Las Vegas Trademark Attorney

Article spotlights partnership and conflict over .VEGAS top-level-domain

noreply@blogger.com (Ryan Gile) — Thu, 04 Feb 2010 01:57:00 +0000

The Las Vegas Sun ran a story yesterday (link here) regarding the efforts of the City of Las Vegas to enter into a partnership with a local company, Dot Vegas Inc. (“Dot Vegas”), over the creation of a new top-level-domain (“TLD”) — .VEGAS (a new domain name address suffix that could be used instead of the more common TLDs of .COM, .ORG, or .NET). Dot Vegas is proposing that the City of Las Vegas get 75 cents per registration or 10 percent of the gross revenues from future registrations.

But another player in the picture is The Greenspun Corporation which owns VEGAS.COM (along with numerous Section 2(f)-based trademark registrations for the domain name as mark) and which has also been evaluating the business prospects behind a .VEGAS TLD ever since ICAAN announced in 2008 that it would allow the creation of custom TLDs. The CEO of Vegas.com reportedly was prepared to enter into a partnership for $1 per registration.

“The Strip” . . . in Fabulous Clark County, Nevada

Further complicating the matter is the “Vegas” governmental municipality with the authority to be involved in (and receive the benefits of) the .VEGAS TLD. After all, while most local Las Vegas residents recognize and understand the distinction between the incorporated City of Las Vegas and the unincorporated area of Clark County, Nevada, most outsiders may not realize that most of what the public identifies as Las Vegas, including “The Strip” (the area most often associated by the public with “Las Vegas”) is technically in the unincorporated area of Clark County and not within the City of Las Vegas. This has certain Clark County officials raising questions about whether the City of Las Vegas should be the only “governmental municipality” in “Vegas” benefiting from registrations of .VEGAS domain names.

For now, while the possible partnerships and conflicts over the creation of a .VEGAS TLD make for interesting news articles (and blog posts), such talk is somewhat premature (to paraphrase the MarkMonitor.com representative quoted in the Sun article) given that ICANN has yet to issue final rules regarding applications for such customized top-level domain names. Information and announcements on ICANN’s gTLD program can be found here.

[Update 2/4/10: Both the Las Vegas Sun and the Las Vegas Review Journal ran articles today reporting on the Las Vegas City Council's vote to endorse Dot Vegas' plans for a .VEGAS TLD.]

Senator Leahy (D-VT) Introduces Trademark Legislation and Decries Trademark Bullies

noreply@blogger.com (Ryan Gile) — Wed, 27 Jan 2010 15:02:00 +0000

According to a press release from Senator Patrick Leahy’s office, the Senator is introducing a bill entitled The Trademark Law Technical and Conforming Amendment Act Of 2010 (S. 2968).

The legislation purports to make some technical and confirming amendments to U.S. trademark lawsuit to help improve the efficiency of United States Patent and Trademark Office (USPTO), including allowing applicants to correct good faith and harmless errors.

More interesting, however, is the requirement in the legislation for the Department of Commerce to study whether large corporations are misusing the trademark laws to harass small businesses by exaggerating the scope of their trademark protection and to report to Congress on any suggested policy changes to protect small businesses. Leahy’s press release statement focused on a particular dispute where Hansen Beverage Co., the maker of the Monster energy drink, sued Rock Art Brewery, a small microbrewery in Morrisville, Vermont (the state that Leahy represents) over its use of the name “The Vermonster” for one of its microbrews (news articles on the dispute here and here):

This legislation also requires a study of how the current system can better protect small businesses from abuses of the trademark system by larger corporations. Congress provides strong enforcement tools to intellectual property owners, as we should, to deter infringing activity and to remove counterfeit products from the market. I have become concerned, however, that large corporations are at times abusing the substantial rights Congress has granted them in their intellectual property to the detriment of small businesses. In fact, we saw a high-profile case like this in Vermont last year involving a spurious claim against Rock Art Brewery in Morrisville. When a corporation exaggerates the scope of its rights far beyond a reasonable interpretation in an attempt to bully a small business out of the market, that is wrong. This legislation therefore directs the Secretary of Commerce, in coordination with the Intellectual Property Enforcement Coordinator, to consider options for protecting small businesses from such harassing litigation, while ensuring that legitimate trademark infringement actions are handled efficiently and expeditiously by the courts.

For a related story involving a different “Monster,” check out these prior blog posts here and here.

[The TTABlog® describes one of the conforming changes made by the legislation to make the renewal deadlines (and grace periods) for trademarks protected in accordance with the Madrid Protocol consistent with the renewal deadlines (and grace periods) of other registered trademarks.]

Busy Busy Busy....

noreply@blogger.com (Ryan Gile) — Tue, 19 Jan 2010 00:45:00 +0000

What’s a blogger to do when too busy to post something original – cite to other interesting blog posts, of course.

Seattle Trademark Lawyer Michael Atkins, posting a follow-up related to a declaratory judgment action for noninfringement of alleged trade dress filed by language software company Topics Entertainment Inc. against Rosetta Stone Ltd., provides a lesson about the “first to file” rule of which every lawyer should take note.

Courthousenews posts on the lawsuit filed by Mine O’Mine, Inc. (the corporation which owns the rights of publicity and intellectual property of Shaquille O’Neal) in Nevada District Court over a clothing company’s use of SHAQTUS (a moniker ascribed to O’Neil after he was traded to the Phoenix Suns and was called “The Big Shaqtus” – a play on the name Shaq and the many cacti prevalent in Arizona). See Mine O'Mine, Inc. v. Michael Calmese, True Fan Logo, Inc. and Dan Mortense, Case No. 10-cv-00043 (D. Nev. January 12, 2010) (complaint here). The Las Vegas Sun also ran a story on the lawsuit (link here).

Onpointnews discusses “The South Butt” case and the “cheeky” answer filed by Jimmy Winkleman’s attorneys in response to the trademark infringement lawsuit filed by the owners of The North Face clothing line that seeks to test the bounds of parody protection (and probably making more light of a matter that Mr. Winkleman should probably be taking much more seriously).

Pittsbrgh Trademark Lawyer Dan Corbett posts on the latest lawsuit filed by my favorite litigious cookie company, Eat ‘N Park Hospitality Group, Inc. (prior posts here and here) who maintains that its Section 2(f) trademark registration gives it a monopoly on a smiley face design on a cookie.

While Eat N’ Park has mostly gone after smaller online cookie sellers (and no doubt, convinced many of them to enter into a license agreement rather than continue with a costly litigation fight), it looks like Eat N’ park is finally going after a competitor, Crumbs Corporation, that actually has some money to fight. As discussed in my prior post here (discussing the setback faced by Franklin Loufrani’s SmileyWorld at the TTAB),

[G]iven that it took a “truly impressive” amount of money for Wal-Mart to stake a claim on a “ubiquitous, non-inherently distinctive design” that has become a “common feature of modern American culture,” one wonders if Eat ‘N Park can continue to claim exclusive rights to its “smiley” cookies when most (if not all) of Eat ‘N Park’s defendants are merely decorating a cookie with that captures this famed ornamental symbol.Does anybody out there really think that Eat ‘N Park has the same “impressive” advertising dollars to back up its claim of acquired distinctiveness? As the TTAB stated “Considering that we have already determined that the smiling face is a common feature of modern American culture, [acquired distinctiveness] will not be something easily achieved."

Finally, Ron Coleman’s Likelihood of Confusion® dispenses some detailed advice to an unnamed attorney with a client looking to establish a brand around the title or other reference that suggests a particular famous movie or scene therefrom. The cartoonish figure pictured above dispenses some of the most detailed and insightful free legal advice I’ve read online in a long time.

Minnesota Indian Casino Sues Local Henderson Casino Over MYSTIC name

noreply@blogger.com (Ryan Gile) — Sat, 09 Jan 2010 02:45:00 +0000

Mystic Lake Casino Hotel in Minnesota

Las Vegas Sun reporter Steve Green reports on the trademark infringement lawsuit filed in Nevada District Court by the Shakopee Mdewakanton Sioux Community (“Shakopee”) against Templeton Gaming Corporation (“Templeton”) and its owner Hugh Templeton (link to story here) [I am quoted in the article]. See Shakopee Mdewakanton Sioux Community v. Templeton Gaming Corporation et al., Case No. 10-cv-00010 (D. Nev). A copy of the complaint can be viewed here.

Shakopee owns the Mystic Lake Casino Hotel in Scott County, Minnesota (near Minneapolis). Templeton owns a local video poker bar in Henderson, Nevada going by the name Mystic Lodge Casino.

Mystic Lodge Casino in Henderson, Nevada

While Shakopee appears to promote its services primarily using the mark MYSTIC LAKE, it also happens to own a trademark registration for the word mark MYSTIC in connection with “entertainment services, namely providing casino facilities” registered January 6, 1998. While Shakopee also owns numerous other registrations containing the word MYSTIC in connection with goods and services related to its casino/hotel operations (a “family of marks” as Shakopee would likely describe it), this single registration alone gives Shakopee some strong ammunition against companies that wish to use the word MYSTIC in connection with a casino related business.

While Shakopee appears to have the upper hand in making a legal argument against Templeton for likelihood of confusion based on the Sleekcraft factors, all I could think about with this case was that it looked like a “Dawn Donut” situation. See Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc., 267 F.2d 358 (2d Cir. 1959). As described recently by the Nevada district court in Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116622 (D. Nev. December 14, 2009) (blog post here):

Under the Dawn Donut rule, even if a federal registrant has rights in a mark, it is not necessarily entitled to an injunction against an unauthorized user: “if the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into the defendant’s market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user’s use of the mark.” Dawn Donut, 267 F.2d at 364 (footnote omitted); see also Fairway Foods, Inc. v. Fairway Markets, Inc., 227 F.2d 193, 198 (9th Cir. 1955) (vacating injunction issued to prevailing plaintiff on essentially the same basis as later became known as the Dawn Donut rule). Only once the federal registrant has expanded its use of the mark, so that the market areas of the two users are no longer separate and distinct, will the registrant be entitled to an injunction. Mister Donut of Am., Inc. v. Mr. Donut, Inc., 418 F.2d 838, 844 (9th Cir. 1969) (citing Dawn Donut).

Given that the tribe’s operation of its casino is certainly bound by its Indian territory boundaries and not likely to expand its use of the Mystic mark into the into the Henderson, Nevada area where this small locals casino operates, should Shakopee be allowed to stop them from using the name until such time as Shakopee expands into the Las Vegas market?

Of course, any discussion of “Dawn Donut” would not be complete without raising the issue of whether in this day and age of nationwide commerce through the Internet, whether “Dawn Donut” is relevant any more. The following are two excellent articles focusing on this particular issue:

Stephen Quigley, “Is 'Dawn Donut' Dead in Internet Age?”. New York Law Journal, May 19, 2008
Jessica Amber Drew, “Death of Dawn Donut: The Demise of Concurrent Trademarks,” 2007 U. Ill. J.L. Tech. & Pol'y 145 (Spring 2007).

Indeed, Shakopee's argument would certainly be that while its casino business is limited to its tribal area in Minnesota, its reputation (thanks to its traditional and Internet marketing) is nationwide and thus, consumers visiting the Henderson, Nevada area who come across this locals place may believe that there is an affiliation between this "Mystic Lodge Casino" and that other "Mystic" casino in Minnesota with which they are familiar or about which they have heard.

Jack Binion Loses Appeal Over BINION Trademark Applications

noreply@blogger.com (Ryan Gile) — Wed, 30 Dec 2009 02:30:00 +0000

(Binion's Casino in Downtown Las Vegas)

The TTABlog® reports on a precedential decision issued by the Trademark Trial and Appeal Board upholding a decision by the U.S. Patent and Trademark Office to refuse registration of two intent-to-use trademark applications filed by Jack Binion for the marks BINION’S and BINION for “casino and gaming services” and “hotel and bar services.” See In re Jack Binion, Serial Nos. 76590702 and 76590729 (T.T.A.B. December 23, 2009) (precedential).

The PTO Examining Attorney cited two grounds for refusing the register the marks – likelihood of confusion over the existing registered mark BINION'S ROADHOUSE for “restaurant services” and that the mark was primarily merely a surname (for which Binion’s evidence of acquired distinctiveness was lacking).

