Tag Archives: trademarks

Trademark vs. Mass Exposure: The Sriracha King Takes a Bold Position

Vietnamese immigrant David Tran began selling his Asian chili “sriracha sauce” under the Huy Fong Foods brand in 1980. Recently, that sauce has become a hot property among foodies, with Bon Appetit magazine once naming it the ingredient of the year. The apparent popularity of this ingredient has not gone unnoticed as numerous other food companies have been capitalizing on the sriracha sauce trend by adding it to their products, notably Frito-Lay, Heinz, and Subway.

While most companies with successful products fiercely protect their trademarks, Tran opted to forego seeking trademark protection for the sriracha name, choosing instead to only seek trademark protection for the unique green topped bottle and the rooster logo. To some marketing executives, the choice is a fundamental misstep, but Tran stands behind his decision citing mass exposure and “free advertising” as a key to his brand’s success. The numbers seem to favor Tran’s argument, with sriracha sales increasing from $60 million to $80 million in the last two years.

Either way, the ship appears to have sailed for Tran on the trademark issue, and actually may have in 1990 when Tran’s ‘rooster logo application’ was filed. In that application, the word SRIRACHA was disclaimed, meaning it was found to be a merely descriptive or generic term in relation to the goods identified in the application. While the history of the rooster logo application prior to registration is not accessible online, the fate of this word may have been sealed in that application, which identified the goods as ‘hot chili sauce; namely, Sriracha Hot Chili Sauce’. This description likely provoked the disclaimer requirement, which has been continued in future applications.

Currently, there are over 24 trademark applications for marks that include the term SRIRACHA, most in association with food or food related services. Of the few that have registered, each was required to disclaim the term SRIRACHA, meaning the Trademark Office is of the opinion that the term is merely descriptive or generic in association with identified goods. Assuming the term ‘sriracha’ was protectable at one point in time, had Tran filed a trademark application for “sriracha” earlier, he may have been able to protect it as a brand of chili sauce, thereby giving him the ability to prevent its use by third parties.

Although Tran seems to be benefitting from the current third party use, Tran may have reason to worry. While there are a number of companies currently selling sriracha style sauce, the makers of Tabasco®, sauce giant McIlhenny Co., is entering the sriracha market, with a vast advertising budget and superior distribution outlets. Should McIlhenny flood the market with its own ‘sriracha’ product, Tran may find that his strategy backfired in decreased profits and market shares. For the time being, McIlhenny admits Tran “got an awful big head start.”

If history is any indicator of the future, it is likely that the term “sriracha” will eventually cease to function as any form of advertising for Mr. Tran exclusively, but will instead, likely be viewed simply as a type of delicious chili sauce. The term is likely to go the way of other terms like “escalator” and “aspirin” that have ceased to be associated exclusively with a single company. Indeed, by allowing numerous other companies to create and market a sriracha sauce, Mr. Tran has all but insured that his original sriracha sauce will soon be but one among many in a vast ocean of sriracha sauces. The sad result of Mr. Tran’s failure to protect his brand may be that the substantial competitive advantage he once possessed may soon be thoroughly neutralized and overshadowed by other companies more intent on building and protecting the brands associated with their products.

Ultimately, the test of Tran’s choice will pass to the consumers. Will sriracha customers remain loyal to Tran and his Huy Fong product that invented the flavor profile and caused the sensation, or will they bow to McIlhenny’s accessibility and name recognition?

Anna Vradenburgh is a well-respected, business-minded expert in intellectual property issues. As a patent attorney licensed to practice before the United States Patent and Trademark Office, Anna assists clients in patent and trademark prosecution, and represents clients in trademark opposition matters, domain name dispute matters, and patent and trademark litigation. Anna can also assist your company in all manner of intellectual property protection. For more information, visit her website, or contact Anna at (818) 946-2300. This article is for educational purposes only and nothing in this article is intended to be, nor should be considered legal advice.

Reservation of Trademark Rights Requires A Bona Fide Intent to Use

While many countries issue trademark registrations with a broad description of goods and services, and without evidence of use of the mark on any of the identified goods and services, to obtain a trademark registration in the United States, an applicant must ultimately provide evidence of use of the trademark in association with the goods and services identified in the applicant’s trademark application.

Although the United States Patent and Trademark Office (USPTO) requires that trademark applicants provide evidence of use of the mark on the goods and services identified in the application, the USPTO allows applicants to file a trademark application based either on actual and current use in interstate commerce, or upon a declaration that the applicant has a bona fide intent to use the trademark in interstate commerce in association with the identified goods and services.  This latter type of application is known as an intent-to-use (ITU) application.

Because an ITU application is not based on use of a mark, applicants tend to include broad descriptions of goods and services in the initial filing.  While doing so is not improper per se, it is important for applicants to remember that they must actually have a bona fide intent to use the mark on the identified goods and services at the time of filing.

While the USPTO may not typically question an applicant’s declared intent to use a mark with specified goods and services, third parties may not be so willing to believe the applicant’s declaration of a bona fide intent to use the mark in association with the listed goods or services.  Indeed, a recent opinion from the Trademark Trial and Appeal Board (TTAB) demonstrates that this declaration, alone, may not be sufficient to overcome a challenge from a third party that the applicant lacked a bona fide intent to use the mark on the goods and services at the time of filing.   In Lincoln National Corp v. Anderson, 100 USPQ2d 1271 (TTAB 2014), the TTAB sustained two oppositions to register the mark FUTURE, finding that the applicant lacked a bona fide intent to use the mark for specific services.

