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Collaborations in Creativity & the Law

Effective Enforcement Strategies – Letters of Protest

Posted in Almost Advice

A letter of protest is an informal procedure that allows third parties to bring to the attention of the USPTO evidence bearing on the registrability of a mark. The letter is filed with the Director of Trademarks and if the Director is persuaded by the evidence, the letter will be accepted and the evidence forwarded to the examining attorney. Only the evidence is forwarded to the examining attorney. Accordingly, it is important to keep any legal argument in a letter of protest to a minimum. This also has the effect of keeping costs down with respect to the preparation of the letter of protest. If the examining attorney finds the evidence persuasive and issues an registration refusal based on the evidence, it can be a cost effective tool to keep the principal register clear of a concerning mark.

Are Trademark Bullies Bringing Plausible Claims?

Posted in Civil Procedure, Copyrights, Fair Use, Guest Bloggers, Infringement, Law Suits, Loss of Rights, Mixed Bag of Nuts, Patents, Trademark Bullying, Trademarks

- Draeke Weseman, Weseman Law Office, PLLC

Intellectual property enforcement continues to make news, and new solutions to curb abusive enforcement – i.e. trademark bullying, patent trolling, and copyright trolling – are being proposed regularly. Central to these solutions is the idea of a “fast-lane” that kicks bad claims to the curb before the bullied or trolled party has incurred significant legal costs.   For example, in copyright infringement cases, a motion for judgment on the pleadings may succeed very early in the process if fair use is obvious. The ability to end frivolous litigation early is critical to a balanced intellectual property system.

Although I haven’t seen it discussed much, one possible means for putting an early end to frivolous trademark litigation is for the bullied party to pursue dismissal on the grounds that the trademark bully has not met the required pleading standard of “plausibility” set forth in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007) and extended in Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937 (2009). (For the non-lawyers reading DuetsBlog, “pleading standard” refers to the threshold content that is required in a complaint so that a plaintiff can have access to the court). My opinion is that claims that deserve the trademark bullying label are not likely to meet the Supreme Court’s pleading standard and, therefore, should be dismissible. Early dismissal of bad trademark claims, if more routinely sought and granted, could provide bullied parties with relatively quick and cost-efficient relief and could be another tool in the toolkit for practitioners faced with responding to abusive intellectual property enforcement.

First, a quick summary of the change in pleading standards. From 1957 to 2007, civil litigants followed the “mere notice” pleading standard of Conley v. Gibson, 355 U.S. 41 (1957), wherein the Court held that a complaint need only state a “conceivable” set of facts to support its legal claims. That all changed in 2007, when, in Bell Atlantic Corp. v. Twombly, the Court replaced that standard with a stricter “plausibility” standard: a complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Because the Twombly case involved a specific set of facts involving allegations of anti-competitive behavior, the courts were confused about whether Twombly’s rule should be extended to all civil litigation. So, in 2009, in Ashcroft v. Iqbal, the Supreme Court confirmed that the new, stricter pleading standard of “plausibility” applied to all civil litigation.

According to the Supreme Court, in order to state a claim that is “plausible on its face,” a plaintiff must string together facts that amount to more than “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” Legal conclusions can provide the framework for a complaint, but are insufficient on their own because legal conclusions are not entitled to an assumption of truth. Asking for plausible grounds “calls for enough fact to raise a reasonable expectation that discovery will reveal evidence” of unlawful conduct.

So, do trademark bullies bring plausible claims? In my view, no. And I think this view is often echoed in the media coverage of trademark bullying cases, where we see the sentiment expressed time and time again that “there’s no way anybody is confused about X and Y.” Those of us following this issue can all remember Vermont Governor Peter Shumlin’s public message to Chick-fil-A: “If you think that Vermonter’s don’t understand the difference between kale and a chicken sandwich, we invite you to Vermont and we’ll give you a lesson about the difference between kale and a chicken. There are some very distinct features . . . ” This seems to me to be a layman’s way of saying that Chick-fil-A’s claim of trademark infringement was just not plausible on its face.

