Trademark Blogs

ordinary consumer goods jump on the lawsuit waiver bandwagon

43 Blog - Fri, 04/18/2014 - 06:43
We all knew it was only a matter of time.  Apparently not sure that merely buying a product with a lawsuit waiver on the wrapper would work, GM now seeks to bind consumers who visit its website or "like" its page.  Speaking of "unfairness," FTC ... I would hope the FTC will act on this. In the meantime, there's Adam Levitin's response.
Categories: Trademark Blogs

You Don’t Have to Parody the Owner of the Mark

Property Intengible - Fri, 04/18/2014 - 06:09

The Office of the Lieutenant Governor for Louisiana owns a state trademark registration for LOUISIANA PICK YOUR PASSION:

The Louisiana Department of Culture, Recreation and Tourism, which is under the Office of the Lieutenant Governor, also registered the word mark PICK YOUR PASSION with the United States Patent and Trademark Office. used the trademark* on a billboard critical of the Governor of Louisiana:

If you can’t read it, the billboard says “Pick your passion! But hope you don’t love your health. Gov. Jindal’s denying Medicaid to 242,000 people.”

Because politicians do not appear to be able to take criticism gracefully, the Lieutenant Governor** sued for trademark infringement. One argument was that since the Lieutenant Governor was the owner of the mark, it was not a lawful parody because the Governor, not the Lieutenant Governor, was the target of the message.

So that’s an interesting concept—is it true that the “parody”*** use of a trademark has to be about the owner of the mark?

According to the court, no:

First, viewers would have to know that the service mark in question is a creation of and sponsored by the Lieutenant Governor’s Office. There is no evidence of this. Furthermore, neither the Lieutenant Governor himself, nor the Office of the Lieutenant Governor as an agency of the State, is the owner of the mark. The owner of the mark is the State, and more specifically its citizens.[****] Hence, the Court is being asked to find that viewers of the billboard are likely to believe that the State, as the owner of the service mark, is being critical of the Governor. The State argues that’s billboard does not criticize the owner of the mark, the State of Louisiana, but rather it criticizes Governor Bobby Jindal. Essentially, the State argues that the target of’s parody (Governor Jindal) is not the holder or owner of the mark (the State). The question is whether the disconnect between the owner of the mark and the target of the parody creates viewer confusion. In other words, is a motorist viewing the billboard likely to conclude that the State of Louisiana is criticizing Governor Jindal. The Court thinks not.

It doesn’t matter who the owner is because the question is whether anyone is confused and clearly, here, no one would be. But you can see what an aggravating problem it could be for an otherwise-uninvolved trademark owner. What if the billboard had said “Can You Hear Me Now? Vote Gov. Jindal out of office for denying Medicaid to 242,000 people.” I suspect the likelihood is low that anyone would think that Verizon was related to an ad critical of the Governor of Louisiana, but Verizon would nonetheless be unhappy about it.

And as you would expect here, the court held the billboard was protected speech under the First Amendment.

Dardenne v., No. 14-00150-DDD-SCR (M.D. La. April 7, 2014).*****

*And did kind of a lousy job copying “Louisiana.” The state registration specifically claims that both letters “I” in “Louisiana” are replaced with exclamation marks, but only replaced one. Lousy replication of the font, too, but good enough to make the point.

**I’m not sure why the Louisiana Department of Culture, Recreation and Tourism, owner of the federal registration, wasn’t also named as a plaintiff, although, as will be discussed, the court sorts out that problem.

***I say “parody” because that’s what the parties argued. I don’t see how this is a parody. There’s nothing “comic” whatsoever about the billboard, but, hey, it’s how the parties and court talked about it so we’ll go with it.

****Thus, the Department of Culture, Recreation and Tourism probably didn’t need to be named as a plaintiff. Although I wonder what the PTO would think about the validity of the registration if the State is actually the owner.

*****Any guesses why the State filed in federal court instead of state court?

The text of this work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

Categories: Trademark Blogs

PTO Publishes Precedential Director's Ruling Reversing Abandonment Refusals

TTABLog - Fri, 04/18/2014 - 04:14
For the first time in years, the USPTO has published a precedential ruling of the Director: In re P.T. Polymindo Permata, 109 USPQ2d 1256, 1257-58 (Dir. USPTO 2013), in which the Director, exercising supervisory authority under Trademark Rule 2.146(a)(3), reversed the holding of abandonment in two applications. The Director found that applicant had substantially complied with Rule 2.65(b) by providing unverified but otherwise acceptable substitute specimens in its requests for reconsideration and then the necessary verifications on petition.

The Director found no clear error in the examining attorney's deeming the applications abandoned when applicant failed to file complete responses to the final refusals. Applicant had submitted, with requests for reconsideration, substitute specimens but failed to include appropriate verifications. However, the Director ruled, applicant had substantially complied with the examining attorney's requirements and had made a good faith attempt to advance prosecution. The preferred course of action for the examining attorney would have been to allow applicant 30 days within which to provide the required verifications. See Rule 2.65(b) and TMEP 715.03(a)(2)(c). Moreover, with its petition to the Director, applicant provided accompanying declarations under Rule 2.20.

The Director therefore exercised her supervisory authority under Rule 2.146(a)(3) to grant the petitions. The applications were returned to the examining attorney for consideration of the substitute specimens and supporting declarations.

Read comments and post your comment here.