In this case, applicant Kent G. Anderson, a colorful trademark applicant, filed two ITU applications to register the mark “FUTURE.”  Between the applications, Mr. Anderson listed goods and services in 19 different classes for literally hundreds of varying and somewhat unrelated goods and services, including, for example, insurance agency brokerages, electronic credit card transactions, leasing shopping mall space, and for goods ranging from candy to electronic consumer products to shoes.   An opposition against each of Mr. Anderson’s applications was filed by the plaintiff, Lincoln National, collectively challenging his Class 35 services, for in part, shopping malls, franchising, and data processing services, and the Class 36 services, which included banking, insurance and financial services.  Lincoln National based its challenges on the claim that the applicant did not have a bona fide intent to use the mark on the services in these classes at the time of filing the applications.

Trademark Act Section 1(b)(1) (“Section 1(b)”) provides, in pertinent part, that “[a] person who has a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce may request registration of its trademark on the principal register….” In its discussion, the Board reiterated the standard for bona fide intention to use a mark, namely, “the determination of whether an applicant has a bona fide intention to use the mark in commerce is to be a fair, objective determination based upon all of the circumstances.”  The Board then noted that the requirement that an applicant have a bona fide intent to use the mark must be read in conjunction with the definition of ‘use in commerce’, wherein ‘use in commerce’ is defined as use “in the ordinary course of trade, and not made merely to reserve a right in a mark.”

In evaluating Mr. Anderson’s intent to use the mark with respect to the challenged services, the TTAB noted that while the applicant had “idealistic hopes for forming a futuristic company,” had created a website that described his plans for the future, and had produced letters he had written to a variety of companies, including Ferrari, Proctor & Gamble, and Kellogg’s, outlining his visions for the future, these actions alone were insufficient to demonstrate intent to use the mark in connection with the described services.  For example, none of the letters actually identified any of the services, and each were merely discussions about general ideas and hopes for a FUTURE project.  The Board noted that Mr. Anderson was a sole proprietor without any knowledge of many of the areas included in his trademark applications, and specifically admitted in depositions that he lacked the funding, connections, know how, and even the desire to undertake business ventures associated with the challenged services identified in the trademark applications.

As a result of its findings, the TTAB found that the applicant failed to demonstrate a bona fide intent to use the “FUTURE” mark, sustaining oppositions to register the mark for the challenged services, stating that the applications were void ab initio as to Classes 35 and 361.  In other words, the TTAB held that bona fide intent to use must be based on tangible evidence-capital, business plans, distribution contracts, concrete partnerships-and may not exist merely in the head of the applicant.

To support its conclusion, the Board looked to the legislative history of Section 1(b), 15 U.S.C. Section 1051(b) et seq., and noted that included in the objective circumstances which may cast doubt or even disprove the bona fide nature of the intent was “an excessive number of intent to use applications in relation to the number of products that the applicant…[was actually] likely to introduce under the applied for marks during the pendency of the applications.”  Accordingly, the Board concluded that Mr. Anderson, “in filing the application, was merely attempting to reserve a general right in the [FUTURE] mark for potential use on some undetermined goods or services at some indefinite time in the future.”

This case is a reminder that, although the Trademark Office allows a liberal filing of goods and services based upon the intent to use a mark, that intent must be demonstrable, if challenged.  Thus, as a practical matter, although it is acceptable to list many unrelated and disparate goods and services in an ITU application, it might be more prudent to limit the goods and services to those that are reasonably likely to be transformed from merely an intent to use, to actual use in commerce.

If you have questions about filing a trademark application, you need an experienced trademark attorney.  Anna Vradenburgh is a well-respected, business-minded expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks.  In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board.  Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements.  For more information visit the Eclipse Law Group website, or contact Anna directly at (818) 488-8146.

1This decision did not affect any of the remaining goods and services.  Thus, the entire applications were not void ab initio, only the applications as to Classes 35 and 36.

Trademarks, the Lanham Act, and Your Business

The Lanham Act Reexamined

In recent months, the U.S. Supreme Court has issued two opinions that clarify the scope of the Lanham Act.  In March, the court ruled on Lexmark International v. Static Control Components, which addressed the issue of standing, including the issue of who could bring a claim, thereby clarifying the Lanham Act’s broad language which states that “any person who believes that he or she is or is likely to be damaged” by another person’s false advertising could bring a civil action.  The high Court’s Lexmark ruling confirmed the right of one competitor to sue another competitor for “false or misleading” statements in advertising and labeling, and dismissed prior complex tests for proving standing to bring Lanham Act claims.In June, following Lexmark, the court ruled in Pom Wonderful v. Coca-Cola, that Lanham Act claims were not pre-empted by Food and Drug Administration (FDA) labeling regulations.  In both of these cases, the court outlined the importance of the Lanham Act and the rights of competitors to use the Lanham Act to address false and misleading statements in both advertising and labeling on products, for the benefit of the consumer.

