Don’t Believe Everything You Read

Just because a court of law issues an order making findings of fact and conclusions of law does not mean that those facts and conclusions reflect the real truth. It only reflects a decision by the court based on the evidence and arguments presented to the court. Thus, a court decision may reflect the truth or may simply reflect the only factual conclusion that the court could reach based on the incomplete picture presented to it by the parties.

Such is the case with the cybersquatting and trademark infringement lawsuit brought by New York-New York Hotel & Casino, LLC (“NY-NY”), the company which owns the New York New York Hotel & Casino in Las Vegas (pictured above), against California resident Ronnie Katzin and his wholly-owned corporation, NewYorkNewYork.com, Inc., over the domain name newyorknewyork.com (the “Domain Name”). See New York-New York Hotel & Casino, LLC v. Katzin et al, Case No.09-cv-02139 (D. Nev.). On October 28, 2010, the Nevada district court issued an order (link here) granting NY-NY’s Motion for Summary Judgment against Defendant Defendant Katzin and finding as a matter of law that Katzin was liable for cybersquatting and trademark infringement with respect to his use of the Domain Name.

But as mentioned in the title above, don’t believe everything you read. For reasons detailed in my previous blog post regarding this case (link here), I believe the court’s decision is wrong. But as this case demonstrates, it’s often not enough that the defendant be in the right – a defendant has to be able to present factual evidence and make effective arguments to the court supporting its position that it is right in the face of accusations (however baseless) to the contrary by another party. And when you have to hire attorneys to help you do this in court, establishing that you are in the right suddenly becomes an expensive proposition.

In this case, Katzin, apparently not in a financial position to hire an attorney to fight NY-NY’s highly questionable allegations, decided to fight NY-NY pro se. But like many pro se litigants, he didn’t have the legal background and experience to put together factual evidence arguments in a way that would have been receptive to the court (and of course, with respect to NewYorkNewYork.com, Inc., because only lawyers can represent corporate entities in federal court and Katzin is not a lawyer, he was prohibited from filing any papers on behalf of his corporation).

The only positive thing about this order is that the court, recognizing the circumstances of the case, exercised its discretion and only awarded NY-NY $1,000 in statutory damages (the minimum amount of statutory damages for cybersquatting) – along with another “nominal” award of $1,000 for “corrective advertising” [ed.—correcting what?]. This is probably the best the court could do under the circumstances to send the message that while the court may have found Katzin liable for cybersquatting (and trademark infringement), he is not really a cybersquatter and did not really cause any significant harm to NY-NY’s precious trademarks.

The court’s awarding of $1,000 in statutory damages is a far more reasonable determination than the court’s previous awarding of the maximum statutory damages of $100,000 against NewYorkNewYork.com, Inc., as part of the default judgment entered by the court after no attorney made an appearance on behalf of the corporation to answer NY-NY’s allegations (and Katzin’s Answer filed on behalf of the corporation was struck since, as previously mentioned, Katzin is not a lawyer who could file an Answer on behalf of a corporate entity).

Having previously granted a default judgment against Defendant NewYorkNewYork.com, Inc., which resulted in the transfer to NY-NY of what NY-NY was really after in the first – the extremely valuable domain name newyorknewyork.com, the court’s decision (assuming no appeals are filed) effectively brings this example of injustice to an end.

Mélange of Trademark Stories

The Cupcakery Lawsuit Settles
Gourmet cupcake bakery The Cupcakery quietly settled its lawsuit (previous blog posts here and here) against former employee Andrea Ballus and her cupcake bakery Sift: A Cupcakery. See The Cupcakery, LLC v. Ballus et al, Case No. 09-cv-00807 (D. Nev.). Click here for the Court’s Order dismissing the case.

While no terms were disclosed, it would appear that part of the dismissal involved Ballus withdrawing her earlier filed trademark application for Sift: A Cupcakery that was blocking Cupcakery’s four applications to register THE CUPCAKERY – two for the word mark THE CUPCAKERY (for retail and online retail services and cakes and cupcakes) and two for the THE CUPCAKERY logo (for retail and online retail services and cakes and cupcakes).

