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Five Years: Most Relevant Time Period for Considering Third Party Trademark Use, Federal Circuit Says

Converse filed a complaint at the International Trade Commission (ITC) seeking an order blocking the importation of several shoes that Converse alleged to infringe Converse’s trade dress rights in three design elements on the mid-sole of Converse’s All Star shoes.

Converse asserted trade dress rights in the “design of the two stripes on the midsole of the shoe, the design of the toe cap, the design of the multi-layered toe bumper featuring diamonds and line patterns, and the relative position of these elements to each other.”

Here, the design elements of the shoe are product design trade dress, for which the owner must show that these design elements have acquired distinctiveness in the relevant market place. If the owner fails to show acquired distinctiveness, then it does not have trademark rights to enforce.

Third party use of a mark is relevant to whether a trademark has acquired distinctiveness in the relevant market place. If many third parties use a mark, then it is less likely that this mark will be recognized in the marketplace as associated with one source of goods or services.

The defendants in the ITC proceeding asserted that the design elements had not acquired distinctiveness. They relied, in part, on evidence of third party designs. Some of those third party design usages were old.

The Federal Circuit said that the ITC erred by too heavily relying on prior uses long predating the first infringing uses and the date of registration in Converse, Inc. v. ITC, No. 2016-2467 (Fed. Cir. 2018). The court relied on Section 2(f) of the Lanham Act to find that the five year period prior to the relevant date was the most relevant time frame to consider third party use.

Generally a trademark owner must show acquired distinctiveness prior to the date when the first alleged infringement occurred by the other party. Therefore, the first use by the the other party is generally the relevant date (or the date of  registration, if a trademark registration is at issue).

The court said that “Consumers are more likely to remember and be impacted in their perceptions by third-party uses within five year and less likely with respect to older uses.” It continued that “uses older than five years should only be considered relevant if there is evidence that such uses were likely to have impacted consumers’ perceptions of the mark as of the relevant date.”

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Likely Phonic Similarity Dooms Registration Attempt: MIKA Blocks MYCAH

Devon Goocher applied to register MYCAH for music concerts, among other services. The USPTO refused registration based on a registration on MIKA for live performances by a musical entertainer in In re Goocher, Ser. No. 87214736 (TTAB Setp. 20, 2018)

Two marks may be found similar if there are sufficient similarities in the sound or appearance or connotation of the marks. Here the similarity in sound was enough to find the marks were similar.

The Trademark Trial and Appeals Board noted that:

…it is very likely that consumers will pronounce Applicant’s mark MYCAH in the identical way that they would pronounce Registrant’s mark MIKA, that is bi-syllabically with the first syllable being pronounced the same as the word “my,” as the vowels “I” and “Y” are often interchanged in, for example, common names such as Sidney and Sydney. In the second syllable, both the “C” and “K” can be pronounced with a hard “k” sound as in the words “cat” and “Kentucky,” with the “A” and “AH” having the same neutral sound.

Goocher tried to argue the marks were pronounced differently “in reality.”  However, the Board noted that “there is no ‘correct’ or certain pronunciation of a mark because it is impossible to predict how the public will pronounce a particular mark….”

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Uber CEO Acknowledges that Uber is a Verb

In a September 10, 2018 post on Uber’s website, Uber’s CEO is quoted saying “Very few brands become verbs; for Uber to have achieved this shows how we’ve captured imaginations and become an important part of our customers’ lives….”

Many companies go out of their way to discourage the use of their trademark as a verb or a noun. For example, the owners of the VELCRO brand produced a humorous music video instructing the public not to use VELCRO as a noun or verb. Why?

They did this to prevent the loss of trademark rights in the VELCRO trademark due to what is called genericide. Genericide occurs when the public appropriates a trademark and uses it as a generic name for a type of good or service regardless of the source. If this happens, as it did for ASPIRIN, the trademark owner can loose its rights in the mark. Therefore, usually companies avoid, and instruct others to avoid, using their trademarks as nouns or verbs.

