Tuesday, December 29, 2009

Jack Binion Loses Appeal Over BINION Trademark Applications

(Binion's Casino in Downtown Las Vegas)

The TTABlog® reports on a precedential decision issued by the Trademark Trial and Appeal Board upholding a decision by the U.S. Patent and Trademark Office to refuse registration of two intent-to-use trademark applications filed by Jack Binion for the marks BINION’S and BINION for “casino and gaming services” and “hotel and bar services.” See In re Jack Binion, Serial Nos. 76590702 and 76590729 (T.T.A.B. December 23, 2009) (precedential).

The PTO Examining Attorney cited two grounds for refusing the register the marks – likelihood of confusion over the existing registered mark BINION'S ROADHOUSE for “restaurant services” and that the mark was primarily merely a surname (for which Binion’s evidence of acquired distinctiveness was lacking).

The fact that Binion already held registrations for the marks JACK BINION’S (both word mark and design mark) for “restaurant services” and JACK BINION design mark for “Casino, hotel, restaurant and bar services” did not carry any weight with the Board on the issue of likelihood of confusion since the applied-for marks did not contain the first name “Jack” and thus were more similar to the registered mark than his existing registrations. The fact that the registered mark was the name of a single restaurant in North Carolina also did little to persuade the Board – given the nationwide scope afforded registered trademarks.

As for the surname refusal, the Board was unconvinced by the evidence put forward by Binion in an attempt to show that he warrants an exception to the surname refusal as a historical person. As for Binion’s claim of acquired distinctiveness, as noted above, the applications were filed based on intent to use.

While a Section 2(f) claim of acquired distinctiveness can be made if the applicant’s use of the same mark in connection with other goods and services has made the mark distinctive of the goods or services in the intent-to-use applications and the acquired distinctiveness will transfer over to the goods and services in the intent-to-use application when use in commerce begins, the Board found that Binion’s existing registered marks for JACK BINION and JACK BINION'S were not the same.

The Board was also not persuaded by the evidence of the publicity of the Binion family as legends in the Las Vegas community (and let’s not forget the infamy as well from the Ted Binion murder trial) – finding instead that it simply reinforced that consumers would recognize Binion as a surname and did not show use of the name as a trademark to an to an extent sufficient to show acquired distinctiveness

If Binion were inclined to appeal this decision, I think the case might be an excellent contender for an appeal by way of an independent district court civil action under 15 U.S.C. § 1071(b)(1) (rather than a traditional appeal to the Federal Circuit) in order to submit new evidence to overcome what might not have been enough evidence to convince the Board of acquired distinctiveness. And since such an action can be brought in the district where Binion resides (see 28 USC 1391(e)(3)), Binion could file the action in the District of Nevada. You think that might give Binion a home town advantage?

Of course, there is still the little issue of the likelihood of confusion rejection – but that’s nothing that can’t be addressed with a consent and coexistence agreement with the owner of Binion’s Roadhouse (along with a little money).

But there is one other not-so-obvious nuance that stands in the way of Binion getting a federal registration on his name in connection with “casino and gaming services” and “hotel and bar services.” The BINION'S casino pictured at the top of this post is not actually owned by Binion, but rather its owned by TLC Casino Enterprises, which acquired the hotel/casino property in January 2008 from MTR Gaming who had purchased the property from Harrah’s in 2004 after Harrah’s bought out Binion’s Horseshoe and its intellectual property, keeping the “Horseshoe” name and the “World Series of Poker.” (For reasons discussed below, it’s not clear if Harrah’s also sold the “Binion’s” name to MTR, which is what most reports state, or if Harrah’s still considers it part of its trademark portfolio and is licensing it.) A recent news story about the closing of the hotel at Binion’s provides some background. This link also provides some historical perspective.

However, Binion’s intent-to-use applications were filed with the PTO on May 6, 2004. Four months later in early September 2004, a Harrah’s subsidiary filed two use-in-commerce trademark registration applications for the mark BINIONS’S (word mark and design mark) for both “Casino and gaming services” and “Hotel, restaurant and bar services” citing a first use date of June 1964 (a reference back to the opening date of Binion’s Horseshoe). Both of these applications are suspended pending the outcome of Binion’s two intent-to-use applications. Even if Binion were to have gotten his applications published for opposition, Harrah’s (or whatever entity currently owns the goodwill associated with the name Binion’s in connection with the downtown Las Vegas property formerly known as Binion’s Horseshoe) surely would have filed oppositions against Binion’s two applications based on its priority.

Binion's Horseshoe Hotel & Casino

Wednesday, December 23, 2009

Las Vegas Review Journal Sues Companies Over “The Best of Las Vegas”

(...and the award for Best Trademark Law Blog in Las Vegas in 2009 goes to...)

Stephens Media LLC (“Stephens”), the owner of the Las Vegas newspaper The Las Vegas Review Journal, has sued three companies for trademark infringement over the use of the mark “The Best of Las Vegas.” Two of the lawsuits were filed earlier this week and one filed earlier this month. See Stephens Media LLC v. Gault Millau, Inc., Case No. 09-cv-02403 (D. Nev. December 21, 2009) (complaint here); Stephens Media LLC v. US Commerce Association et al, Case No. 09-cv-02405 (D. Nev. December 21, 2009) (complaint here); and Stephens Media LLC v. CitiHealth, L.L.C., Case No. 09-cv-02285 (D. Nev. December 2, 2009) (complaint here).

