Endless Litigation

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Bruce Brown Films, LLC, producer of the 1966 classic surfer film Endless Summer has sued Nike and assorted others for Federal Trademark Infringement, Federal Unfair Competition, Federal Trademark Dilution, Common Law Trademark for using the term Endless Summer in a marketing campaign.

Say . . . are those the new shoes from that movie from 1966?

The Nike display certainly uses the phrase “endless summer” but is not as a brand for its shoes. It is difficult to believe that anyone seeing the display believes that the shoes are somehow connected to the 1966 movie.

Nike did not do itself any favors by selecting artwork “inspired” buy the movie poster:

Section of Nike’s marketing materials (left) compared to a section of the Endless Summer movie poster (right).

However while someone might confuse the source of Nike’s artwork, would someone really going to confuse the source of Nike’s shoes?

Bruce Brown Films, LLC holds a trademark registration on ENDLESS SUMMER for athletic shoes:

But Nike’s use of endless summer is to evoke a common feeling, not identify the source of Nike shoes. it will be interesting to see how the case develops.

Oh Yes You Are.

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On March 26 Adidas prevailed on Summary Judgment in a trademark infringement suit alleging that its use of “You’re Never Done” infringed U.S. Reg. No. 4,928,298 on YOU’RE NEVER DONE for a variety of products including athletic shoes.

Plaintiff’s Reg. No. 4,928,298.

The court held that plaintiff did not use the mark in commerce before defendant. The parties did not dispute that Plaintiff did not make any product sales, because potential customers could not do so through plaintiff’s website until after suit was filed. Plaintiff tried to rely on non-sales activity, such as purchasing the domain names, establishing the website, and ordering products bearing the marks. However, the district court held that these activities, taken together, reflect “mere preparation to use a term as a trademark,” rather than actual use.

Plaintiff’s specimen showing the mark on products that weren’t actually on sale.

Ultimately, the Court found that Plaintiff’s registration on the YOU’RE NEVER DONE was void ab initio. The Court then turned to the question of whether plaintiff had common law rights in YOU”RE NEVER DONE

The court found that plaintiff did not show that he used the marks in commerce such that he is entitled to common law rights in them. Just as the Court found with respect to the plaintiff’s registration, Plaintiff’s non-sales activity relating to YOU’RE NEVER DONE reflects “mere preparation” rather than actual use. The Court found that Adidas started its campaign in March 2018 while plaintiff conceded its actual use did not begin until October 2019. Accordingly, even if plaintiff had “used” the mark in commerce, his alleged use postdates Defendant’s use, thus depriving him of any common law right in the marks.

The Court granted summary judgment in favor of defendant on the Lanham Act, and on plaintiff’s state law claims as well..

Pocket Stitching Trademark is a Pain in Walmart’s A**

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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.

Opportune or Opportunistic?

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The trademark register is like the rings on a tree — revealing over time what is on the minds of the public. This is once again proved in the context of the Covid -19 pandemic. Just four days after the first reported case of Covid-19 in the United States, a U.S. Trademark application was filed for FLU MD for dietary and nutritional supplements. This may even have been coincidental, but it was soon filed by applications on WUHAN VAX, FIGHT THE FLU KIT, CORONAVIRUS SURVIVAL GUIDE, COVID-19 VAX, and CORONABLOK.

By the time of the first Covid-19 death in the United States on February 29, 2020, at least 20 applications apparently related to Covid-19 had been filed. Since February 29, there have been an additional 11 filings, including an applications on COVID 19 for t-shirts and I SURVIVED COVID 19 for clothing.

It seems even a pandemic can’t keep a good market campaign down.

