Pattishall IP Blog

June 18, 2014

REDSKINS Trademark Registrations Canceled After 8 More Years of Litigation

Filed under: TM Registration, Trademark (General), TTAB — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:38 pm

 

PB LRby Phillip Barengolts, Partner, and Kristine A. Bergman, Summer Associate

In the long-running dispute between representatives of Native Americans and Pro-Football, Inc. AKA the Washington Redskins (“Washington”), the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“TTAB”) cancelled six of Washington’s registrations for the mark REDSKINS.[1] It was not the first time the TTAB ruled against Washington, finding that the REDSKINS trademark was disparaging and, therefore, not registrable under Section 2(a) of the Federal Trademark Act.[2] Of course, that has been the nickname of the Washington football team since 1932.

Despite mass media misinterpretation of the implications of this opinion, as the TTAB expressly stated, “This decision concerns only the statutory right to registration under Section 2(a). We lack statutory authority to issue rulings concerning the right to use trademarks.” (emphasis original). This decision does not require the Washington team to change its name. It does not prevent the team from continuing to use the REDSKINS nickname in marketing. It does not affect the team’s ability to license merchandise using the REDSKINS name.[3] Furthermore, it does not prevent the team from suing to enforce its rights in the REDSKINS name against others who may try to use it.[4] It merely prevents the team from enjoying the special protections afforded to an owner of a federal registration.[5]

Ultimately, the TTAB found that the registrations for REDSKINS “were disparaging to Native Americans at the respective times they were registered…” This finding is remarkable because the original registration for THE REDSKINS issued in 1967.

In its analysis, the TTAB first determined that the term “redskins,” although associated with the football team, had not been “stripped” of its ethnic meaning. Second, the TTAB found that a “substantial composite” of Native Americans were disparaged by the mark. [6] The primary basis for this conclusion was a resolution issued in 1993 by the National Congress of American Indians (“NCAI”), which represented approximately 30 percent of Native Americans during the relevant time. This resolution also was found to be competent evidence of the past views of Native Americans.

The TTAB also revisited Washington’s laches defense, which was discussed in the Harjo case. The TTAB rejected the defense because it “does not apply to a disparagement claim where the disparagement pertains to a group of which the individual petitioner or petitioners comprise one or more members.” Laches is an equitable defense and, therefore, the TTAB highlighted that “it is difficult to justify a balancing of equities where a registrant’s financial interest is weighed against human dignity.” Moreover, the TTAB noted that laches is inapplicable in cases presenting a broader public policy concern. Finally, the TTAB stated that, even on the merits, the defense could not stand because there was no showing that the petitioners had unreasonably delayed in bringing the petition after each reached the age of majority or that there was economic prejudice to Washington due to the delay.

Unusually for a TTAB decision, there was a dissent. Lest the dissenting judge be deemed insensitive, the primary criticism levelled at the majority was that the evidence presented by the petitioners was insufficient to prove that “redskins” was a disparaging term in 1967 (and when the subsequent trademark registrations issued). For purposes of the eventual appeal, the dissent has some merit because the evidence relied on by the petitioners was the same as that relied on by the Harjo petitioners – and which was deemed insufficient by the D.C. Circuit to support the TTAB’s original decision finding REDSKINS disparaging.

Despite pressure from the Obama administration, Washington team owner Dan Snyder has refused to change the team’s name.[7] So, stay tuned for the eventual appeal.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both petitioners and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, unfair competition, trade secret, Internet, and copyright law. He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Lexis Publishing.

Kristine A. Bergman is a summer associate with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP.

 

[1] http://ttabvue.uspto.gov/ttabvue/v?pno=92046185&pty=CAN&eno=199.

[2] The original petition to cancel the REDSKINS trademark registrations was brought on September 10, 1992, and the petitioners prevailed before the TTAB. See Harjo v. Pro Football, Inc., 30 U.S.P.Q.3d 1828 (TTAB 1994). The United States District Court for the District of Columbia reversed the TTAB’s original decision, which was upheld by D.C. Circuit Court of Appeals. However, that ruling relied on the defense of laches because the petitioners had waited too long to bring the petition to cancel after reaching the age of majority — the issue of disparagement on the merits was not resolved.

[3] Unless a specific license had a requirement that the mark be registered, which the NFL undoubtedly would not have agreed to, given the long pendency of this objection.

