MVS Filewrapper® Blog: Are Trademarks for Beer Names Becoming a Commodity?

Post by Alex Christian

 

While typically we think of finite resources such as oil and coal as commodities, it could be that the next big commodities are names for craft beers and breweries.  According to a recent NPR story, which can be found here, the craft brewing industry is becoming an increasingly crowded industry with more than 3,000 breweries in the United States. Unfortunately for many craft brewers, the individuals behind naming the brews tend to adopt similar—and in some cases, identical—names and labels for their products.  And although it may be the case that many in the craft brewing industry do not seem to mind sharing similar or identical names for their beers, there still remain significant risks of knowingly adopting and using similar marks to other breweries.

 

The risks involved do not relate solely to future legal battles; rather, the biggest risk may actually be the potential damage confusingly similar trademarks can do to a trademark owner's reputation.  Trademarks are intended to be source identification tools that allow consumers to distinguish product A from product B in the marketplace.  In a crowded industry such as the craft brewing industry, when the marketplace is inundated with hundreds of similar and derivative names for beers, it becomes increasingly difficult for the consumer to identify one particular beer from another. The implication being the trademark for which typically businesses spend significant financial resources to develop and market, fails to serve its very purpose: distinguishing brands in the marketplace.

MVS Filewrapper® Blog: Passing Off and Taking Credit for Architectural Plans

The United States Court of Appeals for the Seventh Circuit has issued a decision in Gensler v. Strabala, overturning a district court’s ruling dismissing a complaint for trademark infringement under §43(a) of the Lanham Act.

Strabala, a former Design Director and architect for the architectural firm Gensler & Associates, formed his own design firm, 2Define Architecture.  The 2Define Architecture website stated that Strabala had designed five projects for which Gensler was the architectural firm of record. Gensler filed suit, contending that this was “reverse passing off” and violated §43(a) of the Lanham Act.  However, the district court dismissed the complaint, ruling that Strabala neither claimed that he built or sold those structures, therefore he could not have violated the statute.

Genseler appealed the dismissal to the Seventh Circuit Court of Appeals.  According to the Seventh Circuit, there are three ways in which an architect’s assertion that he designed the building could be false: “(1) the architect did not have anything to do with the project, never working on the design; (2) The architect worked on the project but overstated his role; (3) The architect worked on the project and contributed some or even all important features, but the project was so complex that no one person bore full responsibility.”  In this case, the Seventh Circuit determined that although Gensler’s complaint did not assert one of these three situations, the complaint could be interpreted to mean that big projects, such as those at issue in this case, require big teams and that Gensler insists on institutional rather than personal credit. Furthermore, the court reasoned that as both firms specialize in large projects with sophisticated clients, and such clients would not be misled by such statements, the purpose of the complaint is to conceal that an architect has left the firm.

Ultimately the court believed that Gensler's allegations were not sufficient to warrant dismissal under Rule 12(b)(6), and the district court's dismissal was not proper before the parties had joined issue on vital topics.

The full opinion is available here.

MVS Filewrapper® Blog: USPTO Cancels Washington, D.C. NFL Franchise's Trademark Registrations

The United States Patent and Trademark Office issued a decision yesterday cancelling six federal trademark registrations owned by the Washington, D.C. National Football League franchise.  The cancellation proceeding was brought by five Native American petitioners on the basis that the marks disparage persons or bring them into contempt or disrepute in violation of 15 U.S.C. § 1052(a).  The Trademark Trial and Appeal Board (TTAB) panel of three Administrative Trademark Judges sided with the petitioners, cancelling all six of the challenged registrations. 

 

The registrations in question were all obtained between 1967 and 1990 on behalf of the Washington NFL franchise, and are all word marks.  The registrations were previously challenged in 1992 in a similar proceeding that also challenged the team logos without the word marks.  In the prior proceeding the TTAB held that the marks were disparaging to Native Americans when registered and ordered the registrations canceled.  The Washington NFL franchise appealed the decision in the prior proceeding to the U.S. District Court for the District of Columbia, who reversed the decision as barred by the doctrine of laches. 

