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.

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.

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).

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).

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).

Happy New Year: It’s not a Trademark for Wine, But it is for Dolls

HappyNewYearLNJ Vineyards LLC applied to register HAPPY NEW YEAR as a trademark for wine. The USPTO Examining Attorney refused registration asserting that HAPPY NEW YEAR did not function as a trademark when used in connection with wine.

The Examining Attorney said:

“HAPPY NEW YEAR, is a common sentiment usually conveyed when wishing someone happiness in the new year…Further, such phrases are commonly associated with wine and wishing someone a happy new year. … Accordingly, the mark functions only as the sentiment it conveys, rather than as a trademark/source identifier for the wine.”

If you heard/saw “HAPPY NEW YEAR” in connection with wine, would you think its a brand or would you think it was the common sentiment wishing you a happy new year? People drink wine on new years eve and commonly wish each other a happy new year. So, the use of HAPPY NEW YEAR in connection with wine is not likely to be understood as indicating a source of wine, i.e. functioning as a trademark.

The case would probably be even stronger if the goods were Champagne rather than wine. Not surprisingly, December is the month with the largest sales of champagne, according to the Guild of Sommeliers. So there is likely a strong connection between the HAPPY NEW YEAR sentiment and Champagne.

When choosing a trademark, make sure that the mark is not in wide and common use as a sentiment with respect to the intended goods or services. Otherwise it may not function as a trademark.

However, if HAPPY NEW YEAR was used on goods having no prior connection to new years celebrations, it could function as a trademark. Mattel applied to register HAPPY NEW YEAR for dolls, doll clothing, and doll accessories. And the USPTO granted the registration.

Here’s the HAPPY NEW YEAR Barbie doll:

HappyNewYearBarbie

 

Of course, Mattel’s trademark registration does not stop anyone from wishing others a Happy New Year. This is a common misunderstanding of trademark law. Mattel’s rights are confined to the use of the phrase as a trademark in connection with dolls.

Happy New Year everyone.

 

How Important is the Description of Goods or Services in a Trademark Application?

LegalForce-v-LegalZoom

Raj Abhyanker is the owner of the lawfirm LegalForce RAPC Worldwide and of Tradmarkia.com. Raj and his lawfirm sued LegalZoom, the USPTO, and the State Bars of California, Arizona, and Texas based on what Raj alleged is LegalZoom’s unauthorized practice of law in connection with trademark application filing.

Alleged Unauthorized Practice of Law

Raj alleged that LegalZoom engaged in the unauthorized practice of law in connection with LegalZoom’s trademark application filing service. Raj and his law firm used LegalZoom to apply for two trademarks in connection with two of the Plaintiff’s businesses.

According to the complaint, LegalZoom represents on its website that it does not practice law. However, the complaint alleges that LegalZoom collects a service fee for its “peace of mind” review service. The complaint alleges that during the “class section and description modification step” LegalZoom routes customers to allegedly non-lawyer “Trademark Document Specialists.”

In the process of using LegalZoom to apply for two trademarks, the plaintiffs allege that LegalZoom provided legal advice by selecting a classification and modifying the goods and services description for a trademark application from the template thereby applying specific law to facts.

Why the Description (Identification) of Goods/Services is Important

Crafting a description of goods/services is an important step that can impact the scope of rights that exist under a trademark registration. This is because trademark rights are normally measured in relation to the goods/services on which the mark is used.

Drafting a description of goods/services is where many pro se applicants run into trouble. Sometimes drafting the description of goods can be relatively straight forward. But many times it is not.

Previously, I explained why the description of goods/service is important:

The description is important because it is what the USPTO will use to compare to other trademark registrations or trademark applications to determine whether there is a conflict. The comparisons occur in two types of situations.

The first comparison situation occurs when the USPTO reviews your application. There, the USPTO compares your mark to previously filed applications and registrations that are live. If the description is too broad, then the USPTO might find a conflict between your mark and a previous application or registration, which would not have occurred if your identification was not over broad…

The second comparison situation occurs when the USPTO is examining later filed trademark applications. If your description is too narrow then the USTPO might allow a later filed trademark application to be registered. But if your application had a proper description the USPTO would have blocked a later confusingly similar mark from being registered. Therefore, a description that is too narrow will not properly operate to block later filed trademark applications that would otherwise be in conflict. As a result, a narrow identification of goods and services will necessarily narrow the blocking effect of your application and narrow your trademark rights.

In addition, the description will be used by a court to determine the scope of rights that you have under trademark registration in a trademark lawsuit.

For a description to be crafted and used without any attorney involvement is problematic given the importance of the description.

Not surprisingly, according to the Complaint, Raj claims ethics attorneys advised him that he cannot have descriptions of goods/services prepared and used in trademark applications without attorney review, otherwise he would risk violating the unauthorized practice of law rules.

