Arnstein & Lehr Llp Intellectual Property Newsletter - Summer 2009

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Second Circuit Court allows case against Google Adwords program to proceed The decision of the U.S. Court of Appeals for the Second Circuit in Rescuecom Corp. v. Google Inc. could be a watershed event for trademark owners in their ongoing battle against the Google Adwords program. In Rescuecom, the Second Circuit reversed the dismissal by the U.S. District Court for the Northern District of New York of Rescuecom's trademark infringement claims and let the case against Google go forward. Google’s AdWords program allows advertisers to purchase terms (“keywords”) that trigger the appearance of the advertiser’s advertising and a link to the advertiser’s website whenever a searcher enters that term into the Google search engine. The search term can be a word describing goods or services, the name of a competitor or a trademark. Google’s Keyword Suggestion Tool recommends keywords to purchasers relating to their area of commerce to improve the effectiveness of their advertising. The results of such purchased keywords can appear above the column of returned “hits” under the label “Sponsored Link” but they are not identified as purchased ads. Rescuecom argued that they may appear to a searcher to be the most relevant entries responding to the search. It claimed that Google makes 97% of its revenue from AdWords sales. The Keyword Suggestion Tool recommended to Rescuecom’s competitors the purchase of Rescuecom’s trademark as a search term and some of those competitors made that purchase. The District Court relied on the prior Second Circuit precedent in 1-800 Contacts, Inc. v. WhenU.com, Inc., 414 F.3d 400 (2d Cir. 2005) to determine that Google's use of the plaintiff's trademarks in its AdWords program and its Keyword Suggestion Tool were not a "use in commerce" as that term is defined in the Lanham

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Flea market landowner not liable for contributory trademark infringement Louis Vuitton (“Vuitton”), the well-known manufacturer of luxury goods such as handbags and luggage, and owner of numerous registered trademarks, discovered that counterfeits of its products were being sold by vendors at the San Jose flea market. The market is one of the largest open-air flea markets in the country, covering 120 acres of land where over 2,000 vendors occupy eight miles of aisles. Vuitton sued The Flea Market, Inc. and Bumb & Associates (“Bumb”), along with three of Bumb’s individual partners and two other individuals. Vuitton alleged that The Flea Market and Bumb were closely related to each other and collectively owned the land, buildings, structures and fixtures at the market. Vuitton further claimed that The Flea Market pays Bumb for the right to lease the property to the vendors. Vuitton alleged that Bumb committed contributory trademark infringement by knowingly allowing vendors at the market to sell counterfeit Vuitton goods. Bumb moved to dismiss the complaint because Vuitton failed to allege enough facts to hold Bumb liable. The U.S. District Court for the Northern District of California noted that a claim of contributory trademark infringement requires that the defendant either (1) intentionally induce a third party to infringe the trademark owner’s mark or (2) supply a product to a third party with actual or constructive knowledge that the product is being used to infringe the mark. As Vuitton did not claim that Bumb induced any of the vendors to sell counterfeit goods, it was required to show that Bumb supplied counterfeit products to the vendors with knowledge that the goods were being used to infringe Vuitton’s trademarks. In determining whether Vuitton had properly claimed that Bumb

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Act; therefore, Rescuecom failed to plead an essential element of a Lanham Act claim. However, in its decision in Rescuecom, the Second Circuit clarified the meaning of the Lanham Act term “use in commerce,” agreeing with Rescuecom that when Google serves up advertising or suggests keywords based on trademarks this constitutes a use in commerce under the Act even if the ads do not display Rescuecom’s trademark.

supplied counterfeit products, the Court considered the extent of control exercised by Bumb over the vendors’ means of infringement. In the context of swap meets, the U.S. Court of Appeals for the Ninth Circuit had held that the owner and operator of the meet, who supplied parking, conducted advertising and retained the right to exclude a vendor for any reason at any time, and who was also aware that vendors were selling counterfeit goods at the meet, was liable for contributory infringement. The Ninth Circuit found that the owner was liable because it supplied the necessary marketplace for the sale of the counterfeits. Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259 (9th Cir. 1996).

