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Tableware Designer Gets Heavenly Results on Its Pearly Plates

by | Jul 21, 2022 | ,

The US Court of Appeals for the Fifth Circuit reversed a district court decision, reversing the dismissal of a copyright claim based on lack of standing and finding ownership of the copyright in the claimant based on an assignment of that claim. The Fifth Circuit also found that the plaintiff had a protectible trade dress under the Lanham Act based on secondary meaning. Beatriz Ball, LLC v. Barbagallo Co., LLC, Case No. 21-30029 (5th Cir. July 12, 2022) (Jones, Haynes, Costa, JJ.) (per curiam).

Beatriz Ball, the founder of Beatriz Ball, LLC, alleged that Pampa Bay was marketing and distributing products that infringed on Ms. Ball’s registered copyrights and unregistered trade dress for its “Organic Pearl” line of tableware. Ms. Ball brought suit against Pampa Bay in Louisiana federal court, asserting claims for copyright infringement under the Copyright Act and unfair competition under § 43 of the Lanham Act.

Pampa Bay has marketed and distributed products similar to the Organic Pearl collection but made with cheaper materials since 2016. Ms. Ball alleged that Pampa Bay infringed upon her copyright and its unregistered trade dress because the products are confusingly similar and look and feel like the Organic Pearl trade dress in every way. The district court ruled against Ms. Ball, finding that it had not established that its unregistered trade dress acquired “secondary meaning” as is required for protection of an unregistered trade dress under the Lanham Act. The district court further held that Ms. Ball lacked standing to bring the copyright claims as a result of a lack of legal interest because when “Beatriz Ball Collection” transferred ownership in the copyrights to “Beatriz Ball, LLC,” the language of the assignment did not specifically transfer the right to a cause of action for prior infringements predating the assignment. The assignment clause in issue read:

Assignment. Assignor [Beatriz Ball and Beatriz Ball Collection] hereby irrevocably conveys, transfers, and assigns to Assignee [Beatriz Ball, LLC], and Assignee hereby accepts, all of Assignor’s right, title and interest in and to any and all copyrights, whether registered or not and whether or not applications have been filed with the United States Copyright Office or any other governmental body. This assignment expressly includes any and all rights associated with those copyrights.

The district court found that because the assignment did not specifically transfer the assignor’s right to causes of action for prior infringements, the LLC lacked standing to challenge infringements pre-dating the assignment. The district court therefore never reached the merits of the copyright claim.

On appeal, the Fifth Circuit first reviewed the standing issue to determine if the LLC owned the copyrights at the time of the alleged infringement or if the right to vindicate prior infringements had been effectively assigned to Ms. Ball. Reversing the district court’s ruling, the Court concluded that the LLC had standing to bring the suit as the actual copyright holder. The Court reasoned that § 411(b)(1), which provides that a registration with “inaccurate information” can support an infringement action [...]

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No Harm, No Foul: No False Advertisement Where Trade Association Failed to Show Injury

by | Jun 30, 2022 |

The US Court of Appeals for the Tenth Circuit affirmed a district court’s grant of summary judgment in favor of a home inspector association on a false advertising claim brought by a competitor, finding no evidence of injury or harm and explaining that harm could not be presumed merely from the fact that the parties compete for members. Am. Soc’y of Home Inspectors, Inc. v. Int’l Ass’n of Certified Home Inspectors, Case No. 21-1087 (10th Cir. June 14, 2022) (Tymkovich, C.J.; Carson, Rossman, JJ.)

The International Association for Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors (ASHI) are competing national organizations that offer memberships with benefits such as advertising, online education and logo design to independent home inspectors. InterNACHI brought a false advertisement claim under the Lanham Act against ASHI, its sole national competitor, for featuring the slogan “American Society of Home Inspectors. Educated. Tested. Verified. Certified.” on its website. InterNACHI alleged that ASHI’s tagline was misleading because ASHI’s membership includes “novice” inspectors who are not trained or certified. These “novice” inspectors are promoted on ASHI’s online “find-an-inspector” tool, where home buyers can find a local inspector and view their contact information, qualifications and membership level (associate, inspector or certified inspector). According to InterNACHI, ASHI’s misleading slogan coupled with its public promotion of novice members as inspectors caused InterNACHI to lose potential members. The parties filed cross motions for summary judgment. The district court granted summary judgment in favor of ASHI, concluding that InterNACHI failed to show that it was injured by the tagline as required under the Lanham Act. InterNACHI appealed.

