple on September 21, 2006, for various trademark related causes of action including registered trademark infringement, federal unfair competition, federal dilution, trade dress infringement, cybersquatting, and related state law claims arising from Podfitness’ use of certain “POD” marks, including PODFITNESS, PODFITNESS.COM & Earbud Logo (pictured below), PODPOCKET, and PODWORKOUT.

Apple, the creator of the IPOD portable and handheld digital electronic devices, has its own series of “POD” marks including IPOD, IPOD NANO, MADE FOR IPOD & Design, IPOD SOCKS, IPOD HI-FI, and POD.

The IPOD (in case you didn't know)

On June 6,2008, the court signed off on a consent judgment and permanent injunction agreed to between the parties whereby Podfitness is enjoined from using its POD marks, which were agreed to be confusingly similar and likely to cause confusion, to cause mistake, or to deceive as to the source of the goods and services by Podfitness, or as to affiliation, connection, association, sponsorship, or approval of such goods and services by Apple as well as likely to dilute the distinctive quality of Apple's IPOD marks. See Apple Inc. v. Podfitness, Inc., Case No. 06-cv-05805 (N.D. Cal. June 6, 2008). A copy of the order can be downloaded here.

The consent judgment notably only provides for injunctive relief – no damages are awarded. In essence, it appears that Podfitness was willing to concede the fight, so long as it did not have to pay any damages to Apple. The parties subsequently stipulated to a dismissal of the case with prejudice.

And while not specifically mentioned in the judgment (surprisingly), Podfitness will also have to abandon its pending applications for PODFITNESS, PODFITNESS.COM & Earbud Logo, PODPOCKET, and PODWORKOUT – all of which had been opposed by Apple. See Apple Inc. v. Podfitness, Inc., Opposition No. 91173003 (Filed Sept. 20, 2006).

Wednesday, June 11, 2008

MGM’s “The Signature” Condo-Hotel goes after unit owner for trademark infringement

On June 20, 2008, MGM Grand Hotel, LLC (“MGM”) and Signature Condominiums, LLC (“Signature” and together with MGM, the “Plaintiffs”) filed a trademark infringement lawsuit in the U.S. District Court for the District of Nevada against an individual named Jarrett Curd. See MGM Grand Hotel, LLC et al v. Curd, Case No. 08-cv-00753 (D. Nev). A copy of the complaint can be downloaded here.

The Signature at MGM Grand

Signature manages the three tower condominium-hotel project gracing the Las Vegas skyline known as "The Signature at MGM Grand.” (“The Signature”). MGM owns a federal trademark registration for the design mark THE SIGNATURE AT MGM GRAND (pictured below) (the “Signature Logo”).

For those not familiar with the condo-hotel concept, condo-hotel units, such as those at The Signature, are traditional condominium units in that they are privately owned. However, the owners of these condo-hotel units also have the option of making their units available to be booked as hotel rooms by, in the case of units at The Signature, MGM-Mirage (the owner of the MGM Grand Hotel & Casino) through the MGM Mirage Central Reservation Service – the same service that all MGM Mirage hotel properties use to make their hotel rooms available for guest booking. These condo-hotel units are available for booking through such Global Distribution Service (“GDS”) providers, such as Sabre, Amadeus, Apollo, Worldspan and Pegasus. For those owners who choose to have their units booked as hotel rooms, Signature handles the management of the room during the duration of the guest’s stay (e.g. check-in/check-out, maid service, maintenance, etc.). The revenue generated is then shared by Signature and the unit owners. Unit owners do not have to use the MGM Mirage Central Reservation Service and can make their condos available for booking through other means, so long as they pay a so-called “transient service fee.”

Curd allegedly owns one or more units in The Signature. According to the complaint, Curd independently offers his units at The Signature for booking by guests using the business name “Owners Suites at Signature MGM Grand." Curd also acquired the domain name, which now simply forwards to the Curd’s current website -- (although it may not have at the time). It should be noted that Curd’s current website does not actually use the whole name “Owners Suites at Signature MGM Grand" (probably after advice from counsel), but instead uses “Owners Suites® at Signature” (a name which has its own problems, but I will address that later).

Plaintiffs maintain that this domain name is likely to cause confusion as to the source or origin of Curd's services or as to an affiliation or relationship with Signature or as to Signature's sponsorship or approval of Curd's services. Plaintiffs also maintain that Curd’s website “emulates the look and feel of the official web site for The Signature.” [Comment: hmmm, judge for yourself, although it’s possible his older website may have looked more similar, but protectable trade dress?]