Like Chick-fil-A in the Eat More Kale dispute, trademark bullies regularly and aggressively claim likelihood of confusion without actually alleging enough factual matter to make that claim plausible, rather than merely conceivable. Trademark bullies often claim a likelihood of confusion based entirely on the similarity of the marks, while ignoring the other elements necessary to establish trademark infringement – strength of the mark, relatedness of the goods, overlapping trade channels, bad faith intent, etc. In doing so, trademark bullies might show a conceivable claim – the marks are the same, so conceivably there could be confusion – but they lack the extra stuff necessary after Twombly to get over the hurdle of plausibility. In other words, the claim isn’t plausible because despite similarities in the marks, the mark is so weak or the goods so unrelated that there is not “a reasonable expectation that discovery will reveal evidence” of trademark infringement. I think if more of the bad trademark claims we see were actually held up to this standard, more of these claims would fail.

Moreover, courts have ample discretion to decide whether a claim is plausible, and thereby to decide whether to subject a bullied party to the burden of discovery. In Iqbal, the Supreme Court held that “[u]ltimately, determining plausibility is a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Courts can look at the success or failure of prior trademark claims and rely on their own common sense about whether there really is any unlawful conduct that will be discovered. This might be a difficult subjective decision, but judges should not shy away from that responsibility.

As a matter of public policy, upholding the plausibility standard is important. Comments from the public, as part of the USPTO’s investigation into trademark litigation tactics in 2011, revealed the following views:

Aggressive tactics used by overreachers presents a problem for the entire intellectual property community by threatening legitimate activities and clogging the legal system with invalid claims.

[D]iscovery and deposition processes were too costly for many small businesses and provided a means for a party to thwart progress in a case and to drain resources from an adversary. . . .

[S]mall companies and individuals are placed in a difficult position where surrender of valid trademarks that are being lawfully used is the only rational financially-feasible option available.

It seems to me that one way to reduce the impact of frivolous trademark litigation is to demand that trademark plaintiffs actually meet the plausibility standard set forth in Twombly. Trademark practitioners should challenge trademark bullies under Twombly and expose the implausibility of claims made by trademark bullies.

“Symmetrically Arranged” Buttons: A Patent Win for Nintendo

Posted in Infringement, Law Suits, Mixed Bag of Nuts, Patents, Technology, USPTO

Nintendo has been making headlines recently.  The gaming industry is in mourning over the unfortunate passing of Nintendo CEO Satoru Iwata last week.  Iwata was instrumental in the success of the Nintendo Wii, among other Nintendo creations, and was known for his accessibility to fans.

Nintendo was in the news again this week for a patent litigation victory.  The gaming company was sued by Quintal Research Group for alleged patent infringement.  Quintal argued several Nintendo products, including the Nintendo DS and Game Boy Advance, infringe Quintal’s patent.

Quintal’s patent, which expired in 2011, relates to handheld computing devices, and particularly to “a portable handheld communication device for rapid retrieval of computerized information.”  The Quintal patent describes a handheld device with a display screen and ergonomically placed finger controls, including thumb controls “symmetrically arranged” on either side of the display screen.

Some drawings from the Quintal patent depicting the handheld device:

The “symmetrically arranged” thumb controls are the two side buttons, each labeled 166 on Fig. 19A.

 

Certainly, Nintendo’s handheld devices also have a display screen and ergonomically placed finger controls.

This chart was referenced in the judge's Order.  Game Boy Advance and Game Boy Dual Screen (a.k.a. Nintendo DS)

This chart was referenced in the judge’s Order to show examples of the accused devices: Game Boy Advance and Game Boy Dual Screen (a.k.a. Nintendo DS)

 

The district court judge granted Nintendo’s motion for summary judgment, finding the Nintendo devices do not infringe the Quintal patent.  According to the judge’s ruling, the case turned on the definition of “symmetrically arranged,” as that term is used in the Quintal patent claims.

In order to argue that Nintendo infringed the Quintal patent, Quintal had to show that Nintendo’s devices meet every element of the Quintal patent claims.  The claims require thumb controls “symmetrically arranged” on each side of the display screen.  Quintal argued that “symmetrically arranged” refers merely to placement or location of the controls on the device—that they are equidistant from the screen.  Nintendo, however, argued that “symmetrically arranged” thumb controls means thumb controls that are mirror images of one another, having the same size and shape.  The judge agreed with Nintendo’s definition.