InterNACHI argued that the district court incorrectly concluded that no reasonable jury could find that InterNACHI was harmed by the slogan and improperly refused to presume harm from the parties’ relationship as direct competitors. The Tenth Circuit disagreed, explaining that a plaintiff claiming false advertising under the Lanham Act must plead “an injury to a commercial interest in sales or business reputation proximately caused by the defendant’s misrepresentations.” In support of its claim, InterNACHI offered the following:

  • A survey showing that consumers may be deceived by the slogan
  • Data showing an increase in ASHI associate membership following implementation of the slogan
  • A declaration by InterNACHI’s founder attesting to the harm caused to InterNACHI as a result of ASHI’s slogan.

The Tenth Circuit reasoned that consumer confusion does not bear on whether home inspectors are more likely to join ASHI instead of InterNACHI because of the slogan. The Court also declined to infer harm from ASHI’s increase in associate membership, which was likely attributable to other factors, such as the institution of reduced student membership fees or the closure of another national association for home inspectors around the time the slogan was introduced. The Court further noted that inspectors can join both organizations and that InterNACHI had not shown that its own membership levels decreased because of ASHI’s slogan. With respect to the declaration by InterNACHI’s founder that “use of th[e] slogan in connection [...]

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Wild and Untamed Trademarks: Madrid Protocol Grants Right of Priority as of Constructive Use Date

by | Apr 28, 2022 |

Addressing for the first time the question of enforceability of a priority of right in a trademark granted pursuant to the Madrid Protocol where the registrant’s actual use in commerce began after the allegedly infringing use, the US Court of Appeals for the Ninth Circuit found that the Madrid Protocol grants priority as of the constructive use date, but to prevail on an infringement action based on that superior right of priority, the registrant must still establish the requisite likelihood of confusion under the Lanham Act. Lodestar Anstalt v. Bacardi & Co., Case No. 19-55864 (9th Cir. Apr. 21, 2022) (Baldock, Berzon, Collins, JJ.)

Under the Madrid Protocol, applicants with trademarks in another country may obtain an “extension of protection” (generally equivalent to trademark registration) in the United States without needing to first use the mark in US commerce. Instead, the grant may be based on an applicant’s declaration of bona fide intent to use its mark in the United States.

In 2000 and 2001, Lichtenstein-based company Lodestar developed a brand of Irish whiskey called “The Wild Geese,” which was marketed in the US as “The Wild Geese Soldiers & Heroes.” Around 2008 and 2009, Lodestar developed the idea for the “Untamed” word marks, and in 2009 the US Patent & Trademark Office (PTO) accepted for filing two applications on behalf of Lodestar seeking extension of protection under the Madrid Protocol for the internationally registered “Untamed” word marks. The PTO published the marks for opposition, then granted the extensions of protection in 2011. In 2013, Lodestar developed a rum under The Wild Geese Soldiers and Heroes brand that used the Untamed word mark on the label. The rum was shown at the April 2013 Rum Renaissance Trade Show in Florida, where consumers sampled the rum. The rum was also featured in print advertisements associated with the trade show. But by June 2013, Lodestar had “decided to park the USA rum project as [it was] getting better returns in other markets.”

In 2012, Bacardi began developing the ad campaign “Bacardi Untameable.” Before launching the campaign, Bacardi ran a trademark clearance search that turned up Lodestar’s “Untamed” trademarks. From 2013 to 2017, Bacardi ran its “Bacardi Untameable” campaign. In response, Lodestar began promoting a then-nonexistent product “Untamed Revolutionary Rum” in an effort “to complement the Wild Geese Rum and also to combat Bacardi’s attempts to take over our Untamed mark.” In January 2015, the first Untamed Revolutionary Rum was sold to US retailers. In August 2016, Lodestar sued Bacardi for trademark infringement, arguing injury based on reverse confusion, as well as associated claims for unfair competition. The district court granted summary judgment in favor of Bacardi. Lodestar appealed.

The Ninth Circuit found that the district court erred on the threshold question of whether Lodestar’s Revolutionary Rum should be considered in the analysis of likelihood of confusion. The district court had found that the relevant products were those existing prior to launch of Bacardi’s campaign (excluding the later-created Revolutionary Rum). The Court found [...]

