IP Law Chat

Postage Stamp Depicting Portion of Korean War Veterans Memorial Not Fair Use of Sculpture

Stacia Lay — Fri, 26 Feb 2010 11:29:53 -0800

Through a fairly involved process (described in detail in the Federal Circuit's opinion), the plaintiff, Frank Gaylord, a nationally-recognized sculptor, was selected to create a sculpture for the Korean War Veterans Memorial in Washington, D.C. Ultimately, he created 19 stainless steel statues for the Memorial that represented a platoon of foot soldiers in formation that was referred to as The Column. Gaylord received five copyright registrations relating to the soldier sculptures.

In 1995, photographer John Alli took a number of photographs of the Memorial as a retirement gift for his father, a veteran of the Korean War. Some years later, Alli's photograph of the Memorial was selected to be used on a 37-cent stamp commemorating the 50th anniversary of the armistice of the Korean War to be issued by the Postal Service. The Postal Service paid Alli $1500 for the use of his photograph. It did not seek nor obtain Gaylord's permission to use The Column in the stamp. The Postal Service received more than $17 million from the sale of almost 48 million stamps before the stamp was retired on March 31, 2005.

Gaylord then sued the government in 2006, alleging copyright infringement of his copyright in The Column.

At trial, the government made several arguments: (1) that the stamp made fair use of Gaylord's work; (2) that it was a joint author of the work, which gave it an unlimited license in the work; and (3) that the stamp fell under the exclusion from copyright infringement liability for architectural works under the Architectural Works Copyright Protection Act.

The Court of Federal Claims disagreed with the government on two of its three arguments, finding that Gaylord was the sole copyright owner and that the work was not an "architectural work" under the AWCPA. The Court agreed, however, that the government was not liable for copyright infringement because it had made fair use of the work.

The Federal Circuit affirmed the trial court's conclusions that the government did not have rights as a joint owner of the work and that the work was not subject to the AWCPA. It parted ways with the trial court on the issue of fair use, however, concluding that the factors did not favor fair use and that "allowing the government to commercially exploit a creative and expressive work will not advance the purposes of copyright in this case."

The Federal Circuit found that the purpose and character of the stamp, including the fact that the stamp clearly had a commercial purpose, the expressive and creative nature of Gaylord's work and the fact that Gaylord's work was the focus ("essentially the entire subject matter") of the stamp did not favor a finding of fair use. The only factor working in favor of fair use was the trial court's conclusion, upheld on appeal, that the stamp had not and would not adversely impact Gaylord's efforts to market derivative works of The Column.

Circuit Judge Newman dissented from the majority opinion, arguing that:

[t]he use for governmental purposes of a photograph of the Korean War Veterans Memorial, a public monument that was designed and built with public money, is unambiguously covered by the contract and statutes under which this Memorial was built. The court errs in its holding that Mr. Gaylord is entitled to damages for copyright infringement.

The majority and dissenting opinions in Gaylord v. United States, No. 2009-5044 (Fed. Cir. Feb. 25, 2010) can be found here (PDF, 36 pgs).

Recent Trademark Filings in the Western District of Washington

Stacia Lay — Wed, 24 Feb 2010 10:24:24 -0800

Checking back in with the happenings in the Western District of Washington, following are brief descriptions of a few of the recent trademark-related claims filed in the Court:

Deloitte Touche Tohmatsu v. Anselmi, No. CV10-00220 RSL, filed Feb. 5, 2010

Deloitte Touche Tohmatsu, a Swiss Verein, alleges that Roberto Anselmi's registration of the domain name rsudeloitte.org and posting of a website at that address violated Deloitte's rights in its "DELOITTE" and "DELOITTE & TOUCHE" marks. Anselmi, an individual alleged to have a mailing address in Italy, was alleged to have registered the domain name with eNom, Inc., a Washington corporation with a principal place of business in Bellevue, Washington. Deloitte alleges a single cause of action for violation of the Anticybersquatting Consumer Protection Act, Section 43(d) of the Lanham Act.

A copy of the complaint, including exhibits, here (PDF, 22 pgs).

S.H. Inc. v. The Law Society, No. CV10-00248 MJP, filed Feb. 9, 2010

S.H. Inc., a Belize corporation, alleges a claim for "reverse hi-jacking" under the Anticybersquatting Consumer Protection Act of the Lanham Act against The Law Society, an entity located in London, in connection with the domain name lawsociety.org. S.H. Inc. seeks, in part, an order enjoining transfer of the domain name (which appears to have been ordered following a UDRP claim filed by The Law Society) and a declaration that S.H. Inc. is the lawful registrant of the domain name.

A copy of the complaint here (PDF, 6 pgs).

Ball & Chain LLC v. Random House, Inc., No. CV10-00235 MJP, filed Feb. 10, 2010

Ball & Chain LLC, a Washington limited liability company, alleges that Random House, Inc. has infringed its trademarks "BEDROOM BUCKS" and "IOU" by using identical marks in connection with competing coupon books. Ball & Chain alleges claims for federal trademark infringement, false designation of origin, and state law unfair competition.

A copy of the complaint here (PDF, 9 pgs).

Choice Advisory Servs., Inc. v. Choice Connections, Inc., No. CV10-00311 TSZ, filed Feb. 22, 2010

Choice Advisory Services, Inc., a Washington corporation that provides retirement-related services, alleges that Choice Connections, Inc., a Michigan corporation and related defendants that provide a senior housing advisory service, infringed its rights in the "CHOICE" mark by using that mark in connection with identical and closely related products and services and by incorporating the mark in domain names. Choice Advisory alleges claims for federal trademark infringement and for infringement and unfair competition under state law.

A copy of the complaint here (PDF, 9 pgs).

Unfinished works of art and the Visual Artists Rights Act

Stacia Lay — Thu, 11 Feb 2010 11:16:24 -0800

The First Circuit took on a fairly specialized issue of copyright law in a lengthy opinion involving, among other claims, allegations that the Massachusetts Museum of Contemporary Art violated the rights of Swiss visual artist Christoph Büchel under the Visual Artists Rights Act ("VARA"), which protects certain so-called "moral rights" of some visual artists.

