Intellectual Property Law Blog

By Ryan Hilbert

Following on the heels of New York Jets quarterback Tim Tebow’s attempt to register the trademark "Tebowing," Baltimore Ravens linebacker Terrell Suggs’ attempt to register the trademark "Ball So Hard University," and New York Knicks phenom Jeremy Lin’s attempt to register the trademark "Linsanity," it appears that another high-profile athlete, former University of Kentucky basketball standout and consensus No. 1 NBA draft pick Anthony Davis, is now getting into the trademark business.
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Luxury brand titan Louis Vuitton recently achieved a significant victory over counterfeiting of its designer products. In an action brought in the U.S. District Court for the Western District of Texas, Louis Vuitton sued the Eisenhauer Road Flea Market, its owner, Bruce L. Gore, and its manager, Patricia D. Walker, for contributory trademark infringement, alleging that the defendants had failed to prevent vendors from selling fake Louis Vuitton goods at the flea market. See Louis Vuitton Malletier v. Eisenhauer Road Flea Market, Inc., No. SA-11-CA-124 (W.D. Tex.). Louis Vuitton stated that counterfeit “LV” products were abundant at the flea market and that Louis Vuitton had given Gore and Walker sufficient opportunities to discipline their vendors that engaged in phony sales. Louis Vuitton alleged, notwithstanding this notice, that Gore and Walker chose to be “willfully blind” to such infringing activity. Gore testified that he warned market tenants not to sell counterfeit goods, only to have those vendors nonetheless engage in distribution of bogus items after they said they would not.
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In Neal Stephenson’s 1992 science fiction novel, Snow Crash, humans interact as avatars in the “Metaverse,” the collective product of online shared three-dimensional space.[1] As imagined by Stephenson, this “Metaverse” has been created by all virtual worlds[2] - it is an augmented and enhanced physical reality, a physically persistent virtual space.[3] The novel is set in Los Angeles during the early 21st Century. The federal government of the United States has relinquished its authority to private entrepreneurs and organizations. Franchising, individual sovereignty, and private automobiles reign supreme. Highway companies compete for traffic in the real world while the Metaverse is populated and travelled by user-controlled avatars and system daemons.

By Gray M. Buccigross

On November 9, 2010, the Federal Circuit, sitting en banc, heard oral arguments in Therasense, Inc. v. Becton, Dickinson & Co., regarding the legal tests to be applied in determining whether a patent is unenforceable due to inequitable conduct. This has been a controversial issue over the last several years among practitioners, Federal Circuit judges, and industry groups, particularly Big Pharma. This article assumes some familiarity with the case and the issues. However, for background information on both, please click here.

Judge Harold Baer in Gucci America, Inc. v. Frontline Processing Corp., No. 09 Civ. 6925 (HB), 2010 WL 2541367 (S.D.N.Y. June 23, 2010), ruled that Gucci had sufficiently alleged facts to defeat a motion to dismiss in a suit brought against three defendant credit card merchant service providers for trademark infringement. The litigation stems out of an earlier action, Gucci America, Inc. v. Laurette Co., Inc., No. 08 Civ. 5065 (LAK) (S.D.N.Y. June 3, 2008), in which Gucci successfully sued defendant Laurette for operating a website, "TheBagAddiction.com," which sold counterfeit Gucci designs. Gucci later brought suit against three credit card merchant companies, Durango Merchant Services (a Wyoming corporation), Frontline Processing Corporation (a Nevada corporation principally operating in Montana), and Woodforest National Bank (a Texas corporation), alleging that those companies aided and assisted Laurette and other similar website operators in infringing Gucci's marks. According to the allegations set forth in Gucci's complaint, Durango established credit card processing services for web companies like Woodforest and Frontline that sold counterfeit products. Gucci brought trademark infringement and counterfeit claims against Laurette based upon website sales of counterfeit Gucci products. Gucci alleged that the credit card processing services established by the three defendants were essential to Laurette's sale of counterfeit Gucci products, and, for that reason, Durango, Frontline, and Woodforest were equally responsible for direct, contributory, and vicarious trademark infringement under the Lanham Act and New York state law. The defendants moved to dismiss the action on the grounds that the court lacked personal jurisdiction and that Gucci had failed to state a claim.

