On March 24, 2020, American Eagle Outfitters sued Walmart in the Western District of Pennsylvania (2:20-cv-00412-DSC) complaining that the stitching on the rear pocket of Walmart’s jeans is confusingly similar to American Eagle’s “unique, distinctive, and proprietary pocket stitching design.” American Eagle alleges that Walmart’s misuse of its mark on a line of lower-priced jeans threatens its reputation.
In Iancu v. Brunetti, the Supreme Court extended our right to register offensive trademarks from the merely disparaging, to the outright immoral or scandalous. The Supreme Court reasoned that the “immoral or scandalous” bar discriminates on the basis of viewpoint and thus collides with the Court’s First Amendment doctrine. As a result, Mr. Brunetti is entitled to register F-U-C-T as a trademark.
In the personal opinion of this blogger, the Supreme Court has never really justified how denial of a federal trademark registration in an impingement on speech. The trademark owner is entitled to say whatever it was entitled to say before the refusal. Ironically, the effect of registration is to make it easier for the registrant to voice the same messages, the registration facilitating the enforcement of exclusive rights in the message. Trademarks are source identifiers, not messages, and by facilitating the protection of messages, what is the Court saying about the right of others to convey the same message.
Trademark owners should be wary. Aside from the continued erosion of propriety, the elevation of trademarks to protected speech may make enforcement more difficult against third parties inclined to voice the same or similar message. Already the line between trademark and message on t-shirts is blurred. With the explicit recognition of trademarks are messages, it seems that infringement may be harder to prove, and dilution almost impossible.
To continue its battle against view point discrimination the Supreme Court sacrificed propriety, and by elevating trademarks to protected speech, may have weakened the trademark rights of everyone. One applicant will get his registration, but all trademark owners may be F-U-C-T.
Well perhaps not a 401(k), but a trademark does need a retirement plan. When a business a legacy mark with a new mark, the legacy mark may be deemed abandoned, free for anyone to adopt. To the extent that the legacy mark has residual good will, it may be lost to the owner, and may inure to the usurper. This unsatisfactory result can be avoided with a little (retirement) planning.
First, the owner should avoid any external (or internal) statements that the legacy mark it being dropped, eliminated or abandoned. It is sufficient to direct use of the new mark.
Second, the owner should use both the legacy mark and the new mark on product and in advertising, gradually decreasing the prominence of the legacy mark until customers’ loyalty is transferred to the new mark.
Third, the owner should find a version or model of the product on which to continue to use the mark. Ideally, this use would be continuous, but anniversary or special or limited editions can be enough to maintain rights. It may even be possible to introduce the new mark as a premium brand over the legacy brand.
Fourth, the business should step up its use of the legacy mark in connection with warranty and repair services and replacement parts. Registering the legacy mark for these services and parts will help maintain rights in the legacy mark.
Fifth, feature the legacy mark in company/product line histories in printed materials and on the company’s website.
Make no mistake, the only reason that an usurper would adopt another company’s legacy mark is to take the residual good will and divert business from the legacy brand owner. A few simple steps during re-branding can insure that your legacy mark enjoys a happy retirement.
In Mission Product Holdings, Inc. v. Tempnology, LLC, the Supreme Court held that when a bankrupt trademark licensor rejects the trademark license agreement license (as it is entitled to do under the bankruptcy law) it does not automatically terminate the licensee’s right to use the licensed mark. Under bankruptcy law, the rejection of the license agreement constitutes a breach of the agreement, but, the Supreme Court reasoned, the licensor’s breach does not necessarily terminate the licensee’s continued right to use the mark.
The bankruptcy law (Section 365(n)) protects the licensees of intellectual property from the effects of the rejection of their licenses. However, the bankruptcy statutes defines intellectual property as a (A) trade secret; (B) invention, process, design, or plant protected under title 35; (C) patent application; (D) plant variety; (E) work of authorship protected under title 17; or (F) mask work protected under chapter 9 of title 17. The omission of trademarks from this list led many, apparently including Tempnology, to believe that trademark licensees were not similarly protected.
The Supreme Court disagreed, saying that read as generously as possible to Tempnology, this mash-up of legislative interventions in 365(n) says nothing much of anything about the content of Section 365(g)’s general rule. The Supreme Court said that read less generously, it affirmatively refutes Tempnology’s position, the Court pointing out Congress enacted 365(n), as and when needed, to reinforce or clarify the general rule that contractual rights survive rejection. The Supreme Court concluded that Congress did nothing in adding Section 365(n) to alter the natural reading of Section 365(g)—that rejection and breach have the same results.
Tempnology argued for a special rule for trademarks, claiming that without the right to terminate the license, a bankrupt licensor risks losing the trademark because it cannot afford to exercise the quality control necessary to maintain the trademark. The Supreme Court found that Tempnology’s plea to facilitate trademark licensors’ reorganizations cannot overcome what Sections 365(a) and (g) direct. The Court noted that while the bankruptcy code aims to make reorganizations possible, it does not permit anything and everything that might advance that goal.
