Wu-t(m)ang Style.docx

TRADEMARK WU I. OVERVIEW ................................................................................................................................. 0 A. THEORIES OF TRADEMARK LAW .............................................................................................. 1 B. TRADEMARK LAW IN CONTEXT ................................................................................................ 2 II. A. B. C. D. E. F. G.

PROTECTABLE MARKS ............................................................................................................. 4 DISTINCTIVENESS ..................................................................................................................... 4 SECONDARY MEANING ............................................................................................................. 5 GENERICNESS ........................................................................................................................... 6 PROVING GENERICNESS............................................................................................................ 8 TYPES OF MARKS ................................................................................................................... 11 TRADE DRESS ......................................................................................................................... 12 FUNCTIONALITY ..................................................................................................................... 15

III. A. B. C. D. E. F. G. H. I. J. K.

ACQUISITION OF RIGHTS ....................................................................................................... 18 USE ........................................................................................................................................ 18 TRADEMARK USE ................................................................................................................... 22 REGISTRATION ....................................................................................................................... 23 PRIORITY ................................................................................................................................ 26 CONCURRENT USE .................................................................................................................. 27 TERRITORIALITY ..................................................................................................................... 30 SCANDALOUS AND DISPARAGING MARKS .............................................................................. 33 NAMES ................................................................................................................................... 34 DECEPTIVE MARKS.................................................................................................................. 37 GEOGRAPHIC MARKS .............................................................................................................. 38 ABANDONMENT ..................................................................................................................... 41

IV. LIABILITY ............................................................................................................................. 43 A. LIKELIHOOD OF CONFUSION ................................................................................................... 44 B. TRADE DRESS INFRINGEMENT ................................................................................................ 50 C. APPROVAL CONFUSION .......................................................................................................... 53 D. POST-SALE CONFUSION.......................................................................................................... 54 E. INITIAL INTEREST CONFUSION ................................................................................................ 56 F. SECONDARY LIABILITY ........................................................................................................... 58 G. DILUTION ............................................................................................................................... 60 H. DOMAIN NAMES ..................................................................................................................... 66 I. REMEDIES ................................................................................................................................ 71 V. A. B. C. D.

DEFENSES ............................................................................................................................... 72 INCONTESTABILITY ................................................................................................................ 72 CLASSIC FAIR USE .................................................................................................................. 73 NOMINATIVE FAIR USE .......................................................................................................... 75 SPEECH ................................................................................................................................... 76

I. OVERVIEW A. THEORIES OF TRADEMARK LAW Purpose of TM law is to protect different interests: Reasons to Protect: 1) Prevent consumer fraud – spend money on something thought was good quality, but was bad quality 2) Reduce consumer search costs – would need to investigate further, which is not efficient 3) Encourage investment in quality, consistency, or brand development – otherwise market of lemons 4) Prevent free-riding – would discourage creation in the first place. Loses out on sale. Reasons not to protect: 5) Encourage competition 6) Protect freedom of expression Hanover Star Milling Co. v. Metcalf (SCOTUS, 1916): Metcalf used mark TEA ROSE for flour in Ohio before Hanover used it for flour in Alabama. Court held it is more about reputation among consumers than who staked claim first if it was in Ohio. All purposes of TM law align here.  TM law’s main purpose is to protect consumers: the essence of the wrong consists in the sale of the goods of one manufacturer or vendor for those of another. If both sold = consumer confusion.  TM law’s other purpose is to protect producer’s goodwill: the redress that is accorded in TM cases is based upon the party's right to be protected in the goodwill of a trade or business. Here, Hanover Star’s reputation is on the line in Alabama.  TM law also exists to prevent free-riding. If both sold, Wheeler would free ride on Hanover Star in Alabama. Champion Spark Club v. Sanders (SCOTUS, 1947): P manufactured sparkplugs under CHAMPION mark; D collected P’s used sparkplugs, refurbished them and resold them with “renewed” and CHAMPION mark still on them. Court held full disclosure gives the manufacturer all protection to which he is entitled.  When consumers purchase D’s refurbished sparkplugs, they will know +/- what they’re buying. Know it is second-hand. The second-hand dealer (D) gets some benefit from the TM but that is wholly permissible so long as the manufacturer is not identified with the inferior qualities of the product resulting from wear and tear or the reconditioning by the dealer. o Free-riding on another’s goodwill is permissible by a refurbisher as long as there is full disclosure that the goods have been refurbished (bc then there is no consumer deception).  Holmes: When the mark is used in a way that does not deceive the public, there is no reason to prohibit its use. Stork Restaurant Inc. v. Sahati (9th circuit, 1948): P owned famous nightclub in NYC [Stork Club] known across nation. Small pub in SF with only a couple of stools also began calling itself the Stork Club. NYC club sued SF pub. NYC club claimed that a consumer might think SF bar is associated with the NYC club, which will generate high expectations that won’t be met by SF bar thus causing consumer confusion and potentially harm to NYC club’s goodwill. Court held:  One would NOT have to uncommonly naïve to assume that even a “humble” case in this shifty part of SF might be an unpretentious branch of the glittering NY night club. o Prof says one would have to be uncommonly naïve to think the two are related.  Even if a consumer is uncommonly naïve, the court is willing to protect the uncommonly naïve too: the law protects not only the intelligent, the experienced and the astute. It safeguards from deception also the ignorant, the inexperienced and the gullible. o Prof says generally however, TM law protects only the “reasonably prudent purchaser.”

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Court recognizes a free-rider problem: NYC club developed rep for a great nightlife exp. by investing in ads & SF bar is freeriding by using mark [“reaping where one has not sown”].  Court holds for NYC club bc a naïve consumer may be confused, but its holding is influenced by its desire to prevent free-riding and protect goodwill. Note: when SF bar freerides on NYC club’s logo, it may not result in consumer confusion [person may recognize SF bar ≠ ass’d w/ NYC club but may go anyway bc it recognizes name]. Note: this case is an example of the court broadening principles of consumer protection to prevent freeriding and protect goodwill. Ralph Brown: Two Kinds of Advertising: (1) informing – inform about the good and through info whether to buy; (2) persuading – buy without further information about it. Tylenol – persuading. Did not inform you of anything about it. Landes & Posner: if a company has a strong recognizable TM, then it must have a good quality product. A TM can be a shorthand way to signal to consumers the quality of the product. Protecting TMs incentivizes companies to develop strong TMs, which then reduce consumer search costs. Note: just bc two products have identical formulations [generics] does not mean that they will be of equal quality; the company with the stronger TM may be of better quality. Also, some consumers value the experience of consumers the “real thing” and value the atmospherics of a brand (Coca Cola versus generic version). Note: prof says you could signal quality of a product w/o the use of TMs; but then you would not have the atmospherics which some people value. Note: Brands advertise that their products will make you feel better and this is fine. There is a demand for the feeling and people want to be fooled. Littman – Breakfast with Batman: people value atmospherics and are willing to pay for them; BUT even if there is social value to atmospherics, it is unclear whether TM law should protect the atmospherics of a TM (i.e., the brand value).

B. TRADEMARK LAW IN CONTEXT COMPETITION Rule: under Supremacy clause and preemption principles, state unfair competition laws cannot be used to protect the copying of things that are held to be unpatentable under federal patent law. Sears Roebuck v. Stiffel Co. (SCOTUS, 1964): Stiffel (P) held design and mechanical patents for its lamps. P sold lamps it designed and soon after, Sears (D) sold identical lamps for cheaper. P sued D claiming: (1) D violated P’s patents, and (2) that by selling copies of P’s lamps, D had caused confusion as to the source of the lamps, violating IL’s unfair competition law.  Court held the patents invalid.  Court explained that under preemption principles, IL’s unfair competition law can NOT be used to impose liability for the copying an article which has been held to be unprotectable under federal law.  State unfair competition law should not extend further than preventing consumer confusion. Compco v. Day-Brite Lighting (SCOTUS, 1964): another example of SCOTUS holding that state CL on unfair competition is preempted by federal patent law: “If the design is not entitled to a design patent or other federal statutory protection, then it can be copied at will.” Rule: under Sears and Supremacy Clause’s preemption principles, state statutory law cannot be used to protect the copying of things that are held to be unpatentable under federal patent law.

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Bonito Boats v. Thunder Craft Boats (SCOTUS, 1969): D used a direct molding process to duplicate the design of P’s unpatented boat hulls. FL § made it unlawful to copy another’s boat design w/o written permission, even if the design has not been patented.  Under Sears, state CL on unfair competition cannot be used to protect designs which are unprotectable under federal patent law.  Here, the court extends the Sears rule to state statutory law. Rule: P can use state unfair comp. laws to protect hot news (i.e., info which has commercial value only during a short period) even though federal law does not provide any protection. International News Service v. Associated Press (SCOTUS, 1918): AP’s hot news was being reported on by INS in mid-west after AP released it on East Cost. Court granted AP protection against INS during the period of initial dissemination of the info to AP’s members.  This case has been viewed as an exception to preemption: if what you are seeking to protect is enough like HOT NEWS (an idea/info which has commercial value only during a short period), then you can make out a case under state unfair competition law even though federal law does not protect it. Note: in Cheney Bros v. Doris Silk, SCOTUS refused to protect design patents that were not original enough to warrant a design patent and were not copyrightable, thus limiting INS’s holding to its facts and only restricted to HOT NEWS. Rule: see below factors. HOT NEWS exception denied. NBA v. Motorola (2nd circuit, 1997): Motorola watched NBA games, tallied up scores on its own, then distributed scores of ongoing basketball games to users of Motorola’s SportTrax program. NBA sued Motorola under INS. Court held: info disseminated by Motorola did not qualify as HOT NEWS and that any protection beyond the limited hot news context would be preempted by the federal copyright act.  Hot news is limited cases where: 1. P generates or gathers information at a cost, 2. the information is time-sensitive, 3. D’s use of info constitutes free-riding on the P’s efforts, 4. D is in direct competition with a product or service offered by the Ps, and 5. the ability of other parties to free ride on the efforts of the P or others would so reduce the incentive to produce the product or service that its existence or quality would be substantially threatened.  Court held that NBA failed third and fifth element. TRADEMARKS Rule: Congress can only make such TM laws as is within its powers under IP clause & Commerce clause. Trade-Mark Cases (SCOTUS, 1879): Federal TM law granted the exclusive right to a TM upon registration. Court held: this TM law was unconstitutional bc the law was a Congressional attempt regulate areas beyond the scope of Congress’s powers under IP & Commerce clauses.  IP clause: Article I, § 8 authorizes congress to promote the progress of science and useful arts, by securing for limited times, to authors and inventors, the exclusive right to their respective writings and discoveries. o Clause only covers things that are invented or discovery. TM is not invented or discovered; it is the adoption of something already in existence as a distinctive symbol of party using it. o Clause does not give Congress the power to grant an exclusive right upon registration of a TM bc creating a TM does not require invention or discovery.  Commerce clause: the interpretation of the CC at the time was not expansive and before adoption of Wickard v. Filburn, which held that intrastate commerce that affects interstate commerce can be regulated under CC. Under pre-Wickard interpretation of CC, Congress could not regulate TMs.

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Note: modern TM law (Lanham Act) is justified under the Commerce clause. II. PROTECTABLE MARKS

A. DISTINCTIVENESS Restatement of Law (Third), Unfair Competition [Restatement §9]  A TM = a word, name, symbol, etc. that is: o distinctive of a person's goods or services and o used in a manner that identifies [the source] of those goods or services & distinguishes them from the goods and services of others.  The subject matter of trademark law was initially limited to fanciful or arbitrary words and symbols. This limitation excluded descriptive words and symbols. Rule: To be a valid TM, the TM must be distinctive. Where it falls on the spectrum depends on the product or service being sold See below spectrum of marks. Fanciful/arbitrary Always inherently distinctive Suggestive Descriptive Can be distinctive if has acquired secondary meaning Generic Can never be inherently distinctive Rule: see below four categories of marks and which are inherently distinctive v. which require 2° meaning to be valid TMs. Abercrombie and Fitch v. Hunting World (2nd circuit, 1976): A&F claimed TM rights in SAFARI for a variety of clothing items and accessories. Court held below principles:  Four different categories of terms w/r/t TM protection: 1) GENERIC: term that refers, or has come to be understood as referring, to the genus of which the particular product is a species. Can NEVER be a valid TM. 2) DESCRIPTIVE: terms have a direct connection with the good or service. Under Lanham Act, a descriptive term can only be a valid TM if it has acquired SECONDARY MEANING. o Example: American Airlines, Windows 3) SUGGESTIVE: different from descriptive marks in that suggestive marks. Has something to do with the product or service but not a direct connection. Merely suggest something about the goods and do not describe them. Suggestive marks do not require 2° meaning and are INHERENTLY DISTINCTIVE. o Example: Greyhound (suggests that it is fast transport), Microsoft. 4) ARBITRARY: TMs that have no meaning related to the goods or services being sold. No 2° meaning required to be valid TMs; are always INHERENTLY DISTINCTIVE. o Example: Apple for computers (but if for apples, descriptive, and if for apple pie, suggestive). 5) FANCIFUL: Words that are completely made up (EXXON for gas; ROLEX for watches) Note: Also see Zobmondo and QuikPrint for more definitions of SUGGESTIVE and DESCRIPTIVE. What makes something distinctive?  It identifies those goods or services and distinguishes them from the goods or services of others o More capable of identifying the source of the product/service being sold  If the term is less related to the good or service, it is more capable of identifying the source  If the term is more related to the good or service, it is less capable of identifying the source. It is more necessary to use the word to identify what the product is

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Rule: see below bullets for definition of suggestive and descriptive marks. In the Matter of QuikPrint Copy Shops, Inc. (CCPA, 1980): PTO examiner refused to allow registration of QUIK-PRINT on the grounds that it was MERELY DESCRIPTIVE. TTAB affirmed. Court here holds that the mark is in fact merely descriptive under the below principles:  A mark is SUGGESTIVE (thus, inherently distinctive w/o 2° meaning) if imagination, thought or perception is required to reach a conclusion on the nature of the goods/services.  A mark is MERELY DESCRIPTIVE (thus, requiring 2° meaning to be a valid TM) if it immediately conveys to one seeing or hearing it knowledge of the ingredients, qualities, or characteristics of the goods or services with which it is used. o Other competitors would need to use the mark to describe their services. Misspelling any consumer would understand. Rule: see below bullets for def of SUGGESTIVE MARK, competitors’ needs test, and imagination test. Zobmondo Entertainment v. Falls Media (9th circuit, 2010): Z used registered TM WOULD YOU RATHER…? for board games asking which undesirable choice a player would prefer. FM petitioned to cancel the TM as merely descriptive w/o 2° meaning. Court holds below rules.  First, a SUGGESTIVE MARK is one for which a consumer must use imagination or any type of multistage reasoning to understand the mark’s significance. The mark does not describe the product’s features but only suggests them.  Two tests are used to determine whether a mark is SUGGESTIVE or DESCRIPTIVE. 1) COMPETITORS’ NEEDS TEST: if competitors MUST USE THE MARK IN ORDER TO PROPERLY ID THEIR GOODS, then the mark is probably DESCRIPTIVE, not suggestive. 2) IMAGINATION TEST: if a mark REQUIRES IMAGINATION, THOUGHT AND PERCEPTION TO REACH A CONCLUSION AS TO THE NATURE OF THE GOODS, then the mark is SUGGESTIVE. If on the other hand, a mark conveys an immediate idea of the ingredients, qualities or characteristics of the goods, it is DESCRIPTIVE. Court remanded to trial for trial ct to apply tests & determine whether mark = suggestive or descriptive. Note from class: the more mental leaps it takes for the mark to conjure in a consumer’s mind the actual nature of the good attached to the mark, the more likely the mark is suggestive/fanciful.  Two reasons for this: 1) ↓ on this scale [the less mental leaps], the more concerned we are about letting 1 corporation have a monopoly over that mark, 2) ↓ on the scale [the less mental leaps], the harder it is to use the mark as a source-identifier. Note from class: why require 2º meaning for descriptive marks to be protected? Otherwise, descriptive marks can be easily depleted. Note from class: fanciful/arbitrary and suggestive marks do not require 2º meaning bc (1) depletion principle does not apply, (2) can’t develop 2º meaning for a fanciful or arbitrary mark, (3) a bigger second comer will be better able to develop 2º meaning to then have protection even if 1st comer used fanciful mark first [this problem is true for descriptive marks, but the depletion concern outweighs this concern].

B. SECONDARY MEANING Rule: one can obtain TM rights in a geographically descriptive mark by acquiring 2º meaning. American Waltham Watch v. United States Watch Co. (MA, 1899): P manufactured watches in Waltham before D and had great rep there; labeled them WALTHAM. D also started manufacturing watches in Waltham and labeling them WALTHAM. D argued that P should not have exclusive right to a geographic

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description of the watches’ origin. Court held: P obtained TM rights in a geographically descriptive mark by acquiring 2º meaning (WALTHAM is not only indicative of the geographic origin of P’s watches, but also that P specifically makes them and have a certain standard or quality; this is 2º meaning). Restatement of the Law (Third), Unfair Competition [Restatement §13]: a designation that is not inherently distinctive [a word that is merely descriptive] nevertheless may become, as a result of its use by a specific person, uniquely associated with that person's goods, services or business and this acquired distinctiveness is called SECONDARY MEANING. Rule: see 7 factor test below to determine whether a descriptive mark has acquired 2º meaning. Chrysler Group v. Moda Group (Michigan District Ct. 2011): Chrysler (P) spent $50m on a marketing campaign featuring the slogan IMPORTED FROM DETROIT. Moda (D) started using the phrase on Detroitthemed products and P sought to enjoin D from doing so. D argued the mark was merely descriptive of the goods’ geographic origin. Court held below.  D argued mark is suggestive b/c it is impossible to import a car from Detroit, thus it requires a mental leap to understand the nature of the goods. Court disagrees; mark ≠ suggestive, = geographically descriptive.  Descriptive terms that are not inherently distinctive may only be protected if they are proven to have acquired a 2º meaning. o 7 factors used to determine whether there is 2º meaning: 1. Direct consumer testimony: not presented by P. 2. Consumer surveys: not presented by P. Take time and money. 3. Exclusivity, length, and manner of use: only a short time passed since P unveiled IFD phrase BUT > short period of time is required in order to establish 2º meaning. Need to show secondary meaning as of the time D started using the mark. 4. Amount and manner of advertising: P spent 50m on ads but this alone does not prove that P acquired 2º meaning, but this weighs in P’s favor. Was on for a short amount of time; but built up to those words 5. Amount of sales and number of customers: nothing was sold under the mark within the few days 6. Established place in the market: P fails to show that IFD phrase had an established place in the marketplace at the time D used the phrase. D started selling shirts with the phrase right after P’s famous commercial, thus P would have to show that it acquired 2º meaning immediately after its commercial. BUT 2º meaning cannot be established instantaneously. 7. Proof of intentional copying: there was intl. copying here. Weighs in P’s favor. Riding on popularity of P’s ad. Evidence of intent to derive a benefit from the reputation of another would be actionable. o Court weighs 7 factors and finds that P did not prove acquisition of 2º meaning. Note: to be descriptive, the mark does not have to describe everything about the good. It only has to describe one trait about the good. This is why IFD could be descriptive.

C. GENERICISM General rule: if the name claimed as a TM is (or becomes) the generic name of the goods or services, principles of competition require that the name remain (or become) free for all purveyors to use.  The more well-known a product name is, the more danger there is that the mark is generic. But think of marks like MCDONALDS which are well-known but are in no danger of becoming generic. So, having a mark that is well-known does not necessarily mean it’s in danger of becoming generic.

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Rules: (1) in order to defeat a finding of genericness, P must prove that the mark has 2º meaning to identify the company (i.e., that consumers don’t think of the product when they hear/see the mark but think of the company producing it). (2) Although it is unfair to freeride on the good of a corporation’s reputation, it is fair to freeride on the reputation of a good. (3) Residual consumer confusion can be dispelled by adding a disclaimer. Kellogg v. National Biscuit (SCOTUS, 1938): Nabisco was the first producer of SHREDDED WHEAT and used to hold a patent for the design of the product. Kellogg began to produce a product called shredded wheat as well in the same pillow-shaped form as Nabisco.  Kellogg argued that Nabisco no longer had rights in the name shredded wheat b/c it became the actual name of the good being sold (i.e., generic).  Nabisco made several arguments against the mark shredded wheat being generic. o B/c Nabisco was the only manufacturer of the product for so many years, consumers have come to associate Nabisco as the source of all shredded wheat.  However, the mere fact that Nabisco has a monopoly over this good does not mean that the name has acquired secondary meaning. Court held that in order to defeat a finding of genericness, you have to show that consumers don’t think of the product when they hear the word but think of the company producing it. o Nabisco’s predecessor invested a lot of money in making the name a household word and creating goodwill in the product; now Kellogg is attempting to free-ride on Nabisco’s investments.  Court held Kellogg is free-riding on the reputation of the good, not the reputation of Nabisco. Although it is unfair to free-ride on the good of a corporation’s reputation, it is fair to freeride on the reputation of a good.  Holding: Kellogg allowed to use the mark shredded wheat [bc the term had become generic for the good itself] as long as Kellogg included a disclaimer that the product did not come from Nabisco. Note: prof said that even if one can show true secondary meaning for a generic term, courts tend not to protect these generic marks bc it is anti-competitive and grants one company a monopoly. Rule: Where the only reasonable inference that can be drawn from the evidence is that the consumer understands a term as nothing more than a kind of drug, w/o association with a particular source, the term is generic and therefore not subject to TM protection. ASPIRIN was a word used to identify the underlying name of the product, not to identify the source. Bayer Co. United Drug Co. (SDNY 1921): Bayer held an expired patent for acetylsalicylic acid under the name ASPIRIN. D started selling the same good under the name ASPIRIN as well. D argued the term had become generic. Court held that there are separate classes of buyers of the drug: one class, composed of pharmacists, associated the mark ASPIRIN with Bayer, but the rest of general consuming public understood the mark to signify the chemical name of the drug. Bayer itself recognized that ASPIRIN was generic to the general public bc of it wrote on its labels “Bayer—Tablets of Aspirin” indicating that this particular aspirin was produced by Bayer. The Court granted injunctive relief against selling the product under the mark ASPIRIN to pharmacists but permitted the use of ASPIRIN for bottles intended for direct sale to consumers. Note: prof emphasized Bayer’s usage of the mark in its label as an indication that the mark was generic. Best evidence that a mark is generic is when the corporation claiming rights in the mark uses the mark as if it was the actual name of the good. Google: GO PLACES. GOOGLE THINGS. Being used as a verb – synonymous with searching on the internet which is a generic thing to do. People still identified Google as a brand because using the Google search engine.

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D. PROVING GENERICNESS SURVEY EVIDENCE: evidence that can be used by a D in infringement suit to prove that P’s TM = generic THERMOS SURVEY: describe a type of thing and ask participants what they call the described thing. If large portion of people call the thing by its brand name, then TM must be generic. King-Seeley Thermos Co. v. Aladdin Industries, Inc. (2nd Circuit, 1963): K-S (P) owned TM registrations to THERMOS. Aladdin (D) tried to sell its own containers as “thermos bottles” claiming the term = generic for bottle that will keep contents warm. Ds presented the following survey evidence to support its claim of genericness:  D asked participants “do you know of a type of container that keeps liquids hot or cold? If so, what is it called?” o 75% of participants who were familiar with such a container called it a thermos.  Court held for D but required D to precede the use of the word “thermos” with “Aladdin” to ensure there is no source-confusion. Note: for critique of Thermos-type survey see E.I. Dupont case below. EXAMPLE OF THERMOS SURVEY EVIDENCE AND HOW TO REBUT ARGUMENTS OF GENERICNESS 1) What would you call a machine that duplicates documents?  Copier: 40%  Xerox machine: 60% 2) Do you know any other names for such a machine?  Of those who initially said “copier”: o Yes, Xerox machine: 30% o No: 70%  Of those who initially said “Xerox machine”: o Yes, copier: 95% o No: 5% Pro-genericness: more than half of people think that the name for a machine that duplicate documents is XEROX, therefore it is a generic name for such a machine. The fact that 95% of those who think the name of such a machine is XEROX know of the term “copier” signifies that the general public finds these two terms interchangeable, making both of these terms generic. Anti-genericness: the fact that 60% of consumers said XEROX = name for a machine that duplicate documents only reflects Xerox’s dominance in the market. When pushed, the vast majority of these consumers divulged that there is another name for this machine (“copier”). THERMOS SURVEY EVIDENCE THAT SEEMS TO INDICATE GENERICS BUT DOESN’T Are you familiar with a highly-caffeinated citrus-flavored soft-drink? If so how would you ask for it?  Mountain Dew: 97%  Other – 3% These results don’t make MOUNTAIN DEW a generic name for a highly-caffeinated citrus-flavored soft drink. This is bc it really is the only soft drink that is highly caffeinated and citrus-flavored on the market. It is a unique product and this survey result does not indicate genericness.  Anonymous source rule: if the consuming public comes to recognize the term as identifying goods that come from a single––though anonymous––source, then the term will not be held to be generic since it still acts to signify a single source. o Codified in Lanham Act § 45: “The term ‘trademark’ includes any word, name, symbol, or device, or any combination thereof—(1) used by a person, or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register

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established by this chapter, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.” Here, consumers know Mountain Dew has one source, just don’t know what the source is. It does not matter why consumers choose a product so long as consumers understand that all products labeled MOUNTAIN DEW come from a single source. o Codified in Lanham Act § 14: “The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become the generic name of goods or services on or in connection with which it has been used.”

TEFLON SURVEY: explain difference bw a brand name and a generic name. Ask participants to ID different names as either generic or brand. If large portion of people ID the name in Q as generic, it is evidence that the name = generic. If people ID the name as a brand name, it is not generic. E.I. Dupont De Nemours v. Yoshida International (EDNY, 1975): Dupont (P) held TM rights to TEFLON mark for non-stick cookware coating. Yoshida (D) used P’s mark for easy-glide zippers. P brought TM infringement suit and D argued that P’s mark was generic for non-stick coatings. P & D both produced different surveys. Court held only one of the presented surveys actually provided evidence of whether or not P’s mark was generic. It was one of P’s surveys:  First, P explained the difference bw a brand name and a common name. o “By brand name, I mean ‘Chevy’ which is made by one company; by common name, I mean a word like ‘automobile,’ which is made by a number of different companies.”  Second, P asked which words in a list of words (including TEFLON) were brand names and which were generic.  Results: 68% identified TEFLON as a brand name, therefore disproving genericness.  Court critiqued D’s Thermos-type survey: participants who responded with a brand name for the described thing may still have understood that the brand name was a protectable TM. Note: critique of a Teflon-type survey is that there’s no way to know if participant actually understands the difference bw a brand name and a generic name. Note: it’s generally not enough that a bare majority of participants think a name is generic or not. Typically courts will find results persuasive if ≥75% of participants find the name generic or not. Rule: Teflon type survey is valid only if it includes a preliminary explanation of the difference bw a generic name and a brand name. Not enough to ask participants if they know the difference. Frito-Lay North-America v. Princeton Vanguard (Fed. Circuit, 2015): TTAB refused registration of F-L (P)’s mark PRETZEL CRISPS bc it found the term generic. Both P and D submitted Teflon-type surveys but P simply asked if participants knew the difference bw a brand and a generic name. P did not explain the difference. D used a Teflon-type survey but it explained the difference bw a brand name and a generic name. Court held that a Teflon-type survey is valid evidence proving or disproving genericness but only if it includes a preliminary explanation re the difference bw a generic name and a brand name. This explanation provides some validation that consumers actually understand what a brand name is. DE FACTO 2º MEANING: occurs when the public IDs a term with a single source of origin, but the term is nonetheless NOT accorded TM protection.  Two types of de facto 2º meaning: 1) Public understands a word to be generic (not a brand name) but nonetheless recognizes that there is a single source for the goods.  Shredded Wheat. Typically arises if there are no competitors or 1 corp. has patent.  Rejected as a basis for TM rights bc it’s not true 2º meaning since the name is not used as a source indicator.

