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When we aren’t playing baseball in the backyard or at little league baseball games, we watch a lot of baseball. Mostly the Twins, but it doesn’t take the M & M boys to bring us together in front of the television. The other day a friend of mine was celebrating a special birthday of a family member, and they had great seats to the Nationals vs. Twins game. So I watched in part because I wanted to see him on television. I very quickly got distracted by the big Red “W” plastered all over the Nationals’ stadium, and honestly for a moment believed that somehow Walgreen’s was sponsoring the team.
I mean look at these:
Walgreen’s Logo Washington Nationals Logo
This isn’t a new discovery, by any means. But what surprised me is that the Washington Nationals have been pretty aggressive in enforcing their rights at the Trademark Trial and Appeal Board. They have opposed or sought extensions of time to oppose marks such as THE BIG “W” for radio broadcasting and internet radio broadcasting services; W & Design for “entertainment services, namely, providing a web site featuring photographic, audio, video and public affairs programming”; and W SHOES for “on-line retail store services featuring shoes, socks, hosiery, handbags, jewelry and eyeglasses.”
In the W SHOES Consolidated Opposition/Petition for Cancellation, the Washington Nationals set forth the progression of their stylized “W” (which harkens back to what does “W” mean to the Washington Nationals?):
The Opposition further states that the Washington Nationals use the stylized “W” in “connection with baseball games and exhibition services and a wide variety of goods and services, including, but not limited to on-line and retail store services; clothing, including, without limitation, shoes, socks, hosiery, slippers, jackets, caps, dresses, ties and wristbands; bags; jewelry. Amazingly, the Opposition then goes on to assert that “[a]s a result of the sales and promotion of goods and services bearing or offered in connection with Opposer’s W Marks, Opposer has built up highly valuable goodwill in Opposer’s W Marks, and said goodwill has become closely and uniquely identified and associated with Opposer.”
Which is why I guess I thought Walgreen’s was sponsoring a baseball team?
To support a Section 2(e)(3) refusal, the PTO must first show that the place named in the mark is generally known to relevant consumers, and not remote or obscure. Purchasers must readily recognize the designation as the name of a geographical place, and not merely as an arbitrary term being used as a trademark.
The Examining maintained that the designation SW3 is synonymous with the Chelsea District of London, famous for its shopping and designer clothing boutiques. Therefore, he asserted, consumers would assume that Applicant's goods come from England. He relied on various Internet pages referring to various stores within the SW3 postal area, and to a Wikipedia entry referring to "Swinging Chelsea."
Applicant argued that the general purchasing public is not aware of the fact that SW3 refers to the Chelsea District of London. Furthermore, he pointed to a several registered marks that refer to zip codes or postal codes (SW2, SW3, SW4, BEVERLY HILLS 91210 & design, DR. 90210, and 33139).
The Board focused on the words SW3 and UK, observing that the crown design and the disclaimed word BESPOKE have "less probative significance" in the Section 2(e)(3) analysis.
There was no dispute that SW3 connotes a geographical location. The question was "how many people in the United States would know the geographical significance of SW3? That is, how many American consumers would know that SW3 identifies the district of Chelsea in particular?"
The Board found the PTO's evidence "inadequate to show that an average American consumer purchasing women's clothing would, upon seeing applicant's mark, conclude that it relates to a neighborhood in London, namely, Chelsea." Even if consumers recognized that SW3 is a British postal code, "there is little evidence that they would recognize it as the code for Chelsea." The designation UK, appearing in very small letters, "does nothing to aid prospective consumers in identifying Chelsea." The Board concluded that the geographical significance of SW3 to the average American consumer is so minor or obscure that it must be considered an arbitrary designation for applicant's goods.
Moreover, to the extent that consumers recognize the meaning of SW3, it would connote a "trendy style, viewed more as evoking an attitude of a place. As to the third-party registrations, only one (33139) covered clothing, but the Board saw no reason to deviate from PTO practice of registering such marks, absent a stronger showing by the PTO.
Finally, the Board noted that the evidence was also insufficient to show a goods/place association with Chelsea, i.e., that Chelsea is associated with the production of clothing.
And so the Board reversed the refusal.
Read comments and post your comment here.
TTABlog note: for a collection of Section 2(e)(3) cases, go here.
