Collaborations in Creativity & the Law

Apple and The World’s Most Public Privacy Policy

Posted in Advertising, Branding, Contracts, Marketing, Search Engines, Technology, Trademarks

It bears mentioning when one of the world’s most famous brands releases one of the world’s most prominent and readable privacy policies. That’s just what Apple did this week, and the message to other brands is clear – privacy policies can be a massive marketing opportunity, not just an obscure legal nuisance.

Every business that interacts with its customers and obtains customer data needs a privacy policy. It informs customers about how it will collect, use, share, and protect the consumer data it collects from them. Many sweep their policies under the rug, and we’re all familiar with the fine print links at the bottom of most websites. Like many clickwrap agreements or other terms and conditions, virtually no consumers read privacy policies, and few are aware of what they agree to when they provide their data to these businesses.

Apple unveiled a new privacy policy this week that turns that concept on its head. Starting with a letter from CEO Tim Cook, the new policy covers all of Apple’s activities and interactions with customers. It is clear, informative, and — most importantly — readable to the average consumer. In fact, as many commentators have noted, Apple actually wants consumers to read the policy. (I should note that Apple’s website — as opposed to its activities more generally — still uses a more traditional, verbose privacy policy.)

Screen Shot 2015-10-02 at 7.44.59 AM

This is a bold step in getting consumers’ attention. And not surprisingly, the tech press has warmly welcomed Apple’s new policy. It’s also a shot across the bow at companies like Google that rely on consumer data as a facet of their monetization strategy (very broadly speaking, Google uses targeted advertisements for much of its revenue, while Apple relies chiefly on its physical products)

As web services continue to broaden their reach, just about every brand owner can take a page out of Apple’s book. This new policy speaks to the importance of a thorough and well-thought out privacy policy, not just for legal compliance reasons but also to support your brand. A privacy policy is not only a legal document — it’s also a marketing strategy.

Successful brands build trust with consumers and encourage transparency, and a readable, forthright privacy policy is a great way to do that. As more and more data breaches occur in the marketplace (most recently, for example, the T-Mobile / Experian breach), it is critically important to inform consumers of what you do to protect their data, not just for legal reasons, but to inspire trust in your brand. This is particularly important in industries where consumers may not be familiar with the businesses’ inner workings (ask someone on the street where “the cloud” is located).

Now may be a good time to ask: is your policy mere boilerplate, or, like Apple, does it work to shape your brand?

Clouding Up Trade Secret Protections

Posted in Almost Advice, Idea Protection, Loss of Rights, Technology

“The cloud” can refer to a lot of things, and is frequently a misunderstood concept. While cloud computing can encompass a number of Internet-based functions, in its simplest form, “the cloud” merely refers to the use of remote servers for data storage, processing, and management. Usually, the remote servers are hosted by a third party cloud service provider. The cloud service provider stores and maintains the physical servers that users access remotely. So essentially, cloud computing is the use of someone else’s server, located somewhere else, to do something on your local computer. Dropbox and Google Docs are common examples of cloud storage. As another example, software like Adobe Photoshop can be provided over the cloud, rather than requiring a user to download it locally.

Many businesses have taken to the cloud in recent years for their processing, storage, and other needs. Cloud platforms provide several benefits over more traditional, local, computing. For example, a business can increase its cloud storage space easily and fluidly, without the need to purchase and store physical drives.

Along with the benefits, however, cloud computing brings new concerns as well. One issue may be the incompatibility of the cloud with trade secrets.

A trade secret, as defined by the Uniform Trade Secrets Act, is information that is (1) secret; (2) valuable because it is secret; and (3) subject to reasonable efforts to maintain its secrecy. The Coca-Cola formula, for one. Disclosure of a trade secret to a third party can, in many cases, render the information no longer protectable as a trade secret. If Coca-Cola were to disclose its secret formula to an outsider, it may no longer be able to protect it as a trade secret in a suit for misappropriation, for example. Generally, unless subject to a confidentiality agreement, the disclosure of a trade secret to a third party can render the information no longer protectable.