  Serial Number Mark Filing Date Representative Goods
1 88771488 FLU MD January 23, 2020 Dietary and nutritional supplements
2 88774489 WUHAN VAX January 27, 2020 Vaccines, etc.
3 88774506 WUHAN MVAX January 27, 2020 Vaccines, etc.
4 88774522 WUHAN CORONA VAX January 27, 2020 Vaccines, etc.
5 88774534 WUHAN CORONA MVAX January 27, 2020 Vaccines, etc.
6 88777531 FLUDEMIC January 29, 2020 Downloadable software and mobile application for providing information relating to infectious diseases, flu outbreaks and pandemics, immunization information and locations of clinics and health facilities
7 88780060 FIGHT THE FLU KIT January 31, 2020 Disinfecting handwash;etc.
8 88781934 CORONAVAX February 1, 2020 Vaccines
9 88783939 CORONAVIRUS SURVIVAL GUIDE February 4, 2020 Magazines in the field of survival, protection, medicine and pandemics
10 88784020 ESPEROFLU February 4, 2020 Vaccines; etc.
11 88790444 CORONAVIRUS February 9, 2020 Prerecorded audio cassettes featuring music and record albums
12 88792162 FLU ARMOUR February 11, 2020 Online retail store services featuring hazardous material body covers
13 88792612 COVID-19 VAX February 11, 2020 Vaccines
14 88800630 CORONA-V February 18, 2020 Dietary supplement drink mixes
15 88805686 FLU-TONE February 21, 2020 Homeopathic supplements
16 88812499 DELEFLU February 27, 2020 Apparatus for disinfecting water
17 88812822 CORONABLOK February 27, 2020 Vaccines
18 88814254 VIRUS POLICE February 28, 2020 Disinfecting wipes; disinfectant sprays; disinfectants; disinfecting handwash; disinfectant soap
19 88814615 THE CORONA YOU WANT February 28, 2020 Liquor and liqueur beverages, namely, spirits and malt beverage
20 88815650 FLUTEA February 28, 2020 Herb teas for medicinal purposes;
21 88816220 ANTIVIRUS-5 March 1, 2020 Chemical additives for use in the manufacture of cosmetics
22 88816317 VIRUSITEA March 1, 2020 Herbal teas for medicinal purposes
23 88818961 FIGHT THE VIRUS March 3, 2020 Cough drops;etc.
24 88822405 CORONAVIRUSRX March 5, 2020 Respirators for artificial respiration; Fever thermometers
25 88823821 VIRUSHIELD March 6, 2020 Masks for use by medical personnel
26 88824831 ANTIVIRUS PRO March 6, 2020 Dietary and nutritional supplements for IMMUNE SUPPORT
27 88826872 COVID 19
March 9, 2020   		T-shirts
28 88827103 I SURVIVED COVID-19
March 9, 2020   		Clothing, etc.
29 88827108 WE CURED COVID-19
March 9, 2020   		Clothing, etc.
30 88827109 TOGETHER WE SURVIVED COVID-19 March 9, 2020 Clothing, etc.
31 88827271 CORONAKIT March 9, 2020 First aid kits

One Applicant Gets his Registration, but all Trademark Owners may be F-U-C-T

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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.

Does Your Trademark Have 401(k)?

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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.

Trademark Licensees Keep Their Rights When Their Bankrupt Licensors Reject the Licenses

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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.

Wake up and Smell the Coffee — Competing Rights in selling “Compatible” Products

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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 compatible” — consumer information or trademark infringement?

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.

Use in Commerce for Infringement is Different than Use in Commerce for Registration

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In Versatop Support Systems, LLC v. Georgia Expo, Inc., [2018-1208](April 19, 2019), the Federal Circuit reversed the district court’s finding that defendant’s advertising using plaintiff’s PIPE & DRAPE 2.0™ and 2.0™ trademarks did not constitute an infringement because advertising did not constitute a use in commerce.

Federal trademark infringement requires that the infringing mark be used in commerce. Relying on the definition of use in commerce in 15 USC 1127, which requires that the mark be placed on goods or containers, the district court concluded that defendant’s use of plaintiff’s marks in these advertisements:

did not constitute infringement because the plaintiff’s marks were not actually applied to products.

The Federal Circuit made quick work of this, first pointing out that the legislative history for the use in commerce definition expressly contemplated that it did not apply to infringement: “Clearly, how-ever, use of any type will continue to be considered in an infringement action.” The Federal Circuit noted that the Ninth Circuit has recognized the distinction between “use in commerce” as a requirement for federal trademark registration—as defined in Section 1127—and infringing uses of a mark. Treatises, such as McCarthy on Trademarks and Unfair Competition likewise recognizes that Section 1127 “defines the kinds of ‘use’ needed to acquire registerable trademark rights—not to infringe them.”

The Federal Circuit concluded that contrary to this precedent, the district court in this case incorrectly applied the definition of “use in commerce” that is included in the statute for purposes of trademark registration, instructing “[t]his definition does not apply to trademark infringement.”

Turning to the likelihood of confusion, the Federal Circuit found ample evidence infringement, so it not only reversed summary judgment, but entered judgment in favor of plaintiff.

A Fine Specimen of a Mark

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In In re Siny Corp., [2018-1077] (January 14, 2019, April 10, 2019), the Federal Circuit affirmed the TTAB’s decision affirming the Examiner’s refusal to register CASALANA because the applicant failed to provide an acceptable specimen of use.

The issue on appeal was whether Siny’s webpage specimen qualified as a “display associated with the goods” under the Lanham Act. The Federal Circuit began its analysis noting that mere advertising is not enough to qualify as such a display. The Federal Circuit disagreed that the TTAB applied improperly rigid requirements, noting that the Board carefully considered the webpage’s contents and determined, on the record before it, that the specimen did not cross the line from mere advertising to an acceptable display associated with the goods.

In particular the Board relied upon the absence of information essential to a purchasing decision, such as a price or or range of prices for the goods, the minimum quantities one may order, accepted methods of payment, or how the goods would be shipped. The Board noted that “if virtually all important aspects of the transaction must be determined from information extraneous to the web page, then the web page is not a point of sale.” The Board further noted the absence of any evidence (as opposed to attorney argument) of how sales are actually made—e.g., documentation or verified statements from knowledgeable personnel as to what happens and how.

The best trademark specimens are, of course, pictures showing the mark actually applied to the product, or to the packages for the product, when these are not available, point of purchase displays, including catalogs and web pages may do, provided they really at the point of purchase and not mere advertising. The only time an advertisement would be an acceptable specimen is to show use of a service mark.

Posted in Use