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).

The Material Girl’s Battle For MATERIAL GIRL

The trademark lawsuit story du jour was the complaint filed by L.A. Triumph, Inc. (“LA Triumph”) against Madonna and her company, Material Girl Brand, LLC, over the trademark MATERIAL GIRL in connection with clothing. See L.A. Triumph, Inc. v. Material Girl Brand, LLC et al, Case No. 10-cv-6195 (C.D. Cal. Filed August 19, 2010). Complaint can be viewed here (via Courthousenews). Multiple news outlets, blogs and gossip sources ran stories about the suit today (ABC News, Fox News, Huffington Post, RadarOnline, and TMZ)

In short, the complaint alleges that a California company named OC Mercantile Corporation started selling a line of MATERIAL GIRL clothes in 1997 – and even registered the name as a trademark with the California Secretary of State that same year (Reg. No. 102808 for women’s apparel). In 2003, LA Triumph became the successor-in-interest to OC Mercantile and purportedly has continued using the mark in connection with the sale of clothing items to the present day and claims that its clothing line has received national exposure. [Interestingly, LA Triumph does not appear to have any online presence where it sells its clothing goods – Google search results only came back with the published stories about this lawsuit. Of course, LA Triumph might argue that MGB’s recent nationwide marketing blitz have overwhelmed LA Triumph’s use of the mark – so called, reversed confusion.]

The complaint goes on to state that sometime in 2010, LA Triumph became aware that the Defendants were going to start selling a line of young women’s clothing using the MATERIAL GIRL mark. The website promoting Madonna’s brand is found at http://www.materialgirlcollection.com/ (as opposed to the website promoting LA Triumph’s clothing which is found . . . umm, anybody have any idea where LA Triumph’s MATERIAL GIRL clothing is promoted online? The closest I could come – based on the fact that L.A. Triumph, Inc. does business in California under the name MedGear – is a website http://www.medgear.com/ which sells clothing for hospital and medical industry workers, but I did not see anything using the mark MATERIAL GIRL.)

LA Triumph also alleges that MGB improperly filed to register the mark MATERIAL GIRL with the United State Patent and Trademark Office (“USPTO”). Interestingly, MGB’s current application (the one cited in the case) was not the first application in line to register the mark MATERIAL GIRL. On May 11, 2009, Audigier Brand Management Group, LLC filed a trademark application for MATERIAL GIRL (covering 7 different classes of goods including clothing). The USPTO initially refused registration in a non-final office action dated August 13, 2009, but only because the description needed some clarification and not based on a Section 2(d) likelihood of confusion refusal.

Subsequently, the Audigier application was assigned to MGB on December 1, 2009. And within days of this assignment, MGB then filed its own intent-to-use application for the mark MATERIAL GIRL (for 4 classes of goods including clothing) on December 4, 2009. This explains why MGB did not file a timely response to the PTO’s office action in the “Audigier” application, which went abandoned on March 26, 2010.

So why, you ask, would MGB file a new intent-to-use application for MATERIAL GIRL when Audigier’s earlier filed MATERIAL GIRL application had already been assigned to MGB? Most likely because the Audigier application was an intent-to-use application and MGB was not really the successor to any kind of ongoing and existing business by Audigier to which the applied-for mark pertained. Under §10 of the Trademark Act (15 U.S.C. § 1060), an application filed under §1(b) (intent-to-use) may not be assigned before a statement of use has been filed except to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing. See 15 U.S.C. §1060(a)(1). The law is quite clear that the assignment of a §1(b) application to an entity that is not the successor to the applicant’s business, before filing an allegation of use, renders the application and any resulting registration void. See The Clorox Co. v. Chem. Bank, 40 USPQ2d 1098 (TTAB 1996). By MGB filing a brand new application, MGB could start fresh without having to be concerned about any resulting registration being deemed void on the basis of improper assignment of a §1(b) application.

Of course, once MGB’s own application was published for opposition on July 20, 2010, LA Triumph timely filed an opposition – filed the same day that LA Triumph’s district court lawsuit was filed. See L.A. Triumph, Inc. v. Material Girl Brand, LLC, Opposition No. 91196172 (T.T.A.B. Filed August 19, 2010). [As a sidenote, another party, Rwachsberg Holdings Inc., filed an Extension of Time to oppose registration of MGB’s mark. Rwachsberg owns the mark MATERIAL GIRLS for cosmetic products and nutritional food products. ]

But the real question is this – why didn’t either OC Mercantile or even LA Triumph seek to register the mark MATERIAL GIRL in connection with clothing with the USPTO?

While one could speculate that neither company bothered to register because they weren’t actively using the mark on clothing and thus the instant lawsuit would be an attempt by LA Triumph to claim trademark rights that were likely minimal at best and/or long since abandoned, another very likely answer was that the mark could not have been registered by either company with the USPTO because there was already an existing trademark registration for the identical mark for the identical goods. A Canadian company name Les Ventes Universelles S.H. Inc. had a trademark registration for MATERIAL GIRL in connection with clothing (registered July 8, 1997) based on the company’s foreign registration of the same mark (dating back to May 1990). The company filed the necessary Section 8 Declaration of Use at the 5 year mark, but did not renew the mark by the 10 year renewal deadline and the mark was canceled April 12, 2008.

So the natural follow-up question is this – why didn’t LA Triumph run out right away and seek to file a federal trademark application to register the mark once Les Ventes’ registration was canceled – during the window between April 12, 2008 and May 11, 2009 (when Audigier filed its first application)? Again, perhaps it was because LA Triumph was not really actively using the mark in connection with clothing, and thus the instant lawsuit would be an attempt by LA Triumph to claim trademark rights that were likely minimal at best and/or long since abandoned – but again that would be just pure speculation. [Did I neglect to mention that according to the California Secretary of State’s records the state registration for MATERIAL GIRL expired August 9, 2007?]

So where can I buy LA Triumph’s MATERIAL GIRL clothing again?

District Court finds that Casino De Monte Carlo owner has no enforceable trademark rights to CASINO DE MONACO

The Casino de Monte Carlo in Monaco

A New York District Court has determined that the owner of the Casino De Monte Carlo does not have enforceable trademark rights in the mark CASINO DE MONACO and has granted summary judgment in favor of a UK company that had been sued for trademark infringement and cybersquatting over its use of the name GRAND MONACO CASINO in connection with an online casino. See In re. Casino de Monaco Trademark Litigation, 2010 U.S. Dist. LEXIS 33950 (S.D.N.Y. March 31, 2010).

Societe des Bains de Mer et du Cercle des Etrangers a Monaco’s (“SBM”) is the operator of all casino properties in the Principality of Monaco, most notably the Casino De Monte Carlo. Playshare PLC (“Playshare”) is a UK company that acquired an online casino that has used or is using various online designations including GRAND MONACO, GRAND MONACO CASINO, GRAND MONDIAL and GRAND MONDIAL CASINO and related domain names.

