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Sour Grapes: Winery Minority Ownership Insufficient for Statutory Standing at Trademark Board

The US Court of Appeals for the Federal Circuit affirmed the dismissal of a petition seeking to cancel the registered marks of two wineries, finding the petitioner (a trust owning an interest in a competitor winery) lacked statutory standing under 15 U.S.C. § 1064. Luca McDermott Catena Gift Trust v. Fructuoso-Hobbs SL, Case No. 23-1383 (Fed. Cir. May 23, 2024) (Lourie, Reyna, Chen, JJ.) (en banc). The Court found that while the cancellation petitioner, Luca McDermott, had Article III standing to seek judicial review of the Trademark Trial & Appeal Board’s decision, it did not have statutory standing under the Lanham Act to petition for cancellation of the registrations at issue.

Paul Hobbs is a winemaker and partial owner of California-based Paul Hobbs Winery. The Paul Hobbs Winery owns the registration for the PAUL HOBBS mark in International Class 33 for “Wines.” Luca McDermott and two other related family trusts are each limited partners of the winery, collectively owning more than 21% of the business. Paul Hobbs is also affiliated with two other wineries: Fructuoso-Hobbs, a Spanish winery and owner of the registered mark ALVAREDOS-HOBBS, and New York winery Hillick & Hobbs Estate, owner of the registered mark HILLICK AND HOBBS. Both marks are registered in International Class 33 for “Alcoholic beverages except beers; wines.”

Luca McDermott and the other two family trusts petitioned to cancel both of the registered marks on the grounds of likelihood of confusion, alleging that the use of the ALVAREDOS-HOBBS and HILLICK AND HOBBS marks in connection with wine was likely to cause confusion with the Paul Hobbs Winery’s use of the PAUL HOBBS mark for wine. The trusts also alleged that Fructuoso-Hobbs committed fraud because it caused its lawyer, the same lawyer of record who managed the registration of the Paul Hobbs Winery’s PAUL HOBBS mark, to declare that the marks would not be likely to cause confusion with another mark.

Fructuoso-Hobbs moved to dismiss the petition, arguing that the family trusts were not entitled by statute to bring the cancellation action because they were not the owners of the PAUL HOBBS mark. Fructuoso-Hobbs also argued that the trusts could not show they had the necessary “proprietary interest” to bring the likelihood of confusion claim. The Board granted the motion to dismiss. Luca McDermott, one of the three trusts in the original action, appealed.

Before it could review de novo the Board’s decision regarding the trust’s lack of standing under the Lanham Act, the Federal Circuit addressed whether the trust had Article III standing to seek judicial review of the Board’s decision. The Court had little trouble concluding that the alleged injury (i.e., the diminished value of the trust’s investment in the winery) constituted an individual injury-in-fact, even for a minority partner. Furthermore, the Court found that the causation requirement was satisfied because the constitutional standard did not require proximate causation but only that the injury be “fairly traceable” to the allegedly unlawful registration of the challenged marks. Finally, the Federal Circuit found it [...]

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Foreign Sales to Foreign Customers Are Not Actionable Under the Lanham Act

Issuing a revised opinion following the Supreme Court’s 2023 decision in Abitron Austria GmbH v. Hetronic Int’l, Inc., the US Court of Appeals for the Tenth Circuit determined that none of the defendant’s purely foreign sales to foreign customers can premise liability for the plaintiff’s Lanham Act claims and that any permanent injunction issued against the defendant cannot extend beyond qualifying domestic conduct. Hetronic International, Inc. v. Hetronic Germany GmbH; Hydronic-Steuersysteme GmbH; ABI Holding GmbH; Abitron Germany GmbH; Abitron Austria GmbH; Albert Fuchs, Case Nos. 20-6057; -6100 (10th Cir. Apr. 23, 2024) (Murphy, McHugh, Phillips, JJ.)

