—David Mitchel, Vice President of Norton Mitchel Marketing

Successful brands often find holes in markets that need to be filled. There are numerous examples to illustrate this point. Microsoft found a great niche in the computer software market and their success made Bill Gates one of the richest individuals on the planet. Apple’s iPod was a product innovation that really enhanced the company’s bottom line. In the 1980’s, Porsche expanded their line of sports cars into a new niche with the 944 and it helped save the company from bankruptcy. However, sometimes holes exist for a reason and they can’t be filled despite the best branding efforts.

The latest example to illustrate this is Devotion Vodka. Devotion Vodka is a protein based vodka. The protein used in Devotion is casein, the same type of protein found in dairy products. According to its website, Devotion is "the world’s first and only 80 proof, triple-distilled casein infused vodka made in the USA". Recently, Devotion announced that they signed Mike "The Situation" Sorrentino of "Jersey Shore" fame to be their spokesperson. Additionally, The Situation will have an equity stake in the company. I believe The Situation is a reasonably qualified spokesperson for this brand. The Situation likes to drink and party as evidenced by his actions on "Jersey Shore" and he is also a fitness enthusiast.

Despite the alignment between The Situation and Devotion Vodka, it is unlikely that this will be a successful brand. This is because the product concept is flawed. The vodka is aimed at a fitness oriented individual. However, vodka is not perceived as a fitness oriented beverage. Additionally, I believe that people will have a hard time understanding how casein protein fits into a hard alcohol product. If the product concept flaw wasn’t a convincing enough argument, consider Devotion’s pricing strategy. Devotion will enter the market similarly priced to Grey Goose. Grey Goose is a vodka brand that is well perceived and associated with quality. It also holds cachet with those who live a Jersey Shore style lifestyle, a target market for the Devotion brand. In a consumer purchase decision between Devotion and Grey Goose, the vast majority of consumers should choose Grey Goose because of its brand equity and stronger price-value proposition.

Continue Reading When Holes in Markets Can’t Be Filled

Today marks the end of the 2010 Minnesota State Fair.

Sad day, but Happy Labor Day!

It also marks an opportunity to talk a bit about the frequently encountered question of trademark priority, frozen trademark rights, the creation of common law trademark rights, and the frequently forgotten concurrent registration trademark tool, using my favorite frozen custard stand at the MN State Fair, as a laboratory and an example:

 No doubt, a clever play on words, and a great inherently distinctive name and mark for a frozen custard business.

Turns out, a frozen custard business in the Kansas City, Missouri area thought so too, so what to do? Who was first and where, and whether any federally-registered rights exist, will have a lot to do with the respective naming rights and the geographic scope of any common law trademark rights. 

Since the folks in Kansas City had the foresight to federally register, they filed a federal registration application on August 30, 2001, a couple of years after their claimed first use on November 5, 1999, with a registration certificate issuing on November 12, 2002, and without knowing when the use began in Minnesota, and assuming the dates set forth in the registration are accurate, here is a proposed three-way framework of analysis and some thoughts to consider, depending which side of the fence you might find yourself or your client, in a fact pattern like this:

Scenario A: MN-CLS’s First Use Predates KC-CLS’s First Use Date of November 5, 1999 —

  1. Normally one with priority — like MN-CLS has in Scenario A — may petition to cancel a confusingly similar trademark registration (thereby freeing itself of any impairment to expand), but since KC-CLS’s registration is more than five years old, MN-CLS is unable to do so based on priority and likelihood of confusion, it is limited to seeking cancellation on other less commonly viable grounds such as fraud and/or abandonment;
  2. This delay by MN-CLS may be costly to its rights because its common law rights may be frozen (no pun intended) to the geographic scope of those rights as of KC-CLS’s filing date of August 30, 2001, making any later geographic expansion a possible violation of KC-CLS’s rights;
  3. MN-CLS’s best position for having the freedom of geographic expansion is to seek a concurrent use registration, requesting some equitable allocation of the entire area within the United States; and
  4. If MN-CLS doesn’t care about geographic expansion, the use it had prior to KC-CLS’s filing date of August 30, 2001, most likely, is safe, and most likely, cannot be disturbed by KC-CLS.

