DuetsBlog

Collaborations in Creativity & the Law

Redefining a Trademark Bully?

By on Posted in Almost Advice, Articles, False Advertising, Mixed Bag of Nuts, SoapBox, Trademarks

We’ve spilled a lot of digital ink discussing the trademark bullying topic, going all the way back to my original blog post from 2010: ”The Mark of a Real Trademark Bully.”

Within the last several days, there has been quite a bit of online media coverage about Trademarkia’s new features that tout an ability to “Find a Trademark Bully” or rank the “Biggest Bullies“.

Maybe I’m missing something, but it appears that the only investigative skill required to apply the label is one’s ability to count the total number of oppositions filed by a trademark owner.

So, nevermind the size of a trademark owner’s portfolio, nevermind the strength or possible fame of the trademarks within a trademark owner’s portfolio, nevermind the number of conflicting applications filed by third parties who don’t search or aren’t well-advised about likely conflicts, nevermind the reasonableness of the trademark owner in working to resolve and settle those concerns, nevermind the trademark owner’s appropriate litigation conduct during the opposition proceeding, and perhaps most importantly, nevermind a qualitative analysis of the actual facts and claims asserted by the trademark owner — ignoring all this, we’re led to believe that if a brand owner files a lot of trademark oppositions, it automatically earns the pejorative label “Biggest Bullies”.

If all it takes to make Trademarkia’s Top Ten Biggest Trademark Bullies Listing is filing more trademark oppositions than anyone else, does it really have any value for the stated purpose?

The last time I checked, every week of every year the USPTO issues scores and scores of Section 2(d) refusals (based on a perceived likelihood of confusion) (hat tip to Towergate Software) – refusals that are eventually withdrawn and resolved through the USPTO’s consideration of apparently valid argument, evidence, and/or amendment (or a combination of these).

Does that make the USPTO a surrogate trademark bully because it issues a lot of registration refusals and throws up a lot of registration road blocks based on likelihood of confusion, especially since many of the refusals end up being withdrawn upon further consideration, after hearing only one side of the argument — the Applicant’s side (and without any required notification of the trademark owner whose registrations were cited)?

When those initial USPTO refusals are withdrawn based on a one-sided limited record, is there no surprise that oppositions will be filed? Is there no surprise that oppositions will be filed when the USPTO doesn’t see a valid conflict for whatever reason? That’s why serious trademark owners watch their marks — the process doesn’t purport to be perfect. Afterall, the purpose of an opposition is to provide a second backstop before registration, so that the USPTO can consider both sides, on a more complete record, making it an essential part of keeping the federal trademark register intact.

From my perspective, boiling the question down to a numbers game might gain headlines, spark some drama, fan the flame, generate more web traffic, but it doesn’t add to the conversation.

In the end, I’m left wondering whether Trademarkia has purchased insurance coverage for “advertising injury” claims, and I’m also left wondering how long it will take for a brand owner on the infamous list to take issue with the labels as false and/or misleading.

What do you think about the labels Trademarkia is applying to brand owners?

Brands on Decline in 2012

By on Posted in Branding, Food

Predictions are in and multiple brands are expected to decline or disappear completely in 2012.  CoreBrand CEO, James Gregory (as reported by Jim Edwards), and 24/7 Wall Street have both released lists of brands they believe are on the chopping block for the coming year.

The predictions attribute some of these brand failures to the economy (Saab & Sears), acquisition (Avery Dennison), inability to keep up with competitive technology (Kodak, Sony Ericsson, & Nokia) and social/media change (MySpace & Soap Opera Digest).

One of the more surprising brands on 24/7’s list is Kellogg’s Corn Pops.  24/7 reports that sales of Corn Pops dropped 18% last year and suggests that this decline may be attributed to a perception that the product is not a “healthy” breakfast choice.  Further, 24/7 suggests that private label sales may be hurting branded cereals.  In the current recession, this is a reality that may be impacting a number of brands (the anticipated growth of private label brands has also recently been reported on by Store Brands).

Meanwhile, Gregory suggests that the brands CA Technologies, Pittsburgh Plate Glass Company, and Steelcase are all disappearing, not due to company setbacks, but due to a lack of an overall brand strategy and promotional campaign.

What are your thoughts on these predictions?  And what brands do you think need a boost to keep afloat in the coming year?

 

 

Super Bowl Logos: A Marketing Review

By on Posted in Guest Bloggers

—David Mitchel, Norton Mitchel Marketing

The matchup for Super Bowl XLVI has now been set. In less than two weeks, about 100 Million people will be watching the New England Patriots play the New York Giants in a rematch from Super Bowl XLII four years ago.