Hetronic is a US company that manufactures radio remote controls for heavy-duty construction equipment. Hetronic sued its foreign distributors and licensees (collectively, Abitron) in the US District Court for the Western District of Oklahoma for trademark infringement when, following termination of the Hetronic distribution and license agreements, Abitron reverse-engineered Hetronic’s products and began manufacturing and selling their own copycat products bearing Hetronic’s trade dress (a “distinctive black-and-yellow color scheme”). Abitron’s sales of the copycat products took place primarily in Europe. In the first rounds of this dispute, the district court rejected Abitron’s argument that Hetronic sought an impermissible extraterritorial application of the Lanham Act, and a jury awarded Hetronic $96 million in damages related to Abitron’s global use of Hetronic’s marks. Abitron was also permanently enjoined from using the marks anywhere in the world. Abitron appealed to the Tenth Circuit.

As a matter of first impression, the Tenth Circuit fashioned its own test to determine the extraterritoriality of the Lanham Act, upholding the district court’s ruling but narrowing the injunction to only the countries where Hetronic marketed or sold its products. Abitron appealed to the Supreme Court.

The Supreme Court granted certiorari to resolve a circuit split over the Lanham Act’s extraterritorial reach. Specifically, the Supreme Court was asked to decide whether the Lanham Act applies to “purely foreign sales that never reached the United States or confused U.S. customers” and considered its long-standing presumption against extraterritoriality, with the first step of its analysis consisting of asking whether Congress has “affirmatively and unmistakably instructed” that a particular statute “should apply to foreign conduct.” As the second step, the Supreme Court determined whether a claim seeks a permissible domestic or impermissible foreign application of a statute.

The Supreme Court held that Sections 32(1)(a) and 43(a)(1)(A) of the Lanham Act are not extraterritorial and that the infringing conduct – being “use in commerce” of a trademark – determines the dividing line between foreign and domestic application of the Lanham Act. The Supreme Court vacated the Tenth Circuit’s findings and remanded for further proceedings, instructing the Tenth Circuit to reevaluate which of Abitron’s allegedly infringing activities count as use in commerce under the Supreme Court’s exterritoriality frameworks and to determine on which side of the dividing line Abitron’s conduct falls.

With the Supreme Court having already determined step one, on remand, the Tenth Circuit started with step two of the extraterritoriality analysis and found [...]

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It May Be a Hairy Situation, but Detailed Declaration Sufficient Evidence of Prior Use

The US Court of Appeals for the Federal Circuit affirmed the Patent Trial & Appeal Board’s refusal to register a mark, finding that an unchallenged, detailed declaration by the opposing company’s director sufficed as substantial evidence of prior use. Jalmar Araujo v. Framboise Holdings, Inc., Case No. 23-1142 (Fed. Cir. Apr. 30, 2024) (Lourie, Linn, Stoll, JJ.)

On December 3, 2019, Jalmar Araujo filed an application to register #TODECACHO as a standard character mark for hair combs. Framboise Holdings filed an opposition on the grounds that Araujo’s mark would likely cause confusion with its #TODECACHO design mark (below).

Framboise Holdings alleged that it owned the mark based on its prior use of it in connection with various hair products since March 24, 2017. Framboise also filed its own application for registration of its design mark on April 14, 2020, claiming the same date of first use.

On October 18, 2021, the final day on which Framboise could submit its case in chief to the Board, it moved for a seven-day extension. Four days after filing the motion, it served Araujo with the declaration of Framboise Director Adrian Extrakt. Although it was the testimony of a single interested party, the Board found Extrakt’s declaration alone to be convincing evidence of prior use. His declaration provided a list of products and dates of first use, as well as examples of the mark displayed on products in stores. After the Board sustained the opposition, Araujo appealed.

Araujo argued that the Board abused its discretion in granting Framboise an extension of the trial period, and that the Board’s finding that Framboise established prior use of the #TODECACHO design mark was not supported by substantial evidence. The Federal Circuit disagreed.