At the complaint stage, we don’t know LegalZoom’s process exactly. Nevertheless, preparing a description (identification) of goods/services for a trademark application is an important step that impacts the scope of the applicant’s trademark rights.

Citation: LegalForce RAPC Worldwide v. LegalZoom.com, Inc., no. 5:17-cv-7194 (N.D.Cal. 2017) [Complaint, Exhibits to Complaint].

Why You Should Own and Control Your Domain Name

“Do you want to build your online brand on the sand of someone else’s domain registration or on a bedrock of a domain registered in your name?”

FLNBIf you buy a piece of land, a house, or a building, would you allow the title to that property to name your real estate agent or your maintenance contractor? No, you would not. When you are spending hundreds of thousands of dollars or more on something you make sure that you actually own it in your name.

The same should be true when you buy a domain name for your website, regardless of the price. You should own and register it in your name, and not your technology provider’s name or anyone else’s name. When this is not the case, it can lead to a lot of problems and possibly tens of thousands of dollars in attorney fees to get your domain name back, as the following case appears to demonstrate.

We Merely Permitted You to Use Your Domain Name for 20 Years as a “Courtesy” 

The First Liberty National Bank of Liberty Texas sued its technology service provider Memran Inc. (d/b/a Computer Solutions) and the service provider’s founder alleging that after First Liberty informed Memran that First Liberty was going to use another company for its technology needs and stop using Memran, Memran allegedly: “claimed for the first time to own the [First Liberty’s] FLNB.com domain name.” Memran also allegedly “claimed that it had merely ‘permitted’ First Liberty to use the domain name for nearly 20 years as a mere ‘courtesy’ to First Liberty, because it ‘[was] a Computer Solutions client.’ ”

We Own It and Will Shut It Down, But Want to Negotiate Getting it Back?

Then Memran allegedly “wrote that it ‘will no longer permit First Liberty’ to use the FLNB.com domain name after the parties’ business relationship concludes on February 1, 2018.” Memran then allegedly “immediately proceeded to say that it was ‘open to negotiations regarding transferring [the] flnb.com domain name” to First Liberty.'”

While this allegation does not directly say “buy/sell” its arguably implied that some compensation was sought. What compensation is sought? Maybe: I own it, but I’ll sell it to you for a fee (probably a large fee). Or maybe: we will transfer it to you if you continue to use us for your technology needs.

The complaint alleges that “At some point in late 1996 or early 1997, First Liberty instructed Computer Solutions, in its role as the bank’s information-technology provider, to register the internet domain name FLNB.com for First Liberty’s future use.” The complaint further alleges that:

“In its role as First Liberty’s information-technology provider, Computer Solutions listed its principal Meche as the registrant of the FLNB.com domain name. First Liberty allowed this because it trusted Computer Solutions and Meche to act in the bank’s best interest as the bank’s trusted information technology provider.”

Register It In Your Name

This was the first mistake. Its my opinion that you should not allow your technology provider to register your domain name in the technology provider’s name. True, maybe many/most times it will not be an issue because you have a good level of trust with the technology provider. However, you never know when things are going to go south.

If needed, have your technology provider come to your office and walk you through the steps of registering the domain name in your name. Make sure you are listed as the owner. Make sure you or a very trusted employee of your company is named as the contact. Further, make sure that if you are not the contact, that the contact email address is one where if email is sent to it, you are copied so you can be aware if someone tries to change ownership of the domain covertly.

Domain names probably have a higher chance of being registered in someone else’s name because many times, if the name is available, they can be obtain for a small fee on the order of tens of dollars. Transactions that involve low dollar amounts tend not to undergo a lot scrutiny. I don’t know the original cost of registering FLNB.com, but its likely that it was for a nominal amount. If First Liberty had spent 100K+ on the domain name FLNB.com, I suspect it would have been registered in First Liberty’s own name, in the same way real property (land and buildings) would be, because such transactions get more scrutiny and more process.

Yet, even if registering a domain name costs tens of dollars, you need to have it registered in your name. Having it registered in someone else’s name leaves you exposed to potential disputes about ownership later. Do you want to build your online brand on the sand of someone else’s domain registration or on a bedrock of a domain registered in your name?

Litigating a Cybersquatting Claim Is Expensive and Stressful; Making Sure the Domain Is in Your Name Is Cheap

From the Complaint it appears that First Liberty has a good chance of recovering the domain based on a claim of cybersquatting. But it had to file a complaint and an emergency motion for a temporary restraining order against the defendants over the holidays. It’s probably going to need a hearing on that motion plus more legal proceedings if the defendants fight back. First Liberty could be in for $10,000 in attorneys fees or more to get the domain back. Not cheap and very stressful over the holidays. What is cheap is making sure the domain is registered in your own name before there’s a problem, preferably at the beginning.

If its not currently registered in your name, have it transferred to you before there’s a problem.

