Immorality, Scandal, and Disparagement at the Trademark Office

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In Matal v, Tam, the Supreme Court affirmed the Court of Appeals for the Federal Circuit  in holding that the 15 USC §1052(a)’s prohibition against the registration of disparaging marks was unconstitutional as a violation of the First Amendment,  15 USC §1052(a) provides:

(a) Consists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute;

While the case before the Supreme Court related to disparaging marks (the same prohibition that caused the Washington Redskins to lose their registrations on REDSKINS), in January in In re Brunetti, the U.S. Patent and Trademark Office told the Federal Circuit that:

Although a court could draw constitutionally significant distinctions between these two parts of [§1052(a)]  we do not believe, given the breadth of the court’s Tam decision and in view of the totality of the court’s reasoning there, that there is any longer a reasonable basis in this court’s law for treating them differently.

So, its now open season on immoral, scandalous, and disparaging trademarks.  It didn’t take long for applicants to take advantage of the decision, with applications being filed later the same day.

These types of filings actually began shortly after the Federal Circuit’s December 22, 2015, decision, and will no doubt increase with the Supreme Court’s decision.

 

 

Ownership of a Trademark Follows Use

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In Lyons v. The American College of Veterinary Sports Medicine and Rehabilitation, [2016-2055](June 8, 2017), the Federal Circuit affirmed the decision of the TTAB cancelling Lyons’ registration of the mark THE AMERICAN COLLEGE OF VETERINARY SPORTS MEDICINE AND REHABILITATION.  Lyons participated in the organization of a committee under the auspices of the  American Veterinary Medical
Association. using the name THE AMERICAN COLLEGE OF VETERINARY SPORTS MEDICINE AND REHABILITATION.  A year after Lyons was dismissed from the committee, she sought and obtained registration of THE AMERICAN COLLEGE OF VETERINARY SPORTS MEDICINE AND REHABILITATION on the Supplemental Register.

The committee petitioned to cancel the Lyon’s registration based on priority of use and Lyons’ fraud in procuring the registration. The cancellation was suspended during the pendency of a civil action between the parties in which Lyons alleged infringement of her registration.  The district court found that the mark had not acquired distinctiveness. but did not cancel the registration.  When the cancellation proceeding resumed, the Board concluded that Lyon’s application was void ab initio because she did not own the mark.

The Federal Circuit said that it was axiomatic in trademark law that ownership of a
mark is predicated on priority of use in commerce.  Thus, the Federal Circuit reasons, registration by one who did not own the mark at the time of filing renders the underlying application void ab initio. The Federal Circuit agreed with the Board that Lyons did not own the mark, and approving the Board’s legal framework for evaluating ownership, which included (1) the parties’ objective intentions or expectations; (2) who the public associates with the mark; and (3) to whom the public looks to stand behind the quality of goods or services offered under the mark.

There are Few Absolutes In Likelihood of Confusion; Apparently Fame isn’t one of Them

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In Joseph Phelps Vineyards, LLC v. Fairmont Holdings, LLC, [2016-1089](May 24, 2017), the Federal Circuit vacated a TTAB decision denying cancellation of Fairmont’s Reg. No. 4213619 on the mark ALEC BRADLEY STAR INSIGNIA for cigars, brought by Joseph Phelps Vineyards, owner of Reg. No. 1123429 on the mark INSIGNIA for wines.

In the eyes of the Federal Circuit, the TTAB’s error was in completely discounting fame as a factor once it determined that the mark was not famous.  As a result of this error, the Board did not properly apply the totality of the circumstances standard, which requires considering all the relevant factors on a scale appropriate to their merits.

Although the TTAB correctly acknowledged that fame for confusion purposes
arises as long as a significant portion of the relevant consuming public recognizes the mark as a source indicator, the TTAB applied a legally incorrect standard in applying
an all-or-nothing measure of “fame,” more akin to dilution analysis than likelihood of confusion analysis.

The Federal Circuit found that the record shows appreciation by consumers and the wine market of Vineyards’ INSIGNIA brand, and concluded that it was error to refuse to accord any “fame” to Vineyards’ INSIGNIA mark. The Federal Circuit concluded that the factor of “fame” warrants reasonable weight, among the totality of the circumstances.

It is not clear from the Opinion what upsets Joseph Phelps Vineyards about Fairmont Holding’s ALEC BRADLEY STAR INSIGNIA mark.  Joseph Phelps Vineyards’ registration already co-exists with a registration on COACH INSIGNIA for wines (Reg. No. 1394292, which is incontestable) and a registration on BAHIA INSIGNIAS (Reg. No. 4,604,938).  Even with fame properly considered as a factor, Joseph Phelps Vineyard may not get the result it is seeking.

 

What’s the Flap Over the Unicorn Frappe?

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On May 3, 2017, Montauk Juice Factory Inc. sued Starbucks Corporation in the Eastern District of New York, [1:17-cv-02678] alleging that Starbuck’s “UNICORN FRAPPUCCINO” infringed its “distinctive and famous” UNICORN LATTE.  Montauk also complained that Starbucks’ Unicorn Frappuccino shares visual similarities to the Unicorn Latte in that both were brightly colored and featured the colors pink and blue prominently.