What makes this case a little more interesting are the allegations that Curd sometime around November 26, 2007, sent a letter to the aforementioned GDS partners on letterhead bearing the Signature Logo, without the knowledge or consent by Signature, stating in part the following:

Please be advised that effective immediately, The Signature at MGM Grand,Las Vegas, Nevada will no longer be represented by MGM/Mirage (MV)Central Reservation Services. This hotel will now be represented by InnLink Central Reservation Services as Owners Suites at Signature MGM.

ven more, Curd provided MGM MIRAGE’s GDS property codes and chain code to enable the GDS providers to change these codes. Curd supposedly signed the letter as President of Signature. Someone at InnLink later followed up with the GDS partners regarding the new codes, the result of which is that travel agents could not for some period of time use the GDS system to book rooms at The Signature.

After Signature realized what had happened, Plaintiffs’ counsel, on December 21, 2007, sent a cease and desist letter to Curd demanding that he stop his conduct, stop using the name “Owners Suites at Signature MGM Grand,” take down his website and transfer the ownership of to MGM. When Curd responded to Plaintiffs’ counsel on December 29, 2007, he claimed that the changing of the reservation codes was a “misunderstanding.” Shortly thereafter, Curd deactivated the website (although now it forwards to Curd’s other website).

Since that time, Signature has apparently received several complaints from customers who booked a unit at The Signature through Curd and his website. Curd supposedly told one guest that Curd would pay for all service charges during the customer’s stay; however, the guest was ultimately charged for such services and the guest informed Signature representatives that Curd’s practices do not “look good” for Signature. In May, Signature supposedly received another complaint from a customer who had booked a room at The Signature from a "Jonathan Jared” although the actual unit was owned by Curd. On May 29, 2008, another guest showed up at The Signature who said that he had booked a unit through Curd’s website; however, Signature had no record of the reservation and Curd’s unit had already been booked. Plaintiffs, without citing any evidence, also maintain that Curd is offering to book units that he does not own and is booking units without paying the required transient service fees to Signature.

Plaintiffs allege that Curd's conduct has injured and is likely to continuing injuring the goodwill and reputation of Signature and MGM’s mark. Plaintiffs’ causes of action are for registered trademark infringement, unfair competition, false advertising, trade dress infringement, common law trademark infringement and unfair competition, and intentional interference with a prospective economic advantage. Plaintiffs seek injunctive relief, the usual damages (compensatory, punitive, exemplary, statutory, treble, and all other damages), costs and attorneys’ fees.

Vegas™Esq Comments:
Interestingly, the first thing I notice upon viewing Curd’s website was not the references to Signature, MGM, or even any kind of similarity with Signature’s website – what I noticed was the following: “Owners Suites® at Signature.” I checked the U.S. Patent and Trademark Office’s (“USPTO’s”) TARR database and there is no federal registration for the mark “Owners Suites.” There is not even an application pending. As every trademark practitioner knows, use of the ® for a mark that is not registered with the USPTO can constitute fraud. I’m surprised Plaintiffs did not throw in a “fraud” claim based on Curd’s use of the ® symbol (maybe it would force them to acknowledge that Curd had changed his website and removed references to MGM Grand, although he still references Signature, but arguably a fair use reference). I also checked with the Nevada Secretary of State (many people think that a state registration allows a person to use the ® symbol, even though it does not), but found nothing. Of course, this little misuse of the ® symbol is the least of Curd’s troubles right now.

Monday, June 9, 2008

Starbucks fails again to defeat “Mister Charbucks” even under amended federal dilution law

A district court decision has once again concluded that a family-owned roastery in New Hampshire can sell it dark coffee blend under the name “Mister Charbucks” or “Mr. Charbucks”

Starbucks Corp., the nation's largest coffee retailer, had filed a lawsuit against Wolfe’s Borough Coffee, Inc. ("Wolfe's") alleging trademark infringement and trademark dilution over Wolfe's use of the “Mister Charbucks” or “Mr. Charbucks” marks to sell coffee.