The Del Mar office of Sheppard Mullin recently had the rare honor and privilege of hosting an inventors forum with David Kappos, the Director of the United States Patent and Trademark Office, as the guest of honor. During the event, inventors from the general San Diego area had the unique opportunity to ask Mr. Kappos questions, in-person, regarding the patent office, and discuss issues relating to their dealings with the patent office.

On August 31, 2009, the United States Court of Appeals for the Federal Circuit issued a decision holding that, in order for a trademark registration to be canceled on the basis of fraud, the party challenging the registration must prove that the registrant had actual intent deceive the United States Patent and Trademark Office (“PTO”). Recent decisions by the Trademark Trial and Appeal Board (“T.T.A.B.”), including Medinol v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205 (T.T.A.B. 2003), had previously applied a broader objective inquiry into whether the applicant “knew or should have known” with respect to allegations of fraudulent representation, resulting in the cancellation of various trademark registrations. Here, the Court explicitly rejected application of such a standard and affirmatively stated that cancellation is only justified where there is proof of subjective fraudulent intent.

On June 19, 2009, in Zino Davidoff SA v. CVS Corp., the Second Circuit enjoined CVS, a national retail chain, from removing unique production codes ("UPC") from Davidoff product packaging for its "Cool Water" fragrances on the grounds of trademark infringement.[1]  Davidoff, a high end luxury brand, imprints a unique UPC on every product for quality control purposes and to protect against diversion and counterfeiting.  The code contains basic information about each product unit, including "where and when it was produced, ingredients used, and distribution path."[2]  The UPC code ordinarily is used to track goods that are sold to and by unlicensed distributors.  The Davidoff UPC also allows Davidoff to spot defects easily and swiftly recall or remove products from the market when such defects are noted.  The UPC is used to protect the reputation of the brand and its trademarks.

On June 10, 2009, the Second Circuit vacated a summary judgment decision that permanently enjoined menswear designer Joseph Abboud from making commercial use of his own name. J.A. Apparel Corp. v. Abboud, No. 08-3181-cv, 2009 U.S.App. LEXIS 12537, at *3 (2d Cir. June 10, 2009). Judge Amalya Kearse authored the decision for the Second Circuit and reversed the district court's decision and remanded the case for proceedings consistent with the Second Circuit's opinion. This case sets forth important guidelines for fashion designers when entering into agreements regarding personal name trademarks and rights of publicity and privacy.

Social network Web site Facebook announced that, beginning this Saturday, June 13, at 12:01 am U.S. EDT, all Facebook users will be allowed to choose a personalized username for their Facebook profiles. This username will replace the numerical string that appears on the URL for each user's profile page. Facebook users will be able to choose names on a "first-come first-served" basis. All at once, millions of Facebook users will be choosing usernames. If you are a registered trademark owner, or represent such an owner, it's important that you immediately register your trademark(s) with Facebook at this link in order to prevent the trademark from being registered by others as a username on Facebook.

On April 3, 2009, the Second Circuit Court of Appeals handed down its decision in the matter of Rescuecom Corp. v. Google, Inc., reversing the United States District Court for the Northern District of New York’s dismissal of Rescuecom’s complaint on the grounds that it failed to state a valid claim for relief. The Court held that Google’s "sale" of Rescuecom’s trademark as a keyword in Google's Adwords and Keyword Suggestion Tool Programs, which sends online search engine users targeted advertisements based on their formulation of search terms, constitutes the "use in commerce” for purposes of the Lanham Act, which governs federal trademark law. Under the Lanham Act, subject matter jurisdiction arises for enforcement of trademark rights against infringement when one party “uses” the trademark of another “in commerce” in a way that “is likely to cause confusion, or to cause mistake, or to deceive," "as to the affiliation, . . . or as to the origin, sponsorship, or approval of . . . goods [or] services.” 15 U.S.C. §§ 1114; 1125(a). By rendering this holding, the Court resolved a significant split between the Second Circuit and federal courts in the Third, Fourth, Fifth, Seventh, Eighth, Ninth, Tenth and Eleventh Circuits over the “use in commerce” issue.