So the question becomes: is a cloud service provider a third party? When a trade secret owner stores a trade secret in the cloud, and effectively “discloses” the information to the cloud service provider, has secrecy been lost? Courts have not had a chance to answer this definitively. The outcome may hinge on the often boilerplate Terms of Use agreements associated with cloud service providers. Unfortunately, such agreements often disclaim any liability on the cloud service provider for loss of confidential information. This may render it difficult for trade secret owners to argue that secrecy was not lost and that reasonable efforts to maintain secrecy were exercised for trade secrets that are or were at any time stored in the cloud.

In order to avoid the potentially harsh consequences of defending the trade secrecy status of information stored in the cloud, Professor Sharon Sandeen of Hamline Law School offers practical advice for trade secret owners to consider. For example, while a business might place a majority of its storage in the cloud, it might consider maintaining any proprietary information separately and locally. And ideally, a business or other trade secret owner may want to seek an express confidentiality agreement from the cloud service provider.

While businesses looking to the cloud for storage and other services should keep trade secret protections in mind, the cloud can still be a useful addition to many business’ computing needs.

When Over-Breadth Can Bite You Like a Lynx

Posted in Almost Advice, Articles, Branding, Marketing, Trademarks, USPTO

While lynx may not be generally known for having a ferocious bite, they do have sharp teeth and I’m sure they can inflict serious pain when they do decide to attack.

In the same way, while breadth can be a good thing when it comes to how a brand owner recites its services in a registration application, there are and must be limits, and when the obvious ones are ignored, especially given the clear and preexisting landscape of third party registrations, the USPTO might be inclined to, let’s just say, at least show its teeth.

For example, you might wonder, what might happen when someone files a multi-class, intent-to-use federal trademark and service mark application, claiming a bona-fide intent-to-use the applied-for mark in connection with an exceedingly broad description of goods and services covering nine different classes, including over-breadth examples like “education and entertainment services” in Int’l Class 41?

Let’s just say, you might get a close up view of the USPTO’s choppers, in the form of a 115-page Office Action, complete with 30 prior registrations cited as the bases for likelihood of confusion refusals, along with 11 more potential likelihood of confusion refusals if those prior-filed pending applications mature to registration.

We know this to be true because earlier this month the USPTO refused registration of the LYNX TECHNOLOGY trademark and service mark application with this warning:


Some of the prior entertainment service mark registrations cited as the bases for likelihood of confusion refusals involving Int’l Class 41 included:

  • MINNESOTA LYNX for rendering live basketball games and basketball exhibitions;
  • AUGUSTA LYNX for providing professional hockey exhibitions;
  • OTTAWA LYNX for entertainment services in the nature of baseball exhibitions;
  • LINXX ACADEMY for martial arts instruction; and
  • RUFUS LYNX for entertainment services in the nature of personal appearances by a costumed mascot at basketball games and exhibitions.

Goodness, there are more federally-registered LYNX marks for entertainment-type services than there are living species of the Lynx genus, but when there is no limit to the claimed “entertainment services,” you still get a brush with the USPTO’s teeth.

The fact that the MINNESOTA LYNX professional women’s basketball team name and mark can peacefully coexist with RUFUS LYNX, the mascot for the men’s CHARLOTTE BOBCATS professional basketball team, doesn’t open the gate to other LYNX marks without any limitations.

Word to the wise, spending a little extra time on the front end, carefully crafting an application with reasonable scope, can save lots of time on the back end, especially after the USPTO has had to work overtime examining an over-broad application, and growling all the while doing so.

By the way, and on a more positive note, hearty congrats to our own Minnesota Lynx for winning their bid to play in the finals for the WNBA national championship.

Maybe Rufus will be invited to help cheer our Lynx on to victory!

Content Infringement in the Age of Social Media

Posted in Copyrights, Guest Bloggers, Infringement, Mixed Bag of Nuts, Social Media

Debbie Laskey, MBA

These days, as newspapers and magazines are on the wane, it seems as if anyone who can write has become an online journalist to promote his or her area of expertise. In social media lingo, the title is now known as a “blogger.”

According to Wikipedia, “A blogger is a person who keeps a blog as a major activity in his or her life…Many blogs provide commentary on a particular subject; others function as more personal online diaries; others function more as online brand advertising of a particular individual or company. A typical blog combines text, images, and links to other blogs, Web pages, and other media related to its topic. The ability of readers to leave comments in an interactive format is an important contribution to the popularity of many blogs.”

