Ted Davis Kilpatrick Townsend & Stockton LLP

Transcription

1 Recent Developments in Trademark and False Advertising Ted Davis Kilpatrick Townsend & Stockton LLP

2 Recent Highlights They include: the Supreme Court s sudden interest in the Lanham Act; the likely end of the presumption of irreparable harm in trademark and unfair competition litigation; the possible resurrection of fraud on the Patent and Trademark Office as a basis for opposition and cancellation; and the resurgence of Section 2(a) of the Lanham Act as a prohibition against registration. 2

3 Establishing Protectable Rights: Use in Commerce Has your company ever updated the appearance of a trademark or service mark? Yes No Don t know 3

4 Establishing Protectable Rights: Use in Commerce Is the inquiry into whether a trademark owner can establish priority of rights through the constructive-use doctrine of tacking a question of fact or a question of law? in later district court litigation? A question of fact. See Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013), cert. granted, 134 S. Ct (2014). 4

5 Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013) HANA Overseas Korean Club 5

6 Establishing Protectable Rights: Use in Commerce Is the inquiry into whether a trademark owner can establish priority of rights through the constructive-use doctrine of tacking a question of fact or a question of law? in later district court litigation? A question of fact. See Hana Fin., Inc. v. Hana Bank, 735 F.3d 1158 (9th Cir. 2013), cert. granted, 134 S. Ct (2014). A question of law. See Data Concepts, Inc. v. Digital Consulting, Inc., 150 F.3d 620 (6th Cir. 1998). A question of law. See Van Dyne Crotty, Inc. v. Wear Guard Corp., 926 F.2d 1156 (Fed. Cir. 1991). 6

7 Establishing Liability: False Advertising Does your company s packaging or advertising have to comply with federal regulations? Yes No Don t know 7

8 Establishing Liability: False Advertising Will compliance with federal labeling regulations immunize a label against a false advertising-based challenge under Section 43(a) of the Lanham Act? No, at least where food and beverage labels are concerned. See POM Wonderful LLC v. Coca- Cola Co., 134 S. Ct (2014). 8

9 POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct (2014) 9

10 Establishing Liability: False Advertising There is no statutory text or established interpretive principle to support the contention that the [Food, Drug, and Cosmetic Act] precludes Lanham Act suits like the one brought by POM in this case. Nothing in the text, history, or structure of the FDCA or the Lanham Act shows the congressional purpose or design to forbid these suits. Quite to the contrary, the FDCA and the Lanham Act complement each other in the federal regulation of misleading food and beverage labels. Competitors, in their own interest, may bring Lanham Act claims like POM s that challenge food and beverage labels that are regulated by the FDCA. POM Wonderful, 134 S. Ct. at 1233 (emphasis added). 10

11 Establishing Liability: False Advertising 11

12 Establishing Standing: False Advertising Is direct competition by the parties a prerequisite for standing to bring a claim of false advertising under the Lanham Act? No. See Lexmark Int l, Inc. v. Static Control Components, Inc., 134 S. Ct (2014). 12

13 Lexmark Int l, Inc. v. Static Control Components, Inc., 134 S. Ct (2014) 13

14 Lexmark Int l, Inc. v. Static Control Components, Inc., 134 S. Ct (2014) 14

15 Establishing Standing: False Advertising [A] plaintiff suing under [Section 43(a)] ordinarily must show economic or reputational injury flowing directly from the deception wrought by the defendant s advertising; and... that [economic or reputational injury] occurs when deception of consumers causes them to withhold trade from the plaintiff. Lexmark, 134 S. Ct. at

16 Issue Preclusion and Administrative Have you ever wondered what the value is of a victory in litigation before the Trademark Trial and Appeal Board? Yes No Don t know 16

17 Issue Preclusion and Administrative What role should a finding of likely confusion by the USPTO have in later district court litigation? in later district court litigation? Stay tuned. See B & B Hardware, Inc. v. Hargis Indus., 716 F.3d 1020 (8th Cir. 2013), cert. granted, 134 S. Ct (2014). 17

18 B & B Hardware, Inc. v. Hargis Indus., 716 F.3d 1020 (8th Cir. 2013) 18

19 Issue Preclusion and Administrative 1. Whether the TTAB s finding of a likelihood of confusion precludes [the defendant] from relitigating that issue in infringement litigation, in which likelihood of confusion is an element. 2. Whether, if issue preclusion does not apply, the district court was obliged to defer to the TTAB s finding of a likelihood of confusion absent strong evidence to rebut it. Petition for writ of certiorari, B&B Hardware, Inc. v. Hargis Indus., No , 82 USLW 3195, at *i (U.S. Sept. 18, 2013). 19

20 Issue Preclusion and Administrative The differing approaches to issue preclusion: Issue preclusion isn t appropriate because the Board s likelihood-of-confusion inquiry is different from that of a court. See B&B Hardware, Inc. v. Hargis Indus., 716 F.3d 1020 (8th Cir. 2013). Issue preclusion isn t appropriate because Congress has authorized courts to second-guess the USPTO in various contexts. See Aktieselskabet AF 21. Nov v. Fame Jeans Inc., 525 F.3d 8 (D.C. Cir. 2008); Freedom Sav. & Loan Ass n v. Way, 757 F.2d 1176 (11th Cir. 1985); Am. Heritage Life Ins. Co. v. Heritage Life Ins. Co., 484 F.2d 3 (5th Cir. 1974). 20