An article on the lawsuits, written by the Las Vegas Sun (the print version of which is owned by a separate company, but distributed with the Review Journal), can be found here.

Stephens has several federal trademark registrations for both the design mark “The Best of Las Vegas” (pictured above) and the word mark “Best of Las Vegas” including:

  • The design mark THE BEST OF LAS VEGAS for “section of a newspaper featuring consumer preferences and recommendations regarding people, places, goods, services, restaurants, entertainment, arts, sports and recreation in the Las Vegas area”;
  • The design mark THE BEST OF LAS VEGAS for “Newspaper articles, periodicals and pamphlets featuring general information about people, places, goods, services, restaurants, entertainment, arts, sports and recreation; paper award certificates”;
  • The word mark BEST OF LAS VEGAS for “Newspaper articles, periodicals and pamphlets featuring general information about people, places, goods, services, restaurants, entertainment, arts, sports and recreation; paper award certificates”;
  • The word mark BEST OF LAS VEGAS for “promoting the sale of goods and services of others by conducting and disseminating business surveys featuring consumer preferences and recommendations regarding people, places, goods, services, restaurants, entertainment, arts, sports and recreation in the Las Vegas area”; and
  • The word mark BEST OF LAS VEGAS for “providing a web site featuring business and consumer preferences and recommendations regarding people, places, goods, services, restaurants, entertainment, arts, sports and recreation in the Las Vegas area.

For those of you wondering how Stephens could possibly obtain trademark registrations for such a descriptive mark, the answer lies in Section 2(f) of the Trademark Act which allows a trademark owner to register a descriptive mark on the basis of acquired distinctiveness. All of the above marks are registered on the Principal Register based on a Section 2(f) claim of acquired distinctiveness (in-part for the design marks do have a distinctive design) – and all registrations have disclaimers of the word “Las Vegas.”

According to the complaint against Gault Millau, its travel website gayot.com has a section named “The Best of Las Vegas Top Restaurants Hotels Travel Guide” (click here to see what I could find) that Stephens finds infringing.

As for the complaint against US Commerce Association, the company is allegedly selling “award” plaques ($80 each) or award trophies ($180 each) to small businesses by sending e-mails stating that they have won a “Best of Las Vegas Award” which are bestowed upon such businesses by US Commerce Association. [Comment: kind of like those scam Who’s Who’s directories that will honor you by listing you in their "Who's Who" book – with the payment of a fee which gets you a copy of the book listing the names of thousands of others suckers as well as a pretty piece of paper]. Stephens feels that the company's actions harms the goodwill associatd with its “Best of Las Vegas” marks.

Finally, the lawsuit against CitiHealth relates to the company’s publication of a magazine in December 2008 called “Healthy Living Las Vegas” that included the phrase on the cover “Best of Las Vegas” (the cover picture appeared online as well at http://www.citihealth.com/). Las Vegas Sun reporter Steve Green spoke with the publisher of the Healthy Living, who stated that the company was not aware of Stephens’ trademarks for “Best of Las Vegas” at the time the magazine was published and that after the company received notice from Stephens, the company took action to remove the magazines from circulation and removed it from the website. [So why the lawsuit after all this time? That’s the real question isn’t it?]

Monday, December 21, 2009

Trademark Battle Over the Fame of “Atlantis” for Casino Services Headed to Trial In Nevada District Court

Two casino companies fighting over the right to use the service mark ATLANTIS in connection with casino services are heading for trial after two Nevada District Court orders ruled on multiple motions filed by the parties and set the stage for the parties to proceed to trial. See Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116622 (D. Nev. December 14, 2009); Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116624 (D. Nev. December 14, 2009).

Atlantis Resort & Casino - Paradise Island, Bahamas

On one side are Kerzner International Limited and Kerzner International Resorts, Inc. (together “Kerzner”), the owners of the Atlantis Resort and Casino on Paradise Island in The Bahamas. On the other side is Monarch Casino & Resort, Inc. and Golden Road Motor Inn, Inc. (together “Monarch”) which own and operate the Atlantis Casino Resort Spa in Reno, Nevada.

Atlantis Casino Resort in Reno, Nevada

The origins of the dispute date back to a trademark registration for the mark ATLANTIS for lodging services which was originally registered with the U.S. Patent and Trademark Office by Atlantis Lodge, Inc. (“Lodge”) on October 11, 1994. Lodge had been using the Atlantis mark in connection with lodging services in North Carolina since June 6, 1963. Lodge’s subsequent licensing of its Atlantis mark to both Kerzner and Monarch set the foundation for the eventual dispute between Kerzner and Monarch.

Monarch had been offering lodging services in Reno, Nevada since 1972 and casino services since 1986, but when Monarch first used the Atlantis mark in 1992, it was in connection with restaurant, bar, lounge, and nightclub services, not lodging or casino services. In February 1996, Monarch entered into a license agreement with Lodge for the exclusive right to use the Atlantis mark in connection with lodging services in all of Nevada. In April 1996, Monarch Reno casino resort (which at the time was operating under the “Clarion” mark) began operating under the name “Atlantis Casino Resort.” In July 1997, Monarch obtained a Nevada state trademark registration for the mark “Atlantis Casino Resort” for casino services, but never sought federal registration of the Atlantis mark for casino services.