The fact that Binion already held registrations for the marks JACK BINION’S (both word mark and design mark) for “restaurant services” and JACK BINION design mark for “Casino, hotel, restaurant and bar services” did not carry any weight with the Board on the issue of likelihood of confusion since the applied-for marks did not contain the first name “Jack” and thus were more similar to the registered mark than his existing registrations. The fact that the registered mark was the name of a single restaurant in North Carolina also did little to persuade the Board – given the nationwide scope afforded registered trademarks.

As for the surname refusal, the Board was unconvinced by the evidence put forward by Binion in an attempt to show that he warrants an exception to the surname refusal as a historical person. As for Binion’s claim of acquired distinctiveness, as noted above, the applications were filed based on intent to use.

While a Section 2(f) claim of acquired distinctiveness can be made if the applicant’s use of the same mark in connection with other goods and services has made the mark distinctive of the goods or services in the intent-to-use applications and the acquired distinctiveness will transfer over to the goods and services in the intent-to-use application when use in commerce begins, the Board found that Binion’s existing registered marks for JACK BINION and JACK BINION'S were not the same.

The Board was also not persuaded by the evidence of the publicity of the Binion family as legends in the Las Vegas community (and let’s not forget the infamy as well from the Ted Binion murder trial) – finding instead that it simply reinforced that consumers would recognize Binion as a surname and did not show use of the name as a trademark to an to an extent sufficient to show acquired distinctiveness

If Binion were inclined to appeal this decision, I think the case might be an excellent contender for an appeal by way of an independent district court civil action under 15 U.S.C. § 1071(b)(1) (rather than a traditional appeal to the Federal Circuit) in order to submit new evidence to overcome what might not have been enough evidence to convince the Board of acquired distinctiveness. And since such an action can be brought in the district where Binion resides (see 28 USC 1391(e)(3)), Binion could file the action in the District of Nevada. You think that might give Binion a home town advantage?

Of course, there is still the little issue of the likelihood of confusion rejection – but that’s nothing that can’t be addressed with a consent and coexistence agreement with the owner of Binion’s Roadhouse (along with a little money).

But there is one other not-so-obvious nuance that stands in the way of Binion getting a federal registration on his name in connection with “casino and gaming services” and “hotel and bar services.” The BINION'S casino pictured at the top of this post is not actually owned by Binion, but rather its owned by TLC Casino Enterprises, which acquired the hotel/casino property in January 2008 from MTR Gaming who had purchased the property from Harrah’s in 2004 after Harrah’s bought out Binion’s Horseshoe and its intellectual property, keeping the “Horseshoe” name and the “World Series of Poker.” (For reasons discussed below, it’s not clear if Harrah’s also sold the “Binion’s” name to MTR, which is what most reports state, or if Harrah’s still considers it part of its trademark portfolio and is licensing it.) A recent news story about the closing of the hotel at Binion’s provides some background. This link also provides some historical perspective.

However, Binion’s intent-to-use applications were filed with the PTO on May 6, 2004. Four months later in early September 2004, a Harrah’s subsidiary filed two use-in-commerce trademark registration applications for the mark BINIONS’S (word mark and design mark) for both “Casino and gaming services” and “Hotel, restaurant and bar services” citing a first use date of June 1964 (a reference back to the opening date of Binion’s Horseshoe). Both of these applications are suspended pending the outcome of Binion’s two intent-to-use applications. Even if Binion were to have gotten his applications published for opposition, Harrah’s (or whatever entity currently owns the goodwill associated with the name Binion’s in connection with the downtown Las Vegas property formerly known as Binion’s Horseshoe) surely would have filed oppositions against Binion’s two applications based on its priority.

Binion's Horseshoe Hotel & Casino

Las Vegas Review Journal Sues Companies Over “The Best of Las Vegas”

noreply@blogger.com (Ryan Gile) — Thu, 24 Dec 2009 02:32:00 +0000

(...and the award for Best Trademark Law Blog in Las Vegas in 2009 goes to...)

Stephens Media LLC (“Stephens”), the owner of the Las Vegas newspaper The Las Vegas Review Journal, has sued three companies for trademark infringement over the use of the mark “The Best of Las Vegas.” Two of the lawsuits were filed earlier this week and one filed earlier this month. See Stephens Media LLC v. Gault Millau, Inc., Case No. 09-cv-02403 (D. Nev. December 21, 2009) (complaint here); Stephens Media LLC v. US Commerce Association et al, Case No. 09-cv-02405 (D. Nev. December 21, 2009) (complaint here); and Stephens Media LLC v. CitiHealth, L.L.C., Case No. 09-cv-02285 (D. Nev. December 2, 2009) (complaint here).

An article on the lawsuits, written by the Las Vegas Sun (the print version of which is owned by a separate company, but distributed with the Review Journal), can be found here.

Stephens has several federal trademark registrations for both the design mark “The Best of Las Vegas” (pictured above) and the word mark “Best of Las Vegas” including:

The design mark THE BEST OF LAS VEGAS for “section of a newspaper featuring consumer preferences and recommendations regarding people, places, goods, services, restaurants, entertainment, arts, sports and recreation in the Las Vegas area”;
The design mark THE BEST OF LAS VEGAS for “Newspaper articles, periodicals and pamphlets featuring general information about people, places, goods, services, restaurants, entertainment, arts, sports and recreation; paper award certificates”;
The word mark BEST OF LAS VEGAS for “Newspaper articles, periodicals and pamphlets featuring general information about people, places, goods, services, restaurants, entertainment, arts, sports and recreation; paper award certificates”;
The word mark BEST OF LAS VEGAS for “promoting the sale of goods and services of others by conducting and disseminating business surveys featuring consumer preferences and recommendations regarding people, places, goods, services, restaurants, entertainment, arts, sports and recreation in the Las Vegas area”; and
The word mark BEST OF LAS VEGAS for “providing a web site featuring business and consumer preferences and recommendations regarding people, places, goods, services, restaurants, entertainment, arts, sports and recreation in the Las Vegas area.

For those of you wondering how Stephens could possibly obtain trademark registrations for such a descriptive mark, the answer lies in Section 2(f) of the Trademark Act which allows a trademark owner to register a descriptive mark on the basis of acquired distinctiveness. All of the above marks are registered on the Principal Register based on a Section 2(f) claim of acquired distinctiveness (in-part for the design marks do have a distinctive design) – and all registrations have disclaimers of the word “Las Vegas.”

According to the complaint against Gault Millau, its travel website gayot.com has a section named “The Best of Las Vegas Top Restaurants Hotels Travel Guide” (click here to see what I could find) that Stephens finds infringing.

As for the complaint against US Commerce Association, the company is allegedly selling “award” plaques ($80 each) or award trophies ($180 each) to small businesses by sending e-mails stating that they have won a “Best of Las Vegas Award” which are bestowed upon such businesses by US Commerce Association. [Comment: kind of like those scam Who’s Who’s directories that will honor you by listing you in their "Who's Who" book – with the payment of a fee which gets you a copy of the book listing the names of thousands of others suckers as well as a pretty piece of paper]. Stephens feels that the company's actions harms the goodwill associatd with its “Best of Las Vegas” marks.

Finally, the lawsuit against CitiHealth relates to the company’s publication of a magazine in December 2008 called “Healthy Living Las Vegas” that included the phrase on the cover “Best of Las Vegas” (the cover picture appeared online as well at http://www.citihealth.com/). Las Vegas Sun reporter Steve Green spoke with the publisher of the Healthy Living, who stated that the company was not aware of Stephens’ trademarks for “Best of Las Vegas” at the time the magazine was published and that after the company received notice from Stephens, the company took action to remove the magazines from circulation and removed it from the website. [So why the lawsuit after all this time? That’s the real question isn’t it?]

Trademark Battle Over the Fame of “Atlantis” for Casino Services Headed to Trial In Nevada District Court

noreply@blogger.com (Ryan Gile) — Mon, 21 Dec 2009 08:01:00 +0000

Two casino companies fighting over the right to use the service mark ATLANTIS in connection with casino services are heading for trial after two Nevada District Court orders ruled on multiple motions filed by the parties and set the stage for the parties to proceed to trial. See Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116622 (D. Nev. December 14, 2009); Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116624 (D. Nev. December 14, 2009).

Atlantis Resort & Casino - Paradise Island, Bahamas

On one side are Kerzner International Limited and Kerzner International Resorts, Inc. (together “Kerzner”), the owners of the Atlantis Resort and Casino on Paradise Island in The Bahamas. On the other side is Monarch Casino & Resort, Inc. and Golden Road Motor Inn, Inc. (together “Monarch”) which own and operate the Atlantis Casino Resort Spa in Reno, Nevada.

Atlantis Casino Resort in Reno, Nevada

The origins of the dispute date back to a trademark registration for the mark ATLANTIS for lodging services which was originally registered with the U.S. Patent and Trademark Office by Atlantis Lodge, Inc. (“Lodge”) on October 11, 1994. Lodge had been using the Atlantis mark in connection with lodging services in North Carolina since June 6, 1963. Lodge’s subsequent licensing of its Atlantis mark to both Kerzner and Monarch set the foundation for the eventual dispute between Kerzner and Monarch.

Monarch had been offering lodging services in Reno, Nevada since 1972 and casino services since 1986, but when Monarch first used the Atlantis mark in 1992, it was in connection with restaurant, bar, lounge, and nightclub services, not lodging or casino services. In February 1996, Monarch entered into a license agreement with Lodge for the exclusive right to use the Atlantis mark in connection with lodging services in all of Nevada. In April 1996, Monarch Reno casino resort (which at the time was operating under the “Clarion” mark) began operating under the name “Atlantis Casino Resort.” In July 1997, Monarch obtained a Nevada state trademark registration for the mark “Atlantis Casino Resort” for casino services, but never sought federal registration of the Atlantis mark for casino services.

In October 1994, Kerzner entered into a license agreement with Lodge for use of the Atlantis mark at its casino resort in The Bahamas (which at the time was under the name “Paradise Island Resort and Casino”). Kerzner began advertising the rebranding of its casino resort under the Atlantis name in October 1994 with the officially reopening occurring in December 1994.

In July 1996, Kerzner entered into an assignment and license agreement with Lodge whereby Kerzner acquired the ATLANTIS trademark registration for lodging services from Lodge and licensed the mark back to Lodge for use in North Carolina. The license agreement between Lodge and Monarch was attached as an exhibit to the Lodge/Kerzner assignment agreement, and Lodge’s representations of its right to assign the Atlantis mark were made subject to Monarch’s exclusive license to use the mark for lodging services in Nevada.

In February 1997, Kerzner filed an intent-to-use application to register the mark ATLANTIS in connection with, among other things, providing casino facilities, which issued on February 3, 2004, after Kerzner filed a Statement of Use in September 2003, claiming a first use date of October 1994.

The parties apparently coexisted in their respective markets without any problems until each side started taking steps towards expanding their respective Atlantis brand into the Las Vegas market.

Kerzner’s first amended complaint against Monarch was filed on February 14, 2006, and sought declaratory judgments that Monarch’s use of the Atlantis mark infringed Kerzner’s trademark right. Monarch fought back by filing counterclaims on December 28, 2006, seeking cancellation of Kerzner’s trademark registration and its own declaratory relief with respect to its own trademark rights to the Atlantis mark that Monarch had developed in connection with casino services. Monarch also filed a cancellation petition with the Trademark Trial and Appeal Board to cancel Kerzner’s trademark registration. See Monarch Casino & Resort, Inc. et al v. Kerzner International Resorts, Inc., Cancellation No. 92045869 (T.T.A.B. Filed May 31, 2006). The TTAB proceeding is stayed pending the outcome of the civil action.

In one of Monarch’s Motions for Partial Summary Judgment, Monarch claimed that it was entitled to a judgment as a matter of law that it had priority of use of the Atlantis mark for casino services. Monarch argued that its use of the Atlantis mark for casino services dated back to 1992 – the date when it first used the mark in connection with restaurant services (and which was before the date Kerzner began to use the Atlantis mark in The Bahamas).

The court, however, rejected Monarch’s argument that its use of the Atlantis mark for a restaurant gave it priority of use in connection with casino services under the “related goods” or “natural expansion” doctrine. The court concluded that restaurant services and casino services are not closely related and that Monarch only began to develop trademark rights in the Atlantis mark for casino services when it actually began using the mark in connection with casino services in April 1996.

Monarch also argued that its April 1996 had priority over Kerzner’s first use of December 1994 under the territoriality principle – Kerzner’s use was outside the United States and thus it use was not use of the Atlantis mark for casino services in the United States.