Scenario B: MN-CLS’s First Use After KC’s First Use, But Before Filing Date of August 30, 2001 —

  1. As was the case in Scenario A, since KC-CLS’s registration is protected by the five year statute of limitations, running from the date of registration in 2002, and for the additional reason that MN-CLS lacks priority over KC-CLS’s first use, cancellation of KC-CLS’s registration is not possible on priority and likelihood of confusion grounds, so the most likely remaining way to attempt to knock out KC-CLS’s registration (to avoid impairment of its ability to freely expand) would be on fraud and/or abandonment grounds;
  2. As such, MN-CLS may want to probe whether KC-CLS ceased operations for a period of time sufficient to abandon rights, since a Section 8 Declaration of Use was filed (which only requires current use to maintain the registration), without the typical accompanying Section 15 Declaration (which more strenuously requires continuous use for the preceding five years, etc.), so this may be a possible abandonment red flag to explore;
  3. Assuming KC-CLS’s registration is not subject to cancellation, MN-CLS’s common law rights are most likely frozen to where they were as of KC-CLS’s filing date of August 30, 2001, unless MN-CLS pursues and obtains a concurrent use registration; and
  4. If MN-CLS doesn’t care about expansion,  the use it had prior to KC-CLS’s filing date of August 30, 2001, most likely, is safe, and most likely, cannot be disturbed by KC-CLS, provided MN-CLS was a good faith adopter in an area geographically remote from KC-CLS’s prior common law rights.

Scenario C: MN’s First Use After KC’s Filing Date of August 30, 2001 —

  1. MN-CLS may have stepped in it, and it is probably living on borrowed time without being in control of its own destiny, assuming there is no basis upon which to cancel KC-CLS’s registration;
  2. Even if MN-CLS had no actual knowledge of KC-CLS, its continued use in Minnesota is vulnerable to a complaint by KC-CLS, since the registration KC-CLS obtained treats KC-CLS as though it constructively used the "Custer’s Last Stand" mark throughout Minnesota as of the filing date of August 30, 2001, prior to MN-CLS’s first use in Minnesota.

Takeaways:

So, this framework of analysis doesn’t necessarily cover all possible factual scenarios and outcomes, but it is a good starting point for evaluating the respective rights of the parties in these all-too-common trademark fact patterns, where many forget about the concurrent use registration angle.

At least one more takeaway from this framework should be apparent: Those who register their rights early — and for those who don’t, but who monitor the Trademark Office filings, taking appropriate action within the first five years of a prior conflicting registration — generally are rewarded under the trademark law more than those who sleep on their rights and delay their registration efforts.

Perhaps, no surprise, at least, until you and/or your client steps in the chocolate custard.

What kind of success have you encountered when pursuing concurrent use registrations to avoid the freezing effect of otherwise conflicting trademark registrations?

A couple of days ago, I promised to try and make the case for why the State of Minnesota ought to hire an experienced trademark attorney.

OK, so I’m a day late, but you can decide if I’m a dollar short too. By the way, it was the federal trademark registration record for the below mark that got me thinking about the need:

As it turns out, the State of Minnesota uses the Minnesota Attorney General’s Office to register various trademarks owned by various Minnesota State entities, including the Minnesota State Agricultural Society, owner of the federal service mark registration for the above MINNESOTA STATE FAIR service mark.

One little problem with the federally-registered mark. The prosecution history for the registration discloses that the assigned Examining Attorney at the United States Patent and Trademark Office (PTO) required a disclaimer of the descriptive wording "Minnesota State Fair":

Applicant must disclaim the descriptive wording “MINNESOTA STATE FAIR” apart from the mark as shown because it merely describes the feature of the identified services. Trademark Act Section 6, 15 U.S.C. §1056; TMEP §§1213 and 1213.03(a).

