Hank Rearden – Trademark rights to a fictional company and character

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In Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190 (9th Cir. 2012), two companies, both inspired by the Hank Rearden character in Ayn Rand’s novel, Atlas Shrugged, fought over the right to use the Rearden name as a trademark.    The Plaintiff was a technology incubator and artistic project production company and the defendant was a web based business-to-business platform.

Among several issues on appeal, the defendant Rearden Commerce, argued that the plaintiff, Rearden LLC failed to use the “Rearden” mark in commerce prior to 2005 because up until that time the technology plaintiff Rearden LLC was “incubating” was primarily in-house business developed by plaintiff’s owner, Steve Perlman.

In analyzing this issue, the Ninth Circuit Court of Appeals, first set out the statutory test for use in commerce codified in the Lanham Act.  That test states,

For purposes of this chapter, a mark shall be deemed to be in use in commerce—

(1) on goods when—

(A) it is placed in any manner on the goods or their containers or the displays*1204 associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and

(B) the goods are sold or transported in commerce, and

(2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

The court noted that the specific statutory language regarding service marks requires that two elements be met: (1) the mark must be displayed in the sale or advertising of services and (2) services must actually be rendered under the mark in commerce.  The court noted that the Ninth Circuit generally follows the “totality of the circumstances” approach when determining whether the two use in commerce tests have been met.  Under the totality of the circumstances test the court looks at both the adoption of the mark and public use of the mark.

As we explained in Chance v. Pac-Tel Teletrac Inc., 242 F.3d 1151 (9th Cir. 2001):

In applying [the “totality of the circumstances”] approach, the district courts should be guided in their consideration of non-sales activities by factors we have discussed, such as the genuineness and commercial character of the activity, the determination of whether the mark was sufficiently public to identify or distinguish the marked service in an appropriate segment of the public mind as those of the holder of the mark, the scope of the non-sales activity relative to what would be a commercially reasonable attempt to market the service, the degree of ongoing activity of the holder to conduct the business using the mark, the amount of business transacted, and other similar factors which might distinguish whether a service has actually been “rendered in commerce.”

In reviewing the evidence before it, the court stated that if it turns out that the defendant’s allegations are true– i.e. that plaintiff has only incubated services on behalf of plaintiff’s owner, then plaintiff would not be able to meet the use in commerce requirement.

If Appellants have only ever incubated new ventures started by Perlman and have never provided or even offered their incubation services to outsiders, their purported incubation business would fail to meet either element of the “use in commerce” requirement. In other words, “[i]f the Rearden entities merely use the name amongst themselves,” Rearden I, 597 F.Supp.2d at 1018, they would fail to show use in a way sufficiently public in nature to identify or distinguish the services in an appropriate segment of the public mind, see, e.g., Brookfield, 174 F.3d at 1052.

The court however, determined that there was not sufficient evidence in the record to make this determination, pointing to several pieces of evidence suggesting that plaintiff had worked with outside entities prior to 2005, including providing motion capture services to a 2001 movie project for Cinemax and HD Editing Services with Electronic Arts.

The Ninth Circuit Court of Appeals therefore concluded that there were genuine issues of material fact with respect to when plaintiff first used the Rearden mark in commerce.  The court noted, however, that simply because it found enough scant evidence for the plaintiff to avoid summary judgment, this was far from dispositive on the issue.  In fact, it went out of its way to state that in its assessment a reasonable finder of fact would likely not find in favor of plaintiff.

In the end, we do not believe that a reasonable finder of fact would be required to find in favor of Appellants with respect to the “use in commerce” requirement. In particular, we note that both Rearden Commerce as well as the District Court do raise some reasonable points in Rearden Commerce’s favor. For instance, we have already mentioned the District Court’s assertion that Appellants have only ever provided incubation services to Perlman himself and that no one has actually paid them to have their ideas incubated.

. . .

Nevertheless, this Court is not currently sitting as the finder of fact at this stage of the proceeding. We instead are confronted with motions for summary judgment implicating a highly fact-specific “totality of the circumstances” inquiry as well as the generally applicable requirement to view all of the evidence in the light most favorable to the non-moving party. Given the record now before us, we conclude that genuine issues of material fact preclude summary judgment in favor of Rearden Commerce on “use in commerce” grounds.