The district court originally found no likelihood of dilution under the federal dilution law in effect at the time Starbucks filed its complaint (the Federal Trademark Dilution Act of 1995 (“FTDA”)). However, in response to the U.S. Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003) that the FTDA required evidence of actual dilution, Congress in 2006 enacted the Trademark Dilution Revision Act of 2006 (“TDRA”), Pub.L.No. 109-312, 120 Stat. 1730 (2006)(now codified at 15 U.S.C. § 1125(c)), effective October 6, 2006, and thereby enacting a likelihood of dilution standard for claims of dilution under federal law.

When the district court’s decision was appealed to the Second Circuit Court of Appeals, the Court of Appeals vacated the district court’s decision and remanded the case back to the district court for reconsideration of the dilution claim in light of the changes to federal trademark dilution law made in the TDRA. See Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., No. 06-0435, (2d Cir. Feb. 17, 2007). Articles on the original decision can be found here and here.

On June 5, 2008, the U.S. District Court for the Southern District of New York once again concluded that the Charbucks Marks does not dilute Starbuck’s famous mark even under the TDRA. See Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., Case No. 01 Civ. 5981, 2008 U.S. Dist. LEXIS 44147 (S.D.N.Y. June 5, 2008). A copy of the decision can be downloaded here (courtesy of Seattle Trademark Lawyer ).

The district court, citing in large part to its prior findings of fact, most of which were still applicable, applied the factors set forth in 15 U.S.C. § 1125(c) for likelihood of dilution by blurring and dilution by tarnishment.

Regarding dilution by blurring, while the court acknowledged that Starbucks’ mark was distinctive and had a high degree of recognition, the court stated the following regarding similarity of the marks:

The question of similarity is also highly relevant in the dilution context. Plaintiff's and Defendant's marks are far from identical. "In order to establish dilution by blurring, the two marks must not only be similar, they must be 'very' or 'substantially' similar." . . . . There is no evidence that Defendant uses "Charbucks" as a stand-alone term. Rather, it is used with "Mr." or "Mister" on Defendant's distinctive packaging or in product lists. For these reasons, the marks at issue here are not substantially similar. This dissimilarity alone is sufficient to defeat Plaintiff's blurring claim, see Hormel Foods Corp., 73 F.3d at 506, and in any event, this factor at a minimum weighs strongly against Plaintiff in the dilution analysis.

The court also found insufficient evidence to establish Wolfe’s intent to create an unlawful association with Starbucks’ famous mark or to establish actual confusion – both of which weighed against Starbucks. The court, in denying Starbucks’ request for injunctive relief, concluded that there was insufficient evidence to demonstrate the requisite likelihood that the association arising from the similarity of the core terms (namely, Bucks) is likely to impair the distinctiveness of Starbucks' mark

Regarding dilution by blurring, the court rejected Starbucks’ survey evidence which calculated that of the 30.5% of respondents who had an immediate association between "Charbucks" and "Starbucks," 62% said they would have a negative impression of a coffee called "Charbucks”:

This statistic says nothing, however, about the likelihood that those respondents' negative impression of a coffee called "Charbucks" would affect detrimentally their perception of Starbucks. It would be just as reasonable to conclude that their negative impressions of a hypothetical coffee named "Charbucks" were based on their strong allegiance to Starbucks, something Defendant observes by noting that 71% of those respondents had a positive impression of Starbucks. Additionally, the record at trial established that Defendant's product is a high-quality coffee with rigorous quality control mechanisms. See Tr. Trans. at 82:7-84:15, 86:8-87:1, 89:6-15; see Starbucks, 2005 U.S. Dist. LEXIS 35578, 2005 WL 3527126, at *6. Thus, looking beyond the inferences argued from the hypothetical phone survey, the record demonstrates that the Defendant's actual "Mr. Charbucks" coffee product is of such a quality that its association with Starbucks is unlikely to be damaging.

The court added that according to the evidence of record, Wolfe’s "Mr. Charbucks" coffee products are of such a high quality that its association with Starbucks would unlikely be damaging. The court concluded that Starbucks had not demonstrated a likelihood of dilution by tarnishment necessary to obtain injunctive relief.

The court simply adopted and reinstated its prior findings of fact and conclusions of law in December 2005 with respect to Starbucks’ federal trademark infringement and unfair competition claims, state trademark dilution claims, and common law unfair competition claim.
Click here for comments by Seattle Trademark Lawyer.

