Descriptive Use of a Registered Mark is not Infringement

15 USC 1115(b)(4) provides that the use of a registered term, otherwise than as a mark, which is descriptive of, and used fairly and in good faith only to describe your goods or services, is not trademark infringement. The Northern District of California in Freelancer International Pty. Ltd. v. Upwork Global, Inc. [20-cv-06132-SI]https://trademarks.hdp.com/wp-admin/upload.php?item=511, recently provided some helpful guidance on what qualifies as a permissible descriptive use.

Freelancer Technology Pty Limited sued Upwork for infringement of U.S. Reg. No. 4,284,314 on FREELANCER, complaining about Upworks’ use of Freelance in connection with its software:

Defendants argued they use the plain meaning of the word “freelancer” on their app display names and elsewhere to describe the appropriate users: freelancers. Defendants further argued they use the word “freelancer” in good faith because they trade on Upwork’s own considerable goodwill and have not sought to trademark the words “Freelance” or “Freelancers.” Finally, defendants argue they use the word “freelancer” “otherwise than as a mark” and rely on defendants’ own Upwork trademark.

The court noted that the Ninth Circuit has identified at least two factors to consider when determining whether a term is being used as a mark: (1) “whether the term is used as a symbol to attract public attention, which can be demonstrated by the lettering, type style, size and visual placement and prominence of the challenged words”; and (2) “whether the allegedly infringing user undertook precautionary measures such as labeling or other devices designed to minimize the risk that the term will be understood in its trademark sense.”

The Court found that all of Upwork’s uses of Freelancer were proper and descriptive. The court specifically said it was not “persuaded that bold font and a capital letter are sufficient to show defendants use “Freelancer” as a mark versus a descriptive term – especially when Upwork’s distinctive lime green logo or coloring is placed directly alongside the various notifications.” The Court Defendants do not list the word “Freelancer” among defendants’ own publicly listed trademarks, nor do defendants implement a stylized font or “TM” symbol when using the word “Freelancer.”

The case is notable for its guidance that merely capitalizing the word, or using a bold typeface does not turn a descriptive use into a trademark use. However, it is advisable to avoid a distinctive typeface, and obviously avoid identifying the mark with a TM.

Overwhelming Differences Lead to Summary Judgment of No Trade Dress Infringement

Topps Co. sued Koko’s Confectionery & Novelty for patent infringement and trade dress infringement.

The district court granted summary judgment of non-infringement of the patent, and of non-infringement of the trade dress.

As to the trade dress infringement claim, the district court said no reasonable jury could find that the trade dresses of the Juicy Drop Pop and the Squeezy Squire Pop are confusingly similar because the lack of similarity between the two products is “overwhelming.” The district court noted that (1) in SSP, the nozzle cap and candy handle are adjacent to each other, while the nozzle and the handle in JDP are located on opposite ends, (2) SSP’s nozzle cap has a plastic “geyser” of the liquid candy in the same color as the nozzle cap, whereas JDP lacks an analogous feature and its nozzle and nozzle cap are a different color from that of the rest of the trade dress. (3) SSP’s nozzle cap and handle are far larger and in different shapes from those of JDP. (4) Lastly, SSP’s bottle has an oval-shaped compressible portion with concentric ovals; JDP ‘s compressible bottle has a round compressible portion with a swirl design. The district court said “[t]aking these features into account, the overall impression of the two products are dissimilar.

Goodwill Hunting

Hot N’ Sweet Concepts, LLC sued Nextbite Brands, LLC, in the Western District of Oklahoma for infringing its MOTHER CLUCKER trademark. In addition to the inexplicable popularity of MOTHER CLUCKER as a name for a restaurant, this case potentially has another important lesson for trademark practitioners.

Among other things, Hot N’ Sweet Concepts is asserting a U.S. Reg. No. 5,288,452 on MOTHER CLUCKERS, that Hot N’s Sweet acquired from Pass Restaurant Group, LLC after Hot N’ Sweet opened for business. The assignment states that the assignment came with the goodwill:

The question is, “did the goodwill in fact pass?” First, the Missouri entity uses MOTHER CLUCKER, while the Mississippi entity used MOTHER CLUCKERS. Second the logos of the two restaurants are quite different:

Third, the menus of the two restaurants are different:

The appearance of the restaurants are different:

Finally, being 809 miles apart, it seems unlikely that there is any overlap in customers. So while the assignment said that the goodwill passed with the registration, will MOTHER CLUCKER be able to show that it actually did?