As shown in the images above, the thumb controls (numbers 166) of the Quintal device are indeed depicted as symmetrically sized and shaped.  In stark contrast, thumb controls on either side of the screen of the Nintendo devices are not at all mirror images (the cross-shaped button is different in size and shape from the opposing A and B buttons on the Game Boy Advance, for example).  Therefore, Quintal could not show that Nintendo’s devices meet every element of the Quintal patent claims.

The case serves as an important reminder of the sometimes contrasting processes of (1) obtaining a patent and (2) enforcing a patent.  Narrow claim limitations added to overcome patent office rejections may render the claims so narrow that competitors can easily overcome them in later litigation.  During the process of obtaining its patent, Quintal added the “symmetrically arranged” language to its claims for the purpose of overcoming a prior art rejection in the patent office.  Quintal’s device was patentable because the buttons were “symmetrically arranged.”  Ultimately, it was that same language that defeated Quintal’s infringement contentions.

Tory Burch Protects Her Brand

Posted in Counterfeits, Famous Marks, Fashion, Infringement, Law Suits, Mixed Bag of Nuts, Trademarks

The barrage of counterfeit jewelry products bearing the “Isis Cross” will cease! After more than two years of battling with counterfeiters, Tory Burch, LLC and its subsidiary (“Tory Burch”) secured a $41 million judgment and permanent injunction against jewelry company Lin & J International, Inc. and its owners (“Lin & J”).   The judge found that Lin & J’s counterfeiting and trademark infringement were willful. Thus, the judgment includes an award of attorney’s fees.

The counterfeiters’ website has been taken down and redirected to Tory Burch’s official website. The website also educates by providing information about counterfeiting:

Photo Credit: Tory Burch Website

Photo Credit: Tory Burch Website

Tory Burch’s iconic “TT” symbol is set forth below.

Photo Credit: Tory Burch Website

Yes, I confess I bought a pair of patent leather ballet flats.

Photo Credit: Tory Burch Website

Photo Credit: Tory Burch Website

I know they are real (not just because of the hefty price tag), because I bought them from an official Tory Burch store in the Meatpacking District in New York City.

Lin & J sold jewelry with an “Isis Cross” design (see below) prior to the judgment.

isiscross

Photo Credit: Observer/News

In the lawsuit, Lin & J tried to paint Tory Burch as the infringer of its Isis Cross design and trademark by bringing a counterclaim alleging unfair trade practices, defamation, trademark infringement and others. Lin & J even sought injunctive relief against Tory Burch.

Tory Burch has a history of vigorously defending her trademark and brand. For example, she has brought lawsuits against other alleged counterfeiters, including Wona Trading Inc., Jewelry House Corp. and Glizlane Boutique.

You might recall the newly minted billionaire Ms. Burch was embroiled in a different type of lawsuit against her ex-husband and former business partner Chris Burch, which DuetsBlog has previously posted about.

The lawsuit involved allegations by Mr. Burch that Tory was tortiously interfering with his business C. Wonder (not sure I like the name) and breaching a contract with him. In response, Tory alleged that her ex-husband had, among other things, violated his fiduciary duty to the Tory Burch company. Although he was forced off the board, Chris Burch still owned a 28.3% stake interest in the company when they divorced. She even called C. Wonder a “knockoff brand.” The battling exes ultimately settled their dispute.

Chris had a nice C. Wonder store in the Time Warner Building at Columbus Circle in the Upper West Side of New York City. Unfortunately for Mr. Burch, C. Wonder closed all of its stores earlier this year.

Med-tech is on its way home: What that means for lawyers and creatives, Part 2

Posted in Branding, Guest Bloggers, Idea Protection, Marketing, Mixed Bag of Nuts, Technology

Jason Voiovich, VP, Marketing, Analytics & Research Services, Logic PD

*This is part 2 of a two-part series on the legal impact of traditional medical devices finding their way to home use. Yesterday, we looked at the broad macro trend of traditional medical technology finding its way into the hands of the average patient. Today, we’ll explore the branding implications of this trend.