The Second Circuit concluded that Rescuecom’s case was materially different from the situation in 1-800 Contacts, because that prior case involved a situation where the search term generated a “pop-up” ad in a separate browser window when a particular website address was entered. The competitor’s brand was displayed in a window frame surrounding the ad so that there was no confusion about the pop-up being an advertisement by a third party, not the trademark owner. The website address involved in 1-800 Contacts was never claimed by the owner to be a trademark, so a trademark was not used to trigger the offending advertising. Also, the pop-up program randomly triggered ads, it did not allow an advertiser to purchase a keyword to trigger an ad. In contrast, Google displays, offers and sells trademarks as search terms to its advertisers and encourages them to purchase the trademarks of others as search terms. Therefore, Google uses and sells trademarks in the sale of its advertising services that are rendered in interstate commerce. Those uses are not merely “internal” to Google’s search algorithm. The Second Circuit also rejected Google’s argument that its use of keywords to generate sponsored ads was no different than a retail vendor who puts a store-branded generic product next to a trademarked product to encourage consumers to consider the less expensive generic product. That practice, the Court noted, is benign because it does not cause a likelihood of consumer confusion. Retailers are not paid by off-brand producers to deliver the off-brand instead of the famous brand consumers were actually seeking. Whether Google’s practice is benign product placement or trademark infringement will be decided at trial. The Second Circuit's decision potentially opens up Google's advertising practices to Lanham Act liability. The Second Circuit's decision allows Rescuecom to move forward with this case to show, if it can, that Google's practices create a likelihood of confusion in the marketplace. More than half of the opinion consists of an extensive Appendix entitled “On the Meaning of ‘Use in Commerce’ in Sections 32 and 43 of the Lanham Act” that discusses how to apply the “use in commerce” definition to the Lanham Act’s provisions against infringement. Although the Appendix is not binding precedent from the Second Circuit, it nevertheless extends this case far beyond keyword advertising issues. - Joel B. Rothman Source: Rescuecom Corp. v. Google Inc., U.S. Court of Appeals for the Second Circuit, No. 06-4881, April 3, 2009

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However, in this case Bumb was not the operator but merely the property owner who leased the land to The Flea Market, a separate entity. Bumb did not exercise any specific, direct control over the vendors’ business operations. Because Vuitton failed to allege that Bumb had a relationship with any of the vendors so that it could control their actions, the District Court dismissed the complaint against Bumb. Vuitton’s broad statement that each of the defendants informed the others of their actions, as well as the lawful and unlawful activities at the market, was not supported by any facts so the District Court dismissed it as a mere “blanket assertion” that failed to provide Bumb with fair notice of the factual grounds for the complaint against it. The Louis Vuitton web site states that they have undertaken “more than 13,000 counterfeiting proceedings and 6000 raids, leading to the arrest of almost 1000 counterfeiters.” Other owners of famous trademarks can be expected to conduct similar campaigns. Whether a landlord can be held responsible for trademark infringement by its tenant is a fact-specific matter, often depending on what the landlord knew or should have known about what the tenant was selling, but landlords should be aware that they could have exposure for trademark infringement if they knowingly allow tenants to sell counterfeit goods. - Judith L. Grubner

Source: Louis Vuitton Malletier v. The Flea Market, Inc., U.S. District Court for the Northern District of California, No. C 09-01062 CW, June 10, 2009

