AMEX Wins Cancellation of BLACKCARD Trademark Registration

American Express (“Amex”), the issuer of the ultra-exclusive “Centurion Card” credit card (which is black in color and thus better known among the public as the “Black Card” -- pictured above), won a victory in the U.S. District Court for the Southern District of New York against Black Card, LLC (“BC”), a company that obtained a trademark registration for the mark BLACKCARD (for credit and debit card services). The Court granted summary judgment in favor of Amex on its claim that BC’s trademark registration for BLACKCARD should be canceled on the grounds that it is merely descriptive and BC had not demonstrated acquired distinctiveness. See American Express Marketing and Development Corp, et al. v. Black Card, LLC, 2011 U.S. Dist. LEXIS 133151 (S.D.N.Y. November 17, 2011)

In 1998, Amex, following its long history of color-based credit cards reflecting a hierarchy of credit card prestige (i.e., green, gold, platinum), developed a black colored credit card which it called the Centurion Card and which was available by invitation only. While Amex never formally refers to the Centurion Card as the “Black Card,” Amex executives recognized that the public referred to its Centurion Card as the “Black Card” and thus often informally referred to the card as Amex’s “black card.” While Amex applied to register BLACK FROM AMERICAN EXPRESS, it never filed a Statement of Use and the application went abandoned.

(The other "Black Card")

In 2008, BC began issuing its own card (in connection with Barclays Bank Delaware and Visa) which was black in color and which had the words “BLACK CARD” emblazoned theron (pictured above). BC’s CEO Scott Blum, who founded Internet retailer Buy.com and who was a Centurion cardholder since Amex first introduced the card, began developing his black-colored premium credit card back in 2005 when he was CEO of Internet company called Yub, Inc. Blum, apparently frustrated with Amex’s Centurion services, sought to build a “better Black Card.” Yub applied for the BLACKCARD on September 20, 2005. The mark was published for opposition in May 2006 and, when no oppositions were filed, the PTO issued a Notice of Allowance in 2006. Yub later assigned all of its rights to the as-yet-unregistered mark to BC. [Query: Was this assignment of an intent-to-use application even valid under 15 U.S.C. § 1060? – see actual recorded assignment]

BC (and its predecessor) filed thirteen applications total between 2005 and 2009 for various BLACK CARD marks. Some were refused on the grounds that the mark was merely descriptive; in others, Examining Attorneys requested information from BC about whether consumers would associate the mark with a different provider of credit card services. Nonetheless, the PTO did issue the aforementioned trademark registration on April 29, 2009. However, for reasons not entirely clear, even though BC’s attorney had filed a preliminary amendment which inserted a disclaimer of the term BLACK apart from the mark as shown, the registration certificate did not reflect the disclaimer when it issued.

On May 13, 2009, Amex filed a petition to cancel with the Trademark Trial and Appeal Board. See American Express Marketing & Development Corp. et al v. Black Card, LLC, Cancellation No. 92050968 (TTAB). On February 16, 2010, BC filed an action in Wyoming that sought a declaratory judgment regarding Amex’s rights to “Black Card” as well as other trademark and unfair competition claims. On February 26, 2010, Amex filed the instant action in New York District Court alleging its own trademark and unfair competition claims as well as seeking to cancel BC’s registration under §2(e) of the Lanham Act. The TTAB’s proceeding was suspended on May 7, 2010, pending the outcome of the lawsuits. Moreover, Amex was able to get BC’s Wyoming complaint dismissed as an anticipatory filing. BC later refiled its counterclaims in the New York action. The parties later stipulated to have Amex's claims for monetary damages and BC's federal and state trademark infringement and unfair competition claims dismissed with prejudice. Upon close of discovery, the parties filed cross motions for summary judgment, with Amex moving for partial summary judgment on its §2(e) cancellation claim.

The court’s decision goes into a lengthy (but informative) discussion of its power to determine the right to registration of a mark, the standard for refusing registration of marks which are “merely descriptive” when used on or in connection with the goods/services of the applicant, the spectrum of distinctiveness with respect to protection of a mark (i.e., generic, descriptive, suggestive, arbitrary, and fanciful), and the rebuttable presumption which arises a mark that is registered by the PTO.

