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Supreme Court: Profit Disgorgement Available Remedy for Trademark Infringement, Willful or Not

Resolving a split among the circuits regarding whether proof of willfulness is necessary for an award of a trademark infringer’s profits, the Supreme Court of the United States issued a unanimous decision holding that the plain language of the Lanham Act has never required a showing of willful infringement in order to obtain a profits award in a suit for trademark infringement under §1125(a). Romag Fasteners, Inc. v. Fossil, Inc., et al. Case No. 18-1233 (Supr. Ct. Apr. 23, 2020) (Gorsuch, Justice) (Alito, Justice, concurring) (Sotomayor, Justice, concurring).

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Stratus Update: Federal Circuit Affirms TTAB Refusal to Register Telecoms Mark

The US Court of Appeals for the Federal Circuit affirmed a US Patent & Trademark Office (PTO) Trademark Trial and Appeal Board (TTAB) refusal to register the mark STRATUS over the existing registration for STRATA, finding a likelihood of confusion between the two marks. Stratus Networks, Inc. v. UBTA-UBET Communications, Inc., Case No. 19-1351 (Fed. Cir. Apr. 14, 2020) (Reyna, J.).

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No Disgorgement When Injunction is Sufficient Remedy

Addressing issues related to the disgorgement of profits and attorneys’ fees in a trademark infringement lawsuit, the US Court of Appeals for the Eighth Circuit affirmed a denial of such fees and profits. Safeway Transit LLC and Aleksey Silenko v. Discount Party Bus, Inc., Party Bus MN LLC, and Adam Fernandez, Case No. 18-2990 (8th Cir. Apr. 6, 2020) (Smith, J.).

In 2000, Alex Fernandez started Party Bus MN, which was the first party-bus company in the Twin Cities region. In 2004, Fernandez formed Discount Party Bus Co., LLC (DPB).  Fernandez also used the names “Rent My Party Bus” and “952 Limo Bus” in print advertising before 2008.

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Federal Circuit Confirms Color Marks of Certain “Character” Can Be Inherently Distinctive for Product Packaging

Reviewing a decision from the United States Patent and Trademark Office (“USPTO”) Trademark Trial and Appeal Board, the Federal Circuit vacated and remanded the Board’s refusal to register a trademark consisting of a gradient of multiple colors applied to product packaging, and relied on Supreme Court precedent in concluding that color marks can be inherently distinctive when used on product packaging “depending upon the character of the color design.” In re Forney Industries, Inc., Case No. 2019-1073 (Fed. Cir. Apr. 8, 2020) (O’Malley, J.)[precedential].

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Belt Fastener Trade Dress Conveyed as Invalid for Being Functional

The US Court of Appeals for the Seventh Circuit affirmed a district court finding that a trade dress for a conveyor belt fastener was invalid as functional because its utilitarian advantages were disclosed in patents, advertising materials and internal corporate documents. Flexible Steel Lacing Co. v. Conveyor Accessories, Inc., Case No. 19-2035 (7th Cir. Apr. 7, 2020) (Ripple, J.).

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Hair of the Dog? Squeaker Toy Is Expressive Work

Addressing whether a dog toy meant to humorously evoke a bottle of whiskey was entitled to First Amendment protection, the US Court of Appeals for the Ninth Circuit held that the toy was a protectable expressive work. The Ninth Circuit vacated and remanded the district court’s finding of trademark infringement, reversed the judgment on dilution, and upheld the validity of the whiskey proprietor’s trademark and trade dress rights. VIP Products LLC v. Jack Daniel’s Properties, Inc., Case No. 18-16012 (9th Cir. Mar. 31, 2020) (Hurwitz, J.).

