On a recent shopping trip, I couldn’t help but notice some interesting brand extensions inside and outside the stores.

My encounter inside involved Burt’s Bees . The brand encompasses a wide variety of lip balms, lotions, cosmetics, and personal body care items. (pets, too). Yet I discovered a new addition to the lineup: Burt’s Bees protein shake powder.

While most cosmetics and lip balm companies don’t make a jump into the nutrition field (a ChapStick shake just doesn’t sound appetizing), Burt’s Bees’ extension seems to make sense. In my mind, I’ve always associated it with an image of healthy, natural products, and nutrition products seem to fit that image.

Outside, I ran into a similar situation in the lawn and garden center: a blast from childhood past:

This seemed a bit further afield than Burt’s Bees. Had my childhood sugary “fruit” drink really expanded into live flowers? After all, the company does sell Hawaiian Punch lip balm.

However, the answer seems to be no. The flowers are a sold by Canadian company Fernlea Flowers. The company has even registered the mark with the U.S. Patent and Trademark Office, without an opposition from Dr. Pepper/Seven Up (the owner of rights in the HAWAIIAN PUNCH mark).

Are flowers sufficiently related to fruit juice and lip balm such that Dr. Pepper should have objected to the use of HAWAIIAN PUNCH for flowers? Generally speaking, I’d say the goods are highly unrelated. Yet the marks are identical, the HAWAIIAN PUNCH mark has been licensed for other non-food goods, and the HAWAIIAN PUNCH mark is arguably famous. Plus, the mark could have been licensed because the flowers are the colors of various flavors of Hawaiian Punch drinks. Are these factors enough to create a likelihood of confusion?

If there isn’t a likelihood of confusion, is there a claim for dilution? This seems more plausible, but would extending protection of HAWAIIAN PUNCH to live plants in this instance effectively give the owner a right in gross to the phrase HAWAIIAN PUNCH? Is that okay for marks that can establish that they are famous? What do you think, was this an enforcement punch worth pulling?

For anyone unfamiliar with internet cat personalities, Grumpy Cat is a well-known feline whose dwarfism and underbite culminate in a perpetual—and adorable—sour expression.  Grumpy Cat’s real name is Tardar Sauce.  In 2012, when Tardar Sauce was only a few months old, she became an internet sensation after a photo of her endearing scowl was posted on Reddit.  Since that time, Tardar Sauce has made several public appearances, and was named to Forbes’ list of Top Pet Influencers.

Tardar Sauce’s owner, Tabatha Bundesen, formed Grumpy Cat Limited to handle licensing and merchandising of the Grumpy Cat brand.  Grumpy Cat Limited holds eight federal trademark registrations, including five registrations for the standard character mark GRUMPY CAT, and three registrations for this design mark:

Grumpy Cat Limited also owns multiple copyright registrations, including these:

 

In 2013, Grumpy Cat Limited entered into a licensing agreement with Grenade Beverage LLC.  Under the agreement, Grumpy Cat Limited licensed the Grumpy Cat trademarks and copyrights to Grenade in connection with a line of iced coffee products (appropriately named Grumppuccinos).

Three flavors of Grumppuccino

The licensing agreement additionally permitted Grenade to develop other Grumpy Cat beverage products, but only with the permission of Grumpy Cat Limited for each new product.  Under this provision, Grenade sought approval from Grumpy Cat Limited for a new line of Grumpy Cat-branded coffee beans.  Grumpy Cat Limited withheld approval for the coffee beans.  Grenade nonetheless moved forward with the new product.  Grenade also began selling unauthorized Grumppuccino t-shirts.

The offending beans

In late 2015, Grumpy Cat Limited sued Grenade for breach of contract, copyright infringement, and trademark infringement.  Namely, Grumpy Cat Limited asserted that Grenade’s use of the Grumpy Cat name and likeness on the coffee bean products and unauthorized Grumppuccino t-shirts was outside the permissible scope of the licensing agreement.

