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Alleged Trademark Infringer Remains Hog-Tied after Appeal

by Paul Devinsky | Feb 3, 2022 | Trademarks

The US Court of Appeals for the Tenth Circuit dismissed an appeal of a district court order denying a stay of a federal action for lack of jurisdiction under 28 U.S.C. § 1291 and reversed in part the district court’s grant of a preliminary injunction. The Trial Lawyers College v. Gerry Spence Trial Lawyers College at Thunderhead Ranch, Case No. 20-8038 (10th Cir. Jan. 27, 2022) (Bacharach, Briscoe, Murphy, JJ.).

The dispute between the parties arose out of a program called The Trial Lawyers College at Thunderhead Ranch in Wyoming. The College’s board of directors split into two factions known as the “Spence Group” and the “Sloan Group.” After the split, the two groups sued each other. The Spence Group sued in state court for dissolution of the College and a declaratory judgment regarding control of the board of directors. The Sloan Group sued in federal court claiming trademark infringement under the Lanham Act.

Both groups sought relief in the federal case. The Spence Group filed a motion to stay the federal court proceedings in light of the state court proceedings, and the Sloan Group requested a preliminary injunction. The district court denied the Spence Group’s stay and granted the Sloan Group’s request for a preliminary injunction. The Spence Group appealed both rulings.

The Tenth Circuit found that it lacked jurisdiction to review the district court’s stay denial. First, the state court resolved the dispute concerning board control, rendering part of the requested stay moot. Second, the Court determined that it lacked jurisdiction over the remaining motion for stay because it was not a final order. The Court explained that it needed to decide the appealability of the ruling based on the category of order rather than the particular facts of the case. The Court found that there was no unsettled issue of unique urgency or importance that warranted the Court exercising jurisdiction over the denial of the stay. Specifically, the Court explained that piecemeal litigation was unlikely because the state court already decided the issue of board control, and the Spence Group did not identify an unsettled issue of unique urgency.

The Tenth Circuit did exercise jurisdiction over the district court’s grant of a preliminary injunction. The Spence Group challenged the district court’s finding of irreparable harm, the order to remove sculptures bearing the College’s name, restrictions on what the Spence Group could say and the consideration of evidence presented after the hearing ended. The Court reviewed the district court’s findings under an abuse-of-discretion standard. The Court found that the district court did not abuse its discretion by finding irreparable harm, considering evidence after the hearing and enjoining the Spence Group from using words associated with the College. The Court explained that the district court reasonably found irreparable harm based on the College’s efforts to protect its name, logo and trademarks, as well as evidence of likely confusion among customers of the College based on the Spence Group’s use of those trademarks. As for the sculptures, the Court found [...]

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Don’t Count Your Lamborghinis Before Your Trademark is in Use

by Sarah Bro | Jul 22, 2021 | Trademarks

The US Court of Appeals for the Ninth Circuit affirmed a grant of summary judgment, finding that a trademark registrant had alleged infringement of its trademark without having engaged in bona fide use of the trademark in commerce, as required by the Lanham Act. The Court found no material issue of fact as to whether the registrant had used the mark in commerce in a manner to properly secure registration, and the alleged infringer therefore was entitled to cancellation of the registration. Social Technologies LLC v. Apple Inc., Case No. 320-15241 (9th Cir. July 13, 2021) (Restani, J., sitting by designation)

This dispute traces back to a 2016 intent-to-use US trademark application filed by Social Technologies for the mark MEMOJI in connection with a mobile phone software application. After filing its application, Social Technologies engaged in some early-stage activities to develop a business plan and seek investors. On June 4, 2018, Apple announced its own MEMOJI software, acquired from a third party, that allowed users to transform images of themselves into emoji-style characters. At that date, Social Technologies had not yet written any code for its own app and had engaged only in promotional activities for the planned software.

Apple’s MEMOJI announcement triggered Social Technologies to rush to develop its MEMOJI app, which it launched three weeks later (although system bugs caused the app to be removed promptly from the Google Play Store). Social Technologies then used that app launch to submit a statement of use for its trademark application in order to secure registration of the MEMOJI trademark. The record also showed that over the course of those three weeks, Social Technologies’ co-founder and president sent several internal emails urging acceleration of the software development in preparation to file a trademark infringement lawsuit against Apple, writing to the company’s developers that it was “[t]ime to get paid, gentlemen,” and to “[g]et your Lamborghini picked out!”