Text Copyright John L. Welch 2013..
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Plaintiffs in this putative consumer class action unsuccessfully sought a preliminary injunction against the allegedly false advertising of certain Puffins cereal and snack products as “all natural” when they actually included synthetic ingredients and GMO corn. The parties strongly disputed what “natural” meant, since the FDA hasn’t seen fit to provide a definition. Plaintiffs cited a study indicating that most consumers believes “natural” implies the absence of GMOs, and another finding that nutrition-related health claims on cereal boxes “lead to greater willingness in parents to buy those cereals for their children,” along with other evidence of consumer concern. For example, a Rhode Island health food store pulled all defendant’s products from its shelves after learning about the GMOs. Plaintiffs sought an injunction against the labeling, or immediate reformulation of the products in the alternative.
The court found no irreparable harm, defined as the harm from the deceptive advertising done to individual consumers—the plaintiffs didn’t rely on concerns about food safety, effects on the ecosystem, etc. Plaintiffs argued that irreparable injury should be presumed under NY GBL §349, citing also Lanham Act cases brought by competitors. The court found no authority for presuming irreparable injury to consumers. False advertising suits by competitors were “qualitatively different from those brought by consumers, who need not prove lost sales or harm to brand equity.” Courts presume irreparable harm in the former case because it’s “notoriously difficult” to prove lost sales or harm to brand reputation. But it’s “neither difficult nor impossible to prove the losses related to excessive or inflated costs in false advertising suits brought by consumers.” Thus, competitors’ excuse from showing irreparable harm didn’t apply.
Separately, plaintiffs unreasonably delayed in seeking a preliminary injunction. They waited nearly five months after suing to move for injunctive relief. They were aware of their rights and not actively pursuing them elsewhere; thus the general rule that delay destroys a presumption of irreparable harm applied. “Furthermore, Plaintiffs are average consumers—they are not competitors or commercial sellers for whom lost goodwill or brand confusion stands to cause permanent fiscal injury, which would be exacerbated by delay in seeking permanent relief.”
And money damages would adequately compensate the plaintiffs, making any injury reparable. Plaintiffs argued that deceptive injury, distorting consumers’ decisions, was irreparable in itself. But plaintiffs couldn’t explain how, other than through excessive pricing, the deceptive ads injured the plaintiffs. (I can, and I think it’s at least of equal dignity to other injuries regularly considered irreparable, though I understand why recognizing it would make things difficult—if the claims are truly false and misleading, then the harm they inflict isn’t just monetary; it’s harm to the dignity and autonomy interests of the consumer. In Kantian terms, deception is wrong because it treats the consumer as a means rather than as an end. At least in cases of willful fraud, most victims don’t feel whole even if they get their money back; it’s the trickery, the disrespect, that inflicts the extra injury.)
Given that plaintiffs sought compensatory damages and restitution for the excess price they alleged they paid, the court didn’t believe them when they said money damages were inadequate. (The court also expressed some skepticism about the money damages from the “supposed” higher price for “natural”-labeled products, since plaintiffs didn’t provide many details about pricing.) Though Section 349 aims to “strongly deter deceptive business practices” through issuance of injunctive relief, these statutory provisions “do not relieve a litigant moving for a preliminary injunction in federal court from the general requirement that she demonstrate irreparable injury.”
Though it wasn’t necessary, the court went on to conclude that the balance of hardships favored Barbara’s Bakery. Plaintiffs were essentially seeking a product recall, which was excessive in a false advertising case without physical injury. Plaintiffs argued that Barbara’s could just use stickers to cover up the misleading language, but despite the “charm” of this alternative, the court wasn’t persuaded. “[W]hether or not Defendant eliminated its allegedly deceptive advertising through the use of stickers, Defendants would be forced to execute product alteration on a national scale in order to remove all references to its products' ‘All Natural’ ingredients from its product packaging.” Given plaintiffs’ delay and the compensabiltity of the harms through money, the burden of making such changes “clearly outweighs that of Plaintiffs in continuing to pay a possibly premium price for Defendant's products.”
The court also noted that a settlement agreement was pending in a case bringing similar claims in the Northern District of California. The proposed settlement contemplates the same relief requested here—an injunction against “All Natural,” “No Artificial Additives,” “No Artificial Preservatives,” and “No Artificial Flavors.”