After a week-long trial, during which Tardar Sauce herself made an appearance, a jury decided in favor of Grumpy Cat Limited.  The jury awarded $710,001 to Grumpy Cat Limited: $230,000 in statutory damages for copyright infringement, $480,000 in statutory damages for trademark infringement, and $1 for breach of contract.  Presumably, the statutory damages awarded to Grumpy Cat Limited equal more than any actual damages the company could have obtained–a reminder of the value of statutory damages in trademark and copyright infringement suits.

The weekend of October 20-21, 2017, the Minnesota Golden Gophers and North Dakota Fighting Hawks traded wins in one of college hockey’s most competitive series. While watching the NCHC broadcast, an ad for the “Sioux Shop” appeared on screen. The ad explained that the Sioux Shop sells North Dakota fan gear at Ralph Englestad Arena (affectionately referred to by North Dakota fans as “the Ralph”), the 400,000 square foot, first-class hockey palace in Grand Forks where the Gophers and Hawks were facing off. I was surprised by the ad, especially in view of the fact that the University of North Dakota is no longer referred to as the “Sioux.”

Picture credit: Pinterest.

The Sioux Shop ad also reminded me of a recent experience I had when flying Southwest Airlines, in which a gate staff member was wearing a Fighting Sioux lanyard. As many frequent Southwest fliers can attest, Southwest’s employees often wear memorabilia of their favorite sports teams. I asked the staff member where she got the lanyard, as it appeared to be new. She replied that the University is still licensing the mark so as not to abandon it and that she picked it up from a licensed merchandiser. Apparently, you can also buy Fighting Sioux gear on Amazon.

As many hockey fans know, the University recently changed its mascot to the Fighting Hawks, from the Fighting Sioux, after backlash from the NCAA and a statewide ballot initiative approved the change. The “Fighting Sioux” is also one of several arguably-disparaging marks based on Native American culture that have been criticized in recent years. For example, the Fighting Sioux trademark is similar to the R-word trademark, which was challenged and later upheld by the U.S. Supreme Court this summer. With this political and legal background in mind, I thought to myself when watching the Sioux Shop ad, “Didn’t North Dakota change it’s sports mascot to the Hawks, and, if so, why does the fan shop still bear the ‘Sioux’ name? Can NCHC, an NCAA conference, even run an ad for a shop selling merchandise bearing a name similar to one that the NCAA singled out as ‘hostile or abusive’?” Just what is going on here?

It turns out that the Southwest staff member was right: the University still licenses the Fighting Sioux trademark so as to avoid abandonment. The reasons appear to be threefold: First, the University agreed in a 2007 settlement with the NCAA that it would maintain the Fighting Sioux trademark. Second, the school appears to be concerned that if it does not license the trademark and control the flow of Sioux merchandise, someone will flood the market and stymy efforts to phase in the Fighting Hawks mascot and phase out the Fighting Sioux mark. Ironically, then, in order to effectively stop using the Fighting Sioux name, the University must “use” the mark. Third—and perhaps this is unfair cynicism—money.

The Lanham Act provides that a trademark may lose its viability through abandonment when the holder of the mark both discontinues use of the mark and intends not to resume use of the mark. See 15 U.S.C. § 1127. The law states that nonuse for three consecutive years is prima facie evidence of abandonment. See id. Clearly, the University hasn’t run into that issue yet. However, the issue that the University does face is whether it is making a “bona fide use” of the Fighting Sioux mark “in the ordinary course of trade, and not made merely to reserve” its right in the mark. Id. Reductions in the use of a mark may contribute to a finding of both prongs of the abandonment test. So can failure to take action against infringers. Of course, whether a reduction in use and a change in the scope and extent of licensing shows abandonment depends on the facts and circumstances of each case.

