TRADEMARK PORTFOLIO ACQUISITION AND PROTECTION:
RECENT DEVELOPMENTS AND TRENDS IN INFRINGEMENT AND
DILUTION LITIGATION
Michael D. Hobbs, Jr.
Anne E. Yates
TROUTMAN SANDERS LLP
Bank of America Plaza
600 Peachtree Street, N.E.
Suite 5200
Atlanta, Georgia 30308
(404) 885-3330
[email protected]
I.
PROTECTABLE TRADEMARK RIGHTS
A.
Genericness
In Microsoft Corp. v. Lindows.com, Inc., 69 U.S.P.Q.2d (BNA) 1863 (W.D. Wash.
Feb. 10, 2004), the court held that a genericness determination should be measured from
the time the mark’s user entered the marketplace, even if the mark in no longer generic.
Although the court instructed the jury to “consider whether the WINDOWS mark was
generic before Microsoft Windows 1.0 entered the marketplace in November 1985,” it
withheld instructions to the jury that “even if the mark was generic prior to November
1985, it would be valid today if its primary significance is not generic.” The court,
however, did agree that there is a substantial difference of opinion as to the relevant
time period for a genericness inquiry; therefore, it certified its ruling for interlocutory
appeal to the Ninth Circuit.
In Retail Svcs. v. Freebies Publ’g., 364 F.3d 535, 70 U.S.P.Q.2d (BNA) (4th Cir. 2004),
the court affirmed a district court’s ruling that the trademark FREEBIES is generic for
items that may be obtained freely and, thus, cannot be infringed by the Internet domain
name <freebie.com>.
The court also affirmed the dismissal of counterclaims for
trademark infringement and cybersquatting on the grounds that since the term is
generic, it is ineligible for protection under the Anticybersquatting Consumer
Protection Act.
In Educ. Tours, Inc. v. Hemisphere Travel, Inc., 70 U.S.P.Q.2d (BNA) 1797 (D. Ill.
Apr. 26, 2004), the court held that an examination of the mark as a whole is required in
determining whether the “EDUCATIONAL TOURS” portion of the mark ET
EDUCATIONAL TOURS is generic. The court stated that “examining EDUCATIONAL
TOURS by itself is not proper because it controverts the ‘anti-dissection rule’ and such
trademarks must be ‘evaluated as a whole, not term by term.’” The court also found
that whether “EDUCATIONAL TOURS” is generic involves a question of fact, and thus,
denied the defendant’s motion to dismiss.
B.
Protectability
In 2001, the U.S. Supreme Court ruled that the functionality of a design is not
undermined by evidence of available design alternatives. TrafFix Devices, Inc. v. Mktg.
Displays, Inc., 532 U.S. 23, 58 U.S.P.Q.2d (BNA) 1001 (2001). The Ninth Circuit, however,
held that “the existence of design alternatives itself might help determine whether the
design was functional in the first place.” Talking Rain Beverage Co. v. S. Beach Beverage
Co., 349 F.3d 601, 68 U.S.P.Q.2d (BNA) 1764 (9th Cir. 2003). In affirming the ruling that
the shape of the disputed “bottle” was functional, the court noted both that money
spent determining the bottle’s useful properties weighed against the plaintiff and that
the validity of the plaintiff’s trademark registration could be rebutted through
demonstration of functionality.
Since the evidence presented demonstrated the
functionality of the design, the court ordered the cancellation of Talking Rain’s design
registration.
In Deere & Co. v. MTD Holdings, Inc., 70 U.S.P.Q.2d (BNA) 1009 (S.D.N.Y. Feb. 18,
2004), the court reiterated the fact that the functionality doctrine bars a company from
claiming broad rights in a particular color combination in connection with the
manufacture and sale of similar products.
The court stated that “to allow such
exclusion would result in available color combinations being quickly snapped up, thus
hindering additional competitors by limiting available designs.” The court complained
that Deere’s counsel did not make it clear what rights it was attempting to protect.
Therefore, the court refrained from making a final determination on Deere’s claims.
Although the court rejected the defendant’s argument that any use of green and yellow
in relation to garden machinery is functional because of the “association of the products
with ‘the natural environment in which they are used,’” the defendant did prevail on
most claims based on its laches defense. The court noted that since the defendant’s
products have been in the market and continuously and unchanged since 1993 without
a challenge from the plaintiff, the plaintiff is now estopped from bringing an action.
The First Circuit ruled that evidence of a plaintiff’s expertise in a specific field
does not constitute evidence of secondary meaning necessary for a personal name to be
protectable as a trademark. Flynn v. AK Peters, Ltd., 377 F.3d 13, 71 U.S.P.Q.2d (BNA)
1810 (1st Cir. 2004). The court affirmed a district court’s grant of summary judgment,
stating “the plaintiff’s resume and a list of papers and speeches did not establish
secondary meaning with regard to the consumers likely to purchase the book in
question.”
C.
Registration
In In re Oppedahl & Larson LLP, 373 F.3d 1171, 71 U.S.P.Q.2d (BNA) 1370 (Fed. Cir.
2004), the court held that the trademark PATENTS.COM was not registrable for a law
firm’s Internet-based patent tracking software because it is merely descriptive of a
feature of the goods. The court upheld a ruling by the Trademark Trial and Appeals
Board (“TTAB”) refusing to register the mark, stating that “the term ‘patents’ merely
describes a feature of the goods…and adding the top level domain indicator ‘.com’
lends no more source-identifying significance to the term than adding ‘Corp.’ to an
otherwise unregistrable mark.” The court, however, declined to adopt a bright-line rule
that domain extensions can never render a descriptive term sufficiently distinctive to
allow trademark registration. To clarify its meaning, the court pointed to the possibility
of registering the mark TENNIS.NET to a company that sells tennis nets, but does not
offer its products over the Internet.
The Fourth Circuit held as neither arbitrary nor capricious in violation of the
Administrative Procedures Act that the Patent and Trademark Office (“PTO”) rule,
which treats a trademark application containing references to multiple marks as an
application only for the mark which drawing is provided. Humanoids Group v. Rogan,
375 F.3d 301, 71 U.S.P.Q.2d (BNA) 1745 (4th Cir. 2004). The court further noted that,
although the regulation’s language was “ambiguous,” the PTO’s interpretation should
be given deference since the interpretation was not “plainly erroneous or inconsistent
with the regulation.” As such, the court rejected the plaintiff’s additional argument that
the PTO had an affirmative duty to determine what mark the defendant “intended” to
use based on requirements outlined in the Lanham Act.
The Federal Circuit upheld a refusal to register the mark JOSE GASPER GOLD
because it is confusingly similar to GASPAR’S ALE. In re Chatam Int’l, Inc., 380 F.3d
1340, 71 U.S.P.Q.2d (BNA) 1944 (Fed. Cir. 2004). The court reasoned its decision by
focusing on the “Gaspar” portion of the mark, and observed that “the dissimilar
portions of the mark were of nominal commercial significance and less weight was
properly afforded the terms.”
D.
Cancellation
In Zimmerman v. National Association of Realtors, No. 92032360 (Trademark Trial &
App. Bd. 2004), the TTAB denied a petition to cancel the marks REALTOR and
REALTORS, stating that the terms were not generic as the petitioner argued. The TTAB
further stated that the words were adopted in 1916 and “function[ ] as a collective mark
used to identify members of a professional association of real estate agents and
brokers.” The court rejected a comparison to the situation in Bayer Co. v. United Drug
Co., 272 F. 505 (D.N.Y. 1921) in a claim over the genericness of the mark ASPRIN in that
“members of the general public have memorable generic alternatives that were
unavailable in Bayer, such as “real estate broker,” “real estate agent,” or “real estate
broker.”
E.
Abandonment
In Halo Mgmt., LLC v. Interland, Inc., 2004 U.S. Dist. LEXIS 15563 (N.D. Cal. Aug.
9, 2004), the court held that Halo Management LLC had abandoned its mark HALO in
connection with Internet services because 1) the license agreement it granted to a user
amounted to a “naked license” since it “failed to provide any quality control over the
mark,” and 2) Halo Management “failed to supervise the mark at all.”
F.
Trade Dress
In Maharishi Hardy Blechman Ltd. v. Abercrombie & Fitch Co., 292 F. Supp. 2d 535,
69 U.S.P.Q.2d 1493 (BNA) (S.D.N.Y. 2003), the court held that the Supreme Court’s
ruling in TrafFix Devices v. Marketing Displays, supra, did not eliminate the relevance of
the availability of alternative designs in determining the functionality, and thus
protectability, of a product’s trade dress. The court interpreted the TrafFix decision to
state that once a product feature has been determined functional, alternative designs
need not be considered. Although the court found that the plaintiff had met its burden
of raising a factual issue regarding functionality, it granted summary judgment in
defendant’s favor because plaintiff failed to demonstrate the two remaining elements of
a trade dress action- acquisition of secondary meaning and likelihood of confusion with
defendant’s products. As a result, the court found that plaintiff also failed to establish
the elements of its unfair competition, deceptive trade practices, dilution, and false
advertising claims due to a lack of protectable matter.
The Seventh Circuit held that a trademark’s incontestability status does not
protect it from a validity challenge based on functionality. Eco Mfg. LLC v. Honeywell
Int’l, Inc., 357 F.3d 649, 69 U.S.P.Q.2d (BNA) 1296 (7th Cir. 2003). In affirming a series of
decisions by the district court, the Seventh Circuit found that although a mark may
have attained incontestable status, that status must yield to prior users, genericism, or a
challenge based on functionality. The court also rejected Honeywell’s argument that
the statute that provided for cancellation based on functionality was inapplicable
because it was enacted after Honeywell’s mark had attained incontestable status. The
court stated there was no need to address this particular question because the statute
was enacted to address future behavior, not to “alter the legal consequences of
completed acts,” thus rendering the retroactive application argument moot.
In Philip Morris USA, Inc. v. Cowboy Cigarette, Inc., 70 U.S.P.Q.2d (BNA) 1092
(S.D.N.Y. Nov. 26, 2003), the court granted Philip Morris’s request for summary
judgment in its claim that defendant’s trade dress was infringing its Marlboro product.
The court stated that Philip Morris was entitled to summary judgment because it
proved the three essential elements to a trade dress infringement claim: nonfunctionality of its trade dress, secondary meaning, and likelihood of confusion
between its product and the defendant’s. The court also rejected defendant’s argument
that, since others used the cowboy and western motif prior to the Marlboro campaign,
Marlboro could not claim exclusive ownership of the trade dress. The court noted that
due to the undisputed duration and demonstrated commercial success of the Marlboro
campaign, plaintiff had proved that its trade dress was indeed strong.
In Gibson Guitar Corp. v. Paul Reed Smith Guitars, No. 3:00-1079 (M.D. Tenn. 2004),
the court held that plaintiff proved that its design was not functional, and thus
protectable, by demonstrating the existence of alternative body shapes and arrangement
of control knobs for electric guitars. The court observed that the single-cutaway design
of the Gibson LES PAUL guitar was protectable trade dress because it was not an
essential element to the functionality of the guitar. In granting summary judgment, the
court found that, in addition to not being functional, Gibson’s design had obtained
secondary meaning through its incontestability status and that all factors in the
likelihood of confusion analysis weighed in favor of plaintiff.
The Eleventh Circuit held that, because the design of the flash-frozen ice cream
product is essential to and affects the ice cream’s shape, taste, and quality, the design is
functional in nature and not protectable trade dress. Dippin’ Dots, Inc. v. Frosty Bites
Distrib., LLC, 369 F.3d 1197, 70 U.S.P.Q.2d (BNA) 1707 (11th Cir. 2004). The court also
held that the district court’s grant of summary judgment was appropriate because of the
“overwhelming” dissimilarity of the products and their respective logos and because
the likelihood of confusion between the two products was remote.