The Court therefore remanded this issue (along with several others) back to the district court for further proceedings.

Maker’s Mark Locks Up Dripping Red Wax as a Trade Dress for Alcohol

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In Maker’s Mark Distillery, Inc. v. Diageo North America, Inc.,  ___ F.3d. ___ (6th Cir. 2012), Marker’s Mark sued Jose Cuervo for trade dress infringement for including a red wax seal on its Reserva de la Familia tequila bottles.  The Sixth Circuit affirmed the district court’s ruling that Maker’s Mark’s registered trademark consisting of  a red dripping wax seal was infringed by Jose Cuervo.

Maker’s Mark has used its distinctive red dripping wax trade dress since 1958.  In 2001, Jose Cuervo decided to follow suit and began using a similar red dripping wax to accent its Reserva de la Famalia premium brand tequila.  In 2003 Maker’s Mark sued Cuevro.  After a bench trial, the district court found the red dripping wax of Maker’s Mark a valid trademark and held that Cuevero had infringed the trademark.

On appeal, Jose Cuervo argued that the red dripping wax was “aesthetically functional” and therefore not protectable as a trademark.

Cuervo appeals only the district court’s ruling as to aesthetic functionality, arguing that the red dripping wax seal is aesthetically functional, and therefore the mark is not enforceable. The Supreme Court has discussed the concept of aesthetic functionality in dicta, noting that “[i]t is proper to inquire into a significant non-reputation-related disadvantage in cases of [aesthetic] functionality.” TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 33 (2001) (internal quotation marks omitted). We have interpreted this dicta to propose that, “where an aesthetic feature (like color), serves a significant function . . . courts should examine whether the exclusive use of that feature by one supplier would interfere with legitimate competition.” Antioch Co. v. W. Tramming Corp., 347 F.3d 150, 155 (6th Cir. 2003).

The Court noted that in the Sixth Circuit there are two different tests for aesthetic functionality, “comparable alternatives” and “effective competition.”

The test for comparable alternatives asks whether trade-dress protection of certain features would nevertheless leave a variety of comparable alternative features that competitors may use to compete in the market. If such alternatives do not exist, the feature is functional; but if such alternatives do exist, then the feature is not functional . . . . The effective competition test asks . . . whether trade dress protection for a product’s feature would hinder the ability of another manufacturer to compete effectively in the market for the product. If such hindrance is probable, then the feature is functional and unsuitable for protection. If the feature is not a likely impediment to market competition, then the feature is nonfunctional and may receive trademark protection.

The Court held that under either test Cuervo’s appeal failed.  Regarding the “comparable alternatives” test, the court noted the district court’s finding that there is more than one way to seal a bottle with wax to make it look appealing.  Regarding the “effective competition” test, the Court noted the District Court’s finding that “red wax is not the only pleasing color of wax.”  The Court of Appeals held that the District Court’s findings were not clearly erroneous and therefore upheld the appeal.

The Court seemed to have a fondness for bourbon, spending considerable time in the opinion discussing its history which began with Dr. James Crow’s original formulation and the history of the name ‘bourbon.”

The name “bourbon” itself is easier to trace: one of the original nine counties of Kentucky was Bourbon County, WILLKIE, supra, at 20, named in honor of the French royal family. Charles K. Cowdery, How Bourbon Whiskey Really Got Its Famous Name, BOURBON COUNTRY READER, July 1996. “[Kentucky] whiskey was shipped from Limestone, a riverside port in Bourbon County,” down the Ohio river to the Mississippi, bound for New Orleans. REGAN &REGAN, supra, at 14. Whiskey shipped from the port in Bourbon County came to be known as “Old Bourbon,” and later, simply “Bourbon,” to distinguish it from Pennsylvania Rye or other whiskeys. Cowdery, How Bourbon Whiskey Really Got Its Famous Name, supra. The name “bourbon” at that time meant whiskey made from mostly corn in Kentucky or points west. But it was likely not until “sometime between 1823 and . . . 1845” that Dr. James Crow “perfect[ed] the sour-mash method of whiskey-making”—the dominant process in use today that, when coupled with aging in charred new oak barrels, produces modern bourbon’s familiar caramel color and distinctive taste. REGAN & REGAN, supra, at 15.