The Federal Circuit concluded that the Board had not abused its discretion in granting Framboise an extension because it identified and applied the correct good cause standard and “reasonably found good cause to grant the extension.” The Court also found that the Board was correct in finding that Extrakt’s declaration alone was sufficient evidence to support a priority date of March 24, 2017, based on evidence of the design mark’s use in connection with various hair products. The Court noted that the declaration did not simply consist of “naked general assertions of prior use,” but contained evidence. Araujo neither deposed Extrakt nor offered any evidence to dispute his claims. Hence, Extrakt’s declaration sufficed to meet the applicable preponderance of the evidence standard.

Practice Note: Oral or written testimony, even when offered by an interested party, can establish priority of use in a trademark proceeding if it is sufficiently detailed, is supported by exhibits and is convincing.




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A Lesson in Laches: You Waited Too Long to Start Your Kar

After the district court, on remand, held that laches did not bar relief, the US Court of Appeals for the Third Circuit again determined that the district court abused its discretion by not properly applying the presumption in favor of laches and issued an order to vacate and remand with instructions to dismiss a charity’s trademark infringement claims with prejudice. Kars 4 Kids Inc. v. America Can!, Case Nos. 23-1273; -1281 (3rd Cir. Apr. 17, 2024) (Bibas, Porter, Fisher, JJ.)

Kars 4 Kids and America Can! Cars for Kids are charities that sell donated vehicles to fund children’s education programs and have been engaged in a trademark dispute since 2003. Both parties have alleged federal and state trademark infringement, unfair competition and trademark dilution over their respective KARS 4 KIDS and CARS FOR KIDS trademarks. The parties were last before the Third Circuit in 2021, when the Court held that America Can was first to use its CARS FOR KIDS trademark in Texas, and Kars 4 Kids waived any challenge to the validity of America Can’s marks. In that 2021 decision, the Third Circuit also vacated the district court judgment in part and remanded the case for the district court to reexamine its laches and disgorgement conclusions, which had been decided in favor of America Can.

The Lanham Act does not contain a statute of limitations. Instead, it subjects all claims to the principles of equity. To determine whether laches bars a claim, a court considers two elements: whether the plaintiff inexcusably delayed in bringing suit, and whether the defendant was prejudiced as a result of the delay. With respect to the burden of proof for the laches claim at issue, America Can and Kars 4 Kids agreed that their Lanham Act claims were properly analogous to New Jersey’s six-year fraud statute. Therefore, because America Can first discovered the Kars 4 Kids trademark in Texas in 2003 and did not bring counterclaims until 2015, America Can was subject to a presumption that its claims were barred by laches unless it was able to prove both that its delay in filing suit was excusable and that it did not prejudice Kars 4 Kids.

On the issue of delay, the Third Circuit found that the district court erred because it did not find that America Can met its burden of establishing that its delay in bringing suit was excusable and that a reasonable person in its shoes would have waited to file suit. Instead, the district court improperly placed the burden on Kars 4 Kids to establish whether its advertisements in Texas were viewed by a sufficient number of Texans so as to put America Can on notice. As the Third Circuit explained, this was error. The district court should have held America Can to the burden of persuasion to show that it was not sufficiently aware of Kars 4 Kids’s use of its mark in Texas and to show what it did to identify and stop any potentially [...]

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Hot Mess? Second Circuit Douses Injunction Based on Weak Mark

The US Court of Appeals for the Second Circuit reversed a district court’s grant of preliminary injunction for abuse of discretion based on an erroneous evaluation of the strength of the “inherently descriptive” marks at issue. City of New York v. Henriquez, Case No. 23-325 (2d Cir. Apr. 16, 2024) (Livingston, CJ; Walker, Carney, JJ.)