Affirming a judgment of trade dress infringement, the court in Gateway, Inc. v.
Companion Prods., 2004 U.S. App. LEXIS 19145 (8th Cir. S.D. Sept. 13, 2004) ruled that the
black-and-white cowhide design used in computer packaging was purely nonfunctional
and, therefore, entitled to protection as trade dress. Although the court noted that
competitors are free to use different color combinations in conjunction with their
products, it concluded that Companion Products developed its “Cody Cow,” a blackand-white stretch pet, with Gateway’s trade dress in mind.
II.
TRADEMARK INFRINGEMENT
A.
Likelihood of Confusion and Infringement
In Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 290 F. Supp. 2d 241; 68 U.S.P.Q.2d
(BNA) 1915 (D.R.I. 2003), the court held that in order for a logo that is similar to another
company’s unregistered mark to infringe, there must be evidence that any resulting
confusion is “commercially relevant.”
The court relied on the basic relevance test set
forth in Astra Pharm. Prods. Inc. v. Beckman Instruments, Inc., 718 F.2d 1201, 220 U.S.P.Q.
(BNA) 786 (1st Cir. 1983) (holding that likelihood of confusion must be “based on the
confusion of some relevant person”). In the present case, the court stated that both
parties inaccurately defined the relevant market to gage confusion. In analyzing the
likelihood of confusion among the commercially relevant group, the court noted that
Beacon Mutual “failed to meet its burden of ‘producing significantly probative
evidence’ that the confusion it identified had an effect on the ultimate purchasing
decision.”
After weighing the eight factors, the court found that the defendant
prevailed on the most critical confusion factors. The court observed that, “although
Beacon Mutual demonstrated that its marks are strong and established similarity
between its marks and those used by OneBeacon, it failed to prove that the confusion it
identified is connected to its commercial interests.”
On appeal, however, the First Circuit reversed the district court’s decision and
remanded the case for trial, stating that, “a fact finder could reasonably infer that the
misdirected communications demonstrated confusion among purchasing companies,
their covered employees, consulting physicians and other health care providers, thirdparty insurers, attorneys for claimant employees, and courts handling such claims, and
that such confusion had caused commercial injury, and [such] confusion would likely
ultimately lead to lost sales.” Beacon Mut. Ins. Co. v. OneBeacon Ins. Group, 376 F.3d 8, 71
U.S.P.Q.2d (BNA) (1st Cir. R.I. 2004).
In Google v. Am. Blind & Wallpaper Factory Inc., C-030-5340 (N.D. Cal. 2003),
Google filed for a declaratory judgment that its sale of advertising links, which appear
on a search page in response to a user’s query for certain descriptive terms, does not
infringe a trademark owner’s rights in the marks comprised of those terms. Google
argued that the terms used by the search engine are descriptive terms such as
AMERICAN BLIND or AMERICAN WALLPAPER and “other advertisers have a right
to use them.” Google asked the court to declare that its “current policy regarding the
sale of keyword-triggered advertising does not constitute trademark infringement.”
In Iowa Paint Mfg. Co. v. Hirshfield’s Paint Mfg., Inc., 296 F. Supp. 2d 983 (S.D. Iowa
2003), the court denied plaintiff’s preliminary injunction request to stop the sale of a
paint product using the mark PRO-WALL based on a claim that the mark is confusingly
similar to plaintiff’s PROWALL mark, which is also used to market paint products. The
court noted that although the marks are “virtually identical” and both are used for paint
goods, the mark must be examined in its entirety to determine likelihood of confusion.
In this case, the court stated that because the paint products are not found on store
shelves but in warehouse stores that cater to professional paint contractors, this reduced
the likelihood of confusion among the actual consumers. In dismissing the injunction
request, the court noted that professional painters are more likely to look to the product
brand name as opposed to the “trademark” placed on the product, and absent bad faith,
the other likelihood of confusion factors weigh against the plaintiff.
In PlayMakers LLC v. ESPN Inc., 297 F. Supp. 2d 1277, 69 U.S.P.Q.2d (BNA) 1439
(W.D. Wash. 2003), the district court held that “word-of-mouth” communication
regarding a product or service is not a form of advertising that can be considered in
evaluating the similarity of marketing channels under the likelihood of confusion
analysis.
In this case, plaintiff sports agency argued that the negative publicity
surrounding a similarly titled ESPN program, which focused on negative deeds of proathletes, had begun to spread via word-of-mouth through the channels in which
plaintiff obtained clients.
The court rejected the plaintiff’s “reverse confusion”
argument, stating that its characterization was “a bit of a stretch, since if anything,
negative attention and talk are negative advertising. But more importantly, word-ofmouth is, in fact, not ‘marketing.’” The court noted that “marketing is any method used
by a promoter of a product or service in which the promoter controls the message; and
word-of-mouth advertising is not controlled by the promoter, and therefore cannot be
used to establish a likelihood of confusion.”
In V & S Vin & Sprit Aktiebolag v. Cracovia Brands, Inc., 69 U.S.P.Q.2d (BNA) 1701
(N.D. Ill. Jan. 5, 2004), the court held that the likelihood of confusion between the verbal
differences of the marks ABSOLUT and ABSOLWENT presents a factual issue, which
precludes summary judgment for either party. The court stated at the outset that
summary judgment would be appropriate only if there was no factual dispute that
consumers are likely to confuse the two marks as they relate to vodka. In order to
determine the likelihood of confusion, the court used the seven-factor test in DorrOliver, Inc. v. Fluid-Quip, Inc., 94 F.3d 376, 39 U.S.P.Q.2d (BNA) 1990 (7th Cir. Ill. 1996).
The main dispute by the parties was the degree of care potential customers are likely to
exercise in choosing or ordering vodka.
The court noted that “because vodka is
purchased both by the bottle in stores and by the glass in restaurants and bars, both the
visual and aural similarity of marks must be considered.”
In denying summary
judgment for either party, the court noted that “because there is no legal rule that
similarity in suffixes is more important than similarity in prefixes, or vice versa…a
genuine issue exists as to the likelihood of confusion due to the aural similarities of the
marks.”
On December 23, 2003, the Starbucks coffee chain filed suit in China against
Shanghai coffee-shop “Xingbake,” alleging trademark infringement. In most Chinese
languages, Starbucks is referred to as “Xingbake.” The company also uses signs and
logos similar in color and font to Starbucks’. The Xingbake shop owner claims that he
registered his name prior to Starbucks coming to Shanghai and intends to fight the suit
and possibly file a counter-suit.
The Southern District of New York ruled that Cubatabaco, a Cuban tobacco
company, 1) owns a protectable interest in the mark COHIBA under the famous mark
doctrine, and 2) has demonstrated a likelihood of confusion regarding use of the mark
even though U.S. law prohibits that sale of its cigars in the U.S. Empresa Cubana Del
Tabaco v. Culbro Corp., 2004 U.S. Dist. LEXIS 7443 (S.D.N.Y. Apr. 30, 2004). In reviewing
the assertions by both parties, the court admitted that under the “territoriality principle
foreign use of a mark could not be the basis of priority in the United States.” The court
then pointed to an exception to the territoriality principle that a mark of “unique and
eminent position” of “international fame and prestige” is protectable.
Vaudable v.
Montmartre, Inc., 20 Misc. 2d 757; 123 U.S.P.Q.2d (BNA) 357 (N.Y. Sup. Ct. 1959).
In
deciding what standard qualified for this exception, the court relied on the Tea RoseRectanus doctrine, established in Hanover Star Milling Co. v. Metcalf, 240 U.S. 403 (1916)
and United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918) and concluded that
“Cubatabaco need only show that the COHIBA mark had a ‘known reputation’ to
premium cigar smokers” at the time of General Cigar’s refiling after abandoning use of
its mark. The court also referred to the Joint Recommendation Concerning Provisions on the
Protection of Well-Known Marks, as adopted by the General Assembly of the World
Intellectual Property Organization and the Assembly of the Paris Union, to determine if
Cubatabaco’s mark had gained secondary meaning.
With those recommendations in mind, the court applied the six-factor test for
secondary meaning found in Genesee Brewing Co. v. Stroh Brewing Co., 124 F.3d 137; 43
U.S.P.Q.2d (BNA) 1734 (2d Cir. 1997).
In its analysis, the court placed particular
emphasis on General Cigar’s “attempt to plagiarize the mark” of Cubatabaco, stating
that “because General Cigar had abandoned the mark in 1992…the decision to use the
name again [later], by itself, provides strong evidence of intentional copying.” The
court stated it was clear that “General Cigar made the decision in part to capitalize on
the success of the Cuban COHIBA brand and especially the good ratings and the
notoriety that it had received in Cigar Aficionado.” As a result, the court concluded that
“Cubatabaco had met the test for fame and secondary meaning as required by Vaudable
to trigger the famous marks doctrine exception to the territoriality principle.”
The court then applied the eight-factor test in Polaroid Corp. v. Polarad Elecs. Corp.,
287 F.2d 492, 128 U.S.P.Q. (BNA) 411 (2d Cir. N.Y. 1961) to determine if a likelihood of
confusion existed.
The court rejected General Cigar’s argument that the Cuban
embargo, which prevents the importation of Cuban cigars into the U.S., precludes a
consumer from the possibility of being confused as to the origin of cigars purchased in
the United States. The court noted that “in order for confusion between the two brands
to be relevant in the present litigation, there must be a significant risk that the consumer
will make a purchase based not on the goodwill or reputed quality of the General Cigar
COHIBA but on the mistaken association with the Cuban COHIBA, a brand with a
reputation as being one of the best cigars in the world.” After applying the eightfactors, the court found that a likelihood of confusion did exist with regard to the use of
the COHIBA name. The court then rejected an abandonment argument by General
Cigar, noting that there was “ample evidence that Cubatabaco contemplated legal
action to protect its mark and that it made efforts to maintain the fame of the mark
within the United States.”
In Peaceable Planet, Inc. v. Ty, Inc., 362 F.3d 986, 70 U.S.P.Q.2d (BNA) 1386 (7th
Cir. 2004), the Seventh Circuit remanded the case to the district court to allow the
plaintiff to show the defendant had violated its trademark rights in the name NILES for
a small stuffed camel. The district court previously held that personal names such as
NILES are “descriptive” and, absent secondary meaning, are unprotectable marks. In
the appeal, the court observed that although names are generally descriptive, when
describing an object, a name may suggest but not necessarily “describe” the object. The
court then outlined three reasons for disallowing the use of personal names as
trademarks without a showing of secondary meaning: (1) a reluctance to prohibit a
person from using his or her own name in a business; (2) confusion that may arise from
the use of common names; and (3) a concern that prohibition of personal name use may
prohibit useful information from reaching the consumer. The court then noted that the
name NILES, when used to identify a stuffed camel, does not meet any of the
aforementioned criteria. The court also noted that the Lanham Act has flexibility, as 15
U.S.C. § 1052(e)(4) prohibits registration of a mark that is “primarily merely a surname”
without a showing of secondary meaning, but makes no mention of first names.
Perhaps the prevailing factor in the court’s decision was its assessment that the
name NILES, “when linked to a toy camel,” is a suggestive mark, as is EOR for a
donkey, which is protectable absent secondary meaning.
According to the court,
completely disallowing the use of personal names as trademarks, absent secondary
meaning, would lead to “absurd results,” such as prohibiting the protection of KITTY in
the mark KITTY LITTER because the mark could also be used as a personal name. The
court, however, did state that on remand, plaintiff must show “that a substantial
number of consumers believe that its camel is actually defendant’s because simply
proving that consumers may think Peaceable Plant pirated Ty’s product is insufficient.