On September 28, 2010, Ballus’ attorney filed an express withdrawal of her application with the Trademark Trial and Appeal Board in the pending Opposition that was filed by Cupcakery when her application was published for opposition. See The Cupcakery, LLC v. Sift: A Cupcakery LLC, Opposition No. 91188833 (T.T.A.B.). So that leaves Cupcakery’s applications next in line to claim exclusive rights to use the term “Cupcakery” in connection with a cupcake bakery. It’s only a matter of time before Cupcakery’s applications will be removed from suspension and examined on the merits.

And it looks like Cupcakery has already started working towards getting other “cupcakeries” to stop using the term “Cupcakery.” One company that had previously been using the term The Cupcakery now seems to be calling itself THE CUP.

USPTO Requesting Comments on Trademark Bullies
The PTO issued a Request for Comments regarding Trademark Litigation Tactics as part of its preparation of a study which the Secretary of Commerce must conduct to explore “(1) the extent to which small businesses may be harmed by litigation tactics by corporations attempting to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to the trademark owner; and (2) the best use of Federal Government services to protect trademarks and prevent counterfeiting.” See prior blog post here regarding the enacted legislation (The Trademark Technical and Conforming Amendment Act of 2010, Pub. L. No. 111-146, 124 Stat. 66 (effective March 17, 2010) which brought about this interest in trademark bullies.

Blogger Erik Pelton is looking to organize attorneys and businesses who want to sign on to a collective statement to the PTO. Deadline for submitting comments is January 7, 2011, and can be emailed to TMFeedback@uspto.gov with the subject line “Small Business Study.”

THE GAP Logo Fiasco
Another example of the maxim “If it ain’t broke, don’t fix it.” BBC Article on Gap’s disastrous decision to change its famous stylized word mark to something that looks like it was created in about 2 minutes using a simple word processor font and unimpressive graphic – and stories of other logo redesigns. Pittsburgh Trademark Lawyer Daniel Corbett blogged on the fiasco here.

Never Ending Trademark Lawsuits
Darden Concepts, owner of the Olive Garden and Red Lobster chain of restaurants and two trademark registrations for NEVER ENDING PASTA BOWL (here and here), sued owner of TGI Fridays for marketing a menu item of “Never Ending Shrimp” (Darden also registered the mark ENDLESS SHRIMP in connection with its Red Lobster restaurants). See Darden Concepts, Inc. et al v. Briad Restaurant Group, L.L.C. et al, Case No. 10-cv-02077 (S.D. Cal. October 6, 2010). Complaint here (via courthousenews). News article on the suit here.

This is not the first time Darden has asserted its rights to the phrase “Never Ending” in connection with food offerings. Just ask IHOP, which was sued by Darden in 2004 over its use of “Never Ending Pancakes” (news article here; cancellation action here). That suit was eventually settled – and you probably have not seen IHOP offering any “Never Ending Pancakes” since.

Incontestable does not Invulnerable
Pamela Chestek reminds us all that having an incontestable trademark registration does not make it an invulnerable trademark registration, especially when the incontestable ownership of the mark may have come about from an improper assignment – as the owners of the STOLICHNAYA trademark for vodka were recently informed of by the Second Circuit Court of Appeals. See Federal Treasury Enter. Sojuzplodoimport v Spirits Int'l N.V., No. 06-3532 (2nd Cir. Oct. 8, 2010).

Copyright, Meet Trademark.

US Copyright Group (“USCG”) is a newly established company which, like Las Vegas’ own (and now infamous) Righthaven, seeks to enforce copyright rights through the filing of mass lawsuits. The company, which purports to represent the copyright interests of motion picture producers and distributors, grabbed news headlines this year with its mass lawsuits against “Doe” individuals suspected of illegally downloading movies using bittorent. See articles here, here, and here.