By September 2018, Apple had initiated a petition before the Trademark Trial & Appeal Board to cancel Social Technologies’ MEMOJI registration. Social Technologies responded by filing a lawsuit for trademark infringement and seeking a declaratory judgment of non-infringement and validity of its MEMOJI registration. When both parties moved for summary judgement, the district court determined that Social Technologies had not engaged in bona fide use of the MEMOJI trademark and held that Apple was entitled to cancellation of Social Technologies’ registration. Social Technologies appealed.

Reviewing the district court’s grant of summary judgment de novo, the Ninth Circuit framed its analysis under the Lanham Act’s use in commerce requirement, which requires bona fide use of a mark in the ordinary course of trade and “not merely to reserve a right” in the mark. The issue on appeal was whether Social Technologies used the MEMOJI mark in commerce in such a manner to render its trademark registration valid.

The Ninth Circuit then explained the Lanham Act’s use in commerce requirement, which requires “use of a genuine character” determined by the totality of the circumstances (including “non-sales [...]

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What You Say Can and Will be Used Against You – Prosecution History and Prior Infringement Arguments

by McDermott Will & Emery | Jun 10, 2021 | Patents

Noting patent owner’s prior litigation statements, the US Court of Appeals for the Federal Circuit upheld a district court ruling that a clear and unmistakable disclaimer in the prosecution history affected claim construction of an asserted patent. SpeedTrack, Inc. v. Amazon.com, Inc., Case No. 20-1573 (Fed. Cir. June 3, 2021) (Prost, J.)

In 2009, SpeedTrack filed suit against various online retailers alleging infringement of its patent directed to a method for accessing files in a filing system leveraging “category descriptions” to aid in organizing the files. The patent describes associating category descriptions with files using a “file information directory.” A “search filter” then searches the files using their associated category descriptions. A limitation that “the category descriptions hav[e] no predefined hierarchical relationship with such list or each other” was added during prosecution to overcome a prior art reference that leveraged hierarchical field-and-value relationships.

The district court initially adopted a proposed claim construction that lacked any reference to a field-and-value relationship, noting that the construction “account[ed] for the disclaimers made during prosecution.” Following a motion by SpeedTrack, the court concluded there was still a fundamental dispute about the scope of the claim term. After further analyzing SpeedTrack’s prosecution history, the court concluded that the history “demonstrate[d] clear and unambiguous disavowal of category descriptions based on hierarchical field-and-value systems” and issued a second claim construction order explicitly disclaiming “predefined hierarchical field-and-value relationships” from the scope of “category descriptions.” SpeedTrack subsequently stipulated to noninfringement under the second claim construction and appealed.

On appeal, the Federal Circuit stressed that prosecution-history disclaimer can arise from both claim amendments and arguments. Here, the prosecution history showed that the applicants “repeatedly highlighted predefined hierarchical field-and-value relationships” as a difference between the prior art and the patent claims in no uncertain terms. That SpeedTrack distinguished the prior art on other grounds did not moot its disclaimer statements.

The Federal Circuit also noted that SpeedTrack argued in litigation against another defendant that the purpose of the amendment was to distinguish the category descriptions from attributes that “have a ‘hierarchical’ relationship between fields and their values.” While the Court agreed with SpeedTrack that such litigation statements were not a disclaimer on their own (since they were not the inventors’ prosecution statements), these litigation statements further supported not accepting SpeedTrack’s arguments. The Court reminded SpeedTrack that it has cautioned (in Aylus and Southwall) that “the doctrine of prosecution disclaimer ensures that claims are not ‘construed one way in order to obtain their allowance and in a different way against accused infringers.’”

After assessing SpeedTrack’s prior statements, the Federal Circuit considered whether the disclaimer was clear and unmistakable. The Court concluded it was. In rejecting SpeedTrack’s argument that prior decisions not expressly finding disclaimer supported that prosecution statements were not clear and unambiguous, the Court noted the construction had not been fully considered in those judgments. Similarly, the Court rejected the notion that the district court’s issuance of a second claim construction order showed there was no clear and [...]