In WE Media Inc. v. Cablevision Sys. Corp., 94 Fed. Appx. 29 (2d Cir. 2004), the
Second Circuit upheld a dismissal of the plaintiff’s trademarks claims, even though the
district court found that likelihood of confusion was possible under Polaroid Corp. v.
Polaroid Elecs. Corp., supra. In its ruling, the court found that the district court did not
err in holding that although WE Media’s WE and WE MEDIA marks are similar to
Cablevision’s WE: WOMEN’S ENTERTAINMENT television mark, “WE Media’s mark
was not strong, the products’ markets were not proximate, there [had] been no
instances of actual confusion, and the consumers are relatively sophisticated.” As a
result, the court held that “even if a few of the Polaroid factors tend to show that
confusion is possible, none show that it is probable.”
In Pfizer, Inc. v. Y2K Shipping & Trading, Inc., 2004 U.S. Dist. LEXIS 10426, 70
U.S.P.Q.2d (BNA) 1592 (E.D.N.Y. Mar. 26, 2004), the district court granted plaintiff’s
summary judgment against the defendant for defendant’s use of the mark TRIAGRA on
the basis that a reasonable fact-finder probably would find defendant’s mark
confusingly similar to plaintiff’s VIAGRA mark. Defendant also advertised that its
product was “clinically proven” and suggested that it was FDA-approved. In its eightfactor analysis under Polaroid, the court found only one factor that could possibly weigh
in favor of defendant. The court noted that although doctors who write prescriptions to
treat erectile dysfunction are sophisticated and will not be confused by the two marks,
“ordinary purchasers” of non-prescription TRIAGRA possibly will be confused as to
the origin of the goods. As such, the court granted plaintiff’s motion for summary
judgment on its trademark infringement claim.
In Car-Freshner Corp. v. Big Lots Stores, Inc., 314 F. Supp. 2d 145, 70 U.S.P.Q.2d
(BNA) 1758 (N.D.N.Y. 2004), the district court found that defendant’s use of a “treeshaped” air freshener, which is similar to plaintiff’s air freshener but with different
packaging, was likely to cause post-sale confusion as to the source of the product. In its
likelihood of confusion analysis under the Polaroid factors, the court noted that almost
all factors favored plaintiff. Although the primary factor that defendant disputed was
the potential for actual confusion, the court noted that “even if the potential for pointof-sale confusion is diminished by the packaging and layering of [defendant’s] product,
post-sale confusion is likely” under the analysis in Nabisco, Inc. v. PF Brands, Inc., 191
F.3d 208, 51 U.S.P.Q.2d (BNA) 1882 (2d Cir. N.Y. 1999). In finding for plaintiff, the court
stated that “once a consumer purchases defendant’s product and hangs the tree-shaped
air freshener from his or her rear-view mirror, the product is virtually indistinguishable
from plaintiff’s, thereby creating a strong likelihood of post-sale consumer confusion
concerning the source of the product.”
The Southern District of New York ruled that a plaintiff could not claim superior
trademark rights for the mark ONO based on (1) plaintiff’s alleged use of the mark for
its sake room, (2) plaintiff’s intent-to-use application to register the mark, and (3)
plaintiff’s claim that the mark represents its chef’s surname. Mkt. Corner Realty Assocs.
LLC v. CGM-GH LLC, 317 F. Supp. 2d 485; 71 U.S.P.Q.2d (BNA) 1061 (S.D.N.Y. 2004).
In this case, two restaurants were competing for the use of the mark ONO, and the
plaintiff claimed its ONO sake room, named for its chef, had priority over the
defendant’s planned use of the mark for its restaurant’s name. The court stated that “a
pending intent-to-use application, not a registration, can invoke Lanham Act right of
priority as a basis for injunction,” and noted that plaintiff filed its application five days
after defendant publicly announced its opening of ONO-branded restaurants.
The
court then observed that testimony by a plaintiff’s former employee that the
restaurant’s sake tasting room was called the “sake room,” not ONO or ONO sake
room, precluded a claim based on use. Finally, the court noted that trademark rights
based on a surname require proof of secondary meaning. The court further stated that
“aside from the fact that plaintiffs did not identify in their trademark application that
ONO is a surname…plaintiffs have not demonstrated any secondary meaning,” and
such demonstrations would be difficult given multiple meanings of the word. As a
result, the court ruled that defendant may open its ONO restaurant as planned.
On May 17, 2004, L.L. Bean filed a complaint against rivals Nordstrom Inc., J.C.
Penney Co., Gevalia Kaffe, and Atkins Nutritionals Inc. alleging trademark
infringement, unfair competition, dilution, false advertising, trespass to chattels, unjust
enrichment, and conversion because of the rivals’ contract with Claira Corporation to
“bombard” visitors to L.L. Bean’s Web site with thousands of pop-up ads.
L.L. Bean
claims that the ads try to lure away customers and profit from L.L. Bean’s goodwill and
the popularity of the company’s web site.
In Kos Pharms. ,Inc. v. Andrx Corp., 369 F.3d 700, 70 U.S.P.Q.2d (BNA) 1874 (3d
Cir. N.J. 2004), the court vacated the district court’s finding that the likelihood of
confusion analysis with regard to similar trade names of a prescription drug must look
beyond the possibility of prescription and dispensing errors on behalf of physicians and
pharmacists. Since 2000, Kos Pharmaceuticals Inc. (“KOS”) owned and had been using
the mark ADVICOR to identify an anti-cholesterol medication. In 2001, Andrx began
using the mark ALTOCOR to identify a similar drug. The Third Circuit found that the
district court made two errors of law that prohibited its judgment from standing. First,
the Third Circuit found that the district court used “an overly narrow definition of
confusion, limiting its analysis to the likelihood of ‘misdispensing’ rather than
confusion,” as it only considered the physician’s and pharmacist’s interaction with the
disputed marks. The court observed that the concept of likelihood of confusion “is not
limited to confusion of products, as in misdispensing, but includes confusion as to the
source of the goods as well.” The court stated that the second error of the district court
was the application of only two factors described in Interpace Corp. v. Lapp, Inc., 721 F.2d
460 (3d Cir. N.J. 1983). The court found that an analysis of all factors, as required by
law, would “support only one conclusion.” In analyzing the strength of the mark, the
court emphasized that the consideration “should take into account the general public,
not just physicians and pharmacists… and the standard of care that may be exercised by
professionals is outweighed by the lower standard of care likely to be exercised by
people taking the drugs.” The court further noted that “there is no reason to believe
that medical expertise as to products will obviate confusion as to source or affiliation or
other factors affecting goodwill.” The court then concluded that KOS would suffer
irreparable harm if a preliminary injunction did not issue and, accordingly, vacated the
district court’s denial of preliminary injunction and remanded the case with directions
to enter the injunction.
In Digital Theater Sys. v. Mintek Digital, Inc., 71 U.S.P.Q.2d (BNA) 1448 (C.D. Cal.
May 25, 2004), the court found that the importation and sale of over 1.3 million DVD
players bearing the plaintiff’s marks constituted trademark infringement, false
designation of origin, and dilution.
Digital Theater Systems (“DTS”) sued Mintek
Digital Inc. (“MDI”), claiming that its unlicensed importation of DVD players with the
marks DTS DIGITAL OUT and DTS DIGITAL SURROUND was a violation of its rights
under the Lanham Act. The court rejected MDI’s assertion that its importation was
legal because the manufacturer of the DVD players had a license from DTS, stating that
“importation and sale [alone] of trademarked goods is use of the trademark in
commerce.” The court further observed that “the players were not ‘genuine’ because the
manufacturer’s license did not extend to the use of the DTS marks in conjunction with a
trademark owned by anyone other than the manufacturer.” The court concluded that
“MDI’s knowing adoption and use of DTS’s marks…along with statements signifying
the players contained genuine DTS technology” was likely to confuse consumers.
Accordingly, the court issued summary judgment in favor of DTS.
The Southern District of New York refused to issue a preliminary injunction
against defendant, which would have barred it from selling handbags that were
allegedly confusingly similar to plaintiff’s handbag. Malletier v. Burlington Coat Factory
Warehouse Corp., 71 U.S.P.Q.2d (BNA) 1507 (S.D.N.Y. May 24, 2004).
In this case,
defendant manufactured a handbag decorated with different shapes, designs, and
flowers that were similar to those used by plaintiff on its much more expensive
handbags. Plaintiff sued to prevent the “colorable imitation” of the LV trademark from
being used on the inferior quality product. The court held that under the Polaroid
likelihood of confusion analysis, plaintiff was only able to prove that one factor, the
strength of its LV mark, was in its favor. Specifically, the court observed that “the
significant differences between the handbags [were] easily discernible whether one
views the handbags side-by-side or from a distance…[defendant’s] bags project a
wholly different impression than that of [plaintiff’s] handbag.”
The court then
surmised that “it is unlikely that [defendant’s] handbag would be confused with
[plaintiff’s] handbag.” As such, the court denied the preliminary injunction for all
claims, including trade dress and state dilution.
In Bumble Bee Seafoods, LLC v. UFS Indus., 71 U.S.P.Q.2d (BNA) 1684 (S.D.N.Y.
July 20, 2004), the court held that a maker of a composite product can use the mark of
the component of that product to indicate existence of that component product in the
finished work as long as such use is not deceptive. In this case, the plaintiff, who owns
the mark BUMBLE BEE for use in connection with the sale of tuna fish, sued to enjoin
the use of its mark by the defendant, who used plaintiff’s product and mark in its
manufacture and sale of tuna salad. The court stated at the outset that the “use of the
[BUMBLE BEE] mark would be deemed [legitimate] depending on whether it is
deceptive as to source of endorsement.” The court turned to the Supreme Court’s
holding in Prestonettes, Inc. v. Coty, 264 U.S. 359 (1924), which permitted the use of a
mark to state that a [particular component] was an ingredient in the new compound.
The court also relied on Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 73 U.S.P.Q.2d
(BNA) 133 (1947), which emphasized that “truthful disclosure of the product’s origin
posed no breach of trademark rights.” The court then noted that since the labeling of
the product was not deceptive, defendant’s use of the plaintiff’s trademark on
defendant’s product was, indeed, fair use under Section 33 of the Lanham Act, 15 U.S.C.
§ 1115(b)(4). Finally, the court rejected as inapplicable the plaintiff’s argument that
relied on cases where the defendant simply repackaged the plaintiff’s goods and sold
the goods under a different brand. After applying the Polaroid factors with the
aforementioned conclusions, the court found that all factors weighed in favor of
defendant, and it denied the plaintiff’s motion for preliminary injunction.
In Scott Fetzer Co. v. House of Vacuums, Inc., 381 F.3d 477 (5th Cir. Tex. 2004), the
court held that use of a manufacturer’s mark in a yellow pages advertisement to
truthfully advertise that it repairs and sells KIRBY vacuums does not create a likelihood
of confusion. In affirming the district court’s grant of summary judgment, the court
stated that the critical question is whether the advertisement suggests affiliation or
endorsement. The court then pointed out that since the KIRBY mark in the ad appeared
fifth in a list of thirteen brands and was not especially prominent, “any chance of
confusion was significantly reduced.” The court also rejected plaintiff’s argument that
the district court should have presumed intent to confuse because the defendant
“knowingly” used the mark, stating that that “the intent to compete…is not tantamount
to intent to confuse.” The court upheld the district court’s position that the survey
evidence did not preclude summary judgment because the “serious flaws in a survey
make any reliance on the survey so unreasonable that it cannot be used to demonstrate
a question of fact on the likelihood of confusion issue.” The court also rejected Scott
Fetzer’s dilution argument that “the used parts installed by defendant will make [those
particular] KIRBY vacuums inferior to authorized rebuilt KIRBY vacuums.”