Friday, June 6, 2008

Battle of the Wolfgangs Part II – The “other” Wolfgang Strikes Back

I previously wrote here about the lawsuit filed by Wolfgang Puck against Wolfgang Zwiener over the latter’s use of the name “Wolfgang’s Steakhouse by Wolfgang Zwiener” in connection with Zwiener’s recently opened Beverly Hills steakhouse which is close in proximity to Puck's own Beverly Hills steakhouse restaurant, Cut. See also’s article on the dispute here.
Yesterday, Zeiener announced in a press release that he had filed an answer to Puck’s initial complaint which also asserted a breach of contract counterclaim against Puck claiming that Puck, by challenging Zwiener’s chosen name for his steakhouse, breached a March 2007 settlement agreement reached between the two which purportedly allowed Zwiener to open steakhouses outside New York City using the disputed name.

Puck, however, claimed in the original lawsuit that the deal was that Zwiener agreed to display his name prominently alongside any future restaurant – and Puck agreed to do the same should he establish a restaurant in Manhattan. Puck’s issue is with the fact that the “by Wolfgang Zwiener” is in much smaller font than the Wolfgang’s Steakhouse.

The press release attempts to dispute Puck’s claims of surprise by noting that the development process for the restaurant was publicly conducted and involved the direct and extensive involvement of the Beverly Hills City Council which approved Zwiener’s restaurant to occupy the location owned by the City of Beverly Hills and even approved the signage used by Zwiener. [Comment: I don’t think a city council’s approval of signage is going to carry any weight in a trademark infringement likelihood of confusion analysis.]

The release quotes the following from the answer filed by Zwiener’s attorneys:

Despite Puck’s melodramatic effort to paint Defendants as villains straight out of “Casablanca,” . . . the actual evidence reflects not a creative Hollywood movie plot, but only a more mundane and entirely legitimate business decision. Defendants expanded into Beverly Hills, as they had an absolute right to do under the Settlement Agreement with Puck, and conducted themselves in complete accordance with that agreement. Defendants sought to build on their own reputation developed as a result of their successful introduction of other “Wolfgang’s Steakhouse” restaurants in New York. While Puck may envision an imaginary world filled with sinister plots to take advantage of his good name, the record evidence simply does not support the Hollywood fiction he seeks to create.

Personally, I liked the “likelihood of confusion” analysis performed by Jessica.Gelt, a Los Angeles Times food critic, who puts her own unique spin on the controversy in her article “Steak-off! Wolfgang's vs. Cut.”

Wednesday, June 4, 2008

Sweet Leaf Tea files declaratory judgment of noninfringement against maker of SweetLeaf Stevia sweetener

The Austin Business Journal ran an article today (link here) on a lawsuit filed by the Sweet Leaf Tea Company (“Sweet Leaf Tea”), a producer of a line of ready-to-drink teas marketed under the name Sweet Leaf Tea, against United American Industries, Inc. (“UAI”), which does business under the tradename Wisdom Natural Brands and sells a brand of stevia sweetners (a natural sugar substitute) under the design mark SWEETLEAF (for nutritional supplements).

Sweet Leaf Tea received a cease-and-desist letter from UAI demanding that Sweet Leaf Tea stop using the mark Sweet Leaf on its beverage products.

Facing the imminent threat of a trademark infringement lawsuit, Sweet Leaf Tea opted to fight the battle on its own turf and filed a lawsuit seeking a declaratory judgment of noninfringement. See Sweet Leaf Tea Company v. United American Industries, Inc., Case No. 08-cv-00441 (W.D. Tex. May 29, 2008).

Having never filed for any applications to register its mark with the USPTO, Sweet Leaf Tea is relying upon its common law rights to use the name Sweet Leaf, which it has been using since 1998 for its ice teas, as well as a laches argument against UAI. On April 16, 2008, Sweet Leaf Tea filed two applications to register the mark SWEET LEAF (for ice tea and lemonades).

Monday, June 2, 2008

Tenth Circuit affirms dismissal of trademark infringement lawsuit by LDS Church critic against parody website

The Tenth Circuit Court of Appeals affirmed a lower court decision denying claims of trademark infringement, unfair competition, and cybersquatting by an organization critical of the Church of Jesus Christ of Latter-day Saints (LDS Church). See Utah Lighthouse Ministry v. Foundation for Apologetic Information and Research et al., Appeal No. 07-4095 (10th Cir. May 29, 2008). A copy of the decision can be downloaded here.