The court rejected Kernzer’s counterargument that activities conducted by it in the United States which are “integral” to its casino services in the Bahamas constitutes use of the Atlantis mark in the United States in connection with casino services. Since Kernzer’s “casino services” were clearly rendered outside the United States, Kerzner had to rely upon an exception to the territoriality principle to claim that its use of the Atlantis mark outside the United States gave it trademark rights in the United States..

With respect to one noted exception to the territoriality principle – described in International Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d 359 (4th Cir. 2003) where the court found that use of a mark in advertising or sale of services in the United States, coupled with the rendering of those services abroad to United States citizens, is sufficient to give rise to trademark rights in the United States – the court noted that the decision was not binding in the Ninth Circuit and, in light of the fact that the Ninth Circuit had even explicitly declined to adopt the reasoning and noted that the decision had been called into question, the Ninth Circuit would decline to adopt such reasoning if presented with the question. Thus, the district court declined to adopt it as well.

As for the other exception to the territoriality principle, that would be the “famous marks” exception to the territoriality principle which was recognized by the Ninth Circuti in Grupo Gigante SA de CV v. Dallo & Co., Inc., 391 F.3d 1088, 1093 (9th Cir. 2004), and thus binding precedent on this district court.

Grupo Gigante describes a two-step analytical process to determine whether a mark falls under the famous-mark exception. First, the district court must determine whether the mark has achieved the level of recognition that would be necessary in a domestic trademark infringement case. Id. at 1098; see also id. at 1106 (Graber, J., concurring). Second, “where the mark has not before been used in the American market, the court must be satisfied, by a preponderance of the evidence, that a substantial percentage of consumers in the relevant American market is familiar with the foreign mark. The relevant American market is the geographic area where the defendant uses the alleged infringing mark.” Id. at 1098. Thus, the standard for famous marks is an intermediate one: “[t]o enjoy extraterritorial trademark protection, the owner of a foreign trademark need not show the level of recognition necessary to receive nation-wide protection against trademark dilution. On the other hand, the foreign trademark owner who does not use a mark in the United States must show more than the level of recognition that is necessary in a domestic trademark infringement case.” Id. at 1106 (Graber, J., concurring).

The district court clarified that Kerzner must show that its mark was “famous” as of April 1996 – the date when Monarch began to use the Atlantis mark in connection with casino services.

And while Kerzner performed some surveys which tended to show that a “substantial percentage of consumers” surveyed were familiar with Kerzner’s use of the Atlantis mark (especially in the Las Vegas market, which was the more relevant market at issue in the case), the survey, conducted in 2007, did not ask questions about when the consumers became aware of the mark, and thus the survey lacked probative value about whether the mark qualifies for the famous-mark exception as of April 1996. The court did note that there was some evidence of the extensive promotional campaign that Kerzner engaged in to promoted its remodeled Atlantis casino resort, which could be reasonably inferred to have penetrated the Las Vegas market.

In the end, the court concluded that there was a genuine issue of material fact regarding when, if ever, Kerzner’s casino resort acquired the status of a famous mark in the meaning of Grupo Gigante. The court found that taking all reasonable inferences in Kerzner’s favor, a jury could conclude that by April 1996 a substantial percentage of consumers in the Las Vegas market were familiar with Kerzner’s mark based on the evidence of Kerzner’s substantial national advertising campaign and media coverage of the opening., and thus Kerzner might have priority of use in the Atlantis mark for casino services in the United States under the Grupo Gigante famous marks exception. Based on this finding, the court denied Monarch’s motion.

For similar reasons, the court also denied Monarch’s Motion that Kernzer does not have standing to bring its trademark infringement lawsuit.

Monarch filed another summary judgment motion arguing that Kerzner cannot show that it is entitled to injunctive relief as a matter of law.

Monarch first argued that Kerzner never had any plans to develop a casino resort in Las Vegas, much less one using the Atlantis mark, and thus Kerzner cannot demonstrate a likelihood of irreparable harm if the injunction did not issue. However, the court disagreed finding that, taking all reasonable inferences in Kerzner’s favor, the evidence submitted by Kerzner could demonstrate that Monarch had relatively immediate intentions either to open a casino resort under the Atlantis mark in Las Vegas or to sell rights in the mark to someone who would, and thus an injunction might well be an appropriate remedy after the conclusion of this lawsuit if Kerzner convinces the jury that it has senior rights in the mark.

Monarch next argued that since it is undisputed that Monarch has the exclusive right under its license agreement with Kerzner (as Lodge’s assignee in interest) to use the Atlantis mark for lodging services in Nevada (including Las Vegas), a Las Vegas resort hotel and casino under the Atlantis mark would create no greater likelihood of confusion than a facility which offers only lodging services, and thus Kerzner cannot demonstrate any additional likelihood of confusion that Kerzner might be entitled to enjoin.

In essence, Monarch argued that its license for lodging services gave Monarch leeway to create a certain likelihood of consumer confusion through providing lodging service, and only activities that would create an additional likelihood of consumer confusion could give rise to liability sufficient to merit an injunction. The court noted the obvious with respect to lodging services – to the extent that a consumer might believe that such a hotel is associated with Kerzner’s Atlantis mark, that consumer would not be confused at all given that Monarch is Kerzner’s licensee of the Atlantis mark for lodging services. The court then rejected Monarch’s argument by noting that Monarch’s license did not give it any rights to use the Atlantis mark in connection with both casino services and lodging services. Moreover, a consumer who believed casino services provided at a Monarch Atlantis casino resort in Las Vegas to be associated with Kerzner would be confused in a way that the consumer making the same association with regard to lodging services alone would not be, and if Kerzner prevails at trial, it may be entitled to an injunction to prevent such consumer confusion.

Monarch’s last argument in an attempt to persuade the court that injunctive relief should not be issued was the “Dawn Donut” rule and Kerzner’s lack of plans to offer casino services to consumers in Las Vegas. The Dawn Donut rule comes from the Second Circuit Court of Appeals decision in Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc. 267 F.2d 358 (2d Cir. 1959):

Under the Dawn Donut rule, even if a federal registrant has rights in a mark, it is not necessarily entitled to an injunction against an unauthorized user: “if the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into the defendant’s market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user’s use of the mark.” Dawn Donut, 267 F.2d at 364 (footnote omitted); see also Fairway Foods, Inc. v. Fairway Markets, Inc., 227 F.2d 193, 198 (9th Cir. 1955) (vacating injunction issued to prevailing plaintiff on essentially the same basis as later became known as the Dawn Donut rule). Only once the federal registrant has expanded its use of the mark, so that the market areas of the two users are no longer separate and distinct, will the registrant be entitled to an injunction. Mister Donut of Am., Inc. v. Mr. Donut, Inc., 418 F.2d 838, 844 (9th Cir. 1969) (citing Dawn Donut).

However, in rejecting Monarch’s argument, the court noted that the Grupo Gigante famous marks exception to the territoriality principle necessarily implies an exception to the Dawn Donut rule – the court in Grupo Gigante recognized that consumer confusion can occur with respect to a famous mark abroad even if the user of the mark has no intention of ever using the mark in the United States. The court held that an injunction in the U.S. where a mark used exclusively abroad is determined to be famous under Grupo Gigante would be appropriate to prevent the consumer confusion.

Monarch also filed a motion seeking summary judgment on its counterclaim for a declaratory judgment that Monarch’s Nevada state trademark registration is valid and enforceable. While there was no dispute over the validity of Monarch’s state registration, there was a dispute over Monarch’s position that its state law rights trump Kerzner’s federal rights.

Monarch argued that its Nevada state trademark rights do not yield to Kerzner’s rights reflected in its federal registration because Kerzner could not use its Atlantis mark in Las Vegas under Nevada law. Monarch’s unique argument comes from the fact that under Nevada law, in order to obtain an unrestricted gaming license in a county of more than 100,000 population (i.e., Las Vegas), the casino must be associated with a hotel with at least 200 rooms. And since Monarch has the exclusive right to use the Atlantis mark for lodging services in Nevada (pursuant to its agreement with Kerzner), Kerzner could not build a casino resort which includes both a casino and a 200-room hotel in Las Vegas under the Atlantis mark, and could not use the Atlantis mark for casino services in Las Vegas or anywhere else in Nevada where the 200-room hotel requirement applies. Monarch’s position is that if Kerzner cannot use the Atlantis mark in Nevada, then Monarch is not blocked from doing so by any federal trademark rights Kerzner may have outside of Nevada.

For similar reasons described above, the court rejected Monarch’s argument based on the Grupo Gigante famous marks exception. Even if Kerzner is unable or unwilling to operate a casino in Nevada, it may still have federal trademark rights enforceable in Nevada under the famous marks exception. And those federal trademark rights would preempt Monarch’s state trademark rights.

The court also rejected Monarch’s invocation of the “natural zone of expansion” doctrine to argue that Monarch is entitled to statewide rights in the Atlantis mark because Las Vegas is within its “natural zone of expansion,” and therefore Monarch should be treated as if Las Vegas is within the territory where it has already used the mark in connection with casino services, even though Monarch does not actually operate a casino in Las Vegas.

In rejecting Monarch’s argument, the court noted the following about the “natural zone of expansion” doctrine:

The doctrine is normally invoked by senior users seeking to expand their federal statutory trademark rights into areas where a junior user is already using the mark under the protection of the common law. See 5 McCarthy, supra, § 26:20. Here, Monarch turns the doctrine on its head, seeking to leverage its state trademark rights to expand the geographic area in which it is entitled to trademark protections in derogation of Kerzner’s federal rights. Monarch has not cited, nor have we discovered, any authority for so applying the natural zone of expansion doctrine.

So while the court granted Monarch’s motion to the extent that the state registration was found to be valid and enforceable under Nevada law, it denied the motion to the extent that there are genuine issues of material fact about whether Kerzner’s mark falls within the Grupo Gigante famous marks exception (and when it became famous) in which case Kerzner would have federal trademark rights which preempt Monarch’s state trademark rights.

The court’s decision in a parallel order dealt with additional motions to exclude certain evidence and motions for summary judgment by Monarch and Kerzner. While I won’t go into detail regarding that order in this blog post (isn’t this one already long enough?), the court did decide as a matter of law that Monarch has continuously used the Atlantis mark for casino services from April 1996 to the present and that Kerzner’s trademark application date (and thus its constructive use date of the mark in the United States) was February 1997.

The court’s decisions now push the case towards trial on the issue of whether Kerzner acquired priority of use in the Atlantis mark under the Grupo Gigante famous marks exception.

Two Trademark Parody Cases For Your Amusement

noreply@blogger.com (Ryan Gile) — Mon, 14 Dec 2009 18:09:00 +0000

In the first case, the companies behind the JOHNNIE WALKER brand of scotch whisky are suing the purveyors of JOHNNIE BARKER BLACK LAB flavored dog water (pictured above on the right) for infringement and dilution of the JOHNNIE WALKER BLACK LABEL trade dress (pictured above on the left) (see registrations here, here, and here). See Diageo Brands B.V. et al v. Vineyards et al., Case No. 09-cv-02002 (D. Conn. Dec. 9, 2009) (complaint here).

Anybody else out there really believe that Johnnie Walker is expanding its famous whisky brand into the highly lucrative canine beverage market? [For those who can’t get enough of these whacky trademark disputes involving parody pet items, check out prior blog posts here, here, and here].

The second trademark parody case involves a lawsuit by the company which owns the clothing brand THE NORTH FACE against a Missouri man named Jimmy Winkelmann and his related company over use of THE SOUTH BUTT in connection with certain clothing items. See North Face Apparel Corp., The v. Williams Pharmacy, Inc., et al., Case No. 09-cv-02029 (E.D. Mo. Dec. 10, 2009) (complaint here).

"The North Face" Jacket

"The South Butt" Jacket

The North Face opposed The South Butt’s attempt to register its mark. See The North Face Apparel Corp. v. The South Butt, LLC, Opposition No. 91191521 (T.T.A.B.). In response to cease and desist correspondence from The North Face, counsel for The South Butt stated that The South Butt was interested in having The North Face acquire The South Butt and its inventory for $1,000,000. {ed.--Hmm, has kind of a cybersquatting feel to it, doesn’t it}. The South Butt has since filed another trademark application and continues to sell its clothes through its website.

