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Exploring the latest in intellectual property law
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Sticky Situation? Circumstantial Evidence Can Support Intent to Confuse in Trade Dress Claims

by | Nov 4, 2020 |

The US Court of Appeals for the 11th Circuit reversed a district court’s grant of summary judgment for the defendant on trade dress infringement and trade dress dilution claims, finding that evidence relating to the likelihood of confusion was not viewed in the light most favorable to the plaintiff. However, the Court affirmed the grant of summary judgment for the defendant on the plaintiff’s false advertising claims because the allegedly deceptive advertising was not material to consumer purchasing decisions. J-B Weld Co., LLC v. Gorilla Glue Co., Case No. 18-14975 (11th Cir. Oct. 20, 2020) (Tjoflat, J.) (Carnes, J., concurring).

J-B Weld and Gorilla Glue are competitors specializing in heavy-duty adhesive products. Gorilla Glue introduced an adhesive under the brand name GorillaWeld that mimicked the packaging of a J-B Weld product. Gorilla Glue advertised GorillaWeld as a steel bond epoxy based on the strength of the bond and its similarity to an epoxy-group polymer, even though the product was not a chemical epoxy and did not contain any steel. J-B Weld sued, alleging trade dress infringement based on the Lanham Act and Georgia law, trade dress dilution based on Georgia law, and false advertising under the Lanham Act. The district court granted Gorilla Glue summary judgment on all claims, finding no trade dress infringement or dilution based on insufficient evidence of likelihood of confusion, and no false advertising because the evidence did not demonstrate that Gorilla Glue’s steel bond epoxy claim was material to consumer purchasing decisions. J-B Weld appealed, arguing that the district court did not properly view the evidence in the light most favorable to J-B Weld.

The 11th Circuit reversed on the trade dress infringement and dilution claims and affirmed on the false advertising claim. On the trade dress infringement claims, the 11th Circuit found that the district court did not view the evidence in the light most favorable to J-B Weld in analyzing the likelihood of confusion between the respective trade dress of J-B Weld and GorillaWeld, as required in the context of summary judgment. The 11th Circuit found that the district court did not properly credit evidence relevant to the similarity of the designs, Gorilla Glue’s intent and instances of actual confusion. For example, despite multiple similarities between the J-B Weld and GorillaWeld packages (including a V-shape tube arrangement and the use, emphasis and location of certain text), the district court found that the presence of the Gorilla Glue logo, brand name and color scheme negated a finding of similarity. The 11th Circuit deemed this finding error in the context of summary judgment. The Court also determined that communications from Gorilla Glue’s packaging design team that repeatedly referenced J-B Weld’s packaging and expressed a desire to use similar elements (including a communication in which a Gorilla Glue employee referred to the GorillaWeld design as a “knock off”) were improperly ascribed to innocuous motives based on self-serving testimony from a Gorilla Glue employee. As the Court explained, summary judgment required drawing all inferences in the light [...]

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Trademark Cancellation Is Appropriate Sanction for Misconduct

by | Nov 4, 2020 |

In upholding a grocery store chain’s standing to petition for cancellation of a US trademark registration, the US Court of Appeals for the Federal Circuit affirmed the Trademark Trial and Appeal Board’s (TTAB’s) express authority to impose cancellation of a trademark by default judgment as a sanction in a TTAB proceeding. Corcamore, LLC v. SFM, LLC, Case No. 19-1526 (Fed. Cir. Oct. 27, 2020) (Reyna, J.).

SFM owns US federal trademark registrations for the mark SPROUTS for use in connection with its retail grocery store services. SFM filed a petition to cancel Corcamore’s US trademark registration for the mark SPROUT for use in connection with vending machine services, alleging a likelihood of consumer confusion with SFM’s prior trademark rights. The TTAB denied Corcamore’s motion to dismiss the cancellation petition for lack of standing. Relying on Empresa Cubana del Tabaco v. General Cigar Co., the TTAB confirmed SFM’s standing based on its “real interest” in the cancellation petition and a “reasonable belief of damage” caused by the continued registration of Corcamore’s SPROUT trademark.

Following the TTAB’s denial of its motion to dismiss, Corcamore undertook a series willful, bad-faith procedural maneuvers that resulted in two separate sanctions. When Corcamore’s further procedural misconduct violated both sanctions orders, the TTAB entered default judgment cancelling Corcamore’s SPROUT trademark registration. Corcamore appealed.