Around Super Bowl time in 2010 and 2011, I wrote about Super Bowl ads in this space. This year, I’m taking a look at the history of Super Bowl logos.

Logos are an integral part of the marketing mix. There are certainly more integral components, but a logo goes a long way. It is how the famous adage of a picture saying 1,000 words is applied in marketing. A lot of brands have obtained an advantage through their logos. Apple, Nike, McDonald’s and BMW are examples of the importance of the logo.

With Super Bowl logos, I evaluated them based on the following components:

  1. A meaningful connection to professional football. After all, the logo of the Super Bowl is an important part of how the NFL brands itself. Professional sports is a multibillion dollar business.
  2. A reflection of the host city of the game. Hosting a Super Bowl helps put a city on the map, makes an economic impact for a region and can help attract trade shows, conventions and even tourists to an area.
  3. How visually appealing it is
  4. How it stands the test of time

My grading scale was simple. I used A,B,C,D,F, and no pluses/minuses because my undergrad alma mater used that scale.

And speaking of higher education, there is not a trace of grade inflation here. Super Bowl logos earned a cumulative GPA of 2.65.

Special thanks to sportslogos.net. Without that website, this article would have been far more difficult. Continue Reading

Coming Soon to Your Facebook Page: Ambiguous Advertising

By on Posted in Guest Bloggers

—Alex Weaver, Associate at Fast Horse

For those of you who thought the mother of all changes to Facebook would be Timeline, think again.

Not many expected the social media giant to sleep for long, but Mark Zuckerberg and the invisible decision-makers at Facebook are at it again with another change in how you interact with homepage content — and how advertisers engage with you.

Last week, Facebook began the rollout of Sponsored Story ads within users’ homepage news feeds. For the first time, Facebook is directly interspersing paid content with information that users have chosen to see.

But these ads aren’t clearly labeled as Sponsored content on your page. They also aren’t being placed in the column on the right side of your page, where Facebook has housed paid content in the past. No, they’re running right in the middle of your personal news feed – the same place you get updates from friends and groups you’ve “liked” on Facebook.

Instead of calling these items ads or sponsored content, however, Facebook is labeling them as “Featured.” This new nomenclature could mislead users into thinking the ads are important stories about friends, or news from pages they’ve subscribed to. Many Facebook users won’t associate the word “Featured” with paid content, especially when a “Featured” story is located in a place that’s previously been reserved for user-generated content.

Josh Constine at TechCrunch reported that a Facebook advertising spokesperson sent him the following information about the Sponsored Story ads:

We’ll be labeling these stories as ‘Featured’ instead of ‘Sponsored.’ We are using the term ‘Featured’ because we want to make it clear to people that they’re seeing content from a Page or person they have chosen to connect to. Since people can see marketing messages from both Pages they have and have not Liked elsewhere on Facebook, we want to make it clear that marketers can only pay for stories to be featured in your News Feed if you have explicitly liked the Page. And because you are always connected to your friends, we are also labeling stories from your friends that have been paid to be featured in your News Feed as ‘featured’ to keep things consistent. We still hope to show an average of approximately one featured story in News Feed per day. (via TechCrunch)

Although this additional advertising option could lead to more highly targeted ads, the ambiguity in labeling leaves users wanting for more transparency between paid content and posts from friends and self-selected pages. And there’s even further potential for confusion: Facebook already uses the word “feature” within the context of unpaid, user-generated content. (A user can “feature” their own story to increase the size on an individual’s Timeline.)

This change could degrade both user experience and advertising practice on Facebook. If more than one “Featured” story runs per day, or people are confused when trying to distinguish paid content from user-generated, then users may choose to Unlike the pages and apps paying for “Featured” stories. That would defeat the purpose of companies looking to engage and interact with Facebook’s users. Not only will their Sponsored content fall short; if users unsubscribe from a page then companies could lose their audience entirely. It also could lead to users deciding to Unfriend those who litter news feeds with advertisements.

In the end, we all knew that Facebook ads – even targeted Facebook ads – were looming in the future, but I don’t understand why transparency in advertising content needs to be compromised. Keep paid advertisement – or content, whichever you prefer – in its separate place. Nobody wants the equivalent of a sneaky pop-up ad on their Facebook news feed.

And We’re Back! (A Note on Why Updating Your Technology is Important)

By on Posted in Marketing

That didn’t take long (thank you, LexBlog).

You’ll notice some minor changes, but we hope things are working faster for you (and us!).

Now, on to more Duets content!