Regarding the rebuttable presumption, the court stated:

When the PTO issues a certificate of registration for a mark, a rebuttable presumption arises that the mark is protectable. Papercutter, 900 F.2d at 562-63. "Registration by the PTO without proof of secondary meaning creates the presumption that the mark is more than merely descriptive, and, thus, that the mark is inherently distinctive." Lane Capital, 192 F.3d at 345. The fact of registration, however, "shall not preclude another person from proving any legal or equitable defense or defect . . . which might have been asserted if such mark had not been registered." 15 U.S.C. § 1115(a). The party challenging the registration "bears the burden to rebut the presumption of [the] mark's protectability by a preponderance of the evidence." Lane Capital, 192 F.3d at 345. "The presumption may be rebutted by a showing that the mark is descriptive, not suggestive." Papercutter, 900 F.2d at 563.

The presumption, in short, is a "procedural advantage" to the registrant and nothing else. Lane Capital, 192 F.3d at 345. It is not "itself evidence of how the public actually views the mark." Id. "The presumption of validity that federal registration confers evaporates as soon as evidence of invalidity is presented. Its only function is to incite such evidence, and when the function has been performed the presumption drops out of the case." Id. (citation omitted).

So while the court gave BC’s BLACKCARD registration its appropriate rebuttable presumption of protectability by virtue of its 2009 PTO registration, the court found that Amex had demonstrated by a preponderance of the evidence that the mark is descriptive was descriptive, and thus not protectable absent secondary meaning. The court also found that “No reasonable factfinder could find that a prospective consumer would consider the mark to be suggestive rather than descriptive.” The court first noted that BC’s mark BLACKCARD appears on a black-colored credit card. “As with other credit cards, it enables its holders to make purchases on credit. The black color of the card is an essential feature or characteristic of the card. BC's advertising emphasizes the color, underscoring this point.” The court further noted that the word BLACK is descriptive in a second sense within the credit card industry:

Within the credit card industry, the word "black" is descriptive in a second sense as well. Largely through the efforts of Amex, the word "black", when used in connection with credit cards is understood to describe access to premium credit card services. Indeed, this was the very reason that Blum chose the mark "BLACKCARD" for his credit card. The term "BLACKCARD" immediately calls to mind an important aspect or characteristic of the product and describes the product's principal features and qualities. It is, in essence, communicating the grade of credit card offered by BC. The black-colored credit card marketed by BC is central enough to the overall product, however defined, to render "BLACKCARD" a descriptive mark.

Finally, following its determination that BC’s mark was descriptive, the court further found that BC had offerred no evidence of secondary meaning accruing to the mark BLACKCARD in order to support an argument of acquired distinctiveness.

BC attempted to argue that Amex lacked standing to seek to cancel BC’s mark, but the court rejected such arguments finding that Amex had “a significant, concrete, and real interest in proceedings to challenge the registration” based on its own use of the term “black card” in communications to prospective customers about the Centurion card (and noting that BC sued Amex for infringement).

BC also attempted to argue that its mark is not descriptive, but instead is suggestive of high-end financial services (citing cases where the color RED was held to be a protectable mark in connection with perfume and scotch whiskey). However, with respect to the Red Label mark on scotch whiskey, the mark did not serve as a grade designation; and with respect to RED on perfume, such reference suggested romance and passion to the prospective purchasers. In the instance case, the court found that BLACKCARD “merely describes the color of the card and the category of credit card services into which BC's card falls.”

As such, the court granted ary judgment for Amex on its cancellation claim under § 2(e) of the Lanham Act.

Casey’s Challenges Subway's Trademark Claim to FOOTLONG

As has been reported widespread in the media, last week, Casey's General Stores, Inc. (“Casey’s”), the owner of the convenience store chain Casey's General Store, filed a declaratory judgment action in Iowa federal district court against Doctor’s Associates, Inc. (“Subway”), the owner of the sandwich shop franchise Subway, seeking a declaration that the term “FOOTLONG” is generic when used in connection with a “footlong submarine sandwich” and thus Casey’s use of the term does not violate any trademark rights owned by Subway. See Casey's General Stores, Inc. v. Doctor's Associates Inc., Case No. 11-cv-00064 (S.D. Iowa February 11, 2011).

