Recent Developments in Trademark and Unfair Competition Law May 8, 2008 IP Innovations Teleconference

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1 May 8, 2008 IP Innovations Teleconference Ted Davis Kilpatrick Stockton LLP 1

2 Highlights of the Past Year the continued preoccupation of courts with the concept of use in commerce ; the Ninth Circuit s (uncharacteristic) protectionist turn; the Fourth Circuit s (characteristic) disregard of Section 43(c) and internal USPTO procedures; and the T.T.A.B. s continued hard line toward allegations of use in commerce. 2

3 Use In Commerce By Plaintiffs Can a foreign owner of an allegedly famous and well-known mark acquire protectable rights absent use in commerce in the U.S.? 3

4 Use In Commerce By Plaintiffs Possible bases for protecting allegedly famous marks not actually used in the United States: Article 6bis of the Paris Convention; the General Inter-American Convention for Commercial Protection; Article 16(2) of TRIPS; Section 43(a) of the Lanham Act; Section 43(c) of the Lanham Act; the Tea Rose-Rectanus doctrine; and New York common law 4

5 Use In Commerce By Plaintiffs Can a foreign owner of an allegedly famous and well-known mark acquire protectable rights absent use in the U.S.? Both yes and no under New York common law. See ITC Ltd. v. Punchgini, Inc., 880 N.E.2d 852 (N.Y. 2007), later proceedings, 518 F.3d 159 (2d Cir. 2008). 5

6 ITC Ltd. v. Punchgini,, Inc., 880 N.E.2d 852 (N.Y. 2007) 6

7 Use In Commerce By Plaintiffs Questions certified to the New York Court of Appeals: Does New York common law permit the owner of a famous mark or trade dress to assert property rights therein by virtue of the owner s prior use of the mark or dress in a foreign country? How famous must a foreign mark or trade dress be to permit its owner to sue for unfair competition? 7

8 Use In Commerce By Plaintiffs [W]hen a business, through renown in New York, possesses goodwill constituting property or a commercial advantage in this State, that goodwill is protected from misappropriation under New York unfair competition law. This is so whether the business is domestic or foreign. ITC, 880 N.E.2d at

9 Use In Commerce By Plaintiffs Protection from misappropriation of a famous foreign mark presupposes the existence of actual goodwill in New York. If a foreign plaintiff has no goodwill in this state to appropriate, there can be no viable claim for unfair competition under a theory of misappropriation.... Thus, at a minimum, consumers... must primarily associate the mark with the foreign plaintiff. ITC, 880 N.E.2d at

10 Use In Commerce By Plaintiffs Does the capitalized use by the Internal Revenue Service of a personal name in delinquency notices and pleadings create protectable trademark rights? No, no, a thousand times no. See In re Wrubleski, 380 B.R. 635 (Bankr. S.D. Fla. 2008). 10

11 Use In Commerce By Plaintiffs Can the attempted sale of a slogan as a commodity constitute a use in commerce of the slogan as a mark? No, especially if the slogan would ultimately be used by, and associated with, its purchaser, rather than its seller. See Am. Express Co. v. Goetz, 515 F.3d 156 (2d Cir. 2008). 11

12 Use In Commerce By Plaintiffs How easily can a claimant lacking actual use of its mark claim priority of rights through analogous use? Very easily, as far as pleading analogous use is concerned. See Aktieselskabet AF 21. Nov v. Fame Jeans Inc., 2008 WL (D.C. Cir. April 29, 2008). Not very easily, as far as proving analogous use is concerned. See Am. Express Co. v. Goetz, 515 F.3d 156 (2d Cir. 2008). 12

13 Use In Commerce By Plaintiffs Does the analogous use doctrine have any viability under an intent to use regime? Maybe. See Fair Indigo LLC v. Style Conscience, 85 U.S.P.Q.2d 1536 (T.T.A.B. 2007) (holding that nothing in TLRA s legislative history precluded opposer s reliance on claimed analogous use). Maybe not. Westrex Corp. v. New Sensor Corp., 82 U.S.P.Q.2d 1215 (T.T.A.B. 2007) (rejecting claimed analogous use and faulting opposer for failing to file ITU application). 13