The Office can require an applicant to disclaim exclusive rights to an unregistrable part of a mark, rather than refuse registration of the entire mark. Trademark Act Section 6(a), 15 U.S.C. §1056(a). Under Trademark Act Section 2(e), 15 U.S.C. §1052(e), the Office can refuse registration of the entire mark where it is determined that the entire mark is merely descriptive, deceptively misdescriptive, or primarily geographically descriptive of the goods. Thus, the Office may require the disclaimer of a portion of a mark which, when used in connection with the goods or services, is merely descriptive, deceptively misdescriptive, primarily geographically descriptive, or otherwise unregistrable (e.g., generic). TMEP §1213.03(a). If an applicant does not comply with a disclaimer requirement, the Office may refuse registration of the entire mark. TMEP §1213.01(b).

A “disclaimer” is thus a written statement that an applicant adds to the application record that states that applicant does not have exclusive rights, separate and apart from the entire mark, to particular wording and/or to a design aspect. The appearance of the applied-for mark does not change.

The computerized printing format for the Office’s Trademark Official Gazette requires a standardized format for a disclaimer. TMEP §1213.08(a)(i). The following is the standard format used by the Office:

No claim is made to the exclusive right to use “MINNESOTA STATE FAIR” apart from the mark as shown.

See In re Owatonna Tool Co., 231 USPQ 493 (Comm’r Pats. 1983).

PTO Examining Attorneys will have a tendency to do that, and the Attorney General’s Office respectfully complied with the well-supported request. What the PTO’s Examining Attorney didn’t volunteer (and they can have a tendency to do that too) — even to the Minnesota Attorney General’s Office — is that a registration disclaimer could have been avoided by submitting a declaration claiming acquired distinctiveness in those words, which, according to the application, have been in use in that specific format since at least as early as January 1, 1981. 

Moreover, Wikipedia reports that the Minnesota State Fair has been in existence since 1859 (missing only five years during that entire period of time), so exclusive rights in the words "Minnesota State Fair" easily could have been claimed under Section 2(f) of the Lanham Act, by way of acquired distinctiveness, long before the current stylized use in 1981.

As it currently stands, there are no federally-registered rights in the words "Minnesota State Fair," only the specific graphic depiction and artwork set forth above (without any limitations as to color) is covered by a federal registration, with exclusive rights in the words having been specifically disclaimed.

Had a simple declaration been put in the record during prosecution to support that the words "Minnesota State Fair" have been in "continuous" and "substantially exclusive" use for at least the five years immediately preceeding the claim of acquired distinctiveness, the registration obtained also could carry the benefit of constituting prima facie evidence of the validity and registrant’s exclusive rights in the entire mark, including the words. Moreover, upon incontestability, these federally-registered rights eventually could become conclusive, not just prima facie valid.

So, the point of the story is not to pick on the Attorney General’s Office of the State of Minnesota, whose attorneys have far better things to do than worry about all the many nuances of federal trademark law. Besides, the point is, this kind of thing happens all the time, even in the commercial business world, when trademark registration and prosecution activities are conducted by those who don’t do it day in and day out.

The newest fare at the Minnesota State Fair is not Camel-on-a-Stick, Buffalo-on-a-Stick, or any other kind of Food-on-a-Stick, but rather, Trademark-on-a-Stick.

Earlier this week, the Minnesota State Fair (owned and operated by the Minnesota State Agricultural Society, a Minnesota State Agency) was hot to skewer the unauthorized use of its nearly three-decade-old and more recently trademarked logo, by incumbent Republican U.S. Congresswoman Michele Bachmann, in a political ad targeting DFL challenger Tarryl Clark’s record on tax policy.