- Mark Prus, Principal, NameFlash
One of my local stores has a huge selection of “As Seen on TV” products. In reviewing their offerings, it occurred to me that the brand names are almost all descriptive & highly functional names that make it very clear what the product does. I’m talking about names like the “Furniture Fix™” chair and cushion support, the “Perfect Pancake™” cooking system, the “Perfect Fries™” French fry cutter and the “Wax Vac™” ear cleaner.
It’s possible that a simple, descriptive name may be all that is needed for a product that is usually accompanied by a long-format infomercial. After all, you are going to demonstrate the product and show its benefits, enabling you to elaborate on the product’s premise over and over again, so why try to deliver a name that has deep and rich meaning? All you really want to do is get people to pull out that credit card and pick up the phone!
Actually, the “branding” in “As Seen on TV” products is part of a trend in name development. Many clients want highly functional names because they claim not to have the money to establish a name that is not obvious to the consumer. That is one of the few pros of a descriptive name.
However, there are many more cons to using a descriptive name. In general, the more functional the name, the more likely it genericizes the product and destroys the potential competitive advantages of the product. How many variants of “fast” are there in the cleaning aisle? How do you decide which one to buy? It also makes trademark clearance a more difficult task. Just try to get anything with “fast” registered for a cleaning product! And if you manage to get a descriptive name registered as a trademark, it will be a weak mark at best.
Not all “As Seen on TV” brands are taking the easy way out, though. Consider “Poo~Pourri™,” the “Before You Go Bathroom Spray.” It’s not exactly a functional name, but I’m not buying it!
Precedential No. 22: WYHA? TTAB Affirms Failure-to-Function Refusal of "No More RINOs!" for Bumper Stickers, T-Shirts, and Buttons
The Board observed that "there are certain designations that are inherently incapable of functioning as trademarks to identify and distinguish the source of products in connection with which they are used." Common laudatory phrases ordinarily used in business or in a particular trade or industry are not registrable (E.g., ONCE A MARINE, ALWAYS A MARINE; DRIVE SAFELY; and THINK GREEN). [How about ALWAYS THINK SAFELY LIKE A GREEN MARINE? - ed.].
The key issue, of course, is how the designation in question would be perceived by relevant consumers. In that context, the Board must consider how the proposed mark is displayed on the specimens of use: the size, location, dominance, and significance of the alleged mark are all relevant factors.
Examining Attorney Tricia Sonneborn submitted evidence that "No More RINOs!" is a commonly-used political slogan meaning "No More Republicans In Name Only." The evidence showed that consumers are accustomed to seeing that phrase on bumper stickers, t-shirts, novelty pins, and other items, from a variety of sources. Consequently, they will not perceive this phrase as a source indicator, but rather as a political message or statement.
Moreover, the size, placement, and dominance of the wording on Applicant's specimens of use are consistent with informational or ornamental use, not trademark use. Even though the phrase as displayed on Applicant's t-shirt (above) is smaller than on its other specimens of use, "given the significance of the phrase, it does not have the commercial impression of a source indicator."
Applicant pointed to its substitute specimens of use [see example below], which added the tagline "By Statesman Enterprises." However, the inclusion of that tagline on the specimens made no difference in the Board's analysis, since it is not part of the applied-for mark. Finally, Applicant's intent that the slogan should function as a trademark is likewise irrelevant.
And so the Board affirmed the refusal.
Read comments and post your comment here.
Text Copyright John L. Welch 2013.
Kraft introduced its Velveeta Toppers cheese product in late 2012, which Saputo claims is in direct competition to its Stella Toppers cheese brand, which it has used since 2006. After Kraft refused to stop use of the trademark, Saputo filed a lawsuit against Kraft Foods on June 7th. To continue reading, click: Kraft’s Use of TOPPERS Alleged to be Trademark Infringement
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By now you’ve probably heard that Gary Friedrich’s claim of ownership of the copyright in the “Ghost Rider” Marvel Comics character has been given a second life. While the district court held that his copyright was assigned to Marvel Comics, the Court of Appeals for the Second Circuit reversed. It’s a decision that keeps on giving for a blogger on ownership issues: the decision covers three different legal theories. I’ll talk about them in a different order than the court did though, because I’ll go through the events chronologically.