SBM holds a U.S. trademark registration for the mark CASINO DE MONACO for “providing casino services within a hotel resort environment” which issued on December 20, 2005, under Section 44(e) of the Lanham Act based on SBM’s registration of the mark in Monaco but also with a claim of acquired distinctiveness based on Section 2(f) of the Lanham Act. SBM also has a second application pending for CASINO DE MONACO for “casino services” but that application (filed in the midst of the dispute at issue) has been opposed by Playshare. See Societe Anonyme Des Bains De Mer Et Du Cercle Des Etrangers v. PlayShare PLC, Opposition No. 91188636 (T.T.A.B. Filed Jan. 30, 2009).

On March 21, 2007, SBM filed a Uniform Domain Name Dispute Resolution Policy (“UDRP”) complaint with the World Intellectual Property Organization (“WIPO”) against the approximately 65 domain names that Playshare acquired as part of the online casino it acquired which included the words “grand” and/or “monaco” with “casino” as part of a URL that led to Playshare’s online casino. In response to SBM’s UDRP complaint, Playshare made a decision to change the name of its online casino to GRAND MONDIAL and even registered the name as a trademark (although the opinion is not clear where the mark was registered and no records appear with the PTO). Despite the name change, SBM continued forward with its claims regarding the “monaco casino” domain names. On May 25, 2007, the WIPO arbitration panel decided in favor of SBM finding Playshare’s domain names confusingly similar to SBM’s trademark and ordered Playshare’s domain names transferred to SBM. See Société des Bains de Mer et du Cercle des Etrangers à Monaco v. Lucan Toh and Max Wright, Case No. D2007-0249 (WIPO May 25, 2007).

On June 6, 2007, SBM sued Playshare alleging that Playshare’s use of the aforementioned names and domain names infringed its trademark rights to the mark CASINO DE MONACO, including even Playshare’s new name GRAND MONDIAL. On June 19, 2007, Playshare filed its own declaratory judgment action against SBM in Arizona district court seeking a declaratory judgment that its use of the domain names did not violate the Anticybersquatting Consumer Protection Act (“ACPA”) and that SBM’s registered mark for CASINO DE MONACO is invalid and unenforceable. The Arizona action was consolidated with the New York action and Playshare’s declaratory judgment causes of actions were treated as counterclaims.

Both sides filed cross motions for summary judgment. The Court denied SBM’s motion and granted Playshare’s motion with respect to SBM’s claims and Playshare’s counterclaims related to CASINO DE MONACO.

The court first addressed the validity of SBM’s CASINO DE MONACO mark. Playshare argued that despite SBM’s registration of CASINO DE MONACO, SBM has no protectable rights under the Lanham Act in its mark since it does not provide any goods or services using the mark in the U.S. SBM does not operate an on-line gaming business, does not operate any casinos in the U.S and has no casino by the name of Casino de Monaco

Nonetheless, SBM argued that it did use the mark as a service mark in the U.S. in connection with an established business or trade.SBM focused on its New York subsidiary that engages in “sales offerings” to U.S. residents of casino services at SBM’s casinos in Monaco. SBM also contended that the name CASINO DE MONACO is an umbrella term for all its Monaco-based casinos, that the mark is used on SBM’s website and verbally when promoting its casino and casino-related services, and that CASINO DE MONACO is a nickname for the Casino de Monte-Carlo, and many people, including Americans, use the name CASINO DE MONACO to refer to the Casino de Monte-Carlo “which embodies tremendous goodwill, glamour, elegance and style in the gaming industry.”

In the end, however, the court rejected SBM’s arguments and concluded that SBM’s activities in the United States relating to SBM’s mark CASINO DE MONACO did not constitute “services” within the meaning of the Lanham Act (services that are not “solely for the benefit of the performer” but rather services “rendered to others”). The court also rejected SBM’s attempt to conflate its CASINO DE MONACO mark with its more established CASINO DE MONTE-CARLO service mark. CASINO DE MONACO is not an actual casino unlike Casino de Monte-Carlo. The court also noted that “any secondary meaning that the mark CASINO DE MONACO can acquire vis-a-vis the use of the mark CASINO DE MONTE-CARLO is limited by the fact that SBM is in an on-going dispute with U.S.-based Victoria Partners over the Monte-Carlo designation when used with the casino business. Without some resolution, the mark CASINO DE MONTE-CARLO can be reasonably construed as not “identifying a single source of origin.” (italics in original). [For prior blog posts on this ongoing dispute, click here and here].

The court noted that SBM’s Section 44(e) based registration only required it to affirm that it had a bona fide intent to use its foreign registered mark. The court went on the state:

However, regardless of SBM’s intent, which is disputed, SBM has not used the mark in any meaningful way anywhere. And SBM has not shown that it has used the mark in the United States at all. SBM argues that its “U.S. based direct sales activities represent ‘material aspects’ of SBM’s casino business...and thus are properly considered ‘services...rendered in commerce.” for SBM’s mark CASINO DE MONACO. However, the record is devoid of evidence that would create a genuine issue of material fact that SBM uses the mark CASINO DE MONACO to identify its services, anywhere, but particularly in the United States. First, there does not exist in Monaco, or anywhere else, a casino identified by the name Casino de Monaco. Nevertheless, SBM asserts that the mark CASINO DE MONACO is: (1) used as a nickname or moniker for Casino de Monte-Carlo; (2) employed on casino website(s); and (3) an umbrella term/brand to refer to SBM’s five casinos in Monaco. However, all that SBM can show to support these representations are self-serving affidavits. Even if this claimed use of the mark CASINO DE MONACO was not insignificant on this record, which it is, all of its use of the mark occurs outside of the United States. There is no real evidence that the claimed nickname/moniker/umbrella term that signifies CASINO DE MONACO has ever existed in the United States.

(internal citations omitted) (emphasis in original).

Furthermore, regarding the one example that SBM could show of use in the United States of the mark CASINO DE MONACO on SBM’s own website, it turns out that such webpages were created on or after April 14, 2008 (almost a year after the lawsuit was filed) and SBM did not show any evidence that anyone in the U.S. ever viewed the pages. The court added that “[i]t does not bolster SMB’s [sic] position that all activity SBM engages in the United States amounts to nothing more than advertising and promotion of SBM’s operations outside the U.S., i.e., in Monaco. What is clear is that there is no evidence on the record that this limited activity ever implicated the mark CASINO DE MONACO.” (emphasis in original).

The court decided that SBM’s “utter lack of use of the mark CASINO DE MONACO anywhere, let alone in the United States,” required it to refuse to enforce any purported trademarks rights by SBM in the mark. Accordingly, the court did not have to engage in any likelihood of confusion analysis. The court did find enough limited activity to protect SBM’s purported right to the unregistered mark CASINO DE MONTE-CARLO because SBM actually utilizes that mark in the United States – but since SBM’s complaint did not allege any infringement of this mark, such rights were irrelevant for purposes of deciding the motions.

Based on its determination that SBM held no enforceable trademark rights to the mark CASINO DE MONACO, the court granted summary judgment on Playshare’s declaratory judgment causes of actions direct to SBM’s CASINO DE MONACO mark. The court found SBM’s trademark registration for CASINO DE MONACO invalid and unenforceable and ordered it to be canceled. The court further granted Playshare’s Motion for Summary Judgment on all of SBM’s federal claims based on the CASINO DE MONACO mark (and choosing to dismiss all state claims by declining to exercise supplemental jurisdiction). Moreover, the court declared that Playshare’s use of the designations GRAND MONACO, GRAND MONACO CASINO, GRAND MONDIAL CASINO and GRAND MONDIAL does not infringe on SBM’s (now cancelled) mark CASINO DE MONACO. Finally, because SBM’s entire basis for its cybersquatting claim was based on rights to the mark CASINO DE MONACO and since the mark was found invalid and unenforceable, then, as a matter of law, Playshare cannot be in violation of the ACPA with respect to its domain names. The court vacated the WIPO decision and ordered the domain names to remain with Playshare.