Goodwill is more than a magic incantation to recite when transferring the mark, there must be some basis to conclude that the meaning of the mark to consumers also passed with the assignment. It’s one thing to acquire a potentially blocking mark to remove it as an obstancle,, but quite another to try to enforce it.

Apparent Agreement did Not Protect Condom Company from Attack

In Australian Therapeutic Supplies Pty. Ltd. v. Naked TM, LLC, [2019-1567] (July 27, 2020), the Federal Circuit reversed and remanded the TTAB’s dismissal of Australian Therapeutic’s petition to cancel Naked TM’s U.S. Reg. No. 3,325,577 for the mark NAKED for condoms.

The Board found that, although no formal written agreement existed, the parties entered into an informal agreement through email communications and the parties’ actions under which Australian Therapeutics agreed it would not use or register its unregistered mark in the United States and that Naked could use and register its NAKED mark in the United States. The Board found that Australian Therepeutic led Naked to reasonably believe that Australian had abandoned its rights in the United States to the NAKED mark in connection with condoms.

The Federal Circuit said that the Board discussed the requirements to bring a cancellation proceeding under 15 U.S.C. § 1064 in terms of “standing” instead of a statutory entitlement to a cause of action under 15 U.S.C. § 1064, and proceeded to review de novo whether Australian has established entitlement to a statutory cause of action under § 1064. Section 1064 provides that a petitioner may seek cancellation of a registered trademark if the petitioner “believes that he is or will be damaged” by the registered trademark. § 1064.

The Federal Circuit said that the Board required that Australian establish proprietary rights in its unregistered mark in order to demonstrate a cause of action under § 1064, and said that this was error. Neither § 1064 nor Federal Circuit precedent requires that a petitioner have a proprietary right in its own mark in order to demonstrate a cause of action before the Board. For example, a trade association may have standing to oppose a mark’s registration without having proprietary rights in a mark.

The Federal Circuit said that the Board determined that Australian had contracted away its right to use and register its unregistered mark, but contracting away one’s rights to use a trademark does not preclude a petitioner from challenging a mark before the Board. The Federal Circuit noted that while an agreement could ultimately bar Australian from proving actual damage, § 1064 requires only a belief of damage.

The Federal Circuit concluded that neither § 1064 nor its precedent requires that a petitioner in a cancellation proceeding must prove that it has proprietary rights in its own mark in order to demonstrate a real interest in the proceeding and a belief of damage.

On the issue of a real interest and reasonable belief of damage,the Federal Circuit said that such an interest exists where the petitioner’s application has been refused registration based on a likelihood of confusion with the challenged mark, or where the petitioner is making and selling products with the challenged mark. The Federal Circuit said that Australian Therapeutic demonstrates a real interest in the proceeding because it twice filed an application to register its unregistered mark, and because the USPTO refused registration of both applications based on a likelihood of confusion with Naked’s registered mark. Australian’s applications for registration, the USPTO’s refusal of registration, and the USPTO’s suspension of prosecution support a conclusion that Australian Therapeutic meets the statutory requirements under § 1064.

Naked argued that Australian Therapeutic’s applications do not support a cause of action under § 1064 because Australian abandoned the first one and the second one was a post filing futile attempt to establish its standing. Naked further argued that “mere ownership of a pending application does not in itself provide standing to oppose other applications.” The Federal Circuit was not persuaded. The Federal Circuit noted that a trademark owner does not abandon her rights in a mark by abandoning prosecution. The Federal Circuit also noted Australian Therapeutic’s advertising and sales in the United States also demonstrate a real interest and reasonable belief of damage.

Naked challenged the sufficiency of Australian’s commercial activity because Australian’s marketing and advertising activities are “isolated,” “limited,” and “de minimis,” and its sales are “sporadic” and “nominal,” but the Federal Circuit said that Section 1064 does not impose a minimum threshold of commercial activity, and it declined to define one.