 

The TTAB panel found that the five petitioners had standing to bring the cancellation proceeding, and were not barred from doing so by the doctrine of laches. The TTAB panel further found that the alleged honorable intent and manner of use of the term did not contribute to the determination of whether the marks were disparaging, but rather the sole issue was whether a substantial composite of the referenced group found the term to be disparaging in the context of the Washington NFL franchise during the time period when the registrations were obtained (1967-1990). 

 

The TTAB consulted evidence that reflected the sentiments of Native Americans, including a resolution passed by the National Congress of American Indians, various reports and testimony, newspaper articles, official records, and letters, and concluded that the substantial evidence may have disparaged a substantial composite of Native Americans at the times of the registrations.

 

Administrative Trademark Judge Bergsman dissented in the opinion on the basis that the petitioners had not shown by a preponderance of the evidence that a substantial composite of Native Americans found the marks to be disparaging in connection with the Washington NFL franchise during the relevant time frame.

 

The full decision and additional information are available here.  

MVS Filewrapper® Blog: 2014 Supreme Court Cases Relating to Intellectual Property

On January 10, 2014 the Supreme Court agreed to review a variety of intellectual property cases in the upcoming session, including two patent cases, a copyright case, and a trademark case (including Lanham Act claim).  A brief overview of these cases is provided and more detail will be available once decisions are entered by the Court.

Limelight Networks, Inc. v. Akamai Technologies, Inc. (U.S., No. 12-786.)

Question Presented to the Supreme Court: Whether the Federal Circuit erred in holding that a defendant may be held liable for inducing patent infringement under 35 U.S.C. § 271(b) even though no one has committed direct infringement under § 271(a).

The Federal Circuit dismissed the “single-entity” rule for finding induced infringement of a method/process claim, finding that steps taken by multiple parties can result in induced infringement. The Federal Circuit stated, “To be clear, we hold that all the steps of a claimed method must be performed in order to find induced infringement, but that it is not necessary to prove that all the steps were committed by a single entity.” If the Supreme Court upholds the Federal Circuit’s ruling, a patentee has increased opportunity to assert induced infringement for method/process claims in the marketplace.

Nautilus, Inc., v. Biosig Instruments, Inc. (U.S., No. 13-369)

Question Presented to the Supreme Court: Does the Federal Circuit’s acceptance of ambiguous patent claims with multiple reasonable interpretations—so long as the ambiguity is not “insoluble” by a court—defeat the statutory requirement of particular and distinct patent claiming? Does the presumption of validity dilute the requirement of particular and distinct patent claiming?

The Federal Circuit reversed a district court decision that a patent claim to a heart rate monitor was invalid for indefiniteness as a matter of law because of its use of the claim term “spaced relationship” in describing the positioning of two electrodes with respect to each other. The Court held that this claim term was not one that is “insolubly ambiguous” when the intrinsic evidence is considered from the perspective of a person of skill in the art. It considered the functionality of the claimed monitor, as described in the specification, as did the USPTO when the claim was under reexamination. “[T]he claims provide inherent parameters sufficient for a skilled artisan to understand the bounds of ‘spaced relationship.’” Judge Schall concurred in the result but would have used a more narrow analysis, explaining that he would not have used the functional limitation to address the definiteness issue.

 

POM Wonderful LLC v. The Coca-Cola Company, U.S. (No. 12-761)

Question Presented to the Supreme Court: Whether the court of appeals erred in holding that a private party cannot bring a Lanham Act claim challenging a product label regulated under the Food, Drug, and Cosmetic Act.

The case arising out of the 9th Circuit resulted in affirming judgment in favor of Coca-Cola, finding that POM's Lanham Act challenge to Coca-Cola’s “Pomegranate Blueberry” name was barred under the Food Drug and Cosmetic Act (FDCA).  Applicability of Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a) (authorizing actions of false/misleading description of goods), The FDCA and/or state law claims will be addressed.

American Broadcasting Companies, Inc. v. Aereo, Inc. (U.S., No. 13-461)

Question Presented to the Supreme Court: Does a company “publicly perform” a copyrighted television program when it retransmits a broadcast of that program to thousands of paid subscribers over the Internet?