Jerald and Sandra Tanner founded the Utah Lighthouse Ministry (UTLM) in 1982 as an organization dedicate to critiquing the LDS Church. UTLM sells books critical of the LDS Church both at its Utah bookstore and online through its website (

The Foundation for Apologetic Information and Research (FAIR) is an organization dedicated to responding to criticisms of the LDS Church. In November 2003, Allen Wyatt, the vice president and webmaster for FAIR, created a website (the “Wyatt website”) parodying the UTLM website which was similar in appearance (image of a lighthouse with black and white barbershop stripes), but with “different, though suggestively parallel, content”:

Prominent text on the Wyatt website consists of a slight modification of the language located in the same position on the UTLM website. For example, the UTLM website states: "Welcome to the Official Website of the Utah Lighthouse Ministry, founded by Jerald and Sandra Tanner." In comparison, the Wyatt website states: "Welcome to an official website about the Utah Lighthouse Ministry, which was founded by Jerald and Sandra Tanner." (emphasis added.) The Wyatt website does not have any kind of disclaimer that it is not associated with UTLM.

Slip op. at 3.

The Wyatt website did not contain any advertising or offer any goods or services for sale, and included hyperlinks to an organization at Brigham Young University, articles on FAIR’s website criticizing the Tanners, and links to FAIR’s website and the LDS Church. In addition, Wyatt, through his company Discovery Computing, Inc. (“Discovery”), registered ten domain names -- combinations of the words “Utah Lighthouse Ministry," "Sandra Tanner," "Gerald Tanner," "Jerald Tanner," and ".com" and ".org." Wyatt’s website was first publicized to FAIR members in April 2004. Presumably in response to UTLM’s complaint, Wyatt later shut down the website and began transferring the domain names to UTLM in April 2005.

UTLM’s complaint against FAIR, Wyatt, and Discovery asserted six causes of action—federal trademark infringement, federal unfair competition, federal trademark dilution, cybersquatting, federal trade dress infringement, and unfair competition under Utah state law. The parties filed cross-motions for summary judgment, and the district court denied Plaintiff's motion and granted Defendants' motion on all six counts. See Utah Lighthouse Ministry v. Foundation for Apologetic Information and Research et al., Case No. 05-CV-00380 (D. Utah). UTLM appealed the district court’s decision on all claims except dilution, but only briefed the issues of trademark infringement, unfair competition, and cybersquatting, so the court only addressed those three claims on appeal.

Trademark Infringement & Unfair Competition
Addressing the trademark infringement and unfair competition claims together, the court started its analysis by noting that UTLM, to make out a case for trademark infringement, must show that the mark is protectable, must demonstrate the Defendant’s use of the mark in connection with any goods or services, and must establish that such use is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person. See 15 U.S.C. § 1125(a).

Protectable Interest
UTLM argued that it was entitled to a presumption of protectability because the UTAH LIGHTHOUSE is a registered trademark/servicemark. However, as the district court noted, the mark was registered on July 25, 2006 – after UTLM had filed its lawsuit – and thus not entitled to the presumption of validity afforded to registered marks under 15 U.S.C. § 1115(a). [The court, in a footnote, stated “It is not clear that a mark must be registered at the time the suit is filed to benefit from the statutory presumption, but it is not necessary to decide that issue on this appeal.” Slip op. at 8, fn. 3.] The district court further found that UTLM had failed to show evidence that its mark had acquired a secondary meaning.

While UTLM argued on appeal that its mark is distinctive by virtue of it being arbitrary, and thus no showing of secondary meaning is necessary, UTLM did not raise this argument at the district court level, instead relying entirely on its federal registration. The court declined to exercise its discretion to consider UTLM’s arguments raised for the first time on appeal. The court also noted that UTLM’s evidence to the district court, which could be construed as an argument of acquired secondary meaning, consisted solely on the number of "hits" generated by searches for UTAH LIGHTHOUSE on the Yahoo and Google search engines and on the websites of other organizations associated with the LDS Church. The court found such evidence lacked any accompanying evidence showing that the relevant market of consumers had visited the websites containing these hits, and thus was insufficient to show that the mark had acquired a secondary meaning.

Commercial Use
The court next addressed UTLM attempts to prove the second factor – Defendant’s use of the mark in connection with any goods or services, specifically, that Wyatt’s website was “commercial” and thus his use of UTLM’s mark was “in connection with any goods or services." 15 U.S.C. § 1125(a)(1)).