DuetsBlog provides a good blog post on the lawsuit filing (including a link to the complaint here). Other news coverage here, here, and here. Other blog coverage from Lawyers and Settlements and Trademarks and Brands.

Casey’s receipt of a cease and desist letter from Subway on January 31, 2011, regarding Subway’s claim over the FOOTLONG term apparently prompted Casey’s to file the action. In the complaint, Casey’s notes that in another pending lawsuit by Subway against convenience store chain Sheetz Inc. (see Doctor's Associates Inc. v. Sheetz Inc. et al, Case No. 09-cv-00088 (E.D. Va.)), the Court denied Subway’s early motion for a preliminary injunction and in doing so made the comment that the term “footlong” is “certainly generic.”

The complaint also notes that with respect to at least one of Subway’s applications for FOOTLONG (for restaurant services), the PTO has refused registration on the grounds that the mark is merely descriptive. In the PTO’s most recent Office Action (which included over 700 pages of exhibits), not only does the PTO note that the term “footlong” is commonly used, not only as an adjective to describe the size of sandwiches but also as a noun generically to refer to the sandwich itself and stating “Being potentially generic for applicant’s menu item, the mark FOOTLONG is highly descriptive for applicant’s restaurant services.” The PTO also noted numerous other restaurant menus, restaurant webpages, recipes, and articles using the term “footlong” to describe sandwiches and hot dogs that are one foot long and concluding that “Clearly, the evidence shows that the mark is and has been widely used descriptively, if not generically, in the food and restaurant industries for many years.”

Of course, as noted by DuetsBlog, the real question is how did Subway ever get its other FOOTLONG application (for sandwiches) to the publication phase? Numerous oppositions have been filed by companies including Long John Silvers, A&W, Taco Bell, Kentucky Fried Chicken, Dairy Queen, and Pizza Hut – with all but one suspended. The opposition that appears to be moving along is (not so coincidentally) the opposition filed by Sheetz. See Sheetz of Delaware, Inc. v. Doctor’s Associates, Inc., Opposition No. 91192657 (T.T.A.B.)

As for how the FOOTLONG application for "sandwiches" ever got the past the examination phase to the publication phase, not even the prosecution history provides a clear answer on that. In response to a descriptiveness refusal by the PTO, Subway merely argued “When applying the mark FOOTLONG to sandwiches it would require imagination, thought or perception to reach a conclusion as to the nature of those goods or services.” Subway added some sales figures in its Office Action response in order to make a claim for acquired distinctiveness if needed – but it never became an issue because the PTO, after dealing with the refusal discussed below, simply moved the application along to the publication phase.

Interestingly, it was not a descriptiveness refusal, but rather a likelihood of confusion refusal, that was Subway’s primary obstacle towards publication of its FOOTLONG application. In the PTO's office action, the Examining Attorney also cited the registered marks FOOTLONG EXPRESS (here and here) in support of a likelihood of confusion rejection. Subway was only able to get its application approved after winning by default cancellation actions against the marks FOOTLONG EXPRESS. See Doctor’s Associates, Inc. v. Skyline Chili, Inc., Cancellation No. 92050678 (T.T.A.B.).

But even after the cited marks had been canceled, the Examining Attorney still received a 72 page Letter of Protest on July 24, 2009 (which would have only been forwarded to the Examining Attorney if the PTO felt that the information raised important issues for the Examining Attorney to consider). While there is a notation in the file that the evidence was reviewed, the application was still forwarded for publication (and the approval itself would have certainly undergone the usual supervisory review, so the approval cannot be blamed on a single Examining Attorney). The rest is history (in the making). One suspects that the PTO, recognzing its mistake to have approved for publication the "sandwiches" application, went above and beyond in order to support its refusal of the "restaurant services" application.

Is there anybody out there that honestly believes that Subway is going to win this on any level?

Of course, this whole blog post was really just to give me an excuse to mention what I am reminded of when I hear the term “footlong” – a scene from the 80s Tom Hanks comedy “Bachelor Party” involving a male stripper who goes by the name “Nick the Dick.” If you watch this clip (sorry in advance for the 30 sec ad at the beginning) from the movie, at about the 1:30 mark, the lady asks “Is that footlong?” to which the gentleman replies “…and then some.” [A little bit of nostalgia for you Gen-Xers out there. . . in addition to being evidence that consumers recognize the term as a generic reference to the “size” of a “sandwich” (or at least a hot dog anyway).]