Text Copyright John L. Welch 2014.
Categories: Trademark Blogs

Beretta, (No) Thank You Very Much . . . .

Duets Blog - Thu, 04/17/2014 - 21:58

Apparently Elvis Presley was a well-known Beretta gun owner during his life, so I suppose his lips might have uttered the words “Beretta, thank you very much.” The King’s estate, however, isn’t thankful about an Elvis-themed advertising campaign designed to promote the sale of Beretta firearms.

Ad Law Access reports that Elvis Presley’s Estate filed suit against Beretta for the ad below and other activities:’s report is here. And, here is a link to a pdf of the complaint filed in federal district court in the Western District of Tennessee.

In the end, will Beretta be singing “Don’t Be Cruel,” “Heatbreak Hotel,” or “Jail House Rock,” while the Estate is singing “Don’t“?

Categories: Trademark Blogs

Adam Levitin responds to General Mills

43 Blog - Thu, 04/17/2014 - 12:47
By permitting, allowing, or suffering me to purchase any of your products or services, whether directly from you or indirectly through dealers, vendors, agents, or other third-parties, you agree to irrevocably surrender all rights to compel me to arbitration or to waive my rights to proceed against you as a member of a class action.  In order to make this provision effective and allow effective vindication of my rights, you also agree to irrevocably surrender all rights to compel arbitration and to prevent class actions against all other purchasers of your products and services.  You also agree to cover all of my costs associated with bringing an action, including attorneys' fees and any damages awarded against me, irrespective of the outcome of the action. As he says, let the battle of the forms begin.
Categories: Trademark Blogs

A couple of Google v. Garcia amicus briefs

43 Blog - Thu, 04/17/2014 - 09:52
Int’l Documentary Ass’n brief, now with actual evidence on standard contracts! Makes a nice pair with Netflix’s brief, which cogently criticizes Kozinski’s entirely typical reliance on “facts” not in the record about what standard entertainment contracts are like.
Categories: Trademark Blogs

Precedential No. 11: TTAB Affirms Genericness Refusal of CHURRASCOS (Stylized) for Restaurant Services

TTABLog - Thu, 04/17/2014 - 03:02
Despite the applicant's ownership of a registration for the mark CHURRASCOS, in standard character form, for "restaurant and bar services; catering," the Board affirmed a genericness refusal of CHURRASCOS in the stylized form shown below, for the same services. The Board also affirmed an alternative refusal based on Section 2(e)(1) mere descriptiveness and lack of acquired distinctiveness. In re Cordua Restaurants LP, 110 USPQ2d 1227 (TTAB 2014) [precedential].

Genericness: The Board found that Examining Attorney Asmat Khan had provided the requisite clear evidence to establish that the relevant consumers of restaurant services (the general public) understands that "churrascos" is generic for a type of restaurant, namely, a restaurant that serves "churrascos." Dictionary definitions established that "churrasco" is "meat cooked over an open fire." Media articles referred to "churrasco" restaurants, and applicant's own evidence supported a finding that "churrasco" is generic for a type or preparation of "steak." A term that is generic for a particular category of goods is likewise generic for service directed to or focused on those goods. Because "churrasco" is generic for restaurant services, registration must be refused even though additional services (in the same class) are recited in the application.

Applicant conceded that the specialty of its restaurants is the churrasco. A term that identifies the primary or central focus of an applicant's services is generic for those services. [E.g., TIRES TIRES TIRES for retail store services; LENS for online retail services featuring contact lenses].

The display of applicant's applied-for mark does not create a separate commercial impression such that the proposed mark would be registrable (with a disclaimer of "churrascos").

Prior Registration: Applicant's ownership of a registration for the standard character mark CHURRASCOS for the same services was of no help. "Trademark rights are not static, and eligibility for registration must be determined on the basis of the facts and evidence of record that exist at the time registration is sought." In short, the examining attorney and the Board are not bound by the decision of the examining attorney who examined the application for applicant's previously registered mark.

Descriptiveness and Acquired Distinctiveness: For the purpose of completeness, the Board considered applicant's argument that the applied-for mark had acquired distinctiveness under Section 2(f). Applicant pointed to its prior registration as proof of acquired distinctiveness of the subject mark under Rule 2.41(b), but the Board noted that although ownership of a prior registration may be accepted as prima facie evidence of acquired distinctiveness, that is not always the case; further evidence may be required.

Because the term CHURRASCOS, if not generic, is highly descriptive of the type of barbequed steaks that are the specialty of applicant's restaurants, the burden on applicant to show acquired distinctiveness was "especially high." Consequently, its prior registration alone was not enough to establish acquired distinctiveness.

Applicant also relied on a declaration of its Vice President, averring that applicant's average annual income exceeded $8 million and its annual advertising and promotional expenditures topped $79,000. However, there was no evidence as to how the money was spent and no evidence of the effectiveness of the advertising in educating customers to the source significance of "churrascos." As to the sales figures, those numbers alone do not prove secondary meaning. Again, there was no evidence of the extent to which the public perceives CHURRASCOS as indicating applicant as the source of the services.

And so the Board concluded that applicant had failed to prove acquired distinctiveness.

Read comments and post your comment here.

Text Copyright John L. Welch 2014.
Categories: Trademark Blogs

Test Your TTAB Judge-Ability: Is "N2WINES" Merely Descriptive of Wine Sold in Kegs?