21 Issue Preclusion and Administrative The differing approaches to issue preclusion: Issue preclusion may be appropriate if a Board determination has been affirmed by the Federal Circuit or the C.C.P.A. See EZ Loader Boat Trailers, Inc. v. Cox Trailers, Inc., 746 F.2d 375 (7th Cir. 1984); Flavor Corp. of Am. v. Kemin Indus., 493 F.2d 275 (8th Cir. 1974). Issue preclusion may be appropriate if the parties vigorously litigated the issue in question before the Board. See Jean Alexander Cosmetics, Inc. v. L Oreal USA, Inc., 458 F.3d 244 (3d Cir. 2006). 21

22 Issue Preclusion and Administrative The differing approaches to issue preclusion: Issue preclusion may be appropriate if the Board considered the entire marketplace context in which the parties marks are used. See Levy v. Kosher Overseers Ass n of Am., 104 F.3d 38 (2d Cir. 1997). Issue preclusion may be appropriate under a straightforward application of the usual test for it. See C & N Corp. v. Kane, 953 F. Supp. 2d 903 (E.D. Wis. 2013). 22

23 Issue Preclusion and Administrative The differing approaches to deference: Courts should not defer to Board determinations and need not admit them into evidence. See B&B Hardware, Inc. v. Hargis Indus., 716 F.3d 1020 (8th Cir. 2013). Courts should not defer to Board determinations if new evidence is introduced. See Swatch AG v. Beehive Wholesale, LLC, 739 F.3d 150 (4th Cir. 2014). Courts should review Board determinations on a de novo basis. See Kellogg Co. v. Toucan Golf, Inc., 337 F.3d 616 (6th Cir. 2003). 23

24 Issue Preclusion and Administrative The differing approaches to deference: Courts should defer to Board determinations in the absence of evidence to the contrary carrying thorough conviction. See Freedom Sav. & Loan Ass n v. Way, 757 F.2d 1176 (11th Cir. 1985); Am. Heritage Life Ins. Co. v. Heritage Life Ins. Co., 484 F.2d 3 (5th Cir. 1974); Nieman v. Plough Chem. Co., 22 F.2d 73 (6th Cir. 1927). 24

25 Issue Preclusion and Administrative The differing approaches to deference: Courts should not overturn registration decisions in the absence of manifest error on the USPTO s part. See Solventol Chem. Prods. v. Langfield, 134 F.2d 899 (6th Cir. 1943). Courts should defer to Board determinations unless those determinations are unsupported by substantial evidence. See Bd. of Regents of the Univ. of Wis. Sys. v. Phoenix Int l Software, Inc., 653 F.3d 448 (7th Cir. 2011). 25

26 Remedies: Injunctive Relief Is the presumption of irreparable harm upon a showing of likely success on the merits still viable in trademark and false advertising litigation after ebay and Winter? Yes. See Country Inns & Suites By Carlson, Inc. v. 3 AM, LLC, No. 14 CV (MJD FLN), 2014 WL (D. Minn. Oct. 24, 2014). Yes. See Hershey Co. v. Friends of Steve Hershey, 111 U.S.P.Q.2d 1826 (D. Md. 2014). Yes. See Unity Health Plans Ins. Co. v. Iowa Health Sys., 995 F. Supp. 2d 874 (W.D. Wis. 2014). 26

27 Remedies: Injunctive Relief Is the presumption of irreparable harm upon a showing of likely success on the merits still viable in trademark and false advertising litigation after ebay and Winter? No. See Ferring Pharma., Inc. v. Watson Pharma., Inc., 765 F.3d 205 (3d Cir. 2014). No. Buzz Bee Toys, Inc. v. Swimways Corp., No. No (JBS/KMW), 2014 WL (D.N.J. May 15, 2014). No. See Vox Amplification Ltd. v. Meussdorffer, No. CV (ADS)(GRB), 2014 WL (E.D.N.Y. Feb. 11, 2014). 27

28 Registration Practice Have you lost any sleep lately over the possibility of facing a claim of fraud on the USPTO? Yes No Don t know 28

29 Registration Practice How easy is it to prove (or even to allege) fraud on the USPTO? Not very. See Hokto Kinoko Co. v. Concord Farms, Inc., 738 F.3d 1085 (9th Cir. 2013). Not very. See Paleteria La Michoacana, Inc. v. Productos Lacteos Tocumbo S.A. De C.V., No (RC), 2014 WL (D.D.C. Sept. 25, 2014). Not very. See Dragon Bleu (SARL) v. VENM, LLC, Opposition No , slip op. (T.T.A.B. Dec. 1, 2014) (precedential). 29