On appeal, Corcamore alleged that the TTAB (1) erred in applying Empresa Cubana rather than the Supreme Court of the United States’ Lexmark v. Static Control framework in affirming SFM’s standing, and (2) abused its discretion in granting default judgment as a sanction. On the issue of standing, the Federal Circuit rejected the TTAB’s “unduly narrow” conclusion that the Supreme Court’s Lexmark framework was inapplicable, since Lexmark related to a claim of false advertising under § 1125(a) of the Lanham Act, while Empresa Cubana addressed the right to bring a cancellation proceeding under § 1064. The Federal Circuit concluded that Lexmark applied to § 1064 and § 1125(a) because both are statutory causes of action. Nevertheless, the Court found no meaningful substantive difference between the analytical frameworks for standing expressed in Lexmark and Empresa Cubana, and found that the Lexmark “zone-of-interests” proximate cause analysis and the “real interest” and “reasonable belief of damage” requirements under Empresa Cubana similarly provided a right to bring a cause of action. As such, the Court ultimately agreed with the TTAB’s conclusion that SFM’s pleaded allegations of a likelihood of consumer confusion based on a similarity of the parties’ SPROUTS and SPROUT trademarks, and their respective goods and services, were sufficient to demonstrate a reasonable belief of damage under Empresa Cubana and thus supported the right to challenge Corcamore’s registered trademark via cancellation.

With regard to the TTAB’s grant of default judgment, Corcamore did not challenge the TTAB’s express authority to grant default judgment as a sanction under 37 CFR § 2.120(h) and Fed. R. Civ. P. 37(b)(2). Instead, Corcamore argued that the TTAB had no factual or legal basis to enter default judgment in the first [...]

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Cookie Trade Dress Infringement Case Crumbles in Face of Functionality Challenge

by | Oct 29, 2020 |

The US Court of Appeals for the Third Circuit found that trade dress protection did not extend to the design of a chocolate-dipped, stick-shaped cookie, because the product configuration was useful. Ezaki Glico Kabushiki Kaisha v. Lotte Int’l America Corp., Case No. 19-3010 (3d Cir. Oct. 8, 2020) (Bibas, J.).

Ezaki Glico is a Japanese confectionary company that makes and sells the snack food Pocky, which is a thin, stick-shaped cookie with one side dipped in chocolate (or a flavored cream) and the other uncoated. Pocky cookies have been sold in the United States for more than 40 years, during which time Ezaki Glico obtained two trade dress registrations for the Pocky design and a patent for a “Stick Shaped Snack and Method for Producing the Same.”

In 2015, Ezaki Glico sued its competitor, Lotte, alleging that Lotte’s similarly designed cookie, Pepero, infringed the Pocky trade dress. The district court granted Lotte’s motion for summary judgment, finding the Pocky product configuration functional and therefore not protected by trade dress. Ezaki Glico appealed.

Ezaki Glico argued that the Pocky trade dress is not functional because it is not essential to its design. The Third Circuit disagreed, stating “that test is too narrow.” The Court explained that functionality applies to features that are useful, even if they are not necessarily essential. The Court enumerated four indicators of functionality:

  • Evidence that the feature or design makes the relevant product work better
  • Examples of marketing materials touting the usefulness of the feature or design
  • Existence of a utility patent
  • Availability of other designs.

The Third Circuit found that most of these factors supported the finding of functionality. First, the design makes the product work better because “[e]very feature of Pocky’s registration relates to the practical functions of holding, eating, sharing, or packing the snack.” Ezaki Glico’s advertisements also promoted the functional features of Pocky’s design: they featured phrases such as “convenient design,” “the no mess handle of the Pocky Stick,” and “easier for multi-tasking without getting chocolate on your hand.” Likewise, the Court was unpersuaded by Ezaki Glico’s evidence of alternative designs, finding that “[e]very aspect of Pocky is useful. The nine other designs do not make it less so.”

The existence of the utility patent, however, was not a supporting factor in the functionality analysis. The Third Circuit explained that “the patent’s innovation is a better method for making the snack’s stick shape. The method is useful for making the shape whether or not the shape itself is useful for anything.” Although the district court improperly considered this factor in its analysis, the Third Circuit noted that the misstep was “immaterial” given that the district court ultimately reached the correct conclusion.