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2) Producer selects as a TM a term that is the generic name of the goods but through substantial advertising, market dominance etc., the producer establishes public recognition of the term as a brand name (rather than a generic name).  Real 2º meaning bc a generic name has been transformed into a source indicator. But nonetheless, there is no TM protection. Granting producer TM rights with either form of de facto 2º meaning would afford the producer with an improper monopoly. Rule for de facto 2º meaning: when a producer uses a generic term as a name for its goods, the producer will not be afforded TM rights in the name even if the public recognizes that there is a single source for the goods, and even if the producer succeeds in establishing true 2º meaning in the generic name. This is to promote competitive use of the generic name.

EXAMPLE OF SURVEY EVIDENCE IMPLICATING DE FACTO 2º MEANING 1) “Do you associate the phrase ‘Internet search engine’ with a single company or more than one company?”  One: 80%  More than one: 20% 2) “If you replied one, which company?”  Google: 95%  Other responses: 5% Pro-genericness: Google might be able to establish de facto 2º meaning [b/c most people associate internet search engines with Google] but this does not mean they can monopolize the use of the term INTERNET SEARCH ENGINE. It was born generic. Anti-genericness: These results do not indicate that GOOGLE has acquired de facto 2º meaning b/c there is no indication that consumers think the term GOOGLE is the generic name for Internet search engines. These results do not show that GOOGLE is generic for an Internet search engine but only that Google is the dominant provider of Internet search engine services. Rule: if a provider of services creates an association between a generic phrase and itself, the provider has acquired de facto 2º meaning but has not acquired TM protection for the phrase. AOL v. AT&T Corp (4th circuit, 2001): AOL (P) developed and used “you’ve got mail,” “buddy list,” and “IM” services with these corresponding names. AT&T (D) started using these same terms for similar or same services. Court held below:  “You’ve Got Mail” = generic phrase informing user that (s)he has received email.  The term has de facto 2º meaning b/c AOL took a generic phrase and through substantial advertising created an association in the public’s mind between the phrase and AOL.  However, since this is de facto 2º meaning, there is no TM protection for it bc granting AOL TM rights over this phrase would be giving them monopoly rights over a generic phrase. Rule: if a producer transforms a generic term for its goods into a source indicator, the producer has acquired de facto 2º meaning, but this does not entitle him to TM rights in the generic word. Harley Davidson v. Grottanelli (2nd circuit, 1999): H-D (P) claimed CL TM rights in HOG. Grottanelli (D) owned a motorcycle repair shop called the “Hog Farm.” P sued D for TM infringement. D claimed HOG was generic for a large motorcycle bc it was used to describe large motorcycles before H-D formed the H-D Owners Group (H.O.G.). Court held the term HOG was generic for a large motorcycle.  HOG was generic for large motorcycles before P began to make TM use of the term.  P may have de facto 2º meaning now bc it turned a generic term (HOG) into a source indicator through substantial advertising and market dominance. But acquisition of de facto 2º meaning does not entitle P to TM rights in the generic term.

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Rule: if a term is used for unrelated services or goods, it is not a generic use of the term. Facebook Inc. v. Teachbook.com (ND Ill 2011): Teachbook (D) used TEACHBOOK mark for its website and Facebook (P) sued D for TM infringement. D defended on the ground that the suffix –BOOK was generic and unprotectable as a TM. Court held P is not using the suffix –BOOK to refer to actual books but rather to social networking services, therefore its usage is not generic. The term –BOOK has not become generic for social networking services. ACRONYMS OF GENERIC WORDS Rule: although a term may be generic for a certain type of good, if a producer uses the generic term as an acronym for related provided services, the term will not be generic for the services provided and can be afforded TM protection. Harley-Davidson v. Top Quality Services (7th circuit, 2007): Top Quality Services (D) used the term HOGS ON THE HIGH SEAS in connection with its service of organizing cruises for H-D motorcycle owners. D tried to register HOGS ON THE HIGH SEAS as a mark, but H-D (P) filed an opposition proceeding and a TM infringement action. D argued HOG is generic for large motorcycles and that therefore there was no TM infringement. Court held although HOG is generic for large motorcycles, it is not generic for a motorcycle club. P’s use of the term HOG in connection with club names is not generic, even though P’s use of the term HOG in connection with large motorcycles is generic. Rule: Abbreviations of generic words can be protectable TMs but only if the party seeking protection for such an acronym demonstrates that the acronym has a meaning distinct from the underlying words in the mind of the public. Acronym must mean more than abbreviated words. Welding Services, Inc. v. Forman (11th circuit, 2007): P claimed TM rights in the acronym W.S.I. (stands for Welding Services, Inc.). P acknowledged that Welding Services Inc. on its own was generic for welding services; but argued that WSI could be protectable TM.  Abbreviations of generic words may be protectable if the party claiming protection for such an acronym shows that the acronym has a meaning distinct from the underlying words in the mind of the public.  Court found P’s advertising expenses irrelevant bc the ads did not establish in the public’s mind a meaning of the acronym that was distinct from the abbreviated generic words. Note: today, abbreviations like ABC, CW, NBC mean something more than just the words they abbreviate. Therefore, they are not deemed generic. May not know what they stand for, but identify a single source

E. TYPES OF MARKS FIVE TYPES OF MARKS 1) TRADE MARK*: any word, name, symbol, or device, or any combination thereof (1) used by a person, or (2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown. [§ 45 of Lanham Act] 2) SERVICE MARK*: same thing as a TM but it is used in connection with services. [§ 45] 3) TRADE NAME: any name used by a person to identify his or her business or vocation. [§ 45] Note: name of a company is protectable only to the extent it is being used to sell goods/services.

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4) CERTIFICATION MARKS: any word, name, symbol, or device, or any combination thereof used by a person other than its owner … to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person’s goods or services or that the work or labor on the goods or services was performed by members of a union or other organization. [§ 45]  Certification marks are used to indicate that goods/services meet some sort of standard [e.g., kosher symbols].  However, under § 14 of Lanham Act, certification marks are subject to cancellation if the “registrant A) does not control, or is not able legitimately to exercise control over, the use of such mark, (B) engages in the production or marketing of any goods or services to which the certification mark is applied, or (C) permits the use of the certification mark for purposes other than to certify, or (D) discriminately refuses to certify or to continue to certify the goods or services of any person who maintains the standards or conditions which such mark certifies. o 14(B) – subject to cancellation if sell goods/services or advertise under the mark  But allowed to promote recognition of the certification program or of the goods or services meeting the certification o 14(D) – subject to cancellation if discriminately refuses to certify o 14(A) – need to exercise control otherwise the mark would have meaning because anyone would be able to use it without meeting the standards  Collection or Certification marks can have genericness problems if it no longer indicates to consumer that there is some standard that is being met o Roquefort cheese: ROQUEFORT is a certification mark indicating the cheese’s geographic origin. It is not generic for blue cheese, but it is blue cheese made by a particular process in the Roquefort region of France. o Swiss cheese: has been held to be generic b/c it’s not made by a particular process in Switzerland anymore; today it is just cheese with holes. 5) COLLECTIVE MARK: a TM or service mark used by members of a cooperative, an association, or other collective group or organization, … and includes marks indicating membership in a union, an association, or other organization. [§ 45]  Used to signify membership in an organization or association. [e.g., REALTOR mark].  Organization/association can discriminately refuse to grant membership and will not face cancellation of its collective mark. Unlike certification marks, there is no law [like § 14] requiring that holders of a collective marks to permit membership indiscriminately.  Can indicate membership without selling goods or services * A slogan can function as a TM or a service mark.

F. TRADE DRESS TRADE DRESS = overall impression consumer

gets from any particular product or service.

Distinctiveness with Trade Dress Inherently distinctive ---------------------------------Distinctive only with secondary meaning ----------------------------------Never distinctive

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Rule: no per se rule that colors = never distinctive and thus can never be TMs; colors = never inherently distinctive but can become distinctive and can thus be afforded TM protection if they acquire 2º meaning. Qualitex Co. v. Jacobson Products Co. (SCOTUS, 1995): Qualitex (P) used a special shade of green for dry cleaning press pads that it makes and sells to dry cleaning companies. Jacobson (D) started using the same color green on its pads and sold them to P’s customers. P applied to register its green color as a TM for its dry-cleaning pads. D opposed registration; argued that a color is never distinctive and therefore per se cannot constitute a TM. Court held below.  Colors are never inherently distinctive but court rejects the premise that a color can never be distinctive. A color can be registered as a TM if the color has acquired 2º meaning. o If colors were held to be never distinctive [thus never protectable as TMs], then there could be consumer confusion bc consumers may associate a particular color on a particular good with a particular source. If another party uses the same color on the same good, consumer will think the good comes from the original source and not the imposter.  Problems with granting TM protection for colors? 1) If the law permits use of color as a TM, it will produce uncertainty and unresolveable court disputes re what shades of a color a competitor may lawfully use due to shade confusion. Hard to tell if one is similar to another or not. o Court says this problem is not specific to colors only. If a court can distinguish bw similar words and design for purposes of whether they infringe others’ TM rights, then it can do the same for colors. 2) If the law permits use of color as a TM, there will be color depletion. o Court says even though color depletion problem may exist, it is not as problematic as D alleges. o Having rights in a color as a TM only relates to a particular class of goods. Therefore, the use of the same color for other goods is not precluded. 3) Colors are often functional in that they are required in order to make the good. Could give a monopoly o If the color is functional (i.e., needed to make the good), the doctrine of functionality will require the color to be unprotectable as a TM.  Example: brown cannot be a TM for a wooden table.  Court thus decides to determine whether particular colors are protectable on a case-by-case basis, rather than adopting a per se rule banning protectability of colors as TM. Note: unlike colors, sounds can be inherently distinctive. All goods will inherently have a color therefore they are not always uses to indicate source. But goods/services will not inherently have sounds; they have to be added and they’re usually added to indicate source. Example: Pillsbury and Intel. Entire songs can be the subjects of TM protection if registrant getting license to use it from copyright owner. Rule: TD can be inherently distinctive. Inherently distinctive TD does not require a finding of 2º meaning in order to be protectable under §43(a) of the Lanham Act. Two Pesos, Inc. v. Taco Cabana, Inc. (SCOTUS, 1992): Taco Cabana (P) had a chain of Mex. restaurants in TX with a particular atmosphere (layout of seating, colorful murals and artifacts, etc.). D also owned a chain of Mex. restaurants w/ a similar appearance. When D entered TX market, P sued D for TRADE DRESS infringement. Trial and app. courts required a showing of 2º meaning even though they found that P’s TD = inherently distinctive. Court here held below:  TD can be inherently distinctive. But TD is not always inherently distinctive. o Court’s legal basis for this rule: the Lanham Act does not distinguish bw TD and TMs in terms of what must be proven in order to establish rights in a TD. Therefore, if TMs can be inherently distinctive, so can TD. [§43(a) supports: fails to find it should be treated differently than TM] o Theoretical: Worry about other companies adopting another company’s TD because not protected yet. Same as TM, if inherently distinctive don’t want to make them show 2º meaning first

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If TD = inherently distinctive, party seeking protection against TD infringement need not prove that the TD had acquired 2º meaning.

Rule: exception to Two Pesos. Per se rule. Product design is a type of TD that can never be inherently distinctive and that requires 2º meaning in order to qualify as protectable TD. Wal-Mart v. Samara Brothers (SCOTUS, 2000): Samara Brothers (P) designed and manufactured children’s clothes; sold at JC Penney. Wal-Mart (D) contracted w/ another designer to make garments similar to P’s; they were then manufactured and sold at Wal-Mart. P brought suit against Wal-Mart, alleging infringement of its unregistered TD rights under § 43(a). Court held below rules:  Product design (such as the design of the dresses here) can NEVER be inherently distinctive. In order for product design to qualify as protectable TD, it requires a showing of 2º meaning. o Court’s legal basis for this rule: precedent in Qualitex, it was held that color = category of marks that can never be inherently distinctive. Now, court is adding another category that can never be inherently distinctive & that requires 2º meaning to be protected.  Court’s rationale: (1) consumers don’t use product design to ID source unless it has acquired 2º meaning, (2) product design is often functional and therefore should not be protected unless 2º meaning. Worried about competition and being able to prevent others from making clothing. WHEN IS SOMETHING INHERENTLY DISTINCTIVE? Seabrook Test: test for whether non-product-design TD is inherently distinctive. 1) Is it was a common basic shape or design?  If common, it is more likely competitors will want to use it, there is it less likely to be inherently distinctive  If not common, it’s more likely to ID source, and more likely to be inherently distinctive. 2) Is it unique or unusual in a particular field?  If more unique, less need for competitors to use it.  If the trade dress is more related to product or service, less likely to find inherently distinctive 3) Is it a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods? 4) Is it capable of creating a commercial impression distinct from accompanying words? Note: Seabrook test should remind you of the tests used to determine whether a mark is suggestive or descriptive. It is most similar to the competitor needs test b/c it attempts to determine how unique or common the TD is. The more common it is, the more likely competitors need it to make their goods. The more unique it is, the less likely it’s necessary. Example: is TD of a Klondike bar protectable?  It’s not product design bc it’s just packaging. So it can be inherently distinctive.  Seabrook test argument that TD is inherently distinctive: considered in totality, the square shape, the silver wrapper, the circle design, the blue band, etc. are not common designs to ice cream wrappers and they are unique in this field. This sort of design is not a commonly-adopted form of ornamentation for ice cream and it is capable of creating a commercial impression distinct from accompanying words.  Note: it’s the overall impression of features that matters most not just the individual features, which by themselves may be common and not inherently distinctive. Example: is a jean pocket flap product design or TD? Court said its product design b/c it’s a part of the product.

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Example: what about the stitching on a jean pocket flap? Could be product design (requires 2º meaning) or it could be product packaging (which is just TD). Walmart court would ask whether it’s the sort of thing that consumers will perceive as source-identifying. Rule: alarm sound ≠ inherently distinctive, can only be registered upon a showing of 2º meaning. In re Vertex Group (TTAB, 2009): applicant sought to register the sound of a security alarm for children. PTO refused to register the sound as a TM. TTAB held registration of an alarm sound is only permitted upon a showing of 2º meaning b/c consumers don’t use the alarm sound as a source-indicator. Note: alarm sound could be completely functional in that the good’s entire function is to emit the very sound the applicant is seeking to register as a TM. If the sound = functional, it is NOT protectable even upon a finding of 2º meaning. Rule: even if a building design is distinctive, it will not be held to be inherently distinctive warranting TM protection b/c a building’s design is not primarily perceived by consumers to indicate source but is rather perceived as merely ornamental. Rock and Roll Hall of Fame v. Gentile (6th circuit, 1998): Cleveland’s R&R Hall of Fame (P) hired IM Pei to design a building to house the museum. Building was very distinctive, and P applied to register the building’s design as a service mark. Gentile (D) sold photos and posters of the building commercially. Court was deciding whether the building’s design was inherently distinctive and thus a protectable mark. Court held the design would only be inherently distinctive if the building design readily appeared to consumers to have no other purpose than source identification (since it was a service mark, it’d be the source of P’s museum services). But here, the building’s design was not used by the P as an indicator of source: it was mere ornamentation when shown on a postcard or poster.

G. FUNCTIONALITY Rule: (1) a functional product feature will not be accorded TM protection even if the feature has acquired 2º meaning. (2) A feature = functional if it meets either the Inwood test OR the Qualitex test for functionality. (3) Existence of expired utility patents bolsters the argument that a feature = functional. Traffix Devices v. Marketing Displays (SCOTUS, 2001): MDI (P) held two expired utility patents for a dual spring design to keep outdoor traffic signs upright despite adverse wind conditions. After the patents expired, Traffix (D) sold signs with P’s dual spring design. P sued D for TD infringement, arguing that its dual spring design had acquired 2º meaning. Court held:  Although P can demonstrate 2º meaning for its dual spring design TD, it will not be protectable under TM law if the dual spring design is functional.  Feature = functional if it is found functional under either of the below tests: o Inwood test: the product feature is essential to the use or purpose of the article or it affects the cost or quality of the article.  If the reason a particular product works is a specific product design, then that product design is essential to the use or purpose of the article even if there exist alternative designs which would work just as well. o Qualitex test: the exclusive use of the product feature would put competitors at a significant nonreputation-related disadvantage.  Qualitex test results: P’s design = not functional under Qualitex test. P’s exclusive use of the design would not put competitors at a significant non-reputation-related disadvantage bc there existed other alternative designs which would work just as well.  Inwood test results: P’s design = functional under the Inwood test. If a particular product works because of the specific product design, then the design is essential to the use or purpose of the article. Thus, even though there were alternatives to the dual spring design that worked just as well, the “dual spring design is the reason the device works.” Thus, the design is essential to its use or purpose.

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Court found P’s expired utility patents relevant bc in order to acquire a patent, P had to prove that the design was useful and new. Since the design is functional under one of the tests, court held that the design = functional. o

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Example: Safecut’s device used to cut seatbelts in emergencies. At issue = top part of the device (which covered the blade). The feature was found to be functional under the Inwood test bc this top feature is the reason why the product worked, making it essential to the use or purpose. Example: round thermostat. The Court found roundness functional bc the thermostat would not work without the roundness of its dial. Morton-Norwich Factors (used to determine if something is functional in the context of registration): (1) Existence of utility patent disclosing the utilitarian advantages of the design [Inwood test’s Q whether the feature is essential to the use or purpose of the product] (2) Advertising touting utilitarian advantages [Inwood test’s Q whether the feature is essential to the use or purpose of the product] (3) Availability of functionally equivalent designs [Qualitex test’s Q whether there are alternative designs such that competitors would not be put to significant non-reputation-related disadvantage] (4) Whether design results in simpler/cheaper method of manufacturing [Inwood test’s Q of whether the feature affects the cost/quality of the article] Rule: when assessing the functionality of a design, the court should assess the design as a whole, rather than assessing the functionality of each individual feature of the design. In re Becton, Dickinson & Co. (Fed. Cir., 2012): BD applied to register the design of its closure cap for blood collection tubes as a TM. TTAB denied registration on the grounds that the design was functional. Fed. Circuit here held the design = functional under the M-N factors:  Whenever a proposed mark includes both functional and nonfunctional features, the critical question is the degree of utility present in the overall design of the mark: how functional is the design as a whole rather? [not is each design feature useful?] (1) Existence of a utility patent disclosing the utilitarian advantages of the design: BD held a utility patent, which showed the usefulness of two features of its cap design (+ functionality) (2) Advertising touting utilitarian advantages: BD did have such ads (+ functionality) (3) Availability of functionally equivalent designs: there some alternative designs but court did not find that any of them were functionally equivalent (+ functionality) (4) Whether design results in simpler/cheaper method of manufacturing: two BD witnesses said that the design features did not lower the cost of manufacture. Court said this was not enough evidence to weigh anti-functionality so this factor was neutral (+/- functionality) Note: combination of product design’s features may make it more than the sum of its parts, making it nonfunctional even if most of the features are functional. AESTHETIC FUNCTIONALITY Rule: application of Inwood & Qualitex tests. Under Qualitex, a product feature w/ no useful purpose may nevertheless be aesthetically functional if it is the sort of thing consumers will find desirable such that exclusive use of the feature would put competitors at a significant non-reputation-related disadvantage. Jay Franco v. Franek (7th circuit, 2010): Franek (P) held a TM registration for the round shape of its beach towel. Years after reg., Jay Franco (D) started selling round beach towels. P sued D for TM infringement. D claimed roundness of the beach towel = a functional feature and thus could not be afforded TM protection. Court held the roundness of the towel = functional. 16

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Court’s analysis under the Inwood test: is the roundness of the towel essential to the use or purpose of the article or would it affect the cost or quality of the article? o One purpose to the feature = enable heliotropic sunbathers to rotate to face the sun w/o getting up to reposition their towel.  It’s not the roundness that serves this purpose, but rather the large size of the towel. Competitors could make a large square towel and still serve the purpose of letting sunbathers rotate without repositioning the towel. Therefore, the roundness is not essential to the use or purpose of the towel.  However, the roundness affects the cost or quality of the product and is therefore functional: roundness most economically serves the purpose bc manufacturers won’t have to spend more $ on excess material to make a square towel and sunbathers won’t have to carry around a heavier towel. o Another purpose to the feature = allow the towel to be drawn up into a bag. If this is a purpose for the roundness feature, then the feature = essential to the use/purpose and is thus functional. Court’s analysis under the Qualitex test: will the exclusive use of the roundness of the towel put competitors at a significant non-reputation-related disadvantage? o Granting P the exclusive use of a basic element of design (shape, material) impoverishes other designer’s palettes [depletion problem], thus putting them at a sign. disadvantage. o Even if no purpose is served by the roundness of the towel, consumers will want a round towel bc it is aesthetically pleasing.

AESTHETIC FUNCTIONALITY:

some product features don’t serve a useful purpose and would thus not be functional under the Inwood test. But sometimes a feature with no use is the kind of thing consumers find aesthetically pleasing and desirable and to grant one producer exclusive use of such a feature would put competitors at a significant non-reputation-related disadvantage, favoring a finding of functionality under the Qualitex test. (i.e. heart-shaped chocolate boxes) Example for aesthetic functionality: are Louis Vuitton prints aesthetically functional? No. Under Qualitex test, the significant disadvantage must be non-reputation-related and here, the disadvantage would be reputation-related. Rule: under the Qualitex test, a feature is functional only if the exclusive use of a feature brings about a significant disadvantage that is non-reputation-related. Automotive Gold v. VW of America (9th circuit, 2006): AG was maker of car accessories that bore the exact replicas of TMs VOLKSWAGEN and AUDI w/o a license to do so. AG argued that these marks were aesthetically functional for the sale of the accessories. Court held that the VOLKSWAGEN and AUDI marks ≠ functional under Qualitex test: any disadvantage AG experienced as a result of the markholders’ exclusive use of the marks was tied to the reputation of markholders and the Qualitex test requires that the disadvantage be non-reputation-related. Louboutin v. Yves-Saint Laurent (2nd circuit, 2012): Louboutin (P) makes shoes w/ a red undersole contrasting the coloring of the rest of the shoe; P registered its contrasting red undersole as a TM in 2008. YSL (D) started making shoes w/ colored undersoles, including shoes w/ red undersoles; but the undersole’s color matched the color of the rest of the shoe (was not contrasting). District court ruled that colors in fashion were always aesthetically functional. Court here did not use aesthetic functionality rationale; instead court held that D’s TM was for a contrasting red undersole and since D used a noncontrasting red undersole, it did not infringe upon P’s mark. Note: court did not decide whether a contrasting red undersole was aesthetically functional. It would not be functional under Inwood test bc the feature does not make the shoe work any better. Under the Qualitex test, the feature might be aesthetically functional bc Louboutin’s exclusive use of this feature puts competitors at a significant non-reputation-related disadvantage (not being able to show passion with 17

the color red when making shoes). Prof cautioned: though this is a non-reputation-related disadvantage, it may not be significant enough for the court to find the feature aesthetically functional. Example: Wolf sells stoves w/ red knobs. Its ads say: “choose black knobs or let everyone know it’s a Wolf with our distinctive red knobs.” Competitor used red knobs for stoves.  Inwood test: is the red color of the stove knob essential to the use or purpose of the article or would it affect the cost or quality of the article? o If the use of red is to alert the user of the stove that the stove is hot, then the red color is essentially to the use or purpose of the article.  Qualitex test: will the exclusive use of the roundness of the towel put competitors at a significant nonreputation-related disadvantage? o It may put competitors at a non-rep-related disadvantage to allow Wolf to have exclusive use of red for stove knobs b/c it is aesthetically pleasing even if it has no purpose.  If it isn’t functional, should it be granted TM protection? o Since it is a color, it can never be inherently distinctive. Also, since it’s product design, it can also never be inherently distinctive. o Therefore, it can only be protected if it is has established 2º meaning.  Surveys can be proof of 2º meaning  Ad encourages 2º meaning bc it says if you see a red knob, you should think it’s a Wolf stove.  Called LOOK-FOR ADVERTISING: tries to establish 2º meaning in a feature.

ACQUISITION OF RIGHTS A. USE PRINCIPLES OF USE      

The right to a particular mark grows out of its use, not its mere adoption. (United Drug) Mere adoption of a mark without bona fide use will not create trademark rights. (Blue Bell) o Consuming public needs to get to know the mark and TM is about protecting consumers Preparations to use a mark in commerce are insufficient to constitute use in commerce. (AirFlite) Trademark rights are not created by sporadic, casual, and nominal shipments of goods bearing a mark (i.e., token use). (P&G) The first use need not have gained wide public recognition, and even a single use in trade may sustain trademark rights if followed by continuous commercial utilization. (Blue Bell) Under Lanham Act, advertising = “use” for services as long as services are then rendered in commerce. Advertising ≠ “use” for goods even if goods are then sold in commerce [the mark must appear on the goods or displays, etc.] o With services, it’s enough for the mark to appear in advertising, as long as the services are actually rendered. o With goods, the mark must actually be used on the good itself and not just on advertising in order to establish use in commerce, and the goods must be sold in commerce.

§1(a) of Lanham Act: “the owner of a TM used in commerce may request registration of its TM” §45 of Lanham Act:  “Commerce”  all commerce which may lawfully be regulated by Congress (i.e., interstate commerce). 18

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“Use in commerce”  bona fide use of a mark in the ordinary course of trade, and not merely to reserve a right in a mark. o (1) A mark shall be deemed to be used in commerce on goods when  It is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, OR if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, AND  The goods are sold or transported in commerce. o (2) A mark shall be deemed to be used in commerce on services when  It is used or displayed in the sale or advertising of services and the services are rendered in commerce, or  The services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.