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Florida jettisons false light invasion of privacy action The right of privacy is generally divided into three categories: the right to be left alone, embarrassing disclosures and false light invasion. Commercial use of the private information is not required. False light invasion of privacy occurs when publicity places a person in a false light before the public, such as the use of a person’s name or picture without consent, in the form of a major misrepresentation that would give offense to a reasonable person. The Florida Supreme Court has ruled that false light invasion of privacy is not a valid cause of action in Florida. The case arose when Jews for Jesus published a newsletter account by a man who had visited his ailing father and the father’s wife, the man’s stepmother. The account read: I had a chance to visit with my father in Southern Florida before my Passover tour. He has been ill for sometime and I was afraid that I may not have another chance to be with him. I had been witnessing to him on the telephone for the past few months. He would listen and allow me to pray for him, but that was about all. On this visit, whenever I talked to my father, my stepmother, Edie (also Jewish), was always close by, listening quietly. Finally, one morning Edie began to ask me questions about Jesus. I explained how G-d [sic] gave us Y’Shua (Jesus) as the final sacrifice for our atonement, and showed her the parallels with the Passover Lamb. She began to cry, and when I asked her if she would like to ask G-d for forgiveness for her sins and receive Y’Shua she said yes! My stepmother repeated the sinner’s prayer with me – praise G-d! Pray for Edie’s faith to grow and be strengthened. And please pray for my father Marty’s salvation. The stepmother, claiming that this publication placed her in a false light regarding her religious beliefs, filed suit against Jews for Jesus. She also asserted claims for defamation and intentional infliction of emotional distress. The trial court dismissed her complaint, as well as two amended complaints. When she appealed, the Florida Fourth District Court of Appeal rejected the defamation claim but asked the Florida Supreme Court to answer the question whether Florida recognized false light invasion of privacy. The Florida Supreme Court discussed two concerns raised by other courts that have rejected the tort of false light: (1) it is largely duplicative of defamation, both in the conduct alleged and the interests protected, and creates the potential for confusion because many of its parameters, in contrast to defamation, have yet to be defined; and (2) without many of the First Amendment protections attendant to defamation, it has the potential to chill speech without any appreciable benefit to society. First, the Supreme Court noted that defamation law already encompasses claims that would fall under the definition of false light, such as “the concept that literally true statements can be defamatory where they create a false impression.” The Court

referred to this as “defamation by implication” and cited several Florida opinions that have discussed that tort. Second, the Court applied Section 652E of the Restatement (Second) of Torts to discuss the different standards applicable to the tort of false light versus defamation, noting that “it is not… necessary to the action for invasion of privacy that the plaintiff be defamed. It is enough that he is given unreasonable and highly objectionable publicity that attributes to him characteristics, conduct or beliefs that are false, and so is placed before the public in a false position … [where] the statement is highly offensive to a reasonable person.” In contrast, “a defamatory statement is one that tends to harm the reputation of another, by lowering him or her in the estimation of the community or, more broadly stated, one that exposes a plaintiff to hatred, ridicule, or contempt or injures his business or reputation or occupation.” For the Court, the critical issued boiled down to the fact that false light is defined in subjective terms while defamation is defined more objectively. The Court also had First Amendment concerns, in that the false light “highly offensive to the reasonable person” standard raised a potential chilling effect on free speech because liability depended too much on the subjective concerns of the plaintiff. Although other states solved that problem by extending defamation protections to false light claims, the Court rejected that suggestion as one that should be left to the Florida legislature. In a parting shot, the Court also noted that no case had been identified where a claim based solely on false light was upheld, signaling to the Court that the tort was irrelevant. Finally, the Court held that the applicable standard in defamation cases is the Restatement standard that the defamatory statement prejudices the plaintiff in the eyes of a “substantial and respectable minority” of the community. Thus, in future, plaintiffs who would normally claim false light invasion of privacy must instead plead a claim for implied defamation and meet the applicable standard for the communication at issue. Unlike Florida, Illinois recognizes a cause of action for false light invasion of privacy. To prevail, a plaintiff must show that (1) he or she was placed in a false light as a result of the defendant’s actions, that is, that the publicity at issue is of and concerning him or her; (2) the false light was offensive to a reasonable person; and (3) the defendant acted with actual malice, that is, with knowledge that the statements were false or with reckless disregard for their truth or falsity. Muzikowski v. Paramount Pictures Corp., 322 F.3d 918, 927 (7th Cir. 2003). The malice requirement applies whether or not the plaintiff is a public or private person. - Joel B. Rothman Source: Jews for Jesus v. Rapp, Supreme Court of Florida, 997 So.2d 1098, 2008 Fla. LEXIS 2010, October 23, 2008