However, in a recent case where the plaintiff unsuccessfully attacked Google’s trademark as generic, the Ninth Circuit Court of Appeals said that verb use of a trademark alone does not automatically constitute a generic use. Instead, to know if the public uses the mark as a generic name of a type of good or service, we need some information about what the consumer is thinking when they use the mark as a verb.

Here, does the consumer mean the Uber ride service or any ride service when using Uber as a verb? The latter case is where the problem lies for trademark owners.

Therefore, the acknowledgement by Uber’s CEO that Uber is a verb is not the end all regarding Uber’s trademark rights. Yet, it is something that a challenger could point to in attempting to attack the validity of Uber’s trademark.

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Avoid Using Trademarks Descriptively: Corn Thins and Rice Thins Found Merely Descriptive

Real Foods Pty Ltd. applied to register the mark “Corn Thins” for the goods of “crispbread slices predominantly of corn, namely popped corn cakes.” It also applied to register the mark “Rice Thins” for the goods of “crispbread slices primarily made of rice, namely rice cakes.” Frito-Lay successfully opposed the registration of marks on the basis that the marks are merely descriptive of the goods and have not acquired distinctiveness in Real Foods Pty Ltd. v. Frito-Lay North America, Inc. Nos. 2017-1959, 2017-2009 (Fed. Cir. 2018).

A mark is merely descriptive if it immediately conveys information concerning a feature, quality, or characteristic of the goods or services for which registration is sought. The Trademark Trial and Appeals Board (TTAB) and the Federal circuit agreed that a consumer would immediately understand, when encountering the proposed marks, that a feature or characteristic of the goods is that they are thin in cross section and made primarily of corn or rice, respectively.

Merely descriptive marks are initially weak and require acquired distinctiveness (a.k.a. secondary meaning) to be registered. Acquired distinctiveness occurs when the primary significance of a mark, in the minds of the relevant public, is to identify the source of the product rather than the product itself.

One fact that the TTAB and the Federal Circuit noted is that Real Foods advertising materials use the word “thin” to describe their products. According to the Federal Circuit opinion, the advertising included the statements that “They are delicious thin corn cakes, with ‘All Natural” flavoring” and “Corn & Rice Thins are THIN.”

While the outcome might not have changed in this case, a trademark owner should take steps to avoid using its mark descriptively in a sentence to describe an attribute of the product. It appears, in the opposition, the Real foods avoided using the term “thin” to describe its products and instead used “slim” or “slimmer.” But such use of slim or slimmer did not change Real Food’s prior descriptive use of thin in advertising, which was used as evidence against it.

Ultimately, the TTAB and the Federal Circuit agreed that Corn Thins and Rice Thins should not be registered because they were merely descriptive of the corresponding goods.

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Protecting Descriptive Marks: Principal Register and Supplemental Register

The USPTO maintains two registers of trademarks. The main register is the principal register while the other is the supplemental register. Most trademark applications seek registration on the principal register. Registration on the principal register provides the trademark owner with more rights and benefits than the supplemental register.

Principal Register

The advantages of owning a registration on the Principal Register, include that the registration on the Principal Register:

  • Provides exclusive nationwide right to use the mark in commerce on or in connection with the goods/services listed in the registration where there was no prior use by others (15 U.S.C. §§ 1057(b), 1115(a));
  • Is constructive notice to the public of the registrant’s claim of ownership of the mark (15 U.S.C. §1072);
  • Provides a legal presumption of the registrant’s ownership of the mark (15 U.S.C. §1057(b)),
  • Operates to provide a constructive use of the mark as of the filing date of the application that results in the registration (15 U.S.C.  §1057(c));
  • Enables the owner the ability obtain the assistance of the US Customs and Boarder Protection to prevent importation of infringing foreign goods (15 U.S.C. §1124);
  • Enables the option for registrant’s exclusive right to use a mark in commerce on or in connection with the goods or services covered by the registration to become “incontestable,” subject to certain exceptions (15 U.S.C. §§1065, 1115(b) );
  • Provides a basis for using a simplified process under the Madrid Protocol to a obtain trademark registrations in foreign countries. (15 U.S.C. §1141b).
  • Operates as a defense to state or common law claims of trademark dilution. (15 U.S.C. § 1125(c)(6)).