14 Use In Commerce By Plaintiffs How receptive is the Trademark Trial and Appeal Board to claims of residual good will? Not at all. See Gen. Motors Corp. v. Aristide & Co., Opposition No (April 21, 2008) (precedential opinion). 14

15 Gen. Motors Corp. v. Aristide & Co.,, Opposition No (April 21, 2008) 15

16 Use In Commerce By Defendants Any person who shall... copy... a registered mark and apply such... copy... to... advertisements intended to be used in commerce... in connection with the... offering for sale... or advertising of goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive... shall be liable in a civil action U.S.C. 1114(1)(b) (2006). 16

17 Use In Commerce By Defendants Does the use of a competitor s trademark as a metatag constitute an actionable use in commerce? Yes, if it occurs in connection with the sale, offering for sale, distribution, or advertising of goods or services. See N. Am. Med. Found. v. Axiom Worldwide, Inc., 2008 WL (11th Cir. April 7, 2008). 17

18 Distinctiveness A certificate of registration of a mark on the Principal Register shall be prima facie evidence of the validity of the registered mark, and of the registration of the mark, [and] of the registrant s ownership of the mark U.S.C. 1057(b) (2006); accord id. 1115(b). 18

19 Distinctiveness What burden does a defendant bear in challenging the distinctiveness of a mark covered by a registration that is not incontestable? The defendant bears the ultimate burden of proof. See Colt Defense LLC v. Bushmaster Firearms, Inc., 486 F.3d 701 (1st Cir. 2007). 19

20 Distinctiveness What burden does a defendant bear in challenging the distinctiveness of a mark covered by a registration that is not incontestable? [T]he presumption of validity that registration creates is easily rebuttable, since it merely shifts the burden of production to the alleged infringer. Custom Vehicles, Inc. v. Forest River, Inc., 476 F.3d 481, 486 (7th Cir. 2007) (emphasis added). 20

21 Distinctiveness Recent findings of genericness: welding services for welding services, see Welding Servs., Inc. v. Forman, 509 F.3d 1351 (11th Cir. 2007) memory for card or card-variant matching games, see Hasbro, Inc. v. MGA Enm t, Inc., 497 F. Supp. 2d 337 (D.R.I. 2007) disinfectable for nail files, see Rudolph Int l, Inc. v. Realys, Inc., 482 F.3d 1195 (9th Cir. 2007) 21

22 Distinctiveness Recent findings of genericness: M4 for carbines, see Colt Defense LLC v. Bushmaster Firearms, Inc., 486 F.3d 701 (1st Cir. 2007) kettle and kettle chips for potato chips, see Classic Foods Int l Corp. v. Kettle Foods, Inc., 468 F. Supp. 2d 1181 (C.D. Cal. 2007) raaga for Indian and South Asian music, see Vista India v. Raaga, LLC, 501 F. Supp. 2d 605 (D.N.J. 2007) bond-ost for cheese, see In re Noon Hour Food Prods., Serial No (T.T.A.B. April 23, 2008) (precedential opinion) 22

23 In re Noon Hour Food Prods.,, Serial No (T.T.A.B. April 23, 2008) 23

24 Distinctiveness Can a mark be generic in one context but distinctive in another? Yes, and even a judicial finding of genericness in one context is not binding in another. See H-D Mich., Inc. v. Top Quality Serv., Inc., 496 F.3d 755 (7th Cir. 2007). 24

25 Distinctiveness Is it necessary for a trade dress claimant seeking to protect a product design to have engaged in look-for advertising? Likely yes, at least where the T.T.A.B. is concerned. See In re!berlin brillen GmbH, 85 U.S.P.Q.2d 2021 (T.T.A.B. 2008). 25