The 60-page opinion gives a long and detailed explanation of the history of the installation as well as the deterioration of the relationship between the Museum and Büchel. In brief, the Museum and Büchel agreed to an installation art project entitled "Training Ground for Democracy" that Büchel described as "essentially a village, . . . contain[ing] several major architectural and structural elements integrated into a whole, through which a visitor could walk (and climb)." Although the parties did not formalize their relationship with regard to the installation by executing a written instrument, they apparently did agree that Büchel would have sole title to any copyright in the completed work.

Unfortunately, as a result of numerous conflicts and a breakdown in the relationship between the Museum and Büchel, the project was never completed. Thus, the Museum sought a declaration in federal court that it was entitled to present the materials and "partial constructions" of the installation to the public. Büchel in turn counterclaimed under VARA and the Copyright Act seeking an injunction preventing the Museum from displaying the unfinished installation as well as damages for alleged violations of his rights.

On cross-motions for summary judgment, the District Court found for the Museum because, although it assumed that VARA applies to unfinished works of art, it concluded that there were no genuine issues of material fact. The First Circuit agreed with the District Court in some respects but ultimately concluded that there were genuine issues of fact as to some of Büchel's claims under VARA and Section 106 of the Copyright Act.

The lengthy opinion is worth the read for those interested but here's a quick summary of some of the First Circuit's conclusions on the legal issues:

VARA applies to unfinished but "fixed" works of art that, if completed, would qualify for protection under the statute
VARA does not provide a damages remedy for violation of the right of attribution, one of the "moral rights" protected under the statute
VARA does not cover the separate moral right of disclosure (also known as the right of divulgation), which protects the artist's authority to prevent third party disclosure of the work to the public without the artist's consent
The failure of claims under VARA does not, necessarily, signify the inadequacy of "more traditional copyright claims"

The cite is Massachusetts Museum of Contemporary Art Foundation, Inc. v. Büchel, No. 08-2199 (1st Cir. Jan. 27, 2010).

The Trademark Battle of the "SC" Universities

Stacia Lay — Fri, 22 Jan 2010 16:10:26 -0800

In a collegiate battle over trademarks, the University of South Carolina suffered defeat at the hands of both the TTAB and the Federal Circuit while the University of Southern California walked away the victor.

The University of South Carolina sought registration of its Carolina Baseball Logo mark (pictured in the opinion linked below) composed of the interlocked letters "S" and "C" for "clothing, namely, hats, baseball uniforms, T-shirts and shorts." The University of Southern California opposed the registration, claiming in part that it would create a likelihood of confusion with its registrations for the letters "SC" in standard character form and for a design mark composed of the interlocked letters "S" and "C" (also pictured in the opinion).

Showing that fighting spirit, South Carolina counterclaimed for cancellation of SoCal's registration of the letters "SC" in standard character form, claiming that the letters falsely suggested an association with the State of South Carolina.

The TTAB disagreed, concluding first that South Carolina lacked standing to bring the cancellation counterclaim and that even if it did have standing, summary judgment would still be granted in favor of SoCal because South Carolina failed to establish a genuine issue of fact as to whether the letters "SC" are "uniquely and unmistakably associated with the State of South Carolina. In another defeat, the TTAB refused registration of South Carolina's mark, finding that it would create a likelihood of confusion with SoCal's registrations.

On appeal, South Carolina challenged the TTAB's likelihood of confusion conclusion only with respect to three factors: the similarity of trade channels; the care exercised by consumers in purchasing the goods; and the absence of evidence of actual confusion.

Although the Federal Circuit did not agree with the TTAB's decision on all three of these factors (specifically with respect to the degree of care differing classes of consumers would exercise in making purchases), it ultimately concluded any error was harmless because the conclusion that the marks were legally identical and would appear on the same classes of goods in the same trade channels was sufficient to support a likelihood of confusion finding.

On the issue of standing, the Federal Circuit agreed with South Carolina that the TTAB had taken an unnecessarily limited view of standing because South Carolina only needed to show that it had a reasonable belief that it would be damaged by SoCal's registration and that it had a direct and personal stake in cancellation. The Federal Circuit had no problem concluding that South Carolina could make that showing.

Victory was short-lived, however, because the Federal Circuit concluded that, although South Carolina had standing to assert its cancellation claim, the claim still failed because South Carolina had failed to show that there was a genuine issue for trial as to whether the letters "SC" uniquely pointed to the State of South Carolina. Although South Carolina pointed to evidence demonstrating that the public associates the letters with the State, SoCal countered with evidence showing that "SC" refers to many other entities. And South Carolina itself had, in the context of another issue, submitted evidence showing that at least 16 other universities and colleges represent themselves as "SC."

The cite is The University of South Carolina v. University of Southern California, No. 2009-1064 (Fed. Cir. Jan. 19, 2010) (non-precedential).

Supreme Court Grants Stay of Order Allowing Broadcast of Trial Challenging California's Proposition 8

Stacia Lay — Thu, 14 Jan 2010 09:33:17 -0800

Admittedly this case is not IP-related but it does involve an issue in which I have a particular interest.

On Wednesday, the Supreme Court issued a decision granting a stay of the order of the District Court for the Northern District of California permitting the live broadcast of a civil trial to five other federal courthouses in Seattle, Pasadena, Portland, San Francisco and Brooklyn. The trial involves the constitutional challenge to California's Proposition 8, which amended the California Constitution to provide that only marriages between a man and a woman are valid or recognized in California.

The Supreme Court's decision gives a detailed description of the history of the District Court's order but ultimately granted the stay preventing the live broadcast of the trial to the federal courthouses on procedural grounds, concluding that the District Court failed to follow appropriate procedure when it amended its local rules to allow for the broadcast. In deciding the matter on procedural grounds, the Court was quick to assert--in the second sentence of the opinion--that it was not expressing any view on the question of whether trials should be broadcast. Nonetheless, opinions could differ on whether the tone of the Court's decision does in fact suggest or at least hint at a view on the question.

Justice Breyer, joined by Justice Stevens, Justice Ginsburg and Justice Sotomayor, dissented from the Court's decision arguing in part that the Court was departing from its own practice and was "micromanag[ing] district court administrative procedures in the most detailed way," and that the balance of the equities tipped heavily against issuing a stay.

The cite is Hollingsworth v. Perry, No. 09A648 (U.S. Jan. 13, 2010).