In October 1994, Kerzner entered into a license agreement with Lodge for use of the Atlantis mark at its casino resort in The Bahamas (which at the time was under the name “Paradise Island Resort and Casino”). Kerzner began advertising the rebranding of its casino resort under the Atlantis name in October 1994 with the officially reopening occurring in December 1994.

In July 1996, Kerzner entered into an assignment and license agreement with Lodge whereby Kerzner acquired the ATLANTIS trademark registration for lodging services from Lodge and licensed the mark back to Lodge for use in North Carolina. The license agreement between Lodge and Monarch was attached as an exhibit to the Lodge/Kerzner assignment agreement, and Lodge’s representations of its right to assign the Atlantis mark were made subject to Monarch’s exclusive license to use the mark for lodging services in Nevada.

In February 1997, Kerzner filed an intent-to-use application to register the mark ATLANTIS in connection with, among other things, providing casino facilities, which issued on February 3, 2004, after Kerzner filed a Statement of Use in September 2003, claiming a first use date of October 1994.

The parties apparently coexisted in their respective markets without any problems until each side started taking steps towards expanding their respective Atlantis brand into the Las Vegas market.

Kerzner’s first amended complaint against Monarch was filed on February 14, 2006, and sought declaratory judgments that Monarch’s use of the Atlantis mark infringed Kerzner’s trademark right. Monarch fought back by filing counterclaims on December 28, 2006, seeking cancellation of Kerzner’s trademark registration and its own declaratory relief with respect to its own trademark rights to the Atlantis mark that Monarch had developed in connection with casino services. Monarch also filed a cancellation petition with the Trademark Trial and Appeal Board to cancel Kerzner’s trademark registration. See Monarch Casino & Resort, Inc. et al v. Kerzner International Resorts, Inc., Cancellation No. 92045869 (T.T.A.B. Filed May 31, 2006). The TTAB proceeding is stayed pending the outcome of the civil action.

In one of Monarch’s Motions for Partial Summary Judgment, Monarch claimed that it was entitled to a judgment as a matter of law that it had priority of use of the Atlantis mark for casino services. Monarch argued that its use of the Atlantis mark for casino services dated back to 1992 – the date when it first used the mark in connection with restaurant services (and which was before the date Kerzner began to use the Atlantis mark in The Bahamas).

The court, however, rejected Monarch’s argument that its use of the Atlantis mark for a restaurant gave it priority of use in connection with casino services under the “related goods” or “natural expansion” doctrine. The court concluded that restaurant services and casino services are not closely related and that Monarch only began to develop trademark rights in the Atlantis mark for casino services when it actually began using the mark in connection with casino services in April 1996.

Monarch also argued that its April 1996 had priority over Kerzner’s first use of December 1994 under the territoriality principle – Kerzner’s use was outside the United States and thus it use was not use of the Atlantis mark for casino services in the United States.

The court rejected Kernzer’s counterargument that activities conducted by it in the United States which are “integral” to its casino services in the Bahamas constitutes use of the Atlantis mark in the United States in connection with casino services. Since Kernzer’s “casino services” were clearly rendered outside the United States, Kerzner had to rely upon an exception to the territoriality principle to claim that its use of the Atlantis mark outside the United States gave it trademark rights in the United States..

With respect to one noted exception to the territoriality principle – described in International Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d 359 (4th Cir. 2003) where the court found that use of a mark in advertising or sale of services in the United States, coupled with the rendering of those services abroad to United States citizens, is sufficient to give rise to trademark rights in the United States – the court noted that the decision was not binding in the Ninth Circuit and, in light of the fact that the Ninth Circuit had even explicitly declined to adopt the reasoning and noted that the decision had been called into question, the Ninth Circuit would decline to adopt such reasoning if presented with the question. Thus, the district court declined to adopt it as well.

As for the other exception to the territoriality principle, that would be the “famous marks” exception to the territoriality principle which was recognized by the Ninth Circuti in Grupo Gigante SA de CV v. Dallo & Co., Inc., 391 F.3d 1088, 1093 (9th Cir. 2004), and thus binding precedent on this district court.

Grupo Gigante describes a two-step analytical process to determine whether a mark falls under the famous-mark exception. First, the district court must determine whether the mark has achieved the level of recognition that would be necessary in a domestic trademark infringement case. Id. at 1098; see also id. at 1106 (Graber, J., concurring). Second, “where the mark has not before been used in the American market, the court must be satisfied, by a preponderance of the evidence, that a substantial percentage of consumers in the relevant American market is familiar with the foreign mark. The relevant American market is the geographic area where the defendant uses the alleged infringing mark.” Id. at 1098. Thus, the standard for famous marks is an intermediate one: “[t]o enjoy extraterritorial trademark protection, the owner of a foreign trademark need not show the level of recognition necessary to receive nation-wide protection against trademark dilution. On the other hand, the foreign trademark owner who does not use a mark in the United States must show more than the level of recognition that is necessary in a domestic trademark infringement case.” Id. at 1106 (Graber, J., concurring).