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Sale of products with UPC code removed constitutes trademark infringement Although consumers and retailers cannot read “unique production code” symbols (“UPC,” also known as universal or uniform product code) without the assistance of scanning devices, the U.S. Court of Appeals for the Second Circuit has concluded that removal of UPC symbols from genuine, branded products can constitute trademark infringement. Even if a retailer is selling a genuine product in its original packaging with the registered trademark intact, altering or removing the UPC symbol can subject the retailer to trademark infringement liability because it interferes with the trademark owner’s ability to control the quality of its goods. Zino Davidoff SA (“Davidoff”) sells high-end luxury goods for personal consumption. Since 1988, Davidoff has sold DAVIDOFF COOL WATER branded colognes for men. In 1997, it introduced a COOL WATER branded fragrance for women. Davidoff licensed Coty to manufacture and market its COOL WATER fragrances. Together they developed a comprehensive quality assurance and anti-counterfeiting program. That program includes placing a UPC symbol on the bottom of each fragrance bottle and its package. Davidoff uses the UPC symbol to detect counterfeit fragrance products and to detect and make targeted recalls of products with quality problems. Davidoff maintains the prestige of its brand by limiting sales of COOL WATER fragrance products to luxury retailers. It has refused to sell its products to CVS, a retail drugstore chain, but CVS nevertheless sells COOL WATER products that it obtains from other sources, including “gray market” goods. Gray market goods are manufactured under the authorization of the trademark owner and are legally purchased from authorized distributors (often outside the U.S.) but are imported by third parties other than the trademark owner without the owner’s consent. They differ from counterfeit products in that they are the genuine goods of the trademark owner. Davidoff products are among CVS’s top-selling fragrances. In 1998 and 2005, Davidoff caught CVS selling counterfeit COOL WATER products. CVS assured Davidoff that it would remove the counterfeit goods and sell only products from authorized distributors in the future. However, when Davidoff discovered more counterfeit products on CVS’s shelves in 2006, it brought this case for trademark infringement and other claims. When the U.S. District Court for the Southern District of New York entered a temporary restraining order against CVS, the court authorized Davidoff to inspect CVS’s inventory bearing the COOL WATER mark. Davidoff discovered that its UPC symbol had been removed from 16,600 items. The symbols had been removed by cutting away portions of the box, using chemicals to wipe away the symbols and grinding away the bottom of the bottles. In many cases, it was clear that the packaging had been opened. Davidoff then amended its complaint to charge CVS with trademark infringement for removing the UPC w w w. a r n s t e i n . c o m

symbols and the District Court granted Davidoff a preliminary injunction prohibiting CVS from selling any Davidoff trademarked products with the UPC symbol removed. CVS appealed the preliminary injunction, contending that it could not be committing trademark infringement because it was selling genuine gray-market goods, that is, real Davidoff products in their original packaging with Davidoff’s visible and unaltered trademarks. But the Second Circuit concluded that removal of the codes interfered with Davidoff’s trademark rights regardless of whether the goods were authorized for sale in the U.S. CVS pointed out that Congress had failed to enact proposed amendments to the Lanham Act to bar alteration or removal of the UPC symbol but the Second Circuit noted that failed legislative proposals are “dangerous ground” because they could mean that Congress believed the statute already covered the issue. Where goods bearing a true trademark do not conform to the trademark owner’s quality control standards or differ materially from the owner’s authorized products, they are no longer considered genuine. Such goods do not have to be defective to injure the owner’s reputation for quality. In order to show that its quality control procedures have been subverted, a trademark holder must prove that its procedures are “established, legitimate, substantial, and nonpretextual,” that it abides by its procedures and that sales of products not conforming to those procedures will diminish the value of the mark. The Second Circuit agreed with the District Court that Davidoff had met all of these requirements. Because creating individual UPCs for every package is expensive, counterfeiters omit the codes or use the same false code on numerous packages. Davidoff’s UPC system allows it to identify knock-offs by scanning for products that either lack codes or display codes known to be false. Davidoff abides by its procedures in that it trains retailers, private investigators and U.S. Customs officials to use its UPCs to identify and seize counterfeit goods. Removal of Davidoff’s UPCs increases the risk that retail units will be counterfeit, diminishing the value of its mark. In addition, the Second Circuit noted that information imbedded in the codes, such as where and when a particular unit was