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.

Egg Works Left With Egg On Its Face After Court Denies Preliminary Injunction Against Egg World

(I doubt they are smiling today)

The owners of the Las Vegas breakfast restaurants The Egg & I and Egg Works got egg on their face when a federal court denied their motion for preliminary injunction against a competing Las Vegas restaurant named Egg World.

Back in June, Bradley Burdsall, along with his two companies Egg Works, Inc. and Egg Works 2, LLC (collectively “Egg Works”), brought a trademark infringement lawsuit against Egg World, LLC, and two of its principals, Gabrijel Krstanovic, and Dejan Debeljak (collectively “Egg World”). See Egg Works, Inc. et al v. Egg World LLC et al, Case No. 10-cv-01013 (D. Nev.). A copy of the complaint can be downloaded here. The Las Vegas Sun ran an article about the dispute back when the suit was filed.

Probably figuring that upstart Egg World would not have the financial resources to devote towards legal fees, Egg Works came out guns blazing filing a Motion for Temporary Restraining (which was quickly denied) followed by a Motion for Preliminary Injunction – along with what can only be described as a litany of declarations from purportedly confused consumers that Egg Works submitted in support of its argument for trademark infringement of its registered mark EGG WORKS and for why an injunction should be issued immediately against Egg World while the lawsuit is pending.

An evidentiary hearing was held and on September 14, 2010, District court Judge Lloyd George denied Egg Works motion for preliminary injunction on the basis that Egg Works had not shown a likelihood of success on the merits of its trademark infringement claims. A copy of the court's order can be viewed here.

Analyzing the likelihood of confusion between Egg Works and Egg World, the court went though each of the Sleekcraft factors.

Regarding “strength of the mark,” the court rejected Egg Work’s unsupported assertion that the mark does not directly convey any feature or characteristic of its services to consumers and concluded that the mark was “descriptive” and “not entitled to protection absent a showing of secondary meaning” (an issue which Egg Works had not expressly addressed). As such, the court stated that “the descriptive nature of the mark indicates that this factor is likely to weigh in favor of defendants.” [Comment: Not sure how this reconciles with the fact that the PTO did register the EGG WORKS service mark, albeit with a disclaimer for the word EGG. Nonetheless, the court’s comments still reflect that Egg Works’ mark is not as strong as Egg Works would have this court believe].

The court next turned its attention to the factor of actual confusion, which even the court acknowledges “[f]rom the outset, Egg Works has relied heavily on its argument of actual confusion” and how Egg Works submitted “numerous declarations of consumers” and even called consumers as its first three witnesses. The court then provides a good background legal discussion, citing the Ninth Circuit’s recent decision in Fortune Dynamic, Inc. v. Victoria's Secret Stores Brand Mgmt., ___ F.3d ___ , Case No. 08-56291 (9th Cir. Aug. 19, 2010), into the often overlooked, but important distinction between relevant confusion and non-relevant confusion.

Regarding Egg Works' evidence of actual confusion in the form of customer declarations, the court found that “the evidence presented by Egg Works reveals that a substantial number of consumers expressed a non-relevant confusion; confusion that resulted from something other than Egg World’s mark.”

The court noted several declarations from consumers mentioning that they were looking for the “Egg & I” restaurant and got confused when they saw Egg World. The court dismissed each of these declaration as express non-relevant confusion: “While the court agrees that these consumers are expressing confusion, their statements also establish that they are expressing a non-relevant confusion. Although the plaintiffs brought this action and motion to protect Egg Works’ mark, and though none of the above quoted declarants were subjected to cross-examination, each expressed confusion concerning the Egg & I. As Egg Works acknowledged and argued, this matter does not concern the Egg & I.”

The court recognized that the evidence “strongly indicates that the source of the consumers’ non-relevant confusion is the close affiliation between the Egg & I and Egg Works.” Other declarations from consumers supported customer recognition of this affiliation – consumers expressing a belief that Egg World was part of the Egg & I and Egg Works affiliated restaurants.