The district court clarified that Kerzner must show that its mark was “famous” as of April 1996 – the date when Monarch began to use the Atlantis mark in connection with casino services.

And while Kerzner performed some surveys which tended to show that a “substantial percentage of consumers” surveyed were familiar with Kerzner’s use of the Atlantis mark (especially in the Las Vegas market, which was the more relevant market at issue in the case), the survey, conducted in 2007, did not ask questions about when the consumers became aware of the mark, and thus the survey lacked probative value about whether the mark qualifies for the famous-mark exception as of April 1996. The court did note that there was some evidence of the extensive promotional campaign that Kerzner engaged in to promoted its remodeled Atlantis casino resort, which could be reasonably inferred to have penetrated the Las Vegas market.

In the end, the court concluded that there was a genuine issue of material fact regarding when, if ever, Kerzner’s casino resort acquired the status of a famous mark in the meaning of Grupo Gigante. The court found that taking all reasonable inferences in Kerzner’s favor, a jury could conclude that by April 1996 a substantial percentage of consumers in the Las Vegas market were familiar with Kerzner’s mark based on the evidence of Kerzner’s substantial national advertising campaign and media coverage of the opening., and thus Kerzner might have priority of use in the Atlantis mark for casino services in the United States under the Grupo Gigante famous marks exception. Based on this finding, the court denied Monarch’s motion.

For similar reasons, the court also denied Monarch’s Motion that Kernzer does not have standing to bring its trademark infringement lawsuit.

Monarch filed another summary judgment motion arguing that Kerzner cannot show that it is entitled to injunctive relief as a matter of law.

Monarch first argued that Kerzner never had any plans to develop a casino resort in Las Vegas, much less one using the Atlantis mark, and thus Kerzner cannot demonstrate a likelihood of irreparable harm if the injunction did not issue. However, the court disagreed finding that, taking all reasonable inferences in Kerzner’s favor, the evidence submitted by Kerzner could demonstrate that Monarch had relatively immediate intentions either to open a casino resort under the Atlantis mark in Las Vegas or to sell rights in the mark to someone who would, and thus an injunction might well be an appropriate remedy after the conclusion of this lawsuit if Kerzner convinces the jury that it has senior rights in the mark.

Monarch next argued that since it is undisputed that Monarch has the exclusive right under its license agreement with Kerzner (as Lodge’s assignee in interest) to use the Atlantis mark for lodging services in Nevada (including Las Vegas), a Las Vegas resort hotel and casino under the Atlantis mark would create no greater likelihood of confusion than a facility which offers only lodging services, and thus Kerzner cannot demonstrate any additional likelihood of confusion that Kerzner might be entitled to enjoin.

In essence, Monarch argued that its license for lodging services gave Monarch leeway to create a certain likelihood of consumer confusion through providing lodging service, and only activities that would create an additional likelihood of consumer confusion could give rise to liability sufficient to merit an injunction. The court noted the obvious with respect to lodging services – to the extent that a consumer might believe that such a hotel is associated with Kerzner’s Atlantis mark, that consumer would not be confused at all given that Monarch is Kerzner’s licensee of the Atlantis mark for lodging services. The court then rejected Monarch’s argument by noting that Monarch’s license did not give it any rights to use the Atlantis mark in connection with both casino services and lodging services. Moreover, a consumer who believed casino services provided at a Monarch Atlantis casino resort in Las Vegas to be associated with Kerzner would be confused in a way that the consumer making the same association with regard to lodging services alone would not be, and if Kerzner prevails at trial, it may be entitled to an injunction to prevent such consumer confusion.

Monarch’s last argument in an attempt to persuade the court that injunctive relief should not be issued was the “Dawn Donut” rule and Kerzner’s lack of plans to offer casino services to consumers in Las Vegas. The Dawn Donut rule comes from the Second Circuit Court of Appeals decision in Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc. 267 F.2d 358 (2d Cir. 1959):

Under the Dawn Donut rule, even if a federal registrant has rights in a mark, it is not necessarily entitled to an injunction against an unauthorized user: “if the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into the defendant’s market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user’s use of the mark.” Dawn Donut, 267 F.2d at 364 (footnote omitted); see also Fairway Foods, Inc. v. Fairway Markets, Inc., 227 F.2d 193, 198 (9th Cir. 1955) (vacating injunction issued to prevailing plaintiff on essentially the same basis as later became known as the Dawn Donut rule). Only once the federal registrant has expanded its use of the mark, so that the market areas of the two users are no longer separate and distinct, will the registrant be entitled to an injunction. Mister Donut of Am., Inc. v. Mr. Donut, Inc., 418 F.2d 838, 844 (9th Cir. 1969) (citing Dawn Donut).

However, in rejecting Monarch’s argument, the court noted that the Grupo Gigante famous marks exception to the territoriality principle necessarily implies an exception to the Dawn Donut rule – the court in Grupo Gigante recognized that consumer confusion can occur with respect to a famous mark abroad even if the user of the mark has no intention of ever using the mark in the United States. The court held that an injunction in the U.S. where a mark used exclusively abroad is determined to be famous under Grupo Gigante would be appropriate to prevent the consumer confusion.