The Pom case is illustrative, in that it is a very simple example of a Lanham Act claim by a competitor.  Pom sells pure pomegranate juice, which it claims has health benefits.  Pom sued competitor Coca-Cola under the Lanham Act alleging that the label on one of its juice products misleads consumers into believing the product consists predominantly of pomegranate and blueberry juice as it prominently displays the wording “pomegranate blueberry”, when it in fact, the product contains only 0.3% pomegranate juice and 0.2% blueberry juice.  In its opinion, the Supreme Court reviewed the intersection between two bodies of federal law-the Lanham Act, and the FDA’s labeling requirements.  Coca-Cola claimed that Pom’s Lanham Act claims were barred because Congress intended the FDA labeling rules to govern product labeling issues.  The high Court disagreed with Coca-Cola, ruling that Pom Wonderful may pursue claims under the Lanham Act against competitor Coca-Cola for alleged false claims on its product labels. (Ironically, Pom Wonderful is appealing a decision of the Federal Trade Commission that concluded Pom’s health claims on its products were deceptive.)

According to a Bloomberg article, “the ruling means that food labels will come under increasing scrutiny, and it’s possible many won’t fare well.”

While this is an important ruling for food manufacturers, the decision extends to all types of businesses.  Indeed, the general issues of unfair competition, and false advertising create a potential Lanham Act claim for any operating business.

Your Business and the Lanham Act

Any business, regardless of whether it sells labeled products, should be aware that it, in addition to other regulations, may be subject to claims of unfair competition and/or false and deceptive advertising under the Lanham Act.  Here are a few tips for consideration to help avoid such claims:

1.  Review your product labels, website, advertising and other written materials.  Ask whether your company’s product labels and advertising is accurate and truthful.  Do they claim that your product or service does more than it really does?  Could your claims be considered misleading to consumers?  Could your product or service claims be confusing to the average customer or client?  If so, maybe it is time for a re-write before you find yourself fending off claims by competitors.

 

2.  Consider your competitors’ claims.  Are your competitors claiming that their products can do more than they really do, in a way that is harming your business?  Could competitor statements be misleading or confusing to consumers?  If your competitors are making fraudulent or misleading claims, and those claims are harming your company’s bottom line, bringing a Lanham Act claim might be one way to fight back.

 

If you have questions about trademarks, or the Lanham Act, and the intersection between the Lanham Act and your intellectual property, you need an experienced trademark attorney.  Anna Vradenburgh is a well-respected, business-mind expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks.  In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board.  Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements.  For more information visit the Eclipse Law Group website, or contact Anna at (818) 488-8146.

Water Bottler Thirsty for Justice in Trademark Dispute

Maine Springs LLC v. Nestlé Waters, U.S. District Court for District of Maine, 2:14-cv-00321 (2014), Filed August 11, 2014

One Maine water bottler is thirsty for justice in a federal unfair competition dispute.  Maine Springs LLC, a local water company in Maine, has filed a suit against Nestlé Waters NA in U.S. District Court for the District of Maine alleging false and misleading advertising, and tortious interference with business.  More specifically, Maine Springs alleges that labels on Nestlé’s bottled water products bearing the Poland Spring® mark contain false and/or misleading statements as to the sources of the water in violation of the federal Lanham Act, and that because of its assertion of its trademark rights in the Poland Spring® mark against Maine Springs, Nestlé has effectively interfered with Maine Springs’s attempts to sell its bulk water to other third party bottling companies.

This suit is one of the first to follow a recent ruling from the U.S. Supreme Court in a similar labeling dispute between Coca-Cola and Pom Wonderful, LLC (discussed in more detail below).  In that case, the Supreme Court ruled that a Lanham Act claim could be brought against a competitor challenging the competitor’s food and beverage label, even though the food and beverage label was subject to Food and Drug Administration labeling regulations.

The dispute between Maine Springs and Nestlé arises from Maine Springs allegations that the Poland Spring, a natural water source in Maine, has not been in use for more than 30 years, and thus, accordingly the complaint, was not in use in 1994, when Nestlé began bottling and selling water under the Poland Spring® brand.  Thus, any statements made by Nestlé that the water is sourced from the Poland Spring are false and misleading.  Further, according to the complaint, Nestlé’s label indicates that the water is 100% spring water.  Maine Springs contends that this too is false, and states that Nestlé utilizes water from other springs and non-spring water sources, from other places in the region.

According to Nestlé, the Poland Spring® brand is famous and has been marketed for decades.  Indeed, Nestlé owns numerous U.S. federal trademark registrations that include the words POLAND SPRING for spring water.  Based on its rights in these registrations, Nestlé sent Maine Springs a cease and desist letter threatening litigation in response to Maine Springs’ attempt to bottle and market a bottled water product after securing permits to extract water from underground spring water sources in Maine, wherein the label on the bottled water product identified the source of the water as Poland Spring, Maine.  Nestlé contended that this would create confusion with Nestlé’s Poland Spring® bottled water product.

Further, Maine Springs was in the process of securing contracts to sell bulk water to other small and mid-sized bottlers, including Niagara Bottling Company, and Crystal Rock.  Maine Springs alleges that because of a cease and desist letter from Nestlé threatening trademark infringement against Maine Springs for labeling that indicated that the water source was Poland Spring, its potential business partners rejected Maine Springs’ proposals for fear of threatened litigation by Nestlé.  Although there are no allegations that Nestlé ever directly contacted any of the bottlers, Maine Springs alleges that Nestlé’s actions constituted tortious interference with prospective business advantage.