[4] But see http://tushnet.blogspot.com/2014/06/unregistrable-means-unprotectable-by.html. The decision discussed by Prof. Tushnet here addresses very different facts, but it raises an interesting potential defense to any infringement claims Washington may bring over the REDSKINS mark in the future, if the TTAB decisions is upheld on appeal, of course.

[5] Perhaps of greatest importance in the context of merchandising would be the unavailability of a claim of counterfeiting, for which registration is required.

[6] Of note, the TTAB stated that a “substantial composite” need not be a majority and ultimately found that “thirty percent is without doubt a substantial composite.”

[7] U.S. Patent and Trademark Office Cancels Redskins Trademark, Huff. Post (June 18, 2014 at 10:22 A.M), http://www.huffingtonpost.com/2014/06/18/redskins-trademark-canceled_n_5507169.html.

 

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June 12, 2014

Supreme Court Permits Competitor False Advertising Suits to Proceed Under Lanham Act Despite FDA Regulation

Filed under: False Advertising, Litigation — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 2:51 pm

PB LRby Phillip Barengolts, Partner

Today, the Supreme Court provided competitors with a powerful new tool to combat potentially false and misleading statements on food and beverage labels, or any other FDA regulated materials – a cause of action for false advertising under the Lanham Act. The unanimous opinion[1] in POM Wonderful LLC v Coca-Cola Co., Slip Op. No. 12-761, 573 U.S. _ (2014)[2], specifically permits POM to proceed with its false advertising claim that Coca-Cola’s MINUTE MAID juice, which contains 99.4% apple and grape juice, .3% pomegranate juice, .2% blueberry juice, and .1% raspberry juice, but displays the words “pomegranate blueberry” in all capital letters (as shown below), misleads consumers, overruling the Ninth Circuit’s ruling to the contrary.

POM v Coca Cola Picture

The key issue before the Court was whether The Federal Food, Drug, and Cosmetic Act (FDCA), which regulates labeling of food and beverages, among other things, precludes[3] a false advertising claim over an FDCA-compliant label. The FDCA prohibits false or misleading labeling. 21 U.S.C. § 343(a). The FDCA does not allow private parties to enforce its provisions through a lawsuit. 21 U.S.C. § 337. Here, Coca-Cola complied with the Food and Drug Administration (FDA) requirements for juice labeling. 21 CFR § 102.33(d).

Both the district court and the Ninth Circuit had ruled in Coca-Cola’s favor, essentially finding that since the FDA did not impose label requirements as stringent as those sought by POM through its lawsuit, then POM should not have a private right of action to impose such requirements under the Lanham Act. The Court, however, found that the “FDCA, by its terms, does not preclude Lanham Act suits.” Slip Op. at 9. Furthermore, the Court noted that when Congress enacted the preemption provisions of the FDCA, “if anything [Congress] indicated it did not intend the FDCA to preclude requirements arising from other sources” and that “pre-emption of some state requirements does not suggest an intent to preclude federal claims.” Slip Op. at 11, citing Setser v. U.S., 566 U.S. __, __ (2012) (slip op., at 6-7).

Ultimately, the Court chose to read the Lanham Act and FDCA as complements – one protecting against unfair competition, the other protecting public health and safety. Slip Op. at 11. Indeed, the Court noted that “[a]llowing Lanham Act suits takes advantage of synergies among multiple methods of regulation.” Id. at 12. This decision will have consequences for companies in regulated industries – especially those in the food and beverage fields – because, before placing products into the marketplace, they will now need to review labels and statements both to assure compliance with FDA regulations and in light of Lanham Act principles to avoid competitor suits.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, unfair competition, trade secret, Internet, and copyright law. He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Lexis Publishing.

 

[1] Justice Breyer did not participate in considering this case.

[2] Read the entire opinion here: http://www.supremecourt.gov/opinions/13pdf/12-761_6k47.pdf.

[3] This is not a preemption case – preemption addresses the situation when state and federal laws conflict. The Court made sure to point this out in its opinion. The FDCA does preempt certain state laws on misbranding. 21 U.S.C. §343-1(a).