While in the early years “[w]hiskey was whiskey, as everybody knew,” some bourbon distillers began to brand their bourbons to capitalize on the differences between “[g]ood Kentucky Bourbon” and all the rest. WILLKIE, supra, at 22. Dr. Crow, a Kentuckian by way of Scotland, “insist[ed] upon strict sanitation in his manufacture,” and branded his bourbon with his name; other Kentucky families followed suit in an effort to differentiate their products. Id. Crow’s branding tactics seem to have worked, as his bourbon accumulated prominent fans. For example, bourbon drinker Ulysses S. Grant preferred Old Crow over other bourbons, Julia Reed, Bourbon’s Beauty, NEWSWEEK, Dec. 21, 2008, as did all three of Congress’s “Great Triumvirate,” Henry Clay, John C. Calhoun, and Daniel Webster. GERALD CARSON & MIKE VEACH, THE SOCIAL HISTORY OF BOURBON 47 (2010).

The court, however, did not discuss the history of red wax used to seal liquor bottles, instead it focused on the reality of today’s liquor market where something once common is now uncommon and therefore protectable as a trademark.

National Chamber Servicemark Found Descriptive… of National Chamber of Commerce Services

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The United States Court of Appeals for the Federal Circuit in the case In Re Chamber of Commerce, 675 F.3d 1297, 102 U.S.P.Q.2d 1217 (Fed Cir. 2012) upheld a Trademark Trial and Appeal Board ruling rejecting as descriptive the mark NATIONAL CHAMBER filed in two applications:

Application Serial No. 77/147075: “Providing online directory information services featuring information regarding local and state Chambers of Commerce; providing information and news in the field of business, namely, information and news on current events and on economic, legislative, and regulatory developments as it relates to and can impact businesses; administration of a discount program enabling participants to obtain discounts on goods and services.”

Application Serial No. 77/975745: “Analysis of governmental policy relating to businesses and analysis of regulatory activity relating to businesses, all for the purpose of promoting the interests of businessmen and businesswomen; business data analysis.”

The Chamber of Commerce of the United States of America (“COC”) filed the appeal arguing that the services in the applications were not descriptive.  The court of appeals disagreed.

The Chamber of Commerce could have overcome the descriptiveness rejection by showing “secondary meaning” or “acquired distinctiveness” but offered no evidence in that regard for the trademark office to consider.  On appeal, the COC was therefore limited to arguing that NATIONAL CHAMBER was not descriptive of the services provided by a national chamber of commerce.  The appeals court was not persuaded:

To decide this case, we need only find that NATIONAL CHAMBER immediately conveys information about one feature or characteristic of at least one of the designated services within each of COC’s applications. See Stereotaxis, 429 F.3d at 1041 (“[R]egistration should be refused if the mark is descriptive of any of the goods for which registration is sought.”) (quoting In re Richardson Ink Co., 511 F.2d 559, 561 (CCPA 1975)). Because we find that NATIONAL CHAMBER describes at least one designated service within each of COC’s applications, we affirm the descriptiveness refusals.

The COC also argued that the appeal board’s lack evidence supporting its conclusory findings.  Again the Federal Circuit disagreed:

Lastly, we address COC’s contention that the TTAB’s reasoning was so conclusory as to preclude meaningful appellate review. We disagree with COC that the TTAB’s necessary findings were not “expressed with sufficient particularity to enable our court, without resort to speculation, to understand the reasoning of the Board, and to determine whether it applied the law correctly and whether the evidence supported the underlying and ultimate fact findings.” COC Br. at 15 (quoting Gechter v. Davidson, 116 F.3d 1454, 1457-58 (Fed. Cir. 1997)) (al-teration removed). The TTAB specifically cited COC’s own online chambers of commerce directory, and expressly found that the promotion of business interests is the core function of a chamber of commerce. While the TTAB’s decision would have been more helpful to us had it more explicitly tied its particular evidentiary findings to the individually recited services within the two applications, its reasoning in this case is sufficiently clear to permit us to understand why it believed that NATIONAL CHAMBER was descriptive of at least the two services discussed above.

And so the ruling of the TTAB was affirmed.