Monarch also filed a motion seeking summary judgment on its counterclaim for a declaratory judgment that Monarch’s Nevada state trademark registration is valid and enforceable. While there was no dispute over the validity of Monarch’s state registration, there was a dispute over Monarch’s position that its state law rights trump Kerzner’s federal rights.

Monarch argued that its Nevada state trademark rights do not yield to Kerzner’s rights reflected in its federal registration because Kerzner could not use its Atlantis mark in Las Vegas under Nevada law. Monarch’s unique argument comes from the fact that under Nevada law, in order to obtain an unrestricted gaming license in a county of more than 100,000 population (i.e., Las Vegas), the casino must be associated with a hotel with at least 200 rooms. And since Monarch has the exclusive right to use the Atlantis mark for lodging services in Nevada (pursuant to its agreement with Kerzner), Kerzner could not build a casino resort which includes both a casino and a 200-room hotel in Las Vegas under the Atlantis mark, and could not use the Atlantis mark for casino services in Las Vegas or anywhere else in Nevada where the 200-room hotel requirement applies. Monarch’s position is that if Kerzner cannot use the Atlantis mark in Nevada, then Monarch is not blocked from doing so by any federal trademark rights Kerzner may have outside of Nevada.

For similar reasons described above, the court rejected Monarch’s argument based on the Grupo Gigante famous marks exception. Even if Kerzner is unable or unwilling to operate a casino in Nevada, it may still have federal trademark rights enforceable in Nevada under the famous marks exception. And those federal trademark rights would preempt Monarch’s state trademark rights.

The court also rejected Monarch’s invocation of the “natural zone of expansion” doctrine to argue that Monarch is entitled to statewide rights in the Atlantis mark because Las Vegas is within its “natural zone of expansion,” and therefore Monarch should be treated as if Las Vegas is within the territory where it has already used the mark in connection with casino services, even though Monarch does not actually operate a casino in Las Vegas.

In rejecting Monarch’s argument, the court noted the following about the “natural zone of expansion” doctrine:

The doctrine is normally invoked by senior users seeking to expand their federal statutory trademark rights into areas where a junior user is already using the mark under the protection of the common law. See 5 McCarthy, supra, § 26:20. Here, Monarch turns the doctrine on its head, seeking to leverage its state trademark rights to expand the geographic area in which it is entitled to trademark protections in derogation of Kerzner’s federal rights. Monarch has not cited, nor have we discovered, any authority for so applying the natural zone of expansion doctrine.

So while the court granted Monarch’s motion to the extent that the state registration was found to be valid and enforceable under Nevada law, it denied the motion to the extent that there are genuine issues of material fact about whether Kerzner’s mark falls within the Grupo Gigante famous marks exception (and when it became famous) in which case Kerzner would have federal trademark rights which preempt Monarch’s state trademark rights.

The court’s decision in a parallel order dealt with additional motions to exclude certain evidence and motions for summary judgment by Monarch and Kerzner. While I won’t go into detail regarding that order in this blog post (isn’t this one already long enough?), the court did decide as a matter of law that Monarch has continuously used the Atlantis mark for casino services from April 1996 to the present and that Kerzner’s trademark application date (and thus its constructive use date of the mark in the United States) was February 1997.

The court’s decisions now push the case towards trial on the issue of whether Kerzner acquired priority of use in the Atlantis mark under the Grupo Gigante famous marks exception.

Monday, December 14, 2009

Two Trademark Parody Cases For Your Amusement

In the first case, the companies behind the JOHNNIE WALKER brand of scotch whisky are suing the purveyors of JOHNNIE BARKER BLACK LAB flavored dog water (pictured above on the right) for infringement and dilution of the JOHNNIE WALKER BLACK LABEL trade dress (pictured above on the left) (see registrations here, here, and here). See Diageo Brands B.V. et al v. Vineyards et al., Case No. 09-cv-02002 (D. Conn. Dec. 9, 2009) (complaint here).

Anybody else out there really believe that Johnnie Walker is expanding its famous whisky brand into the highly lucrative canine beverage market? [For those who can’t get enough of these whacky trademark disputes involving parody pet items, check out prior blog posts here, here, and here].

The second trademark parody case involves a lawsuit by the company which owns the clothing brand THE NORTH FACE against a Missouri man named Jimmy Winkelmann and his related company over use of THE SOUTH BUTT in connection with certain clothing items. See North Face Apparel Corp., The v. Williams Pharmacy, Inc., et al., Case No. 09-cv-02029 (E.D. Mo. Dec. 10, 2009) (complaint here).

"The North Face" Jacket
"The South Butt" Jacket

The North Face opposed The South Butt’s attempt to register its mark. See The North Face Apparel Corp. v. The South Butt, LLC, Opposition No. 91191521 (T.T.A.B.). In response to cease and desist correspondence from The North Face, counsel for The South Butt stated that The South Butt was interested in having The North Face acquire The South Butt and its inventory for $1,000,000. {ed.--Hmm, has kind of a cybersquatting feel to it, doesn’t it}. The South Butt has since filed another trademark application and continues to sell its clothes through its website.

In this case, the attempt to take advantage of the trademarks and goodwill developed by The North Face seems clear enough that The South Butt is not likely to be able to get around a likelihood of confusion finding. And yet, to the extent that The South Butt attempts to defend its mark as a parody, this use of The South Butt on clothes does not strike me as such a clear cut example of a trademark parody which in turn ultimately undercuts the company’s parody argument (i.e., the parody in this instance is not as obvious as say the use of a famous scotch whisky brand label in connection with the sale of flavored dog water).