This trademark objection has generated quite a bit of publicity, with coverage being reporting by MinnPost, The Minnesota Independent, the New York Times (blog), Politics Daily, MPR News, TPM, and Politico. The Bachmann ad referenced the MN State Fair and used its official logo while suggesting that Clark has voted to increase taxes on what foodies covet at the fair, including their favorite corn dogs, deep fried bacon, and beer.

Central in the debate over the lawfulness of the Bachmann campaign’s use of the logo is a question we have pondered on DuetsBlog before (e.g., here, here, and here), namely, whether the use of another’s logo crosses the legal line and is likely to cause confusion as to sponsorship, affiliation, approval, or endorsement, or whether it may constitute lawful nominative fair use. So, it should be no surprise to readers of DuetsBlog, that in the end, it is consumer understanding of the use in the ad that controls whether or not it is lawful.

The Minnesota State Fair’s objection certainly is not frivolous and is rooted in a common and traditional trademark concern over likelihood of confusion. Bachmann for Congress political ads begin with the statement: "I am Michele Bachmann and I approve this message." According to Minnesota State Fair officials, Bachmann’s use of the above Minnesota State Fair logo is likely to lead viewers to incorrectly believe that the Minnesota State Fair approves Congresswoman Bachmann’s message or has endorsed her campaign. What do you think, is that what viewers will believe?

Bachmann’s campaign denies that the logo use was unlawful, but without explaining why no confusion is likely and without specifically articulating what would likely be a nominative fair use defense, it voluntarily has decided to drop use of the official logo and instead opted to switch to a more "generic" image. Apparently what the campaign means by "generic" is not that it lacks the look of a trademark and/or logo, but rather is one not specifically used or owned by the Minnesota State Agricultural Society.

Bachmann for Congress’ revised television advertisement may be viewed here, showing no use of the trademarked official logo, but I’d hardly call the use "generic" — it remains a  logo use, even if it is a fake one that swaps fireworks for a ferris wheel, and alters the color scheme and typeface. Do you think that consumers will notice or recognize the fake logo as being fake or just believe it is an additional logo used by the MN State Fair that they haven’t seen before?

Interestingly, the change may not be enough to satisfy the MN State Fair. Apparently, it continues to have concerns about the revised Bachmann ad, and it has asked the Attorney General to look into the question of whether the change is sufficient to avoid confusion as to endorsement of the Bachmann campaign. Having said that, with only a few more days left before the close of the 2010 MN State Fair, one must wonder whether the campaign will move on and moot this lingering concern too, leaving the State Fair ads behind, as it continues to run new ads down the final stretch of the campaign.

Stay tuned, tomorrow I’ll attempt to make the case for why the State of Minnesota needs to hire an experienced trademark attorney.

Bonus political speech consideration below the jump:

Continue Reading Fair Logo, Fair Use & Fair Politics? The Minnesota State Fair’s Trademark-on-a-Stick

–Sharon Armstrong, Attorney

Whenever I return from a trip from California, I am always surprised at the number of people who ask whether I visited the palace of hamburgers known as In-N-Out. I’m not much of a burger fan, so my trips to that establishment are rare. I try, however, never to miss a trip to El Pollo Loco, one of my favorite restaurants on the planet.

At this point in my life, part of my love of El Pollo Loco stems from its rarity – I only get to have it when I visit my family and friends on the West Coast, and absence does indeed make the heart grow fonder. Imagine my surprise and delight then, when I learned that El Pollo Loco is learning to expand to Minnesota. I learned about this last week, when El Pollo Loco sued a local Minneapolis restaurant purportedly operating as El Pollo Loco De Los Santos. The lawsuit alleges that the latter restaurant continues to use the term “Loco” in its name even though El Pollo Loco requested that El Pollo Loco De Los Santos cease use of the term, or any other mark confusingly similar, in 2008.