Oddly a review of the trademark records shows that the COC previously had a registration for NATIONAL CHAMBER which was granted in 1987.  For unknown reasons the trademark was not renewed at the ten (10) year mark in 1997.  If the COC had renewed the trademark and could have pointed to an existing registration this case may have gone differently.  At the very least the COC may have been able to show secondary meaning or acquired distinctiveness.  Moreover, considering this prior application claimed a date of first use of 1915, the COC certainly should have been able to show us in commerce for at least some of the services in the current application.  The services not in use could then have been moved to a divisional application.

The COC has not yet refilled its trademark applications.

Where the Rubber Meets the Road: Tire Trademarks

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The Federal Circuit in Bridgestone v. Federal Corp., 10-01376, 2012 BL 61825 (Fed. Cir. Mar. 16, 2012) found Federal’s mark MILANZA for tires likely to be confused with Bridgestone’s marks for POTENZA and TURANZA for tires.

Would you be confused into thinking MILANZA was the same tire as either POTENZA or TURANZA?  Do you even know the name of the tire on your car?

Bridgestone owns the marks POTENZA and TURANZA for tires.  In March 2004, a competing tire manufacturer, Federal, filed an intent to use trademark application for the mark MILANZA for tires.

Bridgestone filed an opposition to Federal’s trademark application with the Trademark Trial and Appeal Board (“TTAB”) arguing that MILANZA was likely to be confused with its marks ending in NZA.  The TTAB found the marks not likely to be confused with each other and denied the opposition.  The TTAB held:

Based on the record before us, opposers have failed to establish that the “NZA” suffix is recognized by the purchasing public as exclusively identifying opposers in connection with tires. Opposers’ advertising emphasizes the BRIDGESTONE mark and identifies sub-brands such as POTENZA, TURANZA, DUELER and BLIZZAK.  In fact, the vast majority of advertising by opposers feature the BRIDGESTONE mark in connection with a specific sub-brand. By highlighting the BRIDGESTONE mark and using POTENZA and TURANZA with DUELER and/or BLIZZAK with the BRIDGESTONE mark, opposers do not draw attention to the purported “NZA” family.

Bridgestone then appealed to the United States Court of Appeals for the Federal Circuit.

Bridgestone argued that POTENZA and TURANZA are strong marks consisting of coined terms and that the  marks are heavily advertised and widely sold.  Bridgestone argued the market strength and  public familiarity with the POTENZA and TURANZA means that the public is likely to be confused when it encounters a mark such as MILANZA which has a similar sounding suffix and an Italian connotation.

Federal argued that the marks have obvious differences and different connotations.  Federal argued that its mark MILANZA is suggestive of Milan, while the Bridgestone mark POTENZA is Italian for power and the Bridgestone mark TURANZA suggests a touring tire.  Moreover, Federal states that it chose the ZA ending because it is a Taiwanese company and the ending ZA in Chinese imparts emphasis.  Federal also argued that marks with a ZA or NZA ending are common in the automotive industry, citing the Suzuki FORENZA, the Toyota VENZA and the mark MONZA for various automotive products.

The Federal Circuit reversed the TTAB finding MILANZA likely to be confused with POTENZA and TURANZA.  The Federal Circuit found that Bridgestone’s prolonged exclusive use of its marks, the extensive promotion and marketing, and the billions of dollars of sales showed the commercial strength of the marks.  The Federal Circuit also noted that,

When the goods are identical, the appearance of a mark of similar sound, appearance, or connotation is more likely to cause confusion than if the goods are significantly differ-ent. See Century 21 Real Estate v. Century Life of Am., 970 F.2d 874, 877 (Fed. Cir.1992) (“When marks would appear on virtually identical goods or services, the degree of simi-larity necessary to support a conclusion of likely confusion declines.”). Exact identity is not necessary to generate confusion as to source of similarly-marked products. See Saxlehner v. Eisner & Mendelson Co., 179 U.S. 19, 33 (1900) (“It is not necessary to constitute an infringement that every word of a trademark would be appropriated. It is sufficient that enough be taken to deceive the public in the purchase of a protected article.”).

The Federal Circuit concluded that the TTAB’s ruling should be reversed.

In light of the identity of the goods, the lengthy prior use of POTENZA and TURANZA, the market strength of the POTENZA and TURANZA marks, and the similarities of words, sounds, and connotation with MILANZA, suffi-cient similarity has been shown as would be likely to cause consumer confusion, deception, or mistake. We conclude that the Board erred in denying Bridgestone’s opposition to the registration of MILANZA for intended use with tires. The Board’s decision is reversed.