Rule: a webpage that displays a product and provides a means of ordering the product = a display associated w/ the goods that can constitute use in commerce of the mark for goods. In re Dell, Inc. (TTAB, 2004): Dell sought to register quietcase as a TM for computer workstation hardware. To prove use in commerce, Dell provided a screenshot of its website which contained the image of the product and the product’s description. PTO attorney refused registration on the grounds that Dell’s use of the mark on its website was merely advertising and not a display associated with the good required to establish use of a good in commerce under the Lanham Act. TTAB held: use of the mark on the website was a display associated with the good and was not mere advertising [which on its own is insufficient to establish use for goods] bc a consumer could actually purchase the good on Dell’s website, unlike newspaper advertising where a consumer cannot. Rule: a restaurant that operates only in one state can establish “use in commerce” for purposes of Lanham Act if its services are procured by a substantial number of out-of-state consumers. Larry Harmon Pictures v. Williams Restaurant (Fed Circuit, 1991): Larry Harmon (P) opposed D’s registration of the mark BOZO for restaurant services, asserting that operation of a single restaurant did not constitute “use in commerce” for purposes of the Lanham Act. TTAB allowed D’s registration. Court held a restaurant that operates in one state can nonetheless establish “use in commerce” of the mark if a substantial number of its customers are from out-of-state. The Lanham Act extends to all commerce which Congress may regulate (i.e., interstate commerce). Congress can regulate intrastate commerce if it substantially affects interstate commerce. TOKEN USE Rule: use of a mark that is only meant to reserve rights in a mark and that is not bona fide use will not constitute “use in commerce” but is mere TOKEN USE. Proctor and Gamble example: P&G print labels with the marks SURE and ASSURE for certain products (tampons, mouthwash, deodorant) but did not make widespread commercial use of them (only sold them to a few retailers). D used the mark ASSURE for tampons and P&G sued D for TM infringement. Court held P&G had not acquired rights in the mark b/c its use was mere token use and not enough to constitute bona fide use of the mark. Needed real use and use to reserve the right in the mark. Not a real product. Rule: mere advertising w/o actual provision of services ≠ enough to constitute use. Need to render service Couture v. Playdom (Fed. Circuit, 2015): Couture (P) registered PLAYDOM as a service mark for entertainment services. As proof of “use in commerce,” P provided a screenshot of its website which said “website under construction” and “welcome to Playdom.com. We are proud to offer writing and production services for film and TV.” Playdom (D) used mark PLAYDOM for entertainment services and petitioned to cancel P’s mark, arguing that P had not actually rendered services in commerce, therefore he 19

had not used the mark PLAYDOM in commerce. Court held that P’s mark should be canceled: offering of a service w/o the actual provision of a service ≠ sufficient to constitute use in commerce under §45, which requires actual rendering of services, which itself requires actual provision of services, which Couture has not here done. ANALOGOUS USE Advertising and promotion is sufficient to obtain rights in a mark but only if: (1) they occur w/in a commercially reasonable time prior to the actual rendition of service, and (2) the totality of acts creates association of the goods or services and the mark with the user thereof.” Meant to mitigate the harsh rule of Playdom. This doctrine is reconcilable with rule from Playdom that mere advertising ≠ enough bc the user of the mark must still render actual services w/in a commercially reasonable time post-ads. Maryland Stadium Authority v. Baker Example: Baltimore Orioles built a new park in Camden Yards, to be called “Oriole Park at Camden Yards.” Before park was opened, T-shirt vendor made shirts with the park and park name on it and argued that the Orioles had not acquired rights in the mark b/c mere advertising alone does not constitute a use in commerce. Court used analogous use doctrine to find that advertising that is extensive enough to create an association bw the mark, the services, and the user of the mark can be sufficient to acquire rights in a mark if services are rendered within a commercially reasonable time after the advertising. (publicity was more widespread than Playdom) Rule: analogous use can be a basis for establishing priority in the registration context. Bestseller v. Fame Jeans (DC Cir 2008): Bestseller sold jeans under JACK AND JONES mark around the world but not in US. In 2003, BS planned to expand into US and applied to register the mark. But Fame Jeans applied shortly before BS to register the mark. As of each of their filing dates, neither brand had actually sold jeans in the US under the mark. TTAB held BS had no TM rights in the US and that its application was junior to Fame’s earlier application. Court held for BS: advertising alone is not use BUT advertising can be used as a basis for establishing analogous use to establish priority; foreign companies can use analogous use but only if foreign company eventually makes use of the mark in the US. PRIORITY Rules: (1) In order to establish priority in the use of a mark, the claimant must show adoption of a mark and use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark. (2) Using a new mark on old garments simply to reserve rights in the mark constitutes token use. Blue Bell Inc. v. Farah Manufacturing (5th circuit, 1975): both parties independently designed and adopted the mark TIME OUT for substantially identical men’s slacks and t-shirts. FARAH BLUE BELL May 18: mark conceived, logo adopted; ad campaign authorized June 5: presentation to sales personnel June 18: mark conceived June 27: tags completed June 29: tags completed and added to already existing Mr. Hicks slacks July 3: one pair sold to each of 12 regional managers

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July 4-11: regional managers showed goods to customers; orders received July 5: old goods shipped with two tags August: new goods produced September 4-6: presentation to sales personnel September: goods shipped to customers  October: new goods shipped to customers Holdings: 1) Was Farah's 7/3 sale & shipment of slacks to 12 reg. managers a valid 1st use of the TIME OUT mark? Though technically a sale, the 7/3 shipment to regional managers was not use. In order to establish use, the claimant must show adoption of a mark and use in a way sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark. Here, the sale to regional managers was an internal sale, and not a sale sufficiently public. Note: if Farah [a manufacturer] sold its jeans to retail stores, this would constitute bona fide use of the mark b/c relative to the manufacturer, retailers can be customers even if they are not the ultimate purchasers. 2) Was Blue Bell's 7/5 shipment of old goods marked with MR. HICKS and TIME OUT marks a valid first use of the Time Out mark? No. Labels or designs must be affixed to the merchandise actually intended to bear the mark in commercial transactions. In the instant case Blue Bell's attachment of a secondary label to an older line of goods manifests a bad faith attempt to reserve a mark. 3) Which manufacturer first used the mark in trade? Farah shipped its first order to customers in September. BB did not mail its TIME OUT garments until at least October. Though sales to customers are not the sine qua non of TM use, they are determinative in the instant case. These sales constituted the first point at which the public had a chance to associate TIME OUT with a particular line of sportswear. Therefore, Farah established prior of TM use; it is entitled to a decree permanently enjoining BB from utilization of the TIME OUT TM on men's garments. New York Magazine v. New West Corp. Example: New York Magazine wanted to launch a new magazine called New West Magazine. A different company (New West Corp) wanted to launch a new magazine by the same name. NEW YORK MAGAZINE NEW WEST CORP June 5: mark adopted – X September 25: logo adopted – X December 1-8: mark adopted – X December 9: dummy issue to board – X [like Farah’s sale to regional managers in Blue Bell] December 15: NWC incorporated – X [incorporation is public b/c info can be accessed publicly but it’s not a use of the mark that is public enough to inform customers of what goods or services the corp. will ultimately sell. The mere fact that it can be found in a public database does not mean the use of the mark will actually reach the public; it constitutes constructive, but not actual notice.]

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January 20: press release - ? [may count as analogous use b/c the goods/services were rendered within a commercially reasonable time after the release; however, the press release may not count as sufficient advertising]. January 24: direct mail solicitation - X January 26: public announcement - ? [may count as analogous use if the announcement was sufficient advertising] January 27: first 13,000 subscription orders -  [court held this was when NYM first established use b/c there was an actual txn. Therefore, NYM had priority] February 5: preview edition published February 9: insert published in prior magazine and inaugural edition published May: regular edition published

B. TRADEMARK USE Rule: (1) In order to establish “use” for the purposes of establishing TM rights, the mark must be used as a TM (i.e., to indicate source to the consuming public). (2) One may acquire protection in a service mark through its use by licensees but only if licensees actually use the mark. Thoroughbred Legends LLC v. Walt Disney Co. (ND Ga, 2008): P owned a famous racehorse called Ruffian. D wanted to make a movie about Ruffian. P registered RUFFIAN as a service mark. P offered Ds a license to use the mark RUFFIAN for the movie but D rejected the offer and made the movie. Ps never used the RUFFIAN mark for any services. P licensed the mark to a shop for us in naming clothes and other goods. Court held below.  P did not establish use of the mark RUFFIAN that would grant it TM rights b/c the mark was not used to indicate source to the consuming public. o RUFFIAN mark did not indicate to the public the source behind any goods. o Naming the horse was not by itself a use in commerce b/c it was not use that indicated source.  Ps attempts to license use of the mark did not establish actual use of the mark: though one may acquire protection in a service mark through its use by licensees, Ps evidence here does not show that their licensees ever used the mark. Note: if TM-holder licenses another to use the mark, the licensor can benefit from the licensee’s use of the mark. But if licensee has not used the mark, the licensor cannot claim use of the mark. Rule: one who submits a slogan as part of an idea submission has no TM rights to the slogan b/c it is not used to designate the origin or any goods/services offered by him. American Express v. Goetz (2nd circuit, 2008): Goetz proposed to several CC companies a MY LIFE, MY CARD concept as a complement to a card personalization concept he was selling. Amex received Goetz’s proposal but never responded. Later, Amex aired ads incorporating the slogan. Amex sought a declaratory judgment that Goetz had no TM rights in the slogan. Court held Goetz had no TM rights in MY LIFE MY CARD b/c the slogan was never used as a source-indicator for any of Goetz’s goods: MY LIFE MY CARD slogan was a component of his business proposal to cc companies, not a mark designating the origin of any goods/services he offered to them.

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Note: Goetz could have tried to acquire copyright rights to the slogan, but you can’t get copyright over short phrases. In “idea submission” cases, TM law provides no remedy. Quasi-contract.

C. REGISTRATION FIVE BASES OF REGISTRATION 1) Use in commerce under §1(a) of Lanham Act (see section A infra) [page 183] 2) Bona fide INTENT TO USE the mark in commerce under §1(b) of Lanham Act [page 184]  §1(b) requires applicant to have a bona fide intent to use the mark in commerce.  Pre-1989, there was ITU apps. It was adopted to prevent token use by businesses who want to introduce a product/service but had no assurances to rights in the associated TM.  Procedure: o Once application is filed, if approved, PTO issues NOTICE OF ALLOWANCE. o Applicant has 6 months from the NOTICE OF ALLOWANCE to file their STATEMENT OF USE for the goods/services for which the mark is being used (lists first use dates and provides specimens of use for each class of goods/services). o If applicant cannot meet 6 mo. deadline, applicant can apply for 6-mo. extensions of time up to a total of 5 times for a max. duration of up to 3 years. o If a statement of use is not filed within the allowable time, the application will be deemed abandoned. 3) Ownership of a qualified foreign registration under §44(e) of the Lanham Act  §44(e) allows foreign applicants to obtain registration of a mark in the US on the basis of a prior registration in the applicant’s country of origin. o Requires applicant’s bona fide intention to use the mark in commerce in the United States, but actual use is not required prior to registration (this is a true EXCEPTION to the rule that registration requires actual use in commerce). o Can oppose this sort of registration on the grounds that foreign applicant does not have a bona fide intent to use the mark in commerce. 4) Ownership of a qualified foreign application to register under §44(d) of the Lanham Act  §44(d) allows foreign applicants to obtain registration of a mark in the US on the basis of an application to register its mark in its country of origin. o US application must be filed w/in 6 months of the foreign application’s filing date. o Applicant must also include statement that it has a GF intention to use the mark in commerce. o If obtained, applicant’s registration = effective as of the applicant’s foreign application filing date & US registration will be independent of foreign registration. o Applicant must commence use w/in 3 years of reg.’s issuance or it will be deemed abandoned. 5) Madrid Protocol Extensions to the US under §66 of the Lanham Act  MADRID PROTOCOL = international TM treaty that allows non-US applicants from member countries to extend their international registration to the US and allows domestic mark owners to obtain their international registration extending to member countries.  If the application or registration upon which the international registration is based on is abandoned or canceled within 5 years, then all the extensions of the IR to various countries, including the US, will be similarly abandoned or cancelled (e.g., if a French application is the basis for the IR and is successfully opposed in France, then the IR and all extensions of the IR to other countries will be canceled).  Gives registrant priority as of the date of the filing of the foreign application if registrant files US application within 6 months of the foreign application (should it be registration?).

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Process of an application under §1(a) or §1(b): application  office action/responses  approval  publication  opposition  registration. (1) Conduct a search to see if any ID or similar marks are already registered. (2) File an ITU or if filing under §1(a), start using the mark for the goods (labels on goods) or services (can be advertising as long as services are rendered in interstate commerce). (3) Applicant files an application register its mark for use on certain goods. There is typically a filing fee per class of goods selected in the application. If it’s under §1(a), provide specimens of use. (4) TM examiner in PTO decides whether mark should be registered or whether there is some basis to refuse registration. If there is no basis to refuse registration, TM examiner files a PUBLICATION FOR OPPOSITION [published in the Official Gazette of PTO; opposers have 30 days to oppose]. (5) If there are bases for refusal, TM examiner files an OFFICE ACTION to list substantive issues (e.g., if mark is functional or not distinctive). (6) Applicant has time to respond to the office action. The response is typically like a brief that explains why the mark is not functional or why it is distinctive. (7) TM examiner responds with final office action. Could say mark is functional and not distinctive. (8) Applicant can appeal TM examiner’s decision to TTAB (TM Trial and Appeal Board). Once TTAB rules, applicant has 2 months to respond. If no response, app. is deemed abandoned. (9) If TTAB refuses registration, applicant can appeal to the Federal Circuit or file an original action in the ED VA court (to have PJ over TTAB). If applicant appeals to the Fed. Circuit, it will be faster and easier, but Fed. Circuit can only rule on the basis of evidence already on the record from TTAB proceedings. ADVANTAGES OF A TM REGISTRATION ON THE PRINCIPAL REGISTER  Nationwide Protection from the Date of Application o Once federally registered, the registrant’s TM rights relate back to the date of the TM application and give the registrant nationwide priority.  Incontestability o If the registered mark is used continuously for 5 years, it may become incontestable.  Warning to Others o The registered mark will easily be found in TM searches putting others on notice that they shouldn’t use similar marks for similar goods/services. o Registrant’s constructive use date can make a difference in priority conflict. o If registered, the PTO will protect the mark by refusing to register any other mark the TM examiner thinks is likely to cause consumer confusion.  Barring Imports o Goods produced abroad bearing infringing marks may be blocked at Customs, provided registrant = a US Citizen and is unrelated to producer of imported goods.  Protection Against Counterfeiting o Enhanced remedies are available against counterfeiters of TMs registered on the Principal Register  Evidentiary Advantages o A registered mark is prima facie evidence of a TM’s validity.  Use of ® symbol to denote federal registration o Informs public that proprietary rights are recognized in the mark and confirms ownership and validity.  Basis of Foreign Filings o U.S. application or registration can form basis of an Intl Registration (Madrid Protocol) o U.S. application can form basis for Paris Convention filing priority in PC countries.  Preemption of State Regulation

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o

Lanham Act § 39(b): No State or other jurisdiction of the United States … may require alteration of a registered mark, or require that additional trademarks … that may be associated with or incorporated into the registered mark be displayed in the mark… contemplated by the registered mark as exhibited in the certificate of registration issued by the United States Patent and Trademark Office.

No fixed duration for a trademark if you are using the mark. Between 5 and 6 years file under section 8 to prove continuing to use the mark. Attach a specimen to show using mark in at least one good for every class for which the mark is registered. Between years 9 and 10 need to renew. Rule: ITU applicant cannot establish a bona fide intent to use a mark if testimonial evidence indicates that the ITU app was a mere attempt to reserve rights in the mark. Berger v. Swatch AG (Fed. Circuit 2015): Berger filed an ITU application to register the mark IWATCH for over thirty different goods each of which belonged to 1 of 3 general categories: watches, clocks, and goods related to watches and/or clocks. Swatch filed opposition proceedings, alleging that Berger did not intend to use the mark and filed ITU application merely to reserve a right in the mark. Court concluded from testimonial evidence at TTAB proceedings that Berger did not have a bona fide intent to use the mark on goods listed in its ITU application and that the ITU application was an attempt to reserve a right in the mark  Berger only provided the following evidence of a bona fide intent to use: o Paralegal’s testimony which indicated that Berger applied to register the mark for goods other than watches b/c it was “standard” and used to “leave all doors open.” o CEO’s testimony that Berger only intended to use the mark in connection with watches at the time of filing and not the clocks or personal care products listed in the application and that three years after filing date, Berger still had not decided what type of watch it would sell with the IWATCH mark.  ITU applicant need not have whole design finalized to have bona fide intent to use but must have some idea of how it will use the mark and on which goods, otherwise the app = token use. Rule: one cannot acquire rights to a TM through registration if another party has already acquired rights to the TM via CL by actual use that predates the registration. City of New York v. Tavern on the Green (SDNY 2010): City licensed different operators to run restaurant since 1934. In 1973, City licensed LeRoy to operate. In 1981, LeRoy applied to register TAVERN ON THE GREEN and registration was issued. In 2009, LeRoy went bankrupt and restaurant closed. City selected a new operator for the restaurant and used the mark TAVERN ON THE GREEN. LeRoy sought an injunction against the City’s use of the mark. City argued LeRoy’s registration infringed its prior CL rights in the mark. Court held: city had prior CL rights in TAVERN ON THE GREEN and when it licensed LeRoy’s use of the mark, LeRoy was using the mark on city’s behalf; therefore, LeRoy’s attempt to acquire rights to the mark by registration was void since the City already had CL rights in the mark through actual use. Note: §15 of Lanham Act provides that a holder of a registered TM has incontestable rights to the TM “except to the extent to which the use of a mark registered on the principal register infringes a valid right acquired under the law of any state by use of a mark or trade name continuing from a date prior to the date of registration under this Act of such registered mark.” Rule: in the registration context, it is irrelevant that the mark applicant will ultimately use is not functional (or distinctive, etc); instead, to acquire rights via registration, applicant must prove that the mark it is seeking to register as indicated in its application is not functional. In re Vertex Group LLC (TTAB 2009): Vertex Group LLC sought to register as a TM on the principal register a sound described as a loud descending frequency sound pulse that ranged from 2.3Hz to ~1.5Hz 25

for use as an alarm on children's bracelets. TM examiner found the sound to be functional thus denied its registration as a mark. At TTAB proceedings, VG argued that their alarm sound was a unique variation of notes such that competitors could choose a different sound for their alarms, and therefore the mark ≠ functional under Qualitex. TTAB held: in the registration context, it is irrelevant that the mark applicant will ultimately use is not functional; instead, applicant must prove that the mark it is seeking to register as indicated in its application is not functional. Thus, even if the mark Vertex Group ultimately planned to use may not have been functional, the mark as described in its application was functional and therefore must be denied registration. What matters in the registration context is the four corners of the application.  Not claiming one sound; claiming a range of sounds and that matters for registration.

D. PRIORITY Rule: under §7(c), an ITU applicant can rely upon ITU app’s filing date in an opposition proceeding to defensively establish priority against opposer that alleges CL rights based on opposer’s actual prior use. Zirco Corp. AT&T (TTAB): AT&T filed ITU application and PTO issued a Publication for Opposition. Zirco opposed. AT&T did not have a set deadline for when to file a Statement of Use b/c PTO had not yet filed a Notice of Allowance (ITU applicant must file a Statement of Use w/in 6 months from Notice of Allowance, but Notice of Allowance is only filed if there are no oppositions, and here there was). Court held that even though AT&T has not used the mark, it can rely upon its constructive use date to claim priority defensively against Zirco’s opposition proceeding. §7(c) provides: “Contingent on the registration of a mark on the principal register provided by this Act, the filing of the application to register such mark shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect.” ZIRCO AT&T January 11 1990: AT&T filed ITU app April 15 1990: Zirco made first use of the mark April 23 1991: Zirco filed opposition AT&T did not yet file a statement of use Rule: although an ITU applicant can use §7(c)’s constructive use provision to establish priority in an opposition proceeding over opposer’s prior actual use, ITU applicant cannot use §7(c) offensively in a CL infringement action to establish constructive use and priority over another party’s prior actual use if ITU applicant has not yet been granted registration of its mark. Larami Corp v. Talk to Me Programs Inc. (TTAB, 1995): TTMP filed an ITU application for mark TOTALLY RAD SOAKER. Larami made first use of this mark after the filing date, and TTMP made first use of the mark after Larami’s first use. Then, TTMP filed a CL infringement suit against Larami alleging that TTMP’s constructive use date preceded Larami’s actual use date and that therefore, Larami infringed on TTMP’s TM rights in the mark. After suit was filed, PTO issued publication for opposition and Larami filed an opposition. Shortly afterwards, district court held SJ for Larami. Court held: TTMP could not use §7(c) in a CL TM infringement suit to establish constructive use as of its ITU app.’s filing date and thus priority over Larami’s actual use if TTMP had not yet been granted registration of the mark. TTMP LARAMI July 31, 1990: TTMP filed ITU app. Aug. 24, 1990: Larami made first use Aug. 28, 1990: TTMP made first use July 18, 1991: TTMP sued Larami arguing that Larami’s first use was after TTMP’s first use based on constructive use date on 7/31/90. Aug. 20, 1991: Publication for Opposition

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Sept. 16, 1991: Larami filed opposition (suspended) Oct. 21, 1992: Summary judgment for Larami TTMP Statement of Use not yet filed Note: ITU applicant cannot use §7© to establish constructive use and priority in an infringement lawsuit to prevent another party from using the mark before applicant has acquired registration. Example: Koala (Australian) v. Armadillo (US). KOALA ARMADILLO January 10: Koala files AUS application  [this is Koala’s priority date bc this was the date of their foreign application and it was filed w/in 6 months of their US application under 44(d)] January 15: Armadillo files US ITU application March 2: Armadillo launches US advertising April 15: Koala makes sales in US May 1: Armadillo makes sales in US May 10: Koala files US application  What if Armadillo launched US advertising on January 1? Advertising of goods on its own is not actual use of the mark. However, it could be considered analogous use of the mark if Armadillo’s advertising was extensive enough to establish a connection between the mark, the goods, and Armadillo. If it was extensive, Armadillo could get priority as of January 1.  What if Koala’s first sales were on February 15 and its US application was on July 15? Koala will not get priority as of the date of its Australian application bc the US application was not filed w/in 6 months of it. Armadillo would get priority as of its US ITU application of January 15, which is before Koala’s first use of February 15.  What if Koala’s first sales in US were on January 1, but Koala’s US application was filed on July 15? Koala would get priority as of January 1 because use trumps everything. Example: Danone (French) v. Precision (US). DANONE December 6, 2006: Danone files French application

PRECISION February 21, 2007: Precisions US ITU application

May 11, 2008: Danone’s French application issues May 22, 2007: Danone’s gets International Registration and files a §66 request for extension Danone has priority as of 12/6/2006 bc its §66 request for extension was filed w/in 6 months of its foreign registration.

E. CONCURRENT USE Rule: at CL, one’s TM rights only extend to the area in which one uses the TM. Priority of use in state X will not establish priority of use in state Y if individual hasn’t actually used the mark in state Y. United Drug Co. v. Theodore Rectanus (1918): Ellen Regis was the first to use the mark REX in MA in 1877. Rectanus used the mark REX in KY from 1883 to 1912. Each party acted in good faith (did not 27

know of e/o). Ellen wanted to expand to KY and court had to determine which party had priority. Court held Ellen’s prior use in MA did not give her the right to enjoin Rectanus’s use of the mark in KY: at CL, one’s TM rights only extend to the area in which one uses the TM. Ellen’s plan to use the mark in KY was not enough to establish rights in KY b/c in order to establish TM rights in a mark, the person must actually use the mark. Note: this can be reconciled with Stork Club b/c there, the NY club had a reputation in CA even though the club itself was located in NY. Here, Ellen did not have a reputation in KY at all. Note: knowledge of a remote user’s TM rights in a mark destroys (talk about Stork Club) one’s ability to use the rule of United Drug. Here, Rectanus used the mark in good faith thus he was able to use the CL rule. Other courts says bad faith is irrelevant as long as consumers do not have knowledge of a remote user’s use of a mark. Rule: use of a mark on the internet is not enough (on its own) to establish nationwide TM rights. Dudley v. Health Source Chiropractic (WDNY, 2012): Dudley (P) = small chiropractor in Rochester, NY using the mark HEALTHSOURE CHIROPRACTIC. He started his business in 2003 and had a website using the mark. HSC (D) = a nationwide corp. w/ many offices. Its first office opened in 2006. P claimed to be senior user of the mark in Rochester and nationwide due to its use of the mark on the internet. Court held: P = the senior user in Rochester but P’s use of the mark on the internet was not enough to establish nationwide rights in the mark. Mere fact that the mark was theoretically accessible from anywhere did not mean that P actually used the mark everywhere, giving P nationwide rights. Theoretical accessibility ≠ actually reaching customers. Compare with restaurant case (Larry Harmon) § 33(b)(5) of the Lanham Act: [One defense to a TM infringement claim is] that the mark whose use by a party is charged as an infringement was adopted w/o knowledge of the registrant's prior use and has been continuously used by such party or those in privity with him from a date prior to: (A) the date of constructive use of the mark established pursuant to section 7(c), (B) the registration of the mark under this Act if the application for registration is filed before the effective date of the Trademark Law Revision Act of 1988, or (C) publication of the registered mark under subsection (c) of section 12 of this Act: Provided, however, that this defense or defect shall apply only for the area in which such continuous prior use is proved. Rule: LIMITED AREA DEFENSE (§33(b)(5)) - a D faced with a P that has a federal TM registration establishing nationwide priority can claim TM rights in a particular area if (1) D used the mark prior to P’s issue of registration, (2) D has continued to use the mark to the present time, (3) D initially did so in good faith (w/o knowledge of P’s priority). Thrifty Rent-a-Car System v. Thrift Cars (1st circuit, 1987): see facts below (both car rentals). THRIFTY THRIFT CARS 1958: used the mark THRIFTY in OK July 1962: applied to register the mark October 1962: used the mark THRIFT in East Taunton, MA. July 1964: federal registration issued. 1967: opened a location in MA 1970: expanded into Nantucket Thrifty sued to enjoin Thrift Cars from using THRIFT in connection with care rental business outside East Taunton, MA.

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

 

Thrift Cars can’t make the Rectanus argument b/c Thrifty had a federal registration, which confers a right of nationwide priority to the holder of the registration. o At the time of this case, §7(c) was not enacted, thus a holder of a registration had nationwide priority as of the date of registration, not the date of filing. Thrift Cars’ use in East Taunton, MA (10/1962) occurred before Thrifty acquired nationwide priority as of the date of its federal registration (7/1964). Thrift Cars made a LIMITED AREA DEFENSE under 33(b)(5): a D faced with a P that has a federal TM registration establishing nationwide priority can claim TM rights in a particular area if (1) D used the mark prior to P’s filing for registration [in this case, the issuance of P’s registration], (2) D has continued to use the mark to the present time, (3) D initially did so in good faith (w/o knowledge of P’s priority). o Here, Thrift Cars used the mark in East Taunton, MA prior to Thrifty’s registration issuance, it continued to use the mark there up until the present, and it did so initially in good faith. However, court is unwilling to consider East Taunton and Nantucket a part of the same market. Therefore, Thrift Cars limited area defense only entitles it to rights to use the mark in East Taunton and not in Nantucket.  Court said the fact that every once in a while, someone would rent a car in East Taunton and drive it to Nantucket was only token use of the mark and was not enough to constitute actual use (i.e., sporadic rentals = token use ≠ use). Also, Thrift Cars application operate a car rental facility in Nantucket was not use of the mark in Nantucket b/c it was not public enough of a use (i.e., application for a license in Nantucket ≠ use).

Example: SENIOR USER 2001: first used the mark in MA

JUNIOR USER

2002: first uses the mark in KY 2003: applies to register the mark 2004: registration issues Junior user will be limited to the area in which he used the mark as of 2002. Example: A 2001: first used the mark in MA

B

2002: first uses the mark in KY 2003: applies to register the mark Use by another party in any part of the country can be a basis for rejecting the registration [§2(d): “No trademark … shall be refused registration on the principal register on account of its nature unless it consists of or comprises … a mark or trade name previously used in the United States by another and not abandoned.”]. But what if A never opposes B’s registration, TM examiner does not find A and issues registration? A can file a petition to cancel B’s mark on the basis of its first prior use under §14 [“A petition to cancel a registration of a mark … may … be filed … (1) Within five years from the date of the registration of the mark under this chapter.”]. Therefore, if A does not oppose during the registration, A has 5 years from B’s registration to petition to cancel B’s registration. If A does not petition to cancel w/in 5 years, then B’s registration can no longer be canceled on this ground [§15: “Except to the extent, if any, to which the use of a mark registered … infringes a valid right acquired under state law by use of a mark … the right of the registrant to use such registered mark in commerce for the goods or services on or in connection with which such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce, shall be incontestable.”]. A will be limited to the area of use as of the date of the registration.

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Rule: if there is concurrent use of a mark & P holds a registration, court won’t enjoin D’s use of the mark if P does not sell products in the same market as D (both market level and geographic area). However, court will so enjoin if P shows that it intends to use the mark in D’s market. Dawn Donuts v. Hart’s Food Stores, Inc. (2nd circuit, 1959): DD used mark DAWN DONUTS on bags of donut mix, which it sold and shipped to bakers from its warehouse in MI; registered the mark in 1947. After DD’s registration, Hart’s Food started using the mark on donuts in Rochester, NY but w/o knowledge of DD’s use . DD sued to enjoin Hart’s Foods from using the mark. Court held no injunction: there is no likelihood of consumer confusion arising from the concurrent use of the mark b/c DD and Hart’s Food use the mark in distinct and separate markets with no present prospect that DD will expand its use of the mark into Hart’s Food’s trading area. However, court held that DD could later, upon a proper showing of an intent to use the mark at the retail level in Hart’s Food’s market area, be entitled to enjoin Hart’s Food’s use of the mark. Note: even with nationwide priority, a holder of a registration can’t kick another party out of a market until the holder enters the market b/c there will be no likelihood of confusion.