Activision licensed the Gibson trademark and trade dress in November 2006 in connection with Guitar Hero's "custom guitar controller peripheral." Activision paid a one-time fixed license fee to cover the term of the license and Gibson agreed to help promote the Guitar Hero product.

China has a bad reputation for IP protection, but the reputation might not be fully deserved. People often focus on occurrences of IP infringement in China and mistakenly conclude that there is little IP protection here.

China’s present IP dilemma is rooted in the concept of “rule of the man – Emperor.” China did not adopt the concept of “rule of law” until about 25 years ago when China joined the international community. Since then, China has been faced with a huge challenge of establishing an internationally acceptable legal framework. China has made significant progress in the enactment of laws, establishment of a court system, and training of legal personnel. But one cannot expect a perfect legal framework to be established in a short period of time. The fact is that IP protection is available in China today. This area has been a key focus of the Chinese government and China’s emerging high-tech industries. Significant progress in IP protection can be expected in the near future.

In Comedy Club v. Improv West Associates the Ninth Circuit held that an in-term covenant not to compete (a covenant that continues during the term of a contract or relationship) in a Trademark License agreement was overbroad, but enforced a more limited version of the covenant. The Court held that while there is no exception in California's law against non-competition agreements for in-term covenants not to compete, they may be valid, at least in the context of a "franchise like" agreement.

In June 2006, the International Corporation for Assigned Names and Numbers (ICANN) approved a plan that would allow for the creation of hundreds of new domain names.  The Internet as we know it currently operates using 12 generic top-level domain names (gTLDs) to direct traffic.  Some of the more common gTLDs include .com, .net, .edu, .org, and .gov.  ICANN's proposed changes would make it possible for applicants to create entirely new gTLDs, anywhere from 3 to 63 characters long and in nearly any alphabet, such as Arabic or Chinese.  ICANN released the draft plan for an open comment period, which ran from October 24 – December 15, 2008.  The response from the public has generally been negative and it remains to be seen how, if at all, that response will impact the final version of the plan.  In whatever form the plan does proceed, however, it presents both exciting opportunities and treacherous pitfalls for trademark owners.

On July 16, 2008, the Northern District of California dismissed on summary judgment a lawsuit brought by the company that manufactures, markets and sells Crystal Geyser bottled water (CG Roxane LLC) against Fiji Water Company LLC, Fiji Water Company Holdings LLC and Paramount International Export, LTD.   The court also granted Fiji's summary judgment motion for cancellation of Crystal Geyser's "Bottled at the Source" federal trademark registration.

In a July 14, 2008, decision addressing the issue of who bears the burden in policing counterfeiting on online auction sites, Judge Richard J. Sullivan of the Southern District of New York held that "it is the trademark owner's burden to police its mark and companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their websites." The decision was rendered in Tiffany (NJ) Inc. v. eBay, Inc., No. 04 Civ. 4607 (RJS) (S.D.N.Y). The district court held that Tiffany had failed to meet its burden to hold eBay liable for direct and contributory trademark infringement, unfair competition, false advertising, and direct and contributory trademark dilution.