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First Sale Defense Bars Trademark Infringement Where Trademarked Component Is Adequately Disclosed

by | Apr 14, 2022 |

A US Court of Appeals for the Ninth Circuit panel vacated a grant of summary judgment in favor of the plaintiff, holding that the first sale doctrine applies when a trademarked product is incorporated into a new product. Bluetooth SIG Inc. v. FCA US LLC, Case No. 21-35561 (9th Cir. Apr. 6, 2022) (per curiam).

Bluetooth SIG administers standards for Bluetooth technology. SIG owns and licenses the trademarks below to product manufacturers:

Fiat Chrysler Automobiles (FCA) makes cars that contain Bluetooth-equipped head units. The head units are made by third-party suppliers that have been qualified by SIG, but FCA has not taken steps to qualify the Bluetooth capabilities in its cars. FCA uses the SIG trademarks on its head units and publications.

SIG sued FCA under the Lanham Act for trademark infringement. In its defense, FCA asserted the first sale doctrine. Under the doctrine, the right of a producer to control the distribution of its trademarked product does not extend past the first sale of the product. For example, a purchaser who stocks, displays and resells a producer’s product under a producer’s trademark violates no trademark rights under the Lanham Act. The district court granted partial summary judgment for SIG on the first sale issue, finding that the first sale doctrine was inapplicable because FCA’s conduct went beyond “stocking, displaying, and reselling a product.” FCA appealed.

The Ninth Circuit found that the lower court erred when it took a narrow view of the Ninth Circuit’s 1995 decision in Sebastian Int’l, Inc. v. Longs Drugs Stores Corp., in which the Court stated that “it is the essence of the ‘first sale’ doctrine that a purchaser who does no more than stock, display, and resell a producer’s product under the producer’s trademark violates no right conferred upon the producer by the Lanham Act.” The panel noted that the Sebastian Court never purported to articulate the outer bounds of the first sale doctrine; instead it simply captured the unauthorized resale of genuine goods.

The Ninth Circuit explained that the first sale doctrine also applies when a trademark is used to refer to a component incorporated into a new end product as long as the seller adequately discloses how the trademarked product was incorporated. The Court cited to the 1925 Supreme Court precedent in Prestonettes, Inc. v. Coty, which effectively extends the first sale doctrine beyond the examples stated in Sebastian. In Prestonettes, the Supreme Court held that trademark law did not prohibit a manufacturer from using a trademark, not to indicate the goods, but to say that the trademarked product was a component in a product being offered as new and changed. The Ninth Circuit also noted its 1998 holding in Enesco Corp. v. Price/Costco, in which it found that the first sale doctrine protected a retailer that resold dolls in allegedly inadequate packaging to the extent the repackaging was disclosed. The Enesco Court explained that if the public was adequately informed that [...]

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Half-Baked Case: No Misappropriation or False Advertising Given Over-Broad Allegations

by | Mar 31, 2022 | ,

The US Court of Appeals for the Tenth Circuit affirmed a district court’s grant of summary judgment in favor of a defendant baker on a trade dress infringement claim and reversed the district court’s denial of the defendant baker’s motions for judgment as a matter of law on trade secrets misappropriation and false advertising claims. Bimbo Bakeries USA, Inc. v. Sycamore, Case Nos. 18-4062; -4031; -4040 (10th Cir. Mar. 18, 2022) (Hartz, Phillips, Eid, JJ.)

Bimbo Bakeries (and its predecessor, EarthGrains Baking Companies) owns, bakes and sells Grandma Sycamore’s Home-Maid Bread, a popular bread in Utah. U.S. Bakery is a competitor, and Leland Sycamore is the baker who developed the Grandma Sycamore’s recipe. Sycamore parted with his interest in Grandma Sycamore’s and opened his own bakery, Wild Grains Bakery. U.S. Bakery hired Wild Grains Bakery to produce another homemade bread product, Grandma Emilie’s. The relationship soured, and U.S. Bakery moved its Grandma Emilie’s operations in-house. U.S. Bakery developed a new formula for Grandma Emilie’s and enlisted a former Wild Grain employee to help. U.S. Bakery also created packaging for the bread based on Grandma Sycamore’s packaging. U.S. Bakery used several taglines to help sell its products, including “Fresh. Local. Quality.”