F. TERRITORIALITY Rule: (1) TERRITORIALITY PRINCIPLE: a senior user of a mark = first person to use the mark in commerce that can be regulated by Congress, thus seniority cannot be based on use of a mark in a foreign country alone, (2) an inference of bad faith adoption of a mark requires > mere knowledge of prior use of the mark in foreign commerce. Persons v. Christman (Fed. Circuit, 1990): US biz-man visited Japanese dept store called Persons while in Japan. When he came back to US, he opened a dept store under the PERSONS mark and tried to register the mark. Persons opposed the registration arguing it was the senior user b/c it used the mark in Japan before US biz-man used the mark in US and that US biz-man adopted the mark in bad-faith. Court held below:  Persons could not establish priority based on its foreign use of the PERSONS mark. Since US biz-man was the first to use the mark in the US, he was the senior user of the mark.  There is no inference of bad faith (i.e., adoption of a mark w/ knowledge of another’s rights to the mark) on US biz-man’s part either b/c such an inference requires more than mere knowledge of prior use of a mark in a foreign country. Note: see exception to territoriality principle in Gigante. Problems with TERRITORIALITY PRINCIPLE: (4) Unfair appropriate of good will (5) TM squatting in new markets (6) Consumer confusion if US consumers know about foreign mark even if it is not used in US (7) Reciprocity and treaty obligations: failure to protect foreign marks in US may lead to foreign Js refusing to protect US marks in foreign countries. Reasons for TERRITORIALITY PRINCIPLE: (1) Unwarranted proliferation of TM rights [depletion issues, PTO will have to concern itself with whether marks people want to register have been used anywhere in the world rather than just in the US] (2) Lack of commercial harm [a lot of the time, owners of far flung foreign marks are not actually harmed by use of their marks in the US]

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Example: the mark SCRABBLE is owned by different companies in the US and in the UK b/c of the territoriality principle. Rule: foreign corp.’s mere advertising ≠ use of mark that can be basis of establishing TM rights. Buti v. Impressa Perosa (2nd circuit 1998): Milan café & NY café both called FASHION CAFÉ. Milan café never used the mark in US except for advertising in US but attempted to use advertising as a basis for establishing TM rights in the US and used NY café for infringement. Court held: mere advertising of mark in US ≠ use of the mark in US. Therefore, Milan café did not get priority in US based on when it started advertising. Rule: foreign corp.’s mere advertising = the kind of use required in an opposition proceeding under §2(d) even though such advertising ≠ use that could establish TM rights. First Niagari Insurance v. First Niagari Financial (Fed. Circuit, 2007): Canadian FN opposed US FN’s application to register mark FIRST NIAGARA under §2(d) [“No trademark … shall be refused registration on the principal register on account of its nature unless it consists of or comprises … a mark or trade name previously used in the United States by another and not abandoned”]. Canadian FN did not use mark FIRST NIAGARA in US except for in advertising. Court held an opposer’s advertising of mark in the US w/o more = use that is sufficient to oppose another’s registration of the mark under §2(d) even though such advertising does not constitute use for registration purposes. Note: this meant FN Canada could not have established TM rights in the mark but it could oppose FN US from registering the mark. METHODS OF PROTECTION FOR FOREIGN MARKS (1) US registration – bona fide intent to use in the US (2) Analogous use doctrine  Mere advertising ≠ use of mark in commerce for purposes of establishing rights in mark.  But advertising and promotion can sufficient to obtain rights in a mark only if: (1) they occur w/in a commercially reasonable time prior to the actual provision of services/goods, and (2) the totality of acts creates association of the goods/services and the mark with the user thereof.  Therefore, foreign corps can make use of analogous use doctrine but only if they eventually actually make use of the mark in the US. (3) Expansively defining foreign commerce  International Bancorp v. Societe des Bains (4th circuit): it’s enough if foreign corp. advertises in US and US citizens purchase the good abroad. A mark is used in commerce if US citizens purchase services sold by a foreign corp. b/c such purchases constitute trade w/ a foreign nation that Congress may regulate under the Commerce Clause.  Casino Monte Carlo: Had rights in the US because of the use in commerce part of the Lanham act. Used or displayed in the sale or advertising services and the services are rendered in commerce. This counted as commerce with foreign nations because purchased services from a foreign nation (4) Famous marks doctrine  See Gigante and ITC cases below (8) State unfair competition law  If circuit doesn’t recognize FAMOUS MARKS doctrine, maybe state unfair competition law provides protection for US use of famous foreign marks. See ITC (NY unfair comp law). Rule: exception to territoriality principle. If an owner of a foreign mark that’s never been used in the US can persuade court that a substantial % of consumers in the relevant US market are nonetheless familiar w/ the foreign mark, it will be able to assert TM rights in mark against an infringing D. Relevant US market = geographic area where D uses the allegedly infringing mark.

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Grupo Gigante v. Dallo & Co. Inc. (9th circuit, 2004): P was a Mexican corp. that owned a famous chain of supermarkets in MX operating under GIGANTE name. D opened 2 stores in San Diego (near Mexican border) under name GIGANTE. P sued D for TM infringement, asserting TM rights to the mark in US [even though it did not actually use the mark in US]. Court held below:  TERRITORIALITY PRINCIPLE: TM rights in US depend solely upon priority of use in the US, not on priority of use anywhere else in the world. Earlier foreign use won’t establish priority.  FAMOUS MARKS EXCEPTION: exception to territoriality principle; if the foreign mark owner can persuade the court that a substantial percentage of consumers in the relevant US market is familiar with the foreign mark, it will be able to assert TM rights in that market. The relevant US market is the geographic area where the D uses the allegedly infringing mark.  Here, P qualified for the famous marks exception bc a substantial % of consumers in SD market–– where D was using P’s foreign mark––were familiar with its foreign mark. Note: famous marks principle is meant to protect immigrant consumers who may be confused. Rule: (1) FAMOUS MARKS exception not recognized under Lanham Act in 2nd circuit, (2) but w/o FOREIGN MARKS exception, foreign holder of mark could use NY state unfair competition law to prevail if it could prove that D deliberately copied its mark for use in the US and that the relevant consumer market in the US primarily associated the mark with the foreign holder of the mark. ITC Ltd. v. Puchgini (2nd circuit, 2008): P is an Indian corp. that operated a famous Indian restaurant called BUKHARA in New Delhi, India. D (were former employees of P) moved to US and opened a similar restaurant with the same name. Ps sued Ds for TM infringement, asking court to recognize FAMOUS MARKS doctrine. Court held below.  2nd circuit says there’s no statutory basis in the Lanham Act for adopting the FAMOUS MARKS doctrine but asked [certified to] NY Court of Appeals whether NY state unfair competition law recognized the FAMOUS MARKS doctrine.  NY Court of Appeals explained that NY unfair competition law did not directly adopt the FAMOUS MARKS doctrine but a foreign holder of a foreign mark could prevail against a D that used the foreign mark in NY under an unfair competition theory. o To prevail on an unfair competition theory, under NY law, P would have to show:  (1) That Ds appropriated (i.e., deliberately copied) P’s mark for their NY restaurants and  (2) That the relevant consumer market for NY’s restaurant primarily associated the mark with those restaurants owned by P.  P provided evidence sufficient enough to establish the deliberate-copying element of the claim. However, P did not provide enough evidence to create a genuine issue of material fact on the Q whether D’s NY customers primarily associated the mark w/ P.  Based on application of NY unfair competition law, 2nd circuit affirmed the grant of SJ to Ds. Rule: for purposes of the FM doctrine, fame in a foreign country is immaterial unless the fame permeates into the US causing the mark to be sufficiently famous in the relevant US market. Paleteria La Michoacana v. Productos Lacteos Tocumbo (DDC 2014): 2 companies sought to use similar marks for Mexican style ice cream. Paleteria (P) sold ice cream products in US under the mark since 1991. Prolacto (D) used the mark since 1940s in Mexico but didn’t use the mark in US until 1999. P sued D for TM infringement under the famous foreign marks doctrine. Court held that P did not establish that its mark was sufficiently famous in the relevant US market; fame in a foreign country is immaterial except insofar as that fame permeates into the US.

BARS TO REGISTRATIONS

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G. SCANDALOUS AND DISPARAGING MARKS ABSOLUTE BARS TO REGISTRATION UNDER THE LANHAM ACT:  § 2(a): marks that are scandalous/immoral, deceptive, disparaging, suggest a false connection with persons, institutions, beliefs, or national symbols, or bring them into contempt or disrepute are absolutely barred.  § 2(b): marks that consist of the US flag, government insignia of U.S., states, or any foreign nation are absolutely barred  § 2(c): marks that consists of names, portrait, or signatures of a living person w/o his consent  § 2(d): marks that consist of marks that resemble marks previously registered or used are absolutely barred [priority provision]  § 2(e)(3): marks that are primarily geographically deceptively misdescriptive of the applicant’s goods are absolutely barred.  § 2(e)(5): functional marks are absolutely barred [use M-N factors to determine if functional] MARKS THAT CAN BE REGISTERED IF THEY ACQUIRE 2º MEANING UNDER LANHAM ACT: [i.e., bars that can be overcome upon a showing of 2º meaning]  § 2(e)(1): marks that are merely descriptive or deceptively misdescriptive of applicant’s goods can be registered only if they’ve acquired 2º meaning  § 2(e)(2): marks that are primarily geographically descriptive of applicant’s goods can be registered only if they’ve acquired 2º meaning  § 2(e)(4): marks that are primarily merely surnames can be registered if they’ve acquired 2º meaning. § 2(f): “Except as expressly excluded in subsections (a), (b), (c), (d), (e)(3), and (e)(5) of this section, nothing herein shall prevent the registration of a mark used by the applicant which has become distinctive of the applicant’s goods in commerce.” [They are absolute bars]  Descriptive or deceptively misdescriptive; primarily geographically descriptive; primarily merely a surname are all able to be overcome by secondary meaning MARKS = SCANDALOUS/IMMORAL/DISPARAGING TO AN INDIVIDUAL PERSON (AND THUS BANNED) IF: (1) The likely meaning of the matter in question refers to the individual, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services, AND (2) Whether a substantial composite of the general public would regard the reference as scandalous/immoral/disparaging to the individual as of the date of the registration. In re Fox (Fed. Cir, 2012): affirm the refusal of the registration of COCKSUCKER for rooster shaped chocolate lollipops because it creates a double entendre where one of the meanings is clearly vulgar. Still can use the mark, just cannot be registered. Vulgar: (1) shocking to the sense of truth, decency, or propriety; (2) disgraceful, offensive, disreputable giving offense to the conscience or moral feelings; or (3) calling out for condemnation Rule for individual/corporate disparagement: (1) the mark must be reasonably understood as referring to a person/corporation, and (2) the mark must be considered offensive or objectionable by a reasonable person of ordinary sensibilities. Boston Red Sox v. Sherman (TTAB, 2008): Sherman applied to register mark SEX ROD for certain items of clothing in font stylized to look like font used by Red Sox. Red Sox opposed this registration under

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§2(a) on grounds that the mark was (1) scandalous/immoral, and (2) disparaging to the Red Sox. Court held: (1) the mark was scandalous/immoral b/c there is evidence to suggest that the mark has a vulgar meaning and that the meaning would be understood as vulgar by a substantial composite of the general public, and (2) the mark was disparaging to the Red Sox b/c the mark could reasonably be understood as referring to the Red Sox and the mark would be considered offensive or objectionable by a reasonable person of ordinary sensibilities. Note: once the Red Sox successfully barred Sherman’s registration, Sherman could still use the mark, he just couldn’t register it. Thus, § 2 cannot be used to bar use of a mark, only registration. MARKS = DISPARAGING OF A WHOLE GROUP (AND THUS BANNED) IF: (1) The likely meaning of the matter in question references the group, taking into account not only dictionary definitions, but also the relationship of the matter to the other elements in the mark, the nature of the goods or services, and the manner in which the mark is used in the marketplace in connection with the goods or services” (2) Whether a substantial composite of the referenced group would regard it as disparaging as of the date of the registration. Rule: laches doctrine will bar cancellation action for an allegedly disparaging mark if too much time has passed since allegedly disparaged petitioners reached the age of majority. Harjo v. Pro-Football Inc. (Federal Circuit, 1994): TTAB found that football team’s REDSKINS mark should be cancelled b/c the term is disparaging to a substantial composite of NAs. Federal circuit held that the NAs’ cancellation action was barred by laches doctrine. PURPOSE OF BANNING SCANDALOUS/IMMORAL/DISPARAGING MARKS: (1) If registration incentivizes people to adopt and use marks, barring registration of such marks will disincentivize people from making and selling scandalous, etc. material. (2) B/c registration is a kind of govt sanction of a mark, by barring their registration, govt is expressing an unwillingness to support scandalous/immoral/disparaging marks. ARE THESE BARS CONSTITUTIONAL UNDER 1AM?  Federal circuit said these bars = unconstitutional: govt is denying benefits to speakers that have something to say that govt does not approve of. SCOTUS granted cert recently.  Another perspective: barring registration of offensive marks is the govt deciding not to endorse certain types of messages and that is reconcilable with the 1st amendment.

H. NAMES FALSE CONNECTION § 2(a) of Lanham Act: “No TM … shall be refused registration unless it … consists of … matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute. Individuals have an inherent right in their name. Rule: see four-part test below for suggestion of false connection petitions. W/r/t sufficient fame element (fourth element), fame/rep must be measured as of the date of registration. Hornby v. TJX Companies, Inc. (TTAB, 2008): Twiggy (celeb) petitioned to cancel TJX’s mark TWIGGY for use on children’s clothing under §2(a) on the grounds that the mark falsely suggested a connection with her. Court held below four-part test. Twiggy must show that: (1) Mark is the same or a close approximation of petitioner’s name or ID [can be nickname]. 34

(2) Mark would be recognized as such, in that it points uniquely and unmistakably to that person (3) Person named by the mark is not connected w/ activities performed by applicant under the mark (4) Fame or reputation of the person is such that, when the mark is used with the applicant’s goods or services, a connection with the person or institution would be presumed  TJX claimed Twiggy could not meet fourth element: mark would not be recognized as referring to Twiggy b/c her name is not of sufficient fame/rep that consumers seeing it on children’s clothing would presume a connection with her.  TTAB holds: Twiggy’s fame must be measured as of the date of registration. If fame at time of registration is such that a connection w/ Twiggy will be presumed by consumers of children’s clothes, then this element is met. o Here, registration took place in 2000, and Twiggy was sufficiently famous then. o TJX claimed women who knew of Twiggy in 1960s were beyond childbearing age in 2000 thus her fame ≠ sufficient amongst consumers of TJX’s products. TTAB rejected this argument: women beyond child-bearing age still bought children’s clothing + men who knew of her in 1960s could father children in 2000 and purchase children’s clothing. Thus, a substantial # of consumers knew of Twiggy in 2000. All other elements were met, thus TTAB granted Twiggy’s petition to cancel TJX’s mark. Note: false suggestion under §2(a) can also be claimed by institution, not just persons. Boston Red Sox v. Sherman (TTAB, 2008): Sherman applied to register mark SEX ROD for clothing in font stylized to look like font used by Red Sox. Red Sox opposed registration under §2(a) for falsely suggesting a connection. TTAB found no false connection: it’s so disparaging that consumers will not presume a connection between the mark and the Red Sox [factor 4 is not met.] Note: Red Sox also claimed mark was disparaging [see above]. If mark is disparaging, it probably won’t be held to be a false connection. Example: BASEBALL EVIL EMPIRE stylized like the Yankees’ mark. Might be same outcome as Red Sox case b/c consumers would not assume a connection between Yankees and the mark since Yankees would probably not want to call themselves evil. But apparently, Yankees have embraced calling themselves the Evil Empire, thus TTAB barred the mark under §2(a). Example: REMBRANDT toothpaste. Is there a false connection with the painter? No, b/c a connection would not be presumed (people would not assume painter is connected with the sale of toothpaste). NAMES § 2(c) of Lanham Act: “No TM … shall be refused registration unless it … consists of or comprises a name, portrait, or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the United States during the life of his widow, if any, except by the written consent of the widow. Note: §2(c) only bars marks that use the names of live people and dead presidents during the life of the widow. Thus, in REMBRANDT example above, painter could not use §2(c). In re Richard M. Hoefflin (TTAB, 2010): Applicant wanted to register OBAMA BAHAMA PAJAMAS. TM examiner refused to register the mark under §2(c) on grounds that the mark consisted of a name identifying a particular living individual [Obama]. TTAB held that §2(c) applies if the person must be so well-known that the public would reasonably assume the connection. Here, President Obama is so famous that the public will associate “Obama” w/ him. Note: this is a scenario in which §2(c) applies to bar registration, but §2(a) on false connection would not b/c no one would assume Obama is connected with the sale of these pajamas (factor 3).

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§ 2(e)(4) of Lanham Act: “No TM … shall be refused registration unless it … consists of a mark which … is primarily merely a surname.” Benithin factors: should be balanced to determine whether mark = barred under §2(e)(4). (1) Degree of surname rareness (2) Whether anyone connected with applicant has the surname (3) Whether the term has any recognized meaning other than that of a surname (4) Structure and pronunciation, or “look and sound” of the surname Rule: w/r/t 3rd Benithin factor [whether the term has any recognized meaning other than that of a surname], surname’s other meanings must be recognized by a significant # of people and can’t be too obscure/remote In re Quadrillion Publishing (TTAB, 2000): Quadrillion filed an application for BRAMLEY mark for books. TM examiner refused registration. TTAB affirmed refusal, applied Benithin factors. (1) Degree of surname rareness:  Here, consumers would primarily perceive BRAMLEY as a surname. As evidence of this, TTAB looked at # of Bramleys in phone directory (~400). (2) Whether anyone connected with applicant has the surname.  No connection here. (3) Whether the term has any recognized meaning other than that of a surname:  Applicant says BRAMLEY is also the name of a town in England and it’s a type of apple.  TTAB holds surname’s other meanings must be recognized by a significant # of people.  Here, the surname’s other meanings are too remote and obscure to be so recognized. (4) Structure and pronunciation, or “look and sound” of the surname:  BRAMLEY has structure & pronunciation of surname: -ley suffix in English surnames. In re Joint-Stock Company “Baik” (TTAB, 2007): Applicant wanted to register BAIK as a mark, but TM examiner refused registration under §2(e)(4) b/c it was a surname. TTAB reversed and allowed mark to be registered. Dispositive factor for TTAB: look and sound factor. TTAB held BAIK did not have the look and feel of a surname. PERSONAL NAMES Rule: at CL, personal names are not protected as TMs unless they acquire 2º meaning. This rule won’t apply if usual rationales for the rule are not present. Peaceable Planet v. Ty, Inc. (7th circuit, 2004): Both parties made plush animal toys filled with beans. Ty is more famous with its beanie babies toys. PP started selling a toy camel with name “Niles” [mean to evoke Niles River and Egypt]. Following year, Ty started selling same toy and sold much more than PP. PP brought suit against Ty for use of a personal name as a TM. D argued that PP had no CL rights to the TM: at CL, personal names are not protected as TMs unless they acquire 2º meaning. Court held the usual rationales for why 2º meaning is required to use a personal name as a mark do not apply here, thus court does not require 2º meaning in order to protect NILES mark.  Usual rationales for the rule: o CL rule is designed to allow people to use their names in conjunction w/their business. Here, NILES is not Ty’s name. o CL rule accounts for fact that some names are so common that consumers won’t assume that 2 businesses w/ same name are related simply b/c they share the same name. Here, NILES is not that common a first name. o CL rule is meant to allow someone to use his name to provide consumers with useful information. Here, consumers ≠ deprived of info if D has to choose another name.

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I. DECEPTIVE MARKS DECEPTIVE MARKS § 2(a) of Lanham Act: “No TM … shall be refused registration … unless it… consists of or comprises … deceptive … matter.” Note: this bar cannot be overcome with 2º meaning. DECEPTIVELY MISDESCRIPTIVE MARKS § 2(e)(1) of Lanham Act: “No TM … shall be refused registration unless it … consists of a mark … when used on or in connection with the goods of the applicant is merely descriptive or deceptively misdescriptive of them.” Note: this bar can be overcome if the mark has acquired 2º meaning. Rule: see three-factor Budge test below. Bayer v. Stamatios Mouratidis (TTAB, 2010): Stamatios (applicant) applied to register ORGANIC ASPIRIN for dietary supplements but his supplement didn’t contain any aspirin. Bayer opposed applicant’s registration under §2(a), [alleging that the mark is deceptive], and under §2(e)(1) [alleging that the mark is deceptively misdescriptive of the goods on which its used]. Court decided the proceeding by applying the Budge test (see below factors). 1. Is the term misdescriptive of the character, quality, function, composition or use of the goods (i.e., it must be descriptive of goods in a way that is plausible, but which is not true).  Applicant’s mark acts to describe the supplement as one containing aspirin, it is plausible that dietary supplements contain aspirin, and the applicant’s mark does not actually contain aspirin. Therefore, the mark is misdescriptive. 2. If misdescriptive, are prospective purchasers likely to believe that the misdescription actually describes the goods.  Applicant argued that consumers will know there is no such thing as organic aspirin, thus will not believe that there is any aspirin in the bottle. TTAB held: many consumers may think there is such a thing as organic aspirin (may think it’s some plant-based form) and may think it’s in the supplement.  Also, applicant’s ad copy included the suggestion that the supplement was a natural form of aspirin. This does not affect whether the mark itself is misdecriptive. This ad copy is evidence of the believability of the misdescription (but it not evidence of the misdescription itself).  TTAB ultimately held: prospective purchasers would believe there was aspirin in the supplement bc dietary supplements are taken for health reasons. Thus, the misdecription is believeable. 3. If so, is the misdescription likely to affect a significant portion of the relevant consumers' decision to purchase?  Consumers will care whether or not there is aspirin in it and may base their decision to purchase the supplement on the premise that it contains aspirin. All three factors met, so mark is absolutely barred under §2(a). Note: a mark is deceptively misdescriptive if it meets the first two factors of the Budge test. It can then overcome the §2(e)(1) bar to registration by a showing of 2º meaning. However, if the mark meets the first two factors of the Budge test and the misdescription is likely to affect a consumer’s decision to purchase [factor 3], then the mark is absolutely barred §2(a) [can’t overcome bar w/ showing of 2º meaning]. Example: SUPER SILK mark for shirts that do not contains silk. (1) It is misdescriptive, (2) the misdescription is believable, (3) and it’s likely to affect consumers’ decision to purchase. Thus it’s barred under §2(a) and absolutely barred.

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Coca-Cola Co. v. Koke Co. of America (1920): Koke (D) used COCA-COLA mark and Coca-Cola (P) sued it for infringement. D alleged P’s mark was deceptive b/c P’s soda did not actually contain cocaine. Court held the misdescription was not believable (consumers no longer actually think the soda contains cocaine). Example: GLASS WAX mark for a cleaning product that doesn’t contain any wax. (1) It’s misdescriptive, (2) misdescription is believable, (3) but not likely to affect consumers’ decision to purchase goods b/c they just want a cleaning product that works well (don’t care if it has wax). This means the mark is misdescriptively deceptive under §2(e)(1) and will require 2º meaning to overcome bar. Example: SOLAR COMFORT mark for electric heater that is not solar powered. (1) It’s misdescriptive, (2) the misdescription is not believable though b/c consumers will see the electric plug and know it’s not solar-powered, (3) irrelevant b/c factor 2 not met. This type of mark is just arbitrary or suggestive. Therefore, it’s registrable even w/o 2º meaning. Example: CAFETERIA mark for a restaurant. (1) It is misdescriptive bc it’s not a cafeteria, is more formal, (2) it might be believable b/c if consumers encounter the mark in an ad, they will think it’s just a regular cafeteria and will come to the restaurant [even if they realize it’s not an actual cafeteria when they get to the restaurant, they will have wasted their time getting there], (3) it will likely affect their decision to purchase b/c consumers may just want a cheap place to eat. DESCRIPTIVE/MISDESCRIPTIVE MARKS DESCRIPTIVE MARK MISDESCRIPTIVE BUT NOT BELIEVABLE (E.g. Solar Comfort) MISDESCRIPTIVE & BELIEVABLE, BUT NOT MATERIAL (E.g. Glass Wax) MISDESCRIPTIVE, BELIEVABLE, AND MATERIAL (E.g. Super Silk)

      

2º meaning required Arbitrary/suggestive Inherently distinctive (no 2º meaning required) Deceptively misdescriptive (§2(e)(1)) 2º meaning required Deceptive (§2(a)) Absolute bar

J. GEOGRAPHIC MARKS PRIMARILY GEOGRAPHICALLY DESCRIPTIVE MARKS § 2(e)(2) of Lanham Act: “No TM … shall be refused registration … unless it … consists of a mark which … when used on or in connection with the goods of the applicant is primarily geographically descriptive of them, except as indications of regional origin may be registrable [as a certification mark] under Section 4 of this title” Note: this bar can be overcome with a showing of 2º meaning. Test: (1) Name of a place known generally to the public (2) Public would make a good/place association i.e., believe that the goods or services originate in that place [and they do originate in that place]:  Presumed from the fact that the goods or services do in fact emanate from the place named, unless A. Place named is so obscure or remote that purchasers would fail to recognize the term as indicating the geographical source of the goods, or

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B. Geographical meaning of the term is not its primary significance Rule: three-prong test to determine whether mark is primarily geographically descriptive. In re Newbridge Cutlery Co. (Federal Circuit 2015): An Irish company applied to register mark NEWBRIDGE HOME for household items. TTAB refused to register the mark b/c it was primarily geographically descriptive of the goods and thus barred under §2(e)(2). Court here reversed b/c it held that PTO did not show it was primarily geographically descriptive under 3-part test. In order to be primary geographically descriptive, PTO must show: 1) The mark sought to be registered is the name of a place generally known to the public.  Q is answered from perspective of relevant consumers who’d purchase these specific goods.  Here, US consumers of home goods would not know that Newbridge = a town in Ireland, therefore, PTO could not prove the mark was primarily geo. descriptive, thus barred. 2) The public would make a goods-place association (i.e., believe goods originate in that place).  Q is answered from perspective of relevant consumers who’d purchase these specific goods.  Prima face showing of a good/place association if goods originate from the place unless: o Place named is so obscure or remote that purchasers would fail to recognize the term as indicating the geographical source of the goods, or o Geographical meaning of the term is not its primary significance.  To rebut a prima face showing, the applicant must provide evidence that the public would not actually believe the goods derive from the geographic location IDed by the mark (e.g., place is so obscure that purchasers would fail to recognize the term as indicating the geographic source of the goods, or geo. meaning of the term ≠ its primary significance).  Court didn’t decide if a goods/place association existed here b/c first prong of test not met. 3) The source of the goods is actually the geographic region named in the mark.  Here, the source of the goods is actually the geographic region named in the mark. Court held that the NEWBRIDGE HOME mark was not primarily geographically descriptive and thus not barred under §2(e)(2) b/c first prong of test not met. Note: prof says this test boils down to whether the mark is primary geographic and descriptive. Example: BAIKALSKAYA mark for vodka. Baikal is a lake in Russia. TTAB rejected applicant’s registration under §2(e)(2), holding the name of the lake was sufficiently famous to pass the first prong of the test (i.e., whether the place is generally known to the public) b/c it was a big tourist destination and known for being the world’s deepest lake enough. Second and third prongs satisfied b/c water from the lake was used to make the vodka. Example: EINER mark for beer. Einer is a place in Germany. TTAB held the name of the town was too obscure for the relevant consumers to recognize it (thus not primarily geographically descriptive) and the mark was not barred. Example: HOLLYWOOD FRIES for French fries. First prong is passed b/c Hollywood is sufficiently famous for US consumers to know of it. TTAB held there was no goods-place association in the mind of the public b/c the primary meaning of the term “Hollywood” was to refer to the movie industry / glamour, and not a geographic description, i.e. relates to “geographical meaning of the term is not its primary significance.” Example: CA Pizza Kitchen and Nantucket Nectars; neither of these products are actually manufactured in either of the named places anymore but courts have held that b/c those regions are where the goods originated from.