Western District of Washington Finds No Likelihood of Confusion Between SPIDER and SPYDERCRANE

Stacia Lay — Fri, 08 Jan 2010 15:08:14 -0800

SafeWorks, LLC, based in Tukwila, Washington, is the owner of several registered SPIDER marks for hoisting and suspended staging and scaffolding equipment. Spydercrane.com, LLC, based in Arizona, is a crane distribution business that sells truck-mounted cranes. SafeWorks has manufactured, sold and rented equipment under the SPIDER marks since 1947; Spydercrane began selling cranes under the Spydercrane name in 1999.

SafeWorks learned of Spydercrane after Spydercrane applied to register SPYDERCRANE with the PTO in 2008. Thereafter, SafeWorks sued Spydercrane for trademark infringement and unfair competition under the Lanham Act and for a related claim under Washington state law. Following an apparently unsuccessful summary judgment motion by SafeWorks, the matter was tried to the Court.

In its Memorandum Opinion finding for Spydercrane on all of SafeWorks' claims, the District Court concluded that the "most important [Sleekcraft] factors" for judging the likelihood of confusion between the parties' marks favored Spydercrane.

In SafeWorks' favor, the Court found that the SPIDER marks were suggestive and were very strong with respect to lifting, hoisting, safety and suspended access equipment. Nevertheless, the Court found that the "strength of the mark" factor favored Spydercrane. The Court found that the parties' goods were sold in separate and distinct markets to divergent classes of customers despite the fact that their goods could be broadly described as "products that are used to lift things." In addition, the Court noted the prevalence of the use of the terms "spider" and "spyder" in "the commercial world," although it is not clear that the Court took into consideration the specific goods or services with which these marks were used.

Also in SafeWorks' favor, the Court concluded, with some hesitation, that the similarity of marks favored a likelihood of confusion finding given "some parallels" between the parties' products and the use of Spider/Spyder in the names.

The Court found that the remaining factors favored Spydercrane or were neutral. The Court found that the parties' products, when considered more particularly than merely items used to lift things, were functionally different and were sold to different classes of purchasers (again when examined more precisely than merely those customers affiliated with the construction industry). Thus, the proximity of the goods factor favored a finding of no likelihood of confusion. For somewhat similar reasons, the Court also found that the parties' marketing channels were not convergent and therefore did not support a finding of a likelihood of confusion. Lastly, the Court found that both the degree of care that customers would take with respect to purchase (or rental) of the parties' products and the lack of evidence supporting the existence of an intent to deceive weighed against a finding of a likelihood of confusion.

Thus, taken together, the weight of the factors supported a finding that there was no likelihood of confusion in the marketplace between SafeWorks' SPIDER marks and Spydercrane's SPYDERCRANE mark and the Court found in favor of Defendant Spydercrane.

The cite is SafeWorks, LLC v. Spydercrane.com, LLC, No. 08-00922 (W.D. Wash. Dec. 7, 2009).

Federal Circuit Rejects Bright-Line Rule for Internet Specimens of Use

Stacia Lay — Tue, 05 Jan 2010 15:57:26 -0800

Michael Sones filed an intent-to-use application for the mark "ONE NATION UNDER GOD" for charity bracelets. After the PTO issued a notice of allowance, Sones submitted his Statement of Use along with a specimen of use consisting of two pages from a website bearing the title "Beaches Chapel School Store." Under this title, there appeared a listing for "ONE NATION UNDER GOD™ CHARITY BRACELET" followed by further text stating "ONE NATION UNDER GOD™ CHARITY BRACELET CHOICE OF BLUE OR RED $2.00 EACH." Next to the description appeared a shaded box that stated "Photo not availble [sic]." The specimen further showed a "shopping cart" functionality for online ordering.

The PTO rejected Sones' Statement of Use stating that the specimen did "not show a picture of the goods in close proximity to the mark." Sones submitted argument in rebuttal but did not submit a picture of the charity bracelets or any new textual description. The PTO then issued a final office action affirming the rejection. The TTAB affirmed the decision stating that "it is readily apparent that [the webpages] do not include a picture of the goods."

On the same day that the TTAB's decision affirming the rejection was mailed, Sones filed a use-based application to register the same mark for charity bracelets. He submitted a website specimen showing a picture of the bracelet but the alleged use in commerce date was later than that of Sones' original intent-to-use application.

On appeal, the Federal Circuit first disposed of any claim by the PTO that it was not proposing a bright-line rule requiring a picture for every website specimen of use, concluding that "the PTO's position has been consistent from prosecution up to oral argument in this appeal: a website specimen of use must have a picture of the goods."

The Federal Circuit then examined the origin of the PTO's "rule" from the case of Lands' End, Inc. v. Manbeck, 797 F. Supp. 511 (E.D. Va. 1992). That case involved a specimen of use from a mail order catalog for the mark "KETCH" for purses. The submitted specimen consisted of a catalog page showing a picture of a purse, a description and the term "KETCH." The court in Lands' End concluded that the use of the term with the picture of the purse and the corresponding description was a sufficient display associated with the goods.

The PTO interpreted Lands' End to require that a catalog specimen include a picture of the relevant goods (among other requirements) and created a new section addressing that requirement in the trademark examining manual for "catalogs as specimens." In addition, the Federal Circuit examined the cases demonstrating that the PTO had applied this interpretation of Lands' End to website specimens, including "a rigid requirement for a picture."

The Federal Circuit read Lands' End differently, however, concluding that the case did not state that a picture is mandatory or that such a requirement applied to website specimens. Nor could the Federal Circuit find any basis for a picture requirement in trademark law or policy. Thus, the Court concluded that

a picture is not a mandatory requirement for a website-based specimen of use, and that the test for an acceptable website-based specimen, just as any other specimen, is simply that it must in some way evince that the mark is "associated" with the goods and services as an indicator of source.

The Federal Circuit therefore remanded the case for the PTO to consider Sones' specimen of use in light of the appropriate standard.

Circuit Judge Newman dissented from the decision contending that Sones had rendered the issue moot by filing the second, use-based application for the same mark for the same goods and submitting a specimen that included a picture.

The cite is In re Michael Sones, No. 2009-1140 (Fed. Cir. Dec. 23, 2009) and includes a photo of the website specimen submitted by Sones.

Product Photography and Derivative Works

Stacia Lay — Tue, 24 Nov 2009 12:37:51 -0800

In Schrock v. Learning Curve Int'l, Inc., the Seventh Circuit took up the issue of the extent of originality necessary for a copyright in a derivative work as well as the question of what permissions are necessary for the author of the derivative work to have a copyright in the work.