UTLM first argued that Wyatt’s website was commercial because it hyperlinked to the FAIR website, which contains an online bookstore. While the issue of when hyperlinking renders an otherwise noncommercial website subject to the Lanham Act was one of first impression for the Tenth Circuit, the court cited favorably to the Ninth Circuit’s decision in Bosley Med. Inst., Inc. v. Kremer, 403 F.3d 672, 677 (9th Cir. 2005) (defendant’s gripe website was not in connection with the sale of goods or services where the “roundabout and attenuated” commercial use connection was that the defendant’s website contained a link to a second website by the defendant, which linked to a newsgroup which in turn contained advertisements for plaintiff’s competitors). The court further noted that Wyatt’s use of UTLM’s mark was not in connection with a sale of goods or services, but rather in connection with the expression of an opinion about UTLM’s goods and services. The court also noted that none of Wyatt’s hyperlinks linked directly to the FAIR bookstore, but rather to specific articles on the FAIR website and to the FAIR homepage, which the court stated was “overwhelmingly noncommercial in nature.” As such, the court found the district court’s decision that the Wyatt website was not a commercial use because it "provided no goods or services, earned no revenue, and had no direct links to any commercial sites” consistent with the Bosley case as the court found the connection to commercial use to be “roundabout” and “too attenuated,” and thus

UTLM’s second argument was that the Wyatt website and use of the UTLM mark was commercial because it prevented consumers from accessing UTLM's own goods and services – the so-called “interference” theory of commercial use where a party’s use of a trademark is in such a way that it frustrate users and prevents them from reaching the goods and services of the trademark owner. The court commented that such a theory of commercial use (i.e., use in connection with the trademark owner's sale of goods or services is commercial use) eliminates the requirement of an economic competitor and thus is inconsistent with Lanham Act’s purpose of protecting the ability of consumers to distinguish among competitors. The court also stated that this theory was criticized by the Ninth Circuit in the Bosley case on the basis that it would subject otherwise protected critical consumer commentary to the provisions of the Lanham Act.

UTLM’s final argument was that Wyatt’s use of the trademark on the Internet itself constituted commercial use. However, the court rejected UTLM’s argument that any use of a trademark on the Internet is a use "in connection with goods or services." The court, responding to UTLM’s arguments, clarified that while use of a trademark on the Internet may be sufficient use in interstate commerce to satisfy a jurisdictional requirement, such use does not automatically satisfy the “commercial use” necessary for liability under the Lanham Act.

In the end, the court found that Wyatt’s use of UTLM's UTAH LIGHTHOUSE mark was not in connection with any goods or services, and thus such use could not be the basis for UTLM's trademark infringement and unfair competition claims.

Likelihood of Confusion
In order to cover all its bases, the court went on to conduct a likelihood of confusion analysis “even if” Wyatt’s use were determined to be commercial and UTLM were found to have a protectable interest. The court first cited Sally Beauty Co., Inc. v. Beautyco, Inc., 304 F.3d 964 (10th Cir. 2002) for the six factors used by the Tenth Circuit to determine likelihood of confusion, but also noted that parody is an additional factor (and not an affirmative defense that must be asserted) to consider – one which “casts several of the above-cited six factors in a different light.”

The district court had found no likelihood of confusion based on its analysis of the six factors and its determination that the Wyatt website was a parody of the UTLM website. The court, in balancing the six Sally Beauty Co. factors, found the factors weighed in favor of a finding of no likelihood of confusion.

There was no dispute regarding similarity of the marks, which favored UTLM. As for the intent on Wyatt’s part in choosing the UTLM’s mark, no inference of confusion could be drawn from Wyatt’s intentional use of UTLM’s mark since his use was that of a parody and the benefit derived by Wyatt in using UTLM’s mark was the benefit from the “humorous association, not from public confusion as to the source of the marks. . . .” Slip op. at 19. The court agreed that there was no credible evidence of actual confusion.

Regarding similarity of goods/services offered and of marketing channels, the court noted some similarity between the goods sold by UTLM and FAIR, but that “any potential for confusion created by the similarity in goods and manner of marketing is mitigated by the lengthy path a consumer must take to reach the goods offered for sale. The FAIR bookstore does not use UTLM's trademark, and a searcher must click through a website that does not resemble the UTLM website in order to reach FAIR's bookstore.” Slip op. at 20.

