IP UPDATE

What’s Kühler Than Kühl? No Likelihood of Confusion

By Courtney Seams on Sep 28, 2023
Posted In Trademarks

Addressing unfair competition claims under the Lanham Act, the US Court of Appeals for the Tenth Circuit concluded that no reasonable juror would confuse an alcohol distributer’s use of the word “kühl” with use of a similar mark by a clothing company. Alfwear, Inc. v. Mast-Jägermeister US, Inc., Case No. 21-4029 (Fed. Cir. Sept. 7, 2023) (Holmes, Kelly, Carson, JJ.)

Alfwear has used the mark KÜHL on its outdoor apparel line since 1993 and has registered the mark in connection with apparel, wine and beer. Mast-Jägermeister US (MJUS), a German herbal liqueur distributor, began incorporating “kühl” into its advertisements on billboards, commercials and digital advertising in phrases such as “kühl as ice” and “drink it ice kühl.” In response, Alfwear filed suit against MJUS, asserting trademark infringement and unfair competition. The district court granted MJUS’s motion for summary judgment, finding that there was no likelihood of confusion because all but one factor for assessing likelihood of confusion supported MJUS. Alfwear appealed.

Alfwear argued that the district court erred by not concluding that MJUS’s use of the word “kühl” was likely to cause confusion with Alfwear’s use of the essentially the same word. To determine whether a likelihood of confusion exists, the following factors must be considered:

The degree of similarity between the marks
The intent of the alleged infringer in adopting its mark
Evidence of actual confusion
Similarity of products and manner of marketing
The degree of care likely to be exercised by purchasers
The strength or weakness of the marks.

The Tenth Circuit found that the two marks were not similar in sound, meaning or appearance, and that MJUS only used “kühl” in association with other MJUS marks. The Court explained that Alfwear often depicts the KÜHL mark alongside a logo of a shield-type shape containing a stylized, snow-covered mountain peak in the colors brown, black and white against a bright blue sky. In contrast, MJUS uses the word “kühl” in phrases such as “kühl shots” or “kühl as ice,” on top of a black or green background and accompanied by a combination of either the mark JÄGERMEISTER, the Jägermeister logo or images of a Jägermeister bottle.

The Tenth Circuit also found that MJUS did not intend to copy Alfwear’s mark, explaining that MJUS was not aware of Alfwear’s trademark when designing the new advertising campaign, and noting that when MJUS became aware of the trademark, MJUS intended to avoid infringement by not placing the mark on its apparel or liquor products. The Court also determined that there was insufficient evidence of actual confusion. Alfwear presented anecdotal evidence from Alfwear executives who had heard about confusion from individuals and survey evidence that demonstrated consumers experienced an approximately 30% chance of confusion. The Court found that the anecdotal evidence was de minimis and found that the survey was not designed properly because the products were not shown to survey participants as they would appear in the marketplace and used leading questions. The Court also found that the two [...]

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Grubhub Relishes Victory Against Trademark Preliminary Injunction

By Tessa Kroll on Sep 28, 2023
Posted In Trademarks

Upholding the denial of a preliminary injunction motion in a trademark infringement dispute, the US Court of Appeals for the Seventh Circuit concluded that the district court did not err in finding that the trademark owner failed to show a likelihood of success on its reverse confusion theory. Grubhub Inc. v. Relish Labs LLC, Case No. 22-1950 (7th Cir. Sept. 12, 2023) (Lee, Jackson-Akiwumi, Wood, JJ.)

Relish Labs and the Kroger Company (Home Chef) create and deliver meal kits with pre-portioned ingredients that customers can cook at home. Home Chef began using its “HC Home Mark,” which is protected by five federal trademark registrations, in 2014. Home Chef has spent more than $450 million on advertising and reached $1 billion in annual sales in October 2021.

Grubhub is an online food ordering and delivery service that provides on-demand order management, dispatching and procurement. In June 2021, Grubhub was acquired by Netherlands-based Just Eat Takeaway (JET), an international food delivery company that typically combines its “JET House Mark” with the marks of its local brands.

Before finalizing its acquisition of Grubhub, JET filed an international trademark application for the JET House Mark. However, the US Patent & Trademark Office (PTO) examiner preliminarily rejected the mark, finding it to be “confusingly similar” to the HC Home Mark. JET did not respond and withdrew the application. After acquiring Grubhub, JET adopted the “Grubhub House Logo,” which combined the Grubhub logo with the JET House Mark. Grubhub introduced the new logo in July 2021 and has spent millions of dollars rebranding.