The Federal Circuit concluded that based on the facts established before the Board, Australian Therapeutic had a real interest in the cancellation proceeding and a reasonable belief of damage, thereby satisfying the statutory requirements to seek cancellation of a registered trademark. We reverse and remand to the Board for further proceedings consistent with this opinion.

Public Perception, Not Per Se Rules, Determines Registrability of Marks with Generic Terms

Today in U.S.P.T.O v. Booking.com B.V., the Supreme Court rejected the USPTO’s position that BOOKING.COM was unregistrable because it merely a combination of a generic term and a tld designator.  The Supreme Court rejected the application of a per se rule against the registrability of compound marks based on generic terms, finding instead that consumer perception of the term should control.  Judge Ginsberg noting that “[b]ecause ‘Booking.com’ is not a generic name to consumers, it is not generic.”

The Court distinguished Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U. S. 598 (1888), where it held that a generic corporate designation added to a generic term does not confer trademark eligibility.  The Court found the comparison faulty because of the nature of the internet — a “generic.com” term could convey to consumers a source-identifying characteristic: an association with a particular website.

The Court also rejected a per se rule that every generic term combined with a tld is automatically not generic, holding that whether any given generic.com term is generic “depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of dis­tinguishing among members of the class.”

It will be interesting to see what the USPTO does with the application on remand.  Will it require a disclaimer of the generic term “booking” and the tld “.com”?  If so, then the applicant will have disclaimed the entire mark apart from itself.

It will also be interesting to see what booking.com will do with its registration.  No reasonable competitor would consider using “booking.com” as their own brand, because they would be driving customers to booking.com.  What is the point?  Can booking.com tie up booking combined with other tld’s? Booking.com conceded that booking.com would be “weak” (Tr. of Oral Arg. 66). Indeed they will get a registration only because of the association of the term with a particular website.  What of a booking.online (which presently appears to be available)?  Would that create a likelihood of confusion, or would the fame of booking.com that won them a registration make such confusion unlikely?  Competitors are entitled to use the generic term “booking”, what remains to be seen is how.

Rogers Defense, Blockbuster or Flop?

Australian motorcycle company (and film critics) Deus Ex Machina Motorcycles Pty. Ltd., has sued Warner Bros. and MGM Studios for trademark infringement for dressing the female lead in a jacket bearing their registered trademark “Deus ex Machina” in the “flop” “schmaltzy teen-style love story,” [Complaint, Para. 33] The Sun Is Also a Star.

The Sun Is Also a Star is a teen drama film directed by Ry Russo-Young and written by Tracy Oliver, based upon the young adult novel of the same name by Nicola Yoon. The phrase “deus ex machina” is essential to Yoon’s story, where its presence on the female protagonist Natasha’s backpack gets her noticed by Daniel and sets the love story in motion. The movie moved the phrase from the book’s backpack to a jacket. According to a 2019 article in MarieClaire.com, the jacket plays a critical role in the film. Costume designer Deirdra Govan,  created the jacket from scratch in three-and-a-half weeks with the help of her mighty team of assistants, tailors, set costumers, and costume supervisor, working on roughly 15 different styles before landing on the one.

The Complaint sets up another First Amendment battle between artists and brand owners. Yoon no-doubt selected the phrase for its well known literary meaning; a heavily merchandised motorcycle company with a curated tough-guy image was probably the last think on her mind. Still, the movie moved the phrase from a backpack to a jacket. It also does not help that Charles Melton, who played teenager Daniel Bae in the movie, posed for pictures posted to social media to help promote the movie in which he wore clothing actually sold by Deus Ex Machina [Complaint, Para. 31].

It seems that Warner Bros. and MGM Studios have a reasonable First Amendment Rogers defense, and unless tough-guy biker boys are sneaking into schmaltzy teen-style love stories, a reasonable argument that there is no likelihood of confusion. While the movie may have flopped, hopefully their defense will be a block buster.