This is the third lawsuit that Nestlé has defended regarding the label on its bottled water.  The company settled two prior consumer class action suits for fraud in Illinois and Connecticut, by parties who claimed that Nestlé used municipal water to fill its bottles, despite product labels that represented the product was 100% natural spring water.

Whether Nestlé’s statements on the labels are false and misleading remains to be seen, as does whether threatening litigation against Maine Springs constitutes tortious interference of business with parties in negotiation with Maine Springs.  However, based on its registrations, Nestlé has the right to object to product labels that attempt to utilize its brand Poland Spring® as a source identifier of the product.  Competitors, however, are entitled to identify the geographic location Poland Spring.  Thus, the resolution of this issue will likely depend upon the manner in which the identification of the geographic location, Poland Spring, is presented on the label, as it is not likely that Nestlé’s registration rights will allow them the ability to prevent truthful statements regarding the geographic location of the water being sold to be included on the product.

If you have questions about trademarks, or have received a cease and desist letter from a competitor, you need an experienced trademark attorney.  Anna Vradenburgh is a well-respected, business-mind expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks.  In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board.  Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements.  For more information visit the Eclipse Law Group website, or contact Anna at (818) 488-8146.

Business Tips for Trademarks

There has been a lot of media coverage regarding the case before the Trademark Trial and Appeals Board (TTAB) that resulted in the cancellation of the federally issued trademarks owned by National Football League’s Washington Redskins containing the word “REDSKINS” on the ground that the term is disparaging to Native Americans. With the Redskins case in the news in the last few weeks, many businesses are looking at their own trademark portfolios with an understandable degree of concern as to whether they too may own trademark registrations that might also be potentially challenged and cancelled on similar grounds.

Judging from the discussions I have had in the wake of the news regarding the cancellation of the Redskins federal trademark registrations, I think many business owners are wondering how a famous trademark, like REDSKINS, that has been federally registered since September 1967 (almost 45 years) could be subject to cancellation. Above and beyond simple curiosity, there is justifiable concern regarding the protectability of trademark rights when those rights appear to be subject to termination by judicial fiat. It is not unreasonable, in my opinion, in the wake of the Redskins decision for businesses to wonder whether their investment of capital and effort in a protectable brand is as safe or prudent a use of their resources today as it was prior to the Redskins decision.   One might reasonably wonder, for example, if the owners of the Redskins football team had been asked, years ago, to invest millions of dollars to develop the REDSKINS brand and to properly protect the brand via federal trademark registration, with the caveat, that despite the investment of an enormous amount of time and money, the brand would be subject to challenge, and the corresponding trademark registration subject to cancellation, decades later, by persons, not yet born, who would not be competitors or even associated with football, my guess is that the answer would have been a resounding ‘NO’.

So, just how did the Washington Redskins and the NFL come to find themselves in this position? Well, let’s start with the selection of the trademark.

Trademarks are typically categorized as fanciful or coined, arbitrary, suggestive, and merely descriptive. There is one more category, generic. However, technically any term that falls into this category can never be a trademark for reasons discussed below.

To create a strong brand, it is best if the mark is ‘fanciful’ or ‘coined’. These are terms that are completely made-up, that is, the term has no meaning other than as a trademark. A classic example is XEROX for photocopiers.   These are some of the strongest marks assuming they are properly used and protected.

‘Arbitrary’ marks are those marks which comprise a word that is a common word, but the meaning of the word has no relation to the goods or services associated with the mark. APPLE for computers is one such example. These too, start as very strong marks.

A ‘suggestive’ mark is one that suggests some attribute or characteristic of the goods or services, but does not describe them.   An example of a suggestive mark is AIRBUS for airplanes.

Finally, a ‘descriptive’ mark is one that merely describes the goods or services. These types of marks can ultimately be registered on the Principal (or primary) Register, but only after proving they are capable of being a source identifier, that is, consumers believe the goods or services emanate from a common source. These marks are near the weaker end of the spectrum, but can be protected.

Terms that are generic, that is, they are the common term for the goods or services can never be registered. The selection of a generic term as a brand does not offer protection for the brand name and allows third parties to use the term freely.

The REDSKINS mark is considered an arbitrary mark, and therefore a choice that, from a trademark protection perspective, was a good choice for a strong mark. Why then, was it subject to challenge?

In addition to the considerations of the type of mark to select (fanciful, arbitrary, etc.), persons seeking federal registration of trademarks must also consider other important issues. For example, consideration must be given regarding whether the mark is a surname or a geographical location, whether the mark is misdescriptive of the goods or services with which it is to be associated, whether the mark is protected indicia, or whether the proposed trademark is immoral or scandalous, or may disparage, for example, persons (living or dead), beliefs, or symbols. This last consideration, i.e., whether the mark would be considered disparaging, is the one at the heart of the REDSKINS cancellation proceeding.

There is no published information to my knowledge regarding whether the issue of disparagement toward Native Americans was considered in the selection of the REDSKINS mark. The evidence in the case presumably showed that the sentiment that the trademark was disparaging existed at the time the trademark was selected. The NFL has maintained throughout the dispute that it has always acted honorably and respectfully towards Native Americans. While this may be true, with respect to the action brought by Native Americans before the TTAB, the NFL’s intent is irrelevant.

