Gallup Survives Motion to Dismiss in Trademark Infringement Lawsuit Against Gallup Pakistan

Gallup, Inc. (“Gallup”), the organization famous for its surveys and public opinion polls, filed a trademark infringement and trademark dilution lawsuit in March against Business Research Bureau and Ijaz Shafi Gilani (the “Defendants”) over the use of the mark GALLUP.

Gallup owns numerous United States trademark registrations and applications containing the GALLUP mark including, among other goods and services, public opinion polls and business management consulting services.

Defendants, operating under the name Gallup Pakistan, provide survey and opinion polls on political, social, and business topics to international agencies and educational institutions, including some in the United States. Between January 11 and February 22, 2008, Defendants released six polls regarding Pakistani public opinion of issues surrounding the Pakistani parliamentary elections. The polls were promoted on Defendants’ website, which is in English and accessible to the United States. Defendant Gilani, the chairman of Gallup Pakistan, also made an appearance at a conference in Chicago in 2007 where he presented a paper that bore the Gallup Pakistan name. He also spoke on National Public Radio on February 12, 2008, to discuss his organization’s poll results and was introduced as the head of “the Pakistani chapter of the Gallup polling organization.” Gilani also made an appearance on an internet broadcast around the same time. Gilani was not in the United States during either of those broadcasts.

In response to Gallup’s lawsuit for trademark infringement and dilution, the Defendants moved to dismiss the complaint on the ground that the court did not have subject-matter jurisdiction (Defendants did not challenge the exercise of personal jurisdiction – possibly because Gilani appeared pro se). Specifically, Defendants argued that there was no basis to exercise extraterritorial jurisdiction under the Lanham Act. Gallup countered by arguing that the exercise of extraterritorial jurisdiction was not necessary because Defendants’ committed infringing acts in the United States sufficient to establish subject-matter jurisdiction.

U.S. District Court Judge William Alsup found that Gallup’s complaint had sufficiently alleged that Defendants’ infringing activities occurred in the United States to meet its burden of establish subject-matter jurisdiction under the Lanham Act. See Gallup, Inc. v. Business Research Bureau et al, Case No. 08-cv-01577, 2008 U.S. Dist. LEXIS 93462 (N.D. Cal. November 10, 2008).

Under the Lanham Act, courts have jurisdiction which extends to “all commerce which may lawfully be regulated by Congress.” (see 15 U.S.C. 1127). The court noted that the phrase “in commerce” does not necessarily require that the infringing acts take place “‘in commerce’ which is subject to congressional regulation, but that the acts have an adverse effect on that commerce.” Wells Fargo & Co. v. Wells Fargo Exp. Co., 556 F.2d 406, 427 (9th Cir. 1977).

Gallup alleged that Defendants’ trademark infringement occurred “in commerce” in three ways. The first way was Defendants’ publishing of poll results in the United States using the Gallup name. Gallup alleged that Defendants’ trademark infringement not only occurred in commerce, but also has the potential to adversely affect that commerce. The infringement was “in commerce” because Congress regulates the use of trademarks on published materials and the infringement adversely affects that commerce by impairing Gallup’s right to capitalize on its registered mark in its publications. Further, it did not matter that the Defendants do not advertise, market, or promote any goods or services in the United States: “The test is whether the alleged infringement occurred within an area of commerce that Congress regulates or whether the infringement adversely affected that commerce. Even if defendants did not ‘advertise, market, or promote’ their services in the United States, plaintiff sufficiently alleges that defendants’ use of the Gallup mark occurred within commerce and adversely affected that commerce.”

The second way was Defendant Gilani’s appearance in the U.S. promoting his poll results under the Gallup mark. The court found that Gallup had sufficiently alleged that Defendants’ presentations at conferences in the United States using the Gallup mark as well as Gilani’s interview on NPR and participation in the internet broadcast adversely affected commerce regulated by Congress. Specifically, Gallup’s allegations that a) Defendants’ use of the Gallup mark in connection with opinion polls, surveys, and management consulting occurs in the same markets and channels of trade as those offered by Gallup under the Gallup mark and b) Defendants’ use of the Gallup mark has caused or is likely to cause confusion, to cause mistake, or to deceive customers of both Gallup and the defendants and to cause the dilution of the distinctive quality of the Gallup mark.

