Something From “Nothing”

Nothing Bundt Cakes has built a business around bundt cakes. Anyone with a bundt pan can bake a bundt cake — Nothing Bundt Cakes, like any business, needed something to differentiate itself from other bakers, and found it in the way it frosted its cakes:

Nothing Bundt Cakes protected its unique design as its trade dress, and getting a federal trademark registration was the icing on the cake:

Nothing Bundt Cakes now has over 300 franchise locations throughout the United States and Canada, which collectively earn over $100 million annually in revenue. When All About Bundt Cakes opened a bundt cake business in Dallas-Fort Worth, and copied Nothing Bundt Cakes’s distinctive frosting pattern:

Nothing Bundt Cakes couldn’t stop another bakery form selling bundt cakes, but it could protect the distinctive elements that it purposely incorporated into its product, and the 21 franchisees it had in the area. Nothing Bundt Cakes sued All About Bundt Cakes in the Easter District of Texas [4:20-cv-00813-SDJ, filed 10/22/20]. Nothing Bundt Cakes sought a preliminary injunction, and when Anything Bundt Cakes failed to appear at the February 12 hearing, the Court granted the preliminary inunction.

Even a business with a relatively simple product can create value by making its product distinctive, and protecting that distinctiveness. The key is to develop unique, non-functional features that customers can rely upon to identify the business and its products, and protect those features, for example with a federal trademark registration

It’s OK to Give Less Weight to Suggestive and Descriptive Terms when Comparing Marks as a Whole

In Quiktrip West, Inc., v. Weigel Stores, Inc.,[2020-1304] (January 7, 2021), the Federal Circuit affirmed the dismissal of Quiktrip’s opposition to registration of Weigel’s W WEIGEL’S KITCHEN NOW OPEN:

in view of QuikTrip’s QT KITCHENS mark:

The Board evaluated the likelihood of confusion between the marks by referencing the factors set forth in In re E. I. DuPont de Nemours & Co. It first found that the parties’ identical-in-part goods and related services, overlapping trade channels, overlapping classes of customers, and similar conditions of purchase pointed to a likelihood of confusion finding. However, the Board found that the dissimilarity of the marks weighed against a likelihood of confusion. In conducting its similarity analysis, the Board acknowledged that both marks include the word “KITCHEN(S)” but determined that customers would not focus on that word for source identification because it is “at least highly suggestive, if not descriptive.

The Federal Circuit agreed that the Board correctly analyzed the marks as a whole, saying that it is not improper for the Board to determine that, for rational reasons, it should give “more or less weight to a particular feature of the mark” provided that its ultimate conclusion regarding the likelihood of confusion rests on a consideration of the marks in their entireties.  The Federal Circuit said that the Board properly found that, when evaluating the similarity of the marks, it should accord less weight to the shared term KITCHEN(S) because “kitchen” is a “highly suggestive, if not descriptive” word.  The Federal Circuit added that the Board was entitled to afford more weight to the dominant, distinct portions of the mark.

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.

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.

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..

Pocket Stitching Trademark is a Pain in Walmart’s A**

On March 24, 2020, American Eagle Outfitters sued Walmart in the Western District of Pennsylvania (2:20-cv-00412-DSC) complaining that the stitching on the rear pocket of Walmart’s jeans is confusingly similar to American Eagle’s “unique, distinctive, and proprietary pocket stitching design.” American Eagle alleges that Walmart’s misuse of its mark on a line of lower-priced jeans threatens its reputation.

One Applicant Gets his Registration, but all Trademark Owners may be F-U-C-T

In Iancu v. Brunetti, the Supreme Court extended our right to register offensive trademarks from the merely disparaging, to the outright immoral or scandalous. The Supreme Court reasoned that the “immoral or scandalous” bar discriminates on the basis of viewpoint and thus collides with the Court’s First Amendment doctrine. As a result, Mr. Brunetti is entitled to register F-U-C-T as a trademark.

In the personal opinion of this blogger, the Supreme Court has never really justified how denial of a federal trademark registration in an impingement on speech. The trademark owner is entitled to say whatever it was entitled to say before the refusal. Ironically, the effect of registration is to make it easier for the registrant to voice the same messages, the registration facilitating the enforcement of exclusive rights in the message. Trademarks are source identifiers, not messages, and by facilitating the protection of messages, what is the Court saying about the right of others to convey the same message.

Trademark owners should be wary. Aside from the continued erosion of propriety, the elevation of trademarks to protected speech may make enforcement more difficult against third parties inclined to voice the same or similar message. Already the line between trademark and message on t-shirts is blurred. With the explicit recognition of trademarks are messages, it seems that infringement may be harder to prove, and dilution almost impossible.

To continue its battle against view point discrimination the Supreme Court sacrificed propriety, and by elevating trademarks to protected speech, may have weakened the trademark rights of everyone. One applicant will get his registration, but all trademark owners may be F-U-C-T.

Does Your Trademark Have 401(k)?

Well perhaps not a 401(k), but a trademark does need a retirement plan. When a business a legacy mark with a new mark, the legacy mark may be deemed abandoned, free for anyone to adopt. To the extent that the legacy mark has residual good will, it may be lost to the owner, and may inure to the usurper. This unsatisfactory result can be avoided with a little (retirement) planning.

First, the owner should avoid any external (or internal) statements that the legacy mark it being dropped, eliminated or abandoned. It is sufficient to direct use of the new mark.

Second, the owner should use both the legacy mark and the new mark on product and in advertising, gradually decreasing the prominence of the legacy mark until customers’ loyalty is transferred to the new mark.

Third, the owner should find a version or model of the product on which to continue to use the mark. Ideally, this use would be continuous, but anniversary or special or limited editions can be enough to maintain rights. It may even be possible to introduce the new mark as a premium brand over the legacy brand.

Fourth, the business should step up its use of the legacy mark in connection with warranty and repair services and replacement parts. Registering the legacy mark for these services and parts will help maintain rights in the legacy mark.

Fifth, feature the legacy mark in company/product line histories in printed materials and on the company’s website.

Make no mistake, the only reason that an usurper would adopt another company’s legacy mark is to take the residual good will and divert business from the legacy brand owner. A few simple steps during re-branding can insure that your legacy mark enjoys a happy retirement.