Since a blog is an important element of an overall social media marketing plan that may include sites such as Facebook, Twitter, LinkedIn, Instagram, and Google Plus, it’s important to consider how the blog’s theme and content reflect a business’ or individual’s brand. Does the blog’s voice reflect the brand in a consistent manner? And, most importantly, who reviews the content before posting it live? Does only the Marketing Department review the content? Or, do the Public Relations, Technology, and Legal Departments also review the content?

There are some actions you can and should take to protect your content. First, set up daily alerts with Google Alerts and TalkWalkerAlerts with keywords such as your brand or brands, business name, and blog title. This way, you will receive immediate notification when and/if your content appears on an unknown website. Second, check out the US Government’s copyright site to answer a myriad of questions about copyrights for online content. And third, make sure to add a copyright symbol at the end of all blog posts and on all web pages.

In the words of Oleksiy Synelnychenko of IP WatchDog, “Under the DMCA or Digital Millennium Copyright Act, all content published online is protected under copyright law [because] any content, no matter the form it takes (whether digital, print, or media), is protected under copyright law.”

So, keep up the great writing, aka, blogging – just do your due diligence to protect your content.

Easy Registration Refusal, See Park ‘N Fly

Posted in Articles, Branding, Infringement, Marketing, Trademarks, USPTO

Trademark types know all about Park ‘N Fly, whether they travel or not. That’s because it is more than a nearly fifty year old airport parking and travel service brand and federally-registered service mark, it is short-hand for a famous U.S. Supreme Court trademark case from 1985.

In that decision, the Supreme Court recognized the importance and power of federal registration, ruling that after a registration has become incontestable, someone accused of infringing that federally-registered trademark may not defend itself by arguing or otherwise attempting to show that the registered mark is merely descriptive. Such a defense is simply no longer available. So, good luck overcoming this registration refusal, EZ ParkFly, issued two weeks ago by the USPTO.

One of the added benefits of federal registration is that the USPTO helps out on trademark enforcement, and to some extent, does the trademark owner’s bidding in keeping the Principal Register clear of confusingly similar marks, as demonstrated by the EZ ParkFly registration refusal referenced above. But, when the USPTO doesn’t do the trademark owner’s bidding, and no registration refusal is issued, then the trademark owner needs to step up and oppose, so that is exactly what Park ‘N Fly did a few months ago in opposing registration of this mark:




Who do you think wins this one? Are you surprised the USPTO didn’t refuse registration based on the decades old incontestable Park ‘N Fly registration?

I suspect it is no accident that the applicant is using different coloration of the word PARK and the word FLY to provide a graphic separation of those adjacent terms, for reasons that appear likely motivated by the point of this post.

The question remains though, will that be enough to avoid likelihood of confusion with Park ‘N Fly? It’s kind of hard to interject graphics when the mark is spoken, right?

Yosemite: The Park, the Name, and the Lawsuit

Posted in Contracts, Fair Use, Goodwill, Infringement, Loss of Rights, Trademarks

Tunnel View - YosemiteTunnel View – Photo by David Iliff. License: CC-BY-SA 3.0

As the saying goes, possession is nine-tenths of the law. That other tenth can be pretty complicated, depending on what you’re “possessing.”   When you’re arguing with an older brother over who “possesses” the remote control, it’s an open and shut case. But what about “possession” of trademarks? Trademarks represent the goodwill associated with a mark and the quality of the products or services sold under the mark. How do you “possess” goodwill?

This tension underlies a recent conflict between the National Park Service and former concessionaire DNC Parks & Resorts at Yosemite, Inc. As you probably guessed, the dispute has something to do with the “former” part of that last sentence. After the Park Service declined to renew the contract, DNC was required to sell its proprietary rights (fixtures, buildings, vehicles, etc.). DNC expected to be compensated for the trademarks associated with its services, such as Badger Pass, Ahwahnee Hotel, Curry Village, Wawona Hotel, and more. DNC valued these trademarks at $51 million.  The Park Service disagreed with the valuation and, ultimately, stated that if the trademarks were not available for use, the new concessionaire could simply rename the buildings. After nearly 10 months without obtaining a satisfactory resolution, DNC filed a lawsuit with the U.S. Court of Federal Claims.