While the domain name should be registered in your name, that does not mean that you can’t have a technology service provider do the work of developing and maintaining a website at the domain. You can have contractors build and maintenance a building without the contractor owning and controlling the land and building. We are talking about ownership and control here, not access.

The alleged facts naturally favor First Liberty at the complaint stage. Memran has not answered or responded yet to these allegations. So we don’t have Memran’s side of the story. Nevertheless, the allegations demonstrate the need of owning a domain name in your own name.

Case citation: The First Liberty National Bank, N.A., v. Memran, Inc., No. 1:17-cv-534 (E.D. Tx. Dec. 27, 2017)

The image at the beginning of this post is of First Liberty’s FLNB trademark in stylized form, which it has allegedly used since 1972. Trademark rights are the foundation of a cybersquatting claim.

Incontestable Status of Mark Found Generic Does Not Prevent Exceptional Case Attorney Fees

REACTIVEGeoDynamics sued DynaEnergetics for trademark  infringement of GeoDynamics’ REACTIVE trademark. GeoDynamics owned U.S. Trademark Registration No. 3,496,381 for the REACTIVE mark. After a bench trial the court found that REACTIVE was generic for the goods of fracturing charges for use in oil and gas wells and ordered the registration cancelled.

The defendant moved for fees and the court agreed that GeoDynamic’s trademark case was exceptional based on the weakness of its case. GeoDynamic asserted that the case was not exceptional because, among other reasons, the REACTIVE mark had achieved incontestability status at the USPTO. The court rejected that view. The incontestability status was not a bar to finding the case was exceptional.

Incontestability is somewhat misleading because “incontestability” is only achieved with respect to some grounds on which the registration can be attacked. 15 U.S.C. §1065. But a registration can always be attacked based on the allegation that the mark is generic. 15 U.S.C. §1065(4); 15 U.S.C. §1064(3).

The court found that GeoDynamics trademark case was exceptional because (1) its witnesses admitted the phrases “reactive liner charge” and “reactive charge” was generic for goods in question (2) GeoDynamics did not provide a meaningful analysis of the likelihood of confusion factors, and (3) Geo Dynamics did not provide any evidence that the defendant used the mark since the lawsuit was filed in 2015. On the last point the court said, “Without such evidence of continued use [after the suit was filed], it was unreasonable for GeoDynamics to pursue its trademark claim solely for an injunction with such an objectively weak infringement position.”

Citation: GeoDynamics Inc., v. DynaEnergetics US, Inc., No. 2:15-CV-01546 (E.D. TX Dec. 21, 2017).

Multi-Color Design Trademarks and Trade Dress

SATA_Italco_PaintSATA GmbH sued Discount Auto Body and Paint Supply LLC for infringing its product design trademarks in the alleged sale of paint spray guns. SATA GmbH & Co. KG v. Discount Auto Body and Paint Supply LLC, No. 2-17-cv-03101 (D.N.V. 2017).

This case demonstrates that it is possible not only to obtain trademark protection in a product design comprising a single color applied to an area of the product, but also on any color applied to an area of a product. In other words, the use of any color on an area of a product can itself act as a trademark, indicating a source of goods and/or services.

One of the trademark SATA asserted was U.S. Trademark Registration No. 2,770,801 for a design mark of “a green band of color extended around the circumference of a paint spray gun air cap ring, the green band being narrower than the air cap ring…The drawing is lined for the color green.” The drawing of the mark is:

US_TM_Reg_2770801

SATA also asserted U.S. Trademark Registration No. 2,793,583 for to a design mark of “a band of [any] color extended around the circumference of a paint spray gun air cap ring, the color band being narrower than the air cap ring and of a color that contrasts with the air cap ring.” The drawing of the mark is:

US_TM_Reg_2793583

Therefore, the first trademark registration is directed to a green ring on a paint spray gun. But the second trademark is directed to a ring of any color, as long as that color contrasts with the air cap ring.

Below is a photo of the green ring deployed on SATA’s actual product.

GreenCapRing

The principle of allowing the registration of multi-color design marks appears to be first addressed in a 1972 case where Data Packaging Corp. applied to register a design applied to a computer tape reels. In re Data Packaging Corp., 453 F.2d 1300, 1302 (CCPA 1972). The claimed design was to “a narrow annular band mounted on the front reel flange, adjacent to and concentric with the hub of the reel, in a color which contrasts with the reel flange.” The USPTO refused registration asserting that the law prohibited the registration of a mark which provided for the use of any color as its distinguishing feature.

The court of appeals rejected that view and reversed the USPTO. The court concluded that “there is no reason why an applicant should not be able to obtain a single registration of a design mark covering all the different colors in which it may appear, that is to say, not limited to a particular color.”

The SATA case is only at the complaint stage so we don’t have any rulings with respect to SATA’s marks. Nevertheless, the plead registrations demonstrate a multi-color design trademark registration.