A New Chapter Opens in the “Who Dat” Trademark Story

Earlier this year, the “Super Bowl” trademark story of the year centered not around the NFL’s usual efforts to crack down on unauthorized use of the SUPER BOWL trademark, but instead about purported efforts by the NFL to claim ownership to the mark WHO DAT (coverage of the dispute here and here)

On March 4, 2010, Who Dat? Inc. (“WDI”) filed a lawsuit against the NFL, the New Orleans Saints, the Louisiana Secretary of State and the State of Louisiana. See Who Dat?, Inc. v. NFL Properties, LLC et al, Case No. 10-cv-00154 (M. D. La. March 4, 2010). A copy of the complaint can be downloaded here (or here). Other press coverage here, here and here.

Courthousenews provides an excellent summary of the pertinent allegations of the 60 page, 189 paragraph, 16 count action complaint (which includes pictures) which tells quite a story about the two men who created the “Who Dat” fight song for the New Orleans Saints back in 1983 and began the dream of creating a name that would make them millions . . . and how the dream became a “nightmare.” But the following paragraph near the beginning of the complaint summarizes the crux of the dispute:

Who Dat?, Inc. developed and nurtured “WHO DAT” for over twenty-five years and was uniquely positioned to reap substantial financial rewards in connection with the 2009-2010 National Football League season. On the eve of that success, NFLP and the Saints filed public documents falsely claiming ownership and first use of the phrase. As anyone would have anticipated, the public voiced outrage and State of Louisiana officials publically challenged the claims made by the NFLP and Saints. Since those entities were not the first users of the phrase and had no standing to make the claims made, they publically conceded that they did not own the phrase. With that concession in hand, state officials declared victory and further declared that the phrase belongs to the people as it is in the public domain. As a natural consequence of these actions, Who Dat?, Inc. was not able to obtain the financial fruits of its labor.

Interestingly, while several Louisiana state trademark registrations are noted throughout the complaint as evidence of WDI’s trademark rights, WDI had very few federal registrations to evidence its trademark rights. One was for soft drinks, but it has since been canceled (the 5 year statement of use was not filed). Another was for the mark WHO DAT BLUE BAND, but as noted in the complaint, this was registered by a third party in 2004, and only assigned to WDI in December 2009 in order to resolve a cancellation proceeding filed by WDI.

WDI had several other intent-to-use trademark applications pending, but each went abandoned for lack of any Statement of Use, including two applications for clothing (here and here) and two applications for potato chips (here and here) – all filed on the basis of intent-to-use and all went abandoned after no Statement of Use was filed. One additional use-in-commerce application for bumper stickers went abandoned after failing to respond to an office action.

More recently, WDI filed another use-in-commerce application for WHO DAT on January 7, 2010, covering musical sound recordings and various clothing items (claiming date of first use going back to October 1983). Unfortunately, WDI’s application to register the mark for its clothing goods will inevitably be suspended pending the outcome of two earlier filed applications for WHO DAT (currently allowed and awaiting a Statement of Use from the applicant and WHO DAT' JE CROIS.

One has to wonder why WDI did not follow through with its federal trademark registrations for clothing if, as stated in the complaint, it was licensing the mark to third parties for use in connection with shirts and other products. It certainly recognized the importance of seeking federal registrations – as evidenced by its prior applications. And while it’s not clear how WDI may have sold its goods throughout the years, it currently sells its goods through the website – whodatstuff.com – a domain name registered on August 13, 2009.

The situation serves as lesson that a trademark is only as good as its ability to serve as a unique source identifier for a particular source of goods or services. Just because you come up with a unique phrase does not mean that you have any exclusive rights to the term to the extent you are not actually using it in a manner that would be recognized as a source identifier in connection with particular goods and services. As for WDI, it's one thing to talk about having created a unique term or phrase – its quite another to have the evidence to show that it has always served as a unique identifier for WDI's goods and services. We shall see.

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).

Local Las Vegas companies in a trademark feud over “Appliance Doctor”

The Las Vegas Sun ran a story today (link here) about a dispute between two appliance repair businesses in the Las Vegas valley using the name “Appliance Doctor” to identify their businesses.

Samuel and Mary Gravino, the owners of Applicance Doctor LLC, filed a lawsuit on Tuesday in Clark County District Court against a company operating as “The Appliance Doctor of Las Vegas” owned by Ken and Melissa Jagmin.

The Gravinos claim to have been using the name “Appliance Doctor” in Las Vegas for over 26 years. Of course, it wasn't until a little over a week ago on September 29, 2009, that their company actually registered APPLIANCE DOCTOR LLC as a trade name with the Nevada Secretary of State’s Office (claiming date of first use as October 2, 1989) for “appliance repairs” (of course, their Las Vegas Business license lists the date their business license was issued as October 23, 1989).

According to their complaint, the Gravinos claim to have been receiving calls from angry, disgruntled customers who believed that their company had provided services that it turns out were provided by “The Appliance Doctor of Las Vegas.” The Gravinos claim that the Jagmins, who received their business license on April 30, 2009, are trading off the name, reputation and goodwill that the Gravinos have established over the last 26 years.

When reached for comment, Mr. Jagmin stated that “Appliance Doctor” is commonly used by such companies around the nation and he’s unaware of any trademark covering the name.

A quick internet search does support Mr. Jagmin’s case about the term “Appliance Doctor” being commonly used in connection with appliance repair services. However, as for any trademark on the name, surprisingly, THE APPLIANCE DOCTOR and APPLICANCE DOCTOR are actually federally registered trademarks of a Wichita company named Appliance Doctor, Inc. Based on the widespread (but localized) use of “Appliance Doctor” it would appear that Appliance Doctor, Inc. has not done a very good job of enforcing its trademark rights nationwide. Of course, if it’s true that the Gravinos have been using the name APPLIANCE DOCTOR in the Las Vegas area for over 26 years – long before Appliance Doctor, Inc. received its first trademark registration in 1996– then they would have clear prior user rights to continue to use the name.

Mr. Jagmin also commented that his name was different than his competitor because it includes the phrase “of Las Vegas.” [Someone might want to explain to Mr. Jagmin that additional geographically descriptive words don’t really carry much weight in analyzing whether two marks are likely to cause confusion, especially when the services rendered by “Appliance Doctor” are in the Las Vegas area. I’m thinking about opening a competing hotel/casino called “Red Rock of Las Vegas” – no one would confuse that with “Red Rock” Hotel and Casino in Las Vegas, right?] Of course, Mr. Jagmin fails to mention that on the company's website, the logo (pictured below) is just “The Appliance Doctor” with the “of Las Vegas” used more in the text of the website.