26 Functionality Can a design that was once functional become nonfunctional as a result of technological change? Yes. See adidas Am., Inc. v. Payless Shoesource, Inc., 529 F. Supp. 2d 1215 (D. Or. 2007). 26

27 Likelihood of Confusion Are differences in pronunciation properly accorded less weight in the Internet context? Yes, because Internet users do not utilize verbal communication as a basis for the [goods and] services they seek. See Perfumebay.com v. ebay Inc., 506 F.3d 1165, 1175 (9th Cir. 2007). 27

28 Likelihood of Confusion Is the protection afforded to a registered mark limited to those goods and services recited in the registration? No, because [h]aving established a protectable interest by proving it is the owner of a registered trademark, the owner does not additionally have to show that the defendant s... use involves the same goods or services. See Applied Info. Sci. Corp. v. ebay Inc., 511 F.3d 966, 972 (9th Cir. 2007). 28

29 Likelihood of Confusion Can the likelihood of confusion between marks be determined through a side-by-side comparison? No, it s the overall context in in which the marks are used that matters. See Jada Toys, Inc. v. Mattel, Inc., 496 F.3d 974 (9th Cir. 2007). 29

30 Likelihood of Confusion Can the likelihood of confusion between marks be determined through a side-by-side comparison? Yes, at least where findings of nonliability are concerned. See Welding Servs., Inc. v. Forman, 509 F.3d 1351 (11th Cir. 2007); Top Tobacco, L.P. v. N. Atlantic Operating Co., 509 F.3d 380 (7th Cir. 2007). 30

31 Jada Toys, Inc. v. Mattel, Inc., 496 F.3d 974 (9th Cir. 2007) 31

32 Welding Servs., Inc. v. Forman,, 509 F.3d 1351 (11th Cir. 2007) 32

33 Top Tobacco, L.P. v. N. Atlantic Operating Co., 509 F.3d 380 (7th Cir. 2007) 33

34 Likelihood of Confusion Can there be a likelihood of confusion if the challenged use is not visible? No. See Custom Mfg. & Eng g, Inc. v. Midway Servs., Inc., 508 F.3d 641 (11th Cir. 2007). Yes. See N. Am. Med. Found. v. Axiom Worldwide, Inc., 2008 WL (11th Cir. April 7, 2008). 34

35 Likelihood of Confusion Can the use by a licensee of a shortened form of the licensed mark constitute infringement? Yes. See Aronowitz v. Health-Chem Corp., 513 F.3d 1229 (11th Cir. 2008). 35

36 Dilution Has the test for eligibility for protection under Section 43(c) been tightened up? Yes, marks for which dilution protection is claimed must be widely recognized by the general consuming public. See Green v. Fornario, 486 F.3d 100 (3d Cir. 2007); see also Milbank Tweed Hadley & McCloy LLP v. Milbank Holding Corp., 82 U.S.P.Q.2d 1583 (C.D. Cal. 2007). 36

37 Dilution Are parodies actionable under the revised federal dilution statute? 37

38 Louis Vuitton Malletier v. Haute Diggity Dog, LLC,, 507 F.3d 252 (4th Cir. 2007) 38

39 Louis Vuitton Malletier v. Haute Diggity Dog, LLC,, 507 F.3d 252 (4th Cir. 2007) 39

40 Louis Vuitton Malletier v. Haute Diggity Dog, LLC,, 507 F.3d 252 (4th Cir. 2007) (3) Exclusions The following shall not be actionable as dilution... under this subsection: (A) Any fair use... of a famous mark by another person other than as a designation of source for the person s own goods or services, including use in connection with.... identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner. 15 U.S.C.A. 1125(c)(3)(A) (West Supp. 2007) (emphasis added). 40

41 Dilution Are parodies actionable under the revised federal dilution statute? A parody that is a trademark use may not qualify for Section 43(c)(3)(A) s exclusions, but the parodical nature of the use nevertheless can come into play in the dilution inquiry itself. See Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir. 2007). 41