In
response, the court observed that “trademark law does not entitle mark owners to
control the aftermarket in marked products,” and as such, affirmed the district court’s
ruling on all claims.
In Moose Creek Inc. v. Abercrombie & Fitch Co., 331 F. Supp. 2d 1214 (C.D. Cal.
2004), the court held that although the mark MOOSE CREEK is arbitrary with respect to
apparel, and thus, does not require a demonstration of secondary meaning to be
protectable, the mark is “conceptually weak” under the “crowded field” doctrine as a
result of the common use of images of moose in connection with the sale of clothing. In
this case, plaintiff has used the trademark MOOSE CREEK in connection with its line of
clothing since 1989. In 2003, one of the defendant’s sweatshirts bore the legend “Moose
Creek Athl. Dept. Physical Education.” The plaintiff promptly sought a preliminary
injunction, which the court denied based on a lack of probability of success on the
merits. In applying the eight-factor likelihood of confusion test, established under
AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341, 204 U.S.P.Q. 2d (BNA) 808 (9th Cir. Cal. 1979),
the court concluded under that the MOOSE CREEK mark was “commercially weak.”
Citing Matrix Motor Co. v. Toyota Jidosha Kabushiki Kaisha, 290 F. Supp. 2d 1083 (C.D. Cal.
2003), the court stated that even “an arbitrary mark may be classified as weak where
there has been extensive third party use of similar marks on similar goods.” The court
also noted that the “commercial strength of the marks also weighed in Abercrombie’s
favor because its moose logo was ‘commercially robust.’” Finally, the court found that
many of the marks over which Moose Creek claimed ownership were not similar to
Abercrombie’s moose logo. Ultimately, the court denied the plaintiff’s motion for
preliminary injunction based on its finding that most of the factors weighed in favor of
Abercrombie.
In Knight-McConnell v. Cummins, 2004 U.S. Dist. LEXIS 14746 (S.D.N.Y. July 29,
004), the district court held that the mere appearance on a web site of a hyperlink to
another site is not enough to cause users to think that the two sites are associated,
especially where the sites advertise different services and one site criticizes the other in
its online commentary. In granting the motion to dismiss the Lanham Act claims, the
court rejected plaintiff’s assertion that defendant’s actions violate the “false designation
of origin” provision of the Lanham Act, 15 U.S.C. § 1125(a)(1). The court noted that in
order “to succeed on a false designation of origin claim, the plaintiff must show she has
a valid protectable mark and Cummins’s actions are likely to cause consumer
confusion.” The court then observed that even if plaintiff’s name constitutes a valid
trademark, “[t]he mere appearance on a web site of a hyperlink to another site will not
lead a web-user to conclude that the owner of the site he is visiting is associated with
the owner of the linked site.” The court also found that defendant’s use of plaintiff’s
name in the URL post-domain path does not create confusion as to source. The court
based its finding on a Sixth Circuit case, which found that the post-domain path of a
URL “merely shows how the web site’s data is organized within the host computer’s
files” and does not suggest an association between the items. Interactive Prods. Corp. v.
a2z Mobile Office Solutions, Inc., 326 F.3d 687, 66 U.S.P.Q.2d (BNA) 1321 (6th Cir. 2003).
In Vais Arms, Inc. v. Vais, 2004 U.S. App. LEXIS 18163 (5th Cir. Tex. Aug. 26,
2004), the Fifth Circuit held that a seller of a firearm accessory business, which
incorporated the seller’s surname, intended to abandon the trademark rights in the
business’ name when he sold the company and left the country, thus allowing the buyer
to become the senior user of the mark. The court observed that under the Lanham Act,
15 U.S.C. §1127, a mark is deemed abandoned when (1) its use has been discontinued
by its owner and when (2) the owner has no intention of resuming use of the mark.
While there is no dispute that the seller discontinued use of the mark when he sold his
business and departed for Greece, the parties disagreed as to whether, in doing so, he
had the requisite intent to abandon his rights to the mark. In affirming the district
court’s summary judgment, the Fifth Circuit recognized that an affidavit from the seller
does not convey an understanding on the part of either party that the mark was not
being transferred “with the sale of the business’ other assets.” The court further stated
that, “a reasonable reading of the provision confirms that it was struck out by buyer to
relieve seller of the procedural burden of registering the mark before seller left the
country,” thus appearing more like abandonment.
B.
Use in Commerce
The use of plaintiff’s trademarks to trigger the display of competing pop-up ads
when a user accesses the plaintiff’s web site is a use in commerce that is likely to lead
users to mistakenly assume that plaintiff endorses the ads.
1-800 Contacts, Inc. v.
WhenU.com, 309 F. Supp. 2d 467, 69 U.S.P.Q.2d (BNA) 1337 (S.D.N.Y. 2003). Although
the court granted a preliminary injunction enjoining the ads for initial interest confusion
under the Lanham Act and ordered cancellation of the defendant competitor’s
registered domain name under the Anticybersquatting Consumer Protection Act, it
refused to grant preliminary relief on the plaintiff’s copyright infringement claim, citing
plaintiff’s failure to show an infringing display or derivative work.
In Gen’l Healthcare Ltd. v. Qashat, 364 F.3d 332, 70 U.S.P.Q.2d (BNA) 1566 (1st Cir.
2004), the First Circuit held that transportation of trademarked goods from the United
States to the United Kingdom, where the goods are assembled and sold, does not
constitute a use in commerce under the Lanham Act.
In affirming defendant’s
summary judgment, the court found that the plaintiff abandoned any rights in the
trademark KENT by failing to use the mark in commerce in the United States. The
court noted that in order to prevail on appeal, General Healthcare must prove that it
continued to use the mark in commerce in the United States for three consecutive years.
The court then rejected the plaintiff’s argument that it planned to resume use of the
mark in the near future, pointing to the fact that the plaintiff failed to provide any
evidence that suggested any interest or intent in developing a U.S. market for its
products. In dismissing General Healthcare’s trademark cancellation request, the court
stated that General Healthcare failed to offer any plausible reason for its more than tenyear delay in bringing an action for fraudulent acquisition, in light of the fact that a
cancellation proceeding would have required only a filing with the PTO.
In Gov’t. Emples. Ins. Co. v. Google, Inc., 330 F. Supp. 2d 700 (E.D. Va. 2004), the
district court held that an allegation that the defendant’s search engine used a mark as a
keyword to trigger displays of online advertising is an allegation of use in commerce
sufficient for a prima facie trademark infringement claim. In denying a motion to dismiss
for failure to state a claim, the court rejected a line of cases including U-Haul Int’l Inc. v.
WhenU.com, Inc., 279 F. Supp. 2d 723, 68 U.S.P.Q.2d (BNA) 1038 (E.D. Va. 2003) (holding
that pop-up ads that covered up or appeared alongside Internet sites did not infringe
the site owner’s trademarks); Wells Fargo & Co. v. WhenU.com, Inc., 293 F. Supp. 2d 734,
69 U.S.P.Q.2d (BNA) 1171 (E.D. Mich. 2003) (concluding that the use of a company’s
trademarks as keywords to trigger the display of pop-up advertisements did not
constitute a use in commerce); Interactive Prods. Corp. v. a2z Mobile Office Solutions, Inc.,
supra (holding that using a trademark as part of a web address, but not part of the
second-level domain name, was not infringing).
In Turner Greenberg Assocs. Inc. v. C & C Imps. Inc., 320 F. Supp. 2d 1317, 71
U.S.P.Q.2d (BNA) 1888 (S.D. Fla. 2004), the district court held that a furniture
distributor’s use of a well-known designer’s catalogue and furniture samples to obtain
orders from customers that were then diverted to a third party furniture manufacturer
constituted an infringing use in commerce. Using the seven-prong test established in
Alliance Metals, Inc. v. Hinely Indus. Inc., 222 F.3d 895 (11th Cir. Ga. 2000), the court
conducted a likelihood of confusion analysis and found in defendant’s favor on all
prongs. The court observed that “passing off or palming off can be achieved merely by
sending one product in response to an order for another or other methods that
misrepresent the source to the buyer as well as using the original product as the
demonstrator for selling the accused infringer’s cheaper imitation.” As such, plaintiff
and its principles were liable for common law trademark infringement, unfair
competition, false designation of origin, and palming off.
C.
Initial Interest Confusion
In Playboy Enters. v. Netscape Communs. Corp., 354 F.3d 1020, 69 U.S.P.Q.2d (BNA)
1417 (9th Cir. Cal. 2004), the Ninth Circuit held that users who enter the term “playboy”
into a search engine may be initially confused into thinking that unlabeled banner
advertisements triggered by the search terms are connected to the publisher of Playboy
magazine. Reversing a district court’s award of summary judgment for Netscape, the
court said that evidence presented by plaintiff established a strong likelihood of initial
interest confusion as set forth in Brookfield Communs., Inc. v. West Coast Entm’t Corp., 174
F.3d 1036, 50 U.S.P.Q.2d (BNA) 1545 (9th Cir. Cal. 1999).
In that case, the court
observed that although users searching for the plaintiff’s site would realize they had not
arrived there, they might be distracted from pressing on with their search if the
competitor’s site offered a similar service.
D.
Damages
In Gucci Am., Inc. v. Daffy's Inc., 354 F.3d 228 (3d Cir. 2003), the court held a Fifth
Circuit ruling that 1999 amendments to the Lanham Act removed willful intent as a
precondition to an award of profits in a trademark infringement case did not preclude a
weighing of the equitable factors controlling such an award. Affirming a district court's
refusal to issue an injunction and order disgorgement of the infringer's profits, the court
discounted Gucci's contention that the district court erred in relying on SecuraComm
Consulting, Inc. v. Securacom Inc., 166 F.3d 182 (3d Cir. 1999), given the infringer's good
faith and other equities involved in the case.
In Ciber, Inc. v. Ciber Consulting, Inc., 326 F. Supp. 2d 886 (N.D. Ill. 2004), the
district court held that, a plaintiff's voluntary dismissal of its trademark infringement
claim compels dismissal of the defendant's counterclaim for cancellation of the
plaintiff's trademark. Relying on Windsurfing International, Inc. v. AMF, Inc., 828 F.2d
755 (Fed. Cir. 1987), the court said that absent any infringement suit, or threat thereof,
there is no justifiable controversy under Article III of the Constitution. The court also
rejected the defendant's reliance on the prohibition under Fed.R.Civ.P. 41(a)(2) against
dismissing an action if there is a pending counterclaim, reasoning that the constitutional
considerations raised in this case outweigh the applicability of that rule.
E.
Injunctions
In The Deal v. Korangy Publ., 309 F. Supp. 2d 512; 69 U.S.P.Q.2d (BNA) 1775
(S.D.N.Y. 2004), the court held that a publisher of a financial news publication using the
registered trademark THE DAILY DEAL is not entitled to a preliminary injunction
against a defendant's use of THE REAL DEAL for its real estate magazine. In this case,
the court found that the balancing test established in Polaroid Corp. v. Polarad Elecs.
Corp., supra, weighed in favor of Korangy. The court observed that while THE DAILY
DEAL mark is suggestive, it is not particularly strong. The court pointed out that The
Deal LLC failed to demonstrate that they had acquired a high degree of consumer
recognition. In denying the motion for preliminary injunction, the court found neither
likely consumer confusion nor bad intent on the part of the defendant.