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Pardon My French: France Wins Trademark Dispute Using Sovereign Immunity

by Joshua Revilla | Apr 8, 2021 | Trademarks

The US Court of Appeals for the Fourth Circuit reversed a district’s court denial of sovereign immunity under the Foreign Sovereign Immunity Act (FSIA) and remanded the case to be dismissed with prejudice, holding that France was immune from a trademark infringement claim in the United States brought by the former owner of the domain name France.com. France.com, Inc. v. The French Republic, Case No. 20-1016 (4th Cir. Mar. 25, 2021) (Motz, J.)

Jean-Noel Frydman and his company France.com, Inc. (collectively, Frydman) purchased and registered the domain name France.com and trademarked the name in the United States and in the European Union. In 2015, the Republic of France (RoF) intervened in an ongoing lawsuit between Frydman and a third party, asserting the exclusive right to the use of the term “France” commercially. The RoF also insisted that the use of “France” by a private enterprise infringed on its sovereignty. The Paris District Court agreed and ordered the transfer of the domain name to the RoF.

Frydman filed suit for trademark infringement, expropriation, cybersquatting and reverse domain name hijacking, and federal unfair competition in a Virginia district court against the RoF. The RoF moved to dismiss the claim based on the FSIA. The district court denied the motion, stating that the FSIA immunity defense would be best raised after discovery. The RoF appealed.

The Fourth Circuit first determined, based on Supreme Court precedent, that sovereign immunity was a threshold question to be addressed “as near to the outset of the case as is reasonably possible” and not to be postponed until after discovery.

The Court next considered whether the RoF was immune to suit. The FSIA provides a presumption of immunity for foreign states that can only be overcome if the complaint provides enough information to satisfy one of the specified exceptions. Frydman argued that the commercial activity and expropriation exceptions applied.

The commercial activity exception removes immunity where a foreign state has commercial activity in, or that has a direct effect in, the United States. Essentially, a court must determine whether the actions of the foreign state are those of a sovereign or those of a private party engaged in commerce. The Fourth Circuit first identified that the actual cause of the injury at issue to Frydman was the French court’s ruling that the domain name belonged to the RoF, and found that all claims of wrongdoing by the RoF flowed form the French court’s decision. Additionally, even if it was solely the transfer of the domain name that harmed Frydman, and not the French court’s judgment, the transfer was still based on the French court’s judgment that provided the basis for RoF to obtain the domain name. Because the cause of action was based on the powers of a sovereign nation (the foreign judgment) and not the actions of a private citizen in commerce, the Fourth Circuit found that the commercial activity exception did not apply.

The Fourth Circuit next rejected Frydman’s assertion of the expropriation exception. This exception [...]

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Triple Trouble: Unauthorized Trademark Use among Organizations with Nearly Identical Name

by Tim Dunker | Apr 1, 2021 | Trademarks

The US Court of Appeals for the District of Columbia Circuit affirmed a district court ruling that the use of nearly identical marks by a military order, a related foundation and a funding organization was likely to cause confusion. Military Order of the Purple Heart Service Foundation, Inc. v. Military Order of the Purple Heart of the United States of America, Inc., Case No. 19-7167 (DC Cir. Mar. 16, 2021) (non-precedential).

This case involved a dispute among three entities: the Military Order of the Purple Heart of the United States of America, Inc. (Order); the Military Order of the Purple Heart Service Foundation, Inc. (Foundation); and the Military Order of the Purple Heart Service Foundation Holdings, LLC (Holdings). The Order provides charitable services to veterans, and the Foundation funds the Order’s operations. Holdings is owned by the Foundation and licensed the Order to use Holdings’ “Purple Heart” word mark in connection with charitable fundraising for specific approved projects. The funding agreement between the parties was made in 2016, and the use of the trademark was agreed to in 2017. Following a warning from the Foundation in 2018 that the Order’s funding might be reduced for 2019 because of financial problems, the Order began fundraising on its own, at times purposely diverting funds away from the Foundation while using the “Purple Heart” mark without Holdings’ permission.