The court then eloquently explained how this particular type of consumer confusion is not relevant confusion for purposes of determining if Egg World infringes Egg Works:

While each of these declarants reveal their knowledge of the relationship between the Egg & I and Egg Works, they also reveal that this relationship is the source of their confusion. Each of the declarants quantify the relationship between the Egg & I and Egg Works as being a chain or group of restaurants. Each states a confusion whether Egg World was owned by or part of the Egg & I and Egg Works chain or group of restaurants. Based upon this belief, these consumers express a non-relevant confusion that Egg World was being opened as part of the chain or group of restaurants that includes Egg Works and Egg & I. Stated otherwise, the plaintiffs’ marketing successfully informed their consumers that they operated three breakfast and lunch restaurants under two dissimilar names that included the word “egg.” The consumers, so educated, submitted declarations expressing confusion whether the plaintiffs opened (or were opening) a fourth breakfast and lunch restaurant using a third name that included the word “egg.”

(emphasis added). [Comment: It’s statements like these that restores my faith in an impartial court’s ability to cut through all of the legal arguments propounded by attorneys on both sides and ascertain the truth – and then articulate that truth so brilliantly, eloquently, and concisely]. And with those words, the court essentially knocked away all of Egg Works evidence of actual confusion and found that Egg Works was not likely to succeed in showing that this factor weighed in their favor.

Regarding “similarity of the mark,” on the one hand, the court recognized that Egg Works disclaimed the word “EGG” in their trademark registration. The court, noting how one consumer in their declaration equated “egg” to the Egg & I restaurant (which is not Egg Works mark at issue, stated that:

The consumer’s reliance upon the disclaimed “egg” in relation to an entity that is not before the court suggests that little weight can be given to the similarity caused by the fact that both “Egg Works” and “Egg World” begin with the descriptive word “egg.”

The court also found “Egg World” and “Egg Works” are dissimilar in meaning and definition. Nonetheless, the court, mindful that similarities are given greater weight than differences, concluded that Egg Works is as likely to succeed as it is likely to fail in showing that this factor weighed in its favor – and accordingly, found this factor to neither favor Egg Works or Egg World.

On “relatedness of the services,” this favored Egg Works because both operate breakfast/lunch restaurants. Regarding “intent in selecting the mark,” the court rejected Egg Works purported evidence that the Defendants chose the Egg World mark after seeing Egg Works. The court also commented that “the conceptual strength of both ‘Egg Works’ and ‘Egg World’ strongly indicates that both are descriptive rather than suggestive.” The court found that this factor did not favor either side.

The court gave no weight to the “similarity of marketing channels” since the “only overlap of any significance identified by Egg Works is that both restaurants use exterior signs” and since the nearest Egg Works restaurant is located more than four miles from Egg World, such “marketing channel” “does little to suggest that confusion is likely to result from defendant’s use of its mark.”

The court found the factor of “likelihood of expansion into other markets” to be neutral based on the presented evidence – which thus favors the defendants (since its Egg Works burden to prove that the factors are in its favor in a motion for preliminary injunction).

Regarding the “degree of care likely to be exercised by consumers,” the court found that the evidence of this factor was “equivocal” because on the one hand, some Egg Works consumers “exercised so little care that they were initially confused by seeing the word egg on Egg World’s sign”, yet the evidence also indicated that the “actual confusion was caused by plaintiffs’ operation of three restaurants using two names.” [Hmm, one wonders why Mr. Burdsall has maintained the one “Egg & I” location rather than rebranding it as Egg Works in order to create a uniform brand? After all, wouldn't this also avoid confusion with the Ft. Collins, Colorado-based The Egg & I franchise chain which owns a trademark registration for the mark THE EGG & I?]

Based on its balancing of the Sleekcraft factors, the court concluded that Egg Works was not likely to succeed on the merits of showing a likelihood of confusion caused by the Defendant’s use of Egg World.

[Full Disclosure: The law firm I work for does represent one of the Defendants in some legal matters, but did not represent any of the Defendants in this case.]

Woman Sues Sirius-XM over SUNDAY BAROQUE

The Connecticut Post reports (link here) on the trademark infringement lawsuit filed by an Ohio woman named Suzanne Bona-Hatem against satellite radio company Sirius-XM over the use of the mark SUNDAY BAROQUE for a radio music show featuring guess what kind of music which can be heard on guess what day of the week?