The Supreme Court said “Federal registration …. confers important legal rights and benefits on trademark owners who register their marks.” The Federal Circuit Court of Appeals said, “These benefits [of a federal trademark registration]—unavailable in the absence of federal registration—are numerous, and include both substantive and procedural rights.” So if you are serious about protecting your mark, you want to register it on the principal register.

Supplemental Register

However, when a trademark does not qualify for registration on the principal register, the supplemental register is a fall-back option. A trademark may not qualify for registration on the principal register if it is merely descriptive in relation to the goods/services and has not acquired distinctiveness, i.e. recognition in the relevant marketplace as a trademark. A mark is merely descriptive if it describes an ingredient, quality, characteristic, function, feature, purpose or use of the corresponding goods or services.

Therefore, an applicant may seek registration on the supplemental register when its mark is merely descriptive and has not acquired recognition in the marketplace as a trademark. Further, an applicant might seek registration on the supplemental register if the mark has been refused on the principal register as merely descriptive and the applicant does not want to undertake the effort to attempt to prove to the USPTO that the mark has acquired recognition in the marketplace as a trademark.

The advantages of owning a registration on the Supplemental Register, include that the registration:

  1. Allows the registrant to use the registration symbol ®;
  2. May block the registration of a confusingly similar mark by a third party; and,
  3. Provides a basis for using a simplified process under the Madrid Protocol to a obtain trademark registrations in foreign countries.

The time period that a trademark has been use is one factor in determining whether a mark has acquired distinctiveness (and is thus register-able on the principal register). 15 U.S.C. §1052(f),  provides that “proof of substantially exclusive and continuous use” of a designation “as a mark by the applicant in commerce for the five years before the date on which the claim of distinctiveness is made” may be accepted as prima facie evidence that the mark has acquired distinctiveness. The USPTO is not required to accept 5 years of use as establishing acquired distinctiveness, but they can and often do.

Therefore, one strategy to protect a merely descriptive mark is to seek registration on the supplemental register. Then after a period of time, such as 5 years, the applicant can seek registration on the principal register and rely on section 1502(f) for establishing acquired distinctiveness. Before seeking registration on the principal register, the registration on the supplemental register has the chance of blocking others from registering the same or confusingly similar mark. It may also have the effect of deterring others from using the same or a confusingly similar mark.

Yet, reliance on 1502(f) this might not work if third parties start using the mark for the same goods in the marketplace before 5 years of use. Then the applicant might not be able to say that its use was “substantially exclusive.” Nevertheless, the applicant could still attempt to prove acquired distinctiveness through other evidence.

Choosing a descriptive mark tends to put the applicant at a disadvantage in terms of trademark strength, at least initially. However, overtime if competitors do not use the mark, the mark might acquire trademark protection if the appropriate steps are taken. Seeking registration on the supplemental register is one step that may help in the process.

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Trademark Ownership: The Risk of Owning a Trademark Personally

When a founder starts a business, he or she has many decisions to make. One of those is whether he or she should own assets of the business personally or whether he or she should form a corporation or LLC to own the assets of the business and bear the liabilities of a business. Founders are often quick to form a corporation or LLC to operate the business to shield themselves from personal liability arising from claims against the business.

But occasionally founders and business owners operating under a corporation or LLC seek to register and own trademarks personally rather than have them owned by the corporation or LLC. This is probably a mistake that increases their risk of being personally liable for products or services sold under the trademarks as explained below.