After receiving a cease-and-desist letter from Home Chef, Grubhub sued, seeking a declaratory judgment that its logo did not infringe Home Chef’s marks. Home Chef countered with a motion for preliminary injunction, which was referred to a magistrate judge. The magistrate judge recommended that the court grant Home Chef preliminary injunctive relief, but the district court rejected the recommendation and denied Home Chef’s motion, finding that it had not shown a likelihood of success on the merits. Home Chef appealed.

On appeal, the Seventh Circuit began by addressing which Grubhub mark was at issue: the JET House Mark alone or the Grubhub House Logo (which incorporated the logo portion of the JET House Mark). The Court noted that Grubhub had not used the JET House Mark without the Grubhub brand name in the United States and thus agreed with the district court that the accused mark was the Grubhub House Logo:

Turning next to Home Chef’s reverse confusion theory, the Seventh Circuit addressed the relevant four factors from its [...]

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Standard Practice: The Public Has Right to Copyrighted Material Incorporated Into Law

By Jake B. Vallen on Sep 28, 2023
Posted In Copyrights

In a case that attracted a slew of amicus curiae participation and was the most recent in the series of American Society for Testing and Materials (ASTM) copyright cases, the US Court of Appeals for the District of Columbia Circuit affirmed the district court’s holding that the noncommercial dissemination of standards, as incorporated by reference into law, constitutes fair use and thus does not support liability for copyright infringement. Am. Soc’y for Testing & Materials v. Public.Resource.Org, Case No. 22-7063 (DC Cir. Sept. 12, 2023) (Henderson, Pillard, Katsas, JJ.)

The ASTM and the other plaintiffs are private organizations that develop and promulgate standards for establishing best practices for their respective industries or products. In 2013, they brought an action for copyright infringement against Public.Resource.Org for posting their copyrighted standards (as they were referenced in agency rulemaking and incorporated into law) on its website, thereby making these materials available to the public at no cost. After the district court initially granted ASTM’s motion for summary judgment of copyright infringement and rejected Public Resource’s fair use defense, the DC Circuit reversed and remanded for further consideration the issue of whether posting the incorporated standards constituted fair use. Subsequently, the district court “found fair use as to the posting of standards incorporated into law and infringement as to the standards not so incorporated.” The plaintiffs appealed.

On appeal, the DC Circuit analyzed the following fact-intensive fair use factors:

The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes
The nature of the copyrighted work
The amount and substantiality of the portion used in relation to the copyrighted work as a whole
The effect of the use upon the potential market for or value of the copyrighted work.

The DC Circuit concluded that the first three factors strongly favored holding that Public Resource’s posting of the incorporated standards constituted fair use. As to the first factor, the Court explained that in a manner similar to the one discussed by the Supreme Court of the United States in its 2021 Google v. Oracle Am. case, Public Resource’s use was for nonprofit, noncommercial educational purposes. The DC Circuit further found Public Resource’s use transformative in that it served different purposes than ASTM’s use (“provide[ing] the public with a free and comprehensive repository of the law” versus “producing standards reflecting industry or engineering best practices.”)

As to the second factor, the DC Circuit reasoned that the “nature of the copyrighted work” heavily favored fair use because the standards “fall at the factual end of the fact-fiction spectrum” and “have legal force, [such that] they . . . fall ‘at best, at the outer edge of copyright’s protective purposes.’” As to the third factor, the Court found that it strongly supported fair use because the standards had been incorporated and thus had “the force of law.”

With respect to the fourth factor, the DC Circuit recognized that Public Resource’s [...]

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Chilly Adventures: Design Patent Prior Art Comparison Applies to Article of Manufacture

By Amol Parikh on Sep 28, 2023
Posted In Patents

Addressing a matter of first impression concerning the scope of prior art relevant to a design patent infringement analysis, the US Court of Appeals for the Federal Circuit concluded that “to qualify as comparison prior art, the prior-art design must be applied to the article of manufacture identified in the claim.” Columbia Sportswear North America, Inc. v. Seirus Innovative Accessories, Inc., Case Nos. 21-2299; -2338 (Fed. Cir. Sept. 15, 2023) (Prost, Reyna, Hughes, JJ.)

Columbia owns a design patent that covers an ornamental design of a heat reflective material. Seirus markets and sells products (e.g., gloves) made with material that it calls HeatWave. An image of Columbia’s patented design and Seirus’s HeatWave material appear below:

Columbia sued Seirus for infringement. After the district court granted summary judgment of infringement, Seirus appealed to the Federal Circuit. The Court issued its decision in Columbia I, concluding that the district court improperly declined to consider the effect of Seirus’s logo in its infringement analysis and resolved certain issues that should have been left to the jury. The Court therefore vacated summary judgment and remanded for further proceedings.