Bona-Hatem’s “Sunday Baroque” show is a four-hour syndicated Sunday morning program which is broadcast to over 90 stations and heard in over 30 states to an audience of 2.7 million people (according to the suit)

In addition, Bona-Hatem was able to procure her a trademark registration for the mark SUNDAY BAROQUE for “Entertainment in the nature of on-going radio programs in the field of Baroque music” from the U.S. Patent and Trademark Office (“PTO”). Of course, it was only after she first disclaimed the descriptive word “Baroque” from her mark. Moreover, anticipating an obvious descriptiveness refusal by the PTO, the application was initially filed with a claim of Section 2(f) acquired distinctiveness on the basis of Bona-Hatem’s claimed exclusive and continuous use in commerce of the mark for at least the five years prior to making the claim of acquired distinctiveness. The PTO did not raise any questions about her Section 2(f) claim or request any additional evidence to prove her acquired distinctiveness claim.

The lawsuit alleges that Sirius-XM is broadcasting a similar baroque show on Sunday – and using a name that is identical to her mark (although one wonders how you might describe a baroque radio show broadcast on Sundays without using some semblance of her mark).

While one wonders why Sirius-XM didn’t just change the name of its show in response to correspondence from Bona-Hatem’s attorney. After all, she cannot really prevent anyone from using the term Baroque in connection with playing Baroque music – and do you really have to use the word Sunday as part of the program title?

Of course, from Sirius-XM’s perspective, while Bona-Hatem may have a trademark registration for SUNDAY BAROQUE, can she really prevent other radio programs from using the words SUNDAY and BAROQUE in their descriptive sense when broadcasting a baroque music radio show on Sunday (i.e., would “Sunday Morning Baroque” or “Baroque on Sunday” be considered by Bona-Hatem confusingly similar?).

So who do you think is in the right here? Is Bona-Hatem’s trademark so ridiculously descriptive that she should not be allowed to claim any exclusive rights to the term SUNDAY BAROQUE in connection with a baroque radio show broadcast on Sunday? Or is Sirius-XM being ridiculous in not taking the simple step of simply renaming the show (is calling the show by the boringly descriptive “Sunday Baroque” so important that its willing to go to court over it)?

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.

A Registered Trademark on CYBERLAW?

Eric Goldman’s Technology & Marketing Law Blog had a good post last Friday (link here) on the recent trademark application filed by a District of Columbia intellectual property attorney named Eric Menhart to register the mark CYBERLAW for legal services. The application was filed on December 1, 2007, but first use in commerce is claimed as February 22, 2007.

Prof. Goldman’s research uncovered compelling evidence for why Mr. Menhart’s application is very likely to be rejected under §2(e)(1) as merely descriptive. Indeed, Prof. Goldman may have done a great service to Mr. Menhart’s future assigned examining attorney by providing all the evidence he or she will need to support a descriptiveness rejection.

In addition to the plethora of convincing reasons provided by Prof. Goldman (not to mention some of his fun facts about Mr. Menhart), I would add the fact that several other trademark applicants have sought registration of a similar mark in the past – none with any success:

• CYBERLAW (for development and dissemination of legal educational materials) – §1(a) application filed April 2, 1996, abandoned December 26, 2000.
• A CYBER LAW OFFICE (for legal services provided licensed attorneys by global computer network) – §1(b) application filed June 9, 1999, abandoned March 16, 2000.
• CYBERLAWZ (for legal services) -- §1(b) application filed October 13, 1999, abandoned August 29, 2000.
• CYBERLAW ADVISOR (for legal advice and services related to the law of computers, the Internet and electronic commerce) – 1(b) filed February 7, 2000, abandoned February 15, 2001.

Granted, we don’t know the exact grounds of rejection in each application because the PTO’s TDR system does not have the complete file available online for these older applications. Nonetheless, the single §1(a) application went abandoned after a final refusal and the other three §1(b) applications went abandoned after the initial non-final action.

However, there may be another explanation for the above applications being rejected, and the explanation may actually may bode well for Mr. Menhart. The above applications may not have been rejected for descriptiveness, but instead rejected based on §2(d) as likely to be confused with the registered mark CYBERLAWYER (for attorney referrals and providing legal information), which was registered October 15, 1996, but subsequently cancelled July 19, 2003, for failure to file a Section 8 declaration of continued use. Perhaps, there is now an opening for Mr. Menhart to receive a registration for his mark.