DNC’s complaint is not a traditional claim of infringement but instead a breach of contract. DNC claims that the contracts signed among the parties required the new concessionaire to purchase the intellectual property from DNC. Back before the acrimony, DNC entered into a concession contract with the Park Service to provide services in Yosemite National Park. The services include operation of hotels, restaurants, and entertainment services such as the ski area, golf course, and other services.

For more than 20 years, DNC operated the establishments in Yosemite. They maintained the premises, cleaned the hotel rooms, and did all the items one would expect a business to do to build valuable goodwill and reputation associated with a brand. But did DNC possess the trademarks and service marks? Or was it merely a licensee of the Parks Service?

DNC’s contract requires the new concessionaire to purchase physical property, fixtures, and “other property.” DNC argues that intellectual property such as trademarks qualifies as “other property.” On its face, it seems like a relatively weak claim. However, prior to DNC, these services had been provided for more than 100 years by a single company, Yosemite Park & Curry Company (“Curry”). Curry successfully registered a number of marks with the U.S. Patent and Trademark Office. DNC’s original contract required it to purchase “intangible assets” from Curry, and Curry transferred these registrations to DNC after DNC took over operations. On a whole, these facts make DNC’s argument more plausible.

Unsurprisingly, this is not the first dispute of its kind. In 2006, the Ninth Circuit sided with a concessionaire over the State of California in Dept. of Parks and Rec. Bd. of Cal. v. Bazaar Del Mundo, Inc., 448 F.3d 1118 (9th Cir. 2006). More recently, a similar dispute arose between the Park Service and a concessionaire operating at the Grand Canyon. Ultimately, the concessionaire agreed to back down.

Fortunately for the Park Service, Congress has its back with a new law that took effect last December. The law is codified at 54 U.S.C. § 302106 and provides:

Notwithstanding section 43(c) of the Act of July 5, 1946 (known as the Trademark Act of 1946) (15 U.S.C. 1125(c)), buildings and structures on or eligible for inclusion on the National Register (either individually or as part of a historic district), or designated as an individual landmark or as a contributing building in a historic district by a unit of State or local government, may retain the name historically associated with the building or structure.

The provision allows the Park Services to continue to use the names of landmarks and buildings, what convenient timing! But what does “retain the name” mean? Can Park Services merely identify the buildings as their historical names? Or can it do more? Can DNC also use the marks? Could DNC maintain an infringement action if the Parks Service or its licensees do more than simply “retain the name?”

The provision helps, but it doesn’t address the real issue: does DNC own these trademarks? The Park Service exercises some quality control over the services, including the ability to terminate the contract. And it seems likely that public associates the hotel names like Ahwahnee Hotel with the Yosemite National Park, rather than a particular vendor. Does that mean the Park Service is the owner of the marks? Or, because of the inherent connection with Yosemite Park, are the names simply un-ownable when used in connection with services offered within Yosemite Park? Do they instead belong to the public?

It is possible that DNC’s lawsuit may succeed. However, if DNC wins, it may be the last successful concessionaire lawsuit as Congress may choose to further amend Section 302106 to make it even more difficult for concessionaires to bring similar lawsuits in the future.

Is Gatorade Gonna Hate Hate Hate?

Posted in Mixed Bag of Nuts

It may be because I attended her concert last weekend, but a new trademark lawsuit brought by the owner of the GATORADE mark made me think of Taylor Swift. One of her popular songs, “Shake it Off” has a chorus that says, “Haters gonna hate hate hate.” (I digress, but Ms. Swift has been involved in her own trademark disputes, discussed here and here.)

The lawsuit I was reading about involved allegations against Active Sports Distribution and DuraCap Labs LLC, who had named their supplement “HATERADE.” The owner of the GATORADE mark, Stokely-Van Camp, Inc. (“Stokley-Van Camp”), is hating this mark, alleging that the GATORADE mark is being damaged. In its complaint, Stokely-Van Camp brought claims for dilution of a famous mark, trademark infringement, false designation of origin, violation of the Illinois Deceptive Trade Practices Act, unfair competition and even breach of contract (based on an alleged prior agreement between the parties – this is not the first go-around).