The Supreme Court concluded that while a bankrupt licensor has the right to reject the license agreement, this does not terminate the license, it merely terminates the licensor’s obligations under the agreement (which constitutes a breach of the agreement). If such a breach does not effect a termination of the agreement, then the licensee’s right to use the licensed mark continues.
On April 18, 2019, Nespresso USA, Inc.. sued Jones Brothers Coffee Company in the United States District Court for the Southern District of New York [Case 1:19-cv-03449], alleging that Jones Brothers is infringing its trademarks and trade dress in selling coffee capsules compatible with Nespresso’s coffee machines.
More specifically, Nespresso alleges that Jones Brothers’ use of the phrase “Nespresso compatible” on its packing and in is advertising “falsely suggest and/or imply endorsement and/or sponsorship by and/or affiliation with, Nespressso.” [Complaint, Para. 15]. However if in fact Jones Brothers’ capsules are compatible with Nespresso, that seems like a fact that consumers would want to know, and Jones Brothers should be entitled to tell them. Not surprisingly, there is nothing in the Complaint to suggest how Jones Brothers could otherwise convey this information to consumers,. and it will be interesting to see how the line is drawn between Jones Brothers right to provide information about the use of its products, and Nespresso’s right to be protected from competitors confusing its customers.
Nespresso also complains about the shape of Jones Brothers’ capsules, which it describes as “nearly identical replicas of the Nespresso Trade Dress in size, shape colors and appearance” sown to the “‘dimpled’ cone shape that is identical to the iconic feature of Nespresso’s capsule.” [Complaint, 16]. This picture makes Nespresso’s point
However, this shape is similar to the shape of the capsule that Nestle/Nespresso patented in 1979:
It seems that Jones Brothers would have a right to copy technology from an expired patent, but if Jones Brothers’ capsule is really causing actual confusion, should there be a remedy for Nespresso, or should the deal they struck getting the patent be strictly enforced?
This is just the latest instance of balancing intellectual property rights with competition. Intellectual property should never impeded competition, only unfair combination. Where Jones Brothers’ conduct falls is now up to the Southern District of New York to decide.
On February 6, 2019, Eat’n Park Hospitality Group, Inc. sued Eleni’s NYC, Inc., in the Western District of Pennsylvania for infringing Eat’n Park’s registered smiley face trademark [Civil Action No. 2:19-cv-00131-MJH].
Eleni had previously licensed the smiley face from Eat’n Park, and the cookies on its website carry the registered design:
According to the Wikipedia and the Smithsonian Institution, the smiley face was created in 1963 by graphic artist Harvey Ross Ball, as a morale booster for the employees of State Mutual Life Assurance Company of Worcester, Massachusetts. The smiley, with a bright yellow background, dark oval eyes, full smile, and creases at the sides of the mouth, was imprinted on more than fifty million buttons and became familiar around the world.
While Eleni’s cookies appear to bear the registered mark, the question is whether consumers are likely to be confused. Eat’n Park has a federal trademark registration — several in fact — but they still have to prove a likelihood of confusion. Even though Eleni’s cookies use that design the answer may not be so clear, Given the ubiquity of the smilely as a decoration, and the fact that many cookies are decorated, would consumers perceive the smiley as trademark identifying the source or will they simply think it is a pretty cookie?
Given the popularity of the smiley, one would expect that Eat’n Park’s mark is very valuable, but like all trademark owners Eat’n Park needs to make sure that its mark is perceived as a mark and not merely a decoration. For this reason it is good idea for trademark owners to advertise their trademarks in addition to advertising their trademarked products.
Five years ago the internet obsessed over whether a particular dress was blue and black or white and gold.
Today’s color test is for trademark aficionado’s, who are probably already familiar Tiffany’s self-described robin’s-egg blue used on its packaging and catalog covers and registered in the USPTO:
The question for trademark experts is: What color is 7cs Fashion House’s JC logo:
infringing or non-infringing?
While 7Cs Fashion House calls the color teal, Tiffany sees red, believing it to be an infringing shade of their robin’s-egg blue color, and on February 6, 2019, filed Opposition 91246260 to block its registration.
In Royal Crown Company, Inc. v. The Coca-Cola Company, [2016-2375] (June 20, 2018), the Federal Circuit vacated the TTAB’s dismissal of Royal Crown’s opposition to Coca-Cola’s registration of various ZERO marks for soft drinks and sports drinks including the term ZERO.
Noting that Royal Crown did not offer direct consumer evidence (surveys or testimony), nor did it offer dictionary evidence linking ZERO to soft drinks, offering only indirect evidence of competitor use of ZERO, the Board concluded that Royal Crown had failed to demonstrate that ZERO is generic for the genus of goods. On the issue of descriptiveness, the Board found the evidence, including a five year old survey, indicated that ZERO had acquired distinctiveness.