Color the TTAB Embarrassed; Packaging Colors can be Inherently Distinctive

In re Forney Industries, Inc., [2019-1073] (April 8, 2020), the Federal Circuit vacated and remanded the TTAB’s affirmance of the refusal to register Forney’s proposed mark on grounds that the proposed mark is of a type that can never be inherently distinctive.

On May 1, 2014, Forney filed Trademark Application No. 86/269,096 for its proposed mark for packaging for various welding and machining goods based on use in commerce under Section 1(a) of the Lanham Act.

The Examiner refused registration under Sections 1, 2, and 45 of the Lanham Act because the mark was not inherently distinctive. The examining attorney noted that such marks are registrable only on the Supplemental Register or on the Principal Register with sufficient proof of acquired distinctiveness.

Forney appealed this decision to the Board, arguing that its proposed mark should be treated as product packaging claiming multiple colors. According to Forney, its proposed mark is product packaging trade dress that may be inherently distinctive and, therefore, registrable without proof of acquired distinctiveness, but the Board affirmed the examining attorney’s refusal to register, treating the proposed mark as a color mark consisting of multiple colors applied to product packaging. The Board found that, when assessing marks consisting of color, there is no distinction between colors applied to products and colors applied to product packaging. The Board found no legal distinction between a mark consisting of a single color and one, such as Forney’s, consisting of multiple colors with-out additional elements, e.g., shapes or designs.

The Federal Circuit found that the Board erred in two ways: (1) by concluding that a color-based trade dress mark can never be inherently distinctive without differentiating between product design and product packaging marks; and (2) by concluding (presumably in the alternative) that product packaging marks that employ color cannot be inherently distinctive in the absence of an association with a well-defined peripheral shape or border.

The Federal Circuit held that color marks can be inherently distinctive when used on product packaging, depending upon the character of the color design. As the Supreme Court made clear, inherent distinctiveness turns on whether consumers would be predisposed to equate the color feature with the source. While it is true that color is usually perceived as ornamentation a distinct color-based product packaging mark can indicate the source of the goods to a consumer, and, therefore, can be inherently distinctive.

The Federal Circuit found that as a source indicator, Forney’s multi-color product packaging mark is more akin to the mark at issue in Two Pesos than those at issue in Qualitex and Wal-mart. The Federal Circuit said it falls firmly within the category of marks the Court described as potential source identifiers. Supreme Court precedent simply does not support the Board’s conclusion that a product packaging mark based on color can never be inherently distinctive. The Federal Circuit noted that it was not the only court to conclude that color marks on product packaging can be inherently distinctive.

The Federal Circuit concluded that Forney’s proposed mark comprises the color red fading into yellow in a gradient, with a horizontal black bar at the end of the gradient. It is possible that such a mark can be perceived by consumers to suggest the source of the goods in that type of packaging. Accordingly, rather than blanketly holding that colors alone cannot be inherently distinctive, the Board should have considered whether Forney’s mark satisfies the Federal Circuit’s criteria for inherent distinctiveness.

On the alternate grounds, the Federal Circuit said that without explaining why it was doing so, the Board found that a color may only be inherently distinctive when used in conjunction with a distinctive peripheral shape or border. The Federal Circuit said that “nothing in the case law mandates such a rule.”

In determining the inherent distinctiveness of trade dress, the question to be answered is whether the trade dress makes such an impression on consumers that they will assume the trade dress is associated with a particular source. To assess that question, the Board must look to the following factors: (1) whether the trade dress is a “common” basic shape or design; (2) whether it is unique or unusual in the particular field; (3) whether it is a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods; or, inapplicable here, (4) whether it is capable of creating a commercial impression distinct from the accompanying words. Id. (collecting cases). These factors are all different ways to determine whether it is reasonable to assume that customers in the relevant market will perceive the trade dress as an indicator of origin.

The Federal Circuit concluded that the Board erred in stating that a multi-color product packaging mark can never be inherently distinctive. To the extent the Board’s decision suggests that a multi-color mark must be associated with a specific peripheral shape in order to be inherently distinctive, that too, was error. Accordingly, the Federal Circuit vacated and remanded for the Board to consider, whether, for the uses proposed, Forney’s proposed mark is inherently distinctive under the Seabrook factors, considering the impression created by an overall view of the elements claimed.