El Pollo Loco, which translates to “the crazy chicken,” currently operates in California, Nevada, Texas, Utah and Illinois. El Pollo Loco De Los Santos denies that it has used the word “Loco” in its name since 2008. According to an article in the Minneapolis/St. Paul Business Journal, however, the old name still existed on El Pollo Loco De Los Santos’ website and phone company listings when Pollo Loco filed suit.

The Trademark Manual of Examining Procedure requires that “non-English wording that comprises an unregistrable component of a mark is subject to disclaimer.” El Pollo Loco owns nine live registrations incorporating EL POLLO LOCO, all of which disclaim “pollo.” Therefore, it would seem that if El Pollo Loco De Los Santos is in fact no longer using “Loco” in connection with its name, then the parties can get down to another type of important business, namely making more yummy Mexican food available to the good people of the Twin Cities.

Stay tuned, we’ll let you know if we hear anything about this case.

In the meantime, fellow Twin Citians, have you ever heard of El Pollo Loco? If you have, do you think that the Minneapolis restaurant El Pollo Loco De Los Santos/El Pollo De Los Santos is confusingly similar to El Pollo Loco?

As I was reading US magazine last weekend, I saw that Jennifer Aniston (my favorite “Friend”) launched her first perfume last month. She describes it as a combination of the ocean, sea air, blooming jasmine and tropical oils. I might have to try it. Our guest blogger Mark Prus recently discussed the perfume in his post “Wary of Trademark Infringement?” He informed us that Jennifer Aniston had to change her perfume name “Lolavie,” because she was concerned about potential infringement with Marc Jacob’s perfume “Lola.” Opting for an eponymous perfume she renamed it “Jennifer Aniston.”

Jennifer Aniston’s nemesis Angelina Jolie was involved in a perfume name dispute. Angelina Jolie brought an action on behalf of her at that time infant daughter Shiloh Nouvel Jolie-Pitt (Jennifer’s ex-husband Brad Pitt’s daughter). Specifically, Angelina Jolie sought to prevent perfumer Symine Salimpour from launching the perfume “Shiloh.” Ms. Salimpour had registered the trademark “SHILOH” for perfumes a month after Shiloh Nouvel Jolie-Pitt was born. After battling for thirteen months, Angelina Jolie finally dropped the legal challenge to the application to trademark the name.

Other perfumer stars have registered their names as trademarks for perfume. In order to do so, the law generally requires a showing of “secondary meaning.” This means that the public has come to recognize the personal name as a symbol that identifies and distinguishes the goods of only one seller (i.e., Levi Strauss). Jennifer Lopez was able to establish a “secondary meaning” when she registered her name: “Jennifer Lopez” as a trademark for perfume. In addition, she registered the trademarks: “Live Jennifer Lopez” and “Still Jennifer Lopez.” Despite renaming her perfume, Jennifer Aniston has not yet registered her name as a trademark. She should have read Mark Prus’s blog and follow in the steps of savvy business person Jennifer Lopez.

Now that kids are back to school and summer is coming to a close, this billboard advertisement has disappeared from I-94 just outside of downtown Minneapolis. Before it vanished from the roadside, however, I thought to capture it to tell a little trademark tale here, one from years past, but one that remains relevant, important, and applicable to trademark claims involving the color black. 

As we have discussed before, a single color can function as a trademark and be the basis of exclusive ownership, so long as it is not functional and has acquired distinctiveness for the goods in question. As it turns out, however, and as the billboard reminds me, due to some unique attributes of the color black, it is a tricky one to own as a trademark.

The tale begins back in 1988, after accumulating 25 years of use and allegedly "substantially exclusive" use in commerce, Mercury-Brunswick commenced efforts to register, own and exclude others from using the color black on the surface of internal combustion engines for boats.

As can tend to be the case when claiming exclusive rights in single colors or other non-traditional trademark rights, others within the industry who are paying close attention to what goes on at the Trademark Office come to life and consider getting in the way of these efforts. 

