Pattishall IP Blog

March 8, 2017

Pattishall Prevails in 5th Circuit

Filed under: Litigation, Trademark (General) — Tags: , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 12:02 pm

By Phillip Barengolts

Phil Barengolts and Jessica Ekhoff prevailed in the U.S. Court of Appeals for the Fifth Circuit for Insignia Marketing and Christine McAtee in Vetter v. McAtee, No. 15-20575 (5th Cir. March 1, 2017), http://www.ca5.uscourts.gov/opinions/pub/15/15-20575-CV0.pdf. The Court upheld Insignia Marketing’s trial victory and affirmed the denial of Vetter’s request for attorneys’ fees against our clients.  The Court held the Lanham Act’s “fee-shifting provision vests significant discretion in the district courts to grant or deny attorneys’ fees on a case-by-case basis.”  The case was held not “exceptional” under the standards announced in Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749 (2014).

 

These materials have been prepared by Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP for general informational purposes only.
They are not legal advice. They are not intended to create, and their receipt by you does not create, an attorney-client relationship.

April 12, 2016

Pattishall Prevails for Bayer in Landmark Unfair Competition Case

Filed under: Litigation, Pattishall — Tags: , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 1:47 pm

Phil Barengolts and Bradley Cohn prevailed in the U.S. Court of Appeals for the Fourth Circuit for Bayer Consumer Care AG and Bayer Healthcare LLC in Belmora LLC v. Bayer Consumer Care AG and Bayer Healthcare LLC, No. 15-1335 (4th Cir. March 23, 2016). The Court held that ownership of a U.S. trademark is not a prerequisite for asserting unfair competition and related claims under Section 43(a) of the Lanham Act, or to cancel a trademark registration for misrepresentation under Section 14(3). This is an important clarification of U.S. unfair competition law.

Bayer Consumer Care sells naproxen sodium pain reliever in Mexico under the trademark FLANAX, which is well known in that country. Bayer does not sell FLANAX in the United States, instead selling ALEVE. Bayer sued a U.S. company, Belmora LLC, for using the FLANAX mark in the U.S. to falsely suggest to U.S. consumers–in particular, Mexican-Americans–that Belmora’s FLANAX pain reliever was the same as Bayer’s Mexican FLANAX pain reliever. Bayer sued for unfair competition and false advertising, and petitioned to cancel Belmora’s trademark registration for FLANAX because of Belmora’s misrepresentation.

On March 23, the Fourth Circuit held Bayer was entitled to sue Belmora, reversing the trial court ruling that Bayer could not proceed with its claims because it does not own the FLANAX mark in the U.S. The Fourth Circuit found that “the plain language of § 43(a) does not require that a plaintiff possess or have used a trademark in U.S. commerce as an element of the cause of action.” Based on that finding, and relying on the Supreme Court’s 2014 landmark decision in Lexmark v. Static Control, the Fourth Circuit held Bayer’s claims fell within the Lanham Act’s zone of interest and that Bayer had alleged injuries that were proximately caused by Belmora’s actions.

Many courts previously assumed a party must own a U.S. trademark to bring Section 43(a) claims. However, the Fourth Circuit held that assumption is wrong. A defendant who passes off its products as the plaintiff’s is liable under Section 43(a), regardless of whether the plaintiff actually owns a U.S. trademark. For instance, as the Fourth Circuit explained, a plaintiff can sue a defendant who uses a generic (and hence unprotectable) word to falsely associate its products with the plaintiff’s. Or, as in the present case, a plaintiff can sue a defendant who uses the plaintiff’s non-U.S. trademark to create a false association in the United States.

The Fourth Circuit noted that in a situation where merely “a few isolated consumers . . . confuse a mark with one seen abroad,” the owner of the non-U.S. trademark will “face difficulty” in establishing a Section 43(a) claim. But “the story is different when a defendant, as alleged here, has — as a cornerstone of its business — intentionally passed off its goods in the United States as the same product commercially available in foreign markets in order to influence purchases by American consumers.” In such a situation, the owner of the non-U.S. trademark has viable Section 43(a) claims.