This case seemed to turn on the strength of Bridgestone’s sales and marketing evidence.  It is unlikely that the average consumer pays much attention to tire sub-brands like the POTENZA and TURANZA.  It is therefore certainly conceivable that a consumer could see an ad for Bridgestone TURANZA, go into a non-Bridgestone the tire shop and be confused when encountering MILANZA.  In addition, although not cited in the opinion, during oral argument at the Federal Circuit the questions from the judges seem to indicate that they suspected that Federal chose the name MILANZA because it is confusingly similar to POTENZA and TURANZA.  This may have tipped the balance in an otherwise close case.

How do you Pronounce Gallo?

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Ernest Gallo and Julio Gallo founded their famous winery in 1933.  Their Gallo wine (pronounced gal-lo) is well-known all over the United States.

Cerveza Gallo (pronounced gai-yo, i.e. the Spanish word for rooster) is a beer which is well known in Guatemalan and brewed by Cervecería Centro Americana Sociedad Anónima.

According to a complaint filed by E. & J. Gallo Winery, the Cerveza Gallo mark for beer infringes its Gallo mark for beer.  It is unclear, however, what connection (if any) the defendants have to the Guatemalan brewer.

The defendants in the lawsuit are Cerveza Gallo S.A. Inc. d/b/a Gallo, Cerveza, Cerveza Gallo, Inc., Christopher J. Alexander and Maria E. Belcher.  According to the complaint, the defendants all reside in Louisiana.

E. & J. Gallo Winery filed the complaint after finding two trademark registrations in the state of Louisiana for Cerveza Gallo.  The complaint seeks to cancel the registrations as well as force the two companies to remove the word Gallo from their names.

 

The Guatemalan brewer currently sells its Cerveza Gallo in the United States under the brand name Famosa.

 

The relationship between the Guatemalan brewer and the defendants is not set out in the complaint.  It is possible the defendants have no relationship with the Central American company.  The complaint also does not include any information regarding any products the defendants actually sell.  It is possible the defendants are not currently selling a product.

In 2003 the defendants filed a federal trademark application for Cerveza Gallo.  The application was ultimately rejected, but not due to any potential confusion with E. & J. Gallo Winery.  In fact, the Office Action specifically states, “the Office records have been searched and no similar registered mark has been found.”

Rather, the marks were rejected based on three pending applications for a beer whose name is a English slang word for rooster (see the exhibits attached to the end of the Office Action).  In addition, the Examining Attorney rejected the mark for being filed as Cerveza Gallo, when the label they submitted as a specimen of use read Gallo Cerveza.

Although these rejections could have been overcome, the beer company chose not to file a response to the Office Action and the application went abandoned.

Since it is not apparent whether the defendants are even selling a product in the United States, it is unknown whether they will even contest this matter.

 

Does the service mark Brewskee-Ball infringe the trademark Skee-Ball?

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Skee-Ball, Inc. the owner of the Skee-Ball brand of games — popular at amusement arcades for more than 100 years — filed a trademark lawsuit against Full Circle United (“Full Circle”), a company that runs Skee-Ball tournaments under the name “Brewskee-Ball.”

Defendant Full Circle is a customer of Skee-Ball, Inc., using standard Skee-Ball machines manufactured by Skee-Ball, Inc. for its Brewskee-Ball tournaments.  Despite this relationship, Skee-Ball, Inc. seeks to stop Full Circle from using the name “Brewskee-Ball” claiming it infringes, dilutes, and tarnishes its famous Skee-Ball mark.

In Skee-Ball, Inc.’s complaint, the company points out that the trademark Brewskee-Ball incorporates the famous mark Skee-Ball in the mark itself as well as in its the description of services.  Specifically, Brewskee-Ball was filed for the following services, “Entertainment in the nature of skee-ball games; entertainment services, namely, arranging and conducting of skee-ball competitions; providing a website that provides statistics for skee-ball league players; providing recognition and incentives by the way of awards to demonstrate excellence in the field of skee-ball.”

Skee-Ball, Inc. points to TMEP Section 1402.09, which states that another company’s trademark should not be used in the identification of services for a different company’s mark.  Rather, a generic word should be substituted. (Which, of course, begs the question – what is the generic name for Skee-Ball?)