30 Registration Practice Is proof of fraud nevertheless possible? Yes. See MPC Franchise, LLC v. Tarntino, 19 F. Supp. 3d 456 (W.D.N.Y. 2014). Yes. See Nationstar Mortgage LLC v. Ahmad, 112 U.S.P.Q.2d 1361 (T.T.A.B. 2014). 30

31 Registration Practice The surrounding facts and circumstances provide clear and convincing evidence that applicant did not have a good faith reasonable basis for believing that he was using [his] mark in commerce for all the services identified in the application. Nationstar, 112 U.S.P.Q.2d at

32 Registration Practice We do not need to resolve the issue of the reasonableness as it is not part of the analysis. There is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive.... Unless the challenger can point to evidence to support an inference of deceptive intent, it has failed to satisfy the clear and convincing evidence standard required to establish a fraud claim. In re Bose Corp., 580 F.3d 1240, 1246 (Fed. Cir. 2009) (emphasis added) (citation omitted). 32

33 Registration Practice Applicant was obligated to read and understand what he was signing and investigate the accuracy of his statements in the application to confirm they had evidentiary support prior to signature and submission to the USPTO. Even if counsel had been retained to file the involved application, applicant would have shared the duty to ensure the accuracy of the application and the truth of its statements. Nationstar, 112 U.S.P.Q.2d at 1375 (citation omitted). 33

34 Registration Practice Are you a Washington Redskins fan? Yes No Don t know 34

35 Registration Practice No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration... on account of its nature unless the mark... [c]onsists of or comprises immoral,... or scandalous matter; or matter which may disparage... persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute. Section 2(a) of the Lanham Act, 15 U.S.C. 1052(a) (2012). 35

36 Registration Practice A petition to cancel a registration of a mark... may... be filed... [a]t any time if the... registration was obtained... contrary to the provisions of... subsection (a)... of section 1052 of this title.... Section 14(3) of the Lanham Act, 15 U.S.C. 1064(3) (2012) (emphasis added). 36

37 Registration Practice What kind of marks fall afoul of Section 2(a) s prohibition on the registration of matter which may disparage... persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute? THE SLANTS for entertainment in the nature of live performances by a musical band. See In re Tam, 108 U.S.P.Q.2d 1305 (T.T.A.B. 2013). STOP THE ISLAMISATION OF AMERICA for understanding and stopping terrorism. See In re Geller, 751 F.3d 1355 (Fed. Cir. 2014). THE REDSKINS, REDSKINS, and REDSKINETTES for entertainment services related to professional football contests. See Blackhorse v. Pro-Football, Inc., 111 U.S.P.Q.2d 1080 (T.T.A.B. 2014). 37

38 Blackhorse v. Pro-Football, Inc., 111 U.S.P.Q.2d 1080 (T.T.A.B. 2014) Mark Reg. No. Registration Date REDSKINETTES July 17, 1990 REDSKINS Feb. 7, 1978 June 25, June 18, 1974 WASHINGTON REDSKINS Feb. 12, Sept. 26,

39 Registration Practice The determination of the disparagement claim at issue... requires the following two-step analysis: a. What is the meaning of the matter in question, as it appears in the marks and as those marks are used in connection with the goods and services identified in the registrations? b. Is the meaning of the marks one that may disparage Native Americans? Blackhorse, 111 U.S.P.Q.2d at

40 Registration Practice [T]he meaning of the matter in question, retains the core meaning [of] Native American when used as the name of respondent s sports team. More specifically, the term redskin(s) as used by respondent... in connection with [a] professional football [team] retains the likely meaning Native Americans. Blackhorse, 111 U.S.P.Q.2d at 1110 (internal quotation marks omitted). 40

41 Registration Practice The record establishes that, at a minimum, approximately thirty percent of Native Americans found the term REDSKINS used in connection with respondent s services to be disparaging at all times including 1967, 1972, 1974, 1978 and Section 2(a) prohibits registration of matter that disparages a substantial composite, which need not be a majority, of the referenced group. Thirty percent is without doubt a substantial composite. Blackhorse, 111 U.S.P.Q.2d at 1111 (footnote omitted). 41

42 Registration Practice We find that a [1993] resolution passed by an organization such as [National Congress of American Indians], which throughout the relevant time period represented approximately thirty percent of Native Americans, setting forth the past and ongoing viewpoint of the Native Americans it represents is clearly probative of the views of Native Americans held at the referenced time period. Blackhorse, 111 U.S.P.Q.2d at 1099 (citation omitted). 42

43 Registration Practice Reported trademark opinions adopting inconsistent approaches to the use of after-the-fact evidence include: Rosetta Stone Ltd. v. Google, Inc., 676 F.3d 144 (4th Cir. 2012) (declining to consider after-thefact evidence); Coach Servs. Inc. v. Triumph Learning LLC, 668 F.3d 1356 (Fed. Cir. 2012) (same); Crash Dummy Movie, LLC v. Mattel, Inc., 601 F. 3d 1387 (Fed. Cir. 2010) (considering after-thefact evidence); and Gen. Motors Corp. v. Lanard Toys Inc., 468 F. 3d 405 (6th Cir. 2006) (same). 43

44 Thank You Ted Davis Kilpatrick Townsend & Stockton LLP