Quality Control

Trademark owners are required to control the quality of the goods or services sold under the mark. If a trademark owner fails to control the quality of the goods or services, trademark rights can be lost. The requirement that a trademark owner control the quality ensures that customers expectations are met with respect to goods or services sold under the mark.

If a trademark is owned/registered in the founder’s name but used by his/her wholly owned corporation or LLC, the founder is likely (implicitly or expressly) licensing the use of the trademark to the corporation or LLC. The founder is a licensor of the trademark to the corporation or LLC, who is a licensee/user of the trademark.

An injured plaintiff might assert that the founder (e.g. the trademark licensor) is personally liable because, as the trademark owner, he/she controlled the quality of the goods/services that resulted in the injury. Therefore, owning a trademark in your own name rather than having your corporation or LLC own it may, at least partially, destroy the purpose of forming a corporation or LLC in the first place, which was to limit personal liability.

Kennedy v. Guess

In the case of Kennedy v. Guess, Inc., 806 NE.2d 776 (Ind. 2004), the Indiana Supreme Court found that Guess, Inc. could be liable for alleged defective products sold bearing its licensed GUESS trademark. While this case does not involve the founder being held liable for a defective product of its company, it does illustrate that a trademark owner/ licensor–which is what a founder-trademark-owner is–could be liable for defective products sold by a licensee using its mark.

In the Guess case, Kaye Kennedy purchased a GUESS watch and received a free umbrella bearing the GUESS logo. Kaye’s husband, Richard, took the umbrella to work where a co-worker swung it from the handle. The umbrella’s shaft separated from the handle and struck Richard in the nose and sinus, causing injury.

The Kennedys sued Guess Inc., as well as Callanen, a corporation, licensed by Guess to market Products bearing the GUESS logo, including the watch and umbrella. The court concluded that “Indiana common law should treat trademark licensors as having responsibility for defective products placed in the stream of commerce bearing their marks…” The court also said that “Consumers rightly expect that products bearing logos like ‘Guess’ have been subject to some oversight by those who put their name on the product, but those same consumers can well imagine that in modern commerce the products they buy may have actually been manufactured by someone else.” The process of sorting out comparative fault between Guess and the other defendants was ultimately left to the jury.

The Guess case shows that a trademark licensor might be liable for defective products or services provided by a trademark licensee. Other cases in California have reached the opposite conclusion. See Emery v. Visa Internat. Services Ass’n, 95 Cal.App.4th 952 (3d. Dist. 2002). Nevertheless, the leading trademark treatise provides “In many cases, legal responsibility under one of the relevant legal theories seems impossible for a trademark owner to avoid.” McCarthy on Trademarks 18:75 (2017).

Solutions to Mitigate Risk: Legal Entity Ownership of Trademarks

To avoid the possibility of personal liability as a founder-trademark owner, simply start with the corporation or LLC using, owning, and registering the mark from the founding of the business. This can be done if the corporation or LLC was formed from the beginning of the business.

If trademark ownership is currently owned in the name of the founder, the trademark, and associated goodwill, can be transferred through an assignment to the corporation or LLC. By doing this, use of the mark and ownership of the mark will then reside in one entity. Liability on the basis of trademark law should be reduced or avoided at least going forward after the transfer as the founder is no longer the trademark owner.

There are cases where a person starts out in business without forming a corporation or LLC and operates as a sole proprietor. In that case the person will own the trademark. However, if and when that person forms a corporation or LLC for the business, the trademark can be transferred to the legal entity to avoid potential personal liability arising from trademark ownership.

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How Long Does It Take to Get a US Trademark Registration

After a trademark application is filed, it will be placed in a queue to be examined by a trademark examining attorney at the USPTO. The current USPTO records show that it takes an average of 2.7 months between the time of filing and the time of first action on the application. The USPTO targets between 2.5 and 3.5 months for a first action. In other words, it will take about 2 or 3 months for the office to substantively consider your application.