Bimbo Bakeries (then EarthGrains) sued Leland Sycamore, Tyler Sycamore (Leland’s son and co-baker), Wild Grains Bakery and U.S. Bakery, alleging multiple claims related to the Grandma Emilie’s operations, including trade secret misappropriation under the Utah Uniform Trade Secrets Act and trade dress infringement, trade dress dilution, false designation of origin, false advertising and unfair competition under the Lanham Act. Bimbo Bakeries alleged that U.S. Bakery’s use of the word “local” in the tagline “Fresh. Local. Quality.” constituted false or misleading advertising because U.S. Bakery did not actually bake all its bread products within the state of sale. The district court granted summary judgment in favor of U.S. Bakery on the trade dress infringement claim. The parties went to trial on the trade secrets misappropriation and false advertising claims. The jury ruled in Bimbo Bakeries’ favor on both and awarded more than $2 million in damages. The district court increased the damages owed by U.S. Bakery by almost $800,000 because U.S. Bakery was found to have willfully and maliciously misappropriated Bimbo Bakeries’ trade secret. The district court remitted the jury’s damages for the false advertising claim to around $83,000. The district court also permanently enjoined U.S. Bakery and Sycamore from using Bimbo Bakeries’ trade secret and denied renewed motions by U.S. Bakery and Sycamore for judgment as a matter of law for the trade secrets misappropriation and false advertising claims.

Bimbo Bakeries, U.S. Bakery and Sycamore appealed. Bimbo Bakeries argued that the district court should not have granted U.S. Bakery summary judgment on its trade dress infringement claim and should not have remitted damages for the false advertising claim. U.S. Bakery and Sycamore argued that the district court should have granted their renewed motions for judgment as a matter of law for the trade secrets misappropriation and false advertising claims.

On [...]

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“TRUMP TOO SMALL” Trademark Decision Leaves Big Questions

by | Mar 10, 2022 |

Revisiting jurisprudence touching on the Lanham Act and the First Amendment from the Supreme Court’s decisions in Matal v. Tam and Iancu v. Brunetti, the US Court of Appeals for the Federal Circuit held that applying Sec. 2(c) of the Lanham Act (which bars registration of a trademark that consists of or comprises a name of a particular living individual without their written consent) may, in certain instances, unconstitutionally restrict free speech in violation of the First Amendment. In this instance, the Federal Circuit found that the Trademark Trial & Appeal Board’s (Board) refusal to register the trademark “TRUMP TOO SMALL” for use on t-shirts involved content-based discrimination that was not justified by a compelling or substantial government interest. In re: Steve Elster, Case No. 20-2205 (Fed. Cir. Feb. 24, 2022) (Dyk, Taranto, Chen, JJ.)

Steve Elster filed a US trademark application in 2018 for the mark “TRUMP TOO SMALL” (a reference to a 2016 Republican presidential primary debate exchange between then- candidate Donald Trump and Senator Marco Rubio (R-FL)) for use on shirts. The US Patent & Trademark Office (PTO) examining attorney, and subsequently the Board, refused registration of the mark on grounds that it clearly referred to former President Trump, and that Elster did not have written consent to use former President Trump’s name in violation of Sec. 2(c) of the Lanham Act. Sec. 2(c) requires such consent when a trademark identifies a “particular living individual.” Elster argued that his trademark aimed to convey that some features of former President Trump and his policies were diminutive and appealed the Board’s holding that Sec. 2(c) is narrowly tailored to advance two compelling government interests, namely, protecting an individual’s rights of privacy and publicity and protecting consumers against source deception.

The Federal Circuit started with a brief primer on relatively recent decisions in which the Supreme Court found certain provisions of Sec. 2(a) to be improper viewpoint discrimination because they barred registration of trademarks that were disparaging or comprised of immoral or scandalous matter. The Federal Circuit found that while neither Tam nor Brunetti resolved Elster’s appeal pertaining to Sec. 2(c), the cases did establish that a trademark represents private, not government, speech entitled to some form of First Amendment protection, and that denying a trademark registration is akin to the government disfavoring the speech being regulated. The Court then examined whether Sec. 2(c) could legally disadvantage the specific “TRUMP TOO SMALL” speech at issue in Elster’s case, and whether the government has an interest in limiting speech on privacy or publicity grounds if that speech involves criticism of government officials.

The Federal Circuit did not decide the matter on whether a trademark is a government subsidy, avoiding the somewhat varying opinions of the Supreme Court on that issue. Instead, the Federal Circuit found that Elster’s mark constituted speech by a private party for which the registration restriction must be tested by the First Amendment. Regardless of whether strict or intermediate scrutiny is applied [...]