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May 2, 2014

Defend Trade Secrets Act Would Create Federal Private Right-of-Action For Trade Secret Misappropriation Under Economic Espionage Act

Filed under: Trade Secret — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:59 am

PB LR

 

by Phillip Barengolts, Partner

 

On April 29, Senators Orrin Hatch and Chris Coons introduced the Defend Trade Secrets Act, which would create a federal private right-of-action under Economic Espionage Act.

Currently, claims for trade secret misappropriation generally are brought in state courts regardless of the scope of the misappropriation. The resulting state-by-state protection can create problems for trade secret owners in developing global non-disclosure policies required to maintain protection for these extraordinarily valuable assets, which include secret formulas, customer lists, manufacturing techniques, business processes, advertising strategies and sales methods.

The Defend Trade Secrets Act would amend the Economic Espionage Act to provide an owner of a trade secret with significant remedies for misappropriation, including:

  • the ability to obtain an ex parte order to: a) copy electronically stored information from the alleged thief to preserve evidence of the misappropriation; and b) seize “any property used, in any manner…to commit or facilitate the” misappropriation;
  • injunctions to protect the trade secret;
  • damages for actual losses plus unjust enrichment to the extent not compensated by the award of actual losses, or a reasonable royalty in lieu of damages; and
  • if the misappropriation is willful or malicious, exemplary damages of no more than 3 times the actual damages or reasonable royalty awarded.

The requirements for the seizure order will follow those under the Lanham Act.

If the Defend Trade Secrets Act ultimately becomes law, it would provide businesses with a significant tool to protect their valuable intellectual property. Given the bipartisan support, it stands a good chance. In the meantime, companies seeking to protect their trade secrets will continue to rely upon the state-by-state protection currently in place.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois. Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, trade secret and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues. Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, unfair competition, trade secret, Internet, and copyright law. He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Lexis Publishing.

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April 25, 2013

The FTC Issues Revised Guidance for Mobile Device and Social Media Advertising Claims

Filed under: Advertising, Social Media — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:33 pm

PB LRby Phillip Barengolts, Partner

On March 12, 2013, the Federal Trade Commission issued revisions to its digital advertising guidelines, “.com Disclosures: How to Make Effective Disclosures in Digital Advertising” (the “Guides”).[1]  The Guides do not break new ground, but they provide advertisers with valuable examples of compliant disclosures that qualify advertising claims appearing on mobile devices, on social media such as Twitter and Facebook, and through any other non-traditional platform.

The Guides highlight the FTC’s fundamental belief about advertising claims: the medium does not matter; the advertising claim must be true and not misleading from the viewpoint of a reasonable consumer or else it violates Section 5 of the FTC Act.[2]

Disclosures that qualify an advertising claim must be clear and conspicuous – which can be difficult when dealing with social media or mobile devices due to space constraints.  The FTC’s revised Guides helpfully explain that an advertiser must place a disclosure as close as possible to the qualified claim and must communicate the disclosure in a manner that a consumer is likely to notice and understand.

What if a platform does not provide an opportunity for an adequate disclosure (e.g., Twitter)?  The FTC is clear: don’t use the platform or modify the claim for that platform so that a disclosure is unnecessary.  The Guides do have some detailed suggestions, including:

  • If a consumer has to scroll to view a disclosure, then the disclosure should be unavoidable;
  • Linking to the text of a disclose is permissible, but not if the disclosure is integral to the claim or inseparable from it;
  • Don’t use pop-ups because many browsers block them and most users ignore them;
  • Disclosures should be made before a user clicks “add to cart” or “order now”;
  • If the advertised product is available through outlets other than the advertiser, for example, at an online or brick-and-mortar retailer, the disclosure must be in the ad itself; and
  • for Tweets, the advertiser should use clear terms such as “Ad” or “Sponsored” at the beginning of the Tweet.

The most useful part of the Guides for advertisers are the many examples of compliant and non-compliant disclosures.  Just to highlight a few:

  • the advertiser should optimize its website for mobile devices to ensure that users zooming on a phone will not miss a disclosure;
  • hyperlink disclosures should be right next to the claim they modify (if they can be used at all); and
  • Tweets should include the necessary disclosure not link to it.

Advertisers must be aware of the impact of their claims, intentional or unintentional, and use proper disclosures – suitable to every platform on which the claim will be seen by a consumer –  to qualify any potentially misleading claims.  The Guides provide the FTC’s position on the adequacy of a disclosure to avoid enforcement action.  Of course, advertisers should consult their advertising review counsel to ensure compliance with the Guides and other advertising rules and regulations.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, false advertising and unfair competition litigation, trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, Internet, advertising and copyright law.  He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation: Forms and Analysis, published by Oxford University Press.