The TTAB ruling suggests that Native Americans may have been objecting to the use of this mark for quite some time. But the first cancellation proceeding brought by the petitioners in the REDSKINS case was not filed until 1992, fully twenty-five years after the mark’s initial federal registration. One might ask if a substantial composite of Native Americans found the term “redskins” to be disparaging at the time of the registrations of these successively filed marks, why the offended parties did not institute proceedings years ago? While there may be an answer to that question, it does not appear in the record of the case. Moreover, the issue of the lack of objection by Native Americans to the use of the name for decades did not apparently factor into the TTAB’s decision.   Many believe this is unfortunate or even unfair as the NFL heavily invested in the REDSKINS brand relying on what might well have been a reasonable belief that use of the brand in association with a highly successful and much beloved football team was not offensive to a substantial composite of Native Americans.

The cancellation of the REDSKINS federal trademark registration has sent shock waves throughout the legal and business communities.  The ruling will act as established precedent for future cancellation proceedings.   It is a ruling that has provoked questions about vulnerability of trademark rights to attack by individuals or groups that might be able to demonstrate that they are somehow offended by a mark.   But more importantly, perhaps, is the fact that the case has raised, and will continue to raise, questions of fundamental fairness. Specifically, the fairness of basing the cancellation of a famous trademark comprising an enormously successful brand for which the owner has made a huge monetary investment over literally decades on the ground that the trademark was disparaging at the time of its registration and offends a group that failed to timely pursue its rights.

The NFL has indicated that it will appeal the ruling. Accordingly, the fate of these registrations is yet to be seen.

trademark

If you need assistance with trademark registrations, searches, or trademark licensing, Anna Vradenburgh is a well-respected, business-mind expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks. In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board. Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements. For more information visit the Eclipse Law Group website, or contact Anna at (818) 488-8146.

Washington Redskins Trademark Follow Up

All eyes have been on the Trademark Trial and Appeals Board (TTAB), following the recent order to cancel six trademark registrations owned by National Football League’s Washington Redskins, each containing the word REDSKINS. Although a divided TTAB granted the Native American’s petition to cancel federal registration of the team’s mark, the decision will not prevent the Washington Redskins from using the trademark in its name, uniforms, and the like.

The TTAB decision comes after twenty years of efforts by Native American petitioners who allege that the ‘REDSKINS’ marks disparage Native Americans. The TTAB first reviewed Native American petitions to cancel the trademarks in 1992, although that case, Pro Football, Inc. v. Harjo, 90 USPQ2d 1993 (D.C. Cir. 2009), was ultimately dismissed by the D.C. Circuit, not on the merits, but for procedural reasons.

In the recent matter, because all of the challenged registrations had been registered for more than five (5) years, the TTAB had a very narrow legal question to answer, namely, whether the evidence made of record, established “that the term ‘redskins’ was disparaging to a substantial composite of Native Americans at the time each of the challenged registrations issued.”  (emphasis added)  That is, during the time period from 1967-1990 (registrations issued in 1967, 1974, 1978, and 1990).  To answer this question, the TTAB applied a two-part test, which (1) looked at the meaning of REDSKINS as it appears in the trademarks, including how those marks were used in connection with the goods and services identified in the registration; and (2) whether that meaning may disparage Native Americans.

In considering the first part of the test, the TTAB found that the Washington Redskins and the NFL “made continuous efforts to associate its football services with Native American imagery.”  Because of the maintained association with Native Americans, the TTAB found that the marks retained their connotation and meaning with respect to Native Americans.

With regard to the second part of the test, the TTAB stated that the determination of disparagement must be made within the context of the goods or services, wherein the context could: (a) make an innocuous term offensive; (b) remove the disparaging meaning from an otherwise disparaging term; or (c) have a no effect on a term’s disparaging meaning.

Although the NFL argued that its use of the mark removed the disparaging meaning of the term and that it had honorable intent in its use of the marks, the TTAB ultimately agreed with the petitioners that the NFL’s use had no effect on the disparaging meaning of the term.  The finding that the term was disparaging during the relevant period was based, in part, on a determination that a substantial composite of Native Americans, approximately 30%, found the meaning of the term REDSKINS to be disparaging during the relevant time periods.  Although the NFL produced contradictory evidence from Native Americans, the evidence did not negate the negative opinion of the substantial composite.  In making its finding, the TTAB stated “[t]he ultimate decision is based on whether the evidence shows that a substantial composite of the Native American population found the term “Redskins” to be disparaging when the respective registrations issued.  Heeb Media LLC, 89 USPQ2d at 1077.  Therefore, once a substantial composite has been found, the mere existence of differing opinions cannot change the conclusion.”  In addressing the NFL’s contentions regarding its honorable intent in the use of the marks, the TTAB stated the “alleged honorable intent and manner of use of the term do not contribute to the determination of whether a substantial composite of the referenced group found REDSKINS to be a disparaging term in the context of respondent’s services during the time period 1967-1990, because the services have not removed the Native American meaning from the term and intent does not affect the second prong.” Because the term was determined to be disparaging during the relevant time period, the TTAB concluded that that the marks should be cancelled.

The Washington Redskins have announced plans to appeal the TTAB decision.  The trademark registrations remain in effect while the appeal is pending, and as stated above, this decision has no legal effect on the team’s ability to use the term REDSKINS or the marks.

Beyond potential financial losses to the NFL, the implications of this TTAB decision are unclear at this time.  However, there are many trademarks that could be affected by this ruling.

