United States Court of Appeals for the Ninth Circuit

In Cosmetic Warriors v. Pinkette Clothing, the U.S. Court of Appeals for the Ninth Circuit filed an opinion a couple weeks ago, reconfirming that the equitable defense of laches (unreasonable and prejudicial delay in bringing a lawsuit) applies in trademark cancellation actions, even though the U.S. Supreme Court has recently curtailed that defense in copyright and patent cases, and even if such an action is brought within the five-year window for bringing certain types of cancellation claims under the Lanham Act, 15 U.S.C. § 1064.

In this case, Cosmetic Warriors, makers of LUSH brand cosmetics, filed a lawsuit against a fashion company, Pinkette Clothing, that markets LUSH-branded clothing, claiming trademark infringement and seeking cancellation of its trademark registration. But the Ninth Circuit affirmed that Cosmetic Warriors waited too long (nearly five years) to bring its case after it “should have known about its claims.” According to well-established precedent, because the Lanham Act contains no statute of limitations, courts apply a presumption in favor of laches if the plaintiff’s delay is longer than the most analogous state statute of limitations. The Ninth Circuit concluded that California’s analogous four-year statute of limitations for trademark infringement actions applied. Therefore, because Cosmetic Warriors’ delay was beyond four years, the court held a “strong presumption in favor of laches” applied.

Cosmetic Warriors argued that laches could not bar its claims for cancellation, based on a five-year period for cancellation actions specified in 15 U.S.C. § 1064, and based on recent U.S. Supreme Court precedent limiting the defense of laches in copyright and patent infringement actions, Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) (Copyright Act), and SCA Hygiene Products v. First Quality Baby Products, LLC, 137 S. Ct. 954 (2017) (Patent Act).

The Ninth Circuit rejected Cosmetic Warriors’ arguments based on the Supreme Court precedent from copyright and patent cases, stating, “the principle at work in those cases—a concern over laches overriding a statute of limitations—does not apply here, where the Lanham Act has no statute of limitations and expressly makes laches a defense to cancellation,” see 15 U.S.C. § 1069. Regarding the five-year deadline of 15 U.S.C. § 1064, the court held “[t]here is no question that [15 U.S.C. § 1064] is not a statute of limitations in the usual sense of barring an action entirely once a defined period expires”; rather, that statute “merely limits the grounds on which cancellation may be sought. A petition brought within five years of registration may assert any ground …. By contrast, a petition brought five years after registration (against an incontestable mark) may only assert one of several enumerated grounds.”

This opinion by the Ninth Circuit accords with similar precedent from other federal courts and follows the position of the leading trademark treatise, McCarthy on Trademarks §§ 20:74, 76. It is another reminder to trademark owners and practitioners of the importance of monitoring for infringing uses, and acting quickly to initiate enforcement actions. As in this case, and according to the maxim often quoted by courts, “[t]hose who sleep on their rights, lose them.”

–Dan Kelly, Attorney

For those keeping score at home, various courts and tribunals have previously held the following domain names to be generic in connection with the listed goods or services:

  • BLINDSANDDRAPERY.COM for wholesale and retail services “featuring blinds, draperies and other wall coverings”
  • BONDS.COM for “providing information regarding financial products and services”
  • CONTAINER.COM for “rental of metal shipping containers”
  • HOTELS.COM for “providing information to others about temporary lodging”
  • LAWYERS.COM for “providing an online interactive database featuring information exchange in the fields of law, legal news and legal services”
  • MATTRESS.COM for “online retail store services in the field of mattresses, beds and bedding”
  • SPORTSBETTING.COM for “provision of contests and sweepstakes on and through a global computer network”

To this list, we may soon be adding ADVERTISING.COM for use in connection with a host of online advertising-related services, thanks to the United States Court of Appeals for the Ninth Circuit, which issued its opinion this week in Advertise.com, Inc. v. AOL Advertising, Inc.  Because the appeal only relates to a preliminary injunction, the court’s opinion has not definitively held that ADVERTISING.COM is generic for online advertising services–further litigation may determine that issue.  But the court did make a strong case that, as things stand right now, AOL faces an uphill battle to show that ADVERTISING.COM is not generic for online ad services.  Along the way, the court distinguished AOL’s ADVERTISING.COM domain name from, for instance, STEELBUILDING.COM, which has been held not generic in connection with “computerized on-line retail store services in the field of pre-engineered steel buildings and roofing systems.”

What makes the ADVERTISING.COM case particularly interesting is that, unlike the seven domain names in the above list that did not survive the registration process before the U.S. Trademark Office, AOL actually owns U.S. registrations for its ADVERTISING.COM trademark, albeit in stylized forms.  In the process, AOL actually succeeded in arguing to the Trademark Office that the words “ADVERTISING.COM” were not descriptive (much less generic) for many of the services it offers under the marks.

There are a number of interesting lessons from this case even at its preliminary stage, and perhaps more to come, but the most interesting one can be seen by looking at the larger picture:  the value of a generic domain name.  Even if it cannot be entirely protected from a trademark standpoint, or protected as a trademark when used in connection with the most obvious goods or services, it remains a unique identifier, which, at bottom, is really what trademark protection is all about.

P.S.  To see some of what is at issue in the lawsuit, go check out Advertise.com and compare it to Advertising.com.