Practice Note: It is not necessary for a design feature to be essential for it to be considered functional. Trade dress may be considered functional—and therefore not protectable via trademark law—if it is merely useful to the design.



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Eye Don’t: No Counterfeiting Without Likelihood of Confusion

by | Oct 15, 2020 |

Referring to the act of counterfeiting as “hard core” or “first degree” trademark infringement, the US Court of Appeals for the Ninth Circuit for the first time confirmed that the Lanham Act requires a likelihood of confusion in order for the trademark holder to prevail on a counterfeiting claim. Arcona, Inc. v. Farmacy Beauty, LLC, et al., Case No. 19-55586 (9th Cir. Oct. 1, 2020) (Lee, J.) In doing so, the Court affirmed a grant of summary judgment in favor of defendant Farmacy Beauty in a counterfeiting action brought by skin care brand Arcona.

Arcona’s counterfeiting claims (which remained in the district court action after Arcona requested dismissal of its trademark infringement and unfair competition claims) stemmed from Farmacy Beauty’s use of the term EYE DEW on its skincare products, which Arcona asserted to be counterfeit versions of its eye cream sold in the United States under the registered EYE DEW trademark. The district court, however, found that dissimilar packaging and branding made it “implausible” that consumers would be tricked into believing that Farmacy’s EYE DEW product was actually one of Arcona’s skin care products, and granted partial summary judgment for Farmacy on the counterfeiting claim. Arcona appealed.

Arcona argued that it was not required to show a likelihood of consumer confusion with respect to the parties’ EYE DEW eye creams in order to pursue its trademark counterfeiting claim. The Ninth Circuit starkly disagreed, finding that the plain language of the Lanham Act, 15 USC § 1114, expressly states that likelihood of confusion is a requirement for a counterfeiting claim.

The Ninth Circuit also rejected Arcona’s alternative argument, that there should be a presumption of likelihood of confusion based on the parties’ use of the identical mark EYE DEW. The Court explained that in a claim of counterfeiting—even with identical trademarks—there is no presumption of consumer confusion if the products themselves are not identical. Here, evidence demonstrated that the parties sold their respective EYE DEW products in very different packages, with Arcona’s eye cream being in a “tall, cylindrical, silver bottle encased in a slim, cardboard outer box,” and Farmacy’s eye cream sold in a “short, wide, white jar, along with a squarish outer box.” In reviewing the parties’ respective products as a whole, including prominent displays of the respective house marks FARMACY and ARCONA, as well as differences in packaging, size, color, shape and “all other attributes,” the Court determined that the parties’ products were not identical and that there was no presumption of consumer confusion.

The Ninth Circuit concluded that summary judgment of no counterfeiting was proper because there was no genuine dispute of material fact about the likelihood of consumer confusion factor. The Court acknowledged that the parties’ eye cream products do compete in the same space and in the same geographic markets, but explained that a claim of counterfeiting nevertheless requires that the parties’ marks be “considered in their entirety and as they appear in the marketplace.” Noting that the available evidence demonstrated significant differences between [...]

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Diamonds to Dust? Too Many Factual Disputes Precludes Summary Judgment

by | Aug 26, 2020 |

The US Court of Appeals for the Second Circuit vacated a district court’s summary judgment grant in favor of a fine jewelry producer for trademark infringement, counterfeiting and unfair competition because factual disputes exist around whether the accused infringer’s use of the word “Tiffany” was merely descriptive of a particular ring setting, thereby supporting a fair use defense to infringement. Tiffany and Company v. Costco Wholesale Corporation, Case Nos. 17-2798-cv, -19-338, -19-404 (2nd Cir. Aug. 17, 2020) (Livingston, J.).

In 2012, a Costco customer alerted Tiffany that she believed Costco was selling diamond engagement rings advertised as Tiffany rings. When Tiffany approached Costco about the issue in December 2012, Costco asserted that its point-of-sale displays bearing the Tiffany name referred to the diamond setting styles of its rings, and that other similar point-of-sale displays also identified common ring settings such as “bezel” or “cathedral” settings. Costco also claims that within one week after Tiffany’s December 2012 outreach, it voluntarily removed all uses of “Tiffany” from its jewelry displays and has not since used the word “Tiffany” to identify any rings or setting styles.