In response, Full Circle argues that the word “skee-ball” has become generic for the game and that the trademark office required it to use the word “skee-ball” in its description of services.  Full Circle further argues that it has a federal registration for Brewskee-Ball, which it obtained in 2008 without opposition from Skee-Ball, Inc..  (Most likely, the application was not on Skee-Ball, Inc.’s radar as a search for “skee” or “skee-ball” would not turn up a pending application for Brewskee-Ball.)

There is an obvious connection between the trademark “Skee-Ball” and the service mark “Brewskee-Ball.”  Without a doubt, Brewskee-Ball is merely the word “brew” added to Skee-Ball.  That being said, it is difficult to imagine that anyone would believe that “Brewskee-Ball” was somehow sponsored by the manufacturers of Skee-Ball machines, rather than the bar where the tournament takes places.  Moreover, an increase in popularity of “Brewskee-Ball” would only serve to increase the sales of official Skee-Ball machines.  Skee-Ball, Inc. could even come out with a “tournament” line of machines to sell to bars that wanted to host tournaments.  Another synergistic opportunity lost to trademark litigation.

If Skee-Ball, Inc. is concerned with the tournament name “Brewskee-Ball” is it also concerned about the names of the teams in the Brewskee-Ball league?  Does the Skee Amigos, Skee Patrol, or Skee’s Company further infringe the Skee-Ball brand?  We will just have to wait and see as this case is just getting started.

The case was originally filed by Skee-Ball, Inc. in California.  Recently the court in California transferred the case to New York after Full Circle filed a motion to dismiss for lack of personal jurisdiction in California.  Now the fun moves back east as this case continues.

Eating Popcorn Naked – a Trademarked Way to Snack

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Does NAKED POPCORN infringe HALF NAKED POPCORN?  Good Health Natural Products, Inc. (“Good Health”) the makers of Half Naked Popcorn think so.  Good Health has sued The Mediterranean Snack Food Company, LLC (“Mediterranean Snack Food”) for trademark infringement in federal court in North Carolina.

The complaint alleges that “Mediterranean recently launched a product that is directly competitive to Good Health’s HALF NAKED POPCORN brand of popcorn under a mark – NAKED POPCORN– that is a colorable imitation of, and is confusingly similar to, Good Health’s well-known HALF NAKED POPCORN trademark, as shown below.”  Would you confuse one of these bags of popcorn for the other?

The complaint further alleges that “by virtue of his prior business relationship with Good Health, Vincent James, one of Mediterranean’s members, became familiar with Good Health’s product line, including its HALF NAKED POPCORN brand of popcorn.”  (Of course Mr. James could have also become “familiar” with this product by buying it, opening the package, and chowing down.)
Although the names of the products are certainly similar, Good Health does not have a federal registration for “HALF NAKED” despite claiming to have sold the product since 2004.  Although there are other brands with registrations for “NAKED” products, the only pending registration for a “Half Naked” product is a pending application for Half Naked Texas Hold’em filed by Las Vegas resident Sam Chinkes (which—based on my experience in Las Vegas poker rooms – hopefully has nothing to do with the players undressing…)
In reviewing the pending applications and existing registrations at the U.S. Trademark Office, most likely, Good Health chose not to file an application for the mark due to the crowded “naked” landscape.  There currently exists multiple registrations for BEAR NAKED for various food items.  In addition, Bear Naked, Inc. the owner of the Bear Naked marks currently has an opposition proceeding pending against an applicant who filed for the mark NAKED for various products (including popcorn) back in 2005.
In addition there are registrations for Naked Wings, Naked Scallops, Naked Burgers, Naked Shrimp, Naked Tenders, Naked Nuggets, and the ever popular Naked Jerky.  All of these naked trademarks really begs the question as to whether the word “naked” is merely descriptive of plain food items without anything added.
Mediterranean Snack Food has not yet answered the complaint, but will most likely deny that its naked popcorn could possibly be confused with Good Health’s half naked variety.  No matter which way this case goes, this case is ripe for a final order filled with hilarious nude puns from the judge.