The University’s current licensing strategy definitely toes the blue line on bona fide use. It appears that the University is only licensing productions of 9,000 pieces of merchandise at a time and in limited auctions. Such small offerings surely dwarf those available to fans in the years leading up to the mascot switch. On the other hand, the offerings are in the same category: sportswear. The geographic range of the sales is also smaller than before. In addition to the practically-discontinued use of the mark, the University’s licensing also seems disingenuous. One reason for maintaining the mark is to control the supply of Fighting Sioux gear competing with Fighting Hawks gear, and I’m not sure that purpose shows intent to use the Sioux mark (rather than mere reservation of it). I’m also skeptical that using the mark is helping transition efforts; as one source reports, new Fighting Sioux gear has been known to sell out very quickly, and fans continue to cling to the name–not to mention the Ralph, which has over 2,500 Sioux logos plastered throughout the arena in fulfillment of its late eponymous benefactor’s desire to protest a mascot name change.

Whether the University’s current use of the mark can stave off the threat of abandonment, while at the same time render the Fighting Sioux mark obsolete, remains to be seen. For now, North Dakota hockey fans are stuck between two mascots, and neighboring rivals look on in confusion, with no clear end in sight.

trolls

We’ve spent time discussing the patent troll phenomenon in the past.  Patent trolls are less pejoratively referred to as non-practicing entities, because they do not make or use the inventions covered by their patents.  Instead, these non-practicing entities operate by purchasing patents on various technologies, accusing companies of infringing those patents, and demanding the companies pay licensing fees.  Faced with the threat of patent litigation, many companies—both large and small—will choose to simply pay the troll’s demand.  The infringement allegations might be thin, and the asserted patent might be invalid.  But the potential cost of litigation gives the patent troll great leverage over the companies they target.  Paying the demanded licensing fee is far more cost-effective than defending an infringement suit.

One company, however, is taking a different approach to what it views as a patent troll.  Cloudflare is an Internet security company and content delivery network.  Cloudflare is facing a patent infringement suit filed by patent owner, Blackbird Technologies.  The Complaint alleges Cloudflare is infringing the ‘335 patent, related to incorporating third-party data into existing Internet connections.  Cloudflare has vowed to fight the litigation, arguing both non-infringement and invalidity of the ‘335 patent.  To help in its efforts, Cloudflare is taking the creative approach of crowdsourcing its defense.   In a recent blog post, Cloudflare’s CEO offered up $20,000, to be divided among individuals who submit relevant prior art to invalidate the ‘335 patent.  In addition, and in an apparent effort to stop Blackbird from asserting any other patents against anyone, Cloudflare is offering another $30,000 for prior art submissions that invalidate Blackbird’s other 37 patents and patent applications.

Blackbird Technologies is . . . a law firm?  Blackbird’s website seems to offer legal services with “top law firm experience.”  But Blackbird is the plaintiff in the suit against Cloudflare.  Based on an assignment recorded with the U.S. Patent and Trademark Office, Blackbird purchased the ‘335 patent from the inventor in October 2016 for $1, and shortly thereafter initiated an infringement action against Cloudflare.  Blackbird is not merely representing a client, but instead appears to be stepping into the client’s shoes by purchasing the asserted patent and bringing suit as the plaintiff.

A little research reveals that this is a regular practice for Blackbird.  Blackbird owns at least 38 patents and published patent applications covering a broad range of technical fields.  Since September 2014, the firm has been named as the plaintiff in 109 federal patent infringement cases (107 in the District of Delaware, and 2 in the Central District of California).  The defendants in many of these cases were large corporations—Amazon, Wal-Mart, Petco, Uber, Lululemon, Target, and Netflix.

So, is Blackbird a patent troll?  Blackbird says its business model helps individual inventors and small companies by providing them with a low-cost solution to monetize their patents.  Blackbird also states that it is different from other companies labeled non-practicing entities, because Blackbird is “ready to litigate cases,” and is not merely looking “to settle cases quickly.”  Though it appears that most, if not all, of Blackbird’s suits have settled.