Montauk claims that it began selling the UNICORN LATTE in December 2016 (although their trademark application claims a first use of October 1, 2016.  Peculiarly, Montauk acknowledges that the Unicorn Latte fits with the current trend of colorful foods—a relatively recent interest, particularly on the Internet, with multi-colored foods, and even specifically identifies UNICORN NOODLES and UNICORN POOP.

So is UNICORN a trademark, or is it simply a trend?  Recipes for UNICORN LATTES and UNICORN FRAPPUCCINOS abound on the internet.  There is UNICORN hot chocolate, UNICORN tea, UNICORN shakes, and UNICORN smoothies, UNICORN toast, UNICORN doughnuts.  While there is plenty of press about Montauk’s UNICORN LATTE, there are plenty of indications that UNICORN is descriptive if not generic, and that UNICORN food and drink are a trend.  Montauk may not even the originator of the trend — Toronto’s CutiePie Cupcakes & Co. has been selling a UNICORN LATTE since last summer.

Can Montauk show that it is likely that consumers will believe there is a connection between UNICORN LATTE and UNICORN FRAPPUCCINO, or is the only connection between the products in the minds of consumers that both are brightly colored, like other UNICORN food and drink?  If in fact Montauk is the owner of UNICORN LATTE, it may be the victim of genericization — a common fate for product innovators whose choice of brand name for a new product becomes the name for the product.  When naming a new product, it behooves the innovator to select both a generic name and a brand name, so that brand is not lost.

The Eagles Sue the Hotel California (Baja) Will No Doubt Take it to the Limit

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The Eagles have sued Hotel California Baja, LLC, in the Central District of California [2:17-cv-03276] for trademark infringement.  Hotel California Baja owns a small hotel in Todos Santos, Mexico that opened in 1950 under the name Hotel California, but subsequently went through a number of name changes over the years.  The Eagles allege that to revitalize the hotel and create a reputation for it,the hotel has promoted a reputed, but false, connection to the Hotel in the famous Eagles song.  The Eagles complain that defendant runs a merchandising operation that manufactures and sells a wide variety of clothing and other merchandise featuring their HOTEL CALIFORNIA mark.  There’s not much chance that the Eagle will Take it Easy on this one.

Studios Fire Back: Fictional Publication Depicted in a Movie is Privileged Expressive Use

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Following up a previous post about the February 2017 lawsuit filed by the Sporting Times against Orion Pictures for depicting a fictional magazine title Sporting Times of the same title in a movie about the life of Bill “Spaceman” Lee, MGM has responded with a Motion to Dismiss.  Defendants argue that the use in the movie was not a trademark use, and in any even any theory of a likelihood of confusion was “too implausible to support costly litigation.”  The defendants also affirmative asserted a First Amendment bar to the Sporting Times claims, and arguing that the test from Rogers v. Grimaldi applies and the Sporting Times claims should be dismissed unless the use of the mark has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, unless the title explicitly misleads as to the source or the content of the work.

The Motion pointed out the burden of getting permission from every brand potentially appearing in a expressive work, such as defendants movies, and concluded:

Happily for filmmakers and their audiences (and for the creators of other expressive works), the Lanham Act does not grant trademark owners such veto power over the content of expressive works.

Non-Trademark Use is a Non-Infringing Use

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In Oaklawn Jockety Club, Inc. v. Kentucky_Downs, LLC, [16-5582] (Sixth Circuit April 19, 2017), the Sixth Circuit affirmed a district court dismissal of plaintiff’s trademark infringement action because defendant’s use of plaintiffs’ trademarks in its electronic horse racing games was not likely to cause confusion.  Although the case was designated “NOT RECOMMENDED FOR PUBLICATION,” it makes an important point about trademark infringement: defendant must use plaintiff’s trademark as a trademark.

The district court found, and the Sixth Circuit agreed, that defendant’s marks in its animated video recreations of actual historic horse races, in order to identify the location of the race, was not a trademark use.

The Sixth Circuit noted that the term “Location” preceding the trademarks sufficiently explains to consumers that the trademarks are being used in a wholly descriptive
manner and does not cause a likelihood of confusion as to the source of the video.  The Sixth Circuit added that the fact that the replay is entirely generic and does not visually depict the plaintiffs’ facilities further supports this conclusion.

Because this was a non-trademark use of plaintiffs’ trademarks, the Sixth Circuit did not have to reach the question whether the fair-use defense applied.  As the Supreme Court said in Prestonettes, Inc. v. Coty, 264 U.S. 359, 368 (1924). “When the mark is used in a way that does not deceive the public we see no such sanctity in the word as to prevent its being used to tell the truth.”