Juan Henriquez is a first responder with the Fire Department of New York (FDNY). Henriquez began organizing what he called “medical special operations conferences” (MSOCs) around the United States. In New York, he partnered with the FDNY. Six years into organizing with the FDNY, the relationship soured. Henriquez then applied to register “Medical Special Operations Conference” as a trademark. The US Patent & Trademark Office (PTO) rejected his application on the basis that the mark was merely descriptive. Henriquez amended his application under § 2(f) of the Lanham Act, which allows registration of descriptive marks that have been used on a “substantially exclusive and continuous basis” for at least five years. The PTO agreed to register his mark.

The FDNY and the City of New York brought suit, seeking to cancel Henriquez’s trademark. Henriquez counterclaimed for trademark infringement of his registered “Medical Special Operations Conference” mark and the related unregistered mark “MSOC”. The district court granted Henriquez a preliminary injunction and barred the FDNY from using “medical,” “special” and “operations” in its branding. The FDNY appealed.

The FDNY raised two issues on appeal: did the district court abuse its discretion by enjoining the FDNY’s use of the marks, and alternatively, did the district court grant an “overbroad” injunction?

The Second Circuit agreed with the FDNY on the first injunction issue and therefore did not reach the second.

The Second Circuit requires analysis of the eight “likelihood of confusion” factors under Polaroid when considering a preliminary injunction. While no one factor is dispositive, the strength of a mark “is especially important,” and therefore the Court is “reluctant to affirm any preliminary injunction founded upon an erroneous strength analysis.”

The Second Circuit found three “missteps” that led the district court to commit legal error by improperly categorizing Henriquez’s two marks as “at least strongly suggestive,” when in fact the marks were inherently descriptive.

First, the Second Circuit explained that the district court did not properly consider Henriquez’s past concessions about his marks. Henriquez registered his mark under § 2(f) of the Lanham Act – conceding descriptiveness. Henriquez also argued to the district court that both of his marks were valid based on secondary meaning, which is only necessary for descriptive marks. Because “[w]hat parties say about their marks matters,” the district court was wrong to ignore admissions of descriptiveness.

Second, the Second Circuit found that the district court did not properly consider the PTO’s characterization of the marks as descriptive. Courts should “accord great weight to the PTO’s conclusions” and only decline to follow those conclusions “for compelling reasons.” The Court noted that the PTO initially rejected Henriquez’s application and only granted registration under § 2(f), which [...]

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Sole Searching: Trade Dress Hopes Booted as Functional, Nondistinctive

The US Court of Appeals for the Fourth Circuit affirmed a district court’s summary judgment grant in a trademark dispute, finding that the district court did not err in concluding that a subset of design elements lacked distinctiveness in the public’s view. TBL Licensing, LLC v. Katherine Vidal, Director of the United States Patent and Trademark Office, Case No. 23-1150 (4th Cir. Apr. 15, 2024) (Quattlebaum, Gregory, Benjamin, JJ.)

TBL Licensing is commonly known as Timberland, the prominent footwear manufacturer. Timberland tried to register specific design elements of its popular boot as protected trade dress with the US Patent & Trademark Office (PTO). In its application, Timberland provided a detailed written description of the boot design elements it sought to register as protectable trade dress. Timberland also included a drawing of these design elements.

The PTO rejected Timberland’s application, finding that the design was functional and lacked distinctiveness. Timberland appealed to the Trademark Trial & Appeal Board, which affirmed. Timberland then challenged the Board’s decision in the US District Court for the Eastern District of Virginia. The district court granted summary judgment in favor of the PTO because Timberland’s design was functional and had not acquired distinctiveness. Timberland appealed.

Timberland argued that the district court improperly segmented the design during its functionality analysis. Timberland argued that the district court failed to meaningfully consider the design as a whole, and even if it did, the court erred in considering specific factors, including the availability of alternative designs and the design’s simplicity in manufacturing. The court also relied on inapposite patents and advertisements as evidence to support its functionality finding, an analysis that Timberland argued was improper.