The Foundation and Holdings sued the Order for breach of the 2016 funding agreement, breach of the 2017 licensing agreement, and trademark infringement. The Order filed its own suit for breach of the funding agreement. The cases were consolidated and the district court ruled that the Order’s use of the mark without permission violated the licensing agreement and two provisions of the Lanham Act. The Order appealed.

The DC Circuit agreed that the Order’s use of Holdings’ mark was in plain violation of the parties’ 2017 agreement. The agreement stated that the Order could use the mark “only in connection with charitable fundraising for specific projects that are approved by [Holdings] and are consistent with [the Order’s] mission statement.” Thus, the Order’s fundraising advertisements using the mark without permission were inconsistent with the agreement.

The DC Circuit also found that the Order’s use of the “Purple Heart” mark was likely to cause confusion. Not only are the names of these entities nearly identical, but the Order’s national commander admitted at trial that the public frequently confuses the Order and the Foundation. Citing its 1982 Foxtrap precedent, the Court concluded that consumer confusion is likely where the marks in issue are identical and the record contains evidence that the businesses are sufficiently related so as to be connected in the mind of the relevant public.

Fifth Circuit Says No Preliminary Injunction in Boozy Beverage Trademark Fight

by Sarah Bro | Dec 17, 2020 | Trademarks

The maker of BRIZZY-brand hard seltzer claimed that consumers would confuse a product branded VIZZY hard seltzer with its own. The United States Court of Appeals for the Fifth Circuit disagreed, however, and affirmed the district court’s denial of the preliminary injunction with an explanation as to how the plaintiff failed to demonstrate a substantial likelihood of success on the merits with respect to its trademark infringement claim. Future Proof Brands, L.L.C., v. Molson Coors Beverage Company, et. al., Case No. 20-50323 (5th Cir. December 3, 2020) (Smith, J.).

With a booming market for hard seltzers and ready-to-drink cocktails, it is no surprise that disputes over brand names of the bubbly alcoholic beverages have followed. After the district court denied Proof Brands’ request for a preliminary injunction against Molson Coors’ entry into that market, Proof Brands appealed. The Fifth Circuit issued a reminder that a preliminary injunction is “an extraordinary remedy which should not be granted unless the party seeking it has clearly carried [its] burden of persuasion,” and reviewed the district court’s denial of Future Proof’s request for an abuse of discretion. The Court further noted that under Planned Parenthood Ass’n of Hidalgo Cnty. v. Suehs, Future Proof must demonstrate four factors to obtain a preliminary injunction, namely: (1) a substantial likelihood of success on the merits, (2) a substantial threat of irreparable injury if the injunction is not granted, (3) that the substantial injury outweighs the threatened harm to the party sought to be enjoined and (4) that granting the preliminary injunction would not disserve the public interest. Concluding that Future Proof was unable to demonstrate a substantial likelihood of success on the merits of its trademark infringement claim, the court did not address the remaining three preliminary injunction factors.

Future Proof argued that in the course of determining whether there was a likelihood of confusion between the BRIZZY and VIZZY trademarks, the district court erred in analyzing the various factors, or “digits,” of consumer confusion used by the Fifth Circuit. The Court tackled each of the “digits” assessing the likelihood of consumer confusion, noting that even with “some errors,” the district court correctly concluded that Future Proof failed to show a substantial likelihood of success on its trademark infringement claim.

Starting with the type or strength of the trademark allegedly infringed factor, the Fifth Circuit disagreed somewhat with the district court and found the BRIZZY mark to be suggestive, rather than merely descriptive of “fizzy” beverages. Nevertheless, the Court noted that suggestive marks—like descriptive marks— are “comparatively weak” for purposes of a confusion analysis, and cited a number of third-party carbonated beverage brands sharing the common “-IZZY-” root to affirm its agreement with the district court that BRIZZY is a weak trademark. With a “weak” mark at issue, the Court found the similarity factor to weigh only marginally in favor of the injunction, especially given key differences between the product packaging and labels for the respective BRIZZY and VIZZY beverages.