Since the Supreme Court's decision in eBay v. Merc-Exchange, IP plaintiffs who plan on relying on the presumption of irreparable harm when seeking injunctive relief (whether a TRO, preliminary or permanent) may want to rethink that strategy.  The days of relying on a general "presumption" of irreparable harm, without actual proof of such harm, are essentially over—at least for cases that fall squarely within the eBay decision (i.e., patent infringement cases where injunctions are sought).  Less clear is eBay's holding to other traditional areas of intellectual property, like trademark and copyright infringement cases.  Nevertheless, the vigilant IP owner should be prepared to prove irreparable harm by way of compelling evidence.  Even if the court ultimately applies the presumption of irreparable harm, the effort will certainly pay off and may preclude attacks on appeal.

On April 7, 2008, in North American Medical Corp. v. Axiom Worldwide, Inc., the Federal Court of Appeals for the 11th Circuit Court (with jurisdiction over Alabama, Florida and Georgia), ruled that using another’s trademark in metatags infringes the Lanham Trademark Act.  There is a split of authority regarding trademark infringement by the use of search engine key words and metatags.  This decision followed the reasoning of the 9th Circuit in Brookfield Communications, Inc. v. West Coast Entertainment Corp., along with a majority of other circuits (with the 2nd Circuit being an exception), in holding that the use of another’s trademark(s) in metatags and keywords is a “use in commerce” and may result in trademark infringement.

One of the foundational principles of United States trademark law, as well as the law of most other countries, is that trademark protection is national in nature and does not extend beyond a country in which the mark is used or registered.  A recent decision by the New York State Court of Appeals demonstrates that in an increasingly global economy, this bedrock principle of trademark law is no longer absolute.  The Court of Appeals decision in ITC Ltd. v. Punchgini, Inc., involved a claim by the owner of the Bukhara restaurant in New Delhi, India, that a restaurant which opened in New York City under the same name was infringing its trademark rights.

Internet addresses ending in ".Asia" will soon be available for the registration of domain names.  Trademark owners and businesses may wish to consider registering domains with the ".Asia" ending for their corresponding names.

Traditional legal concepts and e-commerce have not always easily coexisted.  Nowhere is this more apparent than trademarks where the traditional “affixation” requirement flies in the face of how modern internet transactions are proposed and consummated.  Through its decision in In re Valenite Inc., Serial No. 76482852 (July 31, 2007), the Trademark Trial and Appeal Board has, fortunately, engaged in some creative rule bending which provides breathing space for the new realities of the electronic marketplace while remaining faithful to the underpinnings of trademark law – namely, assuring protection only for marks which identify the source of products because of how they are perceived by the relevant purchasing public.

In a case likely to impact intellectual property litigation, the Supreme Court recently issued a ruling that alters the pleading standard necessary to support civil complaints filed in federal court, which governs most IP disputes.  In Bell Atlantic Corp. v. Twombly, 550 U.S. ____ (2007), the Court heightened the pleading standard, requiring that a complaint recite facts sufficient to "plausibly" support the legal claims it sets forth.

There is a groundswell of federal legislative activity aimed at protecting and enforcing the intellectual property rights of United States businesses, authors and artists against international counterfeiting and piracy. This movement is signified most recently by the introduction of Senate Bill 522 on Feb. 7, entitled the "Intellectual Property Rights Enforcement Act." What remains to be seen is whether this groundswell will come out of the halls of Congress and into the international marketplace, or whether it will recede into relative oblivion, as when a prior version of IPREA was introduced in 2005.  

In a win for owners of famous trademarks, the Second Circuit recently held that the 2006 Federal Trademark Dilution Act ("FTDA"), which amends portions of the federal Lanham Act, applies to pending appeals seeking injunctive relief, even if on appeal from a final judgment entered before the amendments were enacted.  Starbucks Corporation v. Wolfe's Borough Coffee, Inc., 2007 U.S. App. LEXIS 3372 (2nd Cir. 2007).

On October 6, 2006, President Bush signed the Trademark Dilution Revision Act of 2006 (“TDRA”) into law. The TDRA amends the Federal Trademark Dilution Act of 1995 (“FTDA”) in a number of important respects, both broadening and narrowing the dilution protection afforded to famous marks.  The TDRA does not preempt state anti-dilution law.