In Brennan's, Inc. v. Brennan's Rest., 360 F.3d 125; 69 U.S.P.Q.2d (BNA) 1939 (2d
Cir. N.Y. 2004), the court found the descriptive mark BRENNAN’S, used in connection
with a well-known New Orleans restaurant, is a common last name and thus an
inherently weak mark not entitled to Lanham Act protection. The court noted that
although common names as descriptive marks may be entitled to protection if the mark
has acquired a secondary meaning, in this case, the plaintiff's mark has not acquired
such meaning in New York, where the defendant has his own reputation. In affirming a
denial of injunctive relief, the court upheld the district court's finding that evidence of
actual confusion was minimal, use of the defendant's first name in the mark helped to
distinguish the marks, and the parties' restaurants were separated by substantial
geographic distance.
In Sunward Elecs., Inc. v. McDonald, 362 F.3d 17; 69 U.S.P.Q.2d (BNA) 2002 (2d
Cir. 2004), the court held the manufacturer of a pet fencing systems is entitled to a
preliminary injunction because it is likely to prevail on its infringement claim against a
former dealer who continued to use the manufacturer's trademark and trade name in
phone listings after the dealership agreement ended. The court agreed with the district
court’s determination that Sunward would likely be able to establish that its
unregistered marks are distinctive and that consumers are likely to be confused by
McDonald's use of a similar mark, and thus, properly granted injunctive relief. In
affirming the district court’s grant of injunctive relief, the court rejected as irrelevant the
defendants' assertion that they were initially authorized to use the trademarks in their
telephone listings when the listings were published. However, the court remanded the
case to determine if there was a less restrictive alternative than to require the defendant
to assign its phone numbers to Sunward.
In Indep. Living Aids, Inc. v. Maxi-Aids, Inc., 303 F. Supp. 2d 327; 70 U.S.P.Q.2d
(BNA) 1238 (E.D.N.Y. 2004), the court held that modification of an injunction to
permanently enjoin a defendant's use of the plaintiff's trademark in lowercase letters
was warranted, given both parties use of the Internet as their primary marketing and
advertising tool. The court stated that failure to enjoin the lower case version of the
plaintiff's protected phrase would defeat the purpose of the original injunction. The
court reasoned that since web searches are not case sensitive, a search for the phrase
"independent living aids" would produce the same results as "Independent Living
Aids.” In granting the plaintiff's request to modify the injunction, the court concluded
that Internet users are more likely to be confused as to ownership and the plaintiff’s
motion to amend the injunction to include the lowercase version of the mark was
granted.
In Partido Revolucionario Dominicano (PRD) v. Partido Revolucionario Dominicano,
311 F. Supp. 2d 14 (D.D.C. 2004) the court held that the Partido Revolucionario
Dominicano trade name and insignia associated with one of three major political parties
in the Dominican Republic is long-standing, strong in the Washington, D.C. area and
warrants trademark protection. In granting the plaintiff's request for a permanent
injunction, the court found that the party’s trade name and insignia have acquired
secondary meaning based on their use in the metropolitan area for over 22 years. The
court also noted that since its inception in 1982, the plaintiff has become connected to
and associated with the party by the relevant consumer class. Specifically, the court
observed, as the only authorized chapter in the Washington, D.C. area, the plaintiff
demonstrated that the defendant's unauthorized use of its name and insignia has
created actual confusion. Thus, the court granted the plaintiff’s motion for permanent
injunction.
In In re Lorillard Tobacco Co., 370 F.3d 982; 70 U.S.P.Q.2d (BNA) 1865 (9th Cir.
2004), the court held that a federal district court order denying an ex parte seizure of
counterfeit goods pursuant to the federal trademark statute is not injunctive relief that
is immediately appealable. In declining to exercise jurisdiction over the appeal, the
court said that jurisdiction over interlocutory appeals under 28 U.S.C. §1292(a)(1) is
available only when a district court has issued an injunction order. The court further
noted that an ex parte seizure order under 15 U.S.C. §1116(d) is not the equivalent of an
injunction and, thus, may not be appealed immediately.
In Nautilus Group, Inc. v. Icon Health & Fitness Inc., 372 F.3d 1330; 71 U.S.P.Q.2d
(BNA) 1173 (Fed. Cir. 2004), the court held that although a district court erred in finding
that the defendant, in choosing the mark CROSSBOW for its exercise equipment,
intended to capitalize on the goodwill created by the mark BOWFLEX, this error did not
have an impact on the overall decision in light of other evidence indicating a likelihood
of consumer confusion. In affirming the preliminary injunction against the defendant,
the court faulted the lower court for considering the transcripts of four phone calls as
evidence of actual confusion given the small number of confused consumers and the
fact that the source of the confusion was unclear. The court then concluded that despite
the district court’s errors, “the injunction was warranted given the strength the mark
had gained after 20 years of use, the similarities between the marks, and the proximity
of the products.”
F.
Fair Use
In MasterCard Int’l Inc. v. Nader 2000 Primary Comm., Inc., 70 U.S.P.Q.2d (BNA)
1046 (S.D.N.Y. Mar. 8, 2004), the court held that a television commercial used by the
Ralph Nader presidential campaign in 2000 was a sufficiently transformative parody of
MasterCard commercials to constitute fair use under Section 107 of the Copyright Act.
In granting Nader's motion to dismiss, the court determined that the eight-factor
Polaroid test weighed in Nader's favor. The court then applied the fair use factors set
forth in 17 U.S.C. §107, and determined that the Nader ad was a parody of the
Mastercard’s priceless ads and, thus, constituted a fair use. The court rejected
MasterCard's argument that the Nader ad could not claim protection as parody because
it did not explicitly comment on MasterCard's products or services. Relying on Campbell
v. Acuff-Rose Music, 510 U.S. 569, 29 U.S.P.Q.2d 1961 (1994), the court rejected the
plaintiff’s claim that because there is nothing in the Nader Ad which "comments on or
refers to MasterCard or its Priceless Ads ..., it cannot be classified as a parody.” The
court noted that the Supreme Court in Campbell stated "[p]arody serves its goals
whether labeled or not, and there is no reason to require parody to state the obvious (or
even the reasonably perceived)."
In Mattel Inc. v. Walking Mt. Prods. 353 F.3d 792; 69 U.S.P.Q.2d (BNA) 1257 (9th
Cir. 2003), the court held that the use of a nude "Barbie" in photographs is a
transformative parody of the doll's symbol as an ideal American woman, and does not
constitute copyright infringement. In affirming a summary judgment in favor of the
defendant, the court reasoned that “Barbie has been marketed as a symbol of American
beauty and its use was necessary to the defendant's criticism of American culture and
consumer perception of womanhood.” Citing both Campbell v. Acuff-Rose Music, 510
U.S. 569, 29 U.S.P.Q.2d 1961 (1994) and Dr. Seuss Enters. L.P. v. Penguin Books USA Inc.,
109 F.3d 1394, 42 U.S.P.Q.2d 1184 (9th Cir. 1997), the court noted that a "parodist is
permitted a fair use of a copyrighted work if it takes no more than is necessary to 'recall'
or 'conjure up' the object of his parody." The court asserted that the threshold question
in the first factor analysis is “whether a parodic character may reasonably be
perceived.” The court rejected Mattel’s argument that the district court could not have
found parody based on its public opinion survey of Forsythe's photos, stating that "[t]he
issue of whether a work is a parody is a question of law, not a matter of public majority
opinion.” In finding the work transformative, the court again rejected Mattel’s plea to
“ignore context--both the social context of Forsythe's work and the actual context in
which Mattel's works are placed in his photos.” Citing Campbell, the court retorted that
"In parody, as in news reporting, context is everything." The court did, however, find
the two remaining factors in favor of Forsythe. The court also applied the balancing test
set forth in Rogers v. Grimaldi, 875 F.2d 994, 10 U.S.P.Q.2d 1825 (2d Cir. 1989) to bar
application of the Lanham Act to the trademark infringement claim, but refused to
apply Rogers to trade dress claims, more narrowly ruling that the defendant made a
nominative fair use of the Barbie trade dress.
G.
Laches
In What-A-Burger of Va., Inc. v. Whataburger, Inc., 357 F.3d 441; 69 U.S.P.Q.2d
(BNA) 1829 (4th Cir. 2004), the court held that a Texas restaurant chain's right to enforce
its federally registered trademark against a Virginia restaurant chain was not barred by
the doctrine of laches. The court rejected Virginia W-A-B's assertion that, “as prior user
of its mark in Virginia, it could take advantage of the ‘limited area’ exception to the
exclusive usage rights to which the Texas WAB was entitled by virtue of its
incontestable registered mark.” The court stated that “Texas WAB enjoys the exclusive
right to use its mark in Virginia. The court did find, however, that the district
misapplied the doctrine of “laches.” The court noted that “the primary obstacle to the
application of laches is that there was never an infringing use of the mark by Virginia
W-A-B, a prerequisite for the application of that doctrine.” The court explained further
that the key determination for estoppel by laches, is “not whether there has been some
delay, but whether that delay was unreasonable.” In this case, the court stated that,
“Logic dictates that ‘unreasonable delay’ does not include any period before the owner
is able to pursue a claim for infringement.” As such, the court held, the application of
the laches doctrine by the district court was inappropriate.
H.
Jurisdiction
In Venture Tape Corp. v. McGills Glass Warehouse, 292 F. Supp. 2d 230 (D. Mass.
2003), the court held that while the mere existence of an interactive web-site, by itself,
may not be enough to establish personal jurisdiction over an out-of-state defendant, the
defendant's alleged trademark infringement directed at a company within the forum is
enough to constitute "minimum contacts" for purposes of personal jurisdiction. The
reason that McGills could expect being haled into court here, the court noted, is "the fact
that the target of the alleged trademark infringement was a Massachusetts company."
Citing Calder v. Jones, 465 U.S. 783 (1984), the court noted “that a defendant should
anticipate being haled into court wherever the forum and its residents are targeted.”
The court compared McGills’ conduct to a "gunman firing across a state line," allegedly
directing harmful acts at a Massachusetts entity, and thus, should be subject to
jurisdiction here” quoting Digital Equip. Corp. v. AltaVista Tech. Inc., 960 F. Supp. 456 (D.
Mass. 1997).
By contrast, in Hy Cite Corp. v. Badbusinessbureau.com, 297 F. Supp. 2d 1154; 70
U.S.P.Q.2d (BNA) 1266 (W.D. Wis. 2004), the court held that an interactive web-site, the
sale of one book, and an exchange of e-mail between a West Indies-based web-site
operator and a Wisconsin resident, did not amount to sufficient contacts with Wisconsin
to support, consistent with federal due process, the assertion of personal jurisdiction. In
refusing to find jurisdiction, the court refused to adopt the sliding scale of web-site
interactivity test articulated in Zippo Mfg. Co. v. Zippo Dot Com, 952 F. Supp. 1119, 42
U.S.P.Q.2d 1062 (W.D. Pa. 1997) (stating that if a web-site has a high degree of
interactivity, then a court will usually find that the web-site operators conduct business
over the Internet, leading to a finding that personal jurisdiction is proper). The court
explained that that a rigid adherence to such a test would lead to "erroneous results."
The court also noted that the “minimum contacts” with the state had not been satisfied
in that “the plaintiff failed to show how the defendant made a purposeful availment of
the benefits of Wisconsin's laws such that it could reasonably anticipate being haled into
court in the state.”
The court concluded that “there was no evidence that it had
received any donations from Wisconsin citizens, that any Wisconsin businesses
advertised on its web-site, or that it had coordinated any class actions involving people
from Wisconsin.”