While other companies have successfully defended their marks before the TTAB against petitions to cancel from Native American groups, notably SQUAW VALLEY marks in connection with ski goods and services, 80 USPQ2d 1264, 1267 (TTAB 2006), the Redskins matter may represent a new reality for owners of Native American themed marks.

If you have questions about the implications of the TTAB Redskins ruling or your company owns a Native American themed trademark, you need an experienced trademark attorney.  Anna Vradenburgh is a well-respected, business-mind expert in trademark issues with extensive experience prosecuting domestic and foreign trademarks.  In addition to her prosecution practice, Anna also assists clients in the selection and use of trademarks and represents clients in trademark opposition matters, domain name dispute matters, and before the federal Trademark Trial and Appeals Board.  Anna can also assist your company in licensing maters, including drafting and negotiation of trademark licensing agreements.  For more information visit the Eclipse Law Group website, or contact Anna at (818) 488-8146.

Successful Trademark Cancellation Based on Defective Claim of Ownership

The Lanham Act is a federal law that governs the registration and enforcement of trademarks and service marks in the United States, including the registration of trademarks in the United States based on foreign registrations.  In particular, Section 44 of the Lanham Act governs the manner in which a foreign registration can be used to obtain a valid registration in the United States for the same mark.  One of the critical aspects of Section 44, more specifically Section 44(e), is the requirement that an applicant for registration of a foreign mark in the United States must prove that it is, at the time of filing the U.S. application or at the time that the Section 44(e) basis for filing is added to the application or at the time of the issuance of a U.S. registration, the owner of a valid registration from the applicant’s country of origin. This requirement recently proved to be fatal to a British company’s U.S. registration for BEARWW for Internet based social networking and introduction services, based on a Canadian trademark registration and registered under Section 44(e).  The U.S. application was originally filed by, and a registration issued to, Canadian citizen, Marie Laure Leclerq.  The registration was assigned to Webid Consulting Ltd. on June 1, 2012.

In that matter (SARL Corexco v. Webid Consulting Ltd., Cancellation No. 92056456 (TTAB 2014)), French company, SARL Corexco (“Corexco”), filed an action for cancellation before the U.S. Trademark Trial and Appeal Board (“Board”) against U.S. Registration No. 4,148,217 for the mark BEARWW .  At the time of the cancellation proceeding, the registration was owned by Webid Consulting Ltd. (“Webid”), a United Kingdom corporation. Corexco based the cancellation on two arguments: (1) that the trademark “BEARWW” is likely to cause confusion with Corexco’s prior use of the mark BEARWWW in association with online social networking services and (2) that the registration, which was based on the Canadian registration for the mark BEARWW and registered pursuant to Section 44(e), was void ab initio as having a defective basis for registration.

After some discovery in the proceeding, Corexco filed a motion for summary judgment.  Although the Board refused to grant summary judgment on the issue of likelihood of confusion, it did order cancellation of Webid’s registration of the trademark on the basis of Corexco’s other stated ground.  In particular, the Board noted that, at the time the BEARWW trademark was registered, the original registrant, Canadian citizen, Marie Laure Leclerq, did not concurrently own the Canadian registration upon which the U.S. application was based and upon which it registered.  During the course of formal discovery in the case, Webid admitted Ms. Leclerq never owned the Canadian registration.  Indeed, on the date that the Section 44(e) basis for filing was added to the application, namely, August 11, 2011, Webid, and not Ms. Leclerq, was the registered owner of the Canadian registration.  And while Ms. Leclerq did eventually assign the American trademark registration to Webid on June 1, 2012, the Board held the assignment to be of no consequence.   Ms. Leclerq neither owned the Canadian mark at the time of registration of the U.S. application, nor any time before.  Thus, the application was defective under the Lanham Act because Ms. Leclerq did not own the Canadian registration, at any of the critical dates, the filing date, the date that the Section 44(e) was added as a basis for registration, or the registration date of the U.S. application.  Since there were no other facts to prove ownership of the foreign registration at any of the crucial times, the Board granted Corexco’s motion for summary judgment and ordered the cancellation of the registration.

This case demonstrates the imperative that individuals and other entities seeking a U.S. registration based on a foreign registration must strictly comply with the rules governing domestic federal registration of foreign marks. It also underscores the importance of relying on experienced and knowledgeable counsel, suitably familiar with trademark law, to obtain registration of such marks.

This article is not intended to be, nor should it be considered to be, legal advice.

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Attorney Anna M. Vradenburgh counsels and represents clients facing trademark, copyright, patent and other intellectual property issues, providing expert advice regarding intellectual property protection, exploitation and rights enforcement.

Ms. Vradenburgh can be contacted as follows:

The Eclipse Group

6345 Balboa Blvd, Suite 325,

Encino, California 91316

(818) 488-8146

www.EclipseGrp.com

Effects of Lack of Net Neutrality Rules

Net neutrality is the aspirational concept that the Internet should be free and open to all of its users.   Advocates for net neutrality believe networks such as Comcast, AT&T and other Internet service providers which offer online access to millions of Americans should be treated as common carriers, the traditional role held by phone companies and railroad companies, which have to provide their services in a nondiscriminatory fashion to all consumers.  But, as indicated in the article, “Circuit Court Strikes Down Net Neutrality Rules” heading this newsletter, the net neutrality rules in place by the FCC must be revisited.