Stokley-Van Camp manufactures, markets, distributes and sells a variety of food, beverage and nutritional products, including the popular GATORADE sports drink. One of Stokley-Van Camp’s claims is that the “HATERADE” maker is diluting its famous GATORADE mark and its family of GATORADE marks. Fame is a difficult bar to establish. Do you think Stokley-Van Camp can prove the GATORADE mark is famous? I am thinking yes (and not just because, as a football fan, I have seen many coaches on national TV doused in GATORADE to celebrate a win). Stokley-Van Camp goes on to allege that “the term ‘hater’ is a derogatory term used colloquially to refer to a person or group who expresses hatred . . . a negative critical person.” This is contrary to GATORADE and the family of GATORADE marks that are associated with a “positive, energetic and healthy image.”

To establish its fame, Stokley-Van Camp asserted that it devoted tremendous resources, time and effort, including millions of dollars, to marketing, promoting and distributing the popular drink. It alleges that there is enormous goodwill and recognition in the GATORADE brand, which has been featured among the top ten brands of Forbes magazine’s list of “The Most Valuable Brands in Sports.”

In addition, “HATERADE” includes a lightning bolt on its label. This is only fueling Stokley-Van Camp’s hatred because GATORADE also has a lightning bolt on its label. Further, the company owns registrations for GATORADE that include lightning bolt designs.


gatorade HATERADE

The makers of HATERADE have not responded yet. We will have to see how this one comes out and if the “Haters” prevail.

Game, Stripes, Match…No Love Between Skechers & Adidas

Posted in Advertising, Fashion, Non-Traditional Trademarks, Product Configurations, Trademarks

Maybe I haven’t quite accepted the fact that the US Open and New York Fashion Week are over and September almost is too, but stories on tennis and fashion always get my attention, especially when they include a little intellectual property infringement flair.

The Stan Smith shoe is a legendary shoe design from Adidas named after the US tennis player (and US Open Champion) who famously wore them in the 1970s.


Last week, Adidas sued Skechers over claims that the Skechers Onix infringed Adidas’ trademark rights in its Stan Smith shoe.  Here is a photograph of the Skechers Onix:SkechersOnix

Notice any similarities?  Actually, perhaps the better question is – do you notice any differences?  Sure, the shape of the toe is a little different, at least in the photos the toungue looks a little different, the number of rivets for the shoelace also differs, and perhaps the most obvious distinction – the shoe has five stripes versus the iconic 3-stripe design on the Adidas version.  But don’t let the number of stripes or their angle lead you to a conclusion that that’s a sufficient difference, it certainly hasn’t stopped Adidas before (see here and here).  So do you think Skechers has a problem here?

According to a Law360 article on the subject, this isn’t the first challenge from Adidas on the striping issue.  Adidas has been prolific in protecting its three-stripe from use by other shoe manufactures and designers, but with Skechers the parties signed a settlement agreement in 1995 and have a pattern of reaching additional confidential agreements to handle similar claims over the past several years.  Maybe what forced their toe over the line here is that Skechers appeared to be using “adidas Originals” and “Stan Smith” as keywords  (although when I tried to search today, neither of those phrases brought me to any shoes on the Skechers site and keyword advertising rulings haven’t exactly gone in brand owners’ favor).   Or maybe it’s that Skechers last year sued Adidas-owned Reebok for patent infringement.

But Skechers isn’t the only one out there making white leather tennis court shoes with perforations and colored heel tabs.  What about this pair from Nike, with its perforated swoosh and additional stitching line?


Or this Isabel Marant sneaker?  I got a kick out of this comparison (and yes, pun intended there), where the $80 Adidas shoe is considered the   “save” over the $400 “splurge” designer version.



Or this from Saint Laurent?

SaintLaurent Do any of these look like they should get the same attention from Adidas that Skechers is getting?