Article printed November 22, 2006 for The Los Angeles Daily Journal

Evidence of actual confusion, or the lack thereof, is often the dispositive factor in trademark infringement cases. Over the last dozen years, the Central and Northern Districts of California have issued conflicting rulings on the admissibility of testimony concerning conversations with third parties to prove actual confusion.

In the past year, the Ninth Circuit Court of Appeals appears to have narrowed the application of the reverse confusion doctrine.  Many companies are familiar with the traditional trademark infringement known as “forward confusion.”  See Lanham Act, 15 U.S.C. §§ 1051 et seq.  Forward confusion occurs when the use of a trademark by a second party (a junior user) is likely to lead consumers to mistakenly believe the junior user’s goods emanate from or are associated with the first (or senior) user of the mark.  Such confusion allows the junior user to trade on and benefit from the reputation and goodwill of the senior user, whether intentional or not.  In launching new brands, companies also should keep in mind another form of trademark infringement recognized under the Lanham Act – “reverse confusion.”

On September 25, 2006, the House of Representatives passed the Senate’s version of the Trademark Dilution Revision Act of 2006 (H.R. 683).  The International Trademark Association led the campaign to enact the new U.S. trademark anti-dilution statute as a reaction to the Supreme Court’s decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003) and splits between the federal circuit courts relating to current dilution law.  President Bush is expected to sign the bill within the next few weeks.

1. Defendant was ordered to pay $15,000,000
2. Defendant was permanently enjoined from violating Section 17(b) of the Securities Exchange Act of 1934 (requiring a prompt document production, including electronic documents); and
3. For one year, Defendant, at its own cost, was ordered to hire an independent consultant (acceptable to the SEC) to review and evaluate defendant's policies, procedures, and training in order to comply with the judgment. The independent consultant is to make recommendations which must, absent undue burden or impracticality, be adopted by Defendant.

In response to the Supreme Court's decision in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003), the Senate Judiciary Committee has unanimously approved revisions to the dilution provisions of the Lanham Act which adopt a standard of likely dilution rather than actual dilution. The following changes were also made to the dilution provisions:

Ruling on a recent trademark infringement lawsuit in which Surfvivor Media, Inc. (a purveyor of beach-themed merchandise) sued Survivor Productions (responsible for the popular "Survivor" television program and related merchandise) for reverse confusion, the Court of Appeals for the Ninth Circuit upheld summary judgment in favor of Survivor on the basis that confusion between the products of the parties was not likely. Surfvivor Media, Inc. et al. v. Survivor Productions et al., 406 F.3d 625 (9th Cir. 2005).

Trademark infringement, the hallmark of which is the "likelihood of confusion" analysis, is determined in the Court of Appeals for the Ninth Circuit by applying the fluid, eight-factor balancing test of AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-349 (9th Cir. 1979). Rarely do all eight factors irrefutably fancy any one party. It seems there are usually at least some factors that leave room for divergent opinions as to whether a consumer is likely to be confused between the trademarks and products or services of the litigants. Because no single factor is supposed to be dispositive, trademark infringement cases are frequently and beautifully uncertain.

In a battle between the producers of reality television shows "Wife Swap" and "Trading Spouses," a California federal court held that trade dress cannot be invoked to provide perpetual protection for what are essentially copyright claims. As a result, the court dismissed plaintiff's claim that defendants have imitated the "total image and appearance," or trade dress, of the "Wife Swap" show.

The Court acknowledged that the same elements of a work may be protected as both copyrightable expression and trade dress. However, it held that such a finding in this case would lead to the misguided conclusion that "every incidence of visual expression would be subject to copyright and trademark protection and that protection would last in perpetuity." 372 F.Supp.2d at 564.

[This case is cited as: RDF Media Ltd. v. Fox Broad. Co., 372 F. Supp. 2d 556 (C.D. Cal. 2005).]