[Update: Daniel Corbett, who posts on the Pittsburgh Trademark Lawyer blog (a blog name that I can certainly relate to), has his own take on the The South Butt lawsuit here.]

Thursday, December 3, 2009

Dispute Over “Cameltoe” Hiding Underwear Invention Morphs Into Trademark Dispute

Fans of “The Howard Stern Show” on Sirius/XM Satellite Radio will appreciate this trademark dispute.

On November 10, 2009, Howard had two females guests on his satellite radio show discussing their competing women’s undergarment products designed for women who wish to hide their visible cameltoe (a rundown of the appearance can be found at the show Rundown section of howardstern.com). For those not familiar with the term “cameltoe,” click here for a definition from the Urban Dictionary -- also a simple Google search of the term will quickly enlighten you, but be forewarned that the search results are not likely to be safe for work.

One woman named Shannon was promoting her product “Camelflage.” The second woman was named Treger Strasberg who had a competing product named “Camelammo.” Much of the discussion on the show dealt with issues of patent law (who had the invention first, whether patent applications were similar, clarifying that a patent pending is not the same as an issued patent). There was really only a brief mention of the issue of the “trademark” on the name “Camelflage” – with Trager pointing out that while Shannon may have filed trademark applications to register the trademark “Camelflage,” it does not mean that it has been registered.

Fast forward to December 1, 2009, when Ruby Tuesday Designs LLC (“Plaintiff”) filed a trademark infringement lawsuit against Camelflage LLC (“Defendant”) in the U.S. District Court for the Eastern District of Michigan. See Ruby Tuesday Designs LLC v. Camelflage LLC, Case No. 09-cv-14676 (E.D. Mich). A copy of the complaint can be downloaded here (courtesy of Marty Schwimmer’s Trademark Blog, who also posted the Exhibit attached to the complaint detailing the ladies’ appearance on “The Howard Stern Show,” which turns out to be excerpted from the detailed Howard Stern show summaries written by Marks Friggins).

For ease of reference to their respective ladies from their appearance on “The Howard Stern Show,” it will help the reader to know that Trager is associated with the Plaintiff in this case and Shannon is associated with the Defendant. In short, Trager followed through with her statements made during her Howard Stern appearance that she would be taking legal action against Shannon (albeit for alleged trademark violations rather than patent infringement claims – likely because Trager does not yet have an issued patent).

According to the complaint, Plaintiff has been engaged in selling its cameltoe-masking undergarments under the mark KAMELFLAGE since March 2009 (Plaintiff registered the kamelflage.com domain name on February 17, 2009, which currently redirects to http://www.camelammo.com/, and cites to a March 31, 2009 New York Times article mentioning its products). The complaint includes the following picture:

On May 27, 2009, Defendant registered the domain name camelflage.com and two days later applied to register the work mark CAMELFLAGE for undergarments and other apparel on the basis of use-in-commerce (claiming first use date of March 15, 2009). On June 7, 2009, Defendant filed to register its CAMELFLAGE Design Mark (pictured below) for the same goods.

Defendant is currently selling its cameltoe-masking undergarments using the CAMELFLAGE mark through its website.

Plaintiff’s alleges that Defendant’s use of the CAMELFLAGE mark infringes on Plaintiff’s common law trademark rights to the KAMELFLAGE mark. Plaintiff’s causes of action for federal and common law unfair competition, common law dilution [ed. – famous? Really?], and violation of Michigan’s Consumer Protection Act (M.C.L. § 445.903), and unjust enrichment.

The complaint specifically references the November 10, 2009 appearance by the parties on “The Howard Stern Show” – although it is described as Defendant refusing to cease and desist using the Plaintiff’s KAMELFLAGE mark. My own recollection of the interview was that the dispute was over the patent rights to the cameltoe masking invention – not the name. In fact, while not specifically mentioned in the complaint, but certainly part of the transcript of The Howard Stern Show, was Treger’s acknowledgement that one of the reasons she changed her product name, originally called “Kamelflage,” to CamelAmmo was because someone else already was using that name (while not specifically identified, she may have been referring to the intent-to-use trademark application for KAMELFLAGE for underwear and related goods filed by Karen A. Pratt on February 13, 2009, which is scheduled to register very soon since the Statement of Use filed in October 2009 was accepted by the PTO).

While Treger used this fact at the time as evidence that Defendant had intentionally created a knock-off product using Plaintiff’s “old” name for the same product, her statements now seem to contradict the argument in the complaint that Plaintiff has been using the mark KAMELFLAGE in connection with her undergarments.

Plaintiff’s webpage now features the following image:

Unlike the picture of Plaintiff’s products included in the complaint (likely produced before Plaintiff had changed to the “Camel-Ammo” name), the mark CAMEL-AMMO is clearly the primary trademark for the goods with the mark “Kamelflage” relegated to a smaller position underneath (and which arguably would not necessarily be perceived by consumers as a trademark). {Query to Readers: does anybody know if this reference to “Kamelflage” has always been there since the time Treger switched to the name “Camel-Ammo” or was it possibly added to the website in light of recent events?}

So for you fans of cameltoe, this will be a fun case to watch (pun intended).