I wonder if the Gravinos would have still claimed trademark infringement if the Jagmin’s had used “The Appliance Doc of Las Vegas.” Given the commonality of the phrase “Appliance Doctor” would use of just the shorthand “Doc” suffice to alleviate consumer confusion?

The Cupcakery Sues Former Employee for Trademark Infringement

On May 5, 2009, The Cupcakery, LLC (“The Cupcakery”) filed a trademark infringement lawsuit against Sift: A Cupcakery, LLC (“Sift”) and owner Andrea Ballus in the U.S. District Court for the District of Nevada. See The Cupcakery, LLC v. Ballus et al, Case No. 09-cv-00807 (D. Nev.). A copy of the complaint (without exhibits) can be downloaded here.

The Cupcakery is a specialty bakery specializing in baking and selling gourmet cupcakes. The company has two locations in Las Vegas along with one in Texas.

According to the complaint, The Cupcakery initially began using the mark THE CUPCAKERY in December 2005 in connection with selling gourmet cupcakes through “special order.” The Cupcakery opened its first retail store in January 2006.

The Cupcakery alleges that it hired Ballus for a part-time position in one of its Las Vegas stores on or about January 8, 2008, at which time Ballus executed a Confidentiality Agreement which included a non-disclosure provision and non-compete provision. Of course, the complaint later alleges that Ballus, upon quitting her job two months later, removed the signature page of this Agreement from her employee files, which suggests that The Cupcakery does not possess a fully executed copy of such agreement. [ed.— hmmmm.]

Sometime around February 8, 2008, Ballus purportedly filed Articles of Organization for SIFT: A CUPCAKERY, LLC with the California Secretary of State. On February 20, 2008, Ballus also registered the domain name www.siftcupcakery.com (which now hosts a webpage advertising Sift’s gourmet cupcakes).

The Cupcakery claims that Ballus used her employment to get access to its trade secrets (cupcake recipes, business development and marketing strategies, and customer lists) and upon quitting, opened up her own gourmet cupcake business in Cotati, California.

Picture of Sift: A Cupcakery in Cotati, California

(Photo Credit: Elliot Kallen)

The Cupcakery also alleges that Ballus took the job with The Cupcakery under false pretenses in order to obtain these trade secrets so that she could develop her own gourmet cupcake business. The Cupcakery cites to a blog -- cupcakeaday.com – where Ballus supposed discussed her plans to open a cupcake business as early as December 2007. (Click here for her post where she embarks on her “massive mission to open my very own cupcake shop” and here to read in her own words the origin of the Sift name).

Most importantly, however, is that on August 18, 2008, Sift filed an application with the PTO to register the mark SIFT:A CUPCAKERY for “Retail bakery shops; Retail stores featuring cupcakes” (claiming date of first use April 2008).

Who knows when The Cupcakery discovered Sift’s pending application or whether the timing is a strange coincidence, but on September 8, 2008, The Cupcakery filed four separate trademark applications of its own – 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). The “cakes and cupcakes” applications claim a date of first use as December 2005 while date of first use for the “retail and online retail services” is January 2006.

Of course, with Sift’s earlier filing date, Sift’s application was passed to publication first. When Sift’s application was published for opposition, The Cupcakery filed a timely opposition. See The Cupcakery, LLC v. Sift: A Cupcakery LLC, Opposition No. 91188833 (T.T.A.B. Filed February 12, 2009).

In the instant complaint, The Cupcakery squarely attacks Sift’s application on the basis of fraud, in particular, the declaration section of Sift’s application stating that “no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, or to cause mistake, or to deceive.” The Cupcakery maintains that Sift (through Ballus) was aware of The Cupcakery’s senior use of THE CUPCAKERY when it made this declaration.

The Cupcakery’s causes of action are (1) Trademark Infringement under 15 U.S.C. § 1125(a) [Note: The Complaint actually cites 1125(c), but this is likely a mistake since no mention of trademark dilution is made and any claims to fame would be laughable]; (2) Unfair Competition under 15 U.S.C. § 1125(a); (3) Common Law Trademark Infringement; (4) Deceptive Trade Practices under Nevada law (N.R.S. § 598.0903, et seq.); (5) Breach of Contract; (6) Fraud; (7) Misappropriation of Trade Secrets under Nevada law (N.R.S. § 600A.030 et seq.); and (8) Intentional Interference with Prospective Economic Advantage

Vegas™Esq. Comments:
By moving the case out of the TTAB and into the federal courts (and adding in additional causes of actions like fraud, trade secret misappropriation and breach of contract), The Cupcakery is able to intensify the pressure against Sift to abandon its application, and thereby allowing The Cupcakery's applications to proceed to registration.

At first, the word “cupcakery” seems somewhat suggestive – a unique play on the words cupcake and bakery. However, with the explosive growth of these specialty “cupcake” stores, several other “cupcakeries” have opened up in different parts of the country. Just a quick internet search revealed the following third parties using the word “cupcakery” to identify their cupcake store:

• http://www.sibbyscupcakery.com/
• http://www.acupcakery.com/
• http://ourcupcakery.com/
  

And at least one company (with stores in St. Louis, MO and Knoxville, TN) is using the identical mark as The Cupcakery)

So would most consumers really associate the word "Cupcakery" with a single source -- or more likely a merely descriptive term describing a cupcake bakery?

And could the presence of these other stores also impact The Cupcakery’s own trademark applications, which also included declarations by The Cupcakery that “no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, or to cause mistake, or to deceive”?

While “cupcakery” may have been a unique word at one time, because The Cupcakery did not pursue trademark protection early (assuming that the company was the first one to use the phrase – a fact I have not verified), such oversight may have resulted in the word “cupcakery” joining the general lexicon as a word identifying a “cupcake bakery” rather than a word identifying a single source of goods and services.

It will be interesting to see if The Cupcakery, when and if it is able to get beyond Sift’s application and get their marks registered (thereby giving them prima facie evidence of the nationwide exclusive rights to the term), will attempt to start a nationwide campaign (a la Sprinkles) to stop other companies from using the word “CUPCAKERY” in connection with a cupcake bakery. Of course, registration is only prima facie evidence – and such marks can still be challenged on the basis of being merely descriptive (and not showing of acquired distinctiveness).

But without any trademark registrations, The Cupcakery must rely upon its common law rights, which given the fact that the company only has three stores (two in Vegas and one in Texas) and a website [Comment: and just because a website is accessible nationwide doesn’t mean your reputation is nationwide], would appear to give the company a limited zone of protection (certainly its zone of actual market penetration, namely Las Vegas and the Texas area where it has its stores). But can The Cupcakery claim that its zone of reputation extends outside these areas or show concrete evidence of a zone of natural expansion reaching into California or the other areas of the countries where “cupcakeries” are opening up?

Fractional Villas Files Trademark Infringement Lawsuit Against Competing Fractional Ownership Company

On November 12, 2008, Fractional Villas, Inc. (“FVI”) filed a trademark infringement lawsuit against LVPalmsplace, LLC and Las Vegas residents Yvonne Milko and Janet Armkenect (“Defendants”) in the U.S. District Court for the Southern District of California. See Fractional Villas, Inc. v. LVPalmsplace, LLC. et al, Case No. 08-cv-02072 (S.D. Cal. November 12, 2008). A copy of the complaint can be viewed here.