The Fourth Circuit affirmed the district court’s decision. While acknowledging the potential error in the district court’s failure to analyze the design holistically, the Court ultimately found that the limited design elements Timberland sought to register lacked secondary meaning – a crucial element for trade dress protection. The Court employed a secondary meaning analysis to assess public perception of Timberland’s design and considered various factors, including advertising expenditures, consumer studies, sales success, unsolicited media coverage, attempts at imitation and length of exclusive use.

Applying each factor, the Fourth Circuit determined that the district court did not clearly err in finding that the design elements lacked distinctiveness. The Court explained that the district court highlighted flaws in Timberland’s consumer survey, noting suggestive questions and a lack of focus on the claimed design features. The district court also emphasized that Timberland’s advertising expenditures did not effectively link the claimed design features with Timberland in consumers’ minds. Timberland’s arguments regarding sales success, media coverage and attempts at plagiarism were also found insufficient to establish secondary meaning. Lastly, the presence of similar-looking boots from other manufacturers undermined Timberland’s claim of exclusivity in using the design.

Lacking direct consumer survey evidence, the Fourth Circuit determined that Timberland’s circumstantial evidence failed to [...]

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ITU Applicants Beware: Federal Courts Have Jurisdiction Over Pending Trademark Applications

The US Court of Appeals for the Ninth Circuit affirmed in part a district court’s ruling in a trademark dispute, upholding its decision to invalidate trademark applications. The Ninth Circuit held that district courts have jurisdiction to alter or cancel trademark applications in an action properly brought under 15 U.S.C. § 1119, and that in the context of challenges to intent-to-use (ITU) applications, proof of a lack of bona fide intent can invalidate. BBK Tobacco & Foods LLP v. Central Coast Agriculture, Inc., Case Nos. 22-16190; -16281 (9th Cir. Apr. 1, 2024) (Hurwitz, Desai, JJ.) (Bumatay, J., dissenting).

BBK sells and distributes smoking-related products with BBK’s “RAW” branding. Central Coast Agriculture (CCA) sells cannabis products using “Raw Garden” branding. BBK filed a complaint against CCA including claims of trademark infringement and a petition to void several ITU trademark applications owned by CCA for lack of a bona fide intent to use the relevant trademarks in commerce. Instead of disputing the merits of BBK’s claims, CCA argued that the district court had no jurisdiction to adjudicate this issue. The district court granted summary judgment in favor of BBK on its claims to invalidate the trademark applications. CCA appealed.

The Ninth Circuit affirmed the summary judgment in favor of BBK on its claims to invalidate CCA’s trademark applications. The Court explained that “when an action involves a claim of infringement on a registered trademark, a district court also has jurisdiction to consider challenges to the trademark application of a party to the action.” The Lanham Act, at 15 U.S.C. § 1119, provides that “[i]n any action involving a registered mark the court may determine the right to registration, order the cancelation of registrations, . . . restore canceled registrations, and otherwise rectify the register with respect to the registrations of any party to the action.” The Lanham Act, at § 1051, defines an application for use of trademark as a “request for registration of a trademark on the principal register.” Because a challenge to an application affects the applicant’s right to the registration, the Court reasoned that § 1119 authorizes a district court to resolve disputes over trademark applications.

The Ninth Circuit held that a “lack of bona fide intent to use a mark in commerce is a valid basis to challenge a trademark application,” aligning with decisions in sister circuits and the Trademark Trial & Appeal Board. An applicant can seek to register a mark if the mark is already being used in commerce or if the applicant has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce. While applicants filing under the ITU provisions may begin the registration process based on a bona fide intent to later use the mark in commerce, the Lanham Act requires such applicants to either subsequently file a verified statement of actual use of the mark or convert their application into a use application. As a result, the Ninth Circuit affirmed the district court’s ruling [...]

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Taking the High Road: Ambiguity Regarding “Versions” of Beer Precludes Summary Judgment

The US Court of Appeals for the Second Circuit affirmed a district court’s summary judgment denial and determination that the definition of “beer” (which encompassed “other versions and combinations” of beer and malt beverages) in a trademark licensing agreement was ambiguous. Cerveceria Modelo de Mexico, S. de R.L. de C.V. v. CB Brand Strategies, LLC, Case No. 23-810 (2d Cir. Mar. 25, 2024) (Cabranes, Wesley, Lohier, JJ.) (nonprecedential).