Descriptive Use or Infringement?

It was not April Fools joke — JaM Cellars, Inc. sued The Wine Group LLC for trademark infringement and unfair competition, complaining that Franzia’s BOLD & JAMMY boxed wine infringes their JaM trademark:

and Franzia’s RICH & BUTTERY wine infringed JaM’s BUTTER wine:

JaM’s name is a mash-up of the owner’s names:

http://www.johnanthonyfamilyofwines.com/people/

while BOLD & JAMMY is arguably a description of Franzia’s wine, “jammy” (according to wikipedia) being a common descriptor: “Jammy: A wine that is rich in fruit but maybe lacking in tannins.” Is Franzia describing, infringing, or both?

Butter is arguably descriptive of JaM’s Butter Chardonay. JaM says:

According to wikipedia, Buttery, like jammy, is a common descriptor of wine: “Buttery: A wine that has gone through malolactic fermentation and has a rich, creamy mouthfeel with flavors reminiscent of butter.”

Again the question is whether Franzia is describing its product, infringing JaM’s marks, or both.

Franzia’s biggest vulnerability may come from the change in its packaging, which JaM attributes to an intent to trade off of JaM’s good will:

Both parties may need to brush upon

Both sides may need to brush up 15 USC 1115(b)(4), which provides:

That the use of the name, term, or device charged to be an infringement is a use, otherwise than as a mark, of the party’s individual name in his own business, or of the individual name of anyone in privity with such party, or of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin

Endless Litigation

Bruce Brown Films, LLC, producer of the 1966 classic surfer film Endless Summer has sued Nike and assorted others for Federal Trademark Infringement, Federal Unfair Competition, Federal Trademark Dilution, Common Law Trademark for using the term Endless Summer in a marketing campaign.

Say . . . are those the new shoes from that movie from 1966?

The Nike display certainly uses the phrase “endless summer” but is not as a brand for its shoes. It is difficult to believe that anyone seeing the display believes that the shoes are somehow connected to the 1966 movie.

Nike did not do itself any favors by selecting artwork “inspired” buy the movie poster:

However while someone might confuse the source of Nike’s artwork, would someone really going to confuse the source of Nike’s shoes?

Bruce Brown Films, LLC holds a trademark registration on ENDLESS SUMMER for athletic shoes:

But Nike’s use of endless summer is to evoke a common feeling, not identify the source of Nike shoes. it will be interesting to see how the case develops.

Oh Yes You Are.

On March 26 Adidas prevailed on Summary Judgment in a trademark infringement suit alleging that its use of “You’re Never Done” infringed U.S. Reg. No. 4,928,298 on YOU’RE NEVER DONE for a variety of products including athletic shoes.

Plaintiff’s Reg. No. 4,928,298.

The court held that plaintiff did not use the mark in commerce before defendant. The parties did not dispute that Plaintiff did not make any product sales, because potential customers could not do so through plaintiff’s website until after suit was filed. Plaintiff tried to rely on non-sales activity, such as purchasing the domain names, establishing the website, and ordering products bearing the marks. However, the district court held that these activities, taken together, reflect “mere preparation to use a term as a trademark,” rather than actual use.

Plaintiff’s specimen showing the mark on products that weren’t actually on sale.

Ultimately, the Court found that Plaintiff’s registration on the YOU’RE NEVER DONE was void ab initio. The Court then turned to the question of whether plaintiff had common law rights in YOU”RE NEVER DONE

The court found that plaintiff did not show that he used the marks in commerce such that he is entitled to common law rights in them. Just as the Court found with respect to the plaintiff’s registration, Plaintiff’s non-sales activity relating to YOU’RE NEVER DONE reflects “mere preparation” rather than actual use. The Court found that Adidas started its campaign in March 2018 while plaintiff conceded its actual use did not begin until October 2019. Accordingly, even if plaintiff had “used” the mark in commerce, his alleged use postdates Defendant’s use, thus depriving him of any common law right in the marks.

The Court granted summary judgment in favor of defendant on the Lanham Act, and on plaintiff’s state law claims as well..