FVI, a company based in Del Mar, California, is in the business of marketing fractional ownership of luxury properties. The company markets its services on its website http://www.fractionalvillas.com/ and has two federal service mark registrations for the mark FRACTIONAL VILLAS – a supplemental registration for the word mark alone for “Real estate consultation; Real estate equity sharing, namely, managing and arranging for co-ownership of real estate” and a principal registration for the FRACTIONAL VILLAS logo pictured above (with the words “FRACTIONAL VILLAS” disclaimed) for two classes of services (“Real estate marketing services in the field of high-value properties” and “Real estate consultation; Real estate equity sharing, namely, managing and arranging for co-ownership of real estate; Real estate time-sharing; Vacation real estate time share exchange services; Vacation real estate time-sharing; Vacation real estate timeshare services.”).

According to the complaint, FVI has been marketing its services since 2003 – although according to the Internet Archive, the website has only been up since December 2005 (which FVI pretty much admits by claiming on its website that its contents are Copyright 2005-2008). The complaint is not specific about the extent of FVI’s marketing efforts prior to the website – it does mention that FVI’s owner, Robert Vicino, was a guest on Fox News and several radio programs and has been featured in numerous print and online articles, but such appearances came after the launch of the website.

Sometime around August 2008, Defendants began marketing fractional ownership of luxury properties under the website http://www.lvfractionalvillas.com/. The Defendants also own the website http://www.lasvegasfractionalvillas.com/, which is currently focused on marketing the Palms Place Hotel & Spa at the Palms Casino Resort in Las Vegas.

Palms Place, Las Vegas, Nevada

FVI argues that as a result of its ongoing advertising and promotion, the “FRACTIONAL VILLAS” mark has acquired a secondary meaning (i.e., has come to be a unique identifier of FVI’s services) and the Defendants’ use of the similar mark Las Vegas Fractional Villas (and the http://www.lvfractionalvillas.com/ domain name) is likely to cause confusion.

Vegas™Esq. Comments:
Since FVI’s trademark registration for the word mark FRACTIONAL VILLAS is only on the Supplemental Register, the registration provides no additional rights beyond what FVI has under the common law and reinforces that the mark is not inherently distinctive (and thus FVI must make a case for acquired distinctiveness). And FVI, in its registration on the Principal Register, concedes that it does not have exclusive rights to use the mark FRACTIONAL VILLAS apart from that mark as shown.

FVI will have an uphill battle in attempting to show that FRACTIONAL VILLAS has acquired a secondary meaning in the marketplace as identifying FVI’s services. The greater the degree of descriptiveness of a mark, the heavier the burden is on the mark holder to prove that the mark has acquired a secondary meaning. In this case, FRACTIONAL VILLAS is no doubt very descriptive of the services offered by FVI under the mark. As the PTO stated in rejecting registration of FRACTIONAL VILLAS on the Principal Register on the basis that it was merely descriptive:

The wording FRACTIONAL VILLAS describes luxury villa properties having a fractional, or shared, ownership. See web sites previously provided describing FRACTIONAL VILLAS. When the mark is applied to the applicant’s services, the consumer is immediately informed that the real estate consultation is specifically in the area of FRACTIONAL VILLAS, and that the equity sharing is specifically for FRACTIONAL VILLAS. See attached pages from applicant’s own website.

The complaint also attempts to make out a cause of action for trade dress infringement based on the website’s “distinctive, non-functional protectable trade dress,” but falls short on details regarding what such trade dress is.

Curiously, while the complaint notes that the contents of the http://www.fractionalvillas.com/ website, authored by Vicino, have been registered with the U.S. Copyright Office (TX-6-613-055 and TX-6-856-810 ), the complaint does not go on to make any claims for copyright infringement. Most likely because there is not enough content on the http://www.lvfractionalvillas.com/ to make out a prima facie case that the Defendants copied any part of the http://www.fractionalvillas.com/ website (other than maybe the concept itself, which copyright does not protect).

But the inclusion of these copyright registrations may have been a carryover from another lawsuit complaint – it turns out that this particular lawsuit is one of many that FVI has filed in the last few months. It would appear that FVI has decided to mount an aggressive intellectual property enforcement campaign against other competitors involved in the “fractional” ownership business.

Filed November 12, 2008
Fractional Villas, Inc. v. WorldFractionals.com et al
Fractional Villas, Inc. v. Paine et al
Fractional Villas, Inc. v. Harbor Light Villas et al
Fractional Villas, Inc. v. Windsor Capital Mortgage Corp. et al
Fractional Villas, Inc. v. Friedman et al

Filed September 23, 2008
Fractional Villas , Inc. v. MWS Fractional et al
Fractional Villas, Inc. v. Panama Fractional Real Estate et al
Fractional Villas, Inc. v. The Fractional Concierge, LLC. et al
Fractional Villas, Inc. v. Walker et al
Fractional Villas, Inc. v. Desert Quarters et al

Filed July 25, 2008
Fractional Villas, Inc. v. Rodgers et al

Filed July 22, 2008
Fractional Villas, Inc. v. Katz et al

Filed May 30, 2008
Vicino et al v. Allen et al
Vicino et al v. Starfish Coastal Properties, LLC et al
Vicino et al v. Coastal Resort Homes LLC et al

But with the exception of the above lawsuit against the Defendants, FVI’s lawsuits have all been copyright lawsuits (of course, trademark claims may have been asserted, but the lawsuits were classified primarily as copyright infringement lawsuits). FVI may be reaping the benefit of having registered its website with the U.S. Copyright Office since, with registered copyrights, FVI can assert statutory damages (rather than having to prove actual damages) against any other website that may have copied its website’s protected content. Of course, this also presumes that the infringement began after registration and not beforehand in which case statutory damages might be unavailable if the websites copied FVI’s website before registration even if such infringement continued after registration – see Derek Andrew, Inc. v. Poof Apparel. Corp., 528 F.3d 696 (9th Cir. 2008).

And one final unrelated note -- I wonder if the owners of Palms Place (Fiesta Palms, LLC -- see pending trademark applications here, here and here) will try to stop the Defendants from operating under the company name LVPalmsPlace, LLC.

Contentious trademark opposition over MONTE CARLO spills over into federal court

On March 28, 2008, Société des Bains de Mer et du Cercle des Etrangers à Monaco (“SBM”), a société anonyme Monegasque organized under the laws of the Principality of Monaco, filed a trademark infringement lawsuit against MGM Mirage, Inc. (“MGM Mirage”) and Victoria Partners, L.P. (“Victoria Partners”) in the U.S. District Court for the Southern District of New York. See Societe Anonyme Des Bains De Mer ET Du Cercle Des Etrangers A Monaco Cercle Des Etrangers A Monaco v. MGM Mirage, Inc. et al, Case No. 08-cv-03157 (S.D.N.Y. March 28, 2008). A copy of the complaint can be downloaded here.

SBM is a holding company headquartered in Monte Carlo, Monaco, which operates several casinos and hotels, most notably Le Casino de Monte-Carlo.

The "Real" Monte Carlo Casino?