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PRIMARILY GEOGRAPHICALLY DECEPTIVELY MISDESCRIPTIVE MARKS § 2(e)(3) of Lanham Act: “No TM … shall be refused registration … unless it … consists of a mark which … when used on or in connection with the goods of the applicant is primarily geographically deceptively misdescriptive of them.” Note: this bar cannot be overcome with a showing of 2º meaning. Rule: test for whether a mark is primarily geographically deceptively misdescriptive below. In re Miracle Tuesday LLC (Federal Circuit, 2012): MT applied to register JPK PARIS 75 in connection with sunglasses, wallets, handbags, etc. Designer spent some time in Paris, but otherwise there was no other connection between the goods and Paris. TTAB refused to register the mark on the grounds that it was primarily geographically deceptively misdescriptive under §2(e)(3). In order to be primarily geographically misdescriptive, PTO must show all of the following: 1) That the primary significance of the mark is a generally known geographic location.  Mark’s primary meaning was to indicate a geographic location (Paris).  Could try and make a HOLLYWOOD FRIES argument that the association is with high-end fashion industry. 2) That the goods/services do not actually originate in the place identified in the mark.  Applicant argued that goods did originate from Paris b/c designer of the goods lived in Paris for a while. Court rejects this argument. Manufacture in the place is not required for the good to originate from there, but a designer’s stay in a geographic location is not enough to establish that the goods designed by designer originated from Paris. 3) That there is a goods-place association (i.e., that the consuming public would be likely to believe that the goods or services originate in the place identified in the mark).  Court holds that this factor is met. 4) Misrepresentation is a material factor in the consumer’s decision to buy the goods/services.  Court holds that this factor is met. Note: even if applicant convinced court that goods originated from Paris, the mark would still be primarily geographically descriptive, and thus the applicant would need to establish 2º meaning. Rule: for foreign-language marks, TTAB must analyze whether the relevant consuming public = foreignlanguage-speakers or general US population for purposes of the materiality prong. In re Spirits International (Federal Circuit, 2009): Applicant wanted to register MOSCOVSKAYA for vodka w/ no connection to Moscow. TTAB refused to register the mark on the grounds that it was primarily geographically deceptively misdescriptive under §2(e)(3). At issue = fourth prong re whether the misrepresentation was a material factor in consumers’ decision to buy the good. Court held TTAB misapplied the materiality prong b/c it decided the Q from perspective of Russian-speakers, but relevant consuming public could’ve been entire Vodka-drinking pop. Court remanded the case for proper application of the test. Example: VEGAS as a mark for playing cards not actually made in Vegas. The primary significance is the location. The goods do not have an actual connection with Vegas. Consumers may very well believe there’s a connection. But the misdescription may be immaterial for consumers. If one prong fails, then there is no bar. Example: PHILADELPHIA for cream cheese. It is primarily geographically misdescriptive, but the misdescription is not believable, nor is it going to be material. Note: if a mark is geographically misdescriptive, but it is immaterial to consumers when they make their decision to purchase, 2º meaning is not required. With geographically misdescriptive marks, 2º meaning

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is not required if the misdescription is immaterial. If it is material, it is absolutely barred. And, if a mark is primarily geographically descriptive, it requires 2º meaning. NON-GEOGRAPHIC If descriptive, it must have 2º meaning.

TEST Descriptive?

If deceptively misdescriptive, it must have 2º meaning.

Is it misdescriptive? Is the misdescription believable?

If deceptive, it is absolutely barred

Is it misdescriptive? Is the misdescription believable and is it material?

PRIMARILY GEOGRAPHIC If primarily geographically descriptive, it must have 2º meaning. If primarily geographically misdescriptive, but immaterial, no 2º is required (no bar at all). If primarily geographically deceptively misdescriptive, it is absolutely barred.

STANDARD FOR SERVICES: geographically misdescriptive marks for services require a stronger showing of the believability of the misdescription b/c location is apparent when you’re receiving services so consumers are less likely to believe that the services originate from some place other than where they are.  Example of exception: COLORADO STEAKHOUSE was barred. Even though consumers know they are not in CO while eating steak, they may think steak was from CO.

K. ABANDONMENT § 45 of Lanham Act: A mark shall be deemed abandoned when either of the following occurs: (1) when its use has been discontinued with intent not to resume such use. Intent not to resume may be inferred from circumstances. Nonuse for three consecutive years shall be prima facie evidence of abandonment. Note: you’re not looking for an affirmative intent to abandon a mark, you’re looking for an absence of intent to resume. Note: presumption of abandonment is rebuttable with a showing of intent to resume in the foreseeable future NON-USE Rule: (1) if a mark-owner has not used a mark for > 3 years, there will be a rebuttable presumption of abandonment. The presumption can be rebutted if owner can show that it intended to resume use of the mark in the foreseeable future. (2) Suing another party to prevent infringement of a mark ≠ use of the mark in commerce. (3) If licensee is not making commercial use of a licensor's mark, licensing the mark ≠ use of the mark in commerce. Silverman v. CBS (2nd circuit, 1989): CBS had rights to old show called AMOS AND ANDY (a minstrel show taken off the air in 1966 bc it was racist). In 1981, Silverman used mark in a musical he wrote & produced. He sought a declaratory judgment that CBS abandoned the mark, placing it in the public domain. Court found that CBS abandoned the mark, held below.  There are two elements for abandonment: (1) non-use and (2) intent not to resume use. Three years of non-use creates a rebuttable presumption of abandonment. o There was a presumption of abandonment b/c CBS hadn’t used the mark for 21 years.  CBS argued presumption should be rebutted by the fact that it intended to resume use of the mark at some future point when there was no social disapproval of the mark.  Court held that in order to overcome a presumption of abandonment, CBS had to show that it intended to use the mark in foreseeable future and it was not foreseeable that social attitudes would ever change to approve of the racist nature of the mark. CBS’s warehousing of the

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mark just in case it wants to someday use it in the future does not constitute and intent to resume use. o CBS also argued that it actually did use the mark by (1) suing others for infringing the marks, and (2) licensing the mark to others for use in documentaries.  Court held: (1) suing another party to prevent infringement of a mark does not constitute use of a mark in commerce (b/c consumers are not exposed to the mark by way of suit), and (2) licensing use of a mark for non-commercial uses does not constitute use of a mark in commerce.  Court also discussed how Silverman’s desire to use the mark for artistic expression should put a thumb on the scale to find abandonment by CBS. [Prof cautions that a D’s intended use of the mark = irrelevant in the abandonment analysis b/c once the mark is deemed abandoned, it can be used for non-artistic purposes].  Finally, if there is some residual consumer confusion, courts can craft a narrow remedy (i.e., a disclaimer) to dispel the confusion. Here, there is no chance of confusion. Note: CBS’ licensees could have used the mark without a license as long as they were using the mark for non-commercial reasons (i.e., documentaries). Example: Maxim’s restaurant closed for WWII. Is there abandonment? No abandonment b/c there was an intent to resume use of the mark once the war ended. Unlike Silverman: the social condition of the war was likely to change, whereas the social condition of aversion to racism was not likely to change. Rule: (1) despite TM registration cancellation, if a mark-holder has CL rights to a mark, a presumption of abandonment arising from 3 cons. years of non-use can be rebutted by a showing an intent to resume use, (2) R&D activities in relation to new products on which to use the mark = an intent to resume use that can rebut the presumption of abandonment from non-use Crash Dummy v. Mattel (Fed. Circuit, 2010): Mattel had TM rights to CRASH DUMMIES but it let its registration w/ PTO lapse. Its TM rights in the mark came from CL. Mattel hadn’t used the mark for > 3 years so there was a presumption of abandonment. During, this time, it was conducting R&D in relation to new toys it planned to manufacture and distribute under the mark. Crash dummy wanted to use the mark and claimed Mattel’s cancellation translated into abandonment. TTAB found Mattel had an intention to resume use, which rebutted the presumption of abandonment. Court here affirmed: despite the cancellation of Mattel’s TM registration, it retained CL rights to the mark; thus, it could rebut the presumption of abandonment [of its CL rights] by showing an intent to resume use of the mark. Court then held its R&D activities showed an intent to resume use of the mark, thus the presumption = rebutted. Rule: in order to constitute intent to resume use that can rebut a presumption of abandonment, the markholder must have intent to resume use in the United States. Foreign intent won’t count. ITC v. Punchgini (2nd circuit, 2007): Bukhara restaurant in India. NYC restaurant claimed Indian restaurant abandoned its mark bc it attempted to expand to NY but didn’t and thus hadn’t used the mark for > 3 cons. years. Indian restaurant attempted to rebut this presumption by arguing it had an intent to reuse, but court held: there was no concrete intent to resume use of the mark in the U.S., even though there was attempt to resume use in other countries. ASSIGNMENT IN GROSS Assignment in Gross does not establish priority unless connection with goods are substantially similar to the goods of the assignor. (purchasing of assignment of TM rights without the accompanying good will) Rule: see below bullets. Clark & Freeman Corp. v. Heartland Co. (SDNY, 1993): Sears used the mark HEARTLAND on women’s boots in 1983. Heartland (D) used same mark on shirts, pants, and jackets in 1985. C&F (P) used mark on 42

men’s shoes and boots in 1986. In an attempt to establish priority against D, P found Sears [who’d used the mark earlier than either party] and bought an assignment of Sear’s TM rights in 1987. Court held: assignment in gross did not establish P’s priority.  When P purchased TM rights from Sears, it received an assignment in gross––an assignment of TM rights w/o the accompanying goodwill.  Rule: If assignee (P) uses the assigned mark in connection w/ goods that are substantially similar to the goods of the assignor, then the assignment can be used to establish priority.  Rule: But an assignment is “in gross” and requires the assignee (P) to rely on its own use to establish priority if the goods are not substantially similar in quality and nature to the assignor’s goods.  Here, P (assignee) wanted to use Sear’s assigned mark on men’s shoes & boots. But Sears used mark on women’s boots. Court held that these two goods ≠ substantially similar. Therefore, P did not establish priority over D and D won suit. Note: what if P had first use? P would win. Assignment in gross invalidates whatever rights were transferred to you by assignor, but an assignee can still rely on its own rights that it establishes through its own use. Note: coats and rainwear have been held to be close enough. NAKED LICENSING Rule: naked licensing [licensing use of a mark to others w/o exercising reasonable control over how licensee uses the mark on goods/services] renders the mark abandoned. Eva’s Bridal Ltd. v. Halanick Enterprises (7th circuit, 2011): EB opened in Chicago, sold bridal dresses. Original owners allowed their children to open their own shops using the mark. Ghusein succeeded as owner of EB & agreed to license use of mark to Nayef and Halanick to operate their own store under an agreement requiring N&H to pay $75k/year to Ghusein. Ghusen did not exercise control over N&H’s branch (didn’t check in with them). N&H stopped paying $$. Ghusein sued N&H to enjoin them from using mark w/o payment. Court held that Ghusein’s agreement to allow N&H’s use of the mark = naked licensing, which renders a mark abandoned.  Naked licensing = licensing use of a mark to others w/o exercising reasonable control over the nature & quality of goods, services, or business on which the mark is used by licensee.  Here, Ghusein did not exercise control over N&H (licensee)’s goods and services: N&H’s store could carry different dresses than original EB, Ghusein didn’t control how goods/services were provided by N&H, no contractual provision requiring N&H to operate the store in any particular way. Therefore, Ghusein engaged in naked licensing and thus, the mark EVA’S BRIDAL abandoned. Note: contractual provision giving licensor right to control how licensee operates a branch can help show a lack of naked licensing, but licensor must still show it exercised its contractual right to control. Note: naked licensing doctrine makes sense b/c TMs are used by consumers as a shorthand for consistent and predictable quality. If licensor does not exercise control over others’ use of its mark, then goods sold under the mark may have differing qualities and mark = unreliable. Should be indicating a single source. Did not emanate from one source anymore. Close working relationship doctrine: defense against naked licensing. Licensor may claim that it justifiably relied on the quality control methods of the licensee if there is a close working relationship beween the licensor and licensee. Mere fact that you’re related or friends ≠ close working relationship. [Freecycle Sunnyvale v. Freecycle Network (9th circuit, 2010)]

LIABILITY REGISTERED MARKS  §32 of Lanham Act: (1) Any person who shall, without the consent of the registrant (a) use in commerce any reproduction, counterfeit, copy, or colorable imitation of a registered

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mark in connection with the sale, offering for sale, distribution, or advertising of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive …shall be liable in a civil action by the registrant for the remedies hereinafter provided. UNREGISTERED MARKS  § 43(a) of Lanham Act: Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person…shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.  Typically, the basis for TM rights under this section = CL rights. But not always (see below).  Belmora v. Bayer: if P’s mark has become generic, but D is somehow causing confusion by not including a disclaimer, then P will succeed on her §43(a) claim even though P does not have TM rights.  If P has abandoned the mark, P can also succeed under §43(a) if D is causing confusion. ELEMENTS FOR A CLAIM OF TM INFRINGEMENT ARE THE SAME UNDER §32 AND §43(A): (1) P must prove D’s use in commerce of some imitation of P’s mark (registered or unregistered) (2) D’s use must have been in connection with the sale of goods or services, and (3) D’s use of P’s mark must be likely to cause confusion [most cases are about this factor]

A. LIKELIHOOD OF CONFUSION Even if P’s TM is registered for one type of good, P has a claim for TM infringement v. D if D uses P’s TM on related though not completely identical goods and if P can establish that there will be some consumer confusion. FACTORS FOR ASSESSING LIKELIHOOD OF CONFUSION Polaroid v. Polarod Elects. Corp. (2nd Cir., 1961): P had federally registered TM in POLAROID for cameras. D uses the mark POLAROD for TV equipment and microwaves devices. 2nd circuit enunciated 8 factors for evaluating likelihood of confusion between non-competing goods/services: (1) STRENGTH OF P’S MARK  Theoretical strength and market strength. o Theoretical – how inherently distinctive o Market Strength – how strong in the marketplace/secondary meaning  Stronger P’s TM  > likely consumers will come to (or already do) ID TM w/ a single source.  Third-party usage: the more 3rd parties use P’s TM, the more likely consumers don’t ID the TM with a single source; thus, > 3rd party usage undercuts the strength of P’s mark. (2) DEGREE OF SIMILARITY BETWEEN THE TWO MARKS  How are consumers going to put this together/perceive this? Just the words themselves: o Sight, sound, meaning, and context.  Strength of P’s mark can overcome difference in context. (3) PROXIMITY OF THE PRODUCTS/SERVICES  If D’s goods compete for sale w/ P’s goods, weighs in favor of finding a likelihood of confusion.  Are the goods similar? Are the markets for P’s & D’s goods sufficiently close to each other? o Think about the marketing channels

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 9th circuit splits this factor into two (similarity of goods and marketing channels). (4) LIKELIHOOD THAT THE PRIOR OWNER WILL BRIDGE THE GAP  If there is no gap (b/c products are substantially similar and marketing channels are the same), then this factor will automatically weigh in favor of P b/c gap has already been bridged.  It is irrelevant if D claims to have no intention to cross over into P’s mark. What’s relevant = whether P is likely to eventually sell the types of goods sold by D. (5) ACTUAL CONFUSION  P and D can both provide evidence showing proof of actual confusion.  A side-by-side survey will be problematic if it does not reflect real-world purchasing conditions.  If P and D have both sold their products for a number of years w/o evidence of actual consumer confusion, it’s unlikely there will be any confusion in the future. (6) D’S INTENT IN ADOPTING ITS OWN MARK  If D intended to confuse consumers, there’s a higher likelihood of confusion.  There is a rebuttable presumption of D’s bad faith intent if D had knowledge of P and P’s mark. D can rebut this presumption if D can come up with some alternative explanation or independent creation story for why it adopted the mark. (7) QUALITY OF D’S PRODUCT  If D’s goods are inferior in quality, P’s reputation could be damaged if consumers are confused. o Whether they are poor quality knock offs  This factor is not about how different the goods are (do that analysis under factor 3 - proximity).  Factor rarely gets any weight in decisions. (8) SOPHISTICATION OF THE BUYERS  If consumers of the type of goods being offered by P and D are sophisticated enough, then it is not likely that they will be confused.  This factor is not about class distinctions; it’s about whether the product is an impulse buy (more likelihood of consumer confusion b/c consumers won’t inspect package) or not (less likelihood of consumer confusion b/c consumers are more likely to carefully inspect the package before purchase). o The more expensive the product, the less likely it is that the product is an impulse buy. After you consider all the factors, you must balance them: come up w/ a story about how there is either a high or low likelihood of confusion (emphasizing relevant factors in your story). Then, choose the more compelling story. Note: every circuit has its own version of this test for whether or not D’s use of P’s mark = likely to cause confusion. The results are largely consistent from circuit to circuit. E&J Gallo Winery v. Consorzio del Gallo Nero (ND Cal, 1991): E&J (P), CA winery, sold wine under GALLO registered TM; one of the largest wineries in US. Gallo-Nero (D) is an Italian trade association whose mark GALLO was going to be used in US on neck seals of wine produced by member wineries (no actual sales yet). Court conducted Polaroid factors analysis: (1) Strength of P’s mark: theoretical strength and market strength.  P’s mark GALLO = family surname thus P’s mark = descriptive, not theoretically distinctive/strong.  Despite an absence of theoretical strength, P’s mark had market strength b/c it had acquired 2º meaning due to P’s high sales and substantial advertising.  Court says P’s registration of GALLO TM is conclusive evidence of the validity of P’s mark but prof. said this is true only to the extent that the mark has become incontestable. If the mark has not yet become incontestable, then the registration is only PF evidence of the mark’s validity.  D pointed out some third-party usage of GALLO TM, but court found the usage irrelevant b/c 3rd parties were using the TM on completely unrelated goods (consumers may expect GALLO w/r/t wine goods, but not w/r/t other goods). (2) Similarity between the two marks: sight, sound, meaning, and context are relevant factors. 45

  

Sight: this factor favor’s P b/c the mark used by D looks exactly like the mark used by P (GALLO). Sound: the two marks used by P and D are pronounced exactly the same. Meaning: P says its mark has no particular meaning except to be a source-identifier for P’s wine. D argues its mark’s meaning is “rooster” in Italian. Court says since consumers are English-speakers, they won’t know the Italian meaning of “gallo.”  Context: D argues context of its use of GALLO [other words & a picture of a rooster] makes the marks different. Court held: P’s mark so strong that D’s use of words & rooster picture ≠ enough to ensure consumers differentiate between 2 marks. Court is playing factors off of e/o [strength & similarity]. (3) Proximity of the products or services: how similar are goods and are same marketing channels used?  D argued goods were different b/c P’s wine is from CA, but D’s wine is from Italy. Consumers will encounter their wines in different parts of the wine store, thus marketing channels are different too.  Court held the wines were substantially similar and marketing channels were also substantially same. (4) Likelihood that the prior owner will bridge the gap: no gap to bridge here. (5) Actual confusion: D had not yet sold its wine in the US, so there was no actual confusion. But both parties presented survey evidence to show rates of actual confusion among surveyed individuals.  D’s survey: D’s survey showed respondents D’s bottle & P’s bottle side by side & asked whether the bottles come from same source. Only ~1% of people thought two bottles came from the same source. o Problems w/ survey: doesn’t reflect real world purchasing conditions (not how consumers would actually encounter mark). Court held survey was improper; proper test: ask whether confusion is likely when a consumer, familiar w/ one party's mark, is presented w/ other's party’s good alone.  P’s survey: only showed consumers D’s mark & asked if they associated D’s mark w/ any other mark. o Problems with survey: P’s survey didn’t present D’s mark in context of D’s bottle design (with neck logo of rooster). Court held this was not a strong survey either but that an absence of actual proof of consumer confusion is not dispositive. (6) D’s intent in adopting the mark:  D knew about P & its mark when it adopted GALLO mark on its wine. Court holds: if D knew about P and P’s mark, D must have intended to confuse consumers by using P’s mark (bad faith presumption). D attempted to rebut this presumption by arguing that the use of the black rooster for Chianti wine has a long history that predates P’s existence. Court nonetheless find that the presumption ≠ rebutted. (7) Quality of D’s products/services: this factor is not considered in 9th circuit. (8) Sophistication of the buyers: calls wine consumers impulse purchasers. Therefore, they are more likely to be confused b/c they won’t carefully inspect the bottle. Court concluded: Polaroid factors balanced in favor of the P (high likelihood of confusion). Banfi Products Corp. v. Kendall-Jackson Winery Ltd (EDNY, 1999): Banfi sued K-J seeking a declaratory J that its use of K-J’s’s mark did not create a likelihood of confusion (Banfi = effectively D). K-J (P) owned winery in CA and sold wine under mark COLLINE DI SASSI. P sold this wine in US since 1990, but on a relatively limited basis. It’s wine = high end. K-J = senior user. Banfi (D) was a large importer of Italian wines in US. D obtained federal registration of TM COL-DI-SASSO for its wine in 1992 and began using the mark in 1993. D’s wine is marketed as affordable. D’s wine bottles have very distinctive trade dress. “Col di sasso” means hills of stone and “colline di sassi” means little hills of stone. (1) Strength of P’s mark: theoretical strength and market strength.  Theoretical strength of K-J’s mark is high b/c it is an arbitrary mark.  But market strength for P’s mark = low b/c there hadn’t been a lot advertising/sale.  Court found P’s lack of market strength more important that P’s theoretical strength (most courts do b/c market strength better shows what consumers actually think now, rather than what they may theoretically think at some point in the future). (2) Similarity b/w the two marks: sight, sound, meaning, and context are relevant factors.  Sight: not literally identical but there are similarities between the look of the two marks.  Sound: sound similar when pronounced even though they are pronounced slightly differently. 46

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Meaning: English-speaking consumers won’t know what marks mean; so many may think they mean the same thing. Also, meaning of the 2 marks are very similar (“hills of stone” v. “pebbles of stone”).  Context: D’s wine bottles have very distinctive TD, making its wine look completely different from P’s wine. Thus, court finds that although sight, sound and meaning may indicate that marks are similar, the overall context of P’s and D’s wine bottles sufficiently differentiates the two marks.  Court holds marks are different enough, but prof. says an honest analysis would look like below. o In Gallo, court held difference in context could overcome strength of P’s mark. Here, P’s mark is not sufficiently strong to overcome the different in context. Thus here, marks = similar. (3) Proximity of the products or services: how similar are goods and are same marketing channels used?  Products = wines but they’re different: price point is different (P’s = high end, D’s = affordable).  Products sold in different marketing channels: P’s wine is not sold by the glass and is largely sold at restaurants and specialty markets; D’s wine is sold through large liquor stores and by the glass.  Thus, court holds the products are not proximate. (4) Likelihood that P will bridge the gap:  No evidence that P intended to produce a product priced at D’s price point. (5) Actual confusion:  Court held there was no actual confusion here: both P and D sold their products for 4 years w/o any evidence of actual confusion, thus it’s unlike that there’d be any actual confusion in the future. (6) D’s intent in adopting the mark: no bad faith presumed b/c D had no knowledge of P when it adopted the mark (proof of this: D sent cease-and-desist letter to P asking P to stop using the mark). (7) Quality of D’s products/services:  D’s product is not inferior to P’s product, it’s just cheaper. Thus, confusion between P and D’s mark will not necessarily harm P’s reputation. (8) Sophistication of the buyers: unlike the court in Gallo, court here says wine consumers are careful purchasers (Prof says it’s about how expensive the wine is: ^ price, ^ sophistication of purchasers). Court concluded: Polaroid factors balanced in favor of the D (no likelihood of confusion). Example on similarity of the marks (second factor): ménage -a-trois wine vs. mélange-a-trois wine.  Sight: the two marks look similar; only a few letters off; cuts in favor of P.  Sound: the two marks sound very similar; also cuts in favor of P.  Meaning: potentially is quite different (“ménage-a-trois” has a sexual connotation but “mélange-atrois” means a mix of three; even if consumers don't actually understand the words “mélange-a-trois”, consumers know what “menage-a-trois” is and they will know that “mélange” is not that); argument that it’s similar (even if some consumers might think they're different, it's only one letter off and consumers that don't speak French may not know these two marks have different meanings)  Context: not enough info. Neutral.  Court found for D: b/c of differences in the meanings and b/c menage-a-trois has a distinct meaning, there will be no consumer confusion. Funnily enough, D eventually stopped selling the wine b/c they received too many complaints that it was too sexual! So, consumers were actually confused. EVIDENCE OF ACTUAL CONFUSION Rule: P’s survey only be considered as evidence of actual confusion if P surveys the consumers that are likely to purchase D’s goods/services and replicates real-world purchasing conditions employed by D. Leelanau Wine Cellars v. Black and Red (6th cir, 2007): P & D both made wine in Leelanau peninsula in MI. P was using the mark LEELANAU since 1977 and registered the mark in 1997. D began making wine in 1999 and used the same mark; D sold its wines primarily at its winery’s tasting rooms. P sued to enjoin D from using the mark, produced survey on actual confusion (factor 5), but court rejected it. 47

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P surveyed the wrong consumers: P’s survey only included respondents who were not from MI. Buyers of MI wine = distinct class of people that were not surveyed but should have been.  P failed to replicate real-world purchasing conditions: P’s survey was done in malls, but D’s wines are primarily purchased in the tasting rooms of D’s winery. Note: the fact that D’s wine is purchased via its winery helps establish that there will be no likelihood of confusion by D’s consumers. D’s consumers will know the source of D’s wine since they are purchasing the wine directly from the source. Kraft Foods Group Brands: Kraft sold cheese in the supermarket under the CRACKER BARREL mark. Cracker Barrel Old Country Store operated chain of restaurants. CBOCS was introducing a line of grocery store deli meats under the CRACKER BARREL OLD COUNTRY STORE mark. Found likelihood of confusion. Seemed substantial and the risk to Kraft of the loss of valuable goodwill and control therefore palpable. Showed them ham with the CBOCS mark and asked what other products they make, and people said cheese. May have just guessed it was cheese. Kraft concern that people will think CBOCS ham is made by Kraft and if they have a bad experience they will blame Kraft. PURCHASE OF ADWORDS = “USE IN COMMERCE” BY D Rule: P cannot prevail on a TM infringement claim if D has not made use of P’s mark in commerce. D’s purchase of adwords made up of P’s mark ≠ use in commerce if adwords are not used to direct consumers to D’s goods/services. Naked Cowboy v. CBS (SDNY, 2010): Naked Cowboy (P) owned the federally registered TM NAKED COWBOY. CBS (D) aired an episode of a show with a character very similar to P. D then posted the clip onto YouTube and bought the adwords “naked” and “cowboy.” Otherwise, the words “naked cowboy” did not appear in the clip or anywhere in the title. Court held that D’s purchase of the ad words “naked” and “cowboy” did not constitute the “use in commerce” that the P was required to prove in order to prevail on his TM infringement suit b/c the adwords were not placed on any “goods or containers.” Rule: D’s purchase of adwords made up of P’s mark = “use in commerce” if D uses the adwords to direct consumers to a website wherein consumers can purchase D’s goods. 1800 Contacts, Inc v. Lens.com (D. Utah, 2010): Lens.com (D) purchased “1800contacts”) as an adword from Google. 1800 Contacts (P) sued D for TM infringement arguing that use of its TM as an adword constituted use in commerce by D. Court held: D’s purchase of P’s mark as an adword from Google in order to trigger a sponsored link for the purpose of promoting D’s goods and providing consumers with a link to D’s website where they could make a purchase D’s goods constitutes use in commerce. Example: Kaplan purchases the term “barbri” as an adword from Google. When consumers search “barbri,” Kaplan’s website will be a sponsored link in the search results. Court have held that this constitutes actual use of P’s mark in commerce by both Kaplan and Google. REGISTRATION CONTEXT Likelihood of confusion analysis arises in registration context when TM holder opposes another party’s application for registration of a mark on grounds that applicant’s mark is confusingly similar to its mark. To prevent success of the opposition, the applicant should focus on:  How the two parties’ channels of trade will be different (proximity factor)  Dissimilarity of the marks (sight, sound, meaning, but context is less relevant since what matters in the registration context = four corners of the registration), and  Dissimilarity of goods (relevant goods = goods applicant is seeking registration for).

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Registration Channels of Trade: TM Examiner will look at how goods are described in the application for registration and ask what channels of trade such goods would normally travel Similarity of Marks Examiner/TTAB will look at the variety of formats in which a mark might appear if the registration is granted.

Infringement Channels of Trade: Court will look at what actual channels are employed by the parties to sell the goods

Similarity of Marks Court will look at how the mark actually appears in the marketplace b/c it is trying to determine where there is a likelihood of confusion in fact, not just theory.