I’m filling in for Dan while he’s “on vacation” (that’s sort of a lawyer joke, sorry fellow authors).

The migration of Duets reminded me of a subject I have yet to discuss (LIE)—technology! OK…I’ll be more specific: updated or outdated technology.

Things change constantly in our world today, and I’ve gone over why we need to think ahead and get on social networks—but what about the technology mainstays—websites and blogs? It is so important for businesses to make sure their websites and blogs aren’t outdated, because this doesn’t affect you as much as it does your clients, customers and/or potential buyers.

Along with this ever-changing technology, people seem to be used to the lightning-speed of it, and have little patience for the sluggishness that can accompany outdated technology or technology that isn’t functioning correctly. So, your intended audience isn’t going to stick around to wait for it to work. They’re going to leave and go elsewhere.

Moral of the story: you don’t have to have the “latest and greatest” technology (we are all aware that it can sometimes work against you), but if your website is slow and buggy, fix it. And fix it right away, before your audience doesn’t want to come back.

Thanks to LexBlog for figuring out how to migrate all of our content to a new site, and for doing so in a speedy way!

Changes Ahead: Stay Tuned

By on Posted in Marketing

If you’re an avid reader of Duets, you’d know that our bloggers post five days a week, sometimes more, and have, since we started in March of 2009 (almost three years!).

For the first time, we’ll be going silent – not in protest (though we could have timed it better!), but because we’re making some changes…good ones! Because of all the great content our lawyer bloggers have posted, our current system has reached its limit (as many of you commenters, I’m sure, have noticed). So, our friends at LexBlog are migrating us to a new and faster platform (no major changes) – which means, we have to halt content for a few days.

Thanks, as always, for your readership. Keep the comments, ideas & guest posts coming!

[photo from theakshay's flickr]

YSL Has a Friend in Its Battle with Christian Louboutin

By on Posted in Law Suits

We have previously blogged about the battle over Christian Louboutin’s (“Louboutin’s”) trademark registration for lacquered red soled shoes that is taking place in New York and is now before the Second Circuit. Friends of the Court (the Latin meaning of the phrase amici curiae) that have weighed in on Louboutin’s side include both Tiffany & Co. and The International Trademark Association (“INTA”). Now friends weigh in on behalf of Yves Saint Laurent (“YSL”).

By way of background, Louboutin urged the Second Circuit to reverse the District Court’s order denying it a preliminary injunction on the grounds that Louboutin could not demonstrate that it was likely to succeed on its trademark infringement and unfair competition claims. In support of Louboutin and a reversal, Tiffany & Co. argued that the District Court’s opinion in this case had “adopted a sweeping and unprecedented per se rule against granting trademark protection to any single color that is used on any ‘fashion item,’ even where the color has achieved ‘secondary meaning’ and is associated with a single brand.”  INTA also weighed in alleging that the color red on soles of shoes was not aesthetically functional and that if left to stand the decision would “upend key aspects of trademark and unfair competition law, making it easier for third parties to use the brands of others.” 

YSL’s friends are professors of law who teach in the area of trademark and related fields (including a professor from my alma mater the University of Minnesota Law School). They argue that “functionality channels the grant of legal monopolies over product features away from trademark to utility . . .” They believe that the District Court appropriately recognized the importance of color to consumers in fashion markets. Aesthetic functionality of a trademark occurs where the consumer’s preferences for attractive product designs drive purchases. These professors further believe that competitors would be harmed if trademarks, such as Louboutin’s red soled mark, were allowed to monopolize certain colors. After discussing design patents, the law professors assert that there is a need to bolster the doctrine of aesthetic functionality to not only protect trademarks, but also design patent applications. 

Finally, the law professors dismiss Tiffany & Co.’s concerns for its own trademark because its rights are based on color marks for nonfunctional product packaging (i.e., the well-recognized robin’s egg blue). This same argument was also expressed in a comment to my prior post on INTA’s amicus curiae brief. 

In their brief, the law professors claim that “it is far from clear how Louboutin would be harmed if a woman mistakenly believes another woman’s monochromatic red shoes to be Louboutin.” I disagree. I have always wanted a pair (unfortunately, they were not under the Christmas tree this year), but would be less inclined to buy a pair if I saw another woman wearing poorly designed red sole shoes that I mistook for Louboutin’s shoes. Maybe, it is just me, but there are likely others who would have a similar reaction.   

The Second Circuit has its work cut out for it. This is a very important battle for color trademarks (and especially those trademark owners in the fashion industry that rely so heavily on color). Will Louboutin and its friends INTA and Tiffany & Co. prevail or will YSL and the law professors prevail?