The third way in which Gallup argued that Defendants’ trademark infringement occurred “in commerce” was Defendants’ operating of a website prominently featuring the Gallup mark. The court found that Gallup had sufficiently alleged that Defendants’ trademark infringement occurred “in commerce” by alleging that the web site was accessible in the United States and that use of the Gallup mark had an adverse effect on commerce.

Because the court found that Gallup’s complaint sufficiently alleged actions “in commerce” and action having an adverse effect on commerce in order to give the court subject-matter jurisdiction over Gallup’s claims against the Defendants, the court did not consider Defendants’ argument that there was no basis for extraterritorial jurisdiction. The court noted that the question of whether a court can exercise extraterritorial jurisdiction under the Lanham Act is only reviewed if the plaintiff seeks to reach foreign activities of the defendant, and, in this case, Gallup clarified in its opposition brief that it was not seeking to enjoin Defendants’ activities in Pakistan or to determine rights to the Gallup mark in Pakistan.

Jones Day Lives to Fight Another Day In Trademark Infringement Lawsuit Against Blockshopper

Those liberal pleading rules have allowed Jones Day to survive a Motion to Dismiss Under Rule 12(b)(6) for Failure to State a Claim with respect to its trademark infringement lawsuit against BlockShopper, a website which collects publicly available information on real estate transactions, for identifying two law firm associates (Dan Malone and Jacob Tiedt) who purchased some expensive condos as being employed by “Jones Day” and linking their names to their Jones Day website bios. See previous blog posts here and here.

News reports of the court’s opinion can be read here, here and here. The actual opinion can be downloaded here.

The court, accepting all well-pleaded factual allegations set forth in Jones Day’s complaint as true, found that Jones Day had plead sufficient facts to make out “plausible” claims for trademark infringement and trademark dilution.

While the court allowed the case against BlockShopper to proceed, the court did dismiss claims against the company’s principals, Brian Timpone and Edward Weinhaus, on the basis that the complaint did not have sufficient allegations to plausibly state a claim of individual liability against the two principals for infringement by the company.

Vegas™Esq. Comments:

I wonder how many people out there can truly appreciate how much this lawsuit is going to cost Blockshopper to defend in terms of legal fees. To the extent that Blockshopper is being charged for time spent by its attorneys, Blockshopper has probably already spent about $10,000 to $20,000 up to this stage. And since the court has chosen not to dismiss the complaint, BlockShopper will now have to file an answer (another $5,000 and possibly up to $10,000 if counterclaims are included). Discovery will soon begin thereafter. Jones Day will use its behemoth resources to deluge BlockShopper’s counsel with document requests and other discovery – all of which BlockShopper’s counsel will have to treat seriously and spend countless hours reviewing such discovery and preparing responses thereto (another $10,000 to $20,000). And that’s just the beginning of discovery. Add $25,000 to $50,000 for additional discovery (assuming Jones Day comes out guns blazing) and then $25,000 for the Summary Judgment Motions.

All of this just for posting public domain information online.

And the truly sad part of it all is that even if Blockshopper ultimately wins this case (and is there anybody out there not employed by Jones Day who thinks they won’t?), the company might not be able to recover its attorney’s fees for having to defend this case. The court has the authority under 15 U.S.C. § 1117(a) to award a winning defendant in a trademark case attorney’s fees in “extraordinary circumstances” – however, so long as the claims are deemed to be not frivolous or unreasonable (and Jones Day will certainly fight hard to show that even though it lost, its claims were not frivolous or unreasonable), then an award of attorney’s fees will be denied.

Article Highlights Intel’s Aggressive Trademark Enforcement

Back in July, I highlighted (link here) an opposition filed Intel against a company that was seeking to register the mark INTELLEQUITY (an opposition which is still pending with the parties continuing to extend the time for the applicant to answer while the parties engage in settlement discussions). See Intel Corporation v. Business Development Partners, LLC, Opposition No. 91185394 (T.T.A.B. Filed July 23, 2008).