TTABLog - Thu, 04/17/2014 - 02:41
N2Wines applied to register the mark N2WINES for "wine sold in kegs," but the PTO refused registration under Section 2(e)(1). The examining attorney deemed the mark merely descriptive of the goods, maintaining that "N2" is the symbol for nitrogen, an inert gas used in connection with wine tapping systems. Applicant's own website stated that its wine is "pushed through a tap system similar to draft beer, by an inert nitrogen (N2) based gas blend." How do you think this came out? In re N2Wines LLC, Serial No. 85680969 (April 15, 2014) [not precedential].

The examining attorney also relied on Internet articles and advertisements referring to other wine tapping systems that use nitrogen to preserve and dispense wine. The applicant and the examining attorney were seemingly in agreement that N2 is a recognized symbol for nitrogen.

The Board, however, found that "N2" takes on a different meaning and will be perceived by consumers in a manner that is not descriptive. The record supported applicant's assertion that "N2 when used in N2WINES is a double entendre meaning 'into wines.'"

Examples of marks that have been found to be registrable double entendres include SUGAR and SPICE for bakery products, SHEER ELEGANCE for pantyhose, SHEER PERFECTION for makeup for legs, FAST'N EASY for pre-cooked meats, and HAY DOLLY for self-loading trailers for hauling bales.

Applicant submitted evidence of registered marks and domain names in which "N2" means "into": for example, Dance N2 Shape; N2 Pottery, N2 Learning, N2 Graphics, and N2WIN.

N2WINES is a double entendre meaning "into wines," which implies that consumers of applicant's goods are interested in wine. "It does not immediately convey an idea of any ingredient, quality, characteristic, feature, function, purpose or use of the goods, and thus is not merely descriptive of the goods."

The Board therefore reversed the refusal.

Read comments and post your comment here.

TTABlog comment:  Well, how did you do?

Text Copyright John L. Welch 2014.
Categories: Trademark Blogs

The ASA on insufficiently close comparisons

43 Blog - Wed, 04/16/2014 - 07:46
The ASA found's ad misleading for claiming "FURNITURE DIRECT FROM THE MAKERS By the time the average sofa hits the high street it's been marked up by 500%. Agents, importers and wholesalers all add a little extra along the way. Our unique and award-winning concept cuts out the middle steps and passes the savings on to you." Though the ad explicitly stated the that the typical high street price was "based on closest equivalent products in design and functionality," that wasn't enough. Most consumers would understand that the "high street" prices were for equivalent, not identical, products, but consumers would expect the high street items to be "of a similar quality, in terms of finish, and the materials used, not just design." Since they weren't, the ad was misleading.

US advertisers don't always know how good they have it.
Categories: Trademark Blogs

An Utterly Disingenuous Post About The Resolutely Hyperbolic Nature of Legal Writing

Duets Blog - Wed, 04/16/2014 - 07:18

During my time at Beloit College, I spent too much time playing frisbee golf, drinking Keystone Light, and getting mad at Ryan Schur and Chris Deszynski while playing FIFA 2005 even though I knew their only purpose in playing the game was to trash talk me until I snapped.  But I did learn a few things from the excellent writing professors at Beloit and an important one is that it is better to “show” the reader something than “tell” them.  For example, I can just tell you that I’m one of the most heroic and successful people you’ve ever met or I can let you arrive at the same conclusion by writing that, in the last week, I have won four NBA championships (with the Knicks!), saved Seattle from an overzealous government organization (with good karma!), and qualified for the Champion’s League with Brentford F.C. (almost impossible, just ask Brentford fans).  Do you see how you might be suspicious that I was a hero and a success if I just told you, but you truly believe it because I showed you?  That’s the power of showing, not telling.

And lawyers screw this up all the time.  We (meaning other lawyers, not me — I’m using the “Throw Other People Under the Bus We”) love to tell, not show.  Just yesterday, a brief filed by an opposing lawyer mentioned my client’s “outrageous behavior,” called every argument I made in my brief “untenable,” said that I had “utterly failed” to explain why I should win, and concluded by arguing that he should win because “enough is enough.”  For those of you who aren’t litigators, I can assure you that this brief is in no way a rare occurence in the profession.  It is the rule, not the exception.  But if you were able to stay awake while reading our briefs, I think most rational people would think that I should probably win on three of the issues we are arguing about and he should win the other — and my guess is that we both know that.  And I doubt you would find that my client’s behavior was “outrageous”, that I had “utterly failed” in my brief, or that the doctrine of “enough is enough” had to be invoked because the opposing lawyer only told the reader these things.  He didn’t show them.

So why do lawyers do this?  Judges hate it, I hate it, and they would for sure get a B- from Shawn Gillen for that type of writing.  (Talk about an unholy trinity of people you shouldn’t make mad!)  My guess is that it’s a combination of unsavory factors: a little bit of everyone-else-does-it-that-way, some he-wants-to-be-a-bulldog-lawyer-well-I’ll-show-him-who-the-real-bulldog-is, a dollop of old-fashioned laziness because it is easier to say the other side is full of it than to show that they are full of it, a sprinkle of the judge-is-going-to-think-his-case-is-better-unless-I-act-just-as-outraged-as-him, and finally the fact that your client really likes it when you say mean things about the other side.  None of these reasons make sense to me and I’ll keep trying to show, not tell.