Five Key Points IP Litigators Should Know About Insurance Recovery

By on Posted in Guest Bloggers

—David A. Gauntlett, Gauntlett & Associates

Intellectual property cases are expensive to litigate. When a brand owner finds itself charged with infringement of intellectual property rights, it is always worth a close examination of any applicable insurance policies to determine whether the carrier has a duty to defend the claims.

Here are five key points that intellectual property litigators should focus on:

First, facts evidencing potential insurance coverage may not be evident from the face of a complaint/counterclaim. In jurisdictions (including Minnesota) where facts known to the insurer, as well as those pled, must be evaluated as well as inferences from those facts, it is often critical to propound Requests for Admission and follow-up Interrogatories to evidence potential coverage.

  • Burgett, Inc. v. American Zurich Ins. Co., No. 2:11-cv-01554-MCE-JFM, 2011 WL 5884251, at *6-7 (E.D. Cal. Nov. 23, 2011) (A press release suggesting that the defendant is not a trademark infringer but has the rights to promote products, which the trademark owner contends the defendant does not, may call into question the claimant’s rights, especially where it asserts publicly in its own marketing materials, its rights to occupy the field.)

Second, insurer claim representatives may not possess necessary distinctions to accurately gauge whether a defense is due or not for intellectual property claims. Indeed, the distinctions necessary to evaluate whether, for example, a business method patent claim is one employing an advertising technique or methodology that might implicate coverage is well beyond the work experience, as well as training of claims representatives assigned to address such issues.

  • DISH Network Corp. v. Arch Specialty Ins. Co., 659 F.3d 1010, 1012-14, 1016, 1018-20 (10th Cir. (Colo.) 2011).

Third, the right to independent counsel (as opposed to insurance panel counsel) is an important issue that should always be addressed when an insurer is asked to defend a suit. An insured should not make a short-term decision to accept the “appointed counsel” whose selection may be not in its long term interests. Appointed counsel is unlikely to possess significant intellectual property defense experience or be familiar with the company’s operations and overall IP program.

Equally critical, “independent counsel” can require insurer funding of affirmative claims for relief (whether by counterclaim or otherwise) that are “conducted against liability” at the insurer’s expense. Absent participation by independent counsel, appointed counsel is unlikely to be authorized to pursue such claims at the insurer’s expense.

  • Ultra Coachbuilders, Inc. v. General Sec. Ins. Co., 229 F. Supp. 2d 284, 289 (S.D.N.Y. 2002) (“In fact the counterclaims, alleging unfair competition and interference with competitive advantage, were used to argue (albeit unsuccessfully) that the injunction application was barred by the doctrine of unclean hands, see Ford Motor Co. v. Ultra Coachbuilders, Inc., 57 U.S.P.Q.2d 1356, 2000 WL 33256536, at *10 (C.D.Cal.2000), and were thus ‘inextricably intertwined with the defense of [defendant’s] claims and necessary to the defense of the litigation as a strategic matter.’ Safeguard Scientifics, Inc. v. Liberty Mut. Ins. Co., 766 F.Supp. 324 (E.D.Pa1991).”)

Fourth, the mere provision of notice to a carrier on risk as of the date of suit may be insufficient. All carriers on risk from the date of the first alleged wrongful conduct should be given notice of a lawsuit/claim. It may not be evident from the complaint which insurer is first on risk. Further fact development in the underlying action may be necessary to deduce the answer to that question. In the interim, so long as it is possible that conduct could arise creating covered damage exposure, all insurers who issued policies during that period of potential exposure should receive notice.

Where potential damages are greater than the policy limits, umbrella insurers in relevant years may also need to be noticed. Some jurisdictions such as New York (prior to January of 2009) and Illinois follow a Draconian late notice rule which could divest an insured of policy benefits where a delay as little as three months from the date of suit occurs.

In the absence of actual notice, constructive notice may be an arguable basis for contending that the insurer has a duty to defend a case. Notice to a broker, however, will not suffice as brokers are typically agents of the insured, not the insurer. Also, it is critical to not have brokers in meetings as there is no privilege for their participation, even though they may desire to know what has happened to the policies they have sold to the insured and how the insured is benefiting from these policies. These communications can be separately communicated by coverage counsel so as to keep the broker informed but no in a way that anything communicated would not be detrimental to the insured’s interests.

Fifth, policyholders should consider the possibility that narrow policy provisions are illusory because they purport to provide broad advertising injury or personal injury coverage and then take virtually any meaningful coverage away under the guise of an intellectual property exclusion.