It’s a fairly simple set of facts. The case is about one work only, the original Ghost Rider comic first published in April, 1972. Gary Friedrich’s version of events is that in 1968 he created, at his own initiative and expense, a synopsis of the main characters and origin story. Friedrich was a freelancer, never employed by Marvel. Friedrich took the idea to Marvel, which ultimately published the story in Marvel Spotlight, a publication used to test new superheroes. At the time the character was created copyright was divided into two terms, the original term and a renewal term. There is no dispute that Friedrich assigned his copyright in the first term to Marvel Comics verbally, as was permitted by the Copyright Act of 1909.
The district court granted Marvel summary judgment that Friedrich had also assigned the second term in an agreement Friedrich signed in 1978, six years after the original comic was published. We’ll get to that in a minute, but first we’ll cover the status of the original work before the post-publication document was signed.
The first question is in whom the ownership of the original Ghost Rider work vested. Marvel said it was a work made for hire; Friedrich said he was the sole owner or at least a joint owner. If the work was a work made for hire at the time it was created, then Marvel Comics would be the owner of the copyright and the 1978 agreement of no moment.
There is a threshold question, though, of whether Friedrich’s claim of ownership is barred by the three-year statute of limitations. 17 U.S.C. § 507(b). A claim for ownership of a copyright accrues when there has been an express repudiation of the claim.
Recall that Friedrich did not dispute that he assigned the original term of copyright. This essentially meant that exploitation of the work during the original term were not acts that necessarily repudiated Friedrich’s ownership of the copyright.
The Copyright Act of 1976, effective January 1, 1978, controls the timing and vesting of the renewal term. In the case of the 1972 Marvel Spotlight work, the end of the first term of copyright would have been 28 years after 1972, 17 U.S.C. § 304(a)(2)(A)(1), that is, ending on December 31, 2000. After that date, the copyright would go into the 67 year renewal term, for purposes of discussion we’ll assuming vesting in Friedrich. 17 U.S.C. § 304(a)(2)(C)(i).
The court looked at public repudiation, private repudiation and implied repudiation. Publicly, Marvel repeatedly acknowledged Friedrich created the work, printing in 2005 the statement “Conceived & Written, Gary Friedrich” in its republication of the Ghost Rider issue of Marvel Spotlight. Marvel didn’t register the copyright in Marvel Spotlight until after the suit was filed, so no repudiation there. And, although the copyright notice on the comic didn’t mention Friedrich, the notice was consistent with Marvel’s ownership of the initial term of copyright, so there was no reason to believe that the notice indicated repudiation. As to private repudiation, the only undisputed evidence that Marvel did not consider Friedrich the copyright owner was in a letter to Friedrich dated April 16, 2004. The suit was filed April 4, 2007, so the claim was timely made after this repudiation.
As to implied repudiation, the Ghost Rider character wasn’t used much between 2000 and the letter in 2004 — six issues between August 2001 and January 2002; advertising a single toy in a toy catalog for two years, and a cameo appearance of Ghost Rider in a Spiderman video game. There wasn’t enough evidence to show that a reasonably diligent person would have been put on notice that there was exploitation of the copyright after the end of the renewal original term. Marvel claimed that there was a lot of publicity after 2000 about the upcoming Ghost Rider movie (filming in 2005 with a 2007 release), but the movie deal was made in 2000 when Marvel still had rights to the character. Since the practice in the industry is to pay royalties after release, the publicity alone was not enough to put Friedrich on notice that he wasn’t going to get any money. Further, in 2005 Marvel had paid Friedrich royalties on a Spotlight reprint, so a jury could find that a reasonably diligent person would not have known that Marvel claimed to be the copyright owner. The ownership claim was therefore not untimely as a matter of law.
Moving on to in whom the original ownership of the Ghost Rider character vested, under the Copyright Act of 1909 a work created at the “instance and expense” of the hiring party was a work made for hire owned by the hiring party. While Friedrich claimed to have created a synopsis with the major characters and origin story, there was contradictory evidence that all that he might have brought to Marvel Comics was an uncopyrightable idea for the character. There was evidence that others were substantially involved in the creation of the character, including a competing theory about who thought of the idea of a flaming skull for a head. So while Friedrich indeed was one of the contributors to the finished product, his contribution may have been after he started working with Marvel, performed at the instance and expense of Marvel, and therefore owned by Marvel. Thus since there is a question of fact about what Friedrich had before he started working with Marvel, the appeals court affirmed the district court’s denial of summary judgment on the ownership of the copyright in the character.