42 Dilution Is the use of an allegedly famous mark to criticize the mark owner actionable as likely dilution? 42

43 Dilution Is the use of an allegedly famous mark to criticize the mark owner actionable as likely dilution? No, even if the critic sells goods bearing its imitation of the plaintiff s mark. See Smith v. Wal-Mart Stores, Inc., 2008 WL (N.D. Ga. March 20, 2008). 43

44 Dilution Is the use of an allegedly famous mark for political purposes actionable as dilution? No. See Griffith v. Fenrick, 486 F. Supp. 2d 848 (W.D. Wis. 2007). 44

45 Griffith v. Fenrick,, 486 F. Supp. 2d 848 (W.D.. Wis. 2007) 45

46 Defenses What burden does a defendant bear in demonstrating the abandonment of a mark that has not been used in three years? The defendant bears the ultimate burden of proof. See ITC Ltd. v. Punchgini, Inc., 482 F.3d 135 (2d Cir. 2007). 46

47 Defenses Nonuse for three consecutive years shall be prima facie evidence of abandonment. 15 U.S.C (2006). 47

48 Defenses Does the existence of a copyright covering a claimed trademark or trade dress preclude a claim for trademark infringement? No, trademark and copyright rights protect separate interests and are not incompatible with each other. See Bach v. Living Forever Prods. U.S., Inc., 473 F. Supp. 2d 1110 (W.D. Wash. 2007). 48

49 Bach v. Forever Living Prods. U.S., Inc., 473 F. Supp. 2d 1110 (W.D. Wash. 2007) 49

50 Remedies Does a showing of likely confusion still create a presumption of irreparable harm after ebay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)? Perhaps not. See N. Am. Med. Corp. v. Axiom Worldwide, Inc., 2008 WL (11th Cir. April 7, 2008). 50

51 Remedies Does a plaintiff electing an award of statutory damages under Section 35(c) forfeit the nearautomatic award of attorneys fees under Section 35(b)? No. See Lorillard Tobacco Co. v. A & E Oil, Inc., 503 F.3d 588 (7th Cir. 2007). Yes. See K & N Eng g v. Bulat, 510 F.3d 588 (9th Cir. 2007). 51

52 USPTO Procedure What exposes a registration to cancellation for fraud on the PTO? An inaccurate claim of actual use of the appliedfor mark in connection with particular goods and services, see Hurley Int l LLC v. Volta, 82 U.S.P.Q.2d 1339 (T.T.A.B. 2007). 52

53 USPTO Procedure What exposes a registration to cancellation for fraud on the PTO? A failure to disclose concurrent users with superior rights in their geographic areas, see Angel Flight of Ga. v. Angel Flight Am., 2008 WL (11th Cir. April 4, 2008). 53

54 USPTO Procedure What does not expose a registration to cancellation for fraud on the PTO? An inaccurate date of first use in a Section 1(a) application, so long as the actual date of first use was prior to the application s filing date, see Angel Flight of Ga. v. Angel Flight Am., 2008 WL (11th Cir. April 4, 2008). 54

55 USPTO Procedure What does not expose a registration to cancellation for fraud on the PTO? A failure to disclose that goods sold under a geographic place-name actually originate two miles outside the border of that jurisdiction, see DS Waters of Am., Inc. v. Princess Abita Water, L.L.C., 2008 WL (E.D. La. Feb. 13, 2008). 55

56 USPTO Procedure Can a non-u.s. litigant in a Board proceeding be compelled to appear for a deposition by a federal court subpoena? Yes. See Rosenruist-Gestao E. Servicos LDA v. Virgin Enters., 511 F.3d 437 (4th Cir. 2007). 56

57 USPTO Procedure Can the appropriations process be used to trump substantive provisions of the Lanham Act? Yes. See Last Best Beef, LLC v. Dudas, 506 F.3d 333 (4th Cir. 2007). 57

58 THANK YOU Ted Davis Kilpatrick Stockton LLP 58