USCG now finds itself facing a lawsuit . . . in the trademark realm. On October 11, 2010, a company named Media Copyright Group, LLC (“MCG”) filed a declaratory judgment action against Legacy 21, LLC (“Legacy”), in the U.S. District Court for the Northern District of Illinois. See Media Copyright Group, LLC v. Legacy 21, LLC, Case No. 10-cv-06498 (N.D. Ill.). A copy of the complaint can be downloaded here.

According to the complaint, Legacy does business using the name USCG under a purported license from the owners of the registered (on the Supplemental Register) service mark US COPYRIGHT GROUP for “Providing worldwide copyright enforcement and protection services, namely, assisting copyright holders prevent copyright infringement and recover losses due to copyright infringement”) (“COPYRIGHT” disclaimed), which is jointly owned by two LLCs, Screaming Eagle LLC and Red Eagle LLC [ed.—hmm, joint ownership?].

Interesting sidenote, the trademark applicants stated that the term “US” in the mark is intended to mean the pronoun that is the objective form of "we" rather than implying an association with the United States (U.S.) -- and argument that the PTO rejected in part based on the fact that the mark as used on the speciment and on the applicants' website indicated that the term “is used to indicate the United States not the object case of 'we' . . . applicant consistently uses the term in upper cases rather than 'Us' or 'us.'” [ed.—oops. Trademark Lesson -- always review your client's website before making any assertions like this on the client's behalf.] (Would also be interesting to know if when you contact USCG's offices, do they call themselves the “Us Copyright Group” or the “U S Copyright Group”? Of course, try finding a contact number for USCG online – very clandestine organization with most roads leading back to USCG’s counsel, Dunlap, Grubb & Weaver, PLLC.)

MCG, operating under the name Media Copyright Group, also provides copyright-related services to adult entertainment media companies On October 8, 2010, counsel for Legacy sent MCG a cease and desist letter alleging that MCG’s use of the name Media Copyright Group constituted trademark infringement of Legacy’s trademark rights to the name US Copyright Group and that MCG’s registration of the domain name http://www.mediacopyrightgroup.com/ constituted cybersquatting. Legacy demanded that MCG cease doing business under the name Media Copyright Group and pay Legacy $25,000 [ed.—interesting choice of dollar amount].

MCG, not missing an opportunity to gain the home court advantage (and probably recognizing that if it did not act fast, USCG would not hesitate to file its own legal action given its record of filing lawsuits), immediately filed the instant action against USCG seeking a declaration that its use of name Media Copyright Group and the website http://www.mediacopyrightgroup.com/ did not infringe USCG’s trademark rights.

MCG’s complaint also includes a cause of action for cancellation of the US COPYRIGHT GROUP Supplemental Registration based on purported fraud on the U.S. Patent and Trademark Office – although the supposed fraudulent statements focused upon in the complaint appear to be arguments that the mark was not descriptive or generic. Yet, in that same office action, the mark was amended to be registered on the Supplemental Register instead of the Principal Register. Thus, the PTO, by allowing the mark to issue of the Supplemental Register, clearly did not rely upon such fraudulent statements regarding the mark’s non-descriptive nature in allowing the mark to register. Indeed, the fact that the mark did not register on the Principal Register is further evidence that the mark is merely descriptive and USCG must rely upon its common law trademark rights in taking any action against potential infringements (including having to show some degree of acquired distinctiveness for its admittedly descriptive mark). (For some background regarding supplemental registrations, see INTA’s article entitled “U.S. Trademark Registrations: Principal Register vs. Supplemental Register”; see also prior blog posts here and here).

Does it surprise anyone that a company that has no qualms in filing mass copyright infringement lawsuits would seek to aggressively enforce its own trademark rights, however extremely weak such trademark rights may be? Now that MCG has called USCG’s bluff and gone on the offensive, how much longer will USCG want to continue to fight what is almost certainly a losing battle? A lot may depend on MCG’s willingness to fight its battle (as many of us know, it’s not enough to be legally right, one must have the financial resources to prove such in court). One wonders if USCG now regrets asserting such rights in the first place.