Finally we reach the major focus of the decision — assuming that Friedrich was the owner, whether Friedrich assigned the renewal term to Marvel. Marvel claimed that an agreement Friedrich signed in August, 1978 assigned the renewal term. The district court agreed, but the appeals court didn’t.
After the copyright law changed in 1978, for Marvel to continue to own the copyright in collaboratively-created comics it would need a written agreement with the contributors. It therefore had its freelancers execute an agreement for that purpose. It was this agreement that Marvel said also transferred the renewal term in Friedrich’s work to it.
The one-page agreement had one sentence that Marvel said did the trick:
SUPPLIER acknowledges, agrees and confirms that any and all work, writing, art work material or services (the “Work”) which have been or are in the future created, prepared or performed by SUPPLIER for the Marvel Comics Group have been and will be specially ordered or commissioned for use as a contribution to a collective work and that as such Work was and is expressly agreed to be considered a work made for hire.
There is a “strong presumption against the conveyance of renewal rights” which may be rebutted by express words stating a clear intention to convey the renewal. Construing the contract under New York law, there wasn’t any clear express statement here.
It is ambiguous whether the agreement covered a work published six years earlier. The document as a whole was forward-looking, and the reference to past works might have been a reference to works-in-progress. There was also no specific reference to renewal rights and instead the agreement language tracks only the 1976 Act’s definition of work made for hire.
Extrinsic evidence was of no help either; according to Friedrich he was told the agreement was for future work, not preexisting work. And here’s a lesson we’ve talked about in the past: calling a work a work-made-for-hire doesn’t make it so:
Even if the parties intended the definition of “Work” to extend to Ghost Rider, that alone would not mean that they intended the Agreement to convey Friedrich’s remaining renewal rights in that work. First, the Agreement appears to create an “employee for hire” relationship, but the Agreement could not render Ghost Rider a “work made for hire” ex post facto, even if the extrinsic evidence shows the parties had the intent to do so. The 1909 Act governs whether works created and published before January 1, 1978 are “works made for hire,” and that Act requires us to look to agency law and the actual relationship between the parties, rather than the language of their agreements, in determining the authorship of the work. Thus, regardless of the parties’ intent in 1978, the evidence must prove Ghost Rider was actually a “work made for hire” at the time of its creation. But the circumstances surrounding the creation of the work are genuinely in dispute.
I think it’s pretty clear that Marvel is using a document ill-suited to the purpose for claiming an assignment of the renewal right (and kudos for pulling it off in the district court). But Marvel has been pretty successful in the past winning the claim that the pre-1978 comics were works made for hire and I expect it will be equally successful here, despite the loss on summary judgment.
Gary Friedrich Enter., LLC v. Marvel Characters, Inc., No. 12-893-cv (2d Cir. June 11, 2013).
Correction on June 19, 2013.
The text of this work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.
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CGS Indus., Inc. v. Charter Oak Fire Ins. Co., No. 11-2647-cv (2d Cir. June 11, 2013)
Charter appealed from a judgment that it breached its duties to defend and indemnify to its insured, CGS, under its advertising injury policy. The court of appeals affirmed on the duty to defend and reversed on the duty to indemnify, since there was sufficient legal uncertainty about coverage to trigger the duty to defend. The parties stipulated that damages were almost $400,000—the settlement plus CGS’s defense costs; the court remanded for an award just of defense costs.
In the underlying lawsuit, Five Four Clothing sued Walmart and CGS for trademark infringement based on CGS’s use of Five Four’s rear pocket stitching design, known as FF stitching, on jeans it supplied to Walmart. Eventually, CGS settled by paying $250,000 on behalf of both parties (because of course Walmart required CGS to indemnify it). Charter’s policy covered advertising injury, defined as injury arising out of one or more specifically listed offenses, including “[i]nfringement of copyright, title or slogan.” It had the standard exclusion for knowing violation of rights.