Cloudflare, however, views Blackbird as a pure patent troll, which led to Cloudflare’s crowdsourced effort to invalidate any and all of Blackbird’s patents.  Cloudflare’s CEO even went as far as a recent scathing blog post about the suit, accusing Blackbird of violating legal ethics rules.

Usually, infringement allegations asserted by non-practicing entities are quietly settled (see Blackbird’s 108 other cases filed since 2014).  Cloudflare’s approach to the infringement claims will be expensive, but also public.  Cloudflare’s response seems to include rallying its supporters and customers in publicly calling out Blackbird.  Cloudflare even invites supporters to “tell Blackbird Technologies what you think of their business practices” on Twitter.  It’s clear Blackbird has struck a nerve with this defendant.

-Wes Anderson, Attorney

A bit belated, but I finally caught a screening of Star Wars: The Force Awakens. Unbeknownst to me, the film was missing a part of the Star Wars experience many fans hold dear. And it’s all about branding.

Note: No spoilers of the film itself follow here, unless you consider a discussion of the pre-opening titles a “spoiler” unto itself. A further note: I do not hold myself in any way to be a competent Star Wars nerd, so please excuse any missteps or general unfamiliarity with the lore surrounding the films.

When most people think of the Star Wars opening titles, they probably think of the John Williams score’s opening flourish and a giant yellow STAR WARS outlining flashing on the screen before zooming into space to make way for the iconic scrolling text to introduce the film’s story. But many fans also immediately think of what precedes all of that – the 20th Century Fox “spotlights” logo and its associated fanfare.

20thcentury

 

It turns out that prior to the release of the first Star Wars film in 1977, 20th Century Fox had abandoned the logo and fanfare in the opening titles for films it distributed. But George Lucas loved it so much he insisted that it precede the Star Wars opening titles. It’s said that John Williams went so far as to record the soundtrack’s opening titles in the same key as the Fox fanfare, so as to truly integrate 20th Century Fox’s branding into the fabric of Star Wars. The Fox fanfare was reborn.

This all changed in 2013, after Disney purchased Lucasfilm and the rights to the Star Wars franchise. When releasing the library of Star Wars films in digital download format, Disney removed the 20th Century Fox fanfare from the opening titles. A logical move, it would seem, but it irked many Star Wars fans who considered it an indispensable part of the films. Many worried that Disney’s first new Star Wars film, “The Force Awakens,” would feature an amalgam of Disney / J.J. Abrams branding that would clash with history, as conceptualized in this YouTube video.

Screen Shot 2016-01-15 at 6.57.37 AM

Some even wondered if it would be possible for Disney to license the 20th Century Fox fanfare. While all things are possible in trademark licensing, this would likely be a step too far for 20th Century Fox, which now uses the fanfare and spotlights logo for all of its films.

Fortunately, these Disney-fication fears did not come to fruition – The Force Awakens begins silently, displaying only the Lucasfilm logo, before the iconic text “A long time ago in a galaxy far, far away…” appears on screen, and the John Williams score takes over. The Disney logo never appears (at least I didn’t notice it, unless it snuck into the film’s closing credits). And yet, despite its visual absence, I was acutely aware that this movie had Disney’s fingerprints all over it.

In making branding decisions, sometimes less can be much, much more.

HefeWheaties Tableau

Yesterday General Mills announced that it had partnered with Fulton Brewery to create HefeWheaties: a limited edition brew. The beer is a Hefeweizen, which is traditionally a wheat-based beer, making it a perfect canvas for the Wheaties brand.

Normally when these situations arise, it is because one party is complaining (For example, Lucasfilms’ objection to STRIKES BOCK beer). Not this time. Instead, we have two companies that appear to be on the verge of launching a very successful co-branding venture (just check out the press already, here, herehere ).