On remand, the district court held a trial. Before trial, the district court limited admissible comparison prior art to “wave patterns of fabric,” declined to instruct the jury that “prior art” referred to prior designs of the claimed article of manufacture, and declined to instruct the jury that it did not need to find that any purchasers were deceived or that there was any actual or likelihood of confusion among consumers in the marketplace. Seirus was permitted to admit three prior art references that disclosed fabric, and Columbia was precluded from distinguishing the references by arguing that they did not disclose heat reflective material. The jury returned a verdict of noninfringement. Columbia appealed.

Among other things, Columbia challenged the exclusion of evidence and jury instructions concerning comparison prior art, and the jury instructions implicating Seirus’s logo.

The Federal Circuit began by discussing the appropriate prior art comparison in the context of design patent infringement. Citing its 2008 en banc decision in Egyptian Goddess v. Swisa, the Court explained that under the ordinary-observer test governing design patent infringement, prior art can help highlight distinctions and similarities between the claims and the accused design. For instance, when a claimed design is close to a prior art design, small differences between the accused design and the claim design are likely to be important. Conversely, if an accused design copied a particular feature of the claimed design that departs from the prior art, the accused design is likely to be regarded as deceptively similar to the claimed design, and thus infringing.

The question of first impression before the Federal Circuit was the proper scope of comparison prior art that may be used in the infringement analysis. The Court held that to qualify as comparison prior art, the prior art design must be applied to the article of manufacture identified in the claim. The Court provided several reasons [...]

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Head East: Contract Disputes Act Claims Must Be Filed in DC

By David Beach on Sep 28, 2023
Posted In Trade Secrets

The US Court of Appeals for the Ninth Circuit concluded that the Contract Disputes Act (CDA) “impliedly forbids” federal contractors from bringing most trade secret misappropriation claims against federal agencies in district court. Instead, the CDA requires contractors to bring such claims before the US Court of Federal Claims or the agency board of contract appeals, both of which are located in Washington, DC. United Aeronautical Corp. v. United States Air Force, Case No. 21-56377 (9th Cir. Sept. 7, 2023) (Smith, Lee, JJ.) (Collins, JJ., dissenting).

United Aeronautical Corporation (Aero) develops firefighting products, including the Mobile Airborne Fire Fighting System for use in aerial firefighting. The US Forest Service contracted with Aero to develop an updated aerial system to assist the agency in fighting fires. The ensuing prototype necessarily incorporated significant amounts of Aero’s intellectual property. To protect that information, Aero and the Forest Service executed a Data Rights Agreement (DRA) providing that “the technical data produced . . . or used or related” to developing the prototype “shall remain the property of [Aero],” but specifying that the Forest Service “shall have unlimited rights to view and use the data required for the continued use and operation of the” prototype. The Forest Service proceeded to share Aero’s data with the Air Force, which developed an upgraded aerial firefighting system it marketed internationally.

Aero sued the Air Force for misappropriating its trade secret information. Procedurally, Aero brought its claims under the Administrative Procedure Act (APA), seeking a declaration that the Air Force’s actions violated the Trade Secrets Act and federal procurement law, and an injunction prohibiting any further use of that data to develop competing products. Although the Air Force believed it was permitted to use Aero’s trade secrets pursuant to the DRA, it also argued that Aero’s complaint must be dismissed for lack of subject matter jurisdiction. The district court agreed, concluding that the CDA vests exclusive jurisdiction over federal-contractor disputes with the Court of Federal Claims where, as here, the dispute is related to a procurement contract. Aero appealed.

The Ninth Circuit affirmed the dismissal. Aero argued that the APA permits any “person suffering legal wrong[s] because of agency action” to seek redress in a federal district court and that the Air Force’s misappropriation of Aero’s trade secret information—in violation of the Trade Secrets Act—was exactly that. The Ninth Circuit disagreed, concluding that the nature of Aero’s claims (misappropriation, not breach of contract) and the relief it sought (an injunction, not damages or specific performance) mattered little. What mattered was the existence of a contract between the contractor and an agency that “related to” the intellectual property at issue.

Under the APA, a private party cannot bring suit when its claims are “impliedly forbidden” by a different statute that vests exclusive jurisdiction with another tribunal. The Ninth Circuit concluded that the CDA “impliedly forb[ade]” Aero’s claims since it was enacted to create a dispute resolution system for claims concerning federal procurement contracts, vesting exclusive jurisdiction of these disputes with [...]

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