Nevertheless, in 2013, Tiffany filed suit against Costco for trademark infringement and counterfeiting under the Lanham Act, and unfair competition in violation of New York state law, based on Costco’s sales of otherwise unbranded diamond engagement rings identified by point-of-sale signs containing the word “Tiffany.” In response, Costco raised the affirmative defense of fair use, arguing that its use of “Tiffany” on certain signage for rings was not as a source-identifying trademark, but merely to describe a particular six-prong diamond setting style. Costco also filed a counterclaim seeking to cancel certain federal trademark registrations for the TIFFANY mark as “generic” for a specific jewelry setting, and not entitled to registered trademark protection.

The district court granted Tiffany’s motion for summary judgment finding Costco liable for trademark infringement and counterfeiting as a matter of law. The district court then revised a jury’s damages award finding that Costco was liable for willful or intentional infringement to the tune of more than $21 million. Costco appealed.

On appeal, Costco argued it had successfully raised a question of material fact as to its liability for trademark infringement and counterfeiting and was entitled to present its fair use defense to a jury. The Second Circuit addressed the lower court’s trademark “likelihood of confusion” assessment under its own Polaroid factors and explained that if a factual inference must be drawn to arrive at a particular finding on a Polaroid factor, and if a reasonable trier of fact could reach a different conclusion, the district court may not properly resolve that issue on summary judgment. Here, the Court determined that Costco raised a triable question of fact as to at least three of the Polaroid factors, namely, (1) whether Costco’s customers were actually confused as to the source or affiliation of its diamond engagement rings, (2) whether Costco adopted Tiffany’s trademark in bad faith and (3) whether the relevant population of consumers was sufficiently [...]

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The Naked Truth About Trademark Cancellation: Only Harm, No Proprietary Interest Required

by | Aug 5, 2020 |

The US Court of Appeals for the Federal Circuit determined that a contracting party that contractually abandoned any proprietary interest in a mark may still bring a cancellation action if it can “demonstrate a real interest in the proceeding and a reasonable belief of damage.” Australian Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, Case No. 19-1567 (Fed. Cir. July 24, 2020) (Reyna, J.) (Wallach, J., dissenting).

Australian sold condoms with the marks NAKED and NAKED CONDOMS, first in Australia in early 2000, then in the United States in 2003. Two years later, Australian learned that Naked TM’s predecessor had registered a trademark NAKED for condoms in September 2003. Australian and Naked TM communicated by email regarding use of the mark for a few years. Naked TM contended that the parties reached an agreement; Australian disagreed and said no final terms were agreed upon. Australian filed a petition to cancel the NAKED trademark registration. Ultimately, and after trial, the Trademark Trial and Appeal Board (TTAB) concluded that Australian lacked standing because it had reached an informal agreement that Naked TM reasonably believed was an abandonment of any right to contest Naked TM’s registration of NAKED. Thus, the TTAB found that Australian lacked a real interest in the proceeding because it lacked a proprietary interest in the challenged mark. Australian appealed.

The Federal Circuit reversed. First, the Court clarified that the proper inquiry was a matter of proving an element of the cause of action under 15 USC § 1064 rather than standing. The Court explained that, contrary to the TTAB’s conclusion, “[n]either § 1064 nor [its] precedent requires that a petitioner have a proprietary right in its own mark in order to demonstrate a cause of action before the Board.” Assuming without deciding that the TTAB correctly determined that Australian had contracted away its rights, the Court found that fact irrelevant. Ultimately, even though an agreement might be a bar to showing actual damages, a petitioner need only show a belief that it has been harmed to bring a petition under § 1064.

The Federal Circuit found that Australian had a reasonable belief in its own damage and a real interest in the proceedings based on a history of two prior applications to register the mark, both of which the US Patent and Trademark Office rejected on the basis that they would have created confusion with Naked TM’s mark. The Court rejected Naked TM’s argument that Australian’s abandonment of those applications demonstrated there was no harm, instead concluding that Australian’s abandonment of its applications did not create an abandonment of its rights in the unregistered mark. Moreover, as a prophylactic rationale, the Court explained that Australian’s sales of products that might be found to have infringed the challenged registration also create a real interest and reasonable belief in harm.