Before we go too far in today’s discussion, we need to get one thing straight: Today’s med-tech product isn’t really a product at all.

Oh sure, there’s some sort of sensing or treatment delivery “device”, but when that device is actually just a collection of sensors that were in your smartphone or smartwatch anyway, is it really a “separate” device? What I’m getting at is that we need to broaden our thinking about today’s med-tech device in order to get our hands around the branding challenges.

Today’s med-tech “device” (if we want to keep calling it that) is actually the combination of three separate but interconnected parts:

  1. The “device” itself, with all the caveats noted above
  2. The interactive service provided (often experienced via a subscription, but also delivered on-demand)
  3. The aggregated data generated from all devices in the field (yep, you guessed it, “Big” data)

There are plenty of ways to define a brand, but I tend to like the simplest one best: A brand is a promise. When you think about it that way, it begs three important questions that will help us unpack the challenge here: To whom are you making the promise? What exactly are you promising to do? And what benefit will that person (or persons) receive?

Three components of a modern med-tech device. Three important branding questions. Let’s go!

Table

Of course, this is just skimming the surface of the branding and legal strategy you’ll need to have in place as you work in this brave new world. We haven’t even talked about privacy, security and notifications (the core of HIPAA protections). We also haven’t explored all of the new stakeholders in this value chain, especially the provider and payer networks.

But we don’t need all of the details in order to start thinking about the implications of this trend now.

Take it from me: We see a lot of cool stuff in the product development pipeline at Logic PD. We work with the med-tech companies coming up with these ideas, and without divulging anything confidential, it is pretty cool stuff. It will absolutely improve people’s lives.

But if we botch the launch with off-the-mark creative strategies and weak branding, these products will struggle to reach the market. Simply adapting the “clinical” brand to reach a “home” audience will not work. The devices themselves might be less complex than their hospital-bound cousins, but their branding strategy is far more challenging.

The new product pipeline is typically 12-24 months, and the device-makers have already started. As branding and trademark folks, that means we’ve got time, but not much of it.

Med-tech is on its way home: What that means for lawyers and creatives, Part 1

Posted in Branding, Copyrights, Guest Bloggers, Idea Protection, Marketing, Patents, Technology, Trademarks

Jason Voiovich, VP, Marketing, Analytics & Research Services, Logic PD

*This is part 1 of a two-part series on the impact of traditional medical devices finding their way to home use. In this post, Jason will introduce the topic and discuss implications for the four types of intellectual property. In the next post, he will explore in more depth the evolving branding and trademark landscape for these devices.

We’ve had medical devices in our homes for many years.

From portable electronics (ear thermometers) to simple diagnostics (pregnancy hormone tests), the general American public is no stranger to med-tech. For those with chronic medical conditions, blood glucose meters and CPAP machines are a common sight in the home.

But all of those devices are just the rain before the flood.

As medical care decentralizes, the average person is being asked to take control of more and more of his or her own healthcare. Health Savings Accounts (HSAs) and other High-Deductible Health Plans are partly to blame, but also important is the advancement in connectivity technology for these devices. Linking these diagnostic and therapeutic devices to the Internet means many more tests and treatments can be conducted in the comfort of your own home, yet still under the watch of a trained nurse or physician. Patients generally enjoy more control over their care experience, and it often lowers costs to boot.

Common examples coming to a CVS shelf near you include: Ultrasonic skin treatments, cardiac diagnostics, screening for common conditions (strep throat, ear infections, etc.), and human waste analysis – just to name a few. (I won’t go into detail on the last one. Suffice to say, it involves a “smart toilet”).

At Logic PD, our analysis of the mid-tier med-tech market shows a significant shift toward devices designed for use by individuals without as much training as your average clinician, with as many as 30% of those companies designing devices that have the potential to be used in a home setting. In other words, it’s really coming. Soon.