HIT Entertainment owns the copyright to the "Thomas & Friends" train characters and licensed Learning Curve to make toy figures of its characters. Learning Curve then hired professional photographer Daniel Schrock to take photos of the toys for promotional materials. After Learning Curve stopped using Schrock's photography services, it continued to use his photos in advertising and product packaging. Schrock then registered his photos for copyright protection and sued Learning Curve and HIT Entertainment for copyright infringement.

The district court granted the defendants' motion for summary judgment concluding that Schrock did not have a copyright in the photos. The district court, classifying the photos as derivative works (derivative of the "Thomas & Friends" characters), held that for such works, Schrock needed permission from Learning Curve both to make the photos and to copyright them. Because Schrock had only the former permission, the district court dismissed his claim for copyright infringement.

The Seventh Circuit reversed, concluding that the district court had made a number of errors of law in granting summary judgment to the defendants.

As an initial matter, the Seventh Circuit noted the "deep disagreement" regarding whether photos of a copyrighted work are derivative works but chose not to weigh in on the disagreement, concluding that it need not resolve the issue and assumed for purposes of the decision that Schrock's photos were derivative works.

Turning to the issues it was prepared to decide, the Seventh Circuit first addressed the question of what standard of originality Schrock's photos must meet to qualify for copyright protection. Specifically, the defendants argued that the photos must meet a higher standard of originality, relying on language from an earlier Seventh Circuit decision, Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983). In Gracen, the court stated that the plaintiff could not maintain a suit for infringement of a derivative work because that work was not "substantially different from the underlying work to be copyrightable."

The Seventh Circuit concluded that this language was not intended to establish a higher standard of originality for derivative works. Reading Gracen in light of other Seventh Circuit authority, the court identified two general principles: "(1) the originality requirement for derivative works is not more demanding than the originality requirement for other works; and (2) the key inquiry is whether there is sufficient nontrivial expressive variation in the derivative work to make it distinguishable from the underlying work in some meaningful way."

With respect to Schrock's photos, although they were "highly accurate product photos," there was "minimally sufficient variation in angle, perspective, lighting, and dimension to be distinguishable from the underlying works" to entitle the photos to the limited derivative-work copyright protection.

The Seventh Circuit next addressed the district court's conclusion that Schrock needed the permission of the owner of the copyright in the underlying work both to create the derivative work and to copyright the derivative work.

Noting that copyright in a derivative work--and any other work--arises by operation of law upon the fixation of the original expression in a tangible medium, the Seventh Circuit rejected the district court's reasoning. Thus, as long as Schrock created the derivative works with permission--which he did--he owned the copyright in those works (assuming the other requirements for copyright were satisfied). However, because the default rule--that copyright in a derivative work arises by operation of law--can be altered by agreement of the parties, the Seventh Circuit remanded the case to determine whether the parties had done so in this case.

The cite is Schrock v. Learning Curve Int'l, Inc., No. 08-1296 (7th Cir. Nov. 5, 2009).

Federal Circuit Reverses Cancellation of THE COLD WAR MUSEUM

Stacia Lay — Fri, 20 Nov 2009 12:12:11 -0800

A recent trademark decision from the Federal Circuit emphasizes the sometimes critical role procedural issues can play in the outcome of a case.

In 2004, Francis Gary Powers, Jr. obtained registration of the mark THE COLD WAR MUSEUM for museum services based on acquired distinctiveness of the mark under Section 2(f) of the Lanham Act (15 U.S.C. 1052(f)). Mr. Powers later assigned the rights to the mark to The Cold War Museum, Inc. During the initial prosecution of the mark after the examining attorney had refused registration, Mr. Powers submitted more than 200 pages of material supporting his contention that the mark had acquired distinctiveness.

In 2007, Cold War Air Museum Inc. filed a petition to cancel the registration arguing that the mark was merely descriptive for museum services related to the Cold War. In support of this claim, it submitted search engine results evidencing the public's understanding of the term "cold war" and excerpts from the mark owner's website and brochure to demonstrate that the museum's contents all related to the Cold War.

The mark owner responded by arguing that even if the mark was descriptive it had become distinctive and was therefore eligible for registration under Section 2(f), that the PTO had accepted evidence submitted during prosecution as sufficient proof of distinctiveness and thus the mark was now presumed valid. It also argued that the challenger had not presented any evidence showing that the mark should not have been registered under Section 2(f). The mark owner did not resubmit the evidence of acquired distinctiveness that had been submitted during prosecution.

The TTAB granted the cancellation petition finding that the challenger had proven that the mark was "highly descriptive" and had not acquired distinctiveness. The TTAB then shifted the burden to the mark owner to show to the contrary. Although the TTAB acknowledged that evidence of acquired distinctiveness had been submitted during prosecution, it concluded that it could not consider the evidence because the evidence had not been resubmitted in the cancellation proceeding.

The Federal Circuit held that this conclusion was in error and fatal to the TTAB's decision granting the petition for cancellation. Emphasizing that registration of the mark under Section 2(f) afforded it both a presumption of validity as well as a presumption that the mark had acquired distinctiveness, the Federal Circuit stated that the challenger to the registration must therefore produce sufficient evidence to rebut these presumptions.

First, the Federal Circuit concluded that the TTAB had erred in concluding that it could not consider the evidence of acquired distinctiveness submitted during prosecution as the applicable regulation, 37 C.F.R. 2.122(b), unambiguously states that the entire registration file is automatically part of the record in a cancellation proceeding. As a result, the challenger must rebut evidence of acquired distinctiveness in the registration file in order to satisfy its burden of proof.

Second, the Federal Circuit held that the challenger had failed to satisfy this burden. To the contrary, the challenger's arguments in the cancellation proceeding related exclusively to the descriptive nature of the mark, which is irrelevant to the validity of a Section 2(f) registration. The challenger presented no evidence relating to the acquired distinctiveness of the mark and therefore failed to rebut the presumption of validity. And, given that failure, the Federal Circuit also concluded that the TTAB had erred in shifting the burden to the mark owner.

The Federal Circuit therefore reversed the TTAB's decision granting the petition for cancellation.