In Am. Wholesalers Underwriting, Ltd. v. Am. Wholesale Ins. Group, Inc., 312 F. Supp.
2d 247; 71 U.S.P.Q.2d (BNA) 1109 (D. Conn. 2004), the court held that a North Carolina
insurance company's essentially passive web-site did not support Connecticut's exercise
of specific or general jurisdiction in a trademark infringement case. In declining to
exercise jurisdiction, the court noted that the defendant's web-site required a potential
customer to initiate contact with the company by telephone, mail, or e-mail, but did
contain contact information of a company subsidiary based in Connecticut.
In J&D Home Improvement, Inc. v. Basement Doctor, Inc., 70 U.S.P.Q.2d (BNA) 1250
(3d Cir. 2004), the appeals court held that a federal district court neither has original
jurisdiction to authorize concurrent use trademark rights under Section 2(d) of the
Lanham Act nor the jurisdiction to issue a declaratory judgment jurisdiction when there
is no actual controversy. In this case, J&D argued that the district court had subject
matter jurisdiction over the Section 2(d) claim because Section 39(a) of the Lanham Act,
15 U.S.C. §1121(a), states that district courts "shall have original jurisdiction ... of all
actions arising under this Act," and because Section 2(d) authorizes a Section 39(a)
"action." The district court held that Section 2(d) authorizes a remedy only, not a Section
39(a) "action," and therefore, subject matter cannot be based on that statute. The appeals
court agreed stating “Congress clearly said when it wanted to create an ‘action’ under
the Lanham Act,” adding that, “no such unambiguous language is found in Section
2(d).” The court also explained that, “[it] can not predicate subject matter jurisdiction
on the relief sought under the Declaratory Judgment Act…[because] J&D's complaint
fails to state an actual controversy,” but moreover, because “the District Court did not
have jurisdiction to declare the parties' rights to concurrent registration because that
remedy, authorized by § 1052(d) is not a § 1121(a) ‘action.’"
In Schwarzenegger v. Fred Martin Motor Co., 374 F.3d 797; 71 U.S.P.Q.2d (BNA)
1321 (9th Cir. 2004), the court held that a California district court correctly found that it
lacked personal jurisdiction over an Ohio car dealership in a claim alleging that the
dealership's use of a photo of Arnold Schwarzenegger as the "The Terminator" in car
advertisements infringed the actor's right of publicity because the advertisements were
not intentionally aimed at California. The court found that Schwarzenegger failed to
establish either that Martin had "minimum contacts" with the forum state or that the
exercise of jurisdiction would not offend the traditional "notions of fair play and
substantial justice," as required by International Shoe Co. v. Washington, 326 U.S. 310
(1945). Specifically, that court stated that Schwarzenegger’s reliance on Sinatra v.
National Enquirer, Inc., 854 F.2d 1191 (9th Cir. 1988) and Bancroft & Masters Inc. v.
Augusta National Inc., 223 F.3d 1082; 55 U.S.P.Q.2d 1941 (9th Cir. 2000) was misplaced
under the current facts. The court pointed out that both Ninth Circuit cases applied the
test from Calder v. Jones, 465 U.S. 783 (1984), which authorized the exercise of
jurisdiction over an out-of-state defendant in a defamation case based on the finding
that the defendant committed an intentional tortious act aimed at and felt in the forum
state.
The court noted that Schwarzenegger “failed to demonstrate that Martin
committed an ‘intentional act’ that was directed or aimed at California.” Based on its
meaning in the context of Calder, the court explained that “an intentional act refers to an
intent to perform an actual act, rather than an intent to accomplish a result or
consequence of that act.” As such, the requirements under International Shoe had not
been met and personal jurisdiction was lacking.
I.
Sanctions
In Ty Inc. v. Softbelly's, Inc., 353 F.3d 528 (7th Cir. 2003), the court held that
exclusion of a trademark infringement defendant's evidence of a mark's genericness is
too harsh a sanction for the defendant's failure to attach documents related to this
evidence to a pretrial exhibit list. While reversing an infringement ruling for the maker
of “BEANIE BABIES”, the court charged that “the district judge removed the heart of
the evidence as to the genericness of ‘Beanies’ such that the trial was a ‘farce.’” Even
without that error, the court noted that a new trial would be necessary “since the judge
precluded the jury from deciding likelihood of confusion between the parties’
competing products and lacked evidentiary proof of actual dilution.”
In Converse Inc. v. Reebok Int’l, Ltd., 328 F. Supp. 2d 166 (D. Mass. 2004), the court
held that a trademark infringement plaintiff whose counsel filed a contempt motion
asserting violation of a consent decree before conferring with defense counsel is liable
for sanctions because the district court's rules require consultation between parties
before motion filings. The court adopted a magistrate's recommendation to deny a
contempt motion since Reebok never used Converse's "All-Star" marks in advertising;
however it agreed to impose sanctions to remedy the judicial burden of responding to
the motion. The court also noted that Local Rule 7.1 requires that “parties consult and
limit the issues before filing motions.” In awarding sanctions, the court held that the
voice message that Converse's counsel left for defense counsel 30 minutes before filing
“clearly failed to satisfy this mandate” and was a "deliberate choice to disregard the
rules of the District Court."
In Earthquake Sound Corp. v. Bumper Indus., 352 F.3d 1210; 69 U.S.P.Q.2d (BNA)
1119 (9th Cir. 2003), the court held then when a court finds that an instance of
trademark infringement was willful or deliberate, an additional finding of bad faith is
not necessary in order to justify an award of attorneys' fees.
In this case, the award
was granted under Section 35(a) of the Lanham Act, 15 U.S.C. §1117(a), which states,
“The court in ‘exceptional’ cases may award reasonable attorney fees to the prevailing
party.”
Bumper argued that a finding of exceptionality was not justified because
Bumper had offered evidence that it had used the mark in good faith. However, the
court rejected that argument stating that “that the court need not establish bad faith
where there was sufficient evidence to establish willfulness or deliberate infringement.”
In affirming the district court’s award, the court explained that “the issue is not
necessarily one of bad faith but of willful or deliberate infringement.”
J.
Summary Judgment
In Vt. Teddy Bear Co. v. 1-800 BEARGRAM Co., 373 F.3d 241; 71 U.S.P.Q.2d (BNA)
1365 (2d Cir. 2004), the court held that a trademark infringement defendant's failure to
respond to a motion for summary judgment may not be the sole basis for granting
summary judgment in the plaintiff's favor. The court emphasized that under Fed. R.
Civ. P. 56, while summary judgment may be awarded in the case of default, the court
must find that “the moving party has met its burden of proof and that there exists no
genuine outstanding issue of material fact in the case.” Citing Amaker v. Foley, 274 F.3d
677 (2d Cir. 2001), the court said, “[It is] clear, ..., that where the non-moving party
‘chooses the perilous path of failing to submit a response to a summary judgment
motion, the district court may not grant the motion without first examining the moving
party's submission to determine if it has met its burden of demonstration that no
material issue of fact remains for trial.’”
K.
Miscellaneous Proceedings
In Eagles, Ltd. v. Am. Eagle Found., 356 F.3d 724; 69 U.S.P.Q.2d (BNA) 1681 (6th
Cir. 2004), the court held that the Patent and Trademark Office is the proper body to
determine whether an opposition to a trademark application must be dismissed
following the dismissal of a trademark infringement suit involving the mark that was
the subject of the application. In affirming the district court’s refusal to dismiss the
opposition to the trademark application, the court noted that the motion was not
properly before the court, because it had been raised for the first time in its motion for
reconsideration. The court noted that the issue should have been raised as a
counterclaim to the initial action. As such, the court ruled, “the motion amounted to an
assertion of estoppel, and this issue must be determined by the PTO, not by the district
court.” The court further stated that "while the district court may have had general
authority under 15 U.S.C. §1119 to order the PTO to take action, it did not have the
authority to decide issues regarding a mark that was not properly before it."
In Schaut & Sons, Inc. v. Mt. Log Homes, Inc., 71 U.S.P.Q.2d (BNA) 1041 (E.D. Wis.
2004), the court held a party that claimed in a bankruptcy proceeding that its potential
trademark infringement claim would likely yield only an equitable remedy is estopped
from claiming damages in a subsequent infringement suit. Citing In re Coastal Plains
Inc., 179 F.3d 197 (5th Cir. 1999), the court determined that the doctrine of judicial
estoppel applied to bankruptcy proceedings in that the Fifth Circuit applied judicial
estoppel to block a successor corporation's claim on a debtor when the existence of that
successor corporation had not been disclosed in a bankruptcy proceeding. In granting
the motion for summary judgment, the court, applying the Costal Plains doctrine stated,
“The fact that Schaut only represented the claim had no value, as opposed to not
disclosing it at all, does not change the result. Representing that a claim has no
monetary value is hardly different than denying the existence of the claim altogether.”
III.
SECTION 43(A) OF THE LANHAM ACT
A.
Protectable Rights
In Lewittes v. Cohen, U.S. Dist. LEXIS 9467 (S.D.N.Y. 2004), the court held that a
nationally known celebrity journalist's rights in his last name support his Lanham Act
unfair competition and trademark dilution claim against a defendant who registered
her own web-site in that name to relate the details of her divorce from the journalist's
brother. In this case, the plaintiff, a nationally known journalist and screenwriter, sued
his former sister-in-law, alleging unfair competition under the Lanham Act, 15 U.S.C. §
1125, dilution under Section 1125(c), and violation of the Anticybersquatting Consumer
Protection Act (“ACPA”), 15 U.S.C. 1125(d), after they created a web-site using the
domain name www.lewittes.com. The site promised to provide details of her divorce,
including documents and subjective accounts related to the divorce proceedings as well
as the message "soon to be a major motion picture." The court noted that in order to
prevail on an unfair competition claim under 15 U.S.C. § 1125, Lewittes must show that
he has a protectable mark, that the defendants used the mark, and that their use of the
mark is likely to cause confusion. The court further stated that Lewittes must also show
that the mark was used in connection with "goods or services" and in the course of
"commerce. The court rejected the defendant’s assertion that the phrase "soon to be a
major motion picture" is merely a literary device, and does not connect their use of
www.lewittes.com with the sale of any goods or services. As such, the court found that
there were sufficient facts to support an unfair competition claim under the Lanham
Act, denying the defendants' request to dismiss the claim. To proceed with the dilution
claim, the court noted that “Lewittes must demonstrate that his mark, MICHAEL
LEWITTES, is famous and distinctive, that the defendants' use of the domain name is a
commercial use that began after the mark became famous, and that this use dilutes the
distinctive qualities of his mark.” The court concluded that Lewittes allegations that he
used his name as his service mark since 1989, and that he achieved nationwide
recognition with respect to his name and that he is the only person with the name
"Lewittes" practicing as an "editor, writer, journalist, or media correspondent in the
United States" if true, supports a reasonable inference that the mark is distinct. The
court noted, however, to establish a claim under the ACPA, Lewittes must show that
the defendants' use of "www.lewittes.com" either “dilutes a famous mark or is identical
or confusingly similar to a distinctive mark, and that defendants had a bad faith intent
to profit from their use of the domain name.” In dismissing the ACPA claim, the court
stated that Lewittes failed to allege or demonstrate that the defendants engaged in the
type of activities that the statute was designed to prevent.
In Star Indus. v. Bacardi & Co., 71 U.S.P.Q.2d (BNA) 1026 (S.D.N.Y. Dec. 31,
2003), the court held that the letter "O" in the GEORGI O mark for an orange-flavored
vodka is unprotectable against the "BARCARDI O" mark for orange-flavored rum.