The implications are simple, but profound:

  • Usability: The less training the user has, the easier the devices need to be to use. Those devices designed for hospital-trained clinicians will likely need an overhaul.
  • Durability and reliability: If you’ve ever had kids, you understand this one.
  • Mobility: These devices tend to be smaller and more portable, meaning they often require battery power. Smaller size and the need for lots of battery power are not friends.
  • Connectivity: The true potential of these devices are their ability to connect to the Internet and share their data with your health care provider or electronic medical record. You’ve heard of the “Internet of Things”, right? Think of this as the Internet of Medical Things. And they’ll all be connected through your smart phone or home Wi-Fi network.

The average med-tech product developer will really struggle with this. They’re good at packing in more features to sell more products, but the opposite is needed here – these devices actually need fewer features, and they must be much easier to use by the untrained person. But detailing the engineering challenges is a topic for a different time.

Legal and creative types reading this post are much more interested in the Intellectual Property implications of the coming flood of home-use med-tech. I’ll invite the smarter legal folk reading this to sound off with their own take on this trend, but let me throw a little chum in the water to get us started (Get it, chum, sharks, lawyers? Get it? … You guys are no fun.)

Patents:

So obvious, I’ll start here first. Many Silicon Valley startups are inventing new devices to attack this market (and hence the need for fresh patents), but most mid-tier device makers are leveraging their existing patent portfolios to reach the home market. I love patents, but I’m not sure this is the most important piece of IP to think about here.

Trade Secrets:

Think data. These new devices generate a lot of it. It may not mean much for each individual device, but in aggregate, they represent the ability to analyze results in new and profitable ways. More specifically, what you learn from those devices isn’t necessarily something you want to publish for the world to see. Ergo: Trade Secrets.

Copyrights:

This may not seem as obvious, but think about the need to communicate – effectively – with large numbers of new customers who have never picked up a legitimate medical device. While new industrial designs could certainly qualify as patents, the communication materials and strategies should be protected by copyright because those materials will be critical to home-user adoption of this technology.

Trademarks:

Now we’re talking! Actually, we’ll talk more about that in tomorrow’s post, but it comes down to this: Branding efforts for many of these devices were conceived and executed with a very different (clinical) target audience in mind. One could argue that the “doctor-sounding” trademarks might convey higher credibility, but that’s only going to work for early adopters. To really get to meaningful volumes, product managers and product marketers are going to have to get creative.

Luckily, we like that part of our job.

Will Starbucks Be a Closer at the USPTO?

Posted in Advertising, Articles, Branding, Famous Marks, Food, Look-For Ads, Marketing, Non-Traditional Trademarks, Product Packaging, Sight, Trademarks, USPTO

We’ll soon see whether coffee truly goes hand in hand with closers, at least in one famous brand owner’s quest for registration of a non-verbal, non-traditional color trademark at the USPTO. I’ve been noticing Starbucks focus on green straws lately, with the door signage shown below, offering a pretty creative use of “look-for advertising” without using those clunky words:

StarbucksGreenStrawSo, my search of filings at the USPTO was expected to find at least one supporting a claim of ownership to it, but what I found instead is a brewing battle over the green dot on a white cup:

Original December 3, 2012 Drawing for U.S. App. Ser. No. 85792872

Original December 3, 2012 Drawing for U.S. App. Ser. No. 85792872

Original December 3, 2012 Specimen for U.S. App. Ser. No. 85792872

Original December 3, 2012 Specimen for U.S. App. Ser. No. 85792872

Two months ago the USPTO issued a final refusal, maintaining previously issued grounds for refusal, including “the refusals related to the specimen and drawing not matching, the failure to function refusal based on the color mark being nondistinctive, the failure to function as a mark due to nondistinctive background design, and the claims of acquired distinctiveness being insufficient are all made final.”

According to the Examining Attorney: “As an initial matter, it is important to point out that the main issue in this application is whether the mark as shown in the specimens matches the drawing. The applicant has applied for a solid green circle background carrier that is centrally placed on a white beverage cup. The dotted lines on the drawing indicate placement of the mark on an actual cup. The examining attorney’s position is that the only acceptable specimen is an actual white cup with a clearly identifiable green circle background carrier centrally placed in the center of the cup. As discussed below, the specimens submitted by the applicant do not match the drawing.”