The cite is The Cold War Museum, Inc. v. Cold War Air Museum, Inc., No. 2009-1172 (Fed. Cir. Nov. 5, 2009).

Federal Circuit Affirms Conclusion that MATTRESS.COM is Generic

Stacia Lay — Fri, 20 Nov 2009 12:00:36 -0800

1800Mattress.com IP, LLC appealed from the TTAB's decision finding that the mark MATTRESS.COM was generic for the services identified in its application for registration, namely, "online retail store services in the field of mattresses, beds, and bedding." 1800Mattress.com challenged the decision arguing that (1) the only generic term for such services is "online mattress stores," (2) businesses outside the genus of online retail store services use "mattress.com" as part of their domain names, (3) the TTAB improperly looked to the components of the mark rather than the mark as a whole, and (4) the TTAB improperly disregarded the nature of the mark as a mnemonic and "as being capable of evoking the quality of comfort in mattresses." None of these arguments swayed the Federal Circuit.

The Federal Circuit readily agreed with the TTAB's finding that the relevant public understands MATTRESS.COM to be no more than the sum of its constituent parts (the parties did not dispute the genericness of the components), specifically, "an online provider of mattresses." Nor was it relevant whether the public referred to online mattress retailers as "mattress.com" as the inquiry is what the relevant public would understand upon hearing the term. And on a related argument, the Federal Circuit rejected 1800Mattress.com's assertion that there could be only one generic term, "online mattress stores."

Finally, the Federal Circuit agreed with the TTAB's finding that the ".com" "tail" of the mark did not "evoke the quality of comfort in mattresses" and that the mark is not a mnemonic, noting that 1800Mattress.com had failed to prevent any evidence to support such an argument.

The cite is In re 1800Mattress.com IP, LLC, No. 2009-1188 (Fed. Cir. Nov. 6, 2009).

Federal Circuit Rejects "Should Have Known" Standard in Proving Fraud on the PTO in Trademark Cases

Stacia Lay — Wed, 02 Sep 2009 16:24:54 -0800

The Federal Circuit succinctly and decisively rejected a lower standard of proof for proving fraud on the PTO in obtaining or renewing a trademark registration in In re Bose Corp., Opposition No. 91/157,315 (Fed. Cir. Aug. 31, 2009).

In the opposition proceeding before the TTAB, the trademark applicant--Hexawave--counterclaimed for cancellation of Bose's WAVE mark on the ground that Bose had committed fraud in connection with its combined Section 8 affidavit of continued use and Section 9 renewal application, which was signed by Bose's general counsel. In this filing, Bose stated that the WAVE mark was still in use in commerce on, among other things, audio tape recorders and players but the TTAB found that Bose had stopped manufacturing and selling those particular goods between 1996 and 1997 and that Bose's general counsel knew that when he signed the filing.

Bose's general counsel testified that, at the time he signed the filing, Bose continued to repair previously sold audio tape recorders and players and he believed that the WAVE mark was still in use in commerce because "in the process of repairs, the product was being transported back to customers." The TTAB concluded that such repair and shipment back did not constitute sufficient continued use of the mark and found that the belief of Bose's general counsel to the contrary was not reasonable. Apparently following the standard that a trademark owner commits fraud on the PTO in procuring or renewing a registration when it makes material representations of fact which it knows "or should know" to be false or misleading, the TTAB found that Bose had committed fraud and ordered cancellation of its registration for the mark.

The Federal Circuit reiterated the heavy burden of proof the party claiming fraud on the PTO bears, requiring that such fraud be proven "to the hilt" by clear and convincing evidence. The Federal Circuit then painted a brief history of the cases recognizing a "material legal distinction" between a "false" representation and a "fraudulent" one, in that the latter requires an intent to deceive. The Court thus rejected the TTAB's decision in Medinol Ltd. v. Neuro Vasx Inc., 67 U.S.P.Q.2d 1205 (TTAB 2003), to the extent it adopted a negligence standard for fraud by approving of a "knew or should have known" test. In rejecting the "should have known" standard, the Federal Circuit held that "a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO."

As applied to the facts of the case, the Federal Circuit found that Bose had made a material misrepresentation to the PTO but that the challenger had not pointed to clear and convincing evidence to support an inference of deceptive intent in light of the testimony of Bose's general counsel that he believed the statement in the filing was true at the time he signed it. Notably, the Federal Circuit rejected the relevance of the TTAB's conclusion that Bose's counsel's belief as to the sufficiency of use of the mark in commerce was not reasonable, stating that reasonableness was "not part of the analysis" because there "is no fraud if a false misrepresentation is occasioned by an honest misunderstanding or inadvertence without a willful intent to deceive."

The Federal Circuit thus concluded that Bose had not committed fraud in renewing its registration for the WAVE mark and that the TTAB had erred in canceling the registration in its entirety (although the Court did acknowledge that the registration needed to be restricted to "reflect commercial reality").

District Court Extends Summary Judgment Too Far in Eyelash Extensions Trademark Case

Stacia Lay — Fri, 17 Jul 2009 11:06:49 -0800

Xtreme Lashes, LLC and Xtended Beauty, Inc. both market kits used by professional cosmetologists to lengthen and accent clients' eyelashes.

Xtreme, the plaintiff, has used the marks XTREME LASHES and EXTEND YOUR BEAUTY since September 2005 and obtained registration of the marks in April 2008 and October 2007, respectively. The XTREME LASHES mark features a large X, part of which is formed by a stylized eyelash. The mark EXTEND YOUR BEAUTY is typewritten and always appears in conjunction with the XTREME LASHES mark. Each of Xtreme's kits come in a silver carrying case bearing the XTREME LASHES mark.

Xtended, the defendant, has used the mark XTENDED BEAUTY since July 2006. Xtended's mark features a large, type-written X and its kits come in a silver carrying case featuring the XTENDED BEAUTY mark.

Xtreme alleged that Xtended had infringed and diluted its marks. Xtended, in turn, counterclaimed, seeking cancellation of Xtreme's EXTEND YOUR BEAUTY mark.

Xtended moved for summary judgment on all of the claims before the parties conducted discovery. The District Court concluded that no reasonable person would likely confuse the parties' marks because they were so dissimilar and therefore entered judgment in favor of Xtended on Xtreme's trademark infringement and dilution claims. The District Court then later found that EXTEND YOUR BEAUTY was descriptive as a matter of law and therefore ordered Xtreme's mark cancelled.