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No Trade Dress Protection for Functional Shape and Color Scheme

Addressing the scope of trade dress protection, the US Court of Appeals for the Fourth Circuit found that the shape and color scheme of a product was functional and therefore only eligible for patent law’s protection of utilitarian inventions. CTB, Inc. v. Hog Slat, Inc., Case No. 18-2107 (4th Cir. Mar. 27, 2020) (Wynn, J.) (Keenan, J. concurring) (Rushing, J. concurring).

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Internet Sales Lead to Personal Jurisdiction Despite No Physical Presence

Addressing the issue of personal jurisdiction in a trademark infringement case, the US Court of Appeals for the Seventh Circuit reversed the district court and concluded that the plaintiff had made a prima facie showing that defendants, who had no physical presence in the forum state, were subject to personal jurisdiction based on sales to consumers through an interactive website. Charles Curry d/b/a/ Get Diesel Nutrition v. Revolution Labs. LLC, Case No. 17-2900 (7th Cir. Feb. 10, 2020) (Ripple, J).

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2019 IP Law Year in Review: European Issues

Executive Summary

The last year of the 2010s has been prolific in terms of important new pieces of legislation and case law within the European Union, and in France and Germany in particular. Indeed, the European Parliament and the EU Council adopted in April 17, 2019, a controversial directive (Directive 2019/790 on copyright and related rights in the Digital Single Market) imposing on online content-sharing service providers—such as YouTube—a new liability system, based on popularity, time and turnover criteria. This directive was created to encourage these service providers to make greater efforts in fighting copyright counterfeiting on their platforms. In France, the PACTE law, which went into force on May 22, 2019, introduced new material changes—namely the strengthening of the French patent office granting procedure (extension of examination scope) and the introduction of patent opposition proceedings before the French patent office. These two legislations greatly influenced EU and French IP law across the year.

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2019 IP Law Year in Review: Trademarks

Executive Summary

Trademark jurisprudence in 2019 may be best summarized in two words: questions and answers. Decisions handed down at the district court level have teed up key questions that are poised to be answered by the United States Supreme Court in the 2020 term—such as the protectability of certain “.com” trademarks, as well as the standard for obtaining particular damages in trademark infringement disputes. For brand owners and trademark practitioners, 2019 will also go down as a year that provided answers to many important questions. For example, on numerous occasions in 2019, the Trademark Trial and Appeal Board answered questions as to whether certain designs or designations have the capability to function as a source-identifying trademark. The United States Patent and Trademark Office (USPTO) answered questions relating to the cannabis industry and how the 2018 Farm Bill would be applied in the review of US trademark applications listing goods or services for CBD products. And, the Supreme Court answered an important question for trademark licensees regarding their rights when a trademark licensor goes bankrupt. This report provides a summary of 2019’s most important questions and answers when it comes to trademark law, and serves as a useful guide for navigating trademark prosecution and enforcement efforts into the year ahead.

Trademarks

  1. Treatment of Generic & Descriptive Marks
  2. Potential Damages Available In Trademark Infringement Cases
  3. Cannabis, CBD, and Trademarks
  4. Trademark Licenses in Bankruptcy

2020 Outlook

As we await further answers to our most pressing trademark questions in 2020, we anticipate that this year will bring unique opportunities to apply traditional tenets of trademark law to modern-day disputes and business considerations. So long as marketing efforts continue to incorporate influencers, short-form and interactive content, artificial intelligence, blockchain technologies, and other initiatives to elevate brand profiles, trademark practitioners and the courts will need to be creative in applying traditional interpretations of relevant trademark laws and policies to trademark protection strategies and infringement disputes. In 2020, the USPTO also will be forced to continue to address the ever-crowded brand space by furthering its crack-down on fraudulent trademark applications, clearing dead weight from the USPTO register, and maintaining its strict registrability and failure-to-function assessments to make room for new and growing brands. Finally, in 2020 and beyond, we expect that trademark considerations will continue to color other legal matters and disputes, including corporate transactions, data ownership and privacy, and bankruptcy and restructuring, thus showing the immense commercial value and power of brands.

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