  • Aurafin-OroAmerica, LLC v. Federal Ins. Co., 188 Fed. Appx. 565, 567 (9th Cir. (Cal.) 2006) (“It is unclear what the exclusion meant when it excluded statements made in ‘defense of’ intellectual property rights.”)
  • Align Tech., Inc. v. Federal Ins. Co.,673 F. Supp. 2d 957, 969 (N.D. Cal. 2009) (“Federal’s language does not put an insured reasonably on notice that Federal will not cover claims in a lawsuit whenever that lawsuit also includes a claim for intellectual property. Thus, the ‘regardless’ clause does not conclusively eliminate coverage for all of the claims in the Cross-Complaint.”)

Equally problematic is Travelers’ Web Xtend Liability policy (CG D2 34 01 05) which eliminates coverage for “f. the use of another’s advertising idea in your ‘advertisement’ ” and “g. infringement of . . . trade dress in your ‘advertisement.’ ” At least one court has found that this endorsement far from eliminating the previous personal and advertising injury coverage must provide a defense under its terms as well as that of the endorsement.

  • Premier Pet Products, LLC v. Travelers Property & Cas. Co. of America, 678 F. Supp. 2d 409, 417 (E.D. (Va.) 2010) (“An ‘endorsement is not a complete contract in itself.’ Id. Certainly a five-page endorsement that purports to change sections of the original sixteen-page policy cannot be read to replace entirely the underlying policy. The Court will consider, to the extent necessary, the entirety of the contract before it.” (emphasis added)).

What is your experience in obtaining insurance coverage for the defense of IP claims?

Georgia-Pacific 2, Towel-Stuffing Defendants 2

By on Posted in Branding

Back in September of 2010, I discussed a couple of then-recent cases about Georgia-Pacific’s trademark lawsuits over the “stuffing” of non-Georgia-Pacific paper towels into GP’s proprietary dispensers.  By way of brief review, the Eighth Circuit affirmed a lower court decision out of the Western District of Arkansas holding that the practice of “stuffing” does not constitute trademark infringement.  The Fourth Circuit had held that GP was entitled to a trial on the issue of trademark infringement in its case in the Eastern District of North Carolina.

Just this past Monday, GP won its jury trial in North Carolina, and the jury awarded GP about $790,000 in damages.  Unfortunately, being a jury trial, there is no written opinion to review or report upon.  I suspect that there will be an appeal.

So the obvious question is this:  how can GP lose its case in Arkansas, lose the subsequent appeal, then go on to win in North Carolina on substantially the same facts and claims?  Well, that’s a good question, and one that may feature in an appeal of the North Carolina case.  There is a principle in law called “issue preclusion.”  The idea is that once a party has tried a particular legal issue on particular facts, others may rely upon the outcome of that decision and hold it against the party that tried the issue.  Here, GP lost on its trademark infringement claim in Arkansas, therefore, in theory, it should lose that issue on the same facts in North Carolina.  Unfortunately, the defendant in the North Carolina case, in the court’s opinion, waited too long to raise the defense of issue preclusion, so the court denied application of the doctrine.

In my first week of law school, my Torts professor stressed the importance of procedural posture in each case and how it can affect outcomes.  This case is a good example, and the possible negative impact of the delay is amplified by a few other GP cases pending around the country:

  • On Sept. 8, 2011, GP survived a motion to dismiss a suit in the Southern District of Ohio where the motion was based upon applying issue preclusion from the Arkansas / 8th Circuit case.
  • On Nov. 4, 2011, GP lost a motion to dismiss a stuffing suit in the Northern District of Ohio based upon the application of issue preclusion from the Arkansas / 8th Circuit case.  GP is currently appealing to the Sixth Circuit Court of Appeals.  (The other Ohio case above is currently stayed pending the outcome of the appeal, which is likely to be binding in that case.)
  • Another case pending in the District of Nevada is stayed until at least next month.  This case has been stayed since late 2010, initially awaiting the outcome of the 8th Circuit appeal, and now likely awaiting the outcome of the 6th Circuit appeal.

It looks like the North Carolina jury award will not be the final word in this matter, and even if it is, I have a difficult time believing that $800k will cover GP’s attorneys fees in five federal lawsuits and three appeals (possibly four).  It appears that GP is questing to have paper towel dispensers treated like soda fountains–insuring that the product in the machine matches the label on the front.  Unfortunately, as the 8th Circuit pointed out, even GP will sell towels for use in others’ dispensers.

We shall stay tuned to see if the score changes…