Wednesday, December 2, 2009

The SOHMER piano trademark war - a new battle front opens in Illinois District Court

A long-running battle being waged between two companies over the trademark rights to the mark SOHMER in connection with the sale of pianos just got kicked up an additional notch.

On February 15, 2001, an Illinois man named Edward Richards filed an intent-to-use trademark application with the U.S. Patent and Trademark Office (“PTO”) to register the mark SOHMER in connection with pianos. Eight days later, on February 23, 2001, a company named Burgett, Inc. (“Burgett”) filed an intent-to-use trademark application to register the identical mark SOHMER in connection with pianos.

The PTO initially refused Richards’ application on the basis of Section 2(e)(4) that the mark was primarily a surname. In order to get around this refusal, Richards filed an Amendment to Allege Use on August 19, 2002, and then amended his application to seek registration of the mark on the Supplemental Register (in order to get around the surname refusal). However, for reasons discussed herein, the PTO did not move his application onto registration, but instead suspended prosecution of Richards’ application

The PTO also initially refused Burgett’s application on the basis of Section 2(e)(4). The PTO also cited the existing of Richards’ earlier filed application as possible grounds for a Section 2(d) likelihood of confusion rejection and suspended prosecution. However, when Richards converted his application to one on the Supplemental Register, the effective filing date of the application changed to the date he filed his Amendment to Allege Use which was after the effective filing date of Burgett’s application, and thus it no longer could serve as a basis for a possible Section 2(d) refusal.

Of course, there was still the little matter of the Section 2(e)(4) refusal. The PTO made its refusal to register based on Section 2(e)(4) final. Burgett filed a request for reconsideration, which was considered after an ex parte appeal was filed to the Trademark Trial and Appeal Board and the Board remanded the case back to the PTO for consideration of the request for reconsideration. The PTO denied the request for reconsideration on November 20, 2003, and ordered the case back to the Board.

Then a funny thing happened in early 2004. Burgett’s President, Gary Burgett, filed a declaration with the PTO in February 4, 2004, that Burgett was the owner of the rights and goodwill to the mark SOHMER in connection with pianos that had been developed since 1872 by the Sohmer & Company (later Mason & Hamlin) and that the mark had become distinctive for pianos through “the substantially exclusive and continuous use of the mark in commerce by the Applicant and related companies for at least five years” preceding February 4, 2004.

While not clear from this Declaration, the basis for Burgett’s claim of ownership of the SOHMER name was the fact that Burgett’s predecessor-in-interest, Burgett Brothers Incorporated, had acquired the assets of Mason & Hamlin out of bankruptcy in 1996, including the trademark registrations owned by the bankrupt company at the time. The PTO’s Assignments records (click here) reflect the chain of title for the SOHMER marks that were still registered at the time. At the same time, it was apparently well known in the piano industry that the SOHMER factory in Pennsylvania had closed down in 1994.

Nevertheless, reviewing the Declaration at face value, Burgett declared that the SOHMER mark had been used continuously since February 1999. Of course, of the four SOHMER marks that had been registered with the PTO (word mark, design mark, SOHMER & CO., and design mark), the SOHMER word mark was canceled on December 20, 2000, for failure to file a Section 8 Declaration of Use and the SOHMER design mark was cancelled on December 2, 2001 for failure to renew. Nonetheless, the Declaration was accepted at face value and apparently enough to convince the PTO to allow the mark to be registered on the Principal Register under Section 2(f) based on a claim of acquired distinctiveness.

After the mark was published for opposition, Richards, who had assigned his own application to his company Persis International, Inc. (“Persis”), filed an opposition on October 19, 2004. Persis International, Inc. v. Burgett, Inc., Opposition No. 91162715 (TTAB Oct. 19, 2004).

The opposition progressed along for several years with Richards showing Burgett and the world that you don’t need an attorney to make an effective legal argument. Because an officer of a company can represent the company before the TTAB, Richards served as the legal representative for Persis during the entire opposition.

During discovery (which became so evasive at one point that Persis obtained sanctions against Burgett), it was discovered that Burgett’s basis for claiming that the SOHMER mark had continued to be used was a single invoice of a sale of a single piano to who it turns out was an employee (who according to affidavit testimony from that employee, purchase the piano first and was then asked if they could change the name on the front of the piano to SOHMER). Burgett’s response was that this piano was an original work in progress from the old SOHMER piano company that had closed down in 1994 – despite other evidence that showed the particular piano sold was a KNABE brand piano built in China by the Young Chang Piano Company with specifications that did not match the types of pianos produced by the Sohmer Pennsylvania factory. Burgett also provided vague information about sales figures from the years 1996 – 2006 but did not produce specific sales records.

As the time for trial before the TTAB moved closer, several new developments occurred. On March 11, 2009, Burgett decided to assign its trademark application to Samick Music Corporation (“Samick”), supposedly Burgett’s exclusive licensee of the SOHMER mark based on a license agreement entered into sometime in 2002. A further development was that Burgett’s counsel filed a motion to withdraw as counsel on the basis that Burgett no longer had an interest in the opposition proceeding. While Burgett’s attorneys were allowed to withdraw, Persis was successful at keeping Burgett as a party to the proceeding since it was the declaration of Burgett’s president that provided Persis with its strongest evidence that Burgett had committed fraud on the PTO with its declaration of continuous five years use of the SOHMER mark.