As for degree of consumer sophistication, the court held that one could infer that potential customers of the UTLM bookstore are discerning and sophisticated about where they purchase books on controversial religious subjects. While the district court found the factor irrelevant, the court found the factor to favor FAIR because, much like with the fourth factor, “the absence of the UTLM trademark on the FAIR website or the FAIR bookstore lessens the chance that a consumer would be mislead into believing that she is visiting the UTLM online bookstore. Therefore, this factor does not weigh in favor of a finding of likelihood of confusion.” Slip op. at 21.

Finally, with respect to the strength of the mark, UTLM had not submitted any evidence to the district court regarding the strength of the mark and the district court determined that UTLM's evidence of search engine hits did not demonstrate that the mark had significant recognition in the marketplace. The court found the evidence to support a finding that the commercial strength of the mark weighed against a finding of confusion. The court noted that even if it were to consider UTLM’s arguments of strength made for the first time on appeal, this alone would not suffice to find a likelihood of confusion.

The court added that while it concluded no likelihood of confusion based on the conventional balancing of the factors, the fact that Wyatt’s website was a parody website provided “an even more convincing explanation of why consumers are unlikely to be confused.” Slip op. at 22. The court found no error on the district court’s part in finding that the Wyatt website was a parody because it would be immediately apparent to anyone visiting the Wyatt website that it was not the UTLM website due to the differences in content. The court noted that there were sufficient differences between the content and style of the two websites to avoid the possibility of confusion.

In the end, the court found that UTLM had failed to produce sufficient evidence to support a finding that its UTAH LIGHTHOUSE mark is protectable, that Defendants' use of the mark was in connection with any goods or services, and that Defendants' use of the mark was likely to cause confusion among consumers as to the source of the goods sold on the FAIR online bookstore.

In analyzing UTLM’s claim under the Anti-Cybersquatting Protection Act (ACPA), 15 U.S.C. § 1125(d), the court first cited the three elements that UTLM must establish to prevail on its cybersquatting claim:

1) that its trademark, UTAH LIGHTHOUSE, was distinctive at the time of registration of the domain name, (2) that the domain names registered by Wyatt, including and, are identical or confusingly similar to the trademark, and (3) that Wyatt used or registered the domain names with a bad faith intent to profit.

Slip op. at *24.

The second element had been established because Wyatt admittedly registered and, which are confusingly similar to the UTAH LIGHTHOUSE mark. However, based on the court’s determination above that the UTAH LIGHTHOUSE was not distinctive, the court found that UTLM had not established the first element.

In addition, UTLM failed to demonstrate the third element – a bad faith intent to profit. The court, looking at the nine nonexclusive factors set forth in the ACPA (see 15 U.S.C. § 1125(d)(1)(B)(i)), found several of factors which the court stated readily defeated an inference that the Wyatt intended to profit by using domain names similar to UTLM's trademark.

The first such factor was the domain name registrant’s “bona fide noncommercial or fair use of the mark in a site accessible under the domain name.” See 15 U.S.C. §1125(d)(1)(B)(i)(IV). The court agreed with the district court’s determination that Wyatt’s use was both entirely noncommercial and a fair use parody, and thus was not use of the mark in bad faith. Wyatt’s website was a parody that offered an indirect critique and lacked an overt commercial purpose.

The second factor critical to the court’s determination was the defendant’s intent to divert consumers to a website that “could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site.” See 15 U.S.C. § 1125(d)(1)(B)(i)(V). The court agreed with the district court’s conclusion that Wyatt’s website created no likelihood of confusion as to its source, or whether it was affiliated with or endorsed by UTLM, and thus did not evidence any intent on the part of the Defendants to divert consumers and to take advantage of or harm the goodwill of UTLM’s mark.

The court concluded that Wyatt lacked a bad faith intent to profit from the use of UTLM's trademark in several domain names linked to the Wyatt website. The court added that Wyatt’s website, as a parody, fits within the "safe harbor" provision of the ACPA (see 15 U.S.C. § 1125(d)(1)(B)(ii): precluding a finding of bad faith intent if “the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”). Because Wyatt’s website was deemed a parody, Wyatt could have reasonably believed that use of the domain names incorporating UTLM’s trademark was legal, and thus the safe harbor provision applied to Wyatt’s use.

As such, the court concluded that the district court properly granted summary judgment on UTLM's cybersquatting claim

The LDS Church in Las Vegas