Under Hugo Boss Fashions, Inc. v. Federal Insurance Co., 252 F.3d 608 (2d Cir. 2001), New York law distinguishes between the duty to indemnify and the duty to defend, applying “very different presumptions” to each. If there’s a reasonable basis for a difference of opinion as to the meaning of the policy, the language is ambiguous and interpreted in favor of the insured. The duty to defend is broader than the duty to indemnify and an “even stronger presumption in favor of coverage” applies. To avoid that duty, an insurer “must demonstrate that the allegations of an underlying complaint place that pleading solely and entirely within the exclusions of the policy and that the allegations are subject to no other interpretation.”
Charter argued that the FF stitching was neither a “title” nor a “slogan” used in advertising. The court of appeals agreed as to “slogan.” The policy didn’t define slogan, but reference to “a body of law or an established custom” can fill in the gaps. Neither New York law nor industry custom provided insight into the meaning of “slogan,” but the term could still be unambiguous if it had a clear meaning in federal law, which it did. Complete federal judicial unanimity isn’t required, as long as there is an “overwhelming current of judicial opinion,” that is, a meaning used by “the vast majority of federal courts.” Using that standard, the vast majority of federal courts have defined “slogans” as “phrases used to promote or advertise a house mark or product mark, in contradistinction to the house or product mark itself.”
“To hold that the stitching design on a jeans pocket is a ‘slogan’ would stretch that definition beyond recognition, as the design is clearly not a ‘phrase.’” A slogan must be something other than the house mark or product mark itself; the FF stitching was in effect a house or product mark. Here, too, there was no residual ambiguity over meaning to trigger the duty to defend. Hugo Boss settled the meaning of “slogan” in advertising injury policies, and there had been no contrary developments in case law or commercial understanding.
However, the interpretation of “title” was a bit different. Again, the term wasn’t defined in th epolicy, and neither New York law nor industry usage provided significant insight. The “vast majority” of federal cases held that, in this context—“that is, in a list that includes ‘copyright’ and ‘slogan,’ but conspicuously does not include coverage of infringement of ‘trademarks’– ‘title’ means the name or appellation of a product, and does not cover design elements such as pocket stitching that may serve as a trademark designating the origin of the product.” A title need not contain words—the court referred to the symbol of the artist currently known as Prince, also used as an album title—“we have no difficulty in concluding that the stitching on the back pocket of a pair of jeans cannot fairly be called the name or appellation of that pair of jeans.” (The court found no need to decide whether “title” was necessarily limited to literary or artistic works.)
While this definition was clear enough to bar the duty to indemnify, if there was any residual uncertainty about whether a court would find the term unambiguous, then Charter still had a duty to defend. Insurers may refuse to defend only “cases in which the policy is so clear that there is no uncertainty in fact or law.” So here: “while the vast majority of federal cases unambiguously define ‘title’ to mean a word or phrase, a handful define title in a way that could arguably include a design or symbol similar to the pocket stitching at issue here.” One court defined “title” as “names and related trademarks,” then noted that “trademark” is defined as a “‘word, name, symbol, or device, or any combination thereof used by a person . . . to identify and distinguish his or her goods.’” Another court held that infringement of a stylized “D” logo fell under “infringement of title”; still another found that “the language clearly suggests coverage of claims where there are allegations of infringing a company’s mark or slogan.” These cases were mistaken to reason that, because a trademark can be a title, and a symbol is a trademark, infringement of the symbol is infringement of title. But they created enough legal uncertainty to give rise to a duty to defend, at least until the uncertainty around the term was resolved. Thus, Charter’s failure to defend breached the policy. Charter should’ve begun defense and immediately sought a declaratory judgment as to the meaning of “title.”
Charter next argued that the injury alleged by Five Four didn’t stem from “advertising.” But the insurer must defend no matter how groundless the suit may be if the allegations in the underlying complaint, liberally construed, are within the scope of the policy. The underlying complaints consistently alleged “wrongful acts, including advertising.” “If Charter believed that Five Four did not intend to allege advertising by CGS or that CGS did not advertise the jeans, Charter should have begun to defend and immediately sought a bill of particulars to resolve any ambiguity in the pleadings.” To the extent that Charter argued that its duty to defend terminated once discovery responses demonstrated that CGS and Walmart never advertised the jeans, Charter had not so argued below and had instead stipulated to damages, waiving this argument.