In this case, the attempt to take advantage of the trademarks and goodwill developed by The North Face seems clear enough that The South Butt is not likely to be able to get around a likelihood of confusion finding. And yet, to the extent that The South Butt attempts to defend its mark as a parody, this use of The South Butt on clothes does not strike me as such a clear cut example of a trademark parody which in turn ultimately undercuts the company’s parody argument (i.e., the parody in this instance is not as obvious as say the use of a famous scotch whisky brand label in connection with the sale of flavored dog water).

[Update: Daniel Corbett, who posts on the Pittsburgh Trademark Lawyer blog (a blog name that I can certainly relate to), has his own take on the The South Butt lawsuit here.]

Dispute Over “Cameltoe” Hiding Underwear Invention Morphs Into Trademark Dispute

noreply@blogger.com (Ryan Gile) — Thu, 03 Dec 2009 16:45:00 +0000

Fans of “The Howard Stern Show” on Sirius/XM Satellite Radio will appreciate this trademark dispute.

On November 10, 2009, Howard had two females guests on his satellite radio show discussing their competing women’s undergarment products designed for women who wish to hide their visible cameltoe (a rundown of the appearance can be found at the show Rundown section of howardstern.com). For those not familiar with the term “cameltoe,” click here for a definition from the Urban Dictionary -- also a simple Google search of the term will quickly enlighten you, but be forewarned that the search results are not likely to be safe for work.

One woman named Shannon was promoting her product “Camelflage.” The second woman was named Treger Strasberg who had a competing product named “Camelammo.” Much of the discussion on the show dealt with issues of patent law (who had the invention first, whether patent applications were similar, clarifying that a patent pending is not the same as an issued patent). There was really only a brief mention of the issue of the “trademark” on the name “Camelflage” – with Trager pointing out that while Shannon may have filed trademark applications to register the trademark “Camelflage,” it does not mean that it has been registered.

Fast forward to December 1, 2009, when Ruby Tuesday Designs LLC (“Plaintiff”) filed a trademark infringement lawsuit against Camelflage LLC (“Defendant”) in the U.S. District Court for the Eastern District of Michigan. See Ruby Tuesday Designs LLC v. Camelflage LLC, Case No. 09-cv-14676 (E.D. Mich). A copy of the complaint can be downloaded here (courtesy of Marty Schwimmer’s Trademark Blog, who also posted the Exhibit attached to the complaint detailing the ladies’ appearance on “The Howard Stern Show,” which turns out to be excerpted from the detailed Howard Stern show summaries written by Marks Friggins).

For ease of reference to their respective ladies from their appearance on “The Howard Stern Show,” it will help the reader to know that Trager is associated with the Plaintiff in this case and Shannon is associated with the Defendant. In short, Trager followed through with her statements made during her Howard Stern appearance that she would be taking legal action against Shannon (albeit for alleged trademark violations rather than patent infringement claims – likely because Trager does not yet have an issued patent).

According to the complaint, Plaintiff has been engaged in selling its cameltoe-masking undergarments under the mark KAMELFLAGE since March 2009 (Plaintiff registered the kamelflage.com domain name on February 17, 2009, which currently redirects to http://www.camelammo.com/, and cites to a March 31, 2009 New York Times article mentioning its products). The complaint includes the following picture:

On May 27, 2009, Defendant registered the domain name camelflage.com and two days later applied to register the work mark CAMELFLAGE for undergarments and other apparel on the basis of use-in-commerce (claiming first use date of March 15, 2009). On June 7, 2009, Defendant filed to register its CAMELFLAGE Design Mark (pictured below) for the same goods.

Defendant is currently selling its cameltoe-masking undergarments using the CAMELFLAGE mark through its website.

Plaintiff’s alleges that Defendant’s use of the CAMELFLAGE mark infringes on Plaintiff’s common law trademark rights to the KAMELFLAGE mark. Plaintiff’s causes of action for federal and common law unfair competition, common law dilution [ed. – famous? Really?], and violation of Michigan’s Consumer Protection Act (M.C.L. § 445.903), and unjust enrichment.

The complaint specifically references the November 10, 2009 appearance by the parties on “The Howard Stern Show” – although it is described as Defendant refusing to cease and desist using the Plaintiff’s KAMELFLAGE mark. My own recollection of the interview was that the dispute was over the patent rights to the cameltoe masking invention – not the name. In fact, while not specifically mentioned in the complaint, but certainly part of the transcript of The Howard Stern Show, was Treger’s acknowledgement that one of the reasons she changed her product name, originally called “Kamelflage,” to CamelAmmo was because someone else already was using that name (while not specifically identified, she may have been referring to the intent-to-use trademark application for KAMELFLAGE for underwear and related goods filed by Karen A. Pratt on February 13, 2009, which is scheduled to register very soon since the Statement of Use filed in October 2009 was accepted by the PTO).

While Treger used this fact at the time as evidence that Defendant had intentionally created a knock-off product using Plaintiff’s “old” name for the same product, her statements now seem to contradict the argument in the complaint that Plaintiff has been using the mark KAMELFLAGE in connection with her undergarments.

Plaintiff’s webpage now features the following image:

Unlike the picture of Plaintiff’s products included in the complaint (likely produced before Plaintiff had changed to the “Camel-Ammo” name), the mark CAMEL-AMMO is clearly the primary trademark for the goods with the mark “Kamelflage” relegated to a smaller position underneath (and which arguably would not necessarily be perceived by consumers as a trademark). {Query to Readers: does anybody know if this reference to “Kamelflage” has always been there since the time Treger switched to the name “Camel-Ammo” or was it possibly added to the website in light of recent events?}

So for you fans of cameltoe, this will be a fun case to watch (pun intended).

The SOHMER piano trademark war - a new battle front opens in Illinois District Court

noreply@blogger.com (Ryan Gile) — Wed, 02 Dec 2009 08:01:00 +0000

A long-running battle being waged between two companies over the trademark rights to the mark SOHMER in connection with the sale of pianos just got kicked up an additional notch.

On February 15, 2001, an Illinois man named Edward Richards filed an intent-to-use trademark application with the U.S. Patent and Trademark Office (“PTO”) to register the mark SOHMER in connection with pianos. Eight days later, on February 23, 2001, a company named Burgett, Inc. (“Burgett”) filed an intent-to-use trademark application to register the identical mark SOHMER in connection with pianos.

The PTO initially refused Richards’ application on the basis of Section 2(e)(4) that the mark was primarily a surname. In order to get around this refusal, Richards filed an Amendment to Allege Use on August 19, 2002, and then amended his application to seek registration of the mark on the Supplemental Register (in order to get around the surname refusal). However, for reasons discussed herein, the PTO did not move his application onto registration, but instead suspended prosecution of Richards’ application

The PTO also initially refused Burgett’s application on the basis of Section 2(e)(4). The PTO also cited the existing of Richards’ earlier filed application as possible grounds for a Section 2(d) likelihood of confusion rejection and suspended prosecution. However, when Richards converted his application to one on the Supplemental Register, the effective filing date of the application changed to the date he filed his Amendment to Allege Use which was after the effective filing date of Burgett’s application, and thus it no longer could serve as a basis for a possible Section 2(d) refusal.

Of course, there was still the little matter of the Section 2(e)(4) refusal. The PTO made its refusal to register based on Section 2(e)(4) final. Burgett filed a request for reconsideration, which was considered after an ex parte appeal was filed to the Trademark Trial and Appeal Board and the Board remanded the case back to the PTO for consideration of the request for reconsideration. The PTO denied the request for reconsideration on November 20, 2003, and ordered the case back to the Board.

Then a funny thing happened in early 2004. Burgett’s President, Gary Burgett, filed a declaration with the PTO in February 4, 2004, that Burgett was the owner of the rights and goodwill to the mark SOHMER in connection with pianos that had been developed since 1872 by the Sohmer & Company (later Mason & Hamlin) and that the mark had become distinctive for pianos through “the substantially exclusive and continuous use of the mark in commerce by the Applicant and related companies for at least five years” preceding February 4, 2004.

While not clear from this Declaration, the basis for Burgett’s claim of ownership of the SOHMER name was the fact that Burgett’s predecessor-in-interest, Burgett Brothers Incorporated, had acquired the assets of Mason & Hamlin out of bankruptcy in 1996, including the trademark registrations owned by the bankrupt company at the time. The PTO’s Assignments records (click here) reflect the chain of title for the SOHMER marks that were still registered at the time. At the same time, it was apparently well known in the piano industry that the SOHMER factory in Pennsylvania had closed down in 1994.

Nevertheless, reviewing the Declaration at face value, Burgett declared that the SOHMER mark had been used continuously since February 1999. Of course, of the four SOHMER marks that had been registered with the PTO (word mark, design mark, SOHMER & CO., and design mark), the SOHMER word mark was canceled on December 20, 2000, for failure to file a Section 8 Declaration of Use and the SOHMER design mark was cancelled on December 2, 2001 for failure to renew. Nonetheless, the Declaration was accepted at face value and apparently enough to convince the PTO to allow the mark to be registered on the Principal Register under Section 2(f) based on a claim of acquired distinctiveness.

After the mark was published for opposition, Richards, who had assigned his own application to his company Persis International, Inc. (“Persis”), filed an opposition on October 19, 2004. Persis International, Inc. v. Burgett, Inc., Opposition No. 91162715 (TTAB Oct. 19, 2004).

The opposition progressed along for several years with Richards showing Burgett and the world that you don’t need an attorney to make an effective legal argument. Because an officer of a company can represent the company before the TTAB, Richards served as the legal representative for Persis during the entire opposition.

During discovery (which became so evasive at one point that Persis obtained sanctions against Burgett), it was discovered that Burgett’s basis for claiming that the SOHMER mark had continued to be used was a single invoice of a sale of a single piano to who it turns out was an employee (who according to affidavit testimony from that employee, purchase the piano first and was then asked if they could change the name on the front of the piano to SOHMER). Burgett’s response was that this piano was an original work in progress from the old SOHMER piano company that had closed down in 1994 – despite other evidence that showed the particular piano sold was a KNABE brand piano built in China by the Young Chang Piano Company with specifications that did not match the types of pianos produced by the Sohmer Pennsylvania factory. Burgett also provided vague information about sales figures from the years 1996 – 2006 but did not produce specific sales records.

As the time for trial before the TTAB moved closer, several new developments occurred. On March 11, 2009, Burgett decided to assign its trademark application to Samick Music Corporation (“Samick”), supposedly Burgett’s exclusive licensee of the SOHMER mark based on a license agreement entered into sometime in 2002. A further development was that Burgett’s counsel filed a motion to withdraw as counsel on the basis that Burgett no longer had an interest in the opposition proceeding. While Burgett’s attorneys were allowed to withdraw, Persis was successful at keeping Burgett as a party to the proceeding since it was the declaration of Burgett’s president that provided Persis with its strongest evidence that Burgett had committed fraud on the PTO with its declaration of continuous five years use of the SOHMER mark.

But the biggest development came in the form of Samick’s decision to file a civil lawsuit in Nevada District Court against Persis on April 15, 2009. See Samick Music Corporation v. Persis International, Inc., Case No. 09-cv-00197 (D. Nev.). A copy of the complaint can be downloaded here.

The basis for the sudden filing of a district court complaint given the long running opposition proceeding that was close to the finish line can probably be best explained by the fact that in federal court, a company must be represented by an attorney. And while Richards may have been a vociferous advocate for his company before the TTAB, federal court rules prevent him from performing the same role in this lawsuit (until such time as he gets a law degree and passes a bar exam).

Despite the strategy behind the filing, Samick’s complaint reiterates its position as the rightful successor-in-interest to the SOHMER mark in connection with pianos and attempts to demonize the efforts of Richards to apply for registration of and use the SOHMER mark in connection with pianos. Samick’s causes of action against Persis are for federal trademark infringement and unfair competition, common law trademark infringement and unfair competition, and federal trademark dilution,

The most recent development occurred on November 30, 2009, when Persis and Richards filed a lawsuit in the U.S. District Court for the Northern District of Illinois against Burgett. See Persis International, Inc. et al v. Burgett, Inc., Case No. 09-cv-07451 (N.D. Ill.). A copy of the complaint can be downloaded here.

But where the Nevada complaint laid out the story in the light most favorable to Burgett & Samick, this Illinois complaint lays out the story from the perspective of Richards and Persis.