Categories: Trademark Blogs

Google Runs into Trouble in Attempt to Secure Trademark Protection for "Glass"

Intellectual Property News - Wed, 04/16/2014 - 05:36

IPNews® - Tech giant Google has faced an uphill battle in obtaining trademark protection over the word "Glass" for its next big product.

The Silicon Valley powerhouse filed a response to the USPTO's sweeping refusal of the GLASS trademark application, arguing that there was no likelihood of confusion between "Glass" and other similar trademarks and that the  trademark is not merely descriptive.  With a variety of styles including those named "curve", "bold" and "thin," it appears that no matter what the outcome for the "Glass" trademark, Google Glass is well on its way.    To continue reading, click:  Google Runs into Trouble in Attempt to Secure Trademark Protection for "Glass"

Categories: Trademark Blogs

20 Years Of TRIPS: Max Planck Launches Declaration On Patent Protection

IP Watch - Wed, 04/16/2014 - 05:32
The Max Planck Institute for Innovation and Competition has launched a Declaration on Patent Protection with the aim to “clarify some of the regulatory options states still retain under international law, in particular the TRIPS Agreement,” which turns 20 years old this year.
Categories: Trademark Blogs

TTAB Denies Motion to Strike Late-Filed Final Brief

TTABLog - Wed, 04/16/2014 - 03:01
In TTAB proceedings, the defendant sometimes gets confused as to when to file its brief at final hearing. Rule 2.128 says that the defendant's brief is due to be filed "not later than thirty days after the due date of the first brief." The first brief (i.e., plaintiff's brief) is due 60-days after the date set for the close of rebuttal testimony. If plaintiff's brief is served by mail, does defendant get an extra five days to file its brief under Rule 2.119(c)? No. Rule 2.119(c) is inapplicable to briefing deadlines. This point came to play in a recently ruling in Promark Brands Inc. and H.J. Heinz Company v. GFA Brands, Inc., Opposition No. 91194974. The Board, in this order, set a side the interlocutory attorney's order that had stricken defendant GFA's trial brief because it was filed six days late.

GFA mistakenly believed that Rule 2.119(c) applied, giving it five extra days to file its brief. Then it ran into problems e-filing its brief. It filed the brief at 11:10 p.m. Central Time, which was 12:10 a.m. Eastern Time. [ESTTA filing are subject to Eastern Time].

The interlocutory attorney granted Promark's motion to strike GFA's brief. GFA petitioned to the Director, which kicked the matter back to the Board for reconsideration of the interlocutory attorney's ruling. Meanwhile, GFA had requested oral argument and, in light of the order striking its brief, had asked for an extra 15 minutes to argue its case. [The case is set for oral argument at the Fordham IP Institute on April 25th (here)].

The Board noted that the time for filing GFA's brief was set by operation of Rule 2.128 and not by the date of service of Promark's brief, and so Rule 2.119(c) did not apply.

The Board looked to the Supreme Court's Pioneer decision (Pioneer Inv. Serv. Co. v. Brunswick Assoc. Ltd., 507 U.S. 380 (1993)), a five-to-four ruling, "which underscores that the question whether neglect of a matter is excusable is not easily or predictably answered." Such questions "necessarily must be left to resolution by exercise of the discretion of the Board."

The Board found no clear error in the interlocutory attorney's weighing the third Pioneer factor (the reason for the delay and whether it was within the reasonable control of the movant) heavily against GFA. Nor was there error in weighing the second factor (the length of the delay) "somewhat" against GFA.

Nonetheless, the Board may exercise its discretion to considered the additional circumstances that are "significant" in this case. The Board warned, however, that its ruling here is "based solely on the particular facts of the case, and should not be taken as an indication that a similar result would be attainable in another case that differs in any particular fact or circumstance."

The Board observed that having a full set of briefs prior to oral argument enhances the quality of the argument and may suggest issues that the Board panel should consider in its deliberations. Another factor concerned GFA's mistaken reliance on Rule 2.119(c). Similar mistaken reliance has occurred in other Board cases. The Board noted that the TBMP, in the section concerning the time for filing defendant's main brief, makes no reference to the inapplicability of Rule 2.119(c). [The Board suggested that a change to the Rules be considered, to incorporate clarifying language or cross-referencing regarding the interplay of these two Rules].

The Board therefore set aside the order striking Defendant GFA's brief. It denied the request for additional time for argument as moot.

Read comments and post your comment here.

TTABlog note:  Recently, in Pepsico, Inc. v. Jay Pirincci, Opposition No. 91187023 (April 14, 2014) [not precedential], the Board denied opposer's motion to strike applicant's brief that was filed one day late. Although the delay was unjustified, it was minimal in duration, caused no prejudice to opposer, had little impact on the proceeding, and apparently was not the result of bad faith.

Text Copyright John L. Welch 2014.
Categories: Trademark Blogs

Apple Seeks $2.2 Billion in Damages from Samsung

TM Blog of TM Lawyer's Mind - Tue, 04/15/2014 - 18:54

The 2nd trial between Apple and Samsung is 5 days in, Apple is seeking $2.2 billion in damages from Samsung for alleged infringements of 5 of Apple’s patents. Apple filed Apple Inc. v. Samsung Electronics Co., Ltd et al in the California Northern District Court on February 20, 2012, and to make things interesting Samsung filed a counterclaim, alleging that two patents have been infringed on by Apple. Samsung is seeking $6 million, a fraction in comparison. The two tech heavyweights have been at each others throats for years, and by July 2012 had over 50 lawsuits against each other around the world.