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produced, the ingredients used and the distribution path helped Davidoff to identify the source of defective goods and allowed easy and quick identification of distributed products, permitting targeted recalls. The retailers and consumers do not have to be aware of or understand that information for Davidoff to use it to control product quality. The UPCs are bona fide quality control devices relied on by Davidoff. They are not used merely to trap unauthorized distributors and identify importers of gray-market goods, which might not be a sufficient purpose to subject a retailer to Lanham Act liability. The damage caused by CVS to the packaging and the bottles was visible to consumers, who could regard such mutilated packages as stolen, defective, diverted from recall, or otherwise suspicious or untrustworthy. Recipients of such products as romantic gifts could see them as cheap or illicit, the sort of present “given by Tony Soprano to Carmela,” according to the Court. That makes luxury goods with damaged packaging materially different from goods in intact packaging. As the threshold of materiality is low for gray-market goods, a slight difference such as mutilated packaging could endanger the trademark owner’s goodwill and subject consumers to potential confusion. Davidoff’s evidence that the absence of UPCs increased the risk that consumers would purchase counterfeit or defective products was enough to demonstrate that it would be irreparably injured by CVS’s actions, thus justifying the preliminary injunction. This appears to be the first federal appeals court decision that removing or altering UPC symbols can constitute trademark infringement, providing trademark owners with an additional tool against unauthorized distributors. Although the UPC symbol is not usually considered to be a trademark, in 1990 a federal district court indicated that there were at least 10 registered marks that included UPCs as part of their designs. Minturn Advertising, Inc. v. Hermsen Design Assocs., Inc., 728 F. Supp. 430, 433 (N.D. Tex. 1990). - Judith L. Grubner Source: Zino Davidoff SA v. CVS Corp., U.S. Court of Appeals for the Second Circuit, No. 07-2872-cv, June 19, 2009

Yoko Ono retains rights to London film footage of John Lennon and family The United States District Court for the District of Massachusetts has dismissed claims by World Wide Video (“WWV”) against Yoko Ono, widow of former Beatles member John Lennon, for recovery of video tapes that WWV claimed to own, and allowed Ono to keep possession of and the copyrights to those tapes. The story of those tapes reads like a suspense novel. In 1970, filmmaker Anthony Cox, Ono’s ex-husband, shot four days of film footage of John Lennon, Yoko Ono, and their family in and around London. In 1983, Cox registered with the U.S. Copyright Office a copyright in the footage, which at that time consisted of 24 videotapes and a short documentary motion pic-