The Second Circuit denied reviewal of a panel decision that online streaming of TV programs to individual subscribers is not an infringing public performance. The panel found that the creation of a copy of a broadcast that is transmitted to individual subscribes failed to establish infringement as streaming “to the public.”

MVS Filewrapper® Blog: Flawed Evidence Undercuts "Charbucks" Trademark Suit

In Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., the U.S. Court of Appeals for the Second Circuit affirmed a district court’s decision denying injunctive relief in Starbucks’ trademark case against Black Bear Micro Roastery over Black Bear’s use of “Charbucks” for coffee. 

 

Starbucks sued Black Bear in 2001, alleging, among other things, trademark dilution in violation of 15 U.S.C. §§ 1125(c), 1127.  In December 2005 the district court ruled in favor of Black Bear and dismissed Starbucks’ complaint.  Starbucks appealed this original decision, but while the appeal was pending, Congress passed the Trademark Dilution Revision Act of 2006 (“TDRA”), which amended portions of the federal trademark law relevant to the case, resulting in the case being remanded.   The district court again ruled in favor of Black Bear, and Starbucks again appealed.  On appeal, the Second Circuit remanded again, instructing the district court to reconsider Starbucks dilution claim based on its interpretation of the TDRA provisions.  Once again, the district court found in favor of Black Bear, and once again Starbucks appealed.

On appeal, the Second Circuit made its own conclusions regarding the elements of Starbucks’ dilution case, under the TDRA.  The appellate court refused to revisit its previous conclusion that the “Charbucks” mark is only minimally similar to Starbucks famous mark.  The court also rejected Starbuck’s arguments that Black Bear’s admitted intent to create an association raises a strong presumption of actual association, and that Starbuck’s proffered survey evidence proved a high degree of association.  The court then conducted its own weighing of the factors, and concluded that—although four of the six factors favored Starbucks—the overall determination based on the weight afforded each factor favored a finding that there was not a likelihood of dilution. The court concluded that what ultimately tipped the balance was that Starbucks meet its burden due to the combination of fundamentally flawed survey evidence and minimal similarity of the marks.

The full court opinion is available here.  

MVS Filewrapper® Blog: New and Useful - February 21, 2013

·         In U.S. Polo Assoc., Inc. v. PRL USA Holdings, Inc., the Second Circuit Court of Appeals found that the natural zone of expansion doctrine did not permit the United States Polo Association (“USPA”) to expand its offerings into a line of fragrances and affirmed the district court’s entry of a permanent injunction prohibiting such use.  The USPA filed a declaratory judgment to approve use of its Double Horseman mark, accompanied by the words “U.S. POLO ASSN.,” “USPA,” and/or “1890,” in the sale of men’s fragrances.  PRL counterclaimed, seeking entry of a permanent injunction precluding such use—which the district court granted.  USPA’s argument was centered on the, so called, natural zone of expansion doctrine.  USPA argued that its history of selling branded apparel provided it with the right to expand into related markets, i.e., apparel sales give rise to the right to expand into fragrances.  The district court gave little weight to USPA’s survey and found that PRL’s survey gave strong evidence of a likelihood of confusion.  The Second Circuit found that the district court’s holdings regarding the survey evidence did not abuse its discretion and that the previous litigation and USPA’s history did not support USPA’s argued natural right to expand.

·         In Function Media, L.L.C. v. Google, Inc., the Federal Circuit Court of Appeals held that the denial of a pre-trial motion for summary judgment of non-infringement is not sufficient to show that the district court delegated claim construction to the jury.  Function Media (“FM”) sued Google for infringement of three patents directed at “facilitate[ing] advertising on multiple advertising outlets such as newspapers and websites.”  Slip op. at p. 2.  The district court held that one patent was invalid for being indefinite “because the specification did not disclose sufficient structure for its sole independent claim’s means plus function term ‘means for transmitting.’”  Id. at pp. 5–6 (citations omitted).  A jury found the asserted claims in other two patents invalid and not infringed.  FM moved for judgment as a matter of law (“JMOL”) that the claims were not invalid, which the district court granted with respect to four claims.  This did not alter the jury verdict of non-infringement. 