The latest news from the case involve Apple’s expert, Christopher Vellturo, who testified this week that the infringement covers 37 million phones and tablets sold during a 2 year period, and the patents at issue involved software that makes the smartphone user friendly. The damages total $2.2 billion. The argument is that Samsung cut into the public demand for Apple’s products by infringing on their patents. Not surprisingly, Samsung’s lawyers think the $2.2 billion demand in damages is a “gross, gross exaggeration.”

If Apple prevails on the merits, although unprobable, but not impossible, that the tech giant will collect billions in damages. While even Apple’s trial lawyers may not believe they can get it, the late Steve Jobs, who declared “holy war” on Google, would be pleased with the fighting spirit. The trial has just begun, and Samsung could use the victory after losing to Apple in a separate, but similar trial, otherwise Apple may feel empowered to push Samsung even further and more frequently into the court room.

Los Angeles Trademark Lawyer
Categories: Trademark Blogs

FDA has a standard, so no Lanham Act claim can be made

43 Blog - Tue, 04/15/2014 - 11:57
OraLabs, Inc. v. Kind Group LLC, 2014 WL 1395954, No. 13–cv–00170 (D. Colo. Apr. 10, 2014)

The court adopted the magistrate judge's recommendation to deny Kind leave to amend its counterclaims to add a Lanham Act false advertising claim. OraLabs filed a declaratory judgment seeking a ruling that it wasn't infringing Kind's design patent and trade dress rights by selling certain lip balm products. Now that OraLabs has begun selling a particular product, Lip Revo, in the US, Kind alleged that the labeling was false and misleading: while OraLabs advertised a net weight of 7 grams, Kind's test showed actual useable weight of less than 6 grams.

The magistrate found that amendment would be futile because the claim was preempted (precluded) by the FDCA. "When the Lanham Act and the FDCA overlap, any conduct that amounts to a violation of the FDCA is within the Food and Drug Administration’s jurisdiction." (Noting cert. grant in Pom which may change this a bit.) In particular, claims that require interpretation and application of the FDCA can't be recognized under the Lanham Act. Here, the FDCA requires that a product's net weight must be accurately disclosed on the label. Thus, determining whether the 7g representation was false or misleading required interpreting "accurately" in the FDCA. (The "thus" is where all the action is, and it's underanalyzed. Aren't there independent standards for figuring out whether 7g is false or misleading?) To figure out whether the representation was accurate enough, the court would need to know how "accurate" the FDA expects net weight statements to be.

Absolute literalism shouldn't be required; otherwise rounding to the nearest gram would violate the law. If the FDA requires accuracy within one tenth of a gram, the alleged difference could be false and misleading. But if the FDA requires only 1 1/2 grams, 1 gram of difference would be fine. Thus, resolving Kind's claim would require interpretation and application of the FDA’s definition of "accuracy." (Again, I don't see it. Application and interpretation aren't the same thing; if the FDA's rule were really this clear, resolving this particular issue should require no interpretation at all and thus no interference with the FDA's role, any more than a blatantly false claim of FDA approval when a product is in fact unapproved requires interpretation.) Because this was an attempt to enforce the FDCA's net quantity accuracy requirement, it was preempted (precluded).

Kind argued that its false advertising claim wouldn't require interpreting the FDCA, and that it could use surveys or other evidence. While surveys might aid in determining whether consumers "actually felt misled when purchasing 6g of Lip Revo while expecting 7g." ("Felt"? How about "were"?) But that didn't matter where a claim required direct interpretation and application of the FDCA. Thus, adding this claim would be futile.
Categories: Trademark Blogs

conflict mineral disclosure unconstitutional, DC Circuit rules

43 Blog - Tue, 04/15/2014 - 11:03
National Association of Manufacturers v. Securities and Exchange Commission, No. 13-5252 (D.C. Cir. Apr. 14, 2014)