Rule: when determining whether there is a likelihood of confusion in the registration context, DuPont factors are used (similar to Polaroid factors). Analysis is conducted w/ a focus on what applicant seeks registration for (i.e., mark, goods), rather than on what it plans to use the mark for eventually. Coach Services, Inc. v. Triumph Learning LLC (Fed. Cir. 2012): Coach Bag company opposed Triumph’s registration of the mark COACH for use on Triumph’s tutoring services. Coach had a standard character TM registration of mark COACH for use on bags, luggage, etc. TTAB dismissed Coach’s opposition, concluding there was no likelihood confusion. Court conduct likelihood of confusion analysis under DuPont factors: (1) Strength of Coach’s mark: Coach’s mark is exceptionally strong due to the length of use, advertisement, sales, brand awareness, the variety of goods concerning the mark. Favors Coach. (2) Similarity of the marks: although the parties’ marks are visually identical, the COACH mark conveys one meaning when used in connection with Triumph’s goods (i.e., tutor) and suggests a different meaning when used in connection with Coach’s goods (i.e., suggestive of travel accommodations). Thus, they are similar in sound and sight, but their meanings are different. Favors Triumph. (3) Similarity of goods: Coach’s goods are completely different from Triumph’s goods. Favors Triumph. (4) Channels of trade: the channels are distinct, even if there is some minor overlap. Favors Triumph. (5) Classes of customers: Level of sophistication of consumers = high for both parties. Favors Triumph. Since most of DuPont factors favored Triumph, Court allowed Triumph’s registration. Most important = channels of trade/proximity of products/services: goods/services listed in Triumph’s application were sufficiently different from the goods Coach’s mark is registered for to prevent actual confusion (consumers are not likely to think that Coach was behind use of the mark COACH for tutoring services). Rule: in registration context, if applicant seeks to register a standard character mark, applicant’s plans to ultimately use the mark in a way that is very different from opposer’s use of a similar mark will not suffice to differentiate two otherwise similar standard character marks b/c if registration were granted, applicant would be entitled to use the standard character mark in whatever form it desires. In re Viterra (Fed Cir 2012): Applicant sought to register mark XCEED in standard characters for agricultural seeds. Opposer held registration of mark X-SEED, also for agricultural seeds. Applicant argued that it planned to use the mark XCEED in a logo that would look very different from how opposer’s mark was used in opposer’s logo. Court held for opposer based upon above rule. Note: this case relates to the similarity of marks DuPont factor. Rule: in registration context, if applicant seeks to register a mark similar to opposer’s for use in connection with the same services (or goods) as opposer, the applicant’s application must be denied even if actual services rendered are sufficiently different b/c what matters if what’s listed in the registration. Stone Lion Capital v. Lion Capital (Fed Circuit, 2014): Lion Capital held registration of the mark LION CAPITAL for use in connection with financial services. Stone Lion Capital filed an ITU application to register the mark STONE LION CAPITAL for use in connection with financial services. Lion Capital opposed applicant’s registration of the mark on the grounds of likelihood of confusion with its mark. Applicant 49

argued that although both parties are in financial services, their channels of trade were sufficiently different b/c the actual services provided by the parties were sufficiently different. Thus, consumers wouldn’t be confused. Court rejected applicant’s argument and held for opposer based upon above rule. Note: this case relates to the channels of trade/proximity of the products/services DuPont factor. B&B Hardware: Concurrence: Most of the time they will not line up because in registration it is what is in the registration and for infringement it is what they are doing that matters

B. TRADE DRESS INFRINGEMENT Trade Dress usually ≠ registered. Thus, if P brings a TD infringement suit, he typically bases his rights to TD off of what he’s actually using and under §43(a). P must craft a description of his TD that actually triggers D’s infringement:  if too broad, won’t be protected: if P seeks protection of TD that is too general, Court will likely deem it functional. o Inwood: if TD = essential to the use or purpose of the article or affects the cost or quality of the article, then TD = functional (feature = functional if it’s the reason people purchase the good/service) o Qualitex: if monopoly over described TD would put competitors at a significant non-rep related disadvantage.  but if too narrow, won’t capture D’s use. Louis Vuitton Malletier v. Dooney & Bourke, Inc.: the design was inherently distinctive because the combination of symbols was not seen before. Whether the general symbols with colors on white background are descriptive where they would be distinctive with secondary meaning. (Seabrook Test) Competitors would need this. This is aesthetically functional because need a white background for colorful symbols. When the protection was limited to the LV, the protection was less and therefore what is able to be infringed is less. Rule: if P brings a TD infringement suit, court must first determine whether P’s TD is protectable by determining whether P’s TD = functional, and if not, whether P’s TD is inherently distinctive. If the TD = protectable, court must then determine whether there is a likelihood of confusion under Polaroid factors. Best Cellars v. Grape Finds at DuPont, Inc. (SDNY, 2000): BC (P) owned a wine store that separated wine according to taste rather than traditional categorization according to country of origin. P used cubby holes, holding racks, 8 taste categories w/ graphic design for each category, light blond wood accented by stainless steel, & unique lighting system that made wine look like it’s glowing. GF (D) opened wine store using similar taste categories, stainless steel holding racks, lighting system, light blond wood, etc. P sued D alleging TD infringement under §43(a): P listed 14 specific elements which, when taken together, constituted the TD of its wine store used for the services of selling wine. Court held below:  Court first determined whether P’s TD was protectable. o Was P’s TD functional? In order to be non-functional, TD must be non-functional under both Inwood and Qualitex tests. Court holds TD ≠ functional under either test.  Inwood: product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article (feature = functional if it’s the reason people purchase the good/service).  Taken together, 14 different features of P’s TD ≠ reason why people purchase wine.  Qualitex: product feature is functional if the exclusive use of it would put competitors at a significant non-reputation related disadvantage.

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It doesn’t put other wine stores at a disadvantage b/c there are many other effective ways to sell wine. o Was P’s TD inherently distinctive? Yes, under A&F and Seabrook.  First Q = is it product design? If so, it can never be inherently distinctive.  If not product design; moreover, Two Pesos held that design of a store is the kind of thing that can be inherently distinctive.  A&F spectrum of distinctiveness: a mark = arbitrary if it has nothing to do w/ good/service.  P’s use of blonde wood, stainless steel, etc. has nothing to do with the sale of wine.  Seabrook test: the more unique/unusual the TD is in the field, the more likely it is inherently distinctive. (note: court used the Seabrook test without citing to the case)  P’s store is unlike any other wine store, thus its TD = more likely to be inherently distinctive.  Having held that P’s TD ≠ function, and = inherently distinctive, court determined whether there was infringement on D’s part of P’s TD by conducting a Polaroid analysis. Court concluded that majority of the factors favored a finding of likelihood of confusion. (1) Strength of the trade dress: court says it is strong. (2) Similarity between the TDs: TDs are very similar and none of the differences between the two TDs is enough to significantly modify the overall visual effect. (3) Proximity of the products: class of customers is nearly identical, thus there is considerable proximity between the products. (4) Bridging the gap: no gap to bridge b/c both P and D sell the same products in the same field. (5) Evidence of actual confusion: proof of actual confusion is not present in the form of a survey, but the court still finds that there is confusion from some consumers (6) D’s bad faith: P has sufficiently demonstrated existence of D’s bad faith b/c the designer of D’s store used to work for P’s store and D sought out the designer. Further, since the two stores = so similar, court imputed to D an intent to copy P’s TD. (7) Quality of D's products: no evidence that D’s products are inferior. (8) Sophistication of purchasers: both stores are targeting non-sophisticated wine purchasers. Note: P listed so many different aspects of its TD b/c if it listed just one, court would find it too abstract to constitute protectable TD. However, P did not want to get any more specific b/c to do so would make it harder to show D’s infringement since D could more easily argue that its TD differed from P’s. This means Ps are incentivized to craft description of their TD based on what aspects of their TD D has copied. Note: re Polaroid factor of bad faith, D could argue D was only trying to copy an abstract idea of selling wines in a modern and taste-categorized way. On this level of abstraction, the copied idea was not protectable under TM law and thus this should not count as bad faith on D’s part. But Court ultimately rejects this argument b/c the looks of the store were just so similar that it was impossible to the court that D was only trying to copy the overall aesthetic and not the whole design. Rule: in a TD infringement suit, P will not be able to establish a likelihood of confusion, and thus won’t prevail against D, if P’s TD does not have the same look and feel as D’s TD. Best Cellars v. Wine Made Simple (SDNY, 2003): same BC as above sued Bacchus Wines alleging TD infringement. Bacchus’s store had some similar features to P’s store’s overall design, but D’s store was different in some ways: Mediterranean feel, white stucco, dark wood beams (as opposed to P’s blonde wood and stainless steel). Court held: although P’s TD = protectable (i.e., it was not functional, and was inherently distinctive), there was no likelihood of confusion here b/c P’s TD was not sufficiently similar to D’s TD. Look and feel of P and D’s TD = too different (this is a good cop out). PRIVATE LABELS AND STORE BRANDS

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Store brands of brand name products do not violate TM law as long as the store brands are clearly labeled and differentiated so as to avoid consumer confusion with the brand name. Example: Aveeno lotion and CVS brand lotion that looks a lot like Aveeno lotion. Perhaps a TD infringement claim (similar color scheme, labels, design, font). However, it’ll be difficult for Aveeno to prove actual confusion b/c CVS brand. Aveeno could try to argue that CVS is free-riding on its efforts, but TM law does not exist to protect against free-riding, it exists to prevent consumer confusion. In actual case, court held as long as CVS’ brand was clearly labeled and differentiated, then there will be no consumer confusion. The pro of this holding = promotion of competition. Rule: store brand versions of brand name products ≠ presumptively infringing brand name’s TD but only if D’s product is clearly labeled & differentiated from P’s good (by prominently featuring its logo on it). Conopco Inc. v. May Dept Stores (Fed. Cir. 1994): Conopco (P) relaunched its Vaseline lotion. Ansehl (D) became aware of P’s plans, developed a store brand version, and distributed its product shortly after P’s product was released. P filed a TD infringement suit against D. Despite most of the Polaroid factors favoring P, court held there was no TD infringement on D’s part b/c D’s product was clearly labeled and differentiated to indicate that D was providing a product comparable to P’s, rather than P’s actual product. D’s product was clearly labeled and differentiated b/c D’s TD featured D’s prominent and widely recognized logo of three black-and-white stripes on its product. Note: this is a pro-competition, pro-consumer holding. McNeil Nutritional v. Heartland Sweeteners (3rd Cir., 2007): Splenda (P) sued producers of multiple store brands of artificial sweetener made from sucralose, P’s principal ingredient. P brought TD infringement suit against each D. Holdings not important, more an exercise.  Food Lion included its name and logo in black on its TD. Safeway also included its name and logo, including its swish symbol on its TD. Court held these 2 Ds prominently displayed their logos on their product and were well known store brands. Thus, under Conopco, they didn’t infringe P’s TD.  Giant and Stop&Shop also included their logos on their TD. But court held the logos were not prominently enough displayed on their packaging and that therefore these Ds infringed on P’s TD.

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C. APPROVAL CONFUSION §43(a) of Lanham Act: Any person who…uses in commerce any word…which is likely to cause confusion, … or to deceive as to the affiliation, connection, or association of such person with another person, OR as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person…shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. Rule: to prove approval confusion, (1) P must provide survey evidence that a substantial proportion of people think D’s parody ad was approved/sponsored by P, (2) such confusion can be assumed from survey evidence that sub. prop. of people merely thought D needed P’s approval to publish the ad. Anheuser-Busch Inc v. Balducci Publications (8th circuit, 1994): A-B owned federally registered TMs in MICHELOB and MICHELOB DRY. D published a magazine; one of its back covers contained a mock ad for the fictitious product “Michelob Oily.” P brought suit, alleging infringement under §43(a).  Likelihood of confusion: o P produced surveys: 6% thought D’s parody ad was actually P’s ad (source confusion), 56% thought D needed P’s approval to publish the parody ad (approval confusion). o P’s survey indicating small % of actual source confusion = not enough proof of source confusion. o However, P’s survey also showed that 56% of people thought D needed P’s approval to publish the ad. Court reasoned that this survey result coupled with the fact that the ad was published meant that 56% of people thought P’s approval of D’s ad had actually been obtained. Thus, court held: there was sufficient proof of consumer confusion as to whether P approved D’s parody ad.  D’s potential argument (from class): if survey asks respondents whether they think P’s approval is required to publish D’s ad, the survey is simply asking respondents what they think the law is, not whether or not they think D’s ad was actually approved by P.  D invoked protection of 1AM. o Court holds that in determining whether 1AM protects otherwise infringing D from liability for a parody ad, court must weigh the public interest in protecting expressions against the public interest in avoiding confusion. o D could’ve easily avoided approval confusion by including an obvious disclaimer. If D had done this, court would’ve been more likely to allow the ad b/c there’d be less risk of confusion.  Prof: Thinks this is wrongly decided because not sure what D’s goods, services or commercial activities are bothered. Rule: in an approval confusion case, P must provide evidence of consumer confusion as to whether P approved of D’s product, not whether P approved of D’s usage of P’s TM. Medic Alert Foundation v. Corel Corp. (ND Ill, 1999): MAF (P) made bracelets designed to alert EMTs of non-obvious medical conditions; used mark MEDIC ALERT on the bracelets. D produced software, which included clipart images of a bracelet with P’s mark. P brought infringement suit alleging approval confusion. Court held: relevant Q for approval confusion ≠ whether P approved of D’s usage of P’s TM, but rather = whether P approved of D’s goods (here, software). Relevant confusion = consumer confusion about whether P is approving of D’s goods/services. Here, there was no evidence that P approved of or sponsored D’s product even though D included an image of P’s mark as clipart; thus, there was no evidence of approval confusion, and court held for D. MERCHANDISING CASES Rule: if Uni’s color schemes are widely recognized as associated w/ Unis, then Uni’s color schemes have acquired 2º meaning and D’s unlicensed use of Uni’s color schemes will result in approval confusion.

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Board of Supervisors for LSU v. Smack Apparel (5th circuit, 2008): Ps = Unis w/ specific school colors who used these colors around campus and in connection w/ athletic teams. Resulted in widespread recognition of these colors as being associated w/ Unis. Unis granted licenses for retail sales of products bearing Uni’s colors. Ds = T-shirt manufacturer that distributed shirts w/ Uni’s colors on it, but did so w/o a license. Court held: given wide recognition of Uni’s colors as being associated w/ Unis, color schemes had acquired 2º meaning; thus D’s use of Unis’ color schemes would cause consumers confusion as to sponsorship (i.e., would think that Unis sponsored D’s Ts, when in fact Unis didn’t). Note: when people see these shirts, do they think Uni approved/sponsored shirts? Or are people wearing shirts just to support the school? If people think approval is required, then Unis will have a viable approval confusion claim. But if people don’t think approval is required, no claim. Thus, approval confusion necessarily implicates what consumers’ think the law requires. Even so, most courts find pro-P. BAA v. Sullivan: D distributed shirts w/ Boston Marathon’s (P’s) logos/marks. Issue = whether consumers were likely to believe that P produces, licenses, or endorses D’s shirt. Court recognized the chicken-or-the-egg conundrum: which came first––the law or what people think the law is? If consumers think usage of a mark requires mark-holder’s authorization, and then authorization is required, the law will come to require authorization before usage of a mark; it becomes unclear whether law requires authorization b/c that’s what the law is or whether law requires authorization b/c most consumers think authorization is required. Despite this conundrum, court holds for P. Note: most merchandising cases come out for P [contrast to private label case] likely b/c if P has control over their mark, P’s has more money to put on the Boston Marathon, etc. Tension between free-riding (pro-P) and free competition (pro-D). Note: Defense rarely wins because this is kind of free-riding. Buying the feeling you get from wearing something with the Yankees logo on it

D. POST-SALE CONFUSION POINT-OF-SALE CONFUSION: purchasers of products are confused at the point of purchase as to source. POST-SALE CONFUSION: actual purchaser is not confused as to source, but onlookers that are potential purchasers might be confused as to source. Typically used by luxury brands.  Original product purchaser knows it’s counterfeit and doesn’t care. But onlooking potential consumers may observe products poor quality and think owner of TM (original producer) produces low-quality products (source confusion). Original producer experiences loss of reputation and $$.  What if counterfeit is not of poor quality? There would be no reputation loss, even if there exists source confusion. Should post-confusion claims be allowed in these circumstances? o Allowing high-quality fakes will lead to luxury brands to lose control of their brand. Thus, even if counterfeit is of high quality, post-sale confusion claims are allowed so that Ps can control their brand images. o Allowing high-quality fakes will lead to inability of luxury brands to sell a feeling of exclusivity, and thus lead to their non-existence. If we want to allow luxury brands to be exclusive, then postsale confusion claims should be allowed. In order for post-sale confusion to give rise to infringement, P must show that confusion actually matters:  Are D’s goods of an inferior quality? If so, post-sale confusion will give rise to infringement b/c P experiences a harm to reputation and ability to sell.  If D’s goods are not of an inferior quality, is P’s ability to control its brand image or sell products on the basis of exclusivity impaired? If so, post-sale confusion will give rise to infringement.

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Mastercrafters Clock v. Vacheron (2nd Cir., 1955): Vacheron (P) = US importer/distributor of expensive luxury Swiss Atmos clock that was atmospherically powered. Ds manufactured less expensive clock that looked very similar to P’s luxury clock, but it was powered electrically and had a power cord attached. P brought unfair competition suit against D. Court found post-sale confusion and held for P. Note: it was unlikely that consumers would actually be confused (b/c there was an electric cord on D’s watch) but court was probably guided by concerns IDed above (wanted luxury brands to retain control of their brand, and ensure exclusivity of luxury brands). Jeremy Sheff - Veblen Bands (2012) [article]: There are several theories of post-sale confusion. (1) Bystander Confusion:  D sells their product to a non-confused consumer, one who knows what the product is and observers who see the non-confused consumer using the D’s product mistake it for the P’s product and therefore become confused as to the source of the product. These confused 3rd party bystanders make observations and conclusions about P’s product based on their observations of the D’s product that influence their future purchasing decisions. (2) Downstream Confusion:  Is implicated where there is a risk that a non-confused purchaser of a counterfeit good might resell the good to a confused recipient. Here, there is no immediate confusion, but may occur when the initial purchaser resells the product.  This would actionable as traditional TM infringement. (3) Status Confusion:  This is the theory that most often serves to justify liability against manufactures of counterfeits even though the purchasers of these counterfeit items know they are not authentic.  The Status Confusion theory creates the scarcity needed by luxury brand producers that is required for the items to have a social meaning. The theory is based on the economic idea that if a product is freely available to everyone, then the product will lose its status symbol and creditability. Sheff argues that TM law should only be used only to product against consumer confusion. If there is no risk of consumer confusion, then TM law shouldn’t be used to protect luxury manufacturers. Example: kit sold to help make a regular car look like a Ferrari. Original purchaser obviously not be confused, but there could be post-sale confusion. Rule: there can be post-sale confusion only if D’s goods = typically observable in public (not underwear) Munsingswear v. Jockey Intl (D. Minn. 1994): P & D manufactured underwear that looked very similar (i.e., similar TD). P & D sold their underwear in different packaging, thus there could be no point-of-sale confusion. Instead, P alleged post-sale confusion, arguing 3rd party observers of purchasers of D’s goods would see P’s distinctive TD on D’s goods and experience source confusion. Court held there was no post-sale confusion: once D’s goods were purchased, 3rd parties would ordinarily not observe D’s goods on the purchaser bc ppl generally don’t walk around in underwear, thus there’d be no post-sale confusion. Example: P manufactures Gibson Guitars and D manufactures Paul Reed Smith guitars. Very similar TD. P alleged there was post-sale confusion: 3rd party observers would see D’s guitar and think it was P’s.  D’s guitar was high quality and if observers saw D’s guitar and thought it was P’s guitar, they would be more likely to go purchase P’s guitar b/c they observed its high quality.  But aren’t luxury brands still protected against high quality counterfeits? Yes, but here, neither of the underlying rationales for allowing post-sale confusion exist. o D is not selling inferior products (rationale #1), and o P is not selling products on the basis of exclusivity (rationale #2).

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Example: Levis had back pocket stitching. Lois Jeans started using similar back pocket stitching, but Lois Jeans were far more expensive than Levis. Levis alleged post-sale confusion: 3rd party observers would see Lois Jeans and think they were made by Levis.  Lois Jeans argued even if there is post-sale confusion, it shouldn’t matter b/c the confusion will benefit Levis since people will think Levis are high quality jeans.  However, Levis brand image = affordable jeans. Permitting this sort of post-sale confusion prevents Levis from exercising control over their brand. Thus, infringement should be found.

E. INITIAL INTEREST CONFUSION INITIAL INTEREST CONFUSION: occurs when one party has used another party’s mark in a manner calculated to capture initial consumer attention, even if upon purchase, consumer is not confused as to source (i.e., realizes actual source of good/service), and even if no actual sale occurs. When will initial interest confusion give rise to infringement?  Free-riding on goodwill alone is usually insufficient.  Confusion alone is also likely insufficient  Confusion plus detrimental reliance by consumer = usually sufficient even if consumer immediately realizes the mistake b/c it increases search costs and wastes their time.  Confusion plus competitive harm to producer = usually sufficient b/c producer may ultimately lose out on sale it should have gotten. Rule: initial interest confusion gives rise to infringement if there is harm to the P by way of lost sales and if there is harm to consumers by way of an increase in consumer search costs. Mobil Oil Corp. v. Pegasus Petroleum Corp (2nd Cir., 1987): Mobil (P) = seller of petroleum products to general public. In connection w/ this business, P uses flying horse symbol as a mark, meant to evoke Pegasus. P also engages in separate oil trading business. Oil trading market is tight knit, sophisticated, and made up of select group of professional buyers/brokers. P doesn’t use its flying horse symbol in connection w/ its oil trading business. PP (D) engages in this oil trading business and uses PEGASUS as a mark in connection with it (sufficiently similar to P’s flying horse mark). P brought infringement suit against D, arguing that D’s use of the PEGASUS mark created initial interest confusion amongst P’s oil trading consumers. Court found infringement.  Although there is no consumer confusion at time transaction is agreed to, there is consumer confusion at time D solicits consumer’s business causing P to ultimate lose a sale due to D’s use of its mark.  Further, even if transaction wasn’t consummated, both P and consumers experience a harm: o P experiences harm b/c its mark’s ability to identify source is weakened. o That, in turn, harms consumers b/c their search costs are increased (consumers can no longer rely on P’s TM as a source identifier). Blockbuster v. Laylco, Inc. (ED Much, 1994): Blockbuster (P) challenged D’s use of the name VIDEO BUSTERS for its video rental business on initial interest confusion grounds. D argued that while consumers might be confused initially, they wouldn’t be confused upon consummation of the transaction b/c they’d need a membership account with D. Court held there was infringement: despite lack of consumer confusion upon consummation of the transaction, D’s creation of initial interest confusion will cause harm by wasting consumers time [b/c they went into D’s store looking for P’s store] and by causing P to lose sales (consumers might just decide to give D its business b/c they’re already there]. Example: same Gibson Guitar hypo from before. P also alleged initial interest confusion. Consumer will see D’s guitar from the far side of the room, think it’s P’s guitar, and approach it. Court rejected far-sideof-the-room theory: not much consumer time waste and once consumer approaches D’s guitar and has

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time to inspect it, consumer will realize it’s not P’s guitar and won’t purchase it. In this example, there is an absence of harm to either P or consumer, thus initial interest confusion won’t be actionable. INITIAL INTEREST CONFUSION ON THE INTERNET If TM-owner’s competitor purchases an adword that is made up of TM-owner’s TM, will use of the adword be actionable as initial interest confusion?  Typically, Polaroid factors all weigh in favor of P so these factors aren’t very helpful (like with private label cases).  Therefore, courts tend not to give too much weight to Polaroid factors in these cases. Instead, courts look at context. o Are search results clearly labeled and differentiated enough to indicate that it is a sponsored ad. If so, no infringement. o What matters is whether consumer is still confused when he gets to D’s website. If he is, then there is confusion and infringement. Rule: TM-owner’s competitor’s use of adwords consisting of TM-owner’s TM will not be actionable under initial interest confusion if competitor’s ad is sufficiently labeled as an ad to prevent confusion. Network Automation v. Advanced Systems Concept (9th Cir., 2011): ASC (P) and Network (D) both sold job scheduling and management software. P used mark ACTIVEBATCH and D used mark AUTOMATE. D purchased P’s mark “activebatch” as an adword, which when keyed into certain search engines produced a sponsored link to D. P brought infringement suit against D, alleging initial interest confusion.  P argued that even if the produced link was labeled as an advertisement, many consumers won’t realize it’s an ad. Also, even if it’s clearly recognizable as an ad, consumers may approval confusion.  Above two concerns = confusion related to the nature of the adwords process, which will eventually be dispelled. If these concerns are found compelling, then entire adwords process = impermissible. Court didn’t find TM infringement: Although many Polaroid factors favored a finding of infringement, D’s use of adwords is allowed b/c D’s ad = sufficiently labeled as an ad such that consumers were not confused that they were being redirected to D’s website, rather than P’s. Note: if cannot buy the keyword then cannot compete and don’t want to stop this kind of competition upon the moment you click enter. Want to stop it at the moment you read the text. Note: the confusion here is more akin that in the Gibson guitar hypo than that in Mobil Oil case b/c consumers were wasting relatively little time by clicking on a competitor’s website; it's like walking to the other side of the store when you see the Gibson-looking guitar, Rule: if use of adwords consisting of TM-owner’s TM causing initial interest confusion that leads to actual point-of-sale confusion, it will give rise of infringement. Rosetta Stone v. Google Inc. (4th Cir., 2012): Google sold adwords to sellers of counterfeit Rosetta Stone software. Consumers were actually fooled into thinking they were purchasing genuine Rosetta Stone software. Rosetta Stone brought infringement suit against Google. Court found infringement b/c the initial interest confusion led to point-of-sale confusion. Rule: (1) if confusion claimed by P ≠ caused by design of competitor’s mark, but by design of webpage displaying competing marks and offering competing products for sale, relevant Q = whether the design of the website would create confusion as to source of listed goods in a reasonable consumer (2) Clear labeling can eliminate likelihood of initial interest confusion in cases involving Internet search terms MTM v. Amazon.com (9th circuit, 2015): MTM (P) produces MTM Special Ops watches and holds federally registered TM MTM SPECIAL OPS for watches. P’s watches ≠ available for purchase on Amazon (D). Instead, consumer who searches for “MTM Special Ops” on D’s site is directed to a list of related

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results of several other brands of military style watches that D does carry (each ID-ed by brand name and photo). P brought infringement claim against D, alleging that these search results constituted TM infringement b/c they created a likelihood of confusion between P’s watches and other non-MTM military style watches listed in D’s search results page. Court found no infringement here.  The core elements of TM infringement = whether D's conduct is likely to confuse customers about the source of the products.  B/c Amazon's search results page clearly labeled the name and manufacturer of each product offered for sale and included photographs of the items, no reasonably prudent consumer accustomed to shopping online would likely be confused as to the source of the products. Dissent: whether or not D’s search results create sufficient confusion in reasonable consumers is a Q of fact that cannot be determined at the SJ stage. OVERVIEW OF INFRINGEMENT Point of Sale Confusion: buyer mistakes junior user's product as that of senior user. Confusion re source.  Confusion as to source, palming off  Confusion as to sponsorship of affiliation Post-sale confusion: potential customers attribute poor quality of junior user’s product to senior user, and TM-owner is unable to maintain prestige or brand image. Initial interest confusion:  Free-riding on good will alone is insufficient  Confusion alone may be sufficient but needs something more  Need:  Confusion + detrimental reliance by consumer (expenditure of energy by consumers) OR  Confusion + competitive harm to producer (lost sale)  But if consumer purchases a competitor’s product thinking it's TM-holder’s, there is source confusion and P does not have to prove +’s above. No matter what kind of confusion you're taking about, the analysis should be under Polaroid factors. But it changes the interpretation of the factors (e.g., if what P is alleging is post-sale confusion, evidence = survey evidence from people who see the goods from the outside).