Mr. Menhart attempts to defend his application in his own blog post (link here) responding to a blog post by Corynne McSherry of the Electronic Frontier Foundation (link here) in which she was critical of Mr. Menhart’s attempt to claim trademark rights to the term.

Notably, in defense of his application, Mr. Menhart states: “The mark [CyberLaw] was granted to Attorney Jonathan Rosenoer of Greenbrae, California in 1996. Mr. Rosenoer let his protection expire in 2000. All such information is publicly available to Ms. McSherry or anyone else at the USPTO web site.” However, this particular application cited by Menhart is among the list of application cited above that were not registered. If you click on the link for CYBERLAW, one can see that Mr. Rosenoer was never granted a registration for this mark. The application was suspended for sometime and then a final refusal was issued (with no appeal filed).

So Mr. Menhart is incorrect in his assertion regarding any prior grant of a registration on the mark “CyberLaw.” If anything, Mr. Menhart should have cited to the CYBERLAWYER mark, which seems more supportive of his position that the PTO has shown willingness in the past to allow such a mark to be registered. Of course, one big difference is that CYBERLAWYER was registered in 1996 – when the Internet was still in its infancy and the use of the prefix “Cyber-” was not as much a part of the mainstream lexicon as it is today. Twelve years have passed, and the term has become much more prevalent since that time.

As most trademark practitioners will tell you, you never know how the PTO is going to respond to an application. Perhaps the past registration of CYBERLAWYER may provide Mr. Menhart with enough of an opening to argue that his mark is at least suggestive.

Most likely, however, Mr. Menhart’s only chance at obtaining a registration on the Principal Register is to argue acquired distinctiveness under §2(f). But given the ubiquitous use of the term CyberLaw, it would seem nearly impossible to argue convincingly that the consuming public has come to associate the mark CYBERLAW with Menhart’s services – especially after less than one year in use.

Perhaps Mr. Menhart will settle for a registration on the Supplemental Register. If the mark is refused registration based on descriptiveness, Mr. Menhart can try to argue that the mark is still capable of distinguishing his services. It’s still an uphill battle given the widespread use of the term (i.e., if its used by so many others to describe an area of the law, how can is possibly distinguish Mr. Menhart’s services). But if the PTO is willing to allow supplemental registration, it may be better than nothing – at least if he can’t have a registration on the Principal Register, he can be assured no one else can (at least not for related goods and services).

Why having an attorney file you trademark application may be worthwhile.

As a regular feature, I will try to bring to you examples of bad trademark applications. Reviewing bad applications is an excellent way to understand successful trademark prosecution.

Today’s bad application is S/N 77/270,897 filed on September 4, 2007, for the mark SNACK MACHINE (standard character mark). The application is a Principal Register Section 1(b) intent-to-use application and the goods and services the mark seeks to cover is “Snack Machine.” Anybody see a problem with this?

Trademark 101 Lesson of the Day: A trademark can be refused registration where the proposed mark merely describes a characteristic, function, feature, purpose or use of applicant’s services. Trademark Act Section 2(e)(1), 15 U.S.C. §1052(e)(1). A mark is merely descriptive under Section 2(e)(1) if it describes an ingredient, quality, characteristic, function, feature, purpose or use of the relevant goods and/or services. In re Gyulay, 820 F.2d 1216, 3 USPQ2d 1009 (Fed. Cir. 1987); In re Bed & Breakfast Registry, 791 F.2d 157, 229 USPQ 818 (Fed. Cir. 1986); In re MetPath Inc., 223 USPQ 88 (TTAB 1984); In re Bright‑Crest, Ltd., 204 USPQ 591 (TTAB 1979); see also TMEP §1209.01(b).

As an intent-to-use application, the mark cannot be applied for registration on the supplement register. Even if it could, given that the mark is a generic name for the applicant's goods, registration on the Supplemental Register will also be refused under §23 of the Trademark Act, 15 U.S.C. §1091. Furthermore, it is doubtful that the applicant can claim that the mark has acquired distinctiveness under 15 U.S.C. §1052(f) (given its generic nature). Looks like the applicant is out the $325 filing fee.