British Seagull Ltd. did just that and filed an opposition lasting six years, ending with and resulting in the final rejection of Mercury-Brunswick’s claimed trademark rights in black, based on the functionality doctrine. You might be wondering, how on earth is the color black functional when applied to the entire surface of internal combustion engines for boats? 

The longer answer can be found in two decisions: The decision of the Trademark Trial and Appeal Board (TTAB) in British Seagull Ltd. v. Brunswick Corp., 28 USPQ2d 1197 (TTAB 1993), and the decision of the Court of Appeals for the Federal Circuit (CAFC), affirming the TTAB’s registration refusal, in Brunswick Corporation v. British Seagull Limited, 35 F.3d 1527 (1994).

The shorter answer is "competitive need" as found in this excerpt from the TTAB’s decision: 

[A]lthough the color black is not functional in the sense that it makes these engines work better, or that it makes them easier or less expensive to manufacture, black is more desirable from the perspective of prospective purchasers because it is color compatible with a wider variety of boat colors and because objects colored black appear smaller than they do when they are painted other lighter or brighter colors. The evidence shows that people who buy outboard motors for boats like the colors of the motors to be harmonious with the colors of their vessels, and that they also find it desirable under some circumstances to reduce the perception of the size of the motors in proportion to the boats.

And the CAFC’s affirmance, here:

Turning to the present case, the Board determined that "black, when applied to [Mercury’s] outboard marine engines, is de jure functional because of competitive need." British Seagull, 28 USPQ2d at 1199. The color black, as the Board noted, does not make the engines function better as engines. The paint on the external surface of an engine does not affect its mechanical purpose. Rather, the color black exhibits both color compatibility with a wide variety of boat colors and ability to make objects appear smaller. With these advantages for potential customers, the Board found a competitive need for engine manufacturers to use black on outboard engines. Based on this competitive need, the Board determined that the color was de jure functional. This court discerns no error in the Board’s legal reasoning and no clear error in its factual findings

So, it’s important to keep in mind this notion of competitive need when a business desires to own exclusive trademark rights in a color, and it is equally important to keep in mind as a defense when such rights are being asserted against your client’s use of a color. 

And, when it comes to asserting or refuting a claim of exclusive trademark rights in the color black, it is well worth exploring competitive need by asking whether black’s unique attributes of color compatibility and/or visual perception have any application to your facts, since those facts already have been found to support a successful functionality defense.

On a related note, I recently came across King Innovation’s announcement of being "granted" a trademark in black underground waterproof electrical connectors. Of course, I’m left wondering whether color compatibility and/or visual perception might impact this claim of rights. I’m also hoping they aren’t referring to this little guy right here, since the application to register this claimed mark was abandoned last year and appears to be deader than a doornail, following a functionality refusal:

 Oh, what do you know, here is another application, filed a year later, that matured to registration and  issued just months ago. Proof that persistence pays dividends!

Last, as I recall Dan’s post entitled I See Black Labels, I’m left wondering what social science data might exist to support a functionality defense, if one was inclined to require such a defense.

Can you think of other unique attributes to the color black that might establish a successful functionality defense to a trademark claim in black?

–Dan Kelly, Attorney

What a difference a year makes.  Last year, I wrote about the .CM top-level domain as a potentially popular typographical variant of the ubiquitous .COM.  In that post, I mentioned that it did not appear that widespread commercialization of .CO was in the works.

Well, .CO domains are available and out there.  Go get them.  Now!

–Dan Kelly, Attorney

By way of update to a previous post, some are still occasionally hitting the jackpot on generic domain names.  At the recently concluded DomainFest auction, Tshirts.com sold for $1.2 million, and Quotes.com sold in the extended online auction last week for $1.15 million.  Granted, these sales are an order of magnitude less than Fund.com that once upon a time sold for just under $10 million, but in a sluggish economy, a seven-figure domain name sale is fairly rich.

This week, DomainName.com goes up for auction (I am not making this up), apparently along with the entirety of the accredited registrar business found at that website, making it difficult to determine the FMV of the domain itself.