According to this complaint, at the time Burgett acquired the aforementioned trademark registrations out of bankruptcy from Mason & Hamlin in 1996, the company had not manufactured, sold or distributed any pianos bearing the SOHMER trademark since at least 1994 nor did Burgett have any intent to resume use of the marks. Moreover, Burgett allegedly did not use the SOHMER trademark in connection with the manufacture, sale or distribution of pianos between 1996 and 2003, and accordingly, abandoned its rights to the mark. One interesting fact from the complaint is that in 1999, Burgett supposedly authorized the destruction of five original SOHMER plate pattern that had been used to manufacture the cast iron piano plates that are essentially to manufacturing SOHMER brand pianos.

According to the complaint, Richards contacted Burgett in late 2000 to discuss the possibility of purchasing one of the piano brands that Burgett had publicly announced that it was discontinuing. At that time, Burgett supposedly told Richards that the names SOHMER and GEORGE STECK were available for purchase. Richards and Burgett agreed on the sale of the GEORGE STECK mark for $100,000, and in early 2001, Richards provided an initial deposit of $33,500. However, Burgett later refused to complete the sale or return the deposit unless Richards withdrew his application for the SOHMER trademark. Burgett supposedly offered to sell Richards its rights to the SOHMER trademark, but Richards refused on the basis that Burgett had not used the SOHMER mark, had destroyed the SOHMER plates, and had even let the trademark registrations expire. [Comment—not to mention the fact that Richards had already filed a trademark application to register the mark].

The complaint then turns its focus to the 2002 license agreement with Samick licensing Burgett’s rights in the SOHMER mark to Samick. From Richards’ and Persis’ perspective, Burgett was aware that Persis was using the SOHMER mark in connection with the sale of pianos and that it had not valid trademark rights to the SOHMER mark when it entered into this license agreement with Samick. Persis publicly exhibited its SOHMER pianos at a piano trade show in July 2002. In early 2003, Samick began selling pianos bearing the SOHMER mark which Persis claims infringes its superior rights. Moreover, Burgett’s actions induced Samick’s acts of infringement.

Persis’ first cause of action against Burgett is for contributory trademark infringement based on its license agreement with Samick for the SOHMER mark despite Burgett’s knowledge that it had abandoned any rights to the SOHMER mark with no bona fide intention to resume use as well as Burgett’s knowledge of Persis’ rights to the SOHMER mark. Additional causes of action are for unfair competition under federal, state and common law, violation of Illinois’ deceptive trade practices act, and unjust enrichment and promissory estoppel (based on the $33,500 deposit that Burgett did not return).

So should Samick be able to lay claim to the reputation and goodwill of the SOHMER mark despite the clear break in use of the mark in connection with pianos or did Persis acquire legitimate rights to an abandoned trademark that it should be allowed to assert against Samick? Of course, even if Persis can show that the mark was abandoned and thus the goodwill never properly transferred to Samick, the ability of Persis to assert trademark infringement against Burgett/Samick may still depend on whether or not (and the extent to which) Persis has established its own strong common law rights in the mark since Persis' acceptance of a registration of the mark on the Supplemental Register is tantamount to an acknowledgment that Persis' trademark rights are only as strong as its common law rights. Persis' case is made even more challenging by the fact that much of the time when Persis was trying to build up a reputation in the name was during the same time that Samick was also using the same mark in connection with the same goods albeit not to take advantage of the reputation and goodwill that Persis had established in the name but instead to take advantage of the reputation and goodwill that had been established in the SOHMER name long before (even though legally abandoned).

Smiley Company Frowns On Court’s Decision to Deny Motion to Dismiss

noreply@blogger.com (Ryan Gile) — Sat, 21 Nov 2009 01:48:00 +0000

An Illinois district court has denied a motion to dismiss filed by Franklin Loufrani and The Smiley Company SPRL (together “Smiley”) seeking dismissal of numerous counterclaims brought by Wal-Mart Stores, Inc. (“Wal-Mart”) in Smiley’s action under 15 U.S.C. § 1071(b)(1) seeking judicial review of the Trademark Trial and Appeal Board’s (“TTAB”) final decision dismissing Smiley’s opposition to Wal-Mart’s trademark application. See Loufrani et al v. Wal-Mart Stores, Inc., 2009 U.S. Dist. LEXIS 105575 (N.D. Ill. Nov. 12, 2009). For background on the long running dispute and the TTAB decision leading up to the lawsuit by Smiley, see my prior blog post here and John Welch’s post on The TTABlog®.

At the TTAB level, the Board dismissed Smiley’s opposition of Wal-Mart’s application to register its Mr. Smiley Mark (the “Wal-Mart Mark”) and sustained Wal-Mart’s opposition of Smiley’s intent-to-use applications (here and here) for Loufrani’s Smiley Face Design (the “Loufrani Mark”) on the basis that the Wal-Mart Mark had acquired a secondary meaning, the Loufrani Mark had not acquired distinctiveness and so could not be registered, and that Smiley’s use of the Loufrani Mark in certain classes of goods would create a likelihood of confusion with the Wal-Mart Mark.

Rather than appeal the TTAB’s decision to the Federal Circuit, Smiley filed a district court action under Section 21(b)(1) of the Lanham Act (15 U.S.C. § 1071(b)(1)) seeking judicial review of the TTAB’s decision. Smiley sought an order declaring its mark to be distinctive, reversing the TTAB’s decision finding a likelihood of confusion, directing the PTO to issue a Notice of Allowance for its applications, and reversing the TTAB’s decision finding that the Wal-Mart Mark had acquired distinctiveness. In response, Wal-Mart filed a six counterclaims: Count I sought a declaratory judgment that the TTAB’s decision was correct, Counts II-IV sought a declaratory judgment that Smiley’s use or licensing of the Loufrani Mark would constitute trademark infringement under federal and common law, and Counts V-VI sought a declaratory judgment that Smiley’s use or licensing of the Loufrani Mark would violate Illinois’ Deceptive Trade Practices Act and Consumer Fraud and Deceptive Business Practices Act.

Smiley moved to dismiss Counts II-VI on the basis that Counts II-VI presented no case or controversy. Smiley also argued that Counts II-IV should be dismissed because the limited scope of this Court’s review of the TTAB’s decision would make the court’s determination of the issue of trademark infringement an improper advisory opinion. Finally, Smiley moved to dismiss Count VI on that basis that Wal-Mart failed to plead that it suffered actual damages as required under the Illinois statute.

With respect to Smiley’s argument that Wal-Mart’s counterclaims presented no case or controversy, the Court, taking all of the facts in Wal-Mart’s counterclaims in the light most favorable to Wal-Mart, concluded that Wal-Mart had plead sufficient facts establishing the existence of a justiciable controversy. In each of Wal-Mart’s counterclaims, Wal-Mart alleges that if Smiley were to begin to use the Loufrani Mark (the application for which identifies hundreds of goods and services identical to goods and services offered by Wal-Mart in its retail stores), it would create a likelihood of confusion with Wal-Mart’s use of its Wal-Mart Mark.

The court, however, took the common sense approach in determining whether an actual controversy exists by noting that “the primary evidence of a substantial controversy here is the case itself: that is, that the parties have numerous claims against one another over similar smiley-face marks that both desired to register with the PTO.” The court also noted that the parties had already developed clear positions on the issue of infringement, thereby further demonstrating a substantial controversy and adverse legal interests of the parties.

With respect to Smiley’s argument that Wal-Mart’s Counts II-IV would constitute an advisory opinion, Smiley argued that Wal-Mart’s trademark infringement counterclaims inappropriately seek to have the court, in reviewing the TTAB’s decision regarding likelihood of confusion, decide whether hypothetical use of the Loufrani Mark constitutes trademark infringement.

The court noted, however, in a district court’s review of a decision by the TTAB, the district court may rule on the issues of likelihood of confusion and trademark infringement under the Lanham Act (citing CAE, Inc. v. Clean Air Engineering, Inc., 267 F.3d 660, 664, 678 (7th Cir. 2001)). The court added that, under the broad jurisdictional powers conferred by the Lanham Act upon district courts (citing Steele v. Bulova Watch Co., 344 U.S. 280, 283-84 (1952)), it may affirm the TTAB’s explicit finding of likelihood of confusion and apply it to render a declaratory judgment that Smiley’s actions would violate the Lanham Act or common law.

In addition, because the court’s review of the TTAB’s decision is both an appeal and an independent action, the parties are allowed to submit new evidence and request additional relief. Accordingly, Wal-Mart, in its counterclaims, may request additional relief not specifically rendered by the TTAB. Finally, the court noted that because Wal-Mart’s counterclaims arise out of the same transaction or occurrence as Smiley’s claims (i.e., the same trademark oppositions and the TTAB’s findings with respect to both parties), Wal-Mart’s counterclaims are compulsory under Fed. R. Civ. P. 13(a)(1).

Finally, with respect to Wal-Mart’s Count VI, the court noted that it is impossible for a claimant seeking a declaratory judgment that a future act would violate Illinois’ Consumer Fraud and Deceptive Business Practices Act to plead damages since no violation would have yet occurred. And based on Wal-Mart’s showing of a substantial controversy between Smiley and Wal-Mart as to the issue of likelihood of confusion underlying all of Wal-Mart’s counterclaims, including Count VI, the court held that Wal-Mart has adequately pled its allegations in Count VI so as to survive a Motion to Dismiss.

As such, the court denied Smiley’s Motion to Dismiss.

Planet Hollywood Resort & Casino Gets TRO Against Domain Name

noreply@blogger.com (Ryan Gile) — Thu, 19 Nov 2009 23:45:00 +0000

(Photo credit: Freelasvegasphotos.com)

Another week, another Las Vegas resort and casino cybersquatting case.

This week, it is OpBiz, LLC (“OpBiz”) – the owner of the Planet Hollywood Resort & Casino in Las Vegas – going after Unister GmbH (“Unister”), an company whose domicile is unknown but believed to be in Germany. See OpBiz, LLC v. Unister GmbH, Case No. 09-cv-02192 (D. Nev.). A copy of the complaint can be downloaded here. The Las Vegas Sun reports on the lawsuit here.

But unlike last week’s cybersquatting case pitting New York New York Hotel and Casino against the owner of newyorknewyork.com (blogged here), this lawsuit is a little more clear cut, as evidenced by the fact that the court has already issued a temporary restraining order in the case ordering the domain registrar to lock the domain and have it transferred to OpBiz pending the outcome of the litigation (copy of the order here).

According to the complaint, Unister registered the domain name http://www.planet-hollywood-resort.com/ with the domain name registrar Domain Robot on July 18, 2009, and soonafter, began linking the domain name to a “hotel reservation website offering links to services provided by Plaintiffs competitors.” OpBiz alleges that the website offers vacation and flight packages at the Planet Hollywood resort and casino, but when website visitors attempt to purchase such packages, they are informed that no rooms are available and instead offered to book rooms at other competing hotels, from which OpBiz believes Unister will obtain pay-per-click referral revenue. The website is already down but Google’s cache still has a snapshot of the website here.

This case is a much clearer illustration of the type of activity that the Anti-Cybersquatting Protection Act was designed to address. And yet, in the end, what does OpBiz get out of the lawsuit except possession of a fairly worthless domain name that was probably not getting much traffic in the first place (nor was it probably diverting a lot of customers away from Planet Hollywood, but this point is certainly up for debate). After all, how many web users will type in planethollywoodresort.com into a web browser with dashes between each word (OpBiz already owns the same domain name without dashes)? It’s not the type of domain name that internet users would just stumble across. Moreover, Unister’s website doesn’t appear anywhere among top search results for the terms Planet Hollywood Resort.

And while OpBiz, upon obtaining a default judgment when Unister undoubtedly fails to respond to the complaint, might be able to obtain the maximum statutory damages award of $100,000 for Unister’s infringing domain name (see 15 U.S.C. §1117(d)), is OpBiz really going to go through the steps to try and collect such a judgment? Then again, in these tough economic times with the Planet Hollywood Resort & Casino teetering on the verge of bankruptcy (news story here), maybe they will. And with federal courts possibly starting to come around towards accepting that domain names can be property subject to creditor claims (see court order in Bosh v. Zavala; see also comments by Venkat and Digital Media Lawyer Blog), perhaps there might be some property for OpBiz to attach after all.