On appeal, the Federal Circuit concluded that the Board erred in its legal framing of
the genericness inquiry in two ways—it failed to examine whether ZERO identified a key aspect of the genus at issue, and it failed to examine how the relevant public understood the brand name at issue when used with the descriptive term ZERO. The Federal Circuit further found that that the Board should have first assessed the level of the marks’ descriptiveness before determining whether Coca-Cola had shown acquired distinctiveness, because absent such a finding, it would not be possible to review whether the evidentiary record can support a finding of acquired distinctiveness.
On genericness the Federal Circuit said the critical issue was whether members of the relevant public primarily use or understand the term sought to be protected to refer to the genus of goods or services in question. The Federal Circuit said that evidence of the public’s understanding of the term may be obtained from any competent source, such as purchaser testimony, consumer surveys, listings in dictionaries, trade journals, newspapers and other publications. The Federal Circuit found the Board’s approach erroneous, asking the wrong question in assessing the alleged genericness
of ZERO. The Federal Circuit said the Board’s approach failed to consider that a term can be generic for a genus of goods or services if the relevant public understands the term to refer to a key aspect of that genus. The test is not just whether the relevant public would use the term to describe the genus, but also whether the relevant public would understand the term to be generic. A term is generic if the relevant public understands the term to refer to part of the claimed genus of goods or services, even
if the public does not understand the term to refer to the broad genus as a whole.
The Federal Circuit found that the Board failed to consider whether the relevant
consuming public would consider the term ZERO to be generic for a subcategory of the claimed genus of beverages i.e., the subcategory of the claimed beverages encompassing the specialty beverage categories of drinks with few or no calories or few or no carbohydrates. The Federal Circuit remanded so that the Board could examine whether the term ZERO, when appended to a beverage mark, refers to a key aspect of the genus. The Court said ZERO need not be equated by the general public with the entire broad genus in order for the term to be generic.
On acquired distinctiveness, the Federal Circuit said that Board erred by failing to first determine exactly what Coca-Cola’s burden was. An applicant’s burden of showing acquired distinctiveness increases with the level of descriptiveness: a more descriptive term requires more evidence of secondary meaning. However the Board did not make any finding as to the degree of descriptiveness conveyed by the term ZERO in the marks and, thus did not assess Coca-Cola’s evidence through an exacting lens.
On May 9, 2018, Josh Berger brought a class action suit against Eden Creamery, complaining that the packaging of its Halo Top ice cream is misleading because the product is actually light ice cream.
The Complaint, with reasoning surpassed only by Sir Vladimir’s detection of witches
Rather than parse the trademark for clues about the product (after all trademarks are not supposed to be descriptive), Mr. Berger could have saved himself, Eden Creamery, and the Federal Courts a lot of time and effort, by simply referencing the giant “280 Calories Per Pint” logo, which might have told him all he needed to know about the product.
Unbelievably, his Complaint argues that the name Halo-Top its is misleading, because:
The was a lot of discussion recently about the episode of NBC’s This is Us, which implicated a faulty switch on a Crockpot® in the death of the family’s beloved patriarch, Jack Pearson. The manufacturers opened a Twitter account to respond to angry fans, and it issued a lengthy statement defending its product and asking NBC for some help to correct the record.
This is probably as good as the manufacturer could do. This unfavorable depiction is not trademark infringement or even dilution. The use, while unfortunate from the trademark owner’s standpoint, is protected by the story tellers first amendment rights. While a disclaimer would be a nice gesture, it is not a legal requirement.
Other trademark owners facing abuse or misuse of their products have similarly found that there is not much legally that the brand owner can do. Several years ago, the Emerson Electric, the manufacturer of Insinkerator waste disposers was upset when the heroine of the TV series Heroes (also by NBC) deliberately put her hand in their waste disposal to demonstrate her recuperative power. Emerson sued to mixed public reaction, and while it did get a concession by NBC to edit the depiction going forward, it eventually dismissed the case.
Many years ago Caterpillar, upset with the use of its bulldozers by the villains in the movie George of the Jungle II to destroy the jungle, sued Disney. However, the suit did not get far. See, Caterpillar Inc. v. Walt Disney Co., 287 F. Supp. 2d 913 (C.D. Ill. 2003). Around that same time, Wham-O, maker of the iconic Slip ‘n’ Slide, sued Paramount Pictures for the misuse of the toy by the title character in the film “Dickie Roberts: Former Child Star,” and didn’t get very far. See, Wham-O, Inc. v. Paramount Pictures Corp., 2003 WL 2300526 (N.D. Cal. 9/29/03).
Trademark protection offers scant protection when bad things happen to good brands. Trademark owners are best off fighting bad percent at the court of public opinion, rather than a court of law.