Judge Wallach dissented. Although he agreed that the TTAB erred by imposing a proprietary-interest requirement to bring suit under § 1064, he disagreed that Australian properly demonstrated an alternative, legitimate interest—i.e., a belief [...]

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Supreme Court: “Booking.com” Can Be Registered as Trademark

by | Jul 15, 2020 |

By an 8-1 vote, the Supreme Court rejected a per se rule by the US Patent and Trademark Office (PTO) that a generic word followed by “.com” is necessarily generic and therefore ineligible for trademark protection. U.S. Patent and Trademark Office et al. v. Booking.com BV, Case No. 19-46 (Supr. Ct. June 30, 2020) (Ginsberg, Justice) (Sotomayor, Justice, concurring) (Breyer, Justice, dissenting). In so doing, the Supreme Court found that the proper test for whether “booking.com” is eligible for trademark protection for travel booking services is whether the public perceives “booking.com” as identifying a single source.

Trademarks identify and distinguish the goods and services of a single party, and the Lanham Act establishes a system of trademark registration. Among other requirements for registration, a trademark must be distinctive, as judged along a spectrum of trademark distinctiveness. Distinctive trademarks, in order of most to least strength, include fanciful or made-up words (e.g., KODAK); arbitrary marks that are existing words that have no connection to the underlying goods or services (e.g., CAMEL cigarettes); and then suggestive marks, which require some mental thought to connect them to an attribute of the products or services (e.g., TIDE laundry detergent). Descriptive words are not inherently distinctive (e.g., BEST BUY), but can still be protectable and registerable upon proof of acquired distinctiveness (i.e., secondary meaning) arising from extensive use and advertising by the trademark owner. At the low end of the spectrum of distinctiveness are generic terms, which merely refer to a category or class of goods or services (e.g., wine or art) and are therefore never protectable or registerable as trademarks.

The PTO refused registration for “Booking.com,” citing policy developed from a 132-year-old Supreme Court case which held that the addition of “Company” to a generic word does not render the resulting name (i.e., Generic Company) distinctive.  See Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598 (1888). After the Trademark Trial and Appeal Board (TTAB) affirmed the refusal of registration, Booking.com appealed to the US District Court for the Eastern District of Virginia, which reversed the refusal of registration, finding that “‘Booking.com’—unlike ‘booking’—is not generic. The district court found that the consuming public primarily understands that BOOKING.COM does not refer to a genus, rather it is descriptive of services involving ‘booking’ available at that domain name.”  The US Court of Appeals for the Fourth Circuit affirmed the judgment of the Virginia federal court (IP Update, Vol. 22, No. 3), and the PTO sought certiorari from the Supreme Court.

The Supreme Court granted certiorari (IP Update, Vol. 22, No. 11), and Justice Ruth Bader Ginsberg delivered the opinion of the Court, with which six other justices joined. Justice Sotomayor filed a short concurring opinion, and Justice Breyer dissented. The question under review by the Court was “whether the addition by an online business of a generic top-level domain (.com) to an otherwise generic term can create a protectable trademark.

Both parties in Booking.com agreed that “booking” is generic for the kind of travel [...]

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Knock It Off, Knockoffs? Ninth Circuit Affirms Trade Dress Rights but Not Fame

by | Jul 9, 2020 |

Taking on issues of functionality and fame relating to trade dress rights, the US Court of Appeals for the Ninth Circuit affirmed in part and reversed in part the district court’s judgment after a jury trial on claims of infringement and dilution of trade dress rights in furniture. The Ninth Circuit distinguished utilitarian functionality from aesthetic functionality, and reaffirmed the high burden on the proponent of dilution to establish that the mark has become a “household name.” Blumenthal Distributing, Inc. DBA Office Star v. Herman Miller, Inc., Case Nos. 18-56471, -56493 (9th Cir. June 25, 2020) (Korman, J.).

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More Than a Feeling: No Fees for Frivolous Claim Where “Perceived Wrongs Were Deeply Felt”

by | Jul 1, 2020 | ,

Addressing the appropriateness of the district court’s decision to deny attorneys’ fees relating to a copyright claim it labeled “frivolous,” the US Court of Appeals for the Seventh Circuit affirmed the denial, despite the strong presumption in favor of awarding fees. Timothy B. O’Brien LLC v. Knott, Case No. 19-2138 (7th Cir. June 17, 2020) (Flaum, J).
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