FM appealed on a number of grounds, including an assertion that the district court gave the claim interpretation to the jury.  The argument was based on the fact that the district court denied Google’s motion for summary judgment of non-infringement. FM argued that the denial of summary judgment demonstrated that there were unresolved issues regarding claim scope, which were subsequently left to the jury rather than construed by the court.  The Federal Circuit did not agree that the district court improperly gave the claim interpretation to the jury, the Federal Circuit stated, “We hold that the denial of a pre-trial motion for summary judgment of non-infringement does not, by itself, show that the district court delegated claim construction to the jury.  This is especially true where, as here, the jury was instructed to apply the district court's claim constructions.”  Id. at pp. 21–22. 

·         In Cephalon, Inc. v. Watson Pharma., Inc. , the Federal Circuit Court of Appeals reversed a district court’s holding of invalidity for lack of enablement stating, “Watson failed as a matter of law to show with clear and convincing evidence that Cephalon’s patents require undue experimentation to practice the invention.”  Slip op. at p. 2.  Throughout the discussion of enablement, the Federal Circuit highlighted that the burden is on Watson to show lack of enablement—undue experimentation—and to do so by clear and convincing evidence.  The district court’s analysis was that, “the disclosures lacked teachings directed to formulating and co-administering two separate dosage forms . . . to achieve an effervescent reaction.  The lack of disclosure of such methods of co-administration would, according to the court, necessitate undue experimentation to practice the invention.”  Id. at p. 11 (citations omitted).  Watson merely provided “[u] nsubstantiated statements indicating that experimentation would be ‘difficult’ and ‘complicated.’”  Id. at pp. 15–16.  The Federal Circuit found that these statements did not meet the standard of clear and convincing evidence to establish undue burden as opposed to reasonable experimentation.  As such, the Federal Circuit reversed the district court’s holding of invalidity and remanded.

·         The United States Patent and Trademark Office published the final rules and guidelines governing First-Inventor-to-File.  (http://www.uspto.gov/news/pr/2013/13-10.jsp)  There were two separate Federal Register publications and each is briefly discussed below.  A more thorough discussion of each is forthcoming.

o   Changes to Implement First Inventor to File Provisions of Leahy-Smith America Invents Act

This publication sets forth the changes that will be necessary to implement the First-Inventor-to-File standards.  It addresses changes regarding each of the following:

§  The addition of definitions in the AIA to the rules of practice;

§  The submission of affidavits or declarations regarding:  disclosures in priority disputes under the first-to-file standards and prior public disclosures;

§  Standards regarding a U.S. Patent or Published Applications having a prior art effect as of the filing date of a foreign priority application;

§  Elimination of the provisions regarding statutory invention registrations; and

§  Adoption of requirements for nonprovisional applications filed on or after March 16, 2013, that claim priority to or the benefit of the filing date of an application filed prior to March 16, 2013.

o   Examination Guidelines for Implementing First Inventor to File Provisions of Leahy-Smith America Invents Act

This publication sets forth the changes the changes to the examination guidelines under the First-Inventor-to-File standard.  The publication is also meant to clarify and respond to questions provided during the public comment period regarding whether there is a requirement that the mode of disclosure by an inventor or joint inventor be the same as the mode of disclosure of an intervening disclosure.

Supreme Court: NFL collective licensing of trademarks not immune from Section 1 antitrust scrutiny

Monday the Supreme Court unanimously held the NFL's practice of collectively licensing the trademarks of all 32 individual teams is not immune from antitrust scrutiny under Section 1 of the Sherman Act.  The NFL argued that because the marks are all licensed through a single entity, NFL Properties, there was no "contract, combination, . . . or conspiracy" under § 1, and therefore there could be no antitrust problem.

The Court disagreed.  The Court first observed the question of whether there is a "single enterprise" is not dependent on the specific legal structure of the entities.  As stated by the Court (internal citations omitted):

The relevant inquiry, therefore, is whether there is a "contract, combination . . . or conspiracy" amongst "separate economic actors pursuing separate economic interests," such that the agreement "deprives the marketplace of independent centers of decisionmaking," and therefore of "diversity of entrepreneurial interests," and thus of actual or potential competition.