But the biggest development came in the form of Samick’s decision to file a civil lawsuit in Nevada District Court against Persis on April 15, 2009. See Samick Music Corporation v. Persis International, Inc., Case No. 09-cv-00197 (D. Nev.). A copy of the complaint can be downloaded here.

The basis for the sudden filing of a district court complaint given the long running opposition proceeding that was close to the finish line can probably be best explained by the fact that in federal court, a company must be represented by an attorney. And while Richards may have been a vociferous advocate for his company before the TTAB, federal court rules prevent him from performing the same role in this lawsuit (until such time as he gets a law degree and passes a bar exam).

Despite the strategy behind the filing, Samick’s complaint reiterates its position as the rightful successor-in-interest to the SOHMER mark in connection with pianos and attempts to demonize the efforts of Richards to apply for registration of and use the SOHMER mark in connection with pianos. Samick’s causes of action against Persis are for federal trademark infringement and unfair competition, common law trademark infringement and unfair competition, and federal trademark dilution,

The most recent development occurred on November 30, 2009, when Persis and Richards filed a lawsuit in the U.S. District Court for the Northern District of Illinois against Burgett. See Persis International, Inc. et al v. Burgett, Inc., Case No. 09-cv-07451 (N.D. Ill.). A copy of the complaint can be downloaded here.

But where the Nevada complaint laid out the story in the light most favorable to Burgett & Samick, this Illinois complaint lays out the story from the perspective of Richards and Persis.

According to this complaint, at the time Burgett acquired the aforementioned trademark registrations out of bankruptcy from Mason & Hamlin in 1996, the company had not manufactured, sold or distributed any pianos bearing the SOHMER trademark since at least 1994 nor did Burgett have any intent to resume use of the marks. Moreover, Burgett allegedly did not use the SOHMER trademark in connection with the manufacture, sale or distribution of pianos between 1996 and 2003, and accordingly, abandoned its rights to the mark. One interesting fact from the complaint is that in 1999, Burgett supposedly authorized the destruction of five original SOHMER plate pattern that had been used to manufacture the cast iron piano plates that are essentially to manufacturing SOHMER brand pianos.

According to the complaint, Richards contacted Burgett in late 2000 to discuss the possibility of purchasing one of the piano brands that Burgett had publicly announced that it was discontinuing. At that time, Burgett supposedly told Richards that the names SOHMER and GEORGE STECK were available for purchase. Richards and Burgett agreed on the sale of the GEORGE STECK mark for $100,000, and in early 2001, Richards provided an initial deposit of $33,500. However, Burgett later refused to complete the sale or return the deposit unless Richards withdrew his application for the SOHMER trademark. Burgett supposedly offered to sell Richards its rights to the SOHMER trademark, but Richards refused on the basis that Burgett had not used the SOHMER mark, had destroyed the SOHMER plates, and had even let the trademark registrations expire. [Comment—not to mention the fact that Richards had already filed a trademark application to register the mark].

The complaint then turns its focus to the 2002 license agreement with Samick licensing Burgett’s rights in the SOHMER mark to Samick. From Richards’ and Persis’ perspective, Burgett was aware that Persis was using the SOHMER mark in connection with the sale of pianos and that it had not valid trademark rights to the SOHMER mark when it entered into this license agreement with Samick. Persis publicly exhibited its SOHMER pianos at a piano trade show in July 2002. In early 2003, Samick began selling pianos bearing the SOHMER mark which Persis claims infringes its superior rights. Moreover, Burgett’s actions induced Samick’s acts of infringement.

Persis’ first cause of action against Burgett is for contributory trademark infringement based on its license agreement with Samick for the SOHMER mark despite Burgett’s knowledge that it had abandoned any rights to the SOHMER mark with no bona fide intention to resume use as well as Burgett’s knowledge of Persis’ rights to the SOHMER mark. Additional causes of action are for unfair competition under federal, state and common law, violation of Illinois’ deceptive trade practices act, and unjust enrichment and promissory estoppel (based on the $33,500 deposit that Burgett did not return).

So should Samick be able to lay claim to the reputation and goodwill of the SOHMER mark despite the clear break in use of the mark in connection with pianos or did Persis acquire legitimate rights to an abandoned trademark that it should be allowed to assert against Samick? Of course, even if Persis can show that the mark was abandoned and thus the goodwill never properly transferred to Samick, the ability of Persis to assert trademark infringement against Burgett/Samick may still depend on whether or not (and the extent to which) Persis has established its own strong common law rights in the mark since Persis' acceptance of a registration of the mark on the Supplemental Register is tantamount to an acknowledgment that Persis' trademark rights are only as strong as its common law rights. Persis' case is made even more challenging by the fact that much of the time when Persis was trying to build up a reputation in the name was during the same time that Samick was also using the same mark in connection with the same goods albeit not to take advantage of the reputation and goodwill that Persis had established in the name but instead to take advantage of the reputation and goodwill that had been established in the SOHMER name long before (even though legally abandoned).