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Alleged Trademark Infringer Remains Hog-Tied after Appeal

by | Feb 3, 2022 |

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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Can’t Presume Personal Jurisdiction Exists When Challenged

by , and | Feb 3, 2022 |

The US Court of Appeals for the First Circuit affirmed a district court order dismissing a trademark infringement case for lack of personal jurisdiction, finding that if challenged, personal jurisdiction cannot be assumed into existence. Motus, LLC v. CarData Consultants, Inc., Case No. 21-1226 (1st Cir. Jan. 18, 2022) (Lynch, Selya, McConnell, JJ.)

Motus is a Delaware corporation headquartered in Boston, Massachusetts. CarData is a Canadian corporation with offices in Colorado, New York and Toronto. Both Motus and CarData offer tools for companies to manage employee expense reimbursement. Motus asserted a trademark over the phrase “corporate reimbursement services,” which was present in the meta title of CarData’s website. In November 2019, Motus asked CarData to remove the phrase from its website, and CarData did so within three days.

Motus nevertheless filed a federal lawsuit in the District of Massachusetts asserting Lanham Act claims for trademark infringement, trademark dilution and other state and federal causes of action. CarData moved to dismiss for lack of personal jurisdiction, among other grounds. The district court granted the motion to dismiss, finding that Motus failed to demonstrate either the existence of personal jurisdiction over CarData or that discovery into CarData’s jurisdictional claims were warranted. Motus appealed.

On appeal, the First Circuit reiterated that Motus bore the burden of demonstrating that the district court’s exercise of personal jurisdiction over CarData was proper, noting that although a plaintiff is not required to plead facts sufficient for personal jurisdiction, “it must—if challenged—ensure that the record contains such facts.” To demonstrate that personal jurisdiction over CarData was proper, Motus had to show that CarData had sufficient “minimum contacts” with the forum that were sufficiently related to the matter at issue and evidenced a “purposeful availment of the privilege of conducting business in the forum,” and also had to show the reasonableness of the exercise of personal jurisdiction in that forum. Motus argued that CarData had sufficient “minimum contacts” with Massachusetts for personal jurisdiction to lie there, primarily because CarData had offices elsewhere in the United States and because CarData maintained a website that was available to serve Massachusetts residents.

Given that Motus’s arguments for personal jurisdiction related primarily to the publicly available nature of CarData’s website to residents of Massachusetts, the First Circuit explained that “[i]n website cases we have recognized that the ‘purposeful availment’ element often proves dispositive.” Here, the Court found nothing in the record suggesting that CarData specifically targeted or did business with Massachusetts residents. The Court rejected Motus’s citation to informational content on the website because it was not specific enough to evidence intentional solicitation of business from any particular state. Nor was there evidence of substantial CarData revenue from Massachusetts. Thus, the Court found that there was no “purposeful availment.”

Finally, the First Circuit affirmed the district court’s denial of jurisdictional discovery into CarData’s “minimum contacts” with Massachusetts. The Court found that although Motus mentioned the availability of jurisdictional discovery in a single sentence in a footnote to its opposition to CarData’s motion to [...]

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Appeal Shuttered for Lack of Finality

by | Jan 27, 2022 |

The US Court of Appeals for the Eighth Circuit held that it lacked jurisdiction under 28 U.S.C. § 1291 and therefore dismissed an appeal of a district court decision staying a federal action pending state court litigation between the parties. Window World Int.’l, LLC et al. v. O’Toole et al., Case No. 21-1108 (8th Cir. Jan. 7, 2022) (Loken, Colloton, Benton, JJ.).

Window World International owns registered trademarks for the marketing of exterior remodeling products, such as custom-made vinyl windows. Window World distributes products through 200 independently owned and operated franchisees, including Window World of St. Louis, Inc. and Window World of Springfield-Peoria, Inc., companies co-owned by James T. Lomax III (collectively, the Lomax parties). Window World sublicenses its franchisees to use its trademarks.

In January 2015, the Lomax parties and other Window World franchisees sued Window World in the North Carolina Business Court. The Lomax parties alleged that Window World failed to make franchise disclosures required by federal and state law. They also asserted claims of fraud and breach of contract. In April 2019, the Lomax parties sent letters to Window World customers making several misrepresentations about Window World’s product warranty. Window World commenced action in federal court, asserting causes of action under the Lanham Act for false advertising, trademark infringement, unfair competition and dilution of a famous mark.