What this ruling might mean for consumers must be viewed in light of two recent deals pursued by Comcast, the leading cable television company in the nation.   Specifically, the deals involve a proposed merger with its closest competitor, Time Warner Cable and a content use arrangement with Netflix potentially providingComcast with the opportunity to access its voluminous video content directly from its servers.  This ostensibly would allow. Comcast users the ability to receive faster downloads from Netflix than non-Comcast customers.  To the extent that Comcast continues to serve a larger share of the country’s Internet users, it can ultimately elect to increase the cost for consumers to obtain higher quality content more quickly.  Consumers who choose to purchase Internet service from less expensive providers may either be unable to access certain content at all, or not be able to access it with speed.

Further, as Comcast owns NBC Universal, some have speculated that it might be able to offer NBC’S content to customers at rates that are lower than many of its competitors.  If so, it would not be surprising if we soon see other content providers attempting to form distribution arrangements that are similarly competitive distribution arrangements.   Currently, the situation remains in flux.  The net result, no pun intended, is that consumers’ content delivery choices may eventually effectively be constricted, perhaps to a two-tier pricing structure where content will be available at an increased cost for faster online delivery.

Even more concerning is the possibility that if net neutrality is not restored, consumers may be faced with the situation that only those that get Internet service from the giant ISPs, like Comcast, will readily have access to premium and more desirable content.  Moreover, if the percentage of consumers receiving Internet access from giant ISPs like Comcast continues to increase, it will likely result in increasing difficulty for providers of less popular content to market their content without a favorable arrangement with one of the large ISPs.   Thus, if net neutrality is not restored, content providers may soon face a distribution environment that discourages video producers, writers and artists without influential connections from producing innovative content because of significant ISP-created barriers reducing the likelihood that such content will ever be viewed.

While it appears to be dead for the moment, the FCC has vowed to take steps to resurrect net neutrality in some form.   Many of the concerns now being loudly expressed by content providers, free speech advocates and some consumer groups may ultimately be unrealized.  Therefore, we will have to wait and see what the FCC ultimately does.

Attorney Anna M. Vradenburgh counsels and represents clients regarding trademark, copyright, patent and other intellectual property issues, providing expert advice regarding intellectual property protection, exploitation and rights enforcement.  To discuss your particular matter with Ms. Vradenburgh, please contact her at the Eclipse Group, located at 6345 Balboa Blvd, Suite 325, Encino, California 91316, by calling (818) 488-8146 or going to her website or her profile on LinkedIn.  This article is not intended to be, nor should it be considered to be, legal advice.
Net Neutrality Rules

Circuit Court Strikes Down Net Neutrality Rules – Perspective

For several years now, an extremely consequential debate concerning net neutrality rules has pitted the freedom to equally access information on the Internet against the right of broadband providers to set prices for, and otherwise control, the bandwidth and Internet connectivity services as they choose.  Net neutrality refers to the notion that the web should be free and open so that users have unimpeded access to any service or application without Internet service providers (ISPs) imposing restrictions or bans on such access.

By statute, the Federal Communications Commission (FCC) is authorized to regulate “all interstate and foreign communications by wire or radio.”  Internet communications, therefore, fall within the jurisdiction of the FCC.   Through the Open Internet Order of 2010, the FCC established net neutrality rules on broadband providers, including disclosure, anti-blocking and anti-discrimination rules, in an effort to prevent companies, which provide access to the Internet, from discriminating against different content providers.  The FCC feared that broadband providers would grant preferential treatment to some influential content providers at the expense of new startups and smaller companies, which would struggle to compete in such an environment wherein established providers have reinforced brand advantages.  In this type of environment, some content might become slower to access, become inaccessible or simply cost more to access.

Pursuant to Title II of the Communications Act of 1934, the FCC is granted broad authorization to regulate “common carriers”, such as telephone companies.  Under this authority, the FCC could vigorously regulate the telephone companies, including mandating that all telephone calls made on its network be allowed, and further, regulating the rates that could be charged.   The rules set forth in 2010 by the FCC seem to reflect the exercise of this broad authority.   However, this broad regulatory power applies specifically to “common carriers.”  In 1996, Congress enacted The Telecommunications Act of 1996, which defines two types of entities: telecommunications carriers, which are classified as common carriers; and information services providers, which do not fall within that category.

In Verizon v. FCC, No. 11-1355 (D.C Cir Ct. App. 2014), Verizon Wireless sued the FCC claiming the regulatory body lacked the authority to regulate how their company offers content to its customers.  Verizon argued that the FCC could not subject it to the same regulations which governed utilities, such as telephone carriers, like AT&T and the Baby Bells in previous decades.  Verizon contended that anti-blocking and anti-discrimination rules, as applied to the telephone companies in years past, should not apply to them as they fall outside the category of “common carriers” because of the FCC’s prior categorization of Verizon and similar bandwidth providers as information service providers and not as telecommunications carriers.