Further, USPTO records also show the total pendency average to be 9.5 months. Total pendancy is measured from filing to abandonment, allowance, or registration. Currently, the USPTO targets total pendency to be at 12 months or less.

If your application receives an office action with a rejection or objection, it may take longer. The USPTO usually provides six months to respond to an office action. If the applicant takes the full six months to respond, then the application pendency will correspondingly be extended six months.

If your application is an intent to use application, the allowance (“notice of allowance”) is not the end of the process. You must file a statement of use before a registration is issued. You generally have six months to file a statement of use from the notice of allowance. Even if you file a statement of use right away, the USPTO estimates that it will take 3.5 months from the filing of a statement of use until you receive the registration.

Therefore, if you file a statement of use right away after notice of allowance the total pendancy from filing to registration for an intent to use application is 13 month on average. The total pendancy to registration of a use-based application is 9.5 months on average.

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Amazing Woman: Is It Descriptive or Is It a Trademark?

Cathedral Art Metal Co, Inc. sued Nicole Brayden Gifts, LLC for trademark infringement arising from Brayden’s use of the term “Amazing Woman.” The Complaint alleges Brayden’s use of the term on a plate shown below is infringing.

AmazingWoman

Before getting to Brayden’s plate, let’s count the ways that Cathedral’s use of “Amazing Woman” on this plate (left) is not a trademark use.

First, “Amazing Woman” is not provided in a different font type, font size, color, or otherwise distinguished from the surrounding text. Second, it is used descriptively in the phrase “Recipe For An Amazing Woman.” Third, the poem that follows the heading purports to be exactly as the title directs, a “Recipe For An Amazing Woman.” Here’s what the poem on the plate says:

Start with faith and honesty

Mix in pure humility

Add strength of character that rises above the stress of life’s surprises

Fold in personality

Toss with generosity

Pour in love from a heart that’s true

Yield: one terrific, and amazing YOU!

Ask yourself, does “amazing woman” on this plate standout as a trademark? No. A reasonable consumer encountering that plate would not think that “amazing woman” is used to indicate a source of goods. Everything on that plate signals that “amazing woman” is used descriptively to describe how to purportedly “yield” an amazing woman.

The threshold issue for asserting trademark infringement is that the plaintiff has trademark rights. How do you obtain trademark rights? By using the mark as a trademark (or filing an intent to use trademark application and then using the mark as a trademark).

Maybe Cathedral uses Amazing Woman elsewhere in a trademark manner, such as in its catalog, but it does not on this plate.

Ironically, Brayden’s plate provides Amazing Woman in an enlarged and different font from the surrounding text, which is more indicative of a trademark use. But other factors point to a descriptive use such “Recipe for an Amazing Woman” and the poem purports to “yield” an amazing woman:

Start with a strong Woman; not the ordinary kind.

Add in love, compassion caring and consideration combined.

Sprinkle in generosity and kindness and friendship that’s pure and true.

Mix together with a blessing to yield one amazing woman. You!

Cathedral also claims trade dress infringement. The complaint describes the trade dress as including “a stylized presentation of the mark AMAZING WOMAN disclosed against a background of soothing distinctive colors, initially featuring a soft green-and-blue color scheme.” But the plates do not look that similar even setting aside the issue of whether Cathedral has acquired distinctiveness in the alleged trade dress.

Here are some more allegedly infringing products:

AmazingWoman2

Each one of those uses of “Amazing Woman” begins with “You are an” or “Recipe for an” indicating a descriptive use of the words.

Cathedral moved for a temporary restraining order, which, unsurprisingly, was denied. Cathedral has a uphill fight here.

If you want to develop trademark rights in a mark, do not use your mark descriptively. Further, present your trademark in a manner that makes it look like a trademark, e.g. in some way that is distinguished from the surrounding text.