Applying this framework, the Court held the existence of NFL Properties was not sufficient to prevent a "contract, combination . . . or conspiracy" and therefore avoid § 1 scrutiny.  The teams are "sparately controlled, potential competitors with economic interests that are distinct from NFLP's financial well-being." 

Despite holding the NFL's actions were subject to review under § 1, the Court did not pass on the merits, and noted some aspects of the NFL may provide a sufficient justification of its licensing practices under the Rule of Reason.  Ultimately, it will be up to the district court to address the merits of the case and determine whether there is a § 1 violation.

Click below for more detail of American Needle, Inc. v. National Football League and links to media coverage of the case.

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Today's eCommerce lesson: There's no upside to using others' trademarks in your website meta tags

Those who have a passing familiarity with website design are probably familiar with the concept of meta tags.  Meta tags are pieces of data included in the HTML code of a webpage that provide information regarding the content of the page.  You can view the code of a webpage you are visiting by clicking the "view" menu and, in IE, selecting "source," or in Firefox, selecting "page source."

Keyword meta tags have been used frequently in the practice of SEO, or search engine optimization.  This essentially is an industry designed to get a webpage to show up higher in search results for various key terms and phrases in order to make it easier for the website to be found by customers.  SEO practices frequently included loading the meta tags of a site with numerous keywords and phrases in an effort to improve a site's search performance for those terms.

Click below for a discussion of what happens when trademarks are used in connection with this practice, and why website owners would be best served avoiding such use.

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Second Circuit limits 1-800 Contacts; keyword advertising can be use in commerce

In a recent decision, the Second Circuit reversed a district court's grant of a motion to dismiss in a trademark infringement case.  The district court, relying on the Second Circuit's 2005 decision in 1-800 Contacts, Inc. v. WhenU.com, Inc., held Google's use of its Adwords and Keyword Suggestion Tool to cause advertising to appear when certain trademarked words and phrases are searched did not constitute a "use in commerce" as defined in § 1127 and required for a claim of trademark infringement under § 1114.

On appeal, the Second Circuit reversed, holding this practice did constitute a use in commerce.  The court distinguished the 1-800 Contacts case, observing in that case, the advertisements were in response to visiting a website, not the entry of a trademark.  Further, in that case, advertisers could not "purchase" a competitors keyword, so even if an advertiser wanted its ads to appear when a user visited a competitor's site, the defendant did not offer such a service.

In contrast, here Google not only keys the advertisements to the trademark itself (rather than as a result of visiting a website), but also permits anyone to pay to have its advertisements shown when a trademark is searched.  The Keyword Suggestion Tool will also suggest that advertisers key their advertisments to trademarked terms.  Based on these allegations (taken as true in the context of Google's motion to dismiss), the Second Circuit held there was a use in commerce, and reversed the district court's dismissal of the case.

More detail of Rescuecom Corp. v. Google Inc. after the jump.

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Ninth Circuit: Trademark claim against tribal corporation does not confer tribal court jurisdiction

In a recent decision, the Ninth Circuit reversed a district court's grant of a motion to stay federal trademark claims against Indian tribal defendants pending a determination of jurisdiction by a tribal court.  The trademark claims were for alleged passing off of cigarettes on the Internet, on the reservation of another tribe, and elsewhere.  The district court ruled that there was at least a colorable claim to tribal jurisdiction under Supreme Court precedent and granted a stay of federal proceedings pending a determination of jurisdiction by the tribal court.

The Ninth Circuit reversed, holding there was not a colorable claim of jurisdiction in tribal court insofar as it implicated the plaintiff's federal trademark claim against the tribal defendants and its principals, members of the Yakama Tribe.  Accordingly, allowing exhaustion of tribal remedies would serve no purpose other than delay.  As a result, the court reversed the district court's decision and remanded for the case to proceed.

More on Philip Morris USA, Inc. v. King Mountain Tobacco Co. after the jump.

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