Cybersquatting or Domain Name Hijacking? You be the judge.

noreply@blogger.com (Ryan Gile) — Wed, 11 Nov 2009 00:30:00 +0000

New York-New York Hotel & Casino

On November 6, 2009, New York-New York Hotel & Casino, LLC (“NY-NY”), the company which owns the New York New York Hotel & Casino in Las Vegsa, brought a lawsuit in Nevada District Court against California resident Ronnie Katzin, the owner of the domain name newyorknewyork.com. See New York-New York Hotel & Casino, LLC v. Katzin et al, Case No. 09-cv-02139 (D. Nev.) The Las Vegas Sun reported on the lawsuit here and a copy of the complaint can be downloaded here.

Interestingly, NY-NY appears to acknowledge that Katzin registered the domain name around December 7, 1995, and has been in control of the domain name since it was registered in December 1995.

NY-NY appears to be basing its claim for cybersquatting on the fact that its predecessor in interest, MGM Grand, Inc, announced the hotel-casino in 1994, and then on September 13, 1995 (three months prior to the date Katzin registered the domain), NY-NY filed two trademark applications for NEW YORK NEW YORK (one for hotel services and one for casino services), which registered in September 1998. NY-NY claims that Katzin registered the domain name after learning of NY-NY’s plan to build the New York-New York Hotel & Casino. [Comment: Really? You don’t supposed it had anything to do with the fact that maybe “New York New York” is probably the most common way in which to identify New York City, New York and that the domain name might be a valuable domain name for offering marketing and promotional services for New York City businesses? ]

In February 2006, NY-NY had its attorney send a letter complaining about how the newyorknewyork.com website contained links which enabled visitors to book hotel reservations for both New York-New York Hotel & Casino and other Las Vegas hotels. After receiving the letter, Katzin stopped hosting a website which offered hotel bookings at the New York-New York Hotel & Casino.

However, according to the complaint, NY-NY recently discovered a large rectangle banner that appeared in the upper right part of the newyorknewyork.com website which featured a picture of the New York-New York Hotel & Casino and which, according to the complaint, when clicked on would lead the visitor to a different website (not NY-NY’s website) which allowed visitors to book a hotel room at the New York-New York Hotel & Casino (and very likely compensated Katzin for some amount per clicks). [Note: as of November 9th, the banner was still up, but as of November 10th, the banner no longer appeared and the rectangle was simply black.]

So what do you think? In order for a domain name registration to constitute cybersquatting, the person must register, traffic in, or use a domain name that is identical or confusingly similar to a mark that is distinctive at the time of registration of the domain name. Is Katzin a cybersquatter who registered this domain name in order to take advantage of NY-NY’s “distinctive” trademark rights at the time of registration or is NY-NY using this banner ad as a thin basis to now hijack this valuable domain name for its own use?

Does it make a difference knowing that both of NY-NY’s trademark registrations for NEW YORK NEW YORK were based on a claim of Section 2(f) acquired distinctiveness, which is pretty much an acknowledgement that the marks were not inherently distinctive and could not have been distinctive until such time as they were used in commerce, which NY-NY acknowledges was not until at least January 3, 1997?

11/11/09 Update:
Las Vegas Sun reporter Steve Green has a follow-up article on the lawsuit here after speaking directly with Katzin and getting his side of the story.

According to Katzin, he registered the domain name as part of a plan to create a site promoting New York City – the domain name is a reference to the song “New York New York” famously sung by Frank Sinatra (but originally performed by Liza Minnelli in the Martin Scorsese film of the same name).

Katzin also clarifies part of the allegations set forth in NY-NY’s complaint. Specifically, the complaint alleged that a company, True Magic, LLC, held onto the domain name and put up PPC advertising which were taken down after NY-NY’s counsel sent a letter. While the complaint never comes right out and states directly that Katzin and True Magic were one and the same, the insinuation is there based on subsequent allegations that Katzin controlled the website since 1995. According to Katzin, however, True Magic hijacked the name from him around 2004 and used it until 2006 when he was able to get it back.

As for the image of the New York-New York hotel-casino on his current website, Katzin explained that the image linked to a room-booking website operated by Expedia's Interactive Affiliate Network, which has a deal to sell MGM Mirage rooms (NY-NY is part of MGM Mirage). Katzin also indicates that an MGM Mirage official, who he did not identify, told him that such link would be authorized once Interactive Affiliate Network started booking rooms for MGM Mirage.

So does this change anybody’s mind about whether this is a real case of cybersquatting or an example of a “Goliath” company seizing an on opportunity to hijack a domain name from an innocent domain name owner?

Two more high profile trademark infringement lawsuits end with confidential settlements

noreply@blogger.com (Ryan Gile) — Sat, 07 Nov 2009 18:45:00 +0000

McDonald’s reached a confidential settlement with the Lion's Tap – an Eden Prarie, Minnesota restaurant which claimed trademark rights to the mark WHO’S YOUR PATTY in connection with restaurant services (registration application applied for on August 25, 2009) – over McDonald’s Angus burger marketing campaign which used WHO’S YOUR PATTY as a tagline (see billboard below). Original complaint here. Articles on the settlement from NYTimes and AmLawDaily. Duetsblog comments here.

Yahoo also settled on confidential terms the lawsuit filed against it by Mary Kay Cosmetics back in July (blogged here) over pop-up ads appearing from supposedly unauthorized resellers of Mary Kay cosmetics that would appear in the “Yahoo Shortcut” feature of Yahoo’s e-mail services (pictured above). Article on the settlement from Bloomberg.

Weekly Wrapup of Nevada District Court Trademark Lawsuits

noreply@blogger.com (Ryan Gile) — Sat, 31 Oct 2009 19:25:00 +0000

It was a busy week for trademark related lawsuit filings in the U.S. District Court for the District of Nevada (and not a single one of them filed by me).

Price Products, LLC v. Juvenile Solutions, Inc., Case No. 09-cv-02067 (D. Nev. October 27, 2009) (Complaint).

The owner of the DRIPSTIK ice cream/frozen treat holder (pictured above) sues for trademark and trade dress infringement over a knockoff product sold under the name FUN STIK by former Canadian distributor Petite Creations through Petite’s American distributor, Juvenile Solutions. Price Products discovered the products being marketed by Juvenile Solutions at an exhibitor’s booth at the ABC Kids Expo held on September 13-16, 2009, at the Las Vegas Convention Center (which is the only reason why an Idaho LLC is apparently suing a California corporation in Nevada district court).

M Holdings, LLC et al v. Hu Mei Lei, Case No. 09-cv-02071 (D. Nev. October 27, 2009) (Complaint) (Las Vegas Sun Article).
Las Vegas’ newest hotel and casino, The M Resort, files cybersquatting action against Chinese resident Hu Mei Lei over the website wwwmresort.com registered September 5, 2009, and purportedly featuring “provocative images of women” initially and changed thereafter to a typical pay-per-click landing page with links to discount hotel websites.

Rolex Watch U.S.A., Inc. v. Ryska et al, Case No. 09-cv-02093 (D. Nev. October 29, 2009) (Complaint) (Las Vegas Sun Article).

Rolex sues Las Vegas residents Angelika Ryska and Robert Mayer for counterfeiting over their sale of “replica” Rolex® watches through their website moreaffordable4u.com.

Mellow Beverage Co., LLC v. Nounna et. al, Case No. 09-cv-02090 (D. Nev. October 29, 2009) (Complaint) (Las Vegas Sun Article).

A company which sells a “relaxation and sleep aid” beverage under the unregistered trademark MELLOW (pending trademark applications here and here) filed a trademark infringement lawsuit against Shannon N. Nounna and Beverage Concepts, Inc. over a similar type of relaxation beverage using the name MELLOW (pictured below) (pending trademark application here) that Beverage Concepts is apparently launching soon.

CityCenter Land, LLC v. Papillon Airways, Inc. et al, Case No. 09-cv-02088 (D. Nev. October 29, 2009) (Complaint) (Las Vegas Sun Article).

The owner of the massive CityCenter project in Las Vegas is seeking a declaratory judgment that its proposed use of the name PAPILLON (pending trademark applications here and here) for one of CityCenter’s high-end retail stores located at CityCenter’s 500,000 square foot retail complex called “Crystals at CityCenter” does not infringe on the trademark rights of Papillon Airways, Inc. and Monarch Enterprises, Inc. which use the PAPILLON mark in connection with helicopter and bus tour services.

On September 3, 2009, Papillon Airways’ counsel sent a cease and desist letter to CityCenter, citing Paillion Airways’ trademark registration for PAPILLON for various goods and services (e.g., bumper stickers, clothing, helicopter and bus tour services) and claiming that CityCenter’s use of PAPILLON (logo version pictured above) is likely to lead consumers to believe there is an affiliation with Papillon Airways’ goods and services. CityCenter’s response is that Papillon Airways misrepresents the scope of its rights to the PAPILLON mark, which is always used in connection with “Grand Canyon Helicopters” (as pictured below), and thus the second claim for relief for misrepresentation.

Aloha Medicinals, Inc. v. Birkdale Medicinals, Inc., et al, Case No. 09-cv-00639 (D. Nev. October 29, 2009) (Complaint).

A convoluted lawsuit involving claims by Aloha Medicinals, a manufacturer of dietary supplements for people and pets, against former authorized distributor Birkdale Medicinals and one of its officers, Anthony “Tom” Peters, arising from Birkdale Medicinals’ apparent relabeling of Aloha Medicinals’ products to make it appear as if the products were Birkdale Medicinals’ own branded products. There are also claims relating to use of Aloha Medicinals’ copyrighted website, clinical and technical data for Aloha Medicinals’ products (used by Defendants as data for their products), using Aloha Medicinals’ unregistered trademarks as metatags and Google Adwords, and intentional misrepresentation regarding broken promises over special packaging provided by Aloha Medicinals to Birkdale Medicinals.

Nevada District Court dismisses some of Texas Domainer’s counterclaims against World Market Center

noreply@blogger.com (Ryan Gile) — Sat, 17 Oct 2009 01:06:00 +0000

In a case that pits the World Market Center against Texas’ most notorious domainer, Texas International Property Associates (“TIPA”), the Nevada District Court granted World Market Center Motion to Dismiss (with leave to amend) several counterclaims that sought cancellation of some of World Market’s Center registered trademarks listed in its complaint that did not form the basis of its trademark infringement and cybersquatting claims against TIPA. World Market Center Venture, LLC v. Texas International Property Associates, Case No. 08-cv-01753, 2009 U.S. Dist. LEXIS 95752 (D. Nev. October 14, 2009).

On December 12, 2008, World Market Center Venture, LLC, (“WMCV”), the owner and operator of the wholesale furniture trade show complex World Market Center in Las Vegas, filed a trademark infringement and cybersquatting lawsuit against TIPA the well-known domain name holding company that is no stranger to cybersquatting lawsuits, over TIPA’s registration of the domain name lasvagasmarket.com (the “typosquatting” variation of lasvegasmarket.com, used by WMCV to promote the World Market Center) on February 4, 2005, and subsequent use of the domain name in connection with a website that displays links to other websites related to Las Vegas activities (most likely your standard PPC landing page but its currently disabled).

WMCV owns the registered mark WORLD MARKET CENTER along with other variations on the mark including LAS VEGAS MARKET (filed in September 2004 with claimed first use going back to April 2001 and able to be registered on the Principal Register under section 2(f) on the basis of acquired distinctiveness). [Click here my posting on a Nevada district court decision earlier this year on the “genericness” of this particular registered mark].

Soon after the filing of its complaint, WMCV obtained a temporary restraining order requiring the registrar to lock the domain name and ordering TIPA to cease any use of Plaintiff's marks. The court later granted WMCV’s preliminary injunction and denied a motion to dismiss filed by TIPA.

TIPA answered the complaint on June 19, 2009, and included six counterclaims each of which sought to cancel one of WMCV's federal or state trademarks. The Third counterclaim sought to cancel the mark LAS VEGAS FURNITURE MARKET (Note: the court’s opinion seems to mistakenly cite the registration number for this mark as 3,259,971, which is actually WMCV's federal registration for LAS VEGAS MARKET) and the Fourth and Fifth counterclaims sought to cancel LAS VEGAS DESIGN CENTER.

WMCV filed a Motion to Dismiss these counterclaims for lack of standing to request cancellation since WMCV has not claimed that TIPA is infringing these particular marks and because TIPA has claimed no interest in the marks beyond that of the general public nor has it claimed will be damaged by WMCV's registration of the marks. TIPA argued that WMCV “bestowed standing” upon TIPA to counterclaim to cancel these marks when WMCV included claims in its Complaint that it owned these other marks in connection with the mark that it claims TIPA infringed.