And, she goes on: “A claim of acquired distinctiveness under Section 2(f) cannot overcome the matching issue. Nor can any amount of evidence.”

Amended Drawing on October 13, 2015, for U.S. App. Serial No. 85792872

Amended Drawing on October 13, 2015, for U.S. App. Serial No. 85792872

The refusals were maintained despite the amendment to the drawing to add dotted lines, as shown to the right, and despite the amendment to the description of goods, which now reads: “The mark consists of a green circle placed centrally on the front exterior side of a white cup shape. The colors green and white are claimed as elements of the mark. The portions of the drawing represented by dotted lines are not claimed as elements of the mark.

Will Starbucks put this cup of coffee down, not file a Request for Reconsideration by the November 18, 2015 deadline, and fail to close on this application at the USPTO, or will it attempt to best the 200 page Office Action response it filed back in February?

Or, does this new Starbucks application filed just last week provide any insight?

But, what I really want to know is when will we see a non-traditional trademark application to protect the green straw?

 

The Love and Hate State.

Posted in Branding, Goodwill, Guest Bloggers, Marketing, Mixed Bag of Nuts

Aaron Keller, Managing Principal, Capsule

Love and hate are only emotional states, but we’re swimming in murky waters today. In response to a massacre in South Carolina the politicians are fighting to remove the “rebel” flag as an icon. Then, we see a movement here in the Minneapolis community to remove the name John C Calhoun from a lake area. Why stop there, why don’t we dig up his grave and put his head on a spike outside the Calhoun Beach Club? Okay, maybe that’s going too far. Or perhaps the discussion about changing the name of a lake was already too far. Hate has continued to be a theme when it comes to the subject of slavery, the south and racial discrimination.

At the same time, we’ve lowered ourselves into the love pool of gay marriage with the supreme court decision. The love of two individuals can be bonded with a legal piece of paper giving them rights as a couple beyond those of individuals. Love is an interesting word, diametrically opposed to the word above, yet clearly defining an emotion.

Now to a shift of gears and the connection between emotion and symbols. The rainbow has been re appropriated to mean love in the GLBT community. And, the southern symbol of freedom and the right to fight for a belief system (though moronic and wrong) was re appropriated from this flag, the original secession flag of South Carolina. See more at the previous post by Brent Lorentz. Let’s remember none of these flags killed people, though people died below them on battle fields. And, the rainbow doesn’t create love it is just a rainbow. Yet, both insight love and hate, taking people to emotional extremes. Consider the visceral reaction you have to the Swastika, but yet read here all the wonderful meaning associated with it 5,000 years before Hitler re appropriated it to a holocaust.

Now, consider a young man of 29 years old coming out of graduate school at the University of Minnesota with the idea of starting a “design firm” with a design partner, Brian Adducci. All the big roles and financial rewards are going to those kids heading to Wall Street and the financial industry. And, this wide-eyed MBA is starting a firm to design symbols for clients, and his snarky MBA friends ask “you can get paid to do that?”

Well, here we are after writing two books working with clients like Patagonia, 3M, Target, Quirky, SmartWool, Byerly’s and many others. We are in the business of giving brands emotion. We are in the business of designing the symbols which pull people toward brands. We are in the business of designing the very intangible assets driving substantial quantities of value on Wall Street.

And, we love it.

At The Corner of Trademarks and Confusion

Posted in Advertising, Branding, Food, Infringement, Marketing, Trademarks

Even in the age of the Internet, the geographic use of a trademark is an important consideration in determining whether your mark is likely to confuse consumers as to the source of your goods or services. Geographic considerations are particularly important for bars, restaurants, breweries, wineries, and distilleries – especially as they enter new markets.

Case in point: There is a bar downtown Minneapolis that has been open since 2012 called The Pourhouse at Fifth and Hennepin, which many refer to simply as “Pourhouse”.