In 2013, Modelo granted Constellation Brands a perpetual sublicense to use Modelo’s trademarks for Corona and Modelo to sell “beer” in the United States. The sublicense defined “beer” as “beer, ale, porter, stout, malt beverages, and any other versions or combinations of the foregoing, including non-alcoholic versions of any of the foregoing.” Several years later, Constellation launched Corona Hard Seltzer and Modelo Ranch Water, both of which are flavored alcoholic seltzers derived from fermented sugar.

Modelo sued Constellation in 2021, alleging that Constellation’s sales of the “Corona” or “Modelo” branded hard seltzers violated the sublicensing agreement because the license for use of the marks on “beer” did not encompass sugar-based hard seltzers. Modelo moved for summary judgment, which the district court denied after determining that the agreement’s definition of “beer” was ambiguous. At trial, the jury found that Modelo had failed to show that the seltzers were not “beer” under the sublicense definition. Modelo appealed.

Modelo asserted that the district court erred in denying summary judgment, arguing that the agreement’s definition of “beer” was unambiguous and challenged the district court’s jury instructions and exclusion of certain evidence at trial.

The Second Circuit agreed that the term “beer” as used in the agreement was ambiguous. The Court noted that a motion for summary judgment in a contract dispute generally may only be granted when the relevant language has a definite meaning and is unambiguous. Modelo argued that the sublicense plainly excluded the hard seltzers because they were not “beer,” “malt beverages,” or versions or combinations of either. Modelo contended that the term “versions” was limited to beverages with characteristics in common with “beer” and “malt beverages” and would not include “malt-free,” “hops-flavorless” hard seltzers.

The Second Circuit assumed for purposes of the opinion that the plain and ordinary meaning of “beer” and “malt beverages” excluded seltzers but reasoned that Corona Hard Seltzer and Modelo Ranch Water could plausibly be understood as a “version” of either. The Court found Modelo’s limited view of the term “versions” unpersuasive, given that the sublicense allowed for “nonalcoholic versions” of beer and malt beverages, even though dictionary definitions uniformly define “beer” as containing alcohol. Because each party’s reading of “versions” was at least plausible, the Court concluded that the relevant contract language was ambiguous and affirmed the district court’s summary judgment denial.

Modelo also argued that the district court failed to instruct the jury that undefined words should be given their plain and ordinary meaning and improperly instructed the jury to ignore dictionary definitions. The Second Circuit rejected this argument, noting that the instructions properly informed the jury [...]

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PTO Proposes Trademark Application Filing Changes, Fee Adjustments

On March 26, 2024, the US Patent & Trademark Office (PTO) issued a notice of proposed rulemaking in the Federal Register concerning changes to trademark application filings and fee adjustments in trademark cases for 2025. The PTO solicits written comments from the public on the proposed rule changes on or before May 28, 2024. The proposed rules seek to generate sufficient multiyear revenue for trademark operations in future years based on projections described in the notice.

The changes are recommended to support the PTO’s strategic goals and objectives, including optimizing trademark application pendency through the promotion of efficient operations and filing behaviors, issuing accurate and reliable trademark registrations, and encouraging access to the trademark system for stakeholders.

The proposal seeks to incentivize more complete and timely filings, improve prosecution, adjust 31 trademark fees and impose 12 new fees while discontinuing six existing fees. The proposal also seeks to consolidate the present Trademark Electronic Application System (TEAS) filing options (i.e., TEAS Plus and TEAS standard) into a single electronic filing option. The single option would include most of the same requirements as TEAS Plus, while eliminating those under TEAS Standard. The new filing framework would discontinue the previous filing fees and fees for failing to meet the requirements of a TEAS Plus application. Similar to TEAS Plus, however, applicants complying with the proposed requirements in their initial filing would pay the lowest fees.