“Feel the Bern” and Other Questionable Campaign Slogans

Posted in Advertising, Branding, Guest Bloggers, Marketing, Mixed Bag of Nuts, Squirrelly Thoughts

Laurel Sutton, Senior Strategist & Linguist at Catchword Brand Name Development

As Americans are all aware, the presidential campaigns are in full swing, more than a year before the actual election. (There are also holiday decorations for sale in Costco, months before the holiday season. We just can’t wait for some things, I guess.) As the candidates from both major parties revise and refine their brands, we’re seeing an awful lot of campaign slogans being thrown against the wall to see what sticks. Bernie Sanders, the State Senator from Vermont and Democratic party hopeful, just recently decided to (unofficially) go with “Feel the Bern”.


While you might not agree with Samuel Johnson that the pun is the lowest form of humor, you would be completely justified in thinking that it’s probably not a good idea to base your presidential campaign brand around a pun like this one. For those born after the invention of DVDs, the phrase “feel the burn” – a reference to the burning sensation in muscles during exercise – was popularized by Jane Fonda in her series of workout videotapes. (The phrase was followed in popularity by the exhortation “No pain, no gain”, which any physical therapist will tell you is a recipe for serious injury.) More recently, “feel the burn” shows up in Urban Dictionary with a related meaning: “a phrase intended to make someone feel even worse about their current misfortune, by telling them to savor the emotional ‘burn’ which they are already feeling”.

So one meaning refers to muscle pain from exertion, and the other to emotional pain over a bad experience. This raises the obvious question: Who is supposed to “Feel the Bern”? His supporters? That seems counterproductive. His opponents? That makes more sense, but what is the “burn” that they’re getting from Bernie Sanders? The intended meaning of “burn” in “Feel the Bern” seems much closer to the meaning in the phrase “sick burn”, which our friends at Urban Dictionary helpfully define as “to insult someone on an elevated level”: Bernie Sanders is making his opponents feel bad by insulting them.

I suspect that “Feel the Bern” was chosen more for how it sounds than the actual meaning. A little digging shows that the slogan was literally crowdsourced; according to the Bernie Sanders Connecticut Team website:

    “Feel the Bern is the unofficial slogan dreamed up by a young Sanders fans in Vermont that has been catching on along with his campaign. Beyond a slogan, Feel The Bern can be translated to mean the desire among his supporters for a politician that is principled, honest, straightforward and consistent in his/her policies over their careers.”

This explanation introduces a third meaning: rather than a play on “burn”, the meaning here is to empathize or understand Sanders (as in the common phrase “I feel you”). Unofficial or not, you can buy “Feel the Bern” mugs, buttons, bumper stickers, and keychains from Sander’s official site.

In terms of catchiness and appeal to the Youth of Today, it’s a big step up from Sanders’ official slogan, “A political revolution is coming”, which sounds vaguely threatening, in a Soviet way. Sanders also uses “Not For Sale”, which is more a response to the GOP and other Democratic candidates and less about his own campaign.

Hillary Clinton, the other Democratic front-runner, has gone generic with slogans. The current official slogan is “Hillary for America”, but on her website you can buy apparel and signs with a logo that replaces two letters with numbers in her name: “Hil16ry” – so “Hillary in 2016”? And on top of this the “H” in Hillary has an arrow as the cross bar, pointing to the right – indicating progress? – which is then cleverly paired with the phrase “I’m with” to recall those hilarious (NB: not actually hilarious) t-shirts of the 1970s saying “I’m with stupid”. Is that really the association we want for a former Secretary of State and presidential candidate?Hillary_Banner_grande

It is interesting that both Democratic candidates use their first names in their slogans, a way of appearing down-to-earth and friendly, more like the constituents they are supposed to serve. But neither of the slogans has the immediate impact or sense of excitement as famous slogans from the past such as “I like Ike” (Eisenhower, 1952), “Give ‘em hell, Harry!” (Truman, 1948), or even “Yes we can” (Obama, 2008). Prediction: we will see more sloganeering from the Dems and Repubs as they try to galvanize voters, throwing even more spaghetti against that wall. Get your “Feel the Bern” mug before they’re gone for good!

Is Tiffany’s Major Victory Short-Lived?