Initially, the court noted that Star failed to demonstrate that the "O" in the GEORGI O
mark would be recognized by ordinary consumers as a mark that is separate and
distinct form the rest of the label, and thus, should be analyzed in its entirety. The court
also concluded that Star failed to demonstrate consumer confusion between the two
marks. The court stated that, “It stretches credulity to believe that a sober consumer
would go to a store, intending to purchase GEORGI O vodka, and because of one
graphic similarity on the label, purchase Bacardi's orange-flavored rum instead.” The
court highlighted the fact that Star’s argument was further weakened by the fact that
many other vodka brands use the O to designate an orange flavoring.
B.
Passing Off / Reverse Passing Off
In Hearts on Fire Co., LLC v. L C Int’l Corp., 2004 U.S. Dist. LEXIS 14828 (S.D.N.Y.
2004), the court held that a distributor's sale of loose diamonds, whose cut and pattern
resembles the plaintiff's diamonds and which are sold under a mark similar to that of
the plaintiff's, may constitute false designation of origin under the Lanham Act. In this
case, Hearts On Fire Co. (“HOF”), who uses the marks THE WORLD'S MOST
PERFECTLY CUT DIAMOND and THE MOST PERFECTLY CUT DIAMOND IN THE
WORLD in connection with its sale and advertising of diamonds sued L C International
Corp., (“LCI”) who uses the phrase "THE MOST PERFECTLY FASHIONED
DIAMOND IN THE WORLD" in connection with its advertising and sale of diamonds,
asserting unfair competition and false designation of origin in violation of the Lanham
Act, 15 U.S.C. §1125(a), and for unfair competition and trademark dilution under state
law. In denying LCI’s motion to dismiss for failure to state a claim, the court rejected
LCI’s argument that “the phrases are generic and descriptive and thus, even if they
have acquired secondary meaning, they are not entitled to protection under the Lanham
Act.” The court noted that HOF’s argument of genericness, “is premature as the initial
classification of a mark, which is a requisite determination for a trademark infringement
claim, is a factual determination.” The court also noted that “HOF has shown that its
marks have acquired distinctiveness through continuous and exclusive use since 1997
and that LCI’s International's phrase is likely to cause confusion.” The court concluded
that HOF could support a Lanham Act claim, and thus denied the defendant's motion
to dismiss.
A U.S. District Court held that the Supreme Court's ruling in Dastar Corp. v.
Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) precludes a claim for reverse passing
off under the Lanham Act against a company and its founders who used without
attribution an uncopyrighted design proposal and layout obtained from the founder's
former employer. Larkin Group, Inc. v. Aquatic Design Consultants, Inc. 323 F. Supp. 2d
1121 (D. Kan. 2004). The court explained that the Supreme Court declined to read
"origin" in Section 43(a) to require attribution of uncopyrighted materials but held that
"origin of goods" in Section 43(a)(1)(A) "refers to the producer of tangible goods that are
offered for sale, and not to the author of any idea, concept, or communication embodied
in those goods." The court applied the Dastar ruling to the current facts stating that
Larkin's reverse passing-off claims are materially identical to those at issue in Dastar.”
In dismissing the reverse passing off claim, the court explained that the “plaintiff is
essentially claiming that defendants took plaintiff's uncopyrighted and unpatented
ideas and concepts, edited and repackaged them, and passed them off as their own
without attributing any credit to plaintiff.” The court continued stating that “... Even if
those proposals are, however, considered goods or services offered for sale within the
meaning of Dastar, in this case plaintiff does not alleged that plaintiff actually produced
those proposals. Instead, plaintiff alleges that the defendants took plaintiff's materials
and incorporated them into defendant's proposals without attributing any credit to
plaintiff. Thus, the "origin" of the proposals was actually defendants, not plaintiff.”
The court concluded that “even if plaintiff authored some of the ideas and concepts
embodied in those proposals, the Lanham Act does not provide protection for such
plagiarism, i.e., the use of otherwise unprotected works and inventions without
attribution." Accordingly, the court dismissed the reverse passing off claim.
Similarly, in Bob Creeden & Assocs. Ltd. v. Infosoft, Inc., 326 F. Supp. 2d 876; 71
U.S.P.Q.2d (BNA) 1058 (N.D. Ill. 2004), the district court held that the Supreme Court's
ruling in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) bars a
software maker's Lanham Act claim under 15 U.S.C. § 1125(a) for reverse passing off
because the defendant was the "origin" of the accused software system at issue. The
court noted that the Lanham Act imposes liability against a party for "false designation
of origin ... likely to cause confusion ... as to the origin ... of his goods.” In granting
Infosoft’s motion to dismiss, the court concluded, “as in Dastar, the "tangible good"
offered for sale here is not Creeden's system, but the software system that Infosoft
purportedly derived from Creeden's system, and thus Infosoft is the "origin" of that
system.”
The Dastar decision, again, was the basis of the ruling in Tao of Sys. Integration
Inc. v. Analytical Servs. & Materials, Inc., 299 F. Supp. 2d 565 (E.D. Va. 2004) where the
court held a statement that a competitor's proposal for a government project implied
that it owned intellectual property that belonged to someone else cannot be the basis for
a reverse-passing-off claim. The court noted that under Section 43(a) of the Lanham Act,
there is a cause of action "for a false designation of origin made in connection with
goods or services." Then court then noted that “a reverse-passing-off action may
constitute a claim under [Section 43(a)] when the defendant is selling services that are
actually provided by someone else.” Specifically, the court noted that in order “To
[establish] a claim for reverse passing off, Tao must allege that the actual goods
provided to NASA by [Analytical Systems] were in fact produced by Tao, or the actual
services provided to NASA by [Analytical Systems] were in fact performed by Tao.”
The court then concluded that “neither Tao's amended complaint nor any other filing in
this case provides a basis for suspecting that the goods and services which [Analytical
Systems] contracted to provide to NASA were actually provided by Tao.” In rejecting
the reverse passing off claim, the court noted that “Tao appears to claim that [Analytical
Systems], in producing its own ... proposal, incorporated ideas or concepts that
belonged to Tao.” The court stated that, “this, however, is precisely the type of
allegation which the Supreme Court rejected as the basis for a reverse-passing-off claim
in Dastar.”
In Mid-List Press v. Nora, 374 F.3d 690; 71 U.S.P.Q.2d (BNA) 1534 (8th Cir. 2004),
the court held that the defendant's unauthorized use of a publishing company's name
and ISBN to publish his book of poetry was likely to cause consumer confusion and
warranted injunctive relief in connection with the company's false designation of origin
claim under the Lanham Act.
Mid-List Press (“MLP”) sued defendant, its current
president, alleging false designation of origin based on the fact that he was promoting
and selling a book that was not authorized by the company. In affirming the district
courts grant of summary judgment, the appeals court rejected Nora's claims that the
MLP trade name and ISBN number were his personal property, and it disagreed with
his argument that the district court's permanent injunction ruling was an abuse of its
discretion. The court explained that MLP “proved a likelihood of confusion, a required
element needed for an injunction,” The court then concluded that “It is difficult to
imagine how the public would not be confused about the origin of Nora's book when it
was published under MLP's trade name and ISBN number.”
In Beacon Mutual Ins., Co. v. OneBeacon Ins. Group, 376 F.3d 8 (1st Cir. 2004), the
court held that an insurance company whose similarly named competitor uses a similar
logo need not show lost sales to actual or potential policyholders to sue for trademark
infringement under Section 43(a) of the Lanham Act, but need only show harm to its
goodwill and reputation among the general public. The First Circuit, reviewing de
novo, noted that “actual confusion is commercially relevant if the alleged infringer's use
of the mark 'could inflict commercial injury in the form of ... a diversion of sales,
damage to goodwill, or loss of control over reputation' on the trademark holder,"
quoting Sports Auth. Inc. v. Prime Hospitality Corp., 89 F.3d 955 (2d Cir. 1996). The court
stated that although "it is true that when a Lanham Act case involves directly
competing goods, as here, the usual harm from confusion is both the potential purchase
of the defendant's product rather than the plaintiff's and the loss of goodwill and
reputation occasioned when the defendant's product is inferior, but nothing in the
statute suggests that demonstrable harm to plaintiff's goodwill and reputation resulting
from confusion of marks is restricted to this classic situation." The court also noted that
the likelihood of confusion inquiry "is not limited to actual or potential purchasers, but
also includes others whose confusion threatens the mark owner's commercial interest in
its mark." In reversing the district courts summary judgment, the court found that the
most critical likelihood of confusion factors favored Beacon Mutual and there was
sufficient evidence to create a genuine issue of a material fact regarding possible
confusion.
C.
False Advertising
In Société des Hotels Meridien v. LaSalle Hotel Operating P’ship L.P., 380 F.3d 126 (2d
Cir. N.Y. 2004), the court held that in order to establish a reverse passing off claim
under the Lanham Act, the plaintiff need not plead that the defendant made false
disparaging statements regarding the plaintiff's services.
In this case, LaSalle
terminated Meridien’s leases on two hotels and allowed Starwood Hotels to market and
manage the properties as Westin hotels. Meridien brought suit against LaSalle alleging
false advertising and unfair competition by reverse palming off in violation of the
Lanham Act and sought a preliminary injunction to halt distribution of materials that
identified the hotels as Westin hotels. In reversing the district court’s dismissal on the
grounds that there could be no false advertising claim because there was no allegation
of false disparagement of the quality of Meridien's product, the court noted that "[T]he
text of the Lanham Act makes it clear that a false advertising claim can properly be
brought against a defendant who misrepresents the quality of its own goods as well."
The court concluded that the use of the pictures of a plaintiff's product while
identifying it as the defendant's product could constitute a valid claim under 15 U.S.C.
§1125(a)(1)(B).
In Playtex Prods. Inc. v. Procter & Gamble Co., 2004 U.S. Dist. LEXIS 14084
(S.D.N.Y. 2004), the court held that tests establishing superiority of plaintiff’s tampons
sufficiently replicated real world conditions to sustain a jury verdict of false advertising
on behalf of the defendant. When the jury returned a verdict for Playtex Products Inc.
in its suit against Procter & Gamble Co. (“P&G”) for false advertising and unfair
competition under Section 43(a) of the Lanham Act, 15 U.S.C. §1125(a) challenging
P&G's advertising claim that its Tampax Pearl tampons are superior in comfort,
protection, and absorbency to Playtex's Gentle Guide plastic applicator tampons, P&G
moved for a judgment as a matter of law. The court rejected P&G’s argument that the
test conducted by Playtex “did not replicate real world conditions” because users were
asked to wear the product to saturation and leakage.” In denying P&G’s motion, the
court pointed out that the test were representative because, “while women don’t prefer
to wear their products to saturation and leakage,” such leakage occurs, “very, very
often.”
In Am. Italian Pasta Co. v. New World Pasta Co., 371 F.3d 387; 71 U.S.P.Q.2d (BNA)
1046 (8th 2004), the court held that a pasta manufacturer's use of the phrase "America's
Favorite Pasta" on its packaging does not constitute false advertising under the Lanham
Act and was mere puffery when the phrase is viewed in context and appears in
conjunction with factual statements.
The court noted that “the phrase ‘America's
Favorite Pasta,’ standing alone, is not a statement of fact.” The court also noted that the
key term in the phrase, "favorite," is defined as "markedly popular," and "popular" in
this context is defined as "well liked or admired by a particular group or circle,"
according to Webster's Third New International Dictionary. The court then concluded that
by combining the term "favorite" with "America's," American claims Mueller's pasta has
been well liked or admired over time by America and not a non-definitive person and,
therefore, does not meet the threshold to be considered a statement of fact, but rather is
non-quantifiable puffery that can not be the basis of a false advertising claim under
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a)(1)(B). The court further stated that
the district court erred when it used a survey to assign a meaning to “puffery” because
using consumer surveys to determine the benchmark by which a claim is measured
would subject the advertiser or manufacturer to unintended liability for a wholly
unanticipated claim the advertisement's plain language would not support and this
could “chill commercial speech.”