[1] The entire 53-page Guidelines can be found here: http://www.ftc.gov/os/2013/03/130312dotcomdisclosures.pdf.

[2] It should be noted that the Guides, like all other FTC guide, are not laws, but if a company fails to comply, the FTC “might bring an enforcement action alleging an unfair or deceptive practice.”

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October 1, 2012

ICANN Seeks Comments On The Procedures To Be Used by the Trademark Clearinghouse In Connection With The Implementation of New gTLDs

Filed under: International, Internet — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 4:31 pm

by Phillip Barengolts, Partner

On September 24, 2012, ICANN requested comments on two important procedures in the implementation of the Trademark Clearinghouse[1] – proof of trademark use and determination of a match. http://www.icann.org/en/news/announcements/announcement-7-24sep12-en.htm.  The Trademark Clearinghouse will serve as a repository used by trademark owners to protect against the use of their marks for domain names in any of the new gTLDs during the sunrise period of a new gTLD and for trademark claims generally.[2]  See prior coverage here: http://blog.pattishall.com/2011/11/08/trademark-protection-in-icann%E2%80%99s-new-generic-top-level-domain-%E2%80%9Cgtld%E2%80%9D-space-will-require-diligence-by-trademark-owners/.  The deadline to submit comments is November 7, 2012.

The specific procedures for which ICANN seeks comment now are: 1) the procedures that the Trademark Clearinghouse will use to verify that a claimed trademark is in use; and 2) the process by which the Trademark Clearinghouse will determine a match between a trademark recorded with the Trademark Clearinghouse and an applied-for domain name.  Highlights of these memoranda are below.

Proof of Use

ICANN has decided that only marks that are in use will be provided protection through the Trademark Clearinghouse during the sunrise period of a new gTLD.[3]  Most jurisdictions throughout the world do not require proof of use to obtain a trademark registration, but the U.S. does have such a requirement (with notable exceptions for foreign trademark registration holders).

To prove use, a trademark owner must submit a signed declaration of use and a single sample of current use.  The specific proposed declaration is below:

The [Trademark Holder/Licensee/Agent] hereby certifies that the information submitted to the Clearinghouse, is, to the best of [Trademark Holder/Licensee/Agent’s] knowledge complete and accurate, that the trademarks set forth in this submission are currently in use in the manner set forth in the accompanying specimen, in connection with the class of goods or services specified when this submission was made to the Trademark Clearinghouse; that this information is not being presented for any improper purpose; and that if, at any time, the information contained in this submission is no longer accurate, the [Trademark Holder/Licensee/Agent] will notify the Clearinghouse within a reasonable time of that information which is no longer accurate, and to the extent necessary, provide that additional information necessary for the submission to be accurate. Furthermore, if any Clearinghouse-verified mark subsequently becomes abandoned by the holder, the holder will notify the Clearinghouse within a reasonable time that the mark has been abandoned.

The sample of use must be “an item that evidences an effort on behalf of the trademark holder to communicate to a consumer so that the consumer can distinguish the products or services of one from those of another.”  Examples include:

  • Labels, tags, or containers from a product; and
  • Advertising and marketing materials (including brochures, pamphlets, catalogues, product manuals, displays or signage, press releases, screen shots, or social media marketing materials). (more…)

August 22, 2012

The United States Patent and Trademark Office is Seeking Comments on Potentially Amending the Federal Trademark Act, the Lanham Act, to Require the Filing of a Declaration of Use After Three Years of Trademark Registration Rather Than the Current Five

Filed under: TM Registration — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 5:10 pm

by Phillip Barengolts, Partner

On August 16, 2012, the United States Patent and Trademark Office (USPTO) issued a Request for comment in the Federal Register on the potential amendment of the Federal Trademark Act – the Lanham Act – to require the filing of the first Affidavit or Declaration of Use or Excusable Nonuse (Affidavit) from between the third and fourth year after the issuance of a trademark registration, or the six-month grace period that follows.  See www.gpo.gov/fdsys/pkg/FR-2012-08-16/pdf/2012-20130.pdf.  Specifically, the USPTO “is interested in receiving public input on whether and why such an amendment is or is not favored.”  The deadline to submit comments is October 15, 2012.