ThePourhouseAn article in the Minneapolis-St. Paul Business Journal mentioned that a lease was signed for a new bar and restaurant downtown called Old Town Pour House at Seventh and Hennepin.  (The article originally said it was at Sixth and Hennepin.)  Old Town Pour House has three locations in Illinois and Maryland, and this would be their first location in Minnesota.  Given the signage for the Old Town Pour House as shown below, the dominant portion of the mark appears to be POUR HOUSE.   And this restaurant will be a stone’s throw away from the other earlier location.

oldtownpourhouse

 

interiorpourhouse

The article highlighted the fact that confusion between Old Town Pour House and The Pourhouse might be possible:

That site’s just two blocks from The Pourhouse, the locally owned nightclub that’s expanding [in its current location], so if you’re meeting friends at one of them make sure to get your plans straight.

So do you think this might be a problem in the same city?  Maybe not as problematic if Old Town Pour House had opened in St. Paul, or the West End, or Eden Prairie, but still potential for consumers to believe that the two locations emanate from the same source.  What do you think about when they’re on the same street?

Now you can imagine that an after work happy hour text, a Tinder message, or a comment after a Twins game to “meet me at Pourhouse” could potentially lead to some missed connections.  Or maybe someone says “I didn’t like the burger the other night I had at  Pour House downtown” – which could damage their reputation when they both have burgers on the menu.

When opening a restaurant, a bar, a brewery, or a distillery – or entering a new market with one – what steps should you take to lower your risk?

  • Do a search of both the federal trademark register and also the state business records.  Even if you have a federal trademark registration, check again.  Here, Old Town Pour House has a federal trademark registration for its logo – but it was filed after The Pourhouse was established in Minneapolis.
  • Conduct a quick internet search for your mark, and each of the words on their own, to see if there is any unregistered use, colloquial use, or newspaper articles for a similar mark.
  • If something of interest comes up from either of these searches, that doesn’t necessarily mean “no.”  Figure out how you can avoid actual confusion by consumers – a modification to your logo, some clever advertising efforts to distinguish yourself (maybe here to emphasize Old Town), create a different consumer experience, or consider the earlier use when leasing property and select a location that reduces potential for consumer confusion.

Do you think we are going to see some action taken here with Pourhouse like we saw last year with Lulu’s at the State Fair?  Or do you think as Old Town Pour House tweeted at me the other day “We’re all friends here! Craft beer needs less disputes, and more drinking in our eyes” and “far from a trademark dispute”?

Trademarks on the Internet: Are Consumers Really this Clueless?

Posted in Articles, Fair Use, Infringement, Keyword Ads, Law Suits, Trademarks

Are you unaware of the difference between search engine searches and the search results? Do you believe that a search engine can read your mind and return exactly (and only) the results you expect to receive? Is this your first time using the internet? Good news! If you answered yes to these questions, the Ninth Circuit’s recent decision in Multi Time Machine v. Amazon, Inc. is made just for you. But on behalf of the remaining 98% of the public, can I just ask one question: really?

If you’re unfamiliar with the facts, we discussed the (then) soon-to-be-decided decision here a few weeks ago (links to oral argument included). Eric Goldman also had a nice article on Forbes.com Monday. The short summary is this:

  • MTM Special Ops is a brand of military style watches;
  • Amazon does not sell MTM Special Ops watches;
  • If an internet user searches Amazon with the phrase “MTM Special Ops,” the search algorithm will return a handful of products which, based on past searches/purchases, are related to MTM Special Ops watches, all clearly labeled as “by Casio,” “by Luminox,” etc.;
  • MTM sued, claiming that consumers would be confused by the search results, either being confused as to the source of the goods or suffering from initial interest confusion; and
  • The district court granted summary judgment to Amazon.com.

In a 2-1 vote with one judge dissenting, the Ninth Circuit reversed (decision here). The court essentially held that in order to avoid initial interest confusion, Amazon (and other online retailers) must state precisely whether a particular search returned any exact matches. The kindest thing that can be said about this decision is that the Court really appreciates the role of a jury. But kindness aside, I’m still stuck wondering, really?

The court identifies the use of the plaintiff’s marks that is at issue here. They appear in the search engine field (the blank form). The exact search terms appear in quotations below the search field. And then there is another line which states: “Related Searches: mtm special ops watch.” Really? That’s the issue? The user is the one who entered the search term in the blank field. That blank field is editable in case the user didn’t find they wanted and, in case they choose to edit, Amazon includes the search terms below in quotations for the ease of the user. the “Related Searches” is clearly labelled, too. Is this confusing to anyone out there?