The Skinny on SkinnyPop vs. Metacalfe’s Skinny

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A interesting battle has “popped” up between Amplify Snack Brands, Inc., owner of the SKINNYPOP trademark, and Snyders-Lance, which is preparing to enter the market with METCALFE’S SKINNY POPCORN.  Amplify sued Snyders-Lance in federal court in Texas on April 11.  Amplify accused Snyders-Lance of willful infringement in an obvious attempt to confuse customers.  Meanwhile, Snyders-Lance sued Amplify the same day in North Carolina for a declaration that it is not infringing Amplify’s rights.

Popcorn appears to part of a larger plan by Kettle Foods Ltd. to introduce a whole line fo METCALFE SKINNY products including fruit-based snack food; nut-based snack food; fruit chips, low-fat potato chips, nuts, potato chips, bread, pastry and confectionery made of sugar, cereal bars; cereal-based snack food; corn-based snack food; crackers; rice-based snack food; rice cakes U.S. Application Nos. 87160093, 87160099, 87160107, 87160109, 87160114, 87160123).

Whether SKINNY is capable of identifying source is an open question.  There 116 issued registrations and 69 pending applications on marks including the term “SKINNY” for food products. Only 9 of the registrations disclaim of “skinny,” and only 10 of the applications (including all of  Kettle Foods Ltd.’s applications) disclaim “skinny.”  Lance also points out that there is at least one other SKINNY popcorn already in the market: SKINNYGIRL:

If not descriptive of food, SKINNY is certainly widely used, so whether Amplify’s can show METCALFE’S SKINNY POPCORN infringes SKINNYPOP POPCORN will be interesting. Kettle Foods Ltd. will likely contend, consistent with its disclaimer of “skinny” that its use of skinny is a permitted descriptive use under 15 USC §1115(b)(4).  Amplify reportedly has $200 million in popcorn sales, so this could be a epic battle.  Get a bowl of your favorite popcorn, and pull up a chair.

 

Policing the Trademark Playground and Calling Out Bullies

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The prevailing defendant in Louis Vuitton v, My Other Bag, LLC (blogged about here: Louis Vuitton Left Holding the Bag) in a Motion filed on April 7 in the Southern District of New York (Case 1:14-cv-03419-JMF Document 154) is seeking $802,939.05 in fees and costs for defending Louis Vuitton’s claim that MOB’s parody bag infringed or diluted Louis Vuitton’s rights:

MOB argues that a fee award is justified because Louis Vuitton is a trademark bully.  “Trademark bully” is a term that is being used with increasing frequency.  See Three Stripes and You’re Out.  MOB used the term “bully” at least 13 times in its motion for fees.

Trademark Owners are put in a difficult position.  The failure to aggressively enforce their rights, can allow third party uses that either weaken the mark in a likelihood of confusion analysis, or lessen its fame and distinctiveness in a dilution analysis.  A trademark owner may (rightly) feel forced to take actions that it might otherwise be inclined to tolerate.  And outside of the costs of enforcement, there has been little consequence to bringing such a claim.

An award of attorneys fees and costs in appropriate cases, may be exactly what is needed to tip the scales when enforcement decisions are being made.  It is up to the Southern District of New York to judge the propriety of Louis Vuitton’s enforcement efforts, and decide whether or not the name “bully” is appropriate.

 

You Can’t Fake Confusion; “STEAK” is different from “FRESH”

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The Court in Phelan Holdings, Inc. v. Rare Hospitality Management, Inc., [8:15-CV-2294-T-30TBM) (M.D. Fla. March 27, 2017), granted summary judgement that the slogan “You Can’t Fake Steak” is not confusingly similar to “You Can’t Fake Fresh.”

The Court noted that Phelan’s Pinchers Crab Shacks are bright, open air restaurants, painted in pastel colors. The walls are adorned with beachy, Florida-themed decorations, such as driftwood signs, mounted fish, large oars, and Caribbean artifacts. Phelan registered YOU CAN’T FAKE FRESH with the USPTO.   In contrast, Rare’s LongHorn Steakhouse restaurants are a chain of Western-themed casual steakhouse designed as a Texas-style roadhouse. Rare registered YOU CAN’T FAKE STEAK with the USPTO.

On summary judgment Phelan abandoned its confusion claims, asserting only a reverse reverse confusion theory.  The Court noted that Both marks incorporate the common buzz phrase “You Can’t Fake . . .,” but that the last word of each mark, i.e., Fresh vs. Steak, is completely different with a different meaning.  An important fact for the court appeared to that do not encounter either mark apart from the parties’ respective house mark.  The Court discounted Phelan’s linguistic expert because he focused on the first three words of the mark, and ignored the fact that the words “Fresh” and “Steak” are different, and did not account for the parties use of their house marks in connection with their marks,  The Court also attached a lot of significance to the differences in the parties restaurants.  The Court discounted Phelan’s survey evidence because the survey only tested forward confusion (finding between 13% and 26% confusion) , because the Phalen was asserting reverse confusion, not forward confusion.

Based on the Court’s analysis of the seven factors, Phelan failed to adduce sufficient evidence upon which a reasonable jury could find a likelihood of confusion between YOU CAN’T FAKE FRESH and YOU CAN’T FAKE STEAK.  This was despite Phalen presenting both a linguistic expert and a survey expert.  Apparently you can’t fake confusion.