Currently, under Sections 8 and 71 of the Lanham Act, the period to file the required Affidavit is between the fifth and sixth years after the trademark registration issues.  This proposal would require Congress to amend the Lanham Act, and the USPTO cannot implement this change itself through a rulemaking or otherwise.

The purpose of the Affidavit is to eliminate “deadwood” (marks that are not actually used) from the federal trademark register.  For attorneys and companies actively involved in the clearance of potential trademarks, having an accurate trademark register is valuable, and reduces trademark selection costs.  However, as any diligent trademark attorney will tell you, just because a trademark registration has expired does not mean that the underlying trademark is not in use, nor does an active trademark registration reveal the scope of use in the marketplace – only an investigation can provide such details.

A potentially important consideration for this request by the USPTO is that an applicant for a trademark registration in the U.S. relying upon a foreign trademark registration (under Sections 44(e) an 66(a) of the Lanham Act) does not need to submit a specimen of use to obtain the registration.  Thus, such registrations would now be subject to a use requirement two years sooner.

The specific questions on which the USPTO seeks comment are:

1.    Is ‘‘deadwood’’ on the trademark register a concern of yours, and what impact do you believe it has?

2.   Do you favor or oppose an amendment to shorten the first filing deadline for Affidavits or Declarations of Use or Excusable Nonuse under Sections 8 and 71 as a means of ensuring the accuracy of the trademark register? (Please explain why.)

3.   If you favor shortening the deadline, what time period do you believe would be most appropriate for the first filing deadline?

4.   Are you concerned that an amendment to the first Section 8 and 71 affidavit deadline would foreclose the ability to combine the filing with the filing of an Affidavit or Declaration of Incontestability under Section 15? What impact do you believe separating these filings would have?

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, Internet, and copyright law.  He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Oxford University Press.

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July 5, 2012

European Parliament Rejects Anti-Counterfeiting Trade Agreement

Filed under: Counterfeiting, International — Tags: , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 2:38 pm

by Phillip Barengolts, Trademark Attorney

The European Parliament voted against the Anti-Counterfeiting Trade Agreement (ACTA).  Thus, it is highly unlikely to become law in the European Union.  The E.U. had signed the agreement[1] and the European Commission referred it to the European Court of Justice for review.[2]  The E.U. Parliament’s vote signals, however, that ACTA is not likely to be ratified by the E.U. member states.  According to the press release, this was the first time that the Parliament had exercised its Lisbon Treaty right to reject an international trade agreement.[3]  The vote was not even close with 478 votes against, 39 in favor and 165 abstentions.

As previously noted here,[4] ACTA was negotiated among a select group of nations, including the U.S. and the E.U., to set a higher floor for laws against trademark counterfeiting and copyright piracy, including on the Internet.  Most of these countries already have strong protection for intellectual property rights, but these protections were not consistent and, often, not consistently enforced.

ACTA’s provisions establish a level of protection for trademarks and copyrights higher than the baseline embodied in the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS).  ACTA achieves this enhanced protection primarily by harmonizing the participating nations’ laws on remedies (e.g., criminal penalties for commercial counterfeiting and copyright piracy, statutory damages, seizures, preliminary injunctions) and customs authorities’ ability to act.  Some countries, like the U.S., already had these types of laws in place, while others, like Canada, will now have to make minor changes to come into compliance.

ACTA remains signed by 8 of the negotiating nations: the U.S., Australia, Canada, South Korea, Japan, New Zealand, Morocco, and Singapore.  Thus, it can go into effect for those nations once their signatures are properly deposited, despite the likely rejection of the agreement by the E.U.

The negotiations over ACTA generated much controversy because of non-governmental non-IP rights-holder stakeholders generally were not invited to participate.   After early texts were leaked and a draft text officially released, as well as other stakeholders invited to make comment, the final text of the agreement[5] was released by the participating nations in December 2010.

The primary controversy that lingers in the U.S. is whether the President can simply enter into this agreement without ratification by the Senate – as required with a treaty.    Throughout the E.U., however, a mass movement developed against ACTA because of fears that individual rights on the Internet would be threatened.  The agreement generated protests, with some of the largest in Poland, and even a 2.8 million signature petition.