F. SECONDARY LIABILITY CONTRIBUTORY LIABILITY There is no statutory basis for contributory liability; stems from Inwood Labs case below. If a manufacturer or distributor intentionally induces another to infringe a trademark (rare), or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement (what really matters), the manufacturer or distributor is contributorily responsible. Inwood case. Rule: A manufacturer or distributor will be held contributorily liable only if: (1) the manufacturer or distributor intentionally induces another to infringe a TM, or (2) it continues to supply its product to one whom it knows or has reason to know is engaging in TM infringement. Inwood Lands v. Ives Labs, Inc (1982): Ives (P) owned federally registered TM to CYCLOSPASMOL for vascular disease drug. P’s patent expired so other manufacturers were free to use P’s chemical

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formulation of the drug. Pharmacists who received generic manufacturer (D)’s drugs mislabeled the bottles ultimately distributed to consumers w/ mark CYCLOSPASMOL in an effort to pass off D’s drugs as P’s drugs. Ps sued generic manufacturers (D) on the theory that they were contributorily liable for pharmacists’ infringing activities. Court held Ds were not contributorily liable, adopted below test.  A manufacturer or distributor will be held contributorily liable only if: (1) the manufacturer or distributor intentionally induces another to infringe a TM, or (2) it continues to supply its product to one whom it knows or has reason to know is engaging in TM infringement.  Here, there was no evidence that Ds were intentionally inducing the pharmacists to infringe on P’s mark, nor was there any evidence that Ds knew or had reason to know of pharmacists’ infringement and continued to supply their generic drugs to them.  Note: just because they were making the pills the same color did not mean they had an intention to put the brand name on the bottle itself. Rule: (1) in order to hold a D contributorily liable, P must show that D had knowledge (or reason to know) of specific instances of TM infringement (i.e., general knowledge is not enough. Need to know about specific instances of its product / services for TM infringement, (2) Requisite knowledge for contributory liability will be imputed to D if D has made itself willfully blind to use of its products/services for TM infringement (i.e., intentionally shielding itself from knowledge of specific infringing txns despite a suspicion of wrongdoing). Tiffany and Company v. EBay, Inc. (2nd cir, 2010): Sellers on EBay (D)’s online auction site offered counterfeit Tiffany (P) jewelry. Tiffany brought suit against EBay, contending that EBay = contributorily liable for vendor’s infringement. Court did not find D contributorily liable  P argued D knew or had reason to know of the sale of counterfeit items on its site generally and that this was enough to make it contributorily liable for this specific instance of counterfeiting.  Court held: D cannot be held contributorily liable on the basis of its general knowledge of the use of its site to sell counterfeit items; in order to hold D contributorily liable, P was required to prove that D had knowledge or have had reason to know of specific instances of TM infringement. However, if D had reason to suspect that counterfeits of P’s goods were being sold on its website and intentionally shielded itself from discovering the offending listings or the ID of the sellers behind them, D would be charged with the requisite knowledge. Note: P wanted D to more proactively patrol website for instances of counterfeiting. Court found D’s generalized efforts to prevent counterfeiting were enough. Example: flea market is put on where some vendors at the flea market sell counterfeit Hard Rock Café (HRC) shirts. HRC sues flea market under a theory of contributory liability. HRC could argue that there is a general trend of counterfeiting in flea market industry, that flea market was aware of this trend and thus had requisite knowledge of infringement. However, under Tiffany, general knowledge of counterfeiting is not enough to give rise to contributory liability. What if flea market owner was alerted to a specific instance of counterfeiting or potential counterfeiting, but owner refused to investigate further? Owner will be imputed requisite knowledge b/c he was being willfully blind to specific instances of potential infringement; thus, he’d be contributorily liable. If have suspicion, is that enough? Depends on the facts of the case. If a reasonable person would conclude counterfeit, then held liable. REASONABLE REMEDIAL EFFORTS Coach v. Goodfellow (6th circuit 2013): D failed to deny access to infringing vendors or take other reasonable measures to prevent use of flea market resources for unlawful purposes; D failed even to undertake a reasonable investigation. Court held: D was contributorily liable b/c he should have taken reasonable remedial measures. No reasonable investigation. Note: D did much less patrolling than EBay did in Tiffany (Ebay spent millions on investigating).

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Coach v. Sapatis (DNH 2014): Court used reasonable remedial measures as a standard. Note: these later cases show Ds ≠ always off the hook. Suggest that something > sitting back and waiting for reports of counterfeits before investigating is required on D’s part. Now, courts require a showing of reasonable remedial measures to prevent use of flea market resources for sale of counterfeit items. LEVELS OF FAULT  ACTUAL KNOWLEDGE of counterfeiting = sufficient for contributory liability.  WILLFUL BLINDNESS (i.e., suspicion of infringement followed by deliberate failure to investigate) = sufficient for contributory liability  REASON TO KNOW (understand what a reasonably prudent person would understand; uncertainty about whether an item is a counterfeit) = sufficient for liability  MERE NEGLIGENCE (failing to take reasonable precaution) ≠ sufficient for contributory negligence. VICARIOUS LIABILITY Rule: Liability for vicarious TM infringement requires a finding that D and infringer had an apparent or actual partnership, have authority to bind one another in transactions with 3rd parties, or exercise joint ownership or control over the infringing product. Rosetta Stone v. Google Inc. (4th circuit 2010): same case as before. Google sold Rosetta Stone mark as adwords. Some adword purchasers directed consumers to website that sold counterfeit Rosetta Stone products. Rosetta Stone alleged Google should be vicariously liable for their infringement. Court held there was no vicarious liability for Google here under above rule.

G. DILUTION BACKGROUND §43(c)(1) of Lanham Act: Subject to principles of equity, owner of a famous mark that is distinctive, inherently or thru acquired distinctiveness, shall be entitled to an injunction against another person who, at any time after the owner's mark has become famous, commences use of a mark … in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.  Dilution recognizes that TM law should protect strong, well-recognized marks––even in the absence of a likelihood of confusion––if D’s use dilutes the distinctive quality of another’s mark.  Dilution is NOT based on a theory of consumer confusion.  Theory: P’s mark used to be a strong source-indicator but due to D’s use of the mark, consumers have two associations with P’s mark––P’s source-indicating use and D’s other use––which weakens the strength of the mark as a source indicator, despite a lack of actual source confusion.  Three kinds: o Blurring (recognized by Lanham Act) o Tarnishment (recognized by Lanham Act) o Free-Riding (not recognized by Lanham Act) Ty, Inc. v, Perryman (7th Cir., 2002): Ty (P) = manufacturer of beanie babies. Perryman (D) sold P’s secondhand beanie babies on her website. P brought dilution suit against D under Lanham Act. Posner explained the three different types of dilution claims:  Blurring: when D uses P’s TM on unrelated goods; very low likelihood of confusion. But consumer will have to think harder about which goods the TM is referring to b/c P’s TM is now associated with two different unrelated goods when they used to only be associated with P’s goods.

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Lessening the distinctiveness of the mark Example: upscale restaurant calling itself Tiffany. No danger that consumers will think they're dealing with a branch of the Tiffany jewelry store if they patronize the restaurant. But when consumers next see the name Tiffany they may think about both the restaurant and the jewelry store, and if so the efficacy of the name is an identifier of the store will be diminished. Consumers will have to think harder to recognize the name as the name of the store.  Tarnishment: when D uses P’s TM on disreputable products/services; very low likelihood of confusion but now, when consumers see P’s TM, they will remember the association with D’s disreputable goods and this will tarnish P’s reputation. o Example: Strip club called itself Tiffany. Again, there’s no danger consumers will think they're dealing with a branch of the Tiffany jewelry store if they patronize the strip club. But b/c of the inveterate tendency of the human mind to proceed by association every time they think the word Tiffany, image of fancy jewelry store will be tarnished by association of word with strip club.  Free-riding: D takes a free ride on P’s investment in building up the goodwill in her TM; very low likelihood of confusion. o Example: Tiffany’s store in Kuala Lampur. Court held: here, none of above rationales for dilution claims apply. D is using P’s TM on P’s own goods. o o

Rebecca Tushnet: Gone in 60 Milliseconds  Critique of dilution law: Consumers will very rarely encounter TMs in the abstract, w/o enough context to explain which goods the TM is referring to. Hugunin v. Land O’ Lakes (7th Cir., 2016): Land O’ Lakes (P) used its mark LAND O’ LAKES on dairy products. Hugunin (D) used the mark on fishing tackle products in a small business. Posner dismisses dilution claim: (1) no harm to distinctiveness of the P’s mark (context will be enough for consumers to quickly understand which goods mark is referring to), (2) no harm to reputation or image of P’s mark (nothing disreputable with fishing tackle company). Example: Lexis Nexis (P) brought dilution claim against Lexus (D). Dilution claim failed b/c P’s mark wasn’t strong enough a source indicator amongst the general consuming population (niche fame amongst lawyers ≠ enough under Lanham Act). Also, even if P’s mark was strong, D was not actually diluting the distinctiveness of P’s mark b/c the word used by D was substantially different from P’s (spelled differently and pronounced differently).  Federal law requires fame among the general consuming population. However, state laws allow you to claim niche fame. Rule: if P’s mark is only distinctive due to acquired 2º meaning, D can be held liable for dilution if D is attempting to add a new 2º meaning to the mark, rather than using the mark to connote its 1º meaning. Visa International v. JSL Corp (9th Cir., 2010): JSL Corp (D) runs EVisa, a multilingual education and information business. Visa Intl (P) brought dilution claim against D. Court found dilution. D tried to defend by saying it was using the mark in for its primary meaning (dictionary definition) of the mark, but Court said only a business that provided visa services would be using the mark for its dictionary def. D’s use is attempting to add a new 2º meaning to the VISA mark; this creates a new association with the mark, thus impairing the acquired distinctiveness of P’s mark. Example: Apple & Eve for apple juice. Is this dilution of Apple’s TM for computers? Here, Apple is using the primary meaning of APPLE to describe its juices. Thus, Apple computers won’t have dilution claim v. Apple & Eve.

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Example: Apple chairs. Will Apple computers have dilution claim against Apple chairs? Probably not b/c APPLE mark is already pretty diluted and points to many different things. The more exclusive the use on P’s part is, the stronger the dilution claim. The less exclusive P’s use of the mark is, the weaker the claim.  Lack of exclusivity of “apple” as a word means doesn’t point exactly to or strongly to just one company. That’s the point of those slides, e.g. apple bicycles, apple chairs, big apple bagels, etc. DILUTION BY BLURRING From §43(c)(1) above, there are five elements to dilution by blurring claim: (1) P’s mark must be famous, (2) P’s mark must be distinctive (either inherently or through 2º meaning), (3) P’s mark must have been famous before D used the mark, (4) D has to use the mark in commerce, and (5) There must be a likelihood of blurring. Note: mark can be famous but not distinctive if the mark has become generic. FACTORS TO DETERMINE FAME OF P’S MARK §43(c)(2)(A) of Lanham Act: For purposes of paragraph (1), a mark is FAMOUS if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner. In determining whether a mark possesses the requisite degree of recognition, the court may consider all relevant factors, including the following: (i) Duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties. (ii) Amount, volume, and geographic extent of sales of goods or services offered under the mark. (iii) The extent of actual recognition of the mark. o Surveys o Generally, > 75% = enough. (iv) Whether the mark was registered … on the principal register. National Pork Board v. Supreme Lobster and Seafood Company (TTAB 2010): Fish company (D) sought registration of the mark THE OTHER RED MEAT for use on salmon. Pork Board (P) opposed the registration on grounds that registration of D’s mark would result in dilution of P’s mark under §43(c). P holds registration of mark THE OTHER WHITE MEAT for pork. Court considered P’s evidence of fame:  P spent considerable money [$550m] on advertising and publicity of the mark, as did third parties.  P conducted survey showing 80-85% recognition amongst US public. Generally, > 75% = enough. Pinterest, Inc. v. Pintrips, Inc.  Issue of Timing: Not sufficiently famous - was not as famous then as it is now  Relevant Consumers NOT Enough: Problem is they surveyed the potential users of Pinterest, not the general consuming public of the united states o Need that level of fame Rule: (1) TM-holder can oppose applicant’s registration by alleging registration of applicant’s mark likely to dilute TM-holder’s mark, (2) to prevail in the registration context, opposer must provide evidence of the fame of its mark before applicant’s constructive use date) (i.e., applicant’s filing date) Coach Services, Inc. v. Triumph Learning (Fed Cir, 2012): Triumph (D) sought to register mark COACH for tutoring services. Coach (P) opposed, in part, on dilution grounds under §43(c). Court permitted D’s registration: §43(c) requires proof that P’s mark was famous before D used the mark. Under §7(c), D’s constructive use of the mark was in 2004, the date D filed for registration of the mark. P only provided

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evidence that its mark was famous after 2004. P thus lost for evidentiary reasons (P could have easily shown fame before 2004, but it didn’t; if it had, P would have proven requisite fame). Note: TM Examiner cannot refuse registration on the basis of applicant’s potential dilution of another’s mark. But Opposer can intervene and prevent registration by showing a likelihood of dilution. FACTORS TO DETERMINE BLURRING §43(c)(2)(B) of Lanham Act: For purposes of paragraph (1), “DILUTION BY BLURRING” is association arising from the similarity between a mark … and a famous mark that impairs the distinctiveness of the famous mark. In determining whether a mark or trade name is likely to cause dilution by blurring, the court may consider all relevant factors, including the following: 1. Degree of similarity between the mark … and the famous mark. *  Sight, sound, meaning 2. Degree of inherent or acquired distinctiveness of the famous mark. †  How much there is to dilute here?  More inherently distinctive (i.e. not relying on secondary meaning) = more to dilute 3. Extent to which owner of famous mark is engaging in substantially exclusive use of the mark. †  Look at the exclusivity of the mark holder 4. Degree of recognition of the famous mark. †  Measures the amount of fame  E.g. wouldn’t matter if I knew the shape of a Gibson Flying V, EVERYBODY would have to know 5. Whether the user of the mark or trade name intended to create an association w/ famous mark. * 6. Any actual association between the mark … and the famous mark. *  Purely mental association NOT sponsorship/affiliation or source ID which = confusion † Factors 2, 3, and 4 focus on P’s mark and whether or not there’s anything to dilute. * Factors 1, 5, and 6 focus on D’s usage and whether or not D’s usage is likely to dilute P’s mark. Example: recall THE OTHER WHITE MEAT case. How would blurring analysis come out?  Factor 2: P’s mark was either suggestive and thus inherently distinctive or had acquired distinctiveness. Pro-P.  Factor 3: P made exclusive use of the mark. Pro-P.  Factor 4: P’s mark had high degree of recognition amongst general public (recall survey showing 8085% recognition. Pro-P.  Factor 1: P’s mark and D’s mark are similar but not completely identical. Mostly pro-P.  Factor 5: D probably intended to create an association bw its mark and P’s famous mark; intent is more easily imputed if P’s mark is very famous. Pro-P. o Courts will infer D’s intent to associate its mark w/ P’s mark based on knowledge of P’s mark. This is problematic in dilution context b/c it’s almost impossible to come up w/ a scenario where D doesn’t have knowledge of P’s mark in a dilution case (because P is usually famous to bring a dilution claim). Thus, Ds usually be imputed w/ intent. o Don’t need to show bad faith. o Association – means mental association. More than one thought in your head. Intend to make people think of this when they hear this word  Factor 6: determining whether there was any actual association would require survey evidence. What would survey look like? o “When you see phrase THE OTHER RED MEAT on a product, does any other phrase conjure up in your mind? If so, what phrase?” o If answer = THE OTHER WHITE MEAT, then there is actual association. o Need #s > 15%. 63

o

Note: survey results indicating lack of source confusion = irrelevant. Q = whether there is an assn. in minds of consumers between two marks, not whether consumers = confused as to source.

 Rule: even if blurring factors under §43(c) favor P, P must also show association between P’s mark and D’s mark is likely to impair the distinctiveness of P’s mark in order to give rise to dilution liability. Rolex Watch v. AFP Imaging Corp (TTAB, 2011): AFP (D) sought to register ROLL-X mark for rolling x-ray tables. Rolex (P) opposed on the grounds of dilution under §43(c). TTAB found P’s mark was sufficiently famous. Then did blurring analysis. Court ultimately held for D.  Factors 2, 3 and 4 weigh in P’s favor: P’s mark = distinctive, P is engaged in exclusive use of the mark, and P’s mark was highly recognized.  Factor 1: P’s mark was similar to D’s in some respects but different in others. Sound is similar. But meaning is different (P’s meaning is fanciful; D’s meaning is to refer to rolling X-ray tables).  Factor 5: D knew of P’s mark b/c it was famous. But D argued it had an independent creation story: it meant to describe the rolling nature of its x-ray tables; had line of products with similar names for other types of x-ray tables (e.g. had a dental product called Dent-X). Plausible story. Wanted to think of rolling x-ray table.  Factor 6: P’s survey results showed 34% of consumers found an actual association between the two marks. This suffices to show actual associations.  However, in order for to be liable on the basis of dilution by blurring, P must provide evidence that its mark’s distinctiveness (i.e., source-identifying ability) will be impaired as a result of this association. Here, P did not so provide. Thus, court found for D. o This is NOT about source ID confusion, it’s literally just about if you conjure up Roll-X when you hear of Rolex. No longer thinking of just one mark. Starbucks Corp. v. Wolfe’s Borough Coffee, Inc.: Reweighing factors 5 and 6. Factor 5 does not require bad faith intent. Factor 6 showed 30.5% of consumers associated CHARBUCKS with STARBUCKS. On remand determined P failed to carry the burden of proving that D use of its marks is likely to cause dilution by blurring because only weakly associated with the STARBUCKS mark. PARODY Rule: (1) parody is a fair use but only if D’s use of P’s TM ≠ use as a designation of source. (2) even if an association is found between P/D’s mark for dilution by blurring purposes, if D’s use of P’s TM is to parody P, the association will not impair distinctiveness of P’s TM, and thus dilution ≠ actionable. Louis Vuitton v. Haute Diggity Dog (4th circuit, 2007): LV (P) held TMs for handbags and luggage. Haute Diggity Dog (D) manufactures and sells a line of pet chew toys whose designs mimic elegant highend brands of products (perfumes, cars, shoes, bags). P brought dilution by blurring claim against D under §43(c). Court held there was no dilution here.  §33(b)(4) provides that fair use is a complete defense; parody is a type of fair use. However, in order to qualify as a fair use, the parody cannot be used as a designation of source for parody-er’s own goods/services (i.e., as a TM). Here, D was parodying P’s mark however D was using LV’s mark as a designation of source for its own goods, thus fair use defense did not apply.  Court did blurring factors analysis: o Factors 2, 3, and 4: P’s mark = distinctive, P is engaged in exclusive use of the mark, and P’s mark was highly recognized. o Factor 1: P and D’s marks are very similar. Minor misspelling in D’s mark. o Factor 5: fact that D’s good = parody of P’s good indicates D had intent to create an association. o Factor 6: P provided evidence of actual association.  Despite the indication of an association between P/D’s marks here, court held that the association will not impair distinctiveness of P’s mark. D’s use of P’s mark as a parody requires reference to the

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distinctiveness of P’s mark; thus, a parody will reinforce and strengthen the distinctiveness of P’s mark rather than impair it. Rule: making fun of P = parody and will not impair distinctiveness of P’s mark; being funny generally w/o reference to P may impair distinctiveness of P’s mark. Hershey Company v. Art Van Furniture (ED Mich, 2008): Art Van (D) = MI’s largest furniture supplier. D’s delivery trucks are decorated w/ an image of a brown sofa emerging out of brown wrapper, like a candy wrapper. Hershey (P) had same TD and similar ad. P brought suit against D for TD dilution. Court found that most of the factors favored a finding of an association between P’s TD and D’s TD. D invoked rule from Haute Diggity Dog that D’s use of P’s mark as a parody could not impair distinctiveness of P’s mark. Court held parody rule from Haute Diggity Dog was inapplicable here: making fun of P will not impair distinctiveness of P’s mark b/c it does not create a new association with P’s mark BUT being funny in a general way (like D was here) may impair the distinctiveness of P’s mark. Note: This is more similar to LV Fish Sticks than Chewy Vuiton. Makes you think of two different sources where Chewy Vuiton made you think of one source which is LV. Here not poking fun at Hershey’s, just using it. Chewy Vuiton poked fun at it (good counterargument!). Rule: parody rule from Haute Diggity Dog does not apply where D’s product is not actually a parody product but is a legitimate product (good counterargument!). Starbucks Corp. v. Wolfe's Borough Coffee (2nd circuit, 2009): Wolfe’s (D) is seller of coffee products; sold a dark roasted blend of coffee called “Charbucks Blend.” Starbucks (P) sued D co for dilution by blurring. D attempted to invoke rule from Haute Diggity Dog to prevent a finding of blurring. Court held Charbucks Blend coffee was not a parody product, it was a legitimate product. Note: Despite this ruling, on remand, trial court found no dilution by blurring anyway b/c words were sufficiently different (factor 1) and there would be no harm done to distinctiveness of P’s mark. DILUTION BY TARNISHMENT §43(c)(2)(C) of Lanham Act: For purposes of paragraph (1), “DILUTION BY TARNISHMENT” is association arising from the similarity between a mark … and a famous mark that harms the reputation of the famous mark. Note: tarnishment does not ask whether the distinctiveness of P’s mark has been harmed. Elements for dilution by tarnishment claim: (1) P’s mark must be famous, (2) P’s mark and D’s mark must be sufficiently similar, (3) the association between P’s and D’s mark must harm reputation of P’s mark. Rule: if D’s mark is sexually lewd and sufficiently similar to P’s mark, a rebuttable presumption of tarnishment will be raised. Victoria’s Secret Catalogue v. Moseley (6th cir, 2010): Victoria’s Secret (P) used mark VICTORIA’S SECRET on lingerie and catalogues. Moseley (D) used mark VICTOR’S LITTLE SECRET in connection with his retail sex toy store. P brought suit against D for dilution by tarnishment. Court found that there was dilution by tarnishment here: when D uses a mark that is sexually lewd and sufficiently similar to P’s mark, there will arise a rebuttable presumption that the association between P’s and D’s mark harms P’s mark’s reputation. D did not rebut this presumption, therefore court found tarnishment. Although P’s goods were marketed as sexy, they were not explicitly sexual like D’s. Rule: a mere association between P’s mark and D’s mark coupled with a showing that D’s mark is distasteful does not show that the distastefulness of D’s mark will harm P’s mark’s reputation (good counterargument!). 65

Starbucks Corp. v. Wolfe's Borough Coffee (2nd Cir., 2009): Wolfe’s (D) is seller of coffee products; sold a dark roasted blend of coffee called “Charbucks Blend.” Starbucks (P) sued D co for dilution by tarnishment. P provided survey evidence that 20% of people associated CHARBUCKS with STARBUCKS and had a negative impression of a coffee named CHARBUCKS. Court held this was insufficient evidence of tarnishment: a mere association between P’s mark and D’s mark coupled with a showing that D’s mark is distasteful does not show that distastefulness of D’s mark will harm P’s mark’s reputation. Example: John Deere had image of a yellow and green deer as a TM; also had slogan of “nothing runs like a deer.” Yard-Man also provides lawn-mowers.  Yard-Man’s commercial uses Deere’s slogan: “our mowers run like a you-know-what but cost less.” o Yard-Man’s ad suggests that Deere’s products are overpriced. This is not tarnishment b/c a tarnishment claim requires harm to the reputation of the P’s mark, not the reputation of the P as a company! Recall private label products. True claims re quality & price ≠ violations of TM law (good counterargument!).  Yard-Man’s commercial also features Deere’s deer image running away from Yard-Man’s mower in a frightened manner. o This portion of the ad will give rise to liability on a tarnishment claim: Yard-Man’s depiction of Deere’s mark as frightened and running away will cause harm to the reputation of Deere’s mark b/c every time consumers see the Deere mark now they will think of it as frightened.  Note: fair competition to talk about how much better than the competition, e.g. quality and price, but cannot undermine the brand

H. DOMAIN NAMES Basic rule for domain names: first-come first-served. In reaction to cyber-squatting [purchasing famous corporation names as domain names before the corporation got a chance to and waiting until corporation came around and purchased it], Congress passed Anti-Cybersquatting Consumer Protect Act. Anti-Cybersquating Consumer Protection Act [§43(d) of Lanham Act] (1) (A) A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person— (i) has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and (ii) registers, traffics in, or uses a domain name that— (I) in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark; (II) in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or (III) is a trademark… (B) (i) In determining whether a person has a bad faith intent described under subparagraph (A), a court may consider factors such as, but not limited to— (I) the trademark or other intellectual property rights of the person, if any, in the domain name [if D has some sort of rights in the name, this will hinder a showing of bad faith] * (II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person; [if the name is commonly used to ID D, this will hinder a showing of bad faith] *

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(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; [if D used the name in the past for bona fide sales of good/services, this will hinder a showing of bad faith] * (IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name; [if D’s use is bona-fide noncommercial or fair use of the mark, this will hinder a showing of bad faith] * (V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a likelihood of confusion as to the source, sponsorship, affiliation, or endorsement of the site; [if D had an intent to divert consumers, either for commercial gain or w/ intent to tarnish or disparage the mark by creating a likelihood of confusion, this will bolster a showing of bad faith] † (VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the bona fide offering of any goods or services, or the person's prior conduct indicating a pattern of such conduct; [if D offered to sell the domain name for financial gain, w/o having used or had an intent to use, the name for BF sales, or had a prior pattern of such conduct, this will bolster a showing of bad faith] † (VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name, the person's intentional failure to maintain accurate contact information, or the person's prior conduct indicating a pattern of such conduct; [if D provided materially false contact information on the website, this will bolster a showing of bad faith] † (VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, or dilutive of famous marks of others that are famous at the time of registration of such domain names, without regard to the goods or services of the parties; and [if D registered multiple domain names with marks confusingly similar to marks of others, this will bolster a showing of bad faith] † (IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of subsection (c). [if P’s mark is very distinctive, either inherently or acquired through 2º meaning, this will bolster a showing of bad faith]. * May weigh in favor of the Defendant † Hurt the Defendant 9 – extent of distinctiveness or fame of the mark ELEMENTS OF A CLAIM UNDER §43(D): (1) Person bringing the ACPA claim must be a TM-owner of a mark that is distinctive at the time of domain name registration. (2) The domain name registered by D must be identical or confusingly similar to the mark of the person bringing the ACPA claim. (3) In registering the domain name, D must have had a bad faith intent to profit from the mark

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 

Key element. 9 factors to determine whether there is a bad faith intent. First four are helpful to D, and the last four are helpful to P. The last factor asks about the distinctiveness of the mark. There is a safe harbor provision: o Bad faith intent “shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was fair use or otherwise lawful.” [§43(1)(B)(2)].

IN REM JURISDICTION ACPA [§43(d)] allows for in rem jurisdiction: if P can’t establish personal jurisdiction over D, P can sue the property owned by D in the state. The domain name = the relevant property owned by D and ACPA provides that the domain is located wherever the domain’s registry is located. Most registries are located in VA, therefore that’s where most ACPA cases are brought; 4th circuit ultimately hears the appeals. BAD FAITH Rule: see factor V below for diversion of consumers and likelihood of confusion required for ACPA. Fagnelli Plumbing Co v. Gillece Plumbing & Heating (WD PA, 2011): Fagnelli (P) and Gillece (D) both compete to provide plumbing heating & cooling services in PA. D purchased the domain name FAGNELLI.COM in 2007. P’s customer attempted to locate P’s website and entered FAGNELLI.COM into the browser but was redirected to D’s website for Gillece Plumbing and Heating. P brought suit against D alleging a cybersquatting violation of §43(d). Court held P sustained its burden of proving (1) that its mark = distinctive and entitled to protection, (2) that D’s registration of FAGNELLI.COM was ID or confusingly similar to P’s mark, and that D’s registration of the domain name was done with bad faith intent to profit from it. Court applied 9 factors from §43(d) and determined that D had bad faith:  Factor I, II, III: D has no TM or other IP rights in the FAGNELLI.COM domain name. Such a domain name is not consistent with D’s name. D has not legitimately used the domain name in connection with offering its services.  Factor IV: D’s use of FAGNELLI.COM domain name has not been used in a noncommercial or fair use.  Factor VI: D has a pattern of conduct of registering well-known marks of other competitors.  Factor V: D registered a domain name which was a variation of P [D’s direct competitor]’s website and by doing so, D diverted consumers away from P’s website for commercial gain. A likelihood of confusion was created. All that’s necessary for likelihood of confusion under this factor = some initial interest confusion on consumers’ part: consumers type in FAGNELLI.COM expecting to get to P’s website, but instead they’re redirected to D’s different website; even if they aren’t confused by the time they’re redirected, initial confusion is enough.  Factor IX: P’s mark was distinctive. Note: when determine whether D’s domain name is ID or confusingly similar to P’s mark, do not consider the goods/services. Just ask whether the name and are ID or confusingly similar. Rule: bad faith can be found even if most factors do not militate a finding of bad faith if D keeps customers away from P by registering a domain name similar or ID to P’s name. Sportys Farm v. Sportsmans Market (2nd Cir., 2000): Sportsman (P) was a well-known provider of pilot accessories. Omega (D) was P’s competitor in the pilot accessories industry. D registered the name SPORTYS.COM and then started a Christmas tree business under the name SPORTYS. P brought ACPA claim against D under §43(d). Court held all three elements of §43(d) were satisfied (P’s mark = distinctive, D’s domain name was confusingly similar to P’s mark, and D had bad faith intent to profit).  Bad faith intent found even though none of the 9 factors really indicated a bad faith intent!