If we needed an example of how the First Amendment can reinstate Lochner, this would be a good one.  Here we have a regulation, whose merits are debatable, which easily survives APA challenges because Congress is allowed to make rules even if the rules are dumb and the SEC just did what Congress told it to do.  But then a substantial chunk of it founders because the output of the regulation is a disclosure.  Argh.
 In response to horrific human rights violations in the Congo, where war is financed by selling several minerals, Congress enacted a law requiring the SEC to issue regulations requiring firms using “conflict minerals” to investigate and disclose the origin of those minerals.  The required annual report to the SEC needs to disclose whether conflict minerals originated in the Congo or an adjoining country, describe the due diligence measures taken to establish the source and chain of custody of conflict minerals, and list  “the products manufactured or contracted to be manufactured that are not DRC conflict free.” A product is “DRC conflict free” if its necessary conflict minerals did not “directly or indirectly finance or benefit armed groups” in the covered countries.   There’s no exception for de minimis uses, or for issuers who only contract for the manufacture of products made with conflict minerals.
 The SEC estimated that the rule would be expensive--$3-4 billion to begin with, then roughly $200-600 million annually thereafter.  It was unable to quantify the benefits of reduced violence in the Congo, because it couldn’t assess how effective the rule would be. Instead, the SEC relied on Congress’s judgment that supply-chain transparency would promote peace and stability by reducing the flow of money to armed groups, a judgment that undergirded the SEC’s discretionary choices in favor of greater transparency.
 The court rejected the APA-based claims.  E.g., the SEC had the authority to create an exception for de minimis uses of conflict minerals, but given that Congress knew that conflict minerals are often used in very small quantities, the SEC was not arbitrary and capricious in determining that such an exception would conflict with Congress’s purpose.
 The plaintiffs alleged that the SEC failed adequately to analyze the benefits of the final rule by failing to determine whether the rule would achieve its intended purpose.  But the plaintiffs were objecting to Congress’s purpose, not to the SEC’s process:[W]e find it difficult to see what the Commission could have done better. The Commission determined that Congress intended the rule to achieve “compelling social benefits,” but it was “unable to readily quantify” those benefits because it lacked data about the rule’s effects. That determination was reasonable. An agency is not required “to measure the immeasurable,” and need not conduct a “rigorous, quantitative economic analysis” unless the statute explicitly directs it to do so. . Here, the rule’s benefits would occur half-a-world away in the midst of an opaque conflict about which little reliable information exists, and concern a subject about which the Commission has no particular expertise. Even if one could estimate how many lives are saved or rapes prevented as a direct result of the final rule, doing so would be pointless because the costs of the rule—measured in dollars—would create an apples-to-bricks comparison.
 Congress told the SEC to make a rule despite the lack of data.  The SEC could rely on Congress’s determination that the costs were necessary and appropriate in light of the goals. “Congress did conclude, as a general matter, that transparency and disclosure would benefit the Congo. the Commission invoked that general principle to justify each of its discretionary  choices. What the Commission did not do, despite many comments suggesting it, was question the basic premise that a disclosure regime would help promote peace and stability in the Congo.” The SEC was not supposed to second-guess Congress on this point; if it had found that disclosure wouldn’t work, it couldn’t have adopted any rule, and that would’ve been contrary to Congress’s explicit direction.
 But wait!  There’s also a First Amendment claim based on the requirement that an issuer must describe certain products as not “DRC conflict free” in the report it files with the SEC and on its website.  The majority agreed that this was unconstitutionally compelled speech under Central Hudson.  (The plaintiff didn't challenge other disclosures required by the regulation.  What result if it did?)
 The SEC argued that rational basis review was appropriate because the disclosure involved purely factual non-ideological information.  But Zaudereris limited to cases in which disclosure requirements are reasonably related to the prevention of deception, and this requirement isn’t.  (But see Am. Meat Inst. v. USDA, No. 13-5281, 2014 WL 1257959, at *4-7 (D.C. Cir. Mar. 28, 2014), vacated and en banc rehearing ordered, Order, No. 13-5281 (D.C. Cir. Apr. 4, 2014) (en banc).)
 The factual nature of the disclosure is insufficient because speakers also have a right to avoid disclosing facts they don’t want to. Also, it was “far from clear” that “conflict free” was factual and non-ideological, since “[p]roducts and minerals do not fight conflicts.”  “Conflict free” was a “metaphor” that “conveys moral responsibility for the Congo war. It requires an issuer to tell consumers that its products are ethically tainted, even if they only indirectly finance armed groups.”   Issuers might disagree with that assessment of their moral responsibility, and convey that disagreement through silence.  “By compelling an issuer to confess blood on its hands, the statute interferes with that exercise of the freedom of speech under the First Amendment.”  (Compare the result in the tobacco RICO case, where statements that the defendants lied—something that is true, but that they don’t really want you to know—were upheld as reasonable corrective measures.  “Controversial” is not a good standard for disclosures, and this is why.)
 Intervenor Amnesty International argued that SEC v. Wall Street Publishing Institute, Inc., 851 F.2d 365 (D.C. Cir. 1988), applied rational basis review to securities regulation.  That case allowed the SEC to seek an injunction requiring that a magazine disclose the consideration it received in exchange for stock recommendations, but the case didn’t hold that rational basis review governed securities regulation “as such,” but might be “roughly tantamount to the government’s more general power to regulate commercial speech.”  Anyway, that was a classic deception rationale governing inherently misleading speech.To read Wall Street Publishing broadly would allow Congress to easily regulate otherwise protected speech using the guise of securities laws. Why, for example, could Congress not require issuers to disclose the labor conditions of their factories abroad or the political ideologies of their board members, as part of their annual reports? Those examples, obviously repugnant to the First Amendment, should not face relaxed review just because Congress used the “securities” label. (WTF? Disclosure of labor conditions, at least, is the exact same thing as this regulation. Repeating it doesn't make it more obvious.)
 Once rational basis was out of the picture, the regulation flunked even Central Hudson, since “narrower restrictions on expression would serve [the government’s] interest as well.”  Plaintiff suggested that issuers could use their own language to describe their products, or the government could compile its own list of products that it believes are affiliated with the Congo war, based on information the issuers submit to the Commission.  The SEC didn’t show that this would be less effective.  “[I]f issuers can determine the conflict status of their products from due diligence, then surely the Commission can use the same information to make the same determination. And a centralized list compiled by the Commission in one place may even  be  more  convenient  or  trustworthy  to  investors  and consumers.” These “intuitive” alternatives were sufficient to invalidate the rule.
 The SEC argued that the rule’s impact was minimal because issuers could explain what “conflict free” meant in their own terms, but almost all compelled speech offers the possibility of explanation, and that’s inadequate to cure a First Amendment violation. Thus, the rule (and the statute) was unconstitutional to the extent that it (they) required regulated entities to report to the Commission and to state on their website that any of their products have “not been found to be ‘DRC conflict free.’”The concurrence would’ve waited for the en banc review of the COOL regulations raising this exact issue under Zauderer, and stayed just that part of the SEC’s rule while allowing the rest to go into effect.
Categories: Trademark Blogs

Has Brand Jordan Stepped Out of Bounds?