On appeal, the Fifth Circuit reversed each of the District Court's conclusions. Although the Fifth Circuit could not say with certainty whether Xtreme's XTREME LASHES mark was strong or weak, it found that the mark at least had the indicia of a suggestive mark and, for purposes of summary judgment, was entitled to protection. Examining the other "digits of confusion" relating to the parties' XTREME LASHES and XTENDED BEAUTY marks, the Fifth Circuit found that each of the factors either favored Xtreme or were neutral; no factors favored Xtended.

Similarly, the Fifth Circuit found that the District Court had erred in finding no likelihood of confusion between the parties' EXTEND YOUR BEAUTY and XTENDED BEAUTY marks. As an initial matter, the Fifth Circuit rejected the District Court's finding that Xtreme's EXTEND YOUR BEAUTY mark was descriptive as a matter of law, concluding that "consumers must use 'imagination, thought and perception' to conclude that an exhortation to 'extend your beauty' markets eyelash extensions, as opposed to another cosmetically enhanced feature." The Fifth Circuit thus reversed the District Court's order cancelling Xtreme's registration of its EXTEND YOUR BEAUTY mark.

The Fifth Circuit then went on to conclude that there were issues of fact demonstrating a likelihood of confusion between the EXTEND YOUR BEAUTY and EXTENDED BEAUTY marks that precluded summary judgment and therefore reversed the District Court's order and remanded the case for further proceedings.

The Fifth Circuit's decision in Xtreme Lashes, LLC v. Xtended Beauty, Inc., No. 08-20578 (5th Cir. July 15, 2009), can be found here (PDF, 18 pgs).

Ninth Circuit Requires Finding of Substantial Risk of Danger to the Public to Support a Preliminary Injunction Requiring a Product Recall in a Trademark Infringement Case

Stacia Lay — Thu, 02 Jul 2009 13:45:15 -0800

In an opinion issued today, the Ninth Circuit adopted the Third Circuit's standard for determining the propriety of a preliminary injunction directing recall of a product in a trademark infringement case. Specifically, in addition to the traditional standard for a prohibitory preliminary injunction, the district court must consider three other factors in cases involving a requested product recall:

(1) the willful or intentional infringement by the defendant; (2) whether the risk of confusion to the public and injury to the trademark owner is greater than the burden of the recall to the defendant; and (3) substantial risk of danger to the public due to the defendant's infringing activity.

The Ninth Circuit's opinion in Marlyn Nutraceuticals, Inc. v. Mucos Pharma GMBH & Co., No. 08-15101, can be found here (PDF, 14 pgs).

Second Circuit Upholds Conclusion that Removal of UPCs from Trademarked Products Constitutes Trademark Infringement

Stacia Lay — Fri, 26 Jun 2009 10:19:18 -0800

Plaintiff Zino Davidoff SA ("Davidoff"), the creator of high-end luxury goods including the COOL WATER branded cologne and fragrance, sued CVS Corporation, a retail drugstore chain, for federal trademark infringement, unfair competition, and trademark dilution, among other things. Originally, Davidoff sought relief only in connection with CVS's alleged marketing of counterfeit Davidoff products.

However, during a court-authorized inspection of undistributed Davidoff products in CVS's inventory, Davidoff discovered 16,600 items on which the UPCs on the packages and labels had been removed. The UPCs had been removed by, among other things, cutting the portion of the box or label on which the UPC appeared, using chemicals to wipe the UPC away and grinding the bottom of the bottles to remove the UPC.

Davidoff then amended its complaint to claim relief based upon CVS's sale of Davidoff products on which the UPC had been removed and moved for a preliminary injunction forbidding the sale of such products. The District Court granted Davidoff's motion for a preliminary injunction, concluding that Davidoff was likely to succeed on the merits of its trademark infringement claims on the theory that CVS's sale of Davidoff branded products with the UPCs removed constituted trademark infringement.

The Second Circuit affirmed the District Court's decision, finding that the injunction was justified on the ground that removal of the UPCs from Davidoff's trademarked products unlawfully interfered with Davidoff's trademark rights, specifically, its ability to control the quality of its products. The Second Circuit relied on an earlier case holding that

a trademark holder is entitled to an injunction against one who would subvert its quality control measures upon a showing that (i) the asserted quality control procedures are established, legitimate, substantial, and nonpretextual, (ii) it abides by these procedures, and (iii) sales of products that fail to conform to these procedures will diminsh the value of the mark.

The Second Circuit agreed with the District Court that Davidoff had satisfied each of these requirements. Davidoff demonstrated adequately that the affixation of the UPC was a legitimate procedure to detect counterfeits, identify defective products and faciliate effective recalls. In addition, the Second Circuit concluded that CVS was selling under Davidoff's mark goods that were materially different from Davidoff's genuine trademarked products. Specifically, the Court concluded that the damage to the packaging caused by the removal of the UPCs--the cutting of the packaging, the application of chemicals to wipe away the UPC, and the grinding of the bottles to remove the UPC--made the goods sold by CVS materially different from Davidoff's genuine trademarked products.

The Second Circuit thus affirmed the District Court's grant of a preliminary injunction to Davidoff.

The Court's opinion in Zino Davidoff SA v. CVS Corp., No. 07-2872, can be found here (PDF, 16 pgs).

Recent Trademark Claims Filed in the Western District of Washington

Stacia Lay — Thu, 25 Jun 2009 11:18:14 -0800

Keeping with the theme of the previous post, here are brief descriptions of some of the recent trademark claims filed in the Western District of Washington:

adidas America, Inc., et al. v. The Topline Corp., No. CV09-00646 RSM, filed May 11, 2009

adidas alleges that The Topline Corporation imported, sold or offered for sale a variety of footwear that infringed adidas' registered trademarks, namely, its "three-stripe mark" and its corporate logo, as well as adidas' trade dress which adidas refers to as the "SUPERSTAR", "MEI" and "PRAJNA" trade dress. In total, adidas asserts nine claims against The Topline Corporation including federal trademark infringement, unfair competition, and dilution, common law trademark infringement and unfair competition, and state trademark and trade dress dilution and unfair and deceptive trade practices pursuant to the statutes of a number of states.

A copy of the complaint, including photos of the respective products, here (PDF, 32 pgs).