 

Directional Arrow or Trademark Infringment? In-N-Out Burgers v. Pappas Burger

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On November 15, 2011, In-N-Out Burger sued the Houston franchise Pappas Burger for trademark infringement in a Texas federal court.  The complaint claims that the Pappas Burger’s sign in the Houston airport (pictured below) infringes In-N-Out’s distinctive boomerang arrow logo (pictured above).  In-N-Out Burger currently has ten locations in Texas, all in the Dallas – Fort Worth area.  All three Pappas Burger locations are in Houston.

In-N-Out’s complaint alleges that,

13.  The use by Defendant of In-N-Out’s mark is likely to cause confusion, mistake or deception, as those encountering Defendant’s signage may mistakenly assume, at least initially, that its restaurant is in some way sponsored, endorsed, approved by or connected with In-N-Out when in fact it is not.

14.  Upon information and belief, Defendant has performed the aforesaid acts with wrongful purposes and knowledge to inappropriately trade upon In-N-Out’s extensive goodwill including using In-N-Out’s mark to draw attention to their restaurant.

While In-N-Out’s logo is certainly distinctive, it seems unlikely that the Pappas Burger sign (which is dominated by the words “Pappas Burger”) would be confused for an In-N-Out Burger (whose sign is dominated by the words “In-N-Out”).

Is it possible that someone looking at the sign from a distance might be confused?  That seems more likely.  The fact that the arrow is yellow, uses similar lights, and has as a slight bend in the middle does not help either.

Prior to this lawsuit being filed, In-N-Out sent letter to Pappas Burger, but could not reach a resolution to the dispute.

Pappas Burger has not yet answered the complaint.  However, my guess is that this case will quickly settle since the directional arrow is only used by Pappas Burger at its Houston airport location (and is not part of the Pappas Burger logo at other locations).

If You Don’t Use Your Bling You Lose Your Bling

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In a fierce bling battle, a federal court in New York has held that a trademark owner lost its rights in a registered trademark because it was not making sufficient use of the mark in commerce. The Gameologist Group, LLC v. Scientific Games International, et al., 09 Civ. 6261, (United States District Court for the Southern District of New York)

In the case,  Gameologist Group, LLC obtained a trademark registration for “BLING BLING 2002” for an online casino game and a board game. The plaintiff’s founder Jeffrey McGill testified that he chose the name BLING BLING because

it was [a] new song out and it was at the top of the charts and everybody was going crazy. And I knew. If a casino game was named Bling Bling, forget about it.

In 2003 Gameologist began reaching out to various lottery companies about making a Bling Bling lottery game. Gameologist eventually entered into a licensing agreement with a subsidiary of the defendant Scientific Games International. In mid-2004 the licensing agreement was canceled, with the Scientific Games subsidiary claiming that no state lotteries were interested in developing a Bling Bling lottery game. Gameologist asserts that this was simply a ruse so Scientific Gaming could use the Bling Bling idea for its own commercial benefit.

Three years later in 2007 Scientific Gaming began marketing its own Bling games including “$50,000 BLING” ticket for the Georgia Lottery, an “IT’S A BLING THING” ticket for the New Hampshire Lottery, a “BLING ME THE MONEY” ticket for the Kentucky Lottery, a “SPRING BLING” ticket for the New Mexico Lottery, and a “$10,000 BLING” ticket for the District of Columbia Lottery.

Gameologist subsequently sued and Scientific Gaming filed for summary arguing, in part, that even though Gameologist has a federal registration for Bling Bling 2002, it has little to no rights in the mark because it never made significant use of the mark in commerce. As the Court summarized the crux of the issue,

[T]he defendants contend that the plaintiff has not made sufficient use in commerce of the “BLING BLING 2002” mark so as to entitle the mark to protection. The right to exclusive use of a trademark derives from the use in commerce of the mark, rather than from the mark’s mere adoption. 15 U.S.C. § 1125; United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918). The Lanham Act defines “use in commerce” as the “bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.” 15 U.S.C. § 1127. “The talismanic test is whether or not the mark was used in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark.” Int’l Healthcare Exch., Inc. v. Global Healthcare Exch., LLC, 470 F. Supp. 2d 365, 371 (S.D.N.Y. 2007) (internal quotation marks and citation omitted).

Although Gameologist did make five hundred board games under the name Bling Bling 2002, it could only document that four copies were ever sold. Gameologist also claims to have “attended trade shows and gaming expeditions, created prototypes of products, purchased an “email blast” announcing a “Bling Bling” casino game to the gaming industry, disseminated press releases, and took out advertisements.” The Court, however found Gameologist’s documentation regarding these activities completely lacking.