In Emco, Inc. v. Obst, 2004 U.S. Dist. LEXIS 12118 (C.D. Cal. May 7, 2004), the
court held that the removal of country-of-origin labels from goods manufactured
overseas and sold in the United States does not constitute false advertising under the
Lanham Act.
The court observed that, “[the defendant obtains its sales via
telemarketing, so its customers do not see the goods (or the lack of a label on those
goods) until after the sale is complete.” The court then stated, “in order to constitute
advertising or promotion, a communications must tend to "influenc[e] consumers to
buy defendant's goods or services. ... where, as here, the alleged communication is not
seen at all until after the sale is complete, there is no advertising.” In dismissing the
false advertising claim, the court noted that the plaintiff failed to establish all but one
element, and thus, granted summary judgment to defendant.
In Hickson Corp. v. Northern Crossarm Co., 357 F.3d 1256 (11th Cir. 2004), the court
held that a district court erred when it disregarded plaintiff's consumer survey evidence
that a fax advertisement used by one of its competitors in the wood preservation
industry was literally true but false in violation of Section 43(a)(1)(B) of the Lanham Act,
15 U.S.C. § 1125(a)(1)(B). In vacating the district court’s summary judgment, the court
agreed with the plaintiff that the defendants claim that “truth is the ultimate defense” is
incorrect under the Lanham Act. The court noted that the defendant’s contention,
“misses the point on the Lanham Act claim” and “the literal truth of Northern's
statement is immaterial to the necessity of reviewing and weighing the consumer
survey research” for its impact on the consumer.
In Gmurzynska v. Hutton, 355 F.3d 206 (2d Cir. 2004), the court held that an art
gallery's disparaging remarks about its competitor did not constitute advertising subject
to a false advertising claim under the Lanham Act. In a per curiam decision, the court
affirmed the district court's ruling, concluding that even under the liberal pleading
standard of Fed. R. Civ. P. 8(a)(2), Gmurzynska had failed to state a claim under Section
43(a)(1)(B) of the Lanham Act, 15 U.S.C. §1125(a)(1)(B). In dismissing the complaint, the
court concluded that the allegations made in the complaint did not constitute false
statements noting that “the art experts' opinions and assertions, …, are not commercial
advertising or commercial promotion for Hutton Galleries and Hutton Galleries did not
make any of the alleged misrepresentations, and the complaint specifically alleges that
the museum and not the experts.”
IV.
DILUTION
In Savin Corp. v. Savin Group, 68 U.S.P.Q.2d (BNA) 1893 (S.D.N.Y. Oct. 24, 2003),
the court held that the fact that the defendant's and plaintiff's marks are identical does
not mean that the plaintiff is excused from presenting evidence of actual dilution under
the Federal Trademark Dilution Act of 1995, 15 U.S.C. §1125(c) (“FTDA”). Citing the
Supreme Court in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, (2003) (stating that a
plaintiff alleging dilution must present evidence of "actual dilution, rather than a
likelihood of dilution."), the court rejected the plaintiff's argument that Moseley did not
require such a demonstration when the marks in question were identical. The plaintiff’s
argument was grounded in a sentence in Moseley that said that "direct evidence of
dilution such as consumer surveys will not be necessary if actual dilution can be
reliably proven through circumstantial evidence--the obvious case is one where the
junior and senior marks are identical." The court, however, interpreted this passage to
mean that circumstantial evidence of actual dilution, as opposed to direct evidence, is
sufficient when the marks are identical based on the next sentence in the decision:
"Whatever difficulties of proof may be entailed, they are not an acceptable reason for
dispensing with proof of an essential element of a statutory violation."
Since the
plaintiff had offered neither actual nor circumstantial evidence of actual dilution, the
court concluded that the plaintiff had not raised a material issue of fact on the question
of dilution.
In AutoZone, Inc. v. Tandy Corp., 373 F.3d 786 (6th Cir. 2004), the court held that
Radio Shack's use of the mark POWERZONE does not dilute the AUTOZONE mark,
given the lack of similarity between the marks and absent proof of actual dilution. In
determining the properity of district court’s ruling, the court stressed that the Supreme
Court's ruling in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418, (2003) raised the bar for
dilution claims, which now require proof of actual dilution. In affirming a district
court's summary judgment, the court concluded that “AutoZone's failure to provide
evidence that Radio Shack's mark blurs the distinctiveness of its mark and the
dissimilarity between the two marks demonstrates why AutoZone's claim fails.” The
court then observed that “every federal court to decide the issue has ruled that a high
degree of similarity is required in dilution cases, the court stated, finding that as such
the plaintiff must demonstrate a higher degree of similarity than is necessary in
infringement claims.” Consequently, because the AutoZone and PowerZone marks are
not similar enough to pass the higher threshold of actual dilution, and because
AutoZone failed to produce any other evidence of actual dilution, the court held that,
AutoZone cannot demonstrate that Radio Shack's use of PowerZone dilutes its mark.
V.
SUPREME COURT PETITIONS
A.
Petitions Filed and Pending
Degidio v. West Group Corp., 355 F.3d 506, 69 U.S.P.Q.2d (BNA) 1538 (6th Cir.
2004), appealing the Sixth Circuit's ruling that the mark LAWOFFICES in a lawyer's
domain name is unprotectable because it is descriptive as to the provision of legal
information and attorney references. The question presented to the court is whether the
court of appeals was correct in applying a de novo standard of review for ultimate and
subsidiary issues of fact in its review of a Lanham Act trademark infringement claim.
B.
Petition for Review Granted
KP Permanent Make-Up, Inc. v. Lasting Impression I, Inc., 328 F.3d 1061, 66
U.S.P.Q.2d (BNA) 1509 (9th Cir. 2003), the Supreme Court agreed to decide whether a
court must make a likelihood of confusion determination once the fair use defense has
been asserted in a trademark infringement case that involves an incontestable
trademark.
C.
Petition Denied
Parks v. LaFace Records, 329 F.3d 437, 66 U.S.P.Q.2d (BNA) 1735 (6th Cir. 2003),
appealing the Sixth Circuit's ruling famed civil rights icon Rosa Parks may have claims
for Lanham Act and right of publicity violations against a rap group that used her
name.
Enterprise Rent-A-Car Co. v. Advantage Rent-A-Car Inc., 330 F.3d 1333, 66
U.S.P.Q.2d (BNA) 1811 (Fed. Cir. 2001), appealing the Federal Circuit's ruling that any
prior use of a mark before the opposer's mark became famous, even in a limited area,
defeats a trademark opposition claim based on dilution.
Int’l Bancorp, LLC v. Société Des Bains De Mer Et Du Cercle Des Éstrangers a Monaco,
329 F.3d 359, 66 U.S.P.Q.2d (BNA) 1705 (4th Cir. 2003), appealing the Fourth Circuit's
ruling that a Monaco casino that serves U.S. travelers and advertises its services in this
country may assert trademark infringement claims against companies that used its
unregistered but distinctive trademark in Internet domain names.
Garcia v. Horphag Research Inc., 328 F.3d 1108, 67 U.S.P.Q.2d (BNA) 1532 (9th Cir.
2003), appealing the Ninth Circuit's ruling that the use of the PYCNOGENOL mark for
a pine bark extract in a defendant's pharmaceutical products web-site text and metatags
was so excessive that the nominative fair use defense was unavailable.
McFarlane v. Twist, 110 S.W.3d 363, 67 U.S.P.Q.2d (BNA) 1604 (Mo. 2003),
appealing the Supreme Court of Missouri's ruling that a comic book's use of the name
"Tony Twist" and the persona of a tough-guy enforcer violated the right of publicity of a
former professional hockey player with the same name.
Idaho Potato Comm’n v. M&M Produce Farm & Sales, 335 F.3d 130, 67 U.S.P.Q.2d
(BNA) 1348 (2d Cir. 2003), appealing the Second Circuit's ruling that a licensee of a
certification mark cannot be estopped, either equitably or by contract, from challenging
the validity of the mark.
VI.
INSURANCE
In Houbigant Inc. v. Federal Insurance Co., No. 03-1286 (3d Cir. 2004), the court held
that a perfume maker whose trademarks were infringed was covered by the bankrupt
infringer's commercial general liability policy for advertising injuries arising out of
infringement of "trademarked titles." In reversing a summary judgment for the
insurance company, the appellate court held that the “insurance company was bound
by a bankruptcy settlement agreement stipulating that the trademark owner could be
indemnified under the bankrupt infringer's “advertising injury policy.” The court also
held that “the policy coverage for ‘trademarked titles’ applied to trademark
infringement, and was not limited to titles of literary works.”
In Century 21, Inc. v. Diamond State Insurance Co., 71 U.S.P.Q.2d (BNA) 1374
(S.D.N.Y. 2004), the court held an insured's alleged sale of counterfeit goods bearing the
GUCCI trademark is not a covered offense that an insurer has the duty to defend under
a commercial insurance policy's "advertising injury" clause.
In denying plaintiff’s
motion for partial summary judgment, the court referred to A. Meyers & Sons Corp. v.
Zurich Am. Ins. Group, 74 N.Y.2d 298 (1989) stating, just as the claims against that
insured for importing and selling goods, the claims here against Century 21 for selling
counterfeit goods cannot be equated with "advertising."
VII.
MISCELLANEOUS
A.
Preemption
In Bronco Wine Co. v. Jolly, 2004 Cal. LEXIS 8027 (Cal. 2004), the California
Supreme court ruled that a California law mandating that wines bearing the “Napa”
name on the label come from grapes grown in the valley is not preempted by federal
law. The court observed that California, as early as 1860, passed laws penalizing the
sale of adulterated alcoholic beverages, continuing with post-Prohibition laws still in
effect impose a more stringent requirement for labeling than the federal government.
The court point to its labeling law, which like the state of Oregon, is stricter than the
federal laws.
The court concluded by stating that “history shows protection of
consumers from potentially misleading brand names and labels of food and beverages
in general, and wine in particular, is a subject that traditionally has been regulated by
the states."
In Solvay Pharms., Inc. v. Global Pharms., 298 F. Supp. 2d 880 (D. Minn. 2004) the
district court held that The Food, Drug, and Cosmetic Act (“FDCA”) did not preempt a
false advertising and unfair competition lawsuit filed under the Lanham Act and state
law, challenging a drug maker's promotion of its line of drugs as the therapeutic
equivalent of the plaintiff's drug. In denying the defendant's motion to dismiss, the
court stressed that the plaintiff's claims were based on allegedly false marketing
assertions, and were not related to Food and Drug Administration approval. The court
concluded that absent any assertions that tie its claims to FDA approval, “the plaintiff
was not improperly attempting to privately enforce the provisions of the FDCA.”
B.
State Issues
In Hispanic Broadcasting Corp. v. Educational Media Foundation, (C.D. Cal. 2003), the
court held that a trademark registered under state law gives the registrant exclusive
rights to use the mark only in the places where it has established senior common law
rights. The court rejected the plaintiff's claim that a state registration gave it exclusive
rights throughout the state, even though it had used the mark in only two metropolitan
areas. The court concluded “that such state registration does not establish constructive
knowledge on the part of a junior user such that the junior user's use is not in good faith
as a matter of law.”