The provisions of ACTA, as ultimately written, simply did not merit such anger in large part because most European nations already have enforcement mechanisms as tough or even tougher than ACTA would have put in place.  In this author’s opinion, because the debate in the E.U. over ACTA coincided with the debate in the U.S. over the Stop Online Piracy Act (SOPA) at the beginning of this year, the perception of ACTA grew far more negative than was warranted, even though SOPA and ACTA have almost no resemblance and served very different purposes in the overall goals of the IP community.  It remains to be seen where international protection for intellectual property rights goes from here.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, Internet, and copyright law.  He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Oxford University Press.


March 27, 2012

Fourth Circuit Overturns Laches Defense Victory for Clear Channel

Filed under: Litigation, Trademark (General) — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 10:17 am

by Phillip Barengolts, Trademark Attorney

Trademark owners have a duty to police their rights or risk erosion or even loss of those rights.  This duty does not extend to every known infringement, but alleged infringers often assert unaddressed third-party use of other infringing marks as a means of defeating a trademark infringement claim against them.  Thus, a trademark owner should engage in a consistent level of policing to protect its investment in its brand.

As with most types of tort claims, waiting to file suit against a particular infringer carries the risk that the equitable doctrine of laches will bar the suit.  In most jurisdictions laches, may bar monetary relief for trademark infringement, but rarely precludes injunctive relief.  The Fourth Circuit’s recent decision in Ray Commn’s, Inc. v. Clear Channel Commn’s, Inc., No. 11-1050 (4th Cir. Mar. 8, 2012),[1] highlights the difficulty of prevailing on a laches defense and provides guidance for plaintiffs overcoming a laches problem in a suit.

The dispute concerned the trademark AGRINET, used for competing agricultural news radio programs.  Both parties used the mark for many years, but it was undisputed that Ray Communications (“RCI”) was the prior user in all geographic areas.  The relevant issue for laches was whether RCI delayed so long as to bar its trademark infringement claim as a matter of law.  The district court said yes, granting Clear Channel summary judgment on RCI’s trademark infringement claim.  The Fourth Circuit reversed, finding the district court abused its discretion.

The main points raised by the Fourth Circuit in vacating the district court’s decision were:

1.      Although RCI knew of Clear Channel’s uses of AGRINET in certain regions of the country for over 25 years, because it did not use the AGRINET mark in those regions, its trademark infringement claim had not yet accrued;

2.      There was a genuine dispute as to RCI’s grant of licenses to some of Clear Channel’s predecessors-in-interest (even though RCI had trouble producing those licenses in discovery); and

3.      Evidence that Clear Channel had stopped using AGRINET in some jurisdictions to facilitate settlement suggested that Clear Channel would not suffer any economic injury from changing its mark.

The key teachings of this decision are that laches does not start to run until the trademark owner is aware of the infringement, as distinct from mere knowledge of the use.  Keeping a record of all trademark licenses, and other grants of permission, helps protect trademark owners in future suits.  Finally, at least in the Fourth Circuit, to bar injunctive relief, a defendant must meet a higher standard than the traditional factors of 1) knowledge, 2) unreasonable delay, and 3) undue prejudice to the defendant.

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Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, Internet, and copyright law.  He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Oxford University Press.


March 14, 2012

Sky Diving for Dollars: Ninth Circuit Upholds Jury’s $6 Million Award to Skydive Arizona for Defendants’ Trademark Infringement, False Advertising, and Cybersquatting

Filed under: Advertising, Litigation, Trademark (General) — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 11:12 am

by Phillip Barengolts, Trademark Attorney

Skydive Arizona sued a group of defendants, collectively called “Skyride” by the court, for trademark infringement, false advertising, and cybersquatting.  At trial, the jury awarded Skydive Arizona $1 million in actual damages for false advertising, $2.5 million in actual damages for trademark infringement, $2,500,004 in defendant’s profits from the trademark infringement, and $600,000 for statutory cybersquatting damages.  The district court, upon its own initiative, then doubled the two actual damages awards, for a total of $10.1 million.  Finally, the district court enjoined Skyride from operating in Arizona.  Skyride appealed and, except for the doubling of actual damages, lost.[1]  See Skydive Arizona, Inc. v. Quattrocchi, No. 10-16099 (March 12, 2012), available here: http://www.ca9.uscourts.gov/datastore/opinions/2012/03/12/10-16099.pdf.