Regarding the Bling Bling 2002 trademark, the Court held that because Gameologist did not use it, it would lose it.

The plaintiff has failed to raise a genuine issue of material fact that its use of the mark “BLING BLING 2002” in commerce has been anything but “sporadic, casual or transitory.” La Societe Anonyme, 495 F.2d at 1272. Accordingly, the plaintiff’s mark is not entitled to protection and the defendants are entitled to summary judgment on the plaintiff’s Lanham Act trademark infringement claim on this basis.

Gameologist’s state law claims for unjust enrichment and quantum meriut likewise failed. The court held that because Gameologist had no rights in the Bling Bling 2002 mark, Scientific Gaming was free to use the mark Bling with complete disregard to Gameologist.

While the plaintiff has presented some evidence that the defendants knew of the plaintiff’s mark when they created the lottery tickets in question, the plaintiff has failed to raise a genuine issue of material fact that the defendants appropriated something to which they were not entitled. This is because, as discussed above, the plaintiff did not have a valid mark that was entitled to protection against any alleged copying by the defendants.

Gameologist has appealed this case to the United States Court of Appeals for the Second Circuit. It will be interesting to see whether that court reverses. The “it stinks” evidence in favor of Gameologist is clearly the fact that Scientific Gaming’s subsidiary entered into a license agreement with Gameologist, canceled it, and then Scientific Gaming subsequently developed numerous Bling lottery games.

Regardless, the important take away from this case is that while it is critically import to protect your trademarks by obtaining federal registrations, it is equally important to use your trademarks in commerce. As this case points out, if you do not use your trademark then you do not actually have a trademark to protect.

Facebook “Like” Trademark Applications in Thumb War with TiVo and Searchteq, Blocked by “iLike”

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On April 21, 2010 Facebook filed fourteen applications with the United States Patent and Trademark Office trying to corner the word mark “like” as well as the stylized version of the mark with the now famous thumbs up.

The applications were filed by Facebook for all manner of services, including “dating services,” “self-fulfillment,” “bill payment services” and a “virtual currency.”  (So be careful when you click that “Like” button…)

Facebook’s seven design mark applications for the stylized version of the word “like” alongside a thumbs up are being blocked by earlier registrations for different thumbs from the likes of TiVo and Searchteq, a German search engine.

(TiVo Thumb)

(Serchteq Thumb)

 

 

 

 

To add insult to injury, Searchteq is using it’s registered thumb trademark to ask its users to like it on Facebook.

The fact that there are multiple thumbs-up registrations for similar services is actually helpful to Facebook. Arguably its thumbs up is at least as different from TiVo’s and Searchteq’s as those two marks are from each other.  It would be inconsistent to allow TiVo’s and Searchteq’s marks to co-exist on the trademark registry but block Facebook’s differently styled thumb.

This thumb war seems easily resolved with a well written office action response and if that fails, a co-existence agreement with TiVo and SearchTeq.  Maybe Facebook can work out a deal to get its thumbs up on TiVo boxes allowing users to “like” TV Shows while sitting on the couch.

Thus far only Facebook’s application for using the stylized like button for financial transactions, bill payment services and virtual currency has been approved.  The remaining six applications remain suspended.

The applications for just the word “like” by itself are a little trickier.  Those seven applications are currently being blocked by a 2010 registration for the word “iLike” which has been in use since 2006.  That registration is for a number of services some of which are right in Facebook’s wheelhouse, including, “customized web pages featuring user-defined information, personal profiles and information” and “Internet based introduction and social networking services.”

Currently all seven of Facebook’s word mark applications face a non-final office action.  While Like and iLike are admittedly similar, they are not identical.  If Facebook is unable to convince the examining attorney of the differences between Like and iLike, however, it could appeal to the Trademark Trial and Appeal Board and then to the United States Court of Appeals for the Federal Circuit.  As a second alternative, Facebook could simply work out a co-existence agreement with iLike possibly in exchange for some promotion on Facebook or some other compensation.

There is little doubt, however, that one way or the other Facebook will get its “like” trademarks registered.  The word “like” and the famous like button with the thumbs-up are just too valuable to the company.