MTM had provided an expert report that stated that the search results are ambiguous, misleading, and confusing. The Ninth Circuit found that “a jury could infer that users who are confused by the search results are confused as to why MTM products are not listed. Even assuming this inference is warranted, it establishes that customers were not confused as to the source of the goods that appeared in the search results. They recognized that the search results were for different brands, not for MTM Special Ops.

There was also evidence that Amazon’s vendors and customers had complained to Amazon because “they did not understand why they received certain non-responsive search results when they searched for products that are not carried by Amazon.” Again, the evidence confirms that customers were not in fact confused by labeling of the search results. They were annoyed as to why other brands were coming up and confused as to the algorithm behind the search engine, but the court’s characterization suggests that consumers were able to easily confirm that the search results were not related to MTM Special Ops.

The court acknowledges that consumers are not likely to be confused once they visit the product detail page. It is unclear to me though what additional information is available on the product detail page that is not available in the search results. Each search result is clearly labeled as “Brand, Item number by Brand.” For example, Luminox Men’s 8401 Black Ops Watch by Luminox or Chase-Durer Men’s 246, 4BB7 Special Forces Black Watch by Chase-Durer.

The court appears to conflate consumer confusion regarding the marks with consumer confusion as to how search engines work. A search engine is not a personal assistant. A search engine is a functional tool used to index and access relevant information and reduce search time and costs. A user can, if they wish, access Amazon like a more traditional store: Shop By Department, Clothing and Jewelry Department, Watches, and then can click “Refine by Brand.” But that’s a lot of work. Instead, a search engine provides a quick access point to gather the most relevant options, some of which may not be exactly what the user was seeking. For example, the MTM Special Ops searches returned two fiction books. Which are clearly not watches and are clearly not MTM Special Ops brand books.

These same facts in a brick and mortar store could not support a reasonable claim of confusion. Imagine walking into Wal-Mart, Target, or any other large retailer and asking the very first person where the MTM Special Ops watches are. They’ll likely say: “Well, our watches are over there.” If you’re lucky, they may even walk you there and point at the watches. But they’re not likely to affirmatively state “We don’t have MTM Special Ops” watches. In my experience, it is usually “If we have them, they’d be in this aisle.” If I walked out with a Casio watch, would anyone really consider that to be trademark infringement?

Practically speaking, this is a simple fix for Amazon. If a search does not match up with a specific product, then it can state “There were no exact matches for the search, but the following results may be of interest.” The court frequently points out that Overstock.com does exactly that. But if the same type of inquiry in a non-internet store isn’t actionable, why should Amazon be potentially liable?

Perhaps the issue is simply that “initial interest confusion” needs to be discarded, at least with respect to search engine/keyword cases. As the Ninth Circuit reasoned in Toyota Motor Sales v. Tabari, 610 F.3d 1171 (9th Cir. 2010):

[I]n the age of FIOS, cable modems, DSL and T1 lines, reasonable, prudent and experienced internet consumers are accustomed to such exploration by trial and error. They skip from site to site, ready to hit the back button whenever they’re not satisfied with a site’s contents. They fully expect to find some sites that aren’t what they imagine based on a glance at the domain name or search engine summary. Outside the special case of . . . domains that actively claim affiliation with the trademark holder, consumers don’t form any firm expectations about the sponsorship of a website until they’ve seen the landing page—if then.

The Multi Time Machine court discarded this argument (and Network Automation) on the grounds that this case involved summary judgment, rather than a motion for preliminary injunction. But this reasoning doesn’t involve weight of the evidence. It appears to be more of a legal conclusion regarding customer sophistication on the internet, which is directly relevant to the facts of Multi Time Machine.

Personally, I find Amazon’s search features very helpful. It is a convenient way to reduce search time, compare products, and find other potential goods for purchase. Do we really want to inhibit these advantages simply because a few users who rarely shop on the internet might be confused by the search results, even though they aren’t confused before they make an actual purchase? Really?