Victoria Partners, which owns and operates the european-themed Las Vegas hotel and casino Monte Carlo Resort and Casino, since it opened May 1, 1995, was originally a joint venture between Mirage Resorts International and Gold Strike LV. Circus Circus Enterprises, Inc. bought out Gold Strike, and then in 1999 changed its name to Mandalay Resort Group. Mirage Resorts International later merged with MGM Grand Inc. to form MGM Mirage. Finally, last year, Mandalay Resort Group successfully merged into MGM Mirage.

Le Casino Monte Carlo de Las Vegas

The origins of this dispute appear to stem from a service mark application (technically, a concurrent use application in light of some Montana business apparently using the same name, but that's a discussion for another post) for the mark MONTE CARLO (for casino services) filed July 12, 2001, by Victoria Partners. After the mark was published for opposition on October 19, 2004, SBM filed a notice of opposition on February 15, 2005 with the Trademark Trial and Appeal Board ("TTAB"). See Societe Anonyme Des Bains De Mer ET Du Cercle Des Etrangers A Monaco Cercle Des Etrangers A Monaco v. Victoria Partners, Opposition No. 91164390 (TTAB February 15, 2005). The grounds for opposing registration (in SBM’s amended notice of opposition) were under 2(d) likelihood of confusion and 2(a) false suggestion of a connection with SBM and the Casino de Monte-Carlo.

Much of the district court complaint is spent providing some interesting insight into the history of Monaco and the Monte Carlo quarter and SBM’s Casino de Monte-Carlo as well as providing details regarding SBM’s U.S. and worldwide promotion and marketing of its historic casino and the publicity the casino has received (especially in Hollywood movies) and regarding SBM’s sales activities in the United States (recruiting high rollers to visit its casino, opening credit lines for customers planning to gamble at its casino, providing a VIP card for guests staying at one of SBM’s hotels allowing free admission into its casino, and taking reservations for its hotels).

As one can guess, SBM objects to Victoria Partner’s use of the name Monte Carlo in connection with casinos. The causes of action are federal unfair competition (under 15 U.S.C. 1125(a)), federal trademark infringement (the complaint cites 15 U.S.C. §1114(1) although no U.S. registered trademark is cited in the complaint), federal trademark dilution (§1125(c)), cybersquatting (under 15 U.S.C. §1125(d)), deceptive trade practices under New York law (§349(h) of the New York General Business Law), false advertising under New York law (§350-e(3) of the New York General Business Law), trademark dilution under New York law (§360-l of the New York General Business Law), common law trademark infringement, and common law unfair competition.

The big question of course is what prompted SBM to suspend its TTAB proceedings in favor of a federal court action after all this time? The answer may have something to do with how SBM’s opposition was progressing.

In its notice of opposition and amended notice of opposition, SBM cites to a use-in-commerce application it filed on May 2, 2002, for the mark CASINO DE MONTE CARLO for “operating resort and gambling facilities, casino gambling; education, providing of training; entertainment; sporting and cultural activities,” based on its foreign registration of the mark in Monaco, and claiming use in commerce back to 1984 (with first use in 1863) although the “operating resort and gambling facilities, casino gambling” description was apparently pared down to just “resort hotels.” Also noteworthy is the fact that on November 7, 2001, SBM had filed an intent-to-use application for the mark CASINO DE MONTE CARLO for “education; providing of training; entertainment; sporting and cultural activities” but expressly abandoned the application July 3, 2002.

During discovery, Victoria Partners asked SBM about evidence of its use of the mark on all of the goods cited in its “use-in-commerce” application. After all, SBM claimed to be using the mark in commerce on certain services that six months earlier it had claimed it was only intending to use. After receiving an unsatisfactory answer, Victoria Partners filed a motion to compel a more complete response to its interrogatory about use. Soon after, on November 14, 2007, SBM filed another use-in-commerce application for the mark CASINO DE MONTE CARLO for casino services. The application again cites first use in commerce as 1984, but does not reference a foreign registration this time.

Then, on December 20, 2007, SBM filed an express abandonment of the 2002 application which it had cited in its notice of opposition. So, in January 3, 2008, SBM sought to amend its Amended Notice of Opposition once again to replace the citing of the 2002 application with the newly filed 2007 application. Well, it did not take Victoria Partners long, in opposing SBM’s motion to amend, to cite the “fraud” trump card. SBM likely realized that it may have harmed its position at the TTAB (i.e., fraud and/or unclean hands) and opted to start fresh at the district court.

Another reason SBM may have opted for district court could be the opposition proceeding that it is facing currently regarding a Madrid Protocol application it filed on June 15, 2005, to register the mark MONTE-CARLO BAY HOTEL & RESORT for nine classes of goods and services, including “Entertainment services, namely conducting casino games; conducting and providing facilities for special events featuring casino and gaming contests and tournaments, leasing of casino games, providing casino facilities.” On December 19, 2007, Victoria Partners filed a notice of opposition opposing SBM’s application. See Victoria Partners v. Societe Anonyme Des Bains De Mer ET Du Cercle Des Etrangers A Monaco Cercle Des Etrangers A Monaco, Opposition No. 91181442 (TTAB File December 19, 2007). SBM’s right to stop Victoria Partners from registering its mark can be addressed at the same time as SBM’s right to use the name in the U.S.

The complaint notes the worldwide publicity that the Monte Carlo Resort and Casino received when the façade of the hotel caught on fire back in January of this year (see Las Vegas Review Journal article on the fire) and even includes a screenshot from CNN coverage of the fire, showing the “Monte Carlo” sign “literally tarnished and consumed by black smoke and fire” – suggesting that SBM felt the recent negative publicity the hotel received harmed its reputation and goodwill and wanted to stop Victoria Partners altogether from using the Monte Carlo name (and not just prevent a trademark registration which is the extent of the TTAB’s powers). Of course, the complaint does not address why SBM felt no concern about likelihood of confusion for the many years beforehand.

In addition, the complaint notes a verbal message supposedly left by a representative of Victoria Partners with a representative of SBM on December 20, 2007, threatening to file a cancellation proceeding against an unidentified registration held by SBM. Strangely enough, the one registration that SBM did have for the mark CASINO DE MONTE-CARLO (a §44(e) application based on a Monaco registration), for various goods across three different classes including video games, printed matter, and board games, was voluntarily surrendered by SBM on February 13, 2008. Coincidence?

Finally, the complaint also cites to a recent letter (attached as an exhibit, but heavily redacted) that supposedly intimates that Victoria Partners was considering bringing its own trademark infringement lawsuit, which suggests that SBM may have felt it wiser to be proactive and on the offensive with respect to its position on the mark MONTE CARLO lest Victoria Partners get to court first.

Of course, the big question is why SBM waited so long to assert its rights in the first place. The Monte Carlo Resort and Casino has been operating since 1995. Victoria Partners did not even seek federal registration of the mark for casino services until six years later. (Note: Victoria Partners did file an application on June 9, 1997 to register the mark MONTE CARLO for “providing bar services, featuring, alcoholic malt beverages brewed on the premises” but the application went abandoned for failure to response to a non-final action). Certainly, the hotel’s name had come to the attention of SBM before that time.

I have three words for SBM: Vail, Bukhara, and Laches.