Moving on to the defendant’s intent factor, [...]

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Cookie Trade Dress Infringement Case Crumbles in Face of Functionality Challenge

by Eleanor B. Atkins | Oct 29, 2020 | Trademarks

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.

Trademark Claim for Profit Damages Means No Jury Trial

by Jodi Benassi | Jun 11, 2020 | Food, Beverage & Agribusiness, Trademarks

The US Court of Appeals for the Ninth Circuit affirmed a denial of a jury trial demand in a trademark infringement lawsuit where only a claim of disgorgement of profits was at issue. JL Beverage Company, LLC v. Jim Beam Brands Co., Beam Inc., Case No. 18-16597 (9th Cir. May 27, 2020) (Wallace, J.) (Friedland, J., concurring).

JL sued Jim Beam for trademark infringement. JL manufactured and sold vodka in bottles featuring stylized depictions of lips. Jim Beam also sells vodka in bottles featuring stylized depictions of lips. JL alleged that consumers would confuse its “Johnny Love Vodka” lip mark with Jim Beam’s Pucker line of flavored vodka products.

After JL failed to provide a computation of actual damages during discovery, Jim Beam sought to limit the damages JL could seek at trial. The district court found that JL’s failure prevented Jim Beam from preparing a responsive case and granted Jim Beam’s motion to exclude JL’s claims for actual damages. Jim Beam further argued that JL may not recover a royalty because 1) it is not appropriate in situations, like this one, where the parties did not have a previous royalty agreement and 2) as with actual damages, JL never identified a means of calculating a reasonable royalty or produced evidence upon which a fact finder could determine such a royalty. Again, the court agreed, and limited JL’s damage claims to equitable disgorgement of Jim Beam’s profits, as provided under the Lanham Act.

Without claims for actual damages or royalties, Jim Beam moved to strike JL’s demand for a jury trial. Since the Lanham Act does not afford the right to a jury trial, the district court considered whether the Seventh Amendment affords such a right in a trademark dispute. The Seventh Amendment provides that “[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.” The district court found controlling law in Ninth Circuit precedent Fifty-Six Hope Road Music, which held that that the Seventh Amendment does not afford the right to a jury calculation of profits for two reasons: disgorgement is an equitable remedy, and the specific issue of profit determination cannot be said to be traditionally tried by a jury. The district court denied JL’s demand for a jury trial, held a two-day bench trial and ultimately determined that Jim Beam did not infringe JL’s marks. JL appealed the district court’s order granting Jim Beam’s motion to strike its jury trial demand and the district court’s judgment.

The Ninth Circuit affirmed the district court’s order and judgment, finding no error in the court’s likelihood of confusion analysis on any of the factors, nor in its denial of the jury trial.

In a concurring opinion, Judge Friedland wrote separately to address the tension between the Court’s holdings in Fifty-Six Hope Road Music (a trademark case) and Sid & Marty Krofft (a copyright case). In Krofft, the Ninth Circuit found a right to a jury trial in a copyright case where there was only a claim [...]

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2019 IP Law Year in Review: Trademarks

by Eleanor B. Atkins, Rebecca Harker Duttry, Sarah Bro and Paul Devinsky | Feb 6, 2020 | 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

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.

Read full report.

When It’s All In the Family: Reverse Confusion Not a Basis for Broad Trademark Remedies

by Mary Hallerman | Jan 8, 2020 | Trademarks

Addressing reverse confusion and scope of available remedies, the US Court of Appeals for the Seventh Circuit upheld a district court’s refusal to award infringing profits and a broad permanent injunction after a jury found infringement. Fabick, Inc. v. JFTCO, Inc., Case Nos. 19-1760; -0072 (7th Cir. Dec. 9, 2019) (Flaum, J.)

This trademark dispute originates with a family feud. John Fabick, founder of the John Fabick Tractor Company, purchased two Caterpillar equipment dealerships intending for his son, Joe, to operate the dealerships. At the time, the John Fabick Tractor Company had used the mark FABICK in connection with its business. Joe later founded FABCO, which sold Caterpillar equipment and related goods. Eventually, one of Joe’s sons, Jeré, took over FABCO.

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