Trademark and false advertising litigation is different from other commercial litigation in many respects, but what the Ninth Circuit opinion highlights is the difference in precision required to support monetary damages.  Skyride’s appeal focused on the lack of evidentiary support for the jury award.  Specifically, Skyride argued that the district court abused its discretion by:

(1) upholding the jury’s actual damages award, because Skydive Arizona did not present sufficient evidence concerning the amount of damages; (2) upholding the jury’s lost profits award, because the jury failed to deduct SKYRIDE’s expenses and costs based on the “clearly erroneous” testimony of Skydive Arizona’s expert; (3) enhancing the jury’s damages award to punish SKYRIDE; and (4) upholding and enhancing the entire actual damages, lost profits, and statutory damages award, because the judgment was grossly excessive.

Other than (3), the Ninth Circuit found these arguments unpersuasive.

Under the Lanham Act, a court may award the following in its discretion: (1) defendant’s profits; (2) any damages sustained by the plaintiff; and (3) the costs of the action.  15 U.S.C. § 1117(a).  “In assessing profits the plaintiff shall be required to prove defendant’s sales only.”  Id.  A mark holder is held to a lower standard in proving the exact amount of actual damages.  See La Quinta Corp., 603 F.3d 327, 342 (9th Cir. 2010).  Plaintiff’s damages are measured in the same manner as in tort cases: “the reasonably foreseeable harms caused by the wrong.”  A jury award may be supported by “crude” measures “based upon reasonable inferences.”  See Intel Corp. v. Terabyte Int’l, Inc., 6 F.3d 614, 621 (9th Cir. 1993).

The jury had only the following evidence to support the actual damages award: three exhibits showing Skydive Arizona’s advertising expenditure for the years 1997-2007, declarations and witness testimony blaming Skydive Arizona for problems caused by Skyride’s acts, and counsel’s request that the jury consider Skydive Arizona’s need to engage in corrective advertising.

To establish Skyride’s profits, Skydive Arizona presented an expert who calculated Skyride’s revenues by:

calculating the number of Arizona residents identified in SKYRIDE’s records and then increasing that number by 2.131 to account for files missing residence information.  He then multiplied that number by an average transaction amount, and then adjusted for resulting revenue from out-of-state residents who also jumped in Arizona.  Lastly, [he] added an interest factor of 10%, using the prejudgment interest rate applicable under Arizona law.

Skyride argued after trial and on appeal that this expert testimony was clearly erroneous because “he did not properly deduct vendor payments or overhead costs, and he applied an improper interest rate.”  The Ninth Circuit stressed that Skyride did not challenge the admissibility of this expert testimony under Federal Rule of Evidence 702 through a Daubert challenge at any point during the trial and, therefore, upheld the award of profits.  Of course, both courts could also have pointed out that, under the Lanham Act, the burden of deducting vendor payments and overhead was Skyride’s and not Skydive Arizona’s.

Skyride finally won a point on appeal by successfully arguing that the district court doubled the damages awards to punish Skyride.  Lanham Act damages must be compensatory and cannot be punitive. 15 U.S.C. § 1117(a).  The district court’s commentary surrounding the doubling conveyed its distaste for Skyride’s “purposefully deceitful” conduct and need for Skyride to “accept the wrongfulness of [its] conduct.”

Skyride’s last argument was that the overall award of $10 million at trial was grossly excessive and punitive for a company with “only $23 million” in nationwide gross revenues.  The Ninth Circuit easily dismissed this contention that, essentially, Skyride was “too small to justify such a large award.”

So, here is what you need to support a $6 million damages award in a trademark and false advertising case: an unsympathetic defendant, proof of your advertising expenditures, proof of defendant’s revenues, and evidence suggesting the need for corrective advertising.  Your results may vary.

*       *      *

 Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, Internet, and copyright law.  He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Oxford University Press.


[1] Skydive Arizona appealed the geographic scope of the injunction as being too narrow and lost, but we won’t address that here.  For further background on this case and the facts at issue, see http://blog.ericgoldman.org/archives/2010/05/geographic_trad.htm.