ture entitled "Portrait." Cox assigned his rights to the videotapes to a company he controlled, which later sold the videotapes to two individuals, John Fallon and Robert Grenier, Jr. Fallon and Grenier then assigned the rights to the company they controlled, World Wide Video, the plaintiff in this case. Their estimate of the value of the tapes was $10 million to a collector and up to $150 million if Ono agreed to commercialization of the tapes. Apparently the videotapes were then stolen, held for ransom, transferred to other parties, threats were made to destroy them and, in 2002, they were sold to Ono by the alleged thief for $300,000, along with a transfer of the copyrights, alleged by WWV to be forged. That same year, Ono publicly recorded the transfer documents with the Copyright Office. In 2005, WWV learned of Ono's claim of ownership when it attempted to show a copy of a film about Lennon that contained portions of the transferred tapes and Ono complained. Instead of suing Ono right away to recover the tapes and its rights, WWV waited until 2008 to file its suit. In response to Ono’s motion for judgment on the pleadings because the statute of limitations had run on WWV’s copyright claim, the court ruled in Ono’s favor and threw out WWV's claims. The court held that Ono's 2002 registration of the assignment of the copyright in the videotapes with the Copyright Office was “constructive notice” that began the running of the threeyear statute of limitations for copyright infringement. As WWV should have known in 2002 that Ono was claiming rights in the videos because of the “triggering event” that she recorded the copyright transfer, WWV failed to file its suit in time and could not recover against Ono. The recordation of the transfer was “notice to the world of its existence.” In addition, WWV failed to try to discover where the tapes had gone after expiration of an agreement it had made with the alleged thief. Moreover, the Court found that Ono’s recordation of the copyright transfer did not infringe the copyright, even if WWV owned it. WWV simply could no longer challenge Ono’s ownership of the tapes. The court made light of WWV’s burden to check the records of the Copyright Office to discover Ono’s 2002 recordation of the copyright transfer. However, searching the Copyright Office records for information about a particular creative work is not that simple. For example, the two records for the “Portrait” videotape indicate that the copyright was registered in August 1983 by Anthony Cox and that a “bill of sale” was recorded in June 2002. Anthony Cox is listed as Party 1 and Lexon, Inc. as Party 2. Those were the parties to the original assignment in 1996 that Cox made to a corporation he controlled. Neither WWV, which obtained the copyright in 2000, nor Yoko Ono, who apparently recorded the “bill of sale” in 2002, appear on the record. - Joel B. Rothman

Source: World Wide Video, LLC v. Anthony Pagola and Yoko Ono Lennon, U.S. District Court for the District of Massachusetts, No. 08-10391RWZ, June 24, 2009

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South Dakota considers Landham Act abandonment test for state trademarks Section 45 of the Lanham Act (15 USC §1127) provides a rebuttable presumption that a trademark has been abandoned when the mark has not been used for three years. Although not adopting that presumption, the South Dakota Supreme Court has considered it in the context of state trademark registrations. Dakota Industries, Inc. (“DI”), a manufacturer of outerwear products, registered the trademark DAKOTA for its products with the Secretary of State of South Dakota in 1968 and renewed that registration in 2006. When Cabela’s.com, Inc. (“Cabela’s”) sold clothing using “Dakota Vest” and “Dakota Jacket,” DI sued Cabela’s for state trademark infringement. Cabela’s moved for summary judgment, claiming that DI had abandoned the mark by failing to make or sell any DAKOTA-branded goods after 1997 and failing to collect royalties from licensees after 2001. The trial court granted judgment to Cabela’s, finding that DI had not rebutted the evidence of abandonment. DI appealed, and the South Dakota Supreme Court affirmed that decision. Although the Supreme Court acknowledged that abandonment is a defense to trademark infringement which the alleged infringer has the initial burden to establish, the Court noted that once that initial case of abandonment has been made, the trademark owner is required to respond to that evidence with specific facts from which current use of the mark can be shown or inferred. Cabela’s produced evidence from DI’s business records that DI

had not sold any DA“The Court noted that KOTA-branded products although the South Daor collected any royalties from licensees of its kota trademark statute DAKOTA mark from authorized the Secretary 2001-2006. Cabela’s also of State to cancel a state produced the deposition testimony of DI’s CEO trademark registration that DI had not made or that has been abandoned, sold any DAKOTA-brandthe statute did not proed products after 1997 and that the DAKOTA vide any particular period mark had not been used of non-use that would or licensed by DI since constitute abandonment.” 2000. DI’s CEO had also testified that he was “not going to waste any time or efforts” determining whether DI’s licensees were continuing to use the mark or even continued to exist. That evidence, the Supreme Court observed, was sufficient to make a prima facie case of abandonment, requiring DI to come forward with specific facts about its current use of the mark. The Court noted that, although the South Dakota trademark statute authorized the Secretary of State to cancel a state trademark registration that has been abandoned, the statute did not provide any particular period of non-use that would constitute abandonment. The trial court had looked to the federal Lanham Act for