Duets Blog - Tue, 04/15/2014 - 06:00

- Draeke Weseman, Weseman Law Office, PLLC

In 1984, Nike needed an NBA superstar. Magic Johnson and Larry Bird wore Converse brand basketball shoes, as did most of the other major NBA stars. Adding to the pressure, Nike sales were in general decline as Reebok was dominating the broader fitness shoe market with its white aerobic shoes.

Under the gun, Nike decided to gamble on a rookie with the Chicago Bulls named Michael Jordan – and it WAS a gamble. Although Jordan had made the game-winning shot in the 1982 NCAA championship game, he hadn’t made it back to the NCAA Final Four. In the 1984 NBA Draft, he was notoriously drafted third, behind Hakeem “The Dream” Olajuwon (who later humbly endorsed a $34.99 shoe) and, uh, some other guy named Sam Bowie. Jordan was also a young black man, and nobody was sure that his endorsement would carry over to a white audience (for context, the Cosby show premiered on September 20, 1984). Despite these risks, but perhaps in part because of his success at the 1984 Los Angeles Olympics, a bidding war escalated between Nike, Reebok, and Adidas, resulting in a five-year $2.5 million payday, plus royalties, for Jordan (for comparison, Jordan’s rookie NBA contract was $6 million over 7 years) and a new athlete for Nike to live or die by.

The colorful, expensive, Air Jordan I debuted in 1985 and changed the way consumers looked at basketball shoes. David Stern, then NBA commissioner, immediately banned the red and black shoes for violating NBA uniform policy. Jordan played in them anyway, and Nike gladly paid the $5,000 fine per game. Meanwhile, Jordan led the Bulls in points, assists, rebounds, and steals, made the cover of Sports Illustrated, participated in the dunk contest, played in the All-Star Game, led the Bulls to the playoffs, and was awarded Rookie of the Year honors. You most likely know the rest.

Fast-forward thirty years, and the Jordan brand is as strong as ever (some might say too strong). The Jordan brand is ubiquitous in basketball: according to this Forbes article, one out of every two pairs of basketball shoes sold in 2013 were brand Jordan. Continuing to expand the brand, Jordan is now challenging the luxury shoe market to a little game of one-on-one.

Called the Jordan Shine, the newest Jordan brand sneaker takes the original 1985 Air Jordan I silhouette and dresses it up with a woven-leather upper. The shoes will be available in either monochromatic black or red and will retail for $400.

But the move might not be the slam dunk Jordan is hoping for. Standing between Jordan and the luxury-shoe basket could be U.S. Trademark Application Serial No. 77/219,184, for the mark depicted below, for “footwear:”

The mark is described as “a configuration of slim, uniformly-sized strips of leather, ranging from 8 to 12 millimeters in width, interlaced to form a repeating plain or basket weave pattern placed at a 45-degree angle over all or substantially all of the goods.”

The owner of the mark is Bottega Veneta, a Gucci subsidiary, and maker of high-end luxury shoes, like the following:

By applying for trademark protection for the leather weave, Bottega Veneta is making the claim that this design does more than just look nice, it tells consumers that Bottega Veneta made the shoe.

Currently, the Bottega Veneta application is facing opposition from a designer in New York who claims that the design is aesthetically functional (i.e. it just looks nice). But the likelihood of success for that claim is questionable, given the Trademark Trial and Appeal Board’s recent decision in In re Bottega Veneta International S.a.r.l., Serial No. 77219184 (September 30, 2013). Finding that the woven-leather mark is not aesthetically functional, the Board noted:

Our finding that the design is not aesthetically functional is based on a very narrow reading of the proposed mark, and the scope of protection to which it is entitled. . . .

[W]e reiterate that we are finding only that the specific design for which applicant seeks registration is not aesthetically functional. We are not finding that the protection to be accorded this mark would extend to allow applicant to prevent the use, for example, of similar designs with different size leather strips, or to goods having a plain weave set at an angle but also having noticeable plain leather portions.

 (For full coverage of the TTAB case, visit the TTABlog.)

This clarification from the TTAB might be helpful for Jordan, whose shoes seem to have a leather weave set at a different angle, with slightly more plain leather showing at the heel. But what do you think? Has Jordan stepped out of bounds with his new luxury shoe design? Or has Jordan narrowly avoided having his shot at luxury shoes blocked?

Next up: How will Jordan do if these shoes, called the Jordan Future, are matched up against a pair of Louboutins? Does the contrasting red outsole infringe Louboutin’s trademark? Or is the lack of lacquer enough?