(Hat Tip to Marty Schwimmer at The Trademark Blog for pointing out (here) the lack of a copy of the complaint on PACER and forcing me to actually do some digging for once to unearth the current status of this long-running, contentious dispute).

“Vegas” Magazine Mega-Publisher Sues Connecticut Niche Publisher Over a “Niche” mark

On March 14, 2008, Niche Media Holdings, LLC (“NMH”) filed a lawsuit against Niche Downtown, LLC and Joseph A. Gazzola (the “Defendants”) in the U.S. District Court for the District of Nevada. A copy of the complaint can be downloaded here.

March 2008 Cover of "Vegas" Magazine

NMH is the publisher of such well-known regional magazines as “Los Angeles Confidential,” “Ocean Drive,” and “Vegas” – those oversized glossy magazines with articles and advertising catering to a high-end luxury market.

In its complaint, NMH claims to own rights to several marks containing the word “niche.” NMH currently has federal trademark applications pending for each of the following marks containing the word “niche”:

• NICHE MEDIA
• NICHE MEDIA ONLINE
• NICHE MEDIA WORLDWIDE
• NICHE ACCESS and
• NICHE MEDIA'S PALM BEACH

All of the applications are directed to the same two basic classes of goods and services—a series of printed magazines (class 16) and providing a series of online magazines (class 41), both featuring the lifestyles of high net worth individuals covering the areas of movies, theater, fashion, night-life, entertainment, art, ecology, sports, leisure, restaurants, travel, transportation, business, politics and music. (Note: The application for NICHE MEDIA currently reflects only one class; however, the examining attorney is requiring a separation into the same two classes as the others. In addition, while NICHE MEDIA ONLINE currently reflects these two classes, only class 41 will likely remain because the examining attorney inadvertently led NMH, through its amended description, to expand the scope of the goods and services outside the scope of the original application.)

With the exception of NICHE MEDIA, which was filed on August 2, 2005 as a use-in-commerce application based on alleged first use dating back to October 2000, all of the above applications were filed under as intent-to-use applications:

• NICHE MEDIA ONLINE (filed December 29, 2005 – still under non-final)
• NICHE MEDIA WORLDWIDE (filed December 29, 2005 – will be published for opposition April 8, 2008)
• NICHE ACCESS (filed July 7, 2005 – will be published for opposition April 8, 2008)
• NICHE MEDIA'S PALM BEACH (filed December 23, 2005 – will be published for opposition April 8, 2008)

It is interesting to note that a specimen of use was not submitted with the original application for NICHE MEDIA. One wonders if this was merely an oversight on the part of NMH when it originally filed the application or if it was because NMH could not procure a specimen that showed use of the mark on the goods and services set forth in the application at the time of filing. Based on the description of the specimen set forth in the application, however, NMH appears to be relying upon something similar to the below masthead (from NMH’s website).

At issue in the complaint are actions taken by Defendant Gazzola, a Connecticut resident, who organized Niche Downtown, LLC on September 15, 2006, and began conducting business under the name “Niche Hartford Magazine.” On November 17, 2006, Defendant Gazzola registered the domain name http://www.nichehartford.com/, which at the time promoted the pending publication of the magazine “Niche Hartford,” which was formally launched in January 2007 with the publication of its premier issue. The Defendants have since published five additional issues of the quarterly magazine.

NMH supposedly sent a cease and desist letter to the Defendants (although the date is not specified in the complaint). Defendants apparently did not comply with NMH’s demands, and have expanded the number of “marks” using the term “Niche” on its website including “NicheMagazine,” “Niche Advertising,” “Niche Editions,” “Niche Gallery,” and “NicheFamily.”

NMH claims that the Defendants, by using the term “niche” on its magazine, in its domain name, and on its website, are attempting to trade on the goodwill and reputation of NMH and attempting to create a false association between NMH and the Defendants. NMH claims unfair competition (arising from the Defendants’ infringement of NMH’s unregistered marks) under Section 43(a) of the Lanham Act (15 USC §1125(a)), cybersquatting under Section 43(d) of the Lanham Act (15 USC §1125(d)), common law trademark infringement, and intentional interference with a prospective economic advantage.

NMH seeks injunctive relief to stop the Defendants from using any more marks or registering any domain names containing the term “niche” and from publishing its “Niche Hartford” magazine. NMH also seeks a court order transferring the http://www.nichehartford.com/ domain name to the NMH. Finally, NMH seeks the usual damages (compensatory, consequential, statutory, punitive) as well as interest, costs, and attorneys’ fees.


Vegas™Esq. Comments:
At first glance, NMH’s trademark infringement case would appear weak. After all, can NMH really claim to own the exclusive right to the word “niche” in the magazine world? However, when you start to apply the Sleekcraft factors for determining likelihood of confusion between the marks at issue, NMH’s case for trademark infringement does not appear so weak after all.

Regarding strength of the mark, NMH’s complaint asserts that it has spent substantial sums of money to advertise and promote its NICHE MEDIA name in print, broadcast media, and online. NMH can likely back this up, in which case this factor likely favors NMH.

As for similarity of the marks, while NMH uses the mark NICHE MEDIA and the Defendants use NICHE HARTFORD, the dominant part of each mark is the word NICHE (MEDIA is descriptive, as evidence by the disclaimer that NMH will certainly have to file to obtain its federal registration and HARTFORD is geographically descriptive of the subject matter of the Defendants’ magazine). So this factor favors NMH as well. Even if you only compare NMH’s NICHE MEDIA word marks with Defendant’s stylized NICHE HARTFORD logo, there is still enough similarity (black color, similar lettering) that the factor slightly favors NMH.

The relatedness of the goods is an interesting question. NMH is not really using its NICHE MEDIA mark on magazines per se, but rather the mark is used to promote a “series” of printed and online magazines featuring the lifestyles of high net worth individuals. Defendants, on the other hand, are using the mark as the name of an actual magazine that features articles and advertising of interest to local residents of the Hartford, Connecticut area. While I personally think that the content of the magazine is an important distinguishing factor, especially given NMH’s admitted focus on high net worth customers, a court is more likely to focus on the general fact that both marks are used in connection with magazines and not so much the content of those magazines (although NMH can probably also argue that there is some similarity in content as well). As such, the goods are likely to be deemed related, in which case this factor favors NMH.

Both parties use at least one form of the same type of marketing channels (online), so this favors NMH. It’s not clear from the complaint the degree to which the Defendants distribute hard copies of its magazines to the same stores where NMH’s magazines are sold, but there is likely to be some overlap.

Regarding customer degree of care, given the type of goods involved (low cost magazines), purchasers are not likely to exercise a high degree of care when purchasing, so this factor favors NMH.

Defendants’ intent in selecting the name “niche” is not clear, but I would be willing to give the Defendants the benefit of the doubt that the name was chosen not to capitalize on NMH’s goodwill, but rather for the more common meaning of “niche” (signifying something designed for a specialized market). The Defendants are located in the Hartford, Connecticut area and have carved out their own little “niche” by creating a magazine catering to the local community. Barring the discovery by NMH of any strong evidence of the Defendants’ intent to trade off NMH’s reputation and goodwill, this factor favors the Defendants.