Citation: Cathedral Art Metal Co., Inc. v. Divinity Boutique, LLC, No. 1-18-cv-00141 (N.D.GA 2018).

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Love Made sues Victoria’s Secret: Love Made Me Do It

Love Made, LLC sued Victoria’s Secret (VS) alleging the that VS’ use of LOVE MADE ME DO IT on a tote bag and on a neon sign infringed Love Made’s trademark and copyright.

LoveMadeMeDoIt_VSTote1LoveMadeMeDoIt_neon

Love Made owns a trademark registration on LOVE MADE ME DO IT for apparel, which claims a first use of the mark in commerce in April 2013. Love Made operates a website at love-made.com.

LOVE MADE ME DO IT was not coined my Love Made, it appears. Its the name of a 1978 (or 1983) song by Danniebelle Hal and a 2010 album by Swedish singer Elon Lanto. However, there’s no requirement that one coin a phrase in order to generate trademark rights in it.

Sometimes when a phrase in is wide use it fails to function as a trademark. Although the phrase was used in some places, quick internet searching does not clearly show it to be in such wide use that it fails to function as a trademark.

Love Made, LLC v. Victoria’s Secret Stores, Inc, No. 2-18-cv-00099 (C.D.Cal 2018).

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Trademark Registration Invalid for Lack of Use in Commerce Before Statement of Use Deadline

TAOIn 2010, Marcus Bender visited a TAO restaurant or nightclub in an attempt to sell Kia Vodka. After that attempt failed, Bender Consulting Ltd. (Bender), which Mr. Bender owned, filed an intent-to-use trademark application on TAO VODKA for alcoholic beverages other than beer, which later registered.

TAO Licensing, LLC, petitioned to cancel the TAO VODKA registration. TAO owns several restaurants and nightclubs named TAO in cities, such as New York, and Las Vegas. TAO alleged that the registration was not valid because Bender did not use the mark in commerce prior to the deadline to file a statement of use, among other reasons.

Bender asserted that its registration was valid based on one sample case of Vodka shipped to Mr. Bender from a Vietnamese distillery. Mr. Bender allegedly provided samples, at no charge, to three entities: (1) a shareholder of Kia named J.M. Stevens & Associates, (2) a restaurant across the street from Mr. Bender’s office in Hawaii named Tango Contemporary Cafe, and (3) a distributor named Northern Wine & Spirits.

First, none of these three purported distributions was supported by corroborating documentation. This is a problem. The testimony of one witness without any corroboration is usually a very weak position on the issue of priority or first use. This is why it is important to keep documentary evidence of your first sale or shipment under a trademark.

The shipment of the samples to Mr. Bender from the factory was not a use in commerce because the shipment was to the trademark owner and did not make the goods available to the purchasing public.

Each of the distributions also failed to be a use in commerce because they were not a bona fide use in the ordinary course of trade. J.M. Stevens was a shareholder of Kai, a related company of Mr. Bender’s. Bender could not sell the vodka directly to The Tango Cafe because Bender was not a legally authorized distributor. And Northern Wine & Spirits never expressed any interest in the product and there was no written follow-up from either side.

Further Bender did not make any sales of the product for 2 1/2 years after receiving the samples. The board concluded that “sharing of these samples with the three parties was more in the nature of a preliminary advisory consultation than a bonafide use of the [] mark…”

Another fun bit that makes Mr. Bender’s position suspect is that Bender “proposed a business relationship” with TAO in May 2012 seeking a six figure some of money to sell the TAO VODKA registration to TAO, despite having no sales of the product to that date. Its hard to sell a trademark when you have no sales under it.

This case appears to again demonstrate the principle that speculating in trademarks is usually fruitless, and rights only attach on the bona fide use of a trademark.

TAO Licensing, LLC v. Bender Consulting Ltd., Cancelation No. 92057132 (TTAB 2017).