Soaring Helmet Corp. v. Bill Me, Inc., et al., No. CV09-00789 JLR, filed June 9, 2009

Soaring Helmet Corp., a Washington corporation and owner of the registered trademark "VEGA" for motorcycle helmets, alleges that Defendant Google sold Soaring Helmet's "VEGA" trademark to Defendant Leatherup.com as a keyword such that a sponsored link for Leatherup.com appears alongside the search results for "VEGA helmets". Specifically, Soaring Helmet alleges that when the query "VEGA helmets" is searched via Google's search engine, an advertisement appears under the sponsored listings stating that Leatherup.com offers "50% off Vega Helmets" when it does not in fact sell any of Soaring Helmet's VEGA products. Soaring Helmet alleges claims for federal trademark infringement and unfair competition, state unfair competition and tortious interference with prospective economic advantage.

A copy of the complaint, including exhibits, here (PDF, 25 pgs).

Kona USA, Inc. v. DBM Nutrition, et al., No. CV09-00822 MJP, filed June 15, 2009

Kona, the owner of the registered "KONA" mark for bicycles, alleges that DBM Nutrition infringed on Kona's rights in the "KONA" mark by marketing and selling goods and services, including cycling clothing products and cycling related goods and services, under the confusingly similar "KONA ENDURANCE" mark. Kona alleges claims for federal trademark infringement and false designation of origin and state unfair competition.

A copy of the complaint, including exhibits, here (PDF, 49 pgs).

Recent Copyright Claims Filed in the Western District of Washington

Stacia Lay — Tue, 23 Jun 2009 09:28:00 -0800

For a change of pace, here are brief summaries of some of the recent copyright infringement complaints filed in the Western District of Washington:

Corbis Corp. v. Infinity Commercial Capital, LLC, No. CV09-00657 JPD, filed May 12, 2009

Corbis alleges that Infinity Commercial Capital ("ICC"), a business providing hotel and commercial mortgage lending services, downloaded, without authorization, at least 16 images from Corbis' website and uploaded and displayed those images on ICC's website. Corbis alleges claims for direct and vicarious copyright infringement, as well as breach of contract. In connection with the latter claim, Corbis alleges that, pursuant to the Corbis Content License Agreement, by using the Corbis images without authorization, ICC agreed to pay Corbis 10 times the licensing rate in addition to other fees, damages and penalties claimed by Corbis.

Complaint here (PDF, 22 pgs).

Global Research & Rescue v. Six Flags, Inc., No. CV09-00749 MJP, filed May 29, 2009

Global Research and Rescue ("GRR"), a non-profit "engaged in the activity of benefiting whales and other marine mammals by promoting public awareness of the existence of these animals," alleges that it is the owner of the copyrights in three films depicting killer whales in their natural habitat. In 2004, GRR provide complete copies of these films to Six Flags Discovery Kingdom for purposes of demonstrating GRR's capabilities. GRR alleges that Six Flags then used the films through at least the 2006 and 2007 tourist seasons at the Six Flags Discovery Kingdom Park in Vallejo, California without GRR's permission or authorization. GRR alleges claims for copyright infringement and unjust enrichment.

Complaint here (PDF, 5 pgs).

Blue Nile, Inc. v. Gem Stone King, Inc., No. C09-0828 RSL, filed June 16, 2009

Blue Nile, the market leader in the online diamond and fine jewelry retail industry, alleges that Gem Stone King willfully and without authorization copied Blue Nile's distinctive diamond photographs and displayed those photographs on Gem Stone King's website. Blue Nile alleges a single claim of copyright infringement against Gem Stone King.

Complaint here (PDF, 7 pgs).

Third Circuit Adopts Discovery Rule for Claim Accrual under the Copyright Act

Stacia Lay — Thu, 18 Jun 2009 14:49:50 -0800

Although it is not hot off the presses, the Third Circuit's decision in William A. Graham Co. v. Haughey is worth a brief mention.

Most notably, the Third Circuit was faced with a question of first impression, namely, whether the discovery rule or the injury rule governed the accrual of claims under the Copyright Act. Under the discovery rule, a claim accrues when the plaintiff discovers, or with due diligence should have discovered, the injury forming the basis of the claim. Conversely, under the injury rule, a claim accrues at the time of the injury.

Ultimately, the Third Circuit joined the ranks of eight of its sister courts of appeals--the First, Eighth, Sixth, Ninth, Seventh, Fourth, Fifth and Second Circuits--and concluded that the discovery rule governed the accrual of civil claims under the Copyright Act.

The Third Circuit's opinion can be found here.

First Circuit Prohibits Enforcement of Order Permitting Webcast of Motions Hearing

Stacia Lay — Thu, 16 Apr 2009 14:39:59 -0800

Does a federal district judge have the authority to permit gavel-to-gavel webcasting of a hearing in a civil case? According to the First Circuit Court of Appeals, the answer is no, at least with regard to a federal district judge in the District of Massachusetts.

The issue arose in a set of consolidated cases brought by the record companies against individuals who allegedly used file-sharing software to download and disseminate copyrighted songs. In December 2008, one of the individual defendants asked the District Court to permit Courtroom View Network to webcast a non-evidentiary motions hearing. The District Court granted the motion over the objection of the record companies, citing the "keen public interest" in the cases. The record companies then sought relief from the First Circuit, asking that it prohibit enforcement of the order.

The First Circuit granted the relief sought by the record companies and prohibited enforcement of the District Court's order permitting webcasting of the motions hearing. The First Circuit concluded that it was "perfectly clear" that a local rule of the District Court, the policy of the Judicial Conference of the United States, and a resolution of the First Circuit Judicial Council "undermine[d] the district judge's assertion of authority to allow webcasting." Thus, in a case the First Circuit characterized as being about "the governance of the federal courts," the court concluded it was bound to enforce the controlling local rule.

In a concurring opinion, Circuit Judge Lipez acknowledged the "inescapable legal conclusion" reached by the First Circuit but called for the prompt reexamination of the local rule, the Judicial Conference policy and the Judicial Council's resolution, noting that "there are no sound policy reasons to prohibit the webcasting authorized by the district court." Judge Lipez went on to say:

The Local Rule at the center of this controversy was adopted in 1990. Since its adoption, dramatic advances in communications technology have had a profound effect on our society. These new technological capabilities provide an unprecedented opportunity to increase public access to the judicial system in appropriate circumstances. They have also created expectations that judges will respond sensibly to these opportunities.