The DC Circuit Court of Appeals agreed with Verizon’s position and ruled that while the FCC did have some authority under Section 706 of The Telecommunications Act of 1996 to regulate traffic on the Internet, the scope of its regulatory power did not extend to the implementation of the anti-blocking and anti-discrimination rules set forward in the FCC’s Open Internet Order of 2010, the directive which implemented the net neutrality approach.  In some respects, the FCC was hoisted on its own petard, or its prior leadership’s petard, with respect to whether these internet companies can be correctly analogized to the telephone companies of decades past.  The DC Circuit Court relied on the FCC’s decision in 2002 that Internet service providers were not a telecommunications carrier, but rather, an information service provider.  This self-classification limits the F.C.C.’s authority, according to the DC Circuit Court of Appeals.

While Verizon did win this particular battle, the DC Circuit Court of Appeals did offer the FCC some room to maneuver.  It noted, making an obvious analogy between the Internet and railroads, that “Railroads have no obligation to allow passengers to carry bombs on board, nor need they allow passengers to stand in the aisles if all seats are taken. It is for this reason that the Communications Act bars common carriers from engaging in “unjust or unreasonable discrimination, not all discrimination.”

The DC Circuit Court’s decision provides the FCC the chance to rewrite regulations that fall within the limited authority they were granted by Congress via the 1996 Telecommunications Act to encourage innovation and growth of the Internet.  In this regard, the FCC can seek to find a middle ground, which permits Internet service companies to allow some content providers to charge customers for special content, while keeping the information and services available on the Internet open to everyone. The question remains what kind of regulation is, using the railroad analogy, just and reasonable.

Further, the FCC can revisit its decision in 2002, which exempted the Internet from greater regulation as if Internet service providers were a utility.  Ostensibly, the FCC could attempt to reclassify broadband service providers as a utility so as to subject them to greater regulation.  From statements made by the current head of the FCC, Tom Wheeler, the Commission intends to first see if it can redraft some net neutrality rules that do not run afoul of the DC Circuit Court’s decision.  He has not, although, foreclosed the possibility of reclassifying these companies as common carriers to essentially enhance the scope of its own regulatory powers.

Accordingly, for content based businesses, such as, for example, Netflix, if the current regulations remain in force, these businesses could be subject to discriminatory treatment by the service providers.  For instance, preferential treatment could be granted to those companies willing to pay higher fees in exchange for allowing their customers faster access to their content.  Or, companies like Netflix, might refuse to pay, and be disadvantaged by slower transmission of content to its customers.  Ultimately, the end consumer could be paying higher fees for some preferred content.

Attorney Anna M. Vradenburgh counsels and represents clients regarding trademark, copyright, patent and other intellectual property issues, providing expert advice regarding intellectual property protection, exploitation and rights enforcement.  To discuss your particular matter with Ms. Vradenburgh, please contact her at the Eclipse Group, located at 6345 Balboa Blvd, Suite 325, Encino, California 91316, by calling (818) 488-8146 or going to her website or her profile on LinkedIn.  This article is not intended to be, nor should it be considered to be, legal advice.
Net Neutrality

Will Pro Football Fans In Washington Be Rooting For The Redskins In Five Years?

Several months ago, President Obama re-sparked a controversy about the use of the name “Redskins” by Washington’s NFL football team when he suggested that the team’s owner should consider changing their name.  Recently a delegate from the American territory of American Samoa filed a bill in Congress to cancel any trademark registration with that term. Simultaneously, a cancellation proceeding is pending before the U.S. Trademark Trial and Appeal Board (“TTAB”) to terminate six (6) registrations that contain the term REDSKINS in the trademark on the grounds that the term is  offensive to Native Americans.  At least three (3) of these registrations were issued in 1974, one issued in 1978, and the earliest issued in 1967.  The term REDSKINS has been used by the NFL since at least as early as 1932!

If either of these efforts prevail, the team may feel sufficient pressure to change their name. This is not the first time the team has faced this campaign.  When they made it to the Super Bowl in 1992, Native Americans protested outside the Super Bowl venue in Minneapolis against the team’s use of the name and mascot.  Around the same time, a trademark action to cancel various trademark registrations containing the term REDSKINS on the ground that the trademarks should not be registered because they are immoral, scandalous or offensive initially succeeded before the TTAB before being overturned by the U.S. District Court in D.C., in part, because the filing parties waited too long to raise their complaints.

Whether the term is controversial depends upon who you ask.  While members of the Oneida Indian tribe believe it is offensive, many Washington fans view the name as a sign of toughness and strength.  Regardless of these views, there is also a question of constitutionality: should a law be upheld that dictates the prohibition of the registration, not the use, of a term because it is viewed as offensive?   By what standard is it deemed offensive?   What if it becomes not offensive?  The Trademark Office already provides a forum, i.e., a cancellation proceeding, to object to such registrations, which is currently being utilized by the objecting parties.  The use of the federal government through attempted legislation seems heavy handed.  Indeed, in the 1989 case of Texas v. Johnson, 491 US 397, Supreme Court Justice William Brennan stated, “If there is a bedrock principle underlying the First Amendment, it is that the government may not prohibit the expression of an idea simply because society finds the idea itself offensive or disagreeable.”   In this case, it appears to be a limited faction of society that contends the registration of REDSKINS is offensive. We shall soon see which view ends up holding sway.

Attorney Anna M. Vradenburgh counsels and represents clients facing trademark, copyright, patent and other intellectual property issues.  To discuss your particular matter with Ms. Vradenburgh, please contact her at the Eclipse Group, located at 6345 Balboa Blvd, Suite 325, Encino, California 91316, by calling (818) 488-8146 or going to her website.