Free Domain Name Trademark Monitoring for Valued Clients For a limited time, Arnstein & Lehr LLP is offering a free service for valued clients concerned about potential infringers registering domain names with their trademarks. This new service alerts the firm daily to top-level domain names registered with ICANN registrars that contain the client’s trademarks. It is offered as part of Arnstein & Lehr’s emphasis on providing its clients with large firm expertise at mid-market value rates. Hundreds of thousands of new top-level internet domains are registered every week. Often these domains contain valuable trademarks that the registrants are not authorized to use. Good brand management and protection dictates that trademark owners be vigilant about misuse of their marks on the Internet. Services that alert trademark owners to domain registrations using their marks can cost thousands of dollars a year. However, for a limited number of trademarks and a limited time Arnstein & Lehr will, free of charge, add a client’s trademark to the list of marks it monitors for use in new domain registrations. Any alerts the firm receives will be forwarded on to the client for review and legal action, if necessary, at the client’s discretion. Clients or potential clients interested in taking advantage of this new free service are encouraged to contact Judith Grubner in Chicago at 312.876.7885 or [email protected], or Joel Rothman in West Palm Beach at 561.650.8480 or [email protected].

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7 guidance. The trial court did not adopt the Lanham Act’s threeyear non-use presumption but also considered that DI’s non-use stretched for almost six years. DI contended that it had not abandoned the mark during either a three-year or a six-year period because the mark was in use by its licensees. It pointed to recently seen DAKOTA-branded clothing for sale by a company in Sioux Falls. However, DI’s attorney admitted that those garments were sold to that company in 1997 and that DI did not have any evidence that the company was still a licensee. Because DI failed to produce any evidence of actual license agreements, income from licensing or affidavits from current licensees, and no specifics about goods or licensees still in the marketplace or alleged royalty-free oral licenses or license supervision, the Supreme Court concluded that the mark was indeed abandoned. Section 45 of the Lanham Act also provides that a mark will be presumed abandoned if the owner’s course of conduct causes the mark to “lose its significance as a mark.” Allowing unlicensed third parties to use a mark can be evidence of such lost significance.

A state trademark registration, although providing protection for a mark only within the boundaries of the state of registration, is nonetheless an important tool for protection of marks that are not used in interstate commerce or whose owner is not ready to incur the expense of a federal registration. State trademark registrations are relatively easy and inexpensive to obtain and maintain compared to a federal registration. However, unlike federal applications, which can be based on an intent to use a mark in the future, state trademark applications require that the mark be in current use within the state. The DAKOTA mark at issue in this case would probably have been difficult to register on the U.S. Principal Register, as it would likely have been considered to be geographically descriptive. State registrars may not consider that to be grounds for rejection. - Judith L. Grubner Source: Dakota Industries, Inc. v. Cabela’s.com, Inc., South Dakota Supreme Court, No. 24950, May 20, 2009

The Intellectual Property Practice Group counsels clients on matters related to the protection of trademarks, copyrights, domain names and trade secrets, including preparation and processing of trademark and copyright applications, unfair competition, rights of privacy and publicity, review of web sites and advertising claims, and preparation and registration of contest and game promotion rules. Judith L. Grubner Phone: 312.876.7885 Email: [email protected]

Joel B. Rothman Phone: 561.650.8480 Email: [email protected]

Ms. Grubner is a partner in the firm’s Chicago office. She concentrates her practice on intellectual property, specializing in trademarks, copyrights, domain names and sweepstakes, contests and game promotions. Ms. Grubner is a speaker for the Chicago and Milwaukee Bar Associations, the Midwest Society of Professional Consultants and Society of Professional Journalists. In July 2009 Ms. Grubner was named to the list of Leading Lawyers in Advertising & Media Law by Leading Lawyers Network.

Mr. Rothman is a Florida board certified Intellectual Property lawyer and a partner in the firm’s West Palm Beach office. Mr. Rothman represents individual and corporate clients in intellectual property infringement litigation involving patents, trademarks, copyrights, trade secrets, trade libel and related commercial matters. His litigation practice also includes significant focus on electronic discovery issues such as e-discovery management and motion practice relating to e-discovery.

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