The court described the “real interest” that must be demonstrated in the pleadings in order for a party seeking to cancel a registered mark to have standing:

In order to have standing, petitioner for cancellation need not prove actual damage, but only the likelihood of damage from the continuing registration of the mark. 3 McCarthy, Trademarks § 20:46, at 20-109 (4th ed. 2009) (citing Golden Gate Salami Co. v. Gulf States Paper Corp., 332 F.2d 184, 188 (C.C.P.A. 1964)). There must be a “personal commercial interest, rather than the interest of a mere intermeddler.” Golden Gate Salami Co., 332 F.2d at 188. If a party claiming cancellation “does not plead facts sufficient to show a personal interest in the outcome beyond that of the general public, the case may be dismissed for failure to state a claim. Lipton Indus., Inc. v. Ralston Purina Co., 670 F.2d 1024, 1028 (C.C.P.A. 1982) (citing Sierra Club v. Morten, 405 U.S. 727 (1972)). A party attempting cancellation must “demonstrate a real interest in the proceedings.” Id. (citing Universal Oil Prods. Co. v. Rexall Drug & Chem. Co., 463 F.2d 1122 (C.C.P.A. 1972)). The Lipton court identified many contexts in which a real interest could be shown, supporting standing: importation of products deterred by a registration, use of copyrighted appearance of an item, pecuniary interest of trade association, prior registration but not priority in use, protection of subsidiary's mark, descriptive use of term in registered mark, and advertising emphasis of American origin. Id. at 1029 (citations omitted).

WMCV argued that TIPA’s counterclaims did not show how TIPA might plausibly be damaged by WMCV's registrations of the LAS VEGAS FURNITURE MARKET or LAS VEGAS DESIGN CENTER marks. TIPA attempted to argue that WMCV “bestowed standing on TIPA” by suing TIPA for infringement and listing those registered marks in the Complaint as marks that were being infringed by TIPA, and thus giving TIPA a “real interest” in the continued registration of the marks.

While the court acknowledged that TIPA was correct that being sued for infringement is sufficient to support standing for a counterclaim for cancellation, the court took the common sense approach in recognizing that, although WMCV included a list of World Market Center-related marks in its Complaint, “it is clear from the complaint identifying the allegedly infringing Domain Name which mark or marks were alleged to have been infringed.” The mere fact that such marks were listed in WMCV's Complaint against TIPA “is not enough to find that Plaintiff has claimed these marks are being infringed. Plaintiff has made no such claim. . . . TIPA's only claim to a real interest in the two marks mentioned in the Third, Fourth, and Fifth Counterclaims is based on having been sued over them.”

As such, the court found that TIPA did not have standing to counterclaim to cancel the LAS VEGAS FURNITURE MARKET or LAS VEGAS DESIGN CENTER marks that were the subject of TIPA’s Third, Fourth, and Fifth Counterclaims, and dismissed those counterclaims, with leave to amend. The court also granted WMCV’s request for leave to amend its complaint to remove references to the LAS VEGAS FURNITURE MARKET and LAS VEGAS DESIGN CENTER marks.

So is the lesson learned that plaintiff’s shouldn’t engage in a long listing of that clearly are not the basis for the alleged infringement? Likewise, should defendant’s not bother seeking to cancel registered marks that clearly are not the basis for the alleged infringement?

Local Las Vegas companies in a trademark feud over “Appliance Doctor”

noreply@blogger.com (Ryan Gile) — Fri, 09 Oct 2009 00:55:00 +0000

The Las Vegas Sun ran a story today (link here) about a dispute between two appliance repair businesses in the Las Vegas valley using the name “Appliance Doctor” to identify their businesses.

Samuel and Mary Gravino, the owners of Applicance Doctor LLC, filed a lawsuit on Tuesday in Clark County District Court against a company operating as “The Appliance Doctor of Las Vegas” owned by Ken and Melissa Jagmin.

The Gravinos claim to have been using the name “Appliance Doctor” in Las Vegas for over 26 years. Of course, it wasn't until a little over a week ago on September 29, 2009, that their company actually registered APPLIANCE DOCTOR LLC as a trade name with the Nevada Secretary of State’s Office (claiming date of first use as October 2, 1989) for “appliance repairs” (of course, their Las Vegas Business license lists the date their business license was issued as October 23, 1989).

According to their complaint, the Gravinos claim to have been receiving calls from angry, disgruntled customers who believed that their company had provided services that it turns out were provided by “The Appliance Doctor of Las Vegas.” The Gravinos claim that the Jagmins, who received their business license on April 30, 2009, are trading off the name, reputation and goodwill that the Gravinos have established over the last 26 years.

When reached for comment, Mr. Jagmin stated that “Appliance Doctor” is commonly used by such companies around the nation and he’s unaware of any trademark covering the name.

A quick internet search does support Mr. Jagmin’s case about the term “Appliance Doctor” being commonly used in connection with appliance repair services. However, as for any trademark on the name, surprisingly, THE APPLIANCE DOCTOR and APPLICANCE DOCTOR are actually federally registered trademarks of a Wichita company named Appliance Doctor, Inc. Based on the widespread (but localized) use of “Appliance Doctor” it would appear that Appliance Doctor, Inc. has not done a very good job of enforcing its trademark rights nationwide. Of course, if it’s true that the Gravinos have been using the name APPLIANCE DOCTOR in the Las Vegas area for over 26 years – long before Appliance Doctor, Inc. received its first trademark registration in 1996– then they would have clear prior user rights to continue to use the name.

Mr. Jagmin also commented that his name was different than his competitor because it includes the phrase “of Las Vegas.” [Someone might want to explain to Mr. Jagmin that additional geographically descriptive words don’t really carry much weight in analyzing whether two marks are likely to cause confusion, especially when the services rendered by “Appliance Doctor” are in the Las Vegas area. I’m thinking about opening a competing hotel/casino called “Red Rock of Las Vegas” – no one would confuse that with “Red Rock” Hotel and Casino in Las Vegas, right?] Of course, Mr. Jagmin fails to mention that on the company's website, the logo (pictured below) is just “The Appliance Doctor” with the “of Las Vegas” used more in the text of the website.

I wonder if the Gravinos would have still claimed trademark infringement if the Jagmin’s had used “The Appliance Doc of Las Vegas.” Given the commonality of the phrase “Appliance Doctor” would use of just the shorthand “Doc” suffice to alleviate consumer confusion?

Nevada District Court rules that “The Rat Pack” is Generic in connection with “Rat Pack” tribute shows

noreply@blogger.com (Ryan Gile) — Fri, 02 Oct 2009 00:52:00 +0000

I previously posted (link here) about the trademark infringement lawsuit brought by TRP Entertainment, LLC (“TRP”) – the production company behind the “Rat Pack” tribute show “The Rat Pack is Back” playing at the Plaza Hotel and Casino in Downtown Las Vegas and which owns the registered trademark for THE RAT PACK IS BACK – against BC Entertainment, Inc. (“BCE”) and Barrie Cunningham (the “Defendants”). See TRP Entertainment, LLC v. BC Entertainment, Inc. et al, Case No. 08-cv-00579 (D. Nev.). A copy of the complaint can be downloaded here. In short, TRP claimed that the Defendants use of the term “The Rat Pack” in connection with the Defendants’ production of a Rat Pack tribute show infringed on TRP’s trademark rights.

My law firm was subsequently retained by the Defendants to represent them in the lawsuit. After counterclaims had been filed, but very early into discovery, a Motion for Partial Summary Judgment was filed on behalf of the Defendants on several of Defendants’ counterclaims, including counterclaims seeking a declaration that the term “The Rat Pack” is generic when used in connection with a “Rat Pack” tribute show and an order to the U.S. Patent and Trademark Office ordering that TRP’s registered trademark for THE RAT PACK IS BACK include a disclaimer of the term “THE RAT PACK.”

On September 29, 2009, nearly a year after the original Motion was filed (and long after our law firm unfortunately had to withdraw as counsel for the Defendants), Nevada District Court Judge Lloyd George entered an order granting in part Defendants’ Motion for Partial Summary Judgment, in particular, finding that “The Rat Pack” is generic when used in connection with a Rat Pack Tribute show. See TRP Entertainment, LLC v. BC Entertainment, Inc. et al, Document #49, Case No. 08-cv-00579-LDG-RJJ (D. Nev. September 28, 2009). A copy of the court’s order can be downloaded here.

The Court stated the following regarding the evidence of the meaning of the term “The Rat Pack”:

Stated succinctly, Cunningham’s evidence establishes that, long before TRP offered live musical shows, the term the “The Rat Pack” had a meaning that was used in connection with the joint performances of members of the Rat Pack during the 1960s. While some of these performances included movie appearances, typically the joint performances were live musical performances. Since the 1960s, the term “The Rat Pack” has been used by producers of many types of goods or services to indicate that the goods or services relates to members of the Rat Pack or to the joint movie or live (or recorded) musical or movie performances of the Rat Pack during the 1960s. From its initial use to refer to members of the group, particularly when jointly performing live musical entertainment, “The Rat Pack” did not and, indeed, could not refer to or identify TRP’s live musical show.

The court acutely recognized that Defendants’ Motion was not directed towards TRP’s registered trademark but rather merely to the component term “The Rat Pack”:

The question before the court on Cunningham’s partial motion for summary judgment is not whether “The Rat Pack is Back” identifies and distinguishes TRP’s show in tribute to members of the Rat Pack from all other such live shows. Rather, the only question is whether the component term “The Rat Pack” so distinguishes TRP’s live show from all others about or in tribute to the Rat Pack. The evidence establishes that it does not and that TRP cannot appropriate the term “The Rat Pack” for its exclusive use.

And just to make it abundantly clear to TRP about the scope of its trademark rights, the court held that “As the term ‘The Rat Pack’ is generic in the context of live shows about or in tribute to members of the Rat Pack, TRP does not have an exclusive right to use the term ‘The Rat Pack.’”

Furthermore, not only did the court grant Defendants’ declaratory relief counterclaim finding the term “The Rat Pack” generic in connection with Rat Pack tribute shows, the court also granted Defendants' counterclaim which requested that the U.S. Patent and Trademark Office enter a disclaimer of TRP’s “incontestable” Trademark Registration No. 2,640,066 to add a disclaimer of the term “RAT PACK” -- something that arguably should have been done during the original prosecution phase, but which for various reasons was not. The lack of a disclaimer in TRP’s trademark registration is very likely what has allowed TRP to take its aggressive position regarding its trademark rights to the term “The Rat Pack” for so long. Not anymore.

As an attorney always hoping for a win for my clients, I am understandably happy with the court’s decision given my personal, direct involvement in preparing the Motion. And while there is so much else I would like to say about this case as a commentary on our legal system, the price of getting justice in this country, the abusive use of trademarks, and even the unintended consequences of maintaining a legal blog, I will defer such remarks to those who would like to hear them from me in person.

Instead, I would like simply to share this victory (however pyrrhic it might be) with the world – and particularly, any other production companies out there that have wanted to produce a Rat Pack tribute show and use the phrase “The Rat Pack” in the title somewhere, but have been scared away from doing so by the aggressive efforts of TRP based on its registered trademark THE RAT PACK IS BACK (or other asserted trademark rights). You now have at least one decision from a court of law that will back you up in your argument that the term “The Rat Pack” when used in connection with a Rat Pack tribute show is generic and cannot be claimed exclusively by anyone. Sounds ridiculously obvious – and yet so much time, energy, resources, and money was spent litigating just this point.

Of course, what’s really sad is that TRP will certainly attempt to appeal the judge’s decision – after all, this decision has dealt a significant blow to one of TRP’s most valuable pieces of intellectual property (at least in the arena of “Rat Pack” tribute shows). And unless the Defendants are able to garner the financial resources to continue the fight, TRP’s appeal might go unchallenged. If such an appeal follows, one can only hope that the Ninth Circuit Court of Appeals will recognize the reasonableness of the district court’s decision.

Lastly, I want to give thanks to my law firm colleague, Mark Borghese, who pushed the idea of pursuing an early Motion for Partial Summary Judgment that was focused on getting a decision that the “The Rat Pack” is generic and who provided other invaluable direction along the way. This victory is as much his as it is mine.