Finally, as for likelihood of expansion, the complaint notes that NMH already distributes three of its publications to the Hartford, Connecticut area (“Boston Commons,” “Gotham,” and “Hamptons”), so this factor favors NMH.

Therefore, even though I doubt that the Defendants’ current use of the name NICHE HARTFORD for its local magazine seriously threatens NMH’s mark and reputation associated with its series of printed and online luxury lifestyle magazines, a balancing of the factors does tend to favor a finding of a likelihood of confusion.

However, while NMH may be able to stop the Defendants from using the “NICHE” mark in connection with their Hartford magazine, it might not be able to stop the Defendants from some of its other expanded uses of the word NICHE (for goods and services beyond its magazine).

Seventh Circuit affirms District Court dismissal of trademark infringement dispute between JAPONAIS restaurant founders

On February 22, 2008, the Seventh Circuit Court of Appeals affirmed a district court’s dismissal of a derivative trademark infringement claim brought by a co-founder of the Chicago restaurant Japonais against his fellow co-founders using the Japonais name and trade dress at additional restaurant locations outside Chicago. See Segal v. Geisha NYC, LLC, Appeal No. 06-2897 (7th Cir. February 22, 2008). A copy of the decision can be downloaded here.

Jonathan Segal was one of four founders of the Chicago restaurant Japonais Chicago, described as an up-scale restaurant and lounge serving a fusion of Japanese and European cuisine. Segal developed the concept for Japonais along with Rick Wahlstedt. They hired culinary expert Miae Lim and architect Jeffrey Beers to assist in developing the restaurant.

As part of the establishing of the first Japonais restaurant in Chicago, the four founders formed two Delaware LLCs -- Geisha Chicago, LLC (“Geisha Chicago”) and Hospitality Chicago, LLC (“Hospitality Chicago”). Geisha Chicago was set-up to own the Japonais Chicago restaurant and all intellectual property related to the Japonais name and design. In Geisha Chicago’s operating agreement, Hospitality Chicago is named as “Managing Member” and is the sole member listed on the agreement’s member schedule. The agreement also gives Hospitality Chicago complete authority to manage the business of Geisha Chicago and to utilize any asset of Geisha Chicago.

The four founders were the only named members in the operating agreement of Hospitality Chicago. The same agreement also included provisions which allowed at least two of the four founders to open a restaurant outside of Chicago using the Japonais Chicago restaurant concept provided that notice and opportunity to participate was given to the other founders.

In 2006, Wahlstedt, Lim, and Beers decided to open additional Japonais restaurants in New York City and Las Vegas which used the Japonais Chicago concept. When Segal discovered that his three co-founders had expanded the restaurant outside of Chicago (apparently without notifying him or allowing him to participate), he filed a lawsuit (on behalf of himself and derivatively on behalf of Geisha Chicago and Hospitality Chicago) stating ten state-law claims and one federal claim for trademark infringement under Section 43(a) of the Lanham Act (15 U.S.C. §1125(a)). Segal alleged that the defendants misappropriated the Japonais name and trade dress in violation of §1125(a).

In June 2006, the district court granted the defendants’ motion to dismiss the trademark infringement cause of action on the grounds that, as a matter of law, there could be no likelihood of confusion as to source or affiliation because of the clear language of the Hospitality Chicago operating agreement which allowed any two founders to use the Japonais Chicago concept and intellectual property in any expansion of the restaurant outside Chicago. After dismissing Segal’s federal claim, the district court dismissed the remaining state law claims under 28 U.S.C. §1367(c)(3) for lack of pendent jurisdiction. While Segal filed a separate action in Illinois state court, he also filed an appeal of the district court's dismissal of his trademark infringement claim.

The Court of Appeals affirmed the district court’s decision to dismiss the trademark infringement claim as well as the state law claims.

On appeal, Segal argued that Hospitality Chicago’s operating agreement was only meant to govern relations between the members and was not relevant to whether the defendant’s were authorized to use the Japonais Chicago’s intellectual property. The court, however, rejected Segal’s argument, finding that, under Delaware law, an LLC operating agreement allows the members to delegate control over the company by contract. See Del. Code Tit. 6, §18-1101(b). The court agreed that Geisha Chicago’s operating agreement gave Hospitality Chicago total control over Geisha Chicago’s assets, including use of the Japonais Chicago intellectual property. As such, it was relevant to review the provisions of the Hospitality Chicago operating agreement to determine how Geisha Chicago’s intellectual property could be controlled.

In reviewing the Hospitality Chicago operating agreement, the court agreed that the people who controlled the companies behind Japonais New York and Japonais Las Vegas, namely Wahlstedt, Lim, and Beers, were expressly authorized to use the Japonais Chicago intellectual property under such agreement for restaurants outside of Chicago.

Therefore, because Geisha Chicago, through its managing member, Hospitality Chicago, had authorized the three expanding founders to use the Japonais Chicago intellectual property owned by Geisha Chicago, the court agreed that Segal’s trademark infringement claim failed as a matter of law because Segal could not establish that use of the mark by Japonais New York and Japonais Las Vegas is likely to cause confusion with Japonais Chicago among consumers because they are authorized expansions of the same restaurant concept and share three of the same founders:

“[W]here the trademark holder has authorized another to use its mark, there can be no likelihood of confusion and no violation of the Lanham Act if the alleged infringer uses the mark as authorized. See ITOFCA, Inc. v. MegaTrans Logistics, Inc., 322 F.3d 928, 940 (7th Cir. 2003) (“A licensee infringes the owner’s copyright if its use exceeds the scope of its license.” (internal quotation marks and citations omitted)); Am. Legion v. Matthew, 144 F.3d 498, 499 (7th Cir. 1998) (“Without confusion about source, sponsorship, or affiliation, there is no possible claim under . . . § 1125(a).”); see also McDonald’s Corp. v. Robertson, 147 F.3d 1301, 1307 (11th Cir. 1998) (“[I]n order to prevail on a trademark infringement claim, a plaintiff must show that its mark was used in commerce by the defendant without the registrant’s consent and that the unauthorized use was likely to deceive, cause confusion, or result in mistake.”).

Slip op. at 7-8.

Finally, the court agreed that since Segal’s pendent state law claims were based solely on the district court’s supplemental jurisdiction, the district court properly relinquished its jurisdiction over such state law claims under 28 U.S.C. § 1367(c)(3) once Segal’s sole federal claim was dismissed. See Williams v. Rodriguez, 509 F.3d 392, 404 (7th Cir. 2007) (citing Wright v. Associated Ins. Cos., 29 F.3d 1244, 1251-52 (7th Cir. 1994)).

Vegas™Esq. Comments:
The court seems to gloss over the fact that the Hospitality Chicago operating agreement apparently required notice be given to Segal as well as an opportunity to participate in order to be authorized to expand the restaurant outside of Chicago – and that Segal apparently never received such notice and opportunity to participate from the three expanding founders. Under the agreement, if such steps were not taken, then were the three expanding founders legitimately authorized under the agreement to have used the Japonais Chicago intellectual property in restaurants outside of Chicago?

This case serves as an important reminder of how trademark law and corporate law can become intertwined and how anyone becoming involved in a business venture with others should be careful in how the business is structured and the governing documents dictating the relationships among the business partners.