Aside from the fact that I’m excited to try this beer, the news provides a number of insights into how to co-brand a product. The craft beer industry in particular lends itself to these experiments: craft breweries regularly create limited run products (aka seasonal beers). They also have a loyal fan base that is active on social media (free advertising!). Also, beer can tie in just about any product either through imitation of flavor, or finding a clever name and pairing it with eye-catching packaging. Yet the lessons that can be gleaned from the HefeWheaties announcement aren’t limited to breweries. Instead, the announcement provides insight for any business considering co-branding.

First, there should be a basis for the partnership. Fulton’s founder and a number of its employees are former General Mills employees. The companies have been connected long before this idea arose. As a result, there was a level of trust and collaboration that is difficult to create without a prior relationship. This doesn’t mean that you can only co-brand with current contacts; it just helps. If you don’t have an established relationship, build one! Collaborate on the co-branding idea rather than simply creating it yourself and then handing it off.

Second (or if you’ve failed lesson one above), the product should feel authentic. With HefeWheaties, consumers want to like the product: both companies are based out of Minneapolis; the wheat connection makes sense; and the past history between the employees and management all contribute to a feeling that the product is an idea, not a scheme. Plus, even though I never ate Wheaties as a kid, I feel some nostalgia for it (kudos to you, General Mills marketing team).

Third, make sure you consider the effect of the co-branding on your original market. We haven’t seen this play out yet with HefeWheaties, but there are appreciable (or at least vocal) numbers of people who don’t like seeing brands they purchase associated with alcohol. For example, Ben & Jerry’s announced earlier this year that it would be partnering with New Belgium Brewing to release a Salted Carmel Brownie Brown Ale. I can’t wait to try it when its released this fall. But Bruce Livingston, CEO of Alcohol Justice had a different view, calling it

[a] crass, corporate greedy move to put a brand name like Ben & Jerry’s on a beer. It’s bad for children — who will start looking at beer as the next step after ice cream.

For our purposes, the merits of the characterization of “ice cream” as a gateway drug are unimportant. A company that co-brands should be aware that its brand and company will be associated with the partnering company, its products, and its industry. Give some consideration as to whether there is any potential for the co-branding to impact your public image and, if so, think about how you’ll respond.

Fourth, and finally, get the legal side taken care of in advance. You’ll likely need a trademark license. Decide whether royalties should be involved and, if so, when and how much. Carefully define the time frame for the license and renewal (or termination) options for both parties. These types of arrangements don’t need to be complicated. However, they became much more complicated after you begin selling product.

Yes, I know, Lesson Number One is work with someone you trust and like. However, business can affect that relationship. The parties’ memories may be a bit fuzzy months or years after you agree to start working together. It is much easier to avoid a dispute if the terms are in writing.

Co-branding doesn’t work for everyone, but it seems like it may work for HefeWheaties. The beer is set to be released on August 26, so perhaps we won’t have to wait long to gauge its success. But what’s really on my mind now is which cereal is next? I think a Peanut Butter Crunch stout could be good. Or maybe a Frosted Flakes porter. If anyone out there can make either of those happen, get a hold of me and let’s figure this thing out.

– Draeke Weseman, Weseman Law Office, PLLC

Last week, the Chicago Sun Times profiled Loeb & Loeb attorney Douglas Masters, the NCAA’s outside counsel in charge of trademark enforcement during March Madness. Licensing the official sponsorships is big business, and enforcement demands require Masters to send out hundreds of cease-and-desist letters to both accidental infringers and sneaky businesses trying to skirt around expensive trademark licenses. No doubt some of the enforcement demands are probably questionable – just like Steve noted during the Super Bowl, it’s fair to wonder if it’s really necessary to invent code words to invite customers to watch March Madness games with you. Some do:

1marchbballtournamentAnd some don’t:

2blockpartyWhere the choice gets more interesting is where an official sponsor and a direct competitor overlap in their desire to capture audience attention during March Madness. Official sponsors pay the NCAA a pretty penny for a piece of the Madness while competitors attempt to dance around the “official” marks. Based on Twitter posts, can you pick out the official sponsors versus their competitors in the categories below?