Juicy Trademark Dispute Over SMASHBURGER

Icon Burger Development Company, LLC (“Icon”), the owner of the burger chain “Smashburger,” filed a declaratory judgment action in U.S. District Court for the Eastern District of Kentucky against Dairy Cheer Stores Inc. (“Dairy Cheer”), the owner of several “Dairy Cheer” restaurants in Kentucky. See Icon Burger Development Company, LLC v. Dairy Cheer Stores Inc., Case No. 10-cv-00345 (E.D. Ky. Filed September 29, 2010). A copy of the complaint can be downloaded here (via Courthousenews.com).

The dispute centers around the name SMASHBURGER. Icon began its SMASHBURGER restaurant chain in June 2007 and now has locations in major urban cities in 16 states (including right here in Las Vegas). Icon holds trademark registrations for the SMASHBURGER word mark and design mark (pictured above) in connection with restaurant services.

Dairy Cheer operates four soft-serve ice cream stands/fast food restaurants in the State of Kentucky under the name “Dairy Cheer” – the name came from the fact that the first restaurant opened by Dairy Cheer was a former “Dairy Queen” restaurant that was rebranded “Dairy Queen.” Specifically, Dairy Cheer restaurants are located in the rural areas of Pikeville, Carlisle, West Liberty and Prestonsburg, Kentucky.

Relevant to the instant dispute is that part of Dairy Cheer’s storefront signage for its restaurants states “Home of the Smashburger” – with “Smashburger” identifying one of Dairy Cheer’s menu items.

What prompted the dispute is that Icon notified Dairy Cheer earlier this year about its plans to open a “Smashburger” store in Lexington, Kentucky. Not surprisingly, Dairy Cheer, recognizing that it did have some limited prior user rights to the name “Smashburger,” saw this as an opportunity to get a big windfall from a nationwide company with deep pockets that was eager to use the name for a Kentucky-based location. According to the complaint, representatives of Dairy Cheer demanded a “substantial monetary payment” from Icon to settle the dispute over Icon’s Lexington SMASHBURGER location.

Icon apparently refused to give in to Dairy Cheer’s demands, and so on June 18, 2010, Dairy Cheer filed a Petition for Cancellation with the Trademark Trial and Appeal Board to cancel Icon’s SMASHBURGER word mark registration. See Dairy Cheer Stores Inc. v. Icon Burger Development Company, LLC, Cancellation No. 92052579 (Filed June 18, 2010). Dairy Cheer claims that Icon’s registration of the SMASHBURGER mark for restaurant services so resembles Dairy Cheer’s common law trademarks SMASHBURGER and HOME OF THE SMASHBURGER (which Dairy Cheer claims go back to 1992) as to cause a likelihood of confusion, and thus the registration should be canceled.

With Icon’s federal action seeking a declaratory judgment that its use of SMASHBURGER does not infringe any trademark rights held by Dairy Cheer, the dispute now moves to a federal court (and the Cancellation will certainly be suspended pending the outcome of the civil case).

Sidenote: For those of you who live in a city which has a “Smashburger” location (Icon's “Smashburger” -- not Dairy Cheer's “Smashburger”), I highly recommend giving it a try. It’s rare that a new restaurant chain impresses me with its food offerings, especially hamburgers. After having eaten a fair share of “so-so” and “ok” hamburgers for many years, Smashburger reminded me that, when prepared properly, an ordinary hamburger can be incredibly delicious. I consider the burgers made by Smashburger to be the best tasting hamburgers I’ve ever eaten . . . so far anyway (although hamburger connoisseurs wanting to judge my credibility for judging hamburgers should know that I am one of the few people in the world that does not like hamburgers from In-N-Out Burger – and it has nothing to do with their overly aggressive trademark enforcement).