In re Sony BMG Music Entertainment, No. 09-1090 (1st Cir. Apr. 16, 2009) (PDF, 25 pages)

Service Mark Registration Deemed Void Ab Initio More than 30 Years After Registration

Stacia Lay — Fri, 03 Apr 2009 11:40:07 -0800

In the late 1940s, William Aycock conceived of and began developing a service that would allow solo passengers to arrange flights on chartered aircraft because at the time, the common practice was for air taxi companies to lease entire airplanes rather than individual seats. Aycock's service would act as the communication link between customers and the air taxi service operators he contracted with to provide flights on an individual seat basis. Aycock planned to advertise his service under the mark AIRFLITE and have those interested in the service call a toll-free number to schedule reservations.

Aycock believed that in order for the AIRFLITE service to become operational, he would need at least 300 air taxi operators in the United States to participate in his air taxi operator network. In March 1970, Aycock distributed fliers containing in-depth information about his AIRFLITE service to virtually all air taxi operators certified by the FAA and invited them to join his service. Some of these air taxi operators agreed to participate in the AIRFLITE service and entered into contracts with Aycock, paying "modest initiation fees" to him.

In August 1970, Aycock filed an application to register the AIRFLITE service mark. Although there apparently was significant back-and-forth between Aycock and the examining attorney, the final description of services approved by the PTO for the AIRFLITE mark was "[a]rranging for individual reservations for flights on airplanes." The AIRFLITE mark was registered on April 30, 1974, on the Supplemental Register and his application to renew the mark was granted by the PTO in April 1994.

In 2001, Airflite, Inc. filed a petition for cancellation of Aycock's AIRFLITE service mark registration alleging in part that Aycock did not use the mark prior to registration in connection with the services identified in the registration. The TTAB agreed with the petitioner and issued an opinion in October 2007 canceling the AIRFLITE registration.

The Federal Circuit, with one judge dissenting, affirmed the TTAB's decision, concluding that Aycock's AIRFLITE service mark application (and therefore the resulting registration) was "void ab initio" because it did not meet the use requirement when he filed it more than 30 years ago in 1970. Specifically, the Court concluded that, given the description of services in the registration (characterized by the Court as "the arranging of flights between an air taxi operator and a passenger"), Aycock's use of the mark in contracting with the air taxi operators was not sufficient "use in commerce" to support the registration. Rather, the Court concluded that such actions were merely "preparations to use" the mark in commerce. In order to establish the necessary "use in commerce," the Court stated that he "had to develop his company to the point where he made an open and notorious public offering of his AIRFLITE service to intended customers" but the evidence did not support such a finding.

In a sympathetic dissent, Federal Circuit Judge Newman characterized the cancellation of the registration after 35 years as "seriously flawed" and "seriously unjust." The dissent argued in part that--given the prosecution history, which involved extensive exchanges between Aycock and the examiner regarding the description of services--it would be "unfair to penalize the applicant for flaws for which there was at least a shared responsibility." Rather, the dissent argued that the appropriate remedy should be clarification and correction of any perceived flaw in the registration not cancellation after 35 years.

The Federal Circuit's opinion, including dissent, in Aycock Engineering, Inc. v. Airflite, Inc., can be found here (PDF, 29 pages). You can also find the TTAB's opinion in the case here (PDF, 18 pages).

First Circuit: Originality Does Not Equal Novelty for Purposes of Copyright Protection

Stacia Lay — Wed, 25 Mar 2009 16:18:40 -0800

This copyright infringement case involved two competitors that provide consulting services "aimed at improving employee communication and negotiation skills within the workplace."

The plaintiff, Situation Management Systems, Inc. ("SMS") had developed training materials focused on teaching these skills and specifically three training workbooks ("Positive Power & Influence", "Positive Negotiation Program", and "Promoting and Implementing Innovation"). After SMS was acquired in bankruptcy proceedings in 2001, a number of employees left the company, several of whom started defendant ASP. Consulting LLC ("ASP"). ASP then developed training workbooks including three that SMS claimed infringed its copyrights in its workbooks.

The district court found that ASP had in fact copied SMS's works but entered a judgment of noninfringement because it concluded that ASP's works were not substantially similar to the very limited protectable aspects of SMS's works.

The First Circuit disagreed with the district court, however, primarily with the district court's conclusions with regard to the "originality" necessary for copyright protection. Ultimately, the First Circuit concluded that the "district court's originality analysis was obviously tainted by its own subjective assessment of the works' creative worth" which the First Circuit noted "displayed nothing but pejorative disdain for the value of SMS's works." The quotations from the district court cited by the First Circuit appeared to support the characterization of the district court's opinion of SMS's works.

In concluding that SMS's works were "dominated by unprotectable material," the district court opined that

[t]hese works exemplify the sorts of training programs that serve as fodder for sardonic workplace humor that has given rise to the popular television show The Office and the movie Office Space. They are aggressively vapid--hundreds of pages filled with generalizations, platitudes, and observations of the obvious.

Similar comments and characterizations are sprinkled throughout the district court's opinion along with seemingly tangential asides including a brief description of the Civil War's Battle of the Crater and a recitation of Shakespeare's Sonnet 18. Also, in the footnote describing the Battle of the Crater, the district court stated that

[i]t is appropriate to note that law clerk Alex Ewing, Esq., the creative analyst behind this opinion, is the great-great-grandson of George Washington Condrey, a sergeant in Lane's North Carolina Brigade, who believed until his dying day that he had accidentally shot Stonewall Jackson.

And in another footnote in the district court's 34-page opinion, apparently in connection with its substantive discussion of originality, the court noted that "[a]propos of naming concepts, it is interesting to note that The Origin of the Species does not actually include the word evolution" and then quotes the passage of the book from which that word evolved.

Returning to the legal issues, the First Circuit readily concluded that SMS had satisfied the originality requirement for all of the three works at issue and remanded the case back to the district court to consider the question of substantial similarity in light of the standards articulated by the First Circuit.

The First Circuit's opinion in Situation Management Systems, Inc. v. ASP. Consulting, LLC, can be found here (PDF, 20 pages) and the District Court's (somewhat unusual) opinion can be found here (PDF, 34 pages).