The Lomax parties moved to dismiss for failure to state a claim or stay the federal action pursuant to the Supreme Court’s 1976 decision in Colorado River Water Conservation Dist. v. US, which held that the interests of effective judicial administration may lead a federal court to reject taking jurisdiction in a case involving a concurrent state proceeding. Window World opposed the dismissal and stay requests. The district court dismissed several of Window World’s claims but ruled that it had a plausible trademark infringement and unfair competition claim and denied dismissal as to those claims. The district court also stayed the federal action pending determination of the scope of the claims regarding the protected marks in the North Carolina litigation. Window World appealed.

The Eighth Circuit found that the issued stay order was neither a final order under 28 U.S.C. § 1291 nor a collateral interlocutory order that may be appealed. As a result, the Court dismissed the appeal for lack of jurisdiction. In doing so, the Court explained that an order staying civil proceedings is interlocutory and not ordinarily a final decision for purposes of § 1291. However, if the stay effectively ends the litigation, then the order is final and jurisdiction under § 1291 is proper. Here, the Court concluded that the lower court’s stay was not a final order because the order contemplated further litigation in federal court. Additionally, the stay was not a final order merely because it had the practical effect of allowing a state court to be the first to rule on common issues. Therefore, the Court concluded that the stay order was not appealable as a final order and dismissed the appeal.



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Big Little Lies: Guidelines for Challenging Trademark Acquired Distinctiveness Claims

by | Dec 2, 2021 |

For the second time, the US Court of Appeals for the Federal Circuit examined the standard for demonstrating fraud in a party’s claim of a trademark’s acquired distinctiveness for purposes of registration under Section 2(f) of the Lanham Act. The Federal Circuit found that a party challenging an applicant’s Section 2(f) claim based on substantially exclusive use of that trademark does not need to establish secondary meaning in its own mark to undercut the applicant’s claim of substantially exclusive use. The Court also found that use of the mark by any party, regardless of its relationship to the challenger, may undercut a trademark applicant’s claim of substantially exclusive use. Galperti, Inc. v. Galperti S.R.L., Case No. 21-1011 (Fed. Cir. Nov. 12, 2021) (Taranto, J.)

Galperti S.R.L. (Galperti-Italy) filed a US trademark registration for the mark GALPERTI in 2008. In an effort to overcome the US Patent and Trademark Office’s (PTO) initial refusal to register the trademark as “primarily merely a surname” (and therefore not registrable unless the mark has become distinctive of the applicant’s goods in commerce), Galperti-Italy asserted acquired distinctiveness of the GALPERTI mark under Section 2(f) and stated that the mark had become distinctive of Galperti-Italy’s metal hardware goods through its substantially exclusive and continuous use in commerce for the five years prior to the trademark registration. In 2013, Galperti-USA, a US company unrelated to Galperti-Italy that operates in the similar business of metal flanges and related products, petitioned to cancel Galperti-Italy’s registration on various grounds, including fraud in Galperti-Italy’s claim of substantially exclusive use of the GALPERTI trademark during the years 2002 – 2007. Galperti-USA claimed that it and other third parties also used the mark during that time, undercutting Galperti-Italy’s “substantially exclusive use” claims.

The Trademark Trial and Appeal Board (Board) rejected Galperti-USA’s cancellation claims, including the fraud claim. Galperti-USA filed its first appeal, and the Federal Circuit vacated the Board’s determination that Galperti-USA failed to prove the falsity of Galperti-Italy’s Section 2(f) claim. The Court remanded to the Board to assess whether the other uses of GALPERTI noted by Galperti-USA were significant or inconsequential, which would impact the proof of falsity of Galperti-Italy’s representations to the PTO. On remand, the Board again found that Galperti-USA failed to prove significant—rather than inconsequential—uses of GALPERTI between the years 2002 – 2007 so as to make Galperti-Italy’s representations of “substantially exclusive use” false. Galperti-USA filed its second appeal.

In this appeal, Galperti-USA challenged the Board’s conclusions that (1) Galperti-USA had to show that it acquired secondary meaning in its own GALPERTI trademark during the relevant time period, and (2) Galperti-USA could not undercut Galperti-Italy’s claims of substantially exclusive use with evidence of use by third parties with no privity to Galperti-USA. The Federal Circuit determined that both of the Board’s premises for its fraud analysis were incorrect as a matter of law, and it was therefore unclear whether the Board’s determination was affected by these errors. Taking a closer look at the Board’s conclusions, the Court found that [...]

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