The proposed fee adjustments would:

  • Set the fee for a base application at $350 using the ID Master List (which is $100 more than the current fee for a TEAS Plus application)
  • Discontinue current fees for filing an application under the Madrid Protocol
  • Require surcharge fees between $100 and $200 for applications that are noncompliant with the base filing requirements
  • Require an additional $200 fee per class for the identification of goods and services entered in the free-form text field to incentivize use of the Trademark ID Manual for such identifications instead
  • Require an additional $200 fee for each additional group of 1,000 characters in the free-form text field; identifications directly from the ID Manual would not incur these fees
  • Increase fees by $50 for filing amendments to allege use (AAU) and statements of use (SOU), with fees being discounted $100 for electronic filings
  • Increase post-registration maintenance fees from $50 to $75
  • Increase the letter of protest fee from $50 to $150.

Regarding the proposed fee adjustments, the notice describes changes to 37 CFR 2.6 and 7.6. The notice further describes changes to 37 CFR 2.22 and 2.71 with respect to base application fees and amendments to correct informalities, respectively.

For further details, see the Federal Register notice.




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All That Glitters: Use of Registered Mark To Describe Watch Color Was Fair Use

The US Court of Appeals for the Second Circuit affirmed a district court’s grant of summary judgement to a luxury-watchmaker defendant, holding that its use of a registered and incontestable trademarked term was fair use because it was used descriptively and in good faith. Solid 21, Inc. v. Breitling U.S.A., Inc., Case No. 22-366 (2d Cir. Mar. 14, 2024) (Wesley, Sullivan, JJ.) (Park, J., dissenting). The case is notable for its analysis of the fair use defense’s good faith prong, which, as the Second Circuit majority notes, “is not litigated frequently.” This was also the element that provoked Judge Park’s dissent, who argued that the majority’s analysis attempts to resolve factual disputes about Breitling’s intentions that should, instead, go to a jury.

“Red gold” and “rose gold” are terms used to describe a gold-copper alloy that causes gold to have a pinkish hue. Sellers of men’s watches sometimes prefer the term “red gold” because “rose gold” sounds effeminate. Solid 21 is a luxury watch and jewelry business that sells a collection of jewelry and watches under the RED GOLD mark, which was registered in 2003 and now has incontestable status. Breitling is a Swiss company that makes and sells luxury watches, some of which it advertises as available in “red gold,” among other color choices. Solid 21 filed a trademark infringement suit against Breitling, alleging that its use of the term “red gold” was “likely to cause confusion, reverse confusion, mistake, and/or deception as to the source” of Breitling’s watches. Breitling moved for summary judgment on the grounds that the term “red gold” was generic, and the trademark registration was invalid, or alternatively, that its use of the term fell under the Lanham Act’s fair use defense, which allows use of a protected mark to describe one’s goods so long as the use is in good faith and not used as a mark.

Initially, the district court denied Breitling’s motion for summary judgment, finding that Breitling could have used terms like “rose gold” to describe its products and thus did not satisfy the descriptive use requirement. However, on reconsideration, the district court decided that the mere existence of alternative terms for the alloy did not preclude summary judgment, and that Breitling’s materials showed clearly that it was using the term “red gold” descriptively to indicate hue. The district court also found that Breitling satisfied the good faith element, even if Breitling was aware of Solid 21’s RED GOLD mark. Solid 21 appealed.

The Second Circuit affirmed, finding that Breitling’s advertising materials clearly showed that it used the term “red gold” as a descriptor for color and not as a mark. The Court rejected the argument that this conclusion as to descriptive use was undermined by the availability of the term “rose gold” as an alternative descriptor and pointed out that Solid 21 bears the risk of some consumer confusion in choosing to trademark a descriptive term that describes a color of metal. Finally, the Court found that Breitling’s use of [...]

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