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December 22, 2015

Federal Circuit Holds: “Disparagement” Clause of Lanham Act Violates the First Amendment

Filed under: Constitution, TM Registration, Trademark (General), TTAB — Tags: , , , , , — Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP @ 5:13 pm

Widmaier_Uli_1 F LRBy: Uli Widmaier

I.  The Court’s Holding:

Section 2(a) of the Lanham Act, 15 USC § 1052(a), provides that trademarks that “disparage . . . persons, living or dead, institutions, beliefs, or national symbols” shall not be federally registered (emphasis added).

On December 22, 2015, the Court of Appeals for the Federal Circuit, ruling en banc, held that this clause “is unconstitutional because it violates the First Amendment.” See In re Simon Shiao Tam, No. 2014-1203, slip op. at 62 (Dec. 22, 2015). Based on this holding, the Court vacated the Trademark Trial and Appeal Board’s determination that the mark THE SLANTS for “Entertainment in the nature of live performances by a musical band” is unregistrable as disparaging people of Asian descent.

II.   Practical Consequences:

The Federal Circuit is the statutorily designated Court of Appeals for all USPTO actions, see 15 USC § 1071(a). By holding that Section 2(a)’s disparagement clause is unconstitutional, In re Tam necessarily invalidates not only that clause, but also all USPTO precedents and rules that are based on in. Therefore, In re Tam has several immediate practical consequences:

  • Any disparagement grounds in currently pending Office Actions are no longer valid.
  • Any disparagement claims in currently pending opposition actions or petitions for cancellation must be withdrawn or dismissed.
  • No future trademark applications can be refused registration on disparagement grounds.
  • No future opposition or cancellation actions can validly be based on disparagement claims.

This describes the situation today. But it may not be the end of the matter. The issue may be bound for Supreme Court review, particularly given that a circuit split may emerge in short order. The famous REDSKINS case, in which the Board used the disparagement clause to cancel six trademark registrations of the NFL’s Washington Redskins, Pro-Football, Inc. v. Blackhorse, No. 1-14-CV-01043-GBL, 2015 WL 4096277 (E.D. Va. July 8, 2015), is currently on appeal before the Fourth Circuit. The case turns in substantial part on whether Section 2(a)’s disparagement clause violates the First Amendment. If the Fourth Circuit disagrees with the Federal Circuit’s holding and decides that there is no constitutional violation, then the Supreme Court is likely to step in and resolve the split between the Fourth and Federal Circuits on this important question of constitutional law.

If the Supreme Court were to agree with the Federal Circuit and hold that the disparagement clause is unconstitutional, then the practical implications listed above remain as they are at the moment. But if the Supreme Court were to hold that the disparagement clause is not unconstitutional, then the clause—and the USPTO regulations that depend on it—would be reinstated. What would that mean to any “disparaging” trademark registrations that were issued in the meantime? The answer is that such registrations would potentially be subject to cancellation on disparagement grounds.

III.   Takeaway:

For the time being, the practical takeaway from the Federal Circuit’s In re Tam decision is this. Trademark owners are now free to register disparaging marks, since the USPTO cannot refuse to register them on the ground of disparagement. And third parties cannot oppose applications or seek to cancel registrations on the ground of disparagement.

But any resulting registrations remain at some risk for cancellation, since the Supreme Court may well decide to review this issue. If so, the Supreme Court may overrule the Federal Circuit’s holding, whereupon the disparagement clause and the USPTO rules and precedents based on it would be reinstated.

Furthermore, a disparagement attack (should it be reinstated) cannot be averted via incontestability, since Section 14(3) of the Lanham Act, 15 U.S.C. § 1064(3), expressly permits incontestable registrations to be challenged on Section 2(a) grounds.

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Uli Widmaier 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. The firm advises its clients on a broad range of domestic and international intellectual property matters, including brand protection, Internet, and e-commerce issues.  Uli’s practice focuses on domestic and international trademark, copyright, trade dress and Internet law and litigation.

 

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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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