Mobile Phone Service

3att 4verizon

Online Search

5google 6bing

Luxury Cars

7lexus 8infiniti

Fast Food

9burgerking 10mcdonalds

Insurance

11allstate 12libertymutual

Rental Cars

13hertz 14enterprise

Home Improvement Stores

15homedepot 16lowes

Domestic Cars

17chrysler 18buick

Televisions

19lg 20vizio

Did anything about these posts tip you off? Want to know how you did? Here is a list of official sponsors, for those interested in keeping score:

21officialsponsors

Marketers, what do you think of the Twitter posts? Which posts were the most creative? If you were an official sponsor, would you be more direct about your sponsorship? Without looking on Twitter, any guess as to what other March event some competitors chose to officially sponsor instead?

Trademark attorneys, would you think about sending any of these competitors a cease-and-desist letter?

According to this classic 1958 commercial, Mr. Clean does everything: floors, doors, halls, and walls! (I don’t think I’d take Mr. Clean to my diamond jewelry though as the commercial suggests). It turns out that Mr. Clean has expanded outside the home and into the car wash business.

In 2009 Proctor & Gamble teamed up with a small chain of car washes to create a Mr. Clean-branded national car wash franchise. Presently there are locations in Atlanta (9), Cincinnati (2), and Texas (2). While this geographic footprint may be small, the endeavor has a rather large branding footprint. Beyond just the name of the car wash, the car wash utilizes Mr. Clean brand cleaning products and also offers auto detailing services, oil changes, and other maintenance services (available in only some areas).

You can stay in your car if you’d like, but you’d miss out on the “comfort lounge,” which includes a complimentary coffee bar, television room, and even a full-glass view of your car going through the car wash.

And in case it isn’t clear from the picture, that is the Mr. Clean® Sud Soaker! – a water cannon that you can shoot at your (or someone else’s vehicle as it moves through the wash).  Apparently some of the car washes even have gift shops (who wouldn’t want the home version of this fine service?).

I can’t think of many other cross-branding experiments quite like this one where a commercial-based character jumped this far from its roots. Sure, there’s Ronald McDonald, whose made appearances in television shows and even a feature-length movie (“Mac and Me” is a whole other discussion on overreaching by a major brand) but I can’t think of many others.

While I was skeptical at first, the Mr. Clean car wash has grown on me. It did receive a good review from this blogging parent. I just hope it catches on better than Mr. Clean’s first name – Veritably. Yes, Mr. Veritably Clean (1962). Although, looking back, I bet they’re happy they didn’t go with Thundercloud Clean.

The United States Supreme Court recently ruled that agreements among associate members to license their trademarks to one vendor may violate the Sherman Act. In  American Needle, Inc. v. National Football League, the National Football League Properties ("NFLP") terminated its nonexclusive license with American Needle, Inc. to make and sell apparel bearing the NFL team insignias and granted Reebok International Ltd. an exclusive 10-year license to make and sell trademarked headwear for all 32 NFL teams. American Needle filed suit alleging violations of Sections 1 and 2 of the Sherman Act and the NFL and NFLP responded that they were incapable of conspiring because as an association they were a single economic enterprise.

The Supreme Court held that the issue was not whether the NFL and NFLP was a single economic enterprise. Rather, this issue was whether the alleged contract, combination, or conspiracy was concerted action amongst separate economic actors pursuing separate economic interests such that the agreement deprived the marketplace of independent decision makers. The Supreme Court found that the separate teams competed in the marketplace for intellectual property. Each team was pursuing interests of each corporation and each team was a potential independent center of decision-making, which, when centralized through NFLP, deprived the marketplace of actual or potential competition.