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 

If a D––P’s competitor––is keeping away consumers from P by registering a domain name similar or ID to P’s name, this is a form of bad faith even though it does not fit into any of the factors because wanted to keep this away from the competitor (good counterargument!). Factor III is relevant too: D started its Christmas tree business under the SPORTY name after it registered its domain name; this prevents D from showing prior use of the name for bona fide sales.

DIAMONDBRITE.COM example: SGM had DIAMONDBRITE mark for pool finishes. 3M also sold pool finishes under COLOR QUARTZ mark. 3rd party had domain name registration for diamondbrite.com: 3rd party used DIAMONDBRITE mark for unrelated goods. 3M bought the 3rd party company and changed the mark for these unrelated goods to something else. Then, it disconnected the DIAMONDBRITE.COM.

  

This is similar to Sportys case: 3M was trying to have website to gain competitive advantage by preventing SGM's consumers from reaching SGM. But it’s unlike the Sportys case in an important way: here there was a BF prior use of DIAMONDBRITE mark use by the 3rd party company that 3M purchased. Court found for the D: 3rd party was making prior Bona Fide use of the mark. That’s what 3M picked up when it purchased the 3rd party and this was enough to legitimize their ownership of the mark and allowed it to do whatever it wanted to the domain name.

Example: EQITALY.COM was created under a partnership between two people in the fashion business. Lucky actually registered the domain name (in his own name). Their business eventually developed into a full-fledged business. The two partners got into a dispute: Lucky claimed he was owed money by Paolo. Lucky decided to change the website to be blank and only listed Lucky’s email address.  Factor 6: Pablo would argue that there was an offer to sell for financial gain by Lucky. But Lucky could argue that he was not trying to sell it for financial gain, he was only trying to retrieve money already owed to him [other cybersquatters only hold a domain name as ransom, but Lucky is just trying to get what’s already owed to him.]  Court held for Pablo: courts interpret an offer to sell for financial gain very broadly. Any attempt to trade a domain name for something of value = offer to sell for financial gain; courts don’t care whether it’s owed to you or not; can't engage in self-help by holding domain hostage. TYPOSQUATTING Rule: If D receives commission from purchases made on P’s website by consumers redirected from D’s website, D cannot engage in typo-squatting (i.e., registering typo-ed versions of P’s websites) even if D redirects to P’s website. Lands End v. Remy (WD Wis. 2006): Lands End (P) was an online retailer of clothing under LANDSEND.COM. D was a member of P’s affiliate program under which owners of affiliated websites like D could link to P’s website and receive a commission if a linked consumer made a purchase on P’s site. D registered numerous typo-ed versions of P’s website (e.g., lnadsend.com) and if a consumer typed the typo-ed version of P’s URL into the website, D redirected the consumer to P’s website, but it would receive the 5% commission under the affiliate program. Court found for P: P sustained its burden of proving (1) that its mark = distinctive and entitled to protection, (2) that D’s registration of typo-ed versions of P’s website was ID or confusingly similar to P’s mark. Then court analyzed bad faith:  Factor V: there is diversion here for a moment through the affiliate marketing account even though consumers ultimately end up at LANDSEND.COM. o D’s defense: D is providing a service to P b/c instead of consumer getting an error message when he typed in typo website, D redirecting typo-ing consumers to P’s website. o Court rejects D’s argument: if D wants to provide P with a service, D should contract with P to do so and cannot engage in self-help.

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GRIPE SITES Rule: gripe sites (i.e., websites with names either ID of confusingly similar to P’s that complain about P’s goods/services in a truthful manner) do not violate ACPA. Lucas Nursery v. Grosse (6th cir, 2004): Grosse (D) hired Lucas Nursery (P) to do landscaping work for her. She was unsatisfied w/ P’s work and registered the domain named LUCASNURSERY.COM. The site was titled was “My Lucas Landscaping Experience” and D detailed her negative experience. P asked her to take it down, she did for a while, but then put it back up again. P brought suit against D for ACPA violation. Court found that P’s mark was distinctive and D’s domain name was ID or confusingly similar to P’s mark. Then, court analyzed whether there was a lack of bad faith intent on D’s part:  Most factors weighed pro-D: o IV: D made fair use of the mark (informing other consumers about her experience with P. o V: D did not seek to divert consumers from P’s website bc P did not have a website! o VI: D never offered to sell the domain name to P. o VII: D did not include misleading contact info on the website. o VIII: D did not acquire multiple domain names confusingly similar to others’ marks. o However, factors I, II, and III were pro-Lucas (D did not have IP rights in the name, the domain name was not D’s legal or common name, and D did not make any prior use of the name in relation to offering goods/services).  Also important was that D’s actions were undertaken in the spirit of informing fellow consumers about the practices of a landscaping company that she believed performed inferior work on her yard. One of the ACPA’s main objectives is the protection of consumers from slick interest peddlers who trade on the names and reputations of established brands. The practice of informing fellow consumers of one's experience w/ a particular service provider is surely not inconsistent with this ideal. Coca-Cola v. Purdy (8th Cir., 2004): Purdy (D) registered names like DRINKCOKE.COM and MYPEPSI.ORG. D redirected people who sought to reach above websites to his anti-abortion website (abortionismurder.com). On his website, D also linked to offerings of hats, ties, etc. adorned with antiabortion messages. Coca-Cola (P) brought ACPA lawsuit against D. Court found that P’s mark = distinctive and confusingly similar to D’s domain name. Then, court found that there was a bad faith intent to profit.  This case is different from Lucas Nursery b/c there, D’s website discussed P’s services; here, D redirects visitors to websites where he does not mention the products/services sold by Ps at all. o Most important factor here is factor IV: in Lucas Nursery, the D engaged in fair use of the mark by criticizing the goods/services provided by P; here, D is not engaging in fair use of the mark. Note: there could have been a dilution by tarnishment claim here (even if people are not confused, this website will cause consumers to associate the word COCA-COLA w/ the anti-abortion imagery on D’s site). UNIFORM DOMAIN NAME DISPUTE RESOLUTION POLICY Uniform Domain Name Dispute Resolution Policy  ICANN controls root services and therefore ICANN can promulgate rules for the whole system by requiring persons who seek domain registration to agree to certain contractual provisions.  UDRP = terms that ICANN has implemented through its control of the K network.  UDRP cannot provide damages; it simply provides a remedy allowing cancellation of a domain name. Complainant can initiate arbitration proceeding.  UDRP arbitration be much cheaper and quicker than filing lawsuit, but (1) a P can sue under ACPA even if he/she has not filed a UDRP proceeding first, and (2) if either party loses a UDRP arbitration proceeding, issues decided in UDRP proceeding will not create issue preclusion if either party brings suit under ACPA. 70

Registrant is required to submit to a mandatory administrative proceeding in the event that a complainant asserts that:  Registrant’s domain name is ID of confusingly similar to a TM or service mark in which the complainant has rights  Registrant has no rights or legitimate interests in respect of the domain name, and  Registrant's domain name has been registered and is being used in bad faith. o Evidence of registration and use in BAD FAITH: following circumstances if found by Panel to be present, shall be evidence of the registration and use of a domain name in bad faith:  Circumstances indicating that registrant registered or acquired the domain name primarily for the purpose of selling the domain name registration to the complainant who is the owner of the TM or to a competitor of that complainant, for valuable kn in excess of registrant's documented out-of-pocket costs directly related to the domain name, or [purpose of selling the domain name for profit]  Registrant registered the domain name in order to prevent the owner of the TM from reflecting the mark in a corresponding domain name, provided that registrant has engaged in a pattern of such conduct, [pattern of registering domain names to prevent mark holders from reflecting their marks in domain names]  Registrant registered the domain name primarily for the purpose of disrupting the business of a competitor, or [primarily for the purpose of disrupting the business of a competitor] [this is like Sportys]  By using the domain name, registrant has intentionally attempted to attract, for commercial gain, internet users to its web site or other online location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, etc of registrant’s website or location or of a product or service on registrant's website or location. [Intentionally attempting to attract Internet users, for commercial gain, by creating a likelihood of confusion]. o How Registrant can demonstrate its RIGHTS to and LEGITIMATE INTERESTS in the domain name in responding to a complaint: any of following circumstances, if found by Panel to exist, shall demonstrate registrant's rights or legitimate interest to the domain name:  Registrant's use, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a BF offering of goods or services; or [prior use or demonstrable preparations to use the name for bona fide sales]  Registrant has been commonly known by the domain name even if it has acquired no TM or service mark rights; or [registrant is commonly known by the domain name]  Registrant is making a legitimate noncommercial fair use of the domain name, w/o intent for commercial gain to misleadingly divert consumers or to tarnish the TM or service mark at issue. [legitimate non-commercial or fair use of the name] Note: UDRP splits ACPA bad-faith factors into two categories: (1) UDRP bad faith factors, and (2) UDRP rights/legitimate interest factors.

I. REMEDIES Sources of Liability: infringement, dilution, ACPA, UDRP.

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FORMS OF RELIEF:  Injunction (under §34). o Preliminary injunctions/TROs often matter more to Ps than an ultimate injunction. o Courts have great discretion in crafting injunctions (e.g., in Taco Cabana, court ordered D to make several changes in the design of D’s TD and to display prominent sign for a year acknowledging that it unfairly copied D’s restaurant concept. o Disclaimers, recalls (test: how willful was infringement? is the risk of confusion to the public and injury to TM owner > the burden of the recall to D? and is there a substantial risk of danger to the public due to D’s infringement?), destruction orders (rarely). o Changing design may not be enough. May need to apologize and explain no connection.  Monetary relief o P’s damages o D’s profits o Costs of the action o Enhanced damages (court can grant damages that it “finds to be just”) o Attorney’s fees (“in exceptional cases”) o No punitive damages III. DEFENSES

A. INCONTESTABILITY § 15 of Lanham Act: Except on a ground for which application to cancel may be filed at any time under paragraphs (3) and (5) of § 14 [note: §14(3) and (5) allow for cancellation of a mark on the basis of functionality, genericism, and abandonment or fraudulently obtained], the right of a registrant to use a registered mark in commerce for the goods/services on or in connection with which such registered mark has been in continuous use for five consecutive years subsequent to the date of such registration and is still in use in commerce shall be incontestable. Provided, that— (1) there has been no final decision adverse to the owner's claim of ownership of such mark for such goods or services, or to the owner's right to register the same or to keep the same on the register; and (2) there is no proceeding involving said rights pending in the United States Patent and Trademark Office or in a court and not finally disposed of; and (3) an affidavit is filed with the Director within one year after the expiration of any such five-year period setting forth those goods or services stated in the registration on or in connection with which such mark has been in continuous use for such five consecutive years and is still in use in commerce, and other matters specified in paragraphs (1) and (2) hereof; and (4) no incontestable right shall be acquired in a mark which is the generic name for the goods or services or a portion thereof, for which it is registered. Note: Under § 15, a claim of incontestability is available when (1) there has been no final decision adverse to the registrant’s claim of ownership or right to register the mark, (2) there is no such proceeding pending, (3) it is within one year of any five-year period of continuous and consecutive use subsequent to the date of registration and (4) the mark has not become generic. § 33(a) of Lanham Act: … Registration shall be prima facie evidence of the validity of the registered mark and of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce on or in connection with the goods or services specified in the registration … but shall not preclude another person from proving any legal or equitable defense or defect, including those set forth in § 33(b). § 33(b) of Lanham Act: To the extent that the right to use the registered mark has become incontestable under section 14, the registration shall be conclusive evidence of the validity of the registered mark and 72

of the registration of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the registered mark in commerce. Such conclusive evidence of the right to use the registered mark … shall be subject to the following defenses or defects: (1) Fraudulent acquisition of the TM registration or of incontestable right to use mark. [Valid defense against an incontestable mark.] (2) Abandonment of the mark. [Valid defense against an incontestable mark. Grounds for cancelling a mark at any time. Includes non-use w/ intent not to resume, allowing a mark to become generic, and uncontrolled licensing.] (3) Use of the mark to misrepresent source. [Valid defense against an incontestable mark. Intentionally false and misleading designations of origin, nature or ingredients of registrant's goods. (4) Use of a mark in a descriptive sense other than as a TM (so-called fair-use defense). (5) Limited Territory Defense [Valid defense against an incontestable mark. Applies to a junior user who adopts a mark innocently before the senior user registers it and who has used the mark continuously ever since. Benefits of this defense are restricted to the area of continuous use by the junior user prior to the P's registration (or application filing date for registrations resulting from applications after 11/16/1989).] (6) Prior registration by D [Useful only in situations where 2 marks that were not confusingly similar when they were registered (b/c the products, geographic regions, or marks themselves were sufficiently dissimilar at the time to obviate confusion) later became confusingly similar.] (7) Use of mark to violate antitrust laws (8) Functionality [Valid defense against an incontestable mark. (9) Equitable principles [Laches, estoppel, etc.] Note: Cannot challenge on descriptiveness Rule: (1) incontestability provides a defense against cancellation of a mark, but the TM holder may also use incontestability offensively to enjoin another’s use of a mark. (2) Once a mark is incontestable, the mark’s registration cannot be challenged by D on the ground that the mark is merely descriptive. Park and Fly v. Dollar Park and Fly (SCOTUS, 1985): both P & D provided parking services in airports. P registered mark PARK N FLY with PTO and six years later, filed an affidavit with PTO to establish incontestability. D used the mark DOLLAR PARK N FLY. P brought infringement suit against D. D claimed P’s mark was merely descriptive and should be canceled. SCOTUS held for P and held above two rules. Note: this case provides that only §33(b) defenses or §15 ¶(3), (5) provide exceptions to incontestability.

B. CLASSIC FAIR USE §33(b)(4) of Lanham Act: [it is a defense to an infringement claim] that the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, of the party's individual name in his own business, or of the individual name of anyone in privity with such party, or of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin; or applies when an alleged infringer has used a term in good faith, primarily to describe a product, rather than to identify it with a particular source.  This is the CLASSIC FAIR USE defense. It is a true affirmative defense, rather than an attempt by D to disprove the validity of P’s mark or an element of P’s infringement cause of action.  There are 3 elements: o D’s use of the mark is “otherwise than as a mark” (i.e., not used to identify source).

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D’s usage is “descriptive of” D’s own goods/services (i.e., use of the word to describe D’s goods rather than to identify their source).  Only D’s use is important here, not whether P is using slogan descriptively or not D’s uses mark “fairly and in good faith” (i.e., D isn’t just pretending to use mark descriptively).

Rule: use of a mark to convey its 1º meaning, rather than its 2º meaning = use of a mark to describe goods, rather than to identify source. Also, D’s use is less likely to constitute use as a mark if D includes other source identifiers. United States Shoe v. Brown Group (2nd Cir., 1990): Easy Spirit (P) uses the slogan LOOKS LIKE A PUMP, FEELS LIKE A SNEAKER for pumps. Brown Group (D) also sells pumps and in its ad says "when we say it feels like a sneaker, we're not just stringing you along” in the ¶ below the image of the shoe in small font. P brought infringement suit against D. D claimed that it made fair use of the “sneaker” language. Court held for D: D made fair use of P’s mark b/c it was using P’s mark to describe D’s goods by using the mark to convey its primary meaning, rather than to identify source, and D did so in good faith. Note: If D’s products were jeans, rather than pumps. Using the words LOOKS LIKE A PUMP, FEELS LIKE A SNEAKER will be suggestive, not descriptive. Thus, D will not be making fair use of P’s mark. Kelly Brown v. Winfrey (SDNY, 2012): Brown (P) was a motivational speaker with rights to the mark OWN YOUR POWER. O Magazine (D) used phrase OWN YOUR POWER on the cover of the magazine and on its website. P brought TM infringement suit against D and D argued its use of the mark was classic fair use b/c it used instructively, rather than to identify source. SDNY held that D had made fair use: found that D’s use of the words ≠ as a mark; D’s use was meant to instruct consumers to “own their power” thus the mark was being used descriptively. On appeal, 2nd circuit found that SDNY failed to adequately consider whether the mark was being used as a mark (i.e., to identify source) b/c it was possible that D was using the mark OWN YOUR POWER to start a marketing campaign. Note: P likely argued that D was using OWN YOUR POWER as a source-identifier. First, the fact that D already identified source with its other TM is not dispositive b/c products can have multiple TMs and D may have been trying to start using OWN YOUR POWER as another TM. Second, D also owned the TV channel OWN and this indicates that D was not using the mark descriptively. Finally, the words OWN YOUR POWER do not actually instruct anyone to do anything, therefore they cannot be used descriptively. Does not seem to be describing relevant goods and services. Rule: D ≠ required to prove a lack of consumer confusion to be entitled to a descriptive fair use defense b/c the defense is a true AD. However, the Court may consider a showing of actual consumer confusion when determining whether D used P’s mark in good faith (3rd element of descriptive fair use defense). KP Permanent Make-UP v. Lasting Impression (SCOTUS, 2004): Lasting (P) held a registered TM in MICROCOLOR. KP (D) used MICROCOLOR on its cosmetics in an ad. P sued D for infringement and D claimed it was using the phrase in a descriptive manner and thus it was fair use. At trial, there was some evidence of consumer confusion. Court held that D was not obligated to disprove consumer confusion in order to be entitled to a fair use defense b/c the fair use defense is a true AD. If P has shown all elements of TM infringement claim (including consumer confusion), D can nevertheless win if D can prove it made fair use of P’s mark. However, on remand, 9th circuit elaborated that although D is not required to disprove consumer confusion in order to be entitled to the fair use defense, an actual showing of consumer confusion may indicate D’s bad faith in using P’s mark, thus barring its fair use defense. Example: D wants to write WALTHAM WATCHES, MA on its watches. P has TM in WALTHAM WATCHES for watches. This may be descriptive fair use of the mark b/c D is not using it as a source identifier since the good already has other source identifiers on it, the use is geographically descriptive of the goods, and D is using it in good faith b/c it includes the “, MA.” P would argue that the use was not in good faith. It will matter whether it’s a common practice in the industry to indicate the geographic origin of watches; if 74

so, then it is in good faith; otherwise, it might suggest that D is picking up on P’s 2º meaning, rather than using the mark for its primary descriptive meaning (good counterargument!). Example: CHAMPION mark for spark plugs. Albert Champion wanted to also start selling spark plugs and decided to sell spark plugs “by Champion.” Court held this was not fair use. Even though it was technically descriptive, D’s use of the mark would cause much consumer confusion, and this shows that D had bad faith in using the mark (good counterargument!). Note: in addition to parody, descriptive fair use is a defense to dilution claims too under §43(c)(3). In ACPA claims, descriptive fair use can be a factor but is not as strong a defense as in infringement.

C. NOMINATIVE FAIR USE ≠ statutory defense. However, some courts have adopted the defense when a mark is used to refer to another TM owner or its goods/services. It is another affirmative defense (i.e., D will prevail despite the existence of some evidence of confusion if D can make out the elements of defense). Essentially, this is using the words in their TM-sense but to refer to the TM owner or its goods/services. NOMINATIVE FAIR USE

Rule: see below bullets for the elements of nominative fair use defense. New Kids on the Block v. News America Publishing (9th Cir., 1992): New Kids on the Block (P) were a very popular boy band. Ds were 2 newspapers that published ads in their newspapers asking readers to call 900 numbers and vote on who their favorite New Kids on the Block member was; each call cost 50¢. Ps brought TM infringement suit against D. Court held for Ds and adopted nominative fair use defense.  Where the D uses P’s TM to describe P’s product, rather than its own product*, D is entitled to a nominative fair use provided that D meets the following three requirements: o The product or service in Q must be one not readily identifiable w/o use of the TM.  This is met here b/c it is very difficult if not impossible to ID the Ps w/o use of their TM. o Only so much of the mark may be used as is reasonably necessary to ID the product or service.  Also met here b/c both Ds only use the P’s mark to the extent necessary to ID them as the subject of the polls. They don't use the P’s distinctive logo. o The user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the TM holder.  Also met here b/c the ads do not in any way suggest sponsorship or endorsement by the Ps. Note: * prof had issue with the “rather than its own product” language used by the 9th circuit; said the defense is more about whether D is using P’s mark to connote 2º meaning rather than whether D was not using the mark to describe its own product. Note: courts have split re whether it’s a true AD or not. But on exam, simply apply Polaroid factors, and if there’s a nominative fair use defense, apply the New Kids test to determine whether defense applies. Rule: when determining whether D has made nominative fair use of P’s mark, courts should assess the last factor (i.e., whether D’s use of P’s mark did anything to suggest sponsorship by P) from the perspective of the reasonably prudent consumer (online sophisticated consumer will read disclaimers). Toyota Motor Sales Inc v. Tabari (9th Cir. 2010): Tabari (D) was a broker of Lexus cars. Its services were offered at buyalexus.com. Lexus (P) brought infringement claim against D for use of its TM. D defended by alleging that he made nominative fair use of P’s mark: P’s product was not readily identifiable w/o use of the TM, only so much of the mark as was reasonably necessary to identify the product was used, and D’s use did nothing to suggest sponsorship by P. The last factor was assessed from the perspective of the reasonably prudent consumer; here, the sophisticated online consumer would not think there was sponsorship by P especially given D’s disclaimer. Note: P could have brought an ACPA claim here but brought regular infringement claim instead.

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Example: Samsung ad used the word “superbowl” to describe sales on phones that occur around the time of the Superbowl Game. NFL has TM rights in SUPERBOWL. Samsung asserts nominative fair use defense. It is not readily identifiable without use of the TM. Samsung did not use more of the mark than is reasonably necessary (i.e., don’t use NFL logo and font associated with NFL). Reasonable consumers wouldn’t think it NFL sponsored Samsung ad. NFL could argue that a reasonable consumer would think NFL sponsored the ad. Also, Samsung could identify the game without actually using the mark SUPERBOWL by referring to it as the “big football game” and the date. Note: nominative fair use defense is an explicit defense to dilution claims in the Lanham Act. Example: LV basketball ad by Hyundai. LV brought dilution claim against Hyundai. Hyundai’s nominative fair use defense fails b/c Hyundai could describe its cars as luxurious without using LV logo. COMPARATIVE ADVERTISING This was allowed long before nominative fair use defense was adopted. Rule: One who has copied an unpatented product sold under a TM may use the TM in his ads to ID the product he has copied and such ads may not be enjoined under the Lanham Act so long as they do not contain misrepresentations or create a reasonable likelihood that purchasers will be confused as to the source, ID, or sponsorship of the advertiser’s product. Smith v. Chanel (9th Cir., 1968): D sold a duplicate of Chanel’s famous Chanel No. 5 perfume for very cheap. In ads, D stated that its product was a duplicate of Chanel’s Chanel No. 5 perfume. Chanel (P) brought suit against D. Court held for D and held above rule. Note: on remand, trial court that D’s perfume did not actually smell like P’s perfume; therefore, D’s ads were misrepresentations. P was granted an injunction. Note: P in this case claimed there was dilution and failed. Today, Lanham Act specifically excludes comparative advertising from dilution claims under §43(c)(3).

D. SPEECH ARTISTIC EXPRESSION Rule: see below bullets for Rogers Test which deals with analyzing an infringement claim. Rogers v. Grimaldi (2nd Cir., 1989): Ginger Rogers (P) and Fred Astaire were a famous duo in the show business, appearing in numerous movies and shows for over 40 years. Grimaldi (D) produced and distributed a film called “Ginger and Fred” and told the fictional story of two Italian performers who imitated Rogers and Astaire in Italy. P brought infringement suit against D for use of her name (which she had TM rights in) in D’s movie title. D defended that curtailing his use of P’s mark would infringe on his artistic expression. Court held for D and adopted below test.  Lanham Act should be construed to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression.  In the context of titles of artistic works that use a celebrity's name, that balance will normally not support application of the Lanham Act unless (1) the title has no artistic relevance to the underlying work whatsoever, or (2) the title explicitly misleads consumers as to the source/content of the work.  Court applied test: here, title is artistically relevant and there’s nothing explicitly misleading (suggests P needs to show something more than mere use of mark in a title to prove that it’s misleading). o 1. It’s about dancing in that particular style o 2. Just Ginger in the title, nothing else Rule: Rogers test applies not just to titles of artistic works, but also to the content of the works as well. ESS Entertainment 2000, Inc. v. Rockstar Videos, Inc. (9th Cir., 2008) GTA video game used LA scenes, including storefront of the storefront of P’s famous club. Game = work of artistic expression (very 76

broad interpretation, more so than Rosa Parks). Here, the use of P’s TD was artistically relevant and there was nothing misleading as to the source of the work (it’s only a place the player can drive to in the video game out of many and is not particularly highlighted). Example: Rosa Parks challenged the use of her name (which she had TM rights to) in Outkast’s song title. The song told all rappers to go to the back of the bus, so Outkast argued it was artistically relevant. Court held that the use of Rosa Park’s TM ≠ artistically relevant b/c the use of P’s mark was metaphorically relevant, not literally relevant, i.e. about the civil rights movement. Courts are skeptical of this kind of use (i.e., use which draws on kinds of general associations rather on literally the thing itself). This sounds like bs imo. NON-COMMERCIAL USES §43(c)(3) of Lanham Act: The following shall not be actionable as dilution by blurring or dilution by tarnishment under this subsection: (A) Any fair use, including a nominative or descriptive fair use, or facilitation of such fair use, of a famous mark by another person other than as a designation of source for the person's own goods or services, including use in connection with—(i) advertising or promotion that permits consumers to compare goods or services; or (ii) identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner. (B) All forms of news reporting and news commentary. (C) Any noncommercial use of a mark. Rule: use of another’s mark in the content of an artistic work ≠ commercial use even if the artistic work is sold b/c such use is not intended to sell anything. Mattel v. Universal Music International (9th Cir., 2000): Mattel (P, owner of BARBIE TM) sued UMI (D) for dilution by blurring due to the use of P’s mark in the “Barbie Girl” song by Aqua. D defended that the use was non-commercial and therefore was not actionable under §43(c)(3). P argued that D’s use was commercial bc the song was sold. Court held that D’s use of P’s mark = non-commercial b/c the content of the song was not intended to promote the sale of anything. Example: LV basketball in ad for Hyundai cars. Dilution claim by LV. Was this non-commercial use? No bc Hyundai was using LV mark to sell Hyundai cars. Rule: use of another’s mark to promote a political campaign = non-commercial use of a mark and a valid defense to a dilution claim by mark-holder. Mastercard v. Nader (SDNY, 2004): Nader used mark MASTERCARD for his political campaign. Court held this was non-commercial use of a mark bc Nader did not use MASTERCARD to sell anything, he used it to promote his political campaign. Note: under ACPA, D’s bona fide non-commercial use is a factor in determining whether D had bad faith. OVERVIEW OF SPEECH DEFENSES: Infringement: (1) No likelihood of confusion (Polaroid factors) (2) Rogers balancing test for artistic expressions (3) Classic fair use (4) Nominative fair use (5) Not “in connection with” goods or services

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Dilution: (1) No dilution (§43(c)(2)(B) factors) a. Just go through and say no. This is what happened in Chewy Vuitton. (2) Statutory dilution defenses (§ 43(c)(3)) (3) First Amendment defense Both: no “use in commerce”

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