Posted in Law Suits

On September 8, Judge Laura Taylor Swain ruled on summary judgment that Costco Wholesale Corp. had willfully infringed Tiffany & Co.’s trademark by selling engagement rings using the Tiffany name.  (Opinion here)  Frankly, the infringement ruling was not especially surprising, but the willfulness holding may raise an eyebrow or two.

Costco attempted to justify its use of the Tiffany mark by claiming that “Tiffany” was a generic descriptor for a particular type of ring mount.  A quick Google search turns up numerous examples of the mount, many of which appear to have no relationship to Tiffany & Co.  Costco also presented evidence supporting its belief that “Tiffany” could properly be understood as a generic descriptor:

Costco responds with the argument that it has not adopted the Tiffany mark at all, but simply utilized the generic term “Tiffany” to describe a particular type of pronged diamond setting on the unbranded rings that it sells. (See Costco Opp. Memo at p. 21.) To that end, Costco has submitted multiple dictionary entries, as well as an entry from a publication called The Jeweler’s Manual, which purport to show the viability of “Tiffany” as a descriptive term.  (See Costco Opp. Memo, Exs. 1-3.) Further, Costco has submitted a sworn affidavit from Harjit Grewall, a Costco diamond buyer, in which he indicates that “[i]n communications with wholesale vendors of diamonds and diamond rings, the word Tiffany is routinely used in its dictionary definition sense to refer to a type or style of pronged ring setting.” (Declaration of Harjit Grewall ¶ 2.) Mr. Grewall also states that “[i]nformation presented in signs . . .  including setting style information, is generally taken from vendor quote sheets that Costco receives from vendors.” (Id.¶ 7.) Costco has also proffered the Declaration of Megghan Haruff, an Assistant General Merchandise Manager at Costco, who also states that “the content of Costco in-store jewelry case display signs was prepared . . .based on item descriptions received from Costco vendors.” (See Declaration of Megghan Haruff ¶ 9.) By asserting that it extracts the word “Tiffany” from vendor-supplied information where it is used in a purely descriptive sense, Costco attempts to raise an issue of fact with regard to its intent to adopt “Tiffany” as a mark, which in turn would raise an issue of fact regarding Costco’s intent to mislead consumers and whether it has exhibited bad faith in adopting the Tiffany mark.

Despite this evidence, the Court held that “no rational finder of fact could conclude that Costco acted in good faith” in the way it used the Tiffany mark, and denied Costco the right to try this issue to the jury.  This holding seemed like a significant stretch to me.

Based on the opinion and the Complaint filed in the case, it appears Costco’s only actual use of “Tiffany” was in point of sale signs stating “639911 – PLATINUM TIFFANY .70 VS2, 1 ROUND DIAMOND RING – 3199.99″ and “605880 – PLATINUM TIFFANY VS2.1 1.00CT ROUND BRILLIANT SOLITAIRE RING – 6399.99.”

tiffanyringsIf a jury were to find Costco’s evidence persuasive regarding the industry understanding of “Tiffany” as a particular setting, then it seems likely that a reasonable fact finder could conclude that Costco’s use was not bad faith.  The fact that they are not highlighting the word Tiffany in the description would be entirely consistent with a good faith descriptive use.

Now, to be fair, Tiffany did have additional evidence of some Costco employees suggesting an effort to copy Tiffany’s designs, but the Court isn’t allowed to weigh the evidence at summary judgment.  I think Costco presented enough to get past summary judgment on bad faith and willfulness.

Notably, the willfulness and bad faith holding is very significant.  It opens the door to a claim for Costco’s profits by Tiffany & Co.  In trademark cases, this generally is the best damages measure a plaintiff can hope for.  In addition, the judge parlayed the willfulness holding into a right for Tiffany & Co. to seek punitive damages from a jury.  And that’s just the problems in this case.  A willfulness and bad faith holding in this case could potentially open the door for consumer fraud actions under various state law theories, although Costco appears to have taken steps to avoid that risk by offering refunds to anyone that purchased the rings.

Ultimately, September 8 was a very bad day for Costco.  However, if I was a gambling man (and with the qualifier that I’ve read little more than the Court’s opinion on summary judgment), I’d bet that the summary judgment ruling of bad faith gets reversed on appeal.