Categories: Trademark Blogs

UPOV Approves ARIPO Draft Legislation Spreading Plant Variety Protection To Africa

IP Watch - Tue, 04/15/2014 - 05:27
The African Regional Intellectual Property Office last week obtained a positive decision at the international level on its draft law to protect new varieties of plants. Amid protest from civil society, the regional office now has to adopt the draft law and has said it would convene a diplomatic conference (high-level negotiation) in 2014 in order to do so.
Categories: Trademark Blogs

Machine Stand Configuration Lacked Acquired Distinctiveness, Says TTAB

TTABLog - Tue, 04/15/2014 - 03:04
The Board affirmed a refusal to register the product configuration shown below, for stands for industrial stirring machines, finding that applicant had failed to establish acquired distinctiveness under Section 2(f). The lack of "look-for" advertising calling attention to the "Z" shape was a major factor in the Board's decision. Netzsch-Feinmahltechnik GmbH, Serial No. 79100238 (March 25, 2014) [not precedential].

We know from Wal-Mart v. Samara Bros. that a product configuration cannot be inherently distinctive. To merit registration, the purported mark must have achieved acquired distinctiveness. In support of its Section 2(f) claim, applicant submitted marketing materials, advertisements and articles from trade publications, a declaration from a company representative, ten customer statements, and a copy of its registration for the mark ZETA.

The Board observed that, when prompted to look for the "Z" shape in applicant's design, one can recognize it, but nothing in applicant's marketing materials calls attention to the letter "Z" in any explicit way. The company declaration averred that the configuration had been in use since January 1997, and that applicant's products garnered a 35 to 40 percent share of the relevant market. But applicant's evidence did not show promotion of the specific stand configuration embodied in the applied-for mark, as opposed to touting the superiority of applicant's products in general.

The customer's declarations stated that they associated the alleged mark with applicant, but the declarations were insufficient in number to support a finding that the configuration serves as a trademark, particularly in view of the lack of look-for advertising. In short, the Board was "simply not persuaded by these statements that applicant has managed to create consumer recognition of this design as a source indicator."

The trade articles established that applicant is an industry leader, but lacking was any mention of the configuration of the goods, or that consumers associated the Z-shaped stand with applicant's products. These publications gave the Board no reason to conclude that applicant or its competitors use their product shapes as trademarks.

Finally, applicant's ownership of a registration for the word mark ZETA was of no help. Nothing in the record would lead one to conclude that the mark ZETA represents the same source indicator as the "fairly obscure, largely unmentioned shape of [applicant's] industrial milling stand."

Concluding that applicant had failed to establish acquired distinctiveness, the Board affirmed the refusal to register under Sections 1, 2, and 45 of the Trademark Act.

Read comments and post your comment here.

TTABlog comment:  Zzzzzzzzzzzz! Actually, this opinion was not that soporific. Only one Z.

Text Copyright John L. Welch 2014.
Categories: Trademark Blogs

Four Agreements, No Standing

Property Intengible - Mon, 04/14/2014 - 07:09

Today’s post is another of the many currently-pending lawsuits by photographers against textbook publishers (recursive link) for under-reporting the number of copies of books that were published. In this case, the defendant publisher Pearson Education challenged the standing of plaintiff Viesti Associates, Inc., a stock photo agency.

Viesti had four different agreements with photographers, two of them signed before the lawsuit was filed and two signed afterwards trying to cure the standing problem. The first agreement was an assignment so that Viesti could bring an earlier suit against Houghton Mifflin Harcourt Publishing Company; the court held for various reasons the document didn’t assign the copyright of the photographs for this lawsuit.

Next up, Viesti and the photographers also had Agency Agreements. Viesti claimed these agreements assigned the copyright. Here is the paragraph in the agreement that matters:

If you can’t read it, it says:

1. I, the undersigned certify and warrant that I am the sole and exclusive owner of all negatives, prints, positives, original color transparencies, duplicates, stories, motion picture films, text information, and other photographic materials delivered to you, now and in the future. I appoint you as a nonexclusive Agent and representative in respect of the leasing and sale of said materials throughout the world. All negotiations shall be at your discretion without prior consultation with me, except when outright purchase of originals is to be negotiated.

The court found that this language was not an assignment of copyright; instead

the plain meaning of the agreements does not purport to convey to Viesti any ownership interest in the copyright. Rather, the agreements’ first paragraph contains the only reference to ownership and clearly states that the sole and exclusive ownership in the images is vested in the photographer.

There were other theories, based on this part of the agreement:

Viesti’s theory that it was a beneficial owner of the copyright because it earned money from the licensing didn’t work either. A beneficial owner is one who assigns legal ownership of a copyright in exchange for an economic interest in its exploitation.

Because Viesti’s economic interests are derived solely from its own use of the copyright and not from the use of the copyright by its legal owners, the photographers, Viesti is not a beneficial owner pursuant to § 501(b). Viesti does not reconcile its position with the well-settled rule that nonexclusive licensees lack standing to bring an action ….

The last paragraph, which gives Viesti “full and complete authority to make claims or institute suit, in your name if necessary, without further permission from me,” does not describe one of the exclusive rights set forth in § 106 of the Copyright Act and therefore isn’t a basis for standing.

Whether a plaintiff has standing is determined by the ownership at the time of suit; therefore the two agreements signed after the suit was filed didn’t cure the standing problem and the case was dismissed.

Viesti Associates, Inc. v. Pearson Education, Inc., No. 11-cv-01687-PAB-DW (D. Colo. March 19, 2014).

The text of this work is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License.

Categories: Trademark Blogs