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February 23, 2012

What’s In A (Domain) Name? What A Cybersquatter Calls A Web Site By Any Other Name Would Not Sell For A Million Dollars Or Provide A Platform For A Three-Year Old’s Artwork

Filed under: Cybersquatting — Tags: , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 3:41 pm

by Phillip Barengolts, Trademark Attorney

In “one [of] a series of domestic disputes between” Paul Bogoni and Vicdania Gomez, Gomez registered the domain names paulbogoni.org and paulbogoni.com without his authorization.[1]  She offered to sell the domain names for $1 million each and posted content on one of them related to certain of her and her daughter’s artwork.  Bogoni sued under the personal name protection provisions of the Anti-cybersquatting Protection Act, 15 U.S.C. § 8131, seeking a preliminary injunction.  He prevailed when Gomez’s defense of use in connection with a copyrighted work failed to show her good faith registration.  Bogoni v. Gomez, No. 11 civ 08093 (S.D.N.Y. Jan. 6, 2012).[2]

Gomez initially populated paulbogoni.org with statements that her three-year old daughter wrote and operated the website, which would donate proceeds to charity from the sale of art objects called “Angel” and “Airplane.”  A message on the site stated, “Hi, I’m Vittoria and this my [sic] first website that my mommy helped me launch in order to begin my journey in making the world a better place.”  The web site advised visitors that the two art objects were constructed at an arts institution named “Make Meaning in the Upper West Side of Manhattan.”  The “Airplane” object was titled “Bogoni.”  Finally, the web site displayed the following statement: “I will am [sic] also selling this domain name http://www.PAULBOGONI.ORG and http://www.PAULBOGONI.COM for $1Million (ONE MILLION DOLLARS) each.”  A photograph of “Airplane” appeared on the web site a month after the filing of Bogoni’s complaint and Gomez never explained the relationship between the name Bogoni and the “Airplane.”

Under these facts, Bogoni satisfied his burden to show that Gomez: (1) registered a domain name that consists of his name; (2) did so without the Bogoni’s consent; and (3) had the specific intent to profit from Bogoni’s name by selling the domain name for financial gain.[3]  The court’s analysis turned on the availability of a defense to cybersquatting liability for

“good faith registration of a [personal] domain name . . . if such name is used in, affiliated with, or related to a work of authorship protected under Title 17 . . . and if the person registering the domain name is the copyright owner or licensee of the work [and] the person intends to sell the domain name in conjunction with the lawful exploitation of the work.”

15 U.S.C. § 8131(1)(B).

The Court found that Gomez exhibited an absence of good faith based upon the facts in evidence, and her offer to sell the domain names was not “in conjunction” with the sale of the two art objects.  Thus, she did not qualify for this copyrighted work defense.  The Court’s injunction did not require Gomez to transfer the domain names, however, but only required her to stop using them, which she did by removing all content.  Currently, paulbogoni.org simply states “underconstruction.”

This decision illustrates a key distinction between a claim over the use of a personal name as a domain name under the ACPA versus the Uniform Domain Name Dispute Resolution Policy: the UDRP does not protect personal names that are not trademarks as well, even the names of famous people who do not use their names in connection with a designation for their business.  See http://www.wipo.int/amc/en/domains/search/overview2.0/ (response to question 1.6).  Business executives who find themselves subject to attack or pseudo-extortion through domain names incorporating their personal names may be able to take advantage of this targeted ACPA claim, as well as claims under state laws protecting rights of privacy.

* * *

Phillip Barengolts is a partner with Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, a leading intellectual property law firm based in Chicago, Illinois.  Pattishall McAuliffe represents both plaintiffs and defendants in trademark, copyright, and unfair competition trials and appeals, and advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Mr. Barengolts’ practice focuses on litigation, transactions, and counseling in domestic and international trademark, trade dress, Internet, and copyright law.  He teaches trademark and copyright litigation at John Marshall Law School, and co-authored Trademark and Copyright Litigation, published by Oxford University Press.


[footnotes]

[1] Although the Court is vague on specifics, this statement is telling: “[T]he parties made clear to the Court during oral argument that the parties’ relationship is, at the very least, contentious.”

[3] The Court discussed at some length whether Bogoni satisfied the third prong of this test because of some prior decisions finding that personal name cybersquatting to recover a debt would avoid liability.  See Carl v. BernardJCarl.com, 409 F. App’x 628, 630 (4th Cir. 2010) (per curium) (unpublished).

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