Nor did the knowing violation exclusion help Charter. Though the underlying complaint alleged willful infringement, the Lanham Act claims could succeed without such a showing. “Our inquiry ends there: as at least one of the claims in the Underlying Action did not require intent, Charter was required to defend the entire action.” The cases cited by Charter were distinguishable—in one, the defendant “approached a local manufacturer to produce a cheaper, low-quality knock-off product; marketed the counterfeit product in packaging indicating it was a genuine creation manufactured in Denmark, both blatantly false; and then fraudulently misled the plaintiff about sales. In another, the plaintiff was a serial infringer. “Here, the complaint alleges merely that CGS sold jeans with similar pocket stitching to Five Four’s jeans, not that CGS marketed the jeans as genuine Five Four jeans, or that it was a serial infringer. From the facts alleged in the complaint … it is possible that CGS unintentionally infringed on Five Four’s pocket design.”
Precedential No. 21: TTAB Dismisses Belatedly-Filed Opposition, Rejects Claim of Privity With Extension Recipient
Applicant Boyd sought to register the mark RIALTO CINEMAS for movie theaters. Opposer Renaissance Rialto instituted the opposition on November 23, 2010, claiming, inter alia, likelihood of confusion and genericness. The original opposition deadline was October 7, 2010. The third-party, Lakeside Cinema had obtained an extension of time to January 5, 2011 to file an opposition, but Lakeside did not file a notice of opposition. Instead, it executed a "Transfer Agreement" purporting to transfer to Opposer its right to initiate and prosecute this opposition. The question, then, was whether Opposer may claim the benefit of the extension of time granted to Lakeside.
Under Rule 2.102(b), the party filing an opposition during an extended period for filing must have obtained the extension of time in its own name or must be in privity with the person that obtained the extension of time. The concept of "privity" includes, among other things, the relationship of successive ownership of a mark. See TBMP Section 206.02. The Board therefore looked to the terms of the Transfer Agreement to see whether Lakeside effectively transferred its right to oppose (and the benefit of the extension of time to do so). "Typically, the right to go forward with an opposition may be transferred when the opposer, or its pleaded mark and the goodwill associated therewith, has been acquired by another party." SDT Inc. v. Patterson Dental Co., 30 USPQ2d 1707, 1709 (TTAB 1994).
The Transfer Agreement, dated November 1, 2010, recited that Lakeside owned a leasehold interest in a movie theater, that for several years prior to Lakeside obtaining said interest the theater had been operated as "Rialto Cinemas," that Lakeside file a request for extension of time to oppose the instant application, and that Lakeside "has now decided to use a different name." By its terms, the Transfer Agreement assigned to Opposer any right that Lakeside might have to use of the name RIALTO CINEMAS, as well as its right to oppose the subject application pursuant to the extension of time that Lakeside had obtained. [To further complicate matters, the prior leaseholder was Ky Boyd, the applicant here].
The Board, however, found it "not at all clear" from the agreement that Lakeside Cinema ever used the mark or had any goodwill therein to transfer to Opposer Renaissance Rialto. Nothing in the record indicated that Lakeside used the mark in a manner that would create trademark rights that could be transferred to Opposer. Applicant Boyd testified that he did not license use of his mark to Lakeside, nor was he aware of anyone else using the RIALTO CINEMAS mark for movie theaters. Opposer's owner testified that Lakeside had not used that mark, and that the right to oppose that was purportedly transferred was not based on any use of the mark by Lakeside, but rather on "a natural right of a competitor to stop applicant from using what opposer deems to be a generic term."
Therefore, the Board found that the record evidence was insufficient to establish that Lakeside had a proprietary interest in the RIALTO CINEMAS mark. Opposer's acquisition of another's right to oppose, independent of a transfer of trademark rights, is an insufficient basis upon which to assert privity for purposes of claiming the benefit of an extension of time obtained by another person.
Because Opposer's did not timely file its notice of opposition, the Board had no jurisdiction over the matter and it dismissed the opposition, but without prejudice to Opposer's filing a petition for cancellation if and when appropriate.
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Text Copyright John L. Welch 2013.