An article by Zusha Elinson published on Law.com earlier this week (link here) highlights some of Intel’s other aggressive trademark infringement lawsuits.

According to the article, Intel has filed 15 trademark infringement and/or trademark dilution actions this year against companies with the word “intel” in their name. You can see the list for yourself on Justia (although I only count 14 actions, one of which is likely a declaratory judgment filed in Florida three days before Intel brought suit in California).

The article spotlights one particular suit against Barry Hood who received a 108-page trademark-infringement lawsuit from Intel for using the name Intellelectric for his sole proprietorship. The article also notes Hood’s unsuccessful attempt to get help from Pre-Paid Legal Services because the “trademark dispute was a pre-existing condition and not covered by his plan.” Interestingly, however, Hood’s accountant apparently negotiated a payment from Intel of $3,500 to allow Hood to change his name (Intel having apparently originally offered him $1,500 to change the name).

Intel also sued a travel agency (Intellife Travel), an investment advisory business (Insider Intel), and an Ohio telecom company (Intelcom). The travel agency, acting pro se, fought back against Intel for about a month (their cause having caught the attention of TechCrunch blogger Erick Schonfeld in his post “Intel Is Worried You Might Think It Is A Chinese Travel Agency” which includes a copy of the complaint received and some of the back and forth correspondence). The agency apparently reached its own confidential settlement with Intel – but as of today, the agency’s website www.intellifetravel.com is still up and running.

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.

First Amendment Protects Grand Theft Auto from Strip Club’s Trademark Infringement Lawsuit

Much has already been written about the Ninth Circuit’s decision in E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., Case No. 06-56237 (9th Cir. Nov. 5, 2008) finding that the First Amendment protected the makers of the video game Grand Theft Auto from trademark infringement claims brought by the owner of the Los Angeles strip club “Play Pen” over a depiction of a fictional strip club named “Pig Pen” in the video game.

Rather than do my own write-up , I’m opting to provide links to authors who have already written eloquently about the decision:

• Summaries by Filewrapper and Seattle Trademark Lawyer.

• Commentary by Eric Goldman and Rebecca Tushnet.

• News articles by Findlaw and The Register.

• Link to the district court’s decision (here) and commentary at Gamasutra.

The Naked Cowboy Settles Trademark Infringement Lawsuit with Mars Incorporated

I’ve previously written (here and here) about the trademark infringement lawsuit filed by Robert Burck, better known as “The Naked Cowboy,” against Mars Incorporated, the maker of M&Ms candies, over an M&M ad featuring a cartoon M&M guitar-playing street performer wearing a cowboy hat, boots, and underwear – all reminiscent of Burck’s alter ego. See Burck v. Mars, Incorporated et al, Case No. 08 Civ. 01330 (S.D.N.Y. June 23, 2008

As reported by the New York Post today, the parties stipulated to dismiss the lawsuit with prejudice (a copy of the dismissal can be read here). Naturally, the terms of the settlement were not disclosed and Burck’s only comment was that the “matter had been resolved.”

Sprinkles Cupcake Denied Motion for Default Judgment Against Famous Cupcakes

I previously wrote (link here) about the trademark infringement lawsuit filed by California cupcake maker Sprinkles Cupcakes against rival cupcake maker Famous Cupcakes over Sprinkles’ registered "nested circle design" for "bakery goods."

The news reports out yesterday (link here) report that U.S. District Judge Percy Anderson denied Sprinkles’ Motion for Default Judgment in its lawsuit to stop Famous Cupcakes from using its “toppers” in the center of its cupcakes (see picture below). The court supposedly cited “problems with Sprinkles' court filing.” Sprinkles’ attorneys have said they will refile their Motion after making the required corrections.

Anybody know what was wrong with Sprinkles’ Motion?

[Ed. Note: This post was subsequently edited to correct an error in the type of Motion that was filed with the court, as clarified by Bobby Ghajar in the comments.]