[Update: The Las Vegas Sun has an article on the decision here.]

[Update #2: On December 14, 2009, the Nevada District Court denied TRP's Motion for Reconsideration of the court's September 28, 2009 order. A copy of the latest order can be read here.]

Potential Buyer of “Crazy Horse Too” Strip Club Wants “Crazy Horse 3” To Change Its Name

noreply@blogger.com (Ryan Gile) — Sat, 26 Sep 2009 02:30:00 +0000

How many times has a client wanted to buy a strip club that was seized by the federal government as part of a racketeering and tax evasion investigation into the club’s owner -- Rick Rizzolo, who had reputed ties to organized crime families -- but was worried that the “reputation and goodwill” (those in Las Vegas will understand why I put those words in quotes) of the club would be diluted by another strip club that opened up in the meantime by a third party using a similar mark to identify its strip club? (I know, another one of those cases).

The trademark angle is just one part of the story reported by the Las Vegas Sun today (link here) about the likely sale of the infamous Las Vegas strip cub “Crazy Horse Too.” The saga behind the Crazy Horse Too is a long and colorful one – for a collection of articles about Rick Rizzolo, including the saga of the Crazy Horse Too, visit Steve Miller’s “The Rick Rizzolo Connection.”

But as this blog is not so much interested in mobsters and strippers and focused squarely on all things trademark, I found it interesting that, according to the article, the agreement entered into by the U.S. Marshals and the yet to be named buyer hinges on the owner of another Las Vegas strip club giving up the name “Crazy Horse 3” (which was known as The Penthouse Club up until very recently when new owners took over – and apparently decided to trade off the “reputation” of the “Crazy Horse”) so that the buyer of the “Crazy Horse Too” can be assured of keeping intact the exclusive right to use the name Crazy Horse in connection with strip club services (not to mention all of the fantastic goodwill that goes along with that name in this town).

Pete Rinato, the attorney representing the prospective buyer, stated that a lawsuit was being prepared to be filed against the owners of the Crazy Horse 3 demanding that they give up the name.

Of course, that’s not the only trademark battle that Crazy Horse Too is fighting. A South Carolina man named Carl Reid applied for and received a trademark registration for the mark CRAZY HORSE for “Entertainment services, namely, exotic dance performances” in 2006. This registration served to block Crazy Horse Too’s own application in 2007 for registration of the mark CRAZY HORSE TOO GENTLEMAN'S CLUB for “Night clubs; Entertainment in the nature of dance performances.”

On July 9, 2009, Crazy Horse Too filed two cancellation proceedings against Reid (including a second one for the mark PURE GOLD'S CRAZY HORSE) with the Trademark Trial and Appeal Board. See Crazy Horse Too A Gentleman's Club v. Reid, Cancellation Nos. 92051211 and 92051225. Reid failed to answer and so the TTAB entered a default on September 8, 2009. Crazy Horse Too will likely get a default judgment and the two registered marks cancelled unless Reid steps forward soon.

But there is another “crazy horse” on the horizon. In fact, what I find most “crazy” about the competing use of this particular mark is how Sodipa (SAS) has never taken any action against any of them. Sodipa is the French company which owns the international registration for the mark CRAZY HORSE which is most famously associated with the showgirl revue Le Crazy Horse de Paris (which has an Americanized version showing nightly at the MGM Grand – although the show was originally named Le Femme when it first opened at the MGM Grand many years back). [Don’t you think that Crazy Horse Too was also trying to trade off a little bit of the “Crazy Horse” reputation and goodwill created by Sodipa – at least until Crazy Horse Too was able to create its own reputation (which it certainly has)].

Unfortunately for Sodipa, the company did not apply for a Request for Extension of Protection under the Madrid Protocol for its CRAZY HORSE international registration until very recently (March 20, 2008), and the request is currently suspended pending the outcome of several pending applications for the mark CRAZY HORSE with earlier effective filing dates, including the application filed by Crazy Horse Too on September 14, 2007.

Of course, I know what you’re all wondering – where does the “Crazy Horse 1” strip club fit into all of this? I do recall that there was at one time a very small strip club on the East side of the strip that was named “Crazy Horse” around the time that the “Crazy Horse Too” opened (and thus the basis for the play on the word “too”). Don’t know if it even exists anymore – difficult to find using a search engine with most of the hits being for “Crazy Horse Too” or the MGM production “Crazy Horse Paris.” Perhaps I should go out tonight and conduct some “research” in order to better write about these important trademark issues

[Update: Soonafter I published this post, the Las Vegas Review Journal posted an article (link here) on the lawsuit filed in Clark County District Court today by CC Holdings (managed indirectly by Christopher Condotti of Chicago) against Russell Road Food and Beverage, the company doing business as Crazy Horse 3.]

Fish & Richardson Files Foreclosure Action to Let the World Know “Who’s Your Daddy”

noreply@blogger.com (Ryan Gile) — Wed, 16 Sep 2009 01:40:00 +0000

Fish & Richardson, the powerhouse intellectual property law firm, filed an action in federal district court against Who's Your Daddy, Inc. (“WYD”) in order to foreclose on security interests the firm obtained on several trademark registrations owned by WYD for the mark WHO’S YOUR DADDY (including their apparent signature product, energy drinks, as well as for such products as cosmetics, jewelry, sunglasses and CDs, and “adult sexual aids”) See Fish & Richardson, P.C. v. Who's Your Daddy, Inc., Case No. 09-cv-01993 (S.D. Cal. September 10, 2009). A copy of the complaint with exhibits can be downloaded here.

In February 2005, WYD engaged F&R’s legal services (most likely in connection with a trademark infringement lawsuit filed by Who's Ya Daddy, Inc., the owner of the identical mark for clothing, against WYD in 2005 -- Who's Ya Daddy, Inc. v. Who's Your Daddy, Inc., Case No. 05-cv-00670 (S.D. Cal.).

Unfortunately (but not surprisingly given that in litigation, the only parties that win are the lawyers), WYD fell behind in paying its monthly legal services invoices. In September 2006, the parties entered into a Settlement Agreement whereby F&R received a first priority security interest against WYD’s trademarks which was recorded by F&R through a UCC Financing Statement filed with the California Secretary of State on September 27, 2006.

Nonetheless, WYD was still not able to make the payments required under the terms of the Settlement Agreement. F&R sued for breach of contract in California Superior court. After the action was filed, F&R recorded its Security Agreement against WYD’s thirteen trademarks with the United States Patent and Trademark Office (“PTO”).

F&R eventually was granted summary judgment in its state court breach of contract action and the court awarded F&R $348,651.18 [ed. – litigation is expensive]. F&R now seeks to foreclose on WYD’s trademarks against which F&R recorded its security agreement by obtaining a court order directing the PTO to certify that F&R is the owner of WYD’s trademark registrations.

With the economy hurting the revenue streams of so many law firms, perhaps F&R is looking to expand into the energy drink market by claiming ownership of WYD’s trademark registrations (and purpotedly the associated goodwill that goes along with those marks). I can’t wait to try a Who's Your Daddy energy drink where Fish & Richardson is responsible for maintaining the quality control of the goods. Of course, an outright sale of the marks to an existing energy drink maker is the more likely outcome if F&R successfully obtains ownership of the registrations, but it’s an interesting image – law firm licensing its marks and overseeing the quality control of the goods. This could also just be F&R's efforts to force WYD to pay off the judgment under threat of losing its trademark registrations.

Even more interesting is that even if F&R obtains the trademark registrations, are they really obtaining the underlying goodwill associated with the marks if F&R cannot also obtain and sell WYD’s particular energy drink recipes? If F&R resells the marks to another energy drink maker who then slaps those names on their own energy drink beverages, isn’t this misleading to consumers who are likely to believe the source of the goods and services is the same source that they have always known and associated with Who's Your Daddy brand energy drinks?

Blogging Hiatus

noreply@blogger.com (Ryan Gile) — Sat, 05 Sep 2009 04:07:00 +0000

As regular readers have probably noticed, I have not been posting as frequently or as substantively lately. Pre-trial work on top of all of the usual ongoing client matters that arise on a daily basis has been the major cause of the slowdown.

And with a trial beginning the day after labor day that is scheduled to last several weeks as well as various other upcoming court filing deadlines, the slowdown is certainly going to continue throughout most of the month of September.

I hope to have a few posts during the middle of the month and resume more regular postings by the end of the month. For now, I’m calling it a blogging hiatus.

Happy Labor Day to all! (and a day of labor it certainly will be for me).

Federal Circuit Clarifies Trademark Fraud

noreply@blogger.com (Ryan Gile) — Wed, 02 Sep 2009 00:37:00 +0000

In what will certainly be the most talked about court decision of 2009 for trademark practitioners, the Federal Circuit reversed the Trademark Trial and Appeal Board’s decision in Bose Corp. v. Hexawave, Inc., 88 USPQ2d 1332 (T.T.A.B. 2007), which found that Bose had committed fraud when it filed a renewal for goods that it no longer sold under the mark WAVE. See In re Bose Corporation, Appeal No. 2008-1448 (Fed. Cir., Aug. 31, 2009).

The Court found that the Board had erroneously lowered the fraud standard to a simple negligence standard. The Federal Circuit went on to make its holding on fraud quite clear:

Thus, we hold that a trademark is obtained fraudulently under the Lanham Act only if the applicant or registrant knowingly makes a false, material representation with the intent to deceive the PTO.

The TTABlog® discusses the decision here (and make sure to check out the numerous comments), Finnegan provides a detailed summary of the decision here, while Registration Ruminations opines about the decision here.

Another example of what happens when you don’t consult a trademark attorney

noreply@blogger.com (Ryan Gile) — Fri, 28 Aug 2009 00:35:00 +0000

I stumbled across five interesting intent-to-use trademark applications today for the following marks:

Each of the applications, filed in July, recite 13 different classes of goods – each of which consists of a laundry list of goods in that class. And who is listed as the trademark applicant for each of these application? Of course, it’s California residents Pamela Kidd and Paige Linn.

Who?

That’s right – it looks like another case of someone thinking that they can get rich through a trademark registration on a particular word that they know full well is associated by the public with a different source. And in all five applications (in addition to a 2(d) likelihood of confusion rejection in some cases and some provisional rejections), the PTO has rejected (yes – these applications were examined in a record time of about a month after filing) all of the applications under Section 2(a) on the basis of a false association with – guess who?:

Registration is refused because the applied-for mark consists of or includes matter which may falsely suggest a connection with Michael Jackson’s estate. Although Michael Jackson’s estate does not appear to be connected with the goods and/or services provided by applicant under the applied-for mark, Michael Jackson was so famous that consumers would presume a connection.

While these applications – if they had been “legitimate” applications – would have cost $4225 per application in PTO filing fees for a grand total of $21,125 for all five applications, in this case, the ladies only paid the $325 per application fee for a single class of goods – all other classes are noted as inactive due to an insufficient fee paid. So instead of wasting $21,125, the ladies only wasted $1,625.

I guess they will just have to go back to working at their Palm Desert retail clothing and jewelry store PINK CLUB®.

Ninth Circuit Tackles Trademark Tacking in “O'” Trademark Dispute

noreply@blogger.com (Ryan Gile) — Wed, 26 Aug 2009 07:01:00 +0000

The Ninth Circuit addressed the unique issue of trademark tacking in affirming a lower court’s decision on a trademark lawsuit between two companies that produce clothing aimed towards participants of motor cross racing. See One Industries, LLC v. Jim O’Neal Distributing, Inc., No 08-55316, 2009 U.S. App. LEXIS 18967 (9th Cir. August 24, 2009).

On the one side is Jim O’Neal Distributing, Inc. (“O’Neal”), an apparent leader in the industry with 17.5% of the market for motocross apparel and helmets in 1998. Since 1991, O’Neal has used a stylized “O” followed by an apostrophe (the “O’ mark”) on its products. However, over the years, O’Neal used several different version of this O’ mark.

For purposes of this case, the relevant marks were the 1997 version – a thicker, boxier O’ mark with rounded corners (the “Rounded O’ mark”) – and the 2003 version – which abandoned the rounded corners of the 1997 mark in favor of an angular approach (the “Angular O’ mark”).

One Industries, LLC (“One Industries”) was originally founded in 1997 and began by selling stickers and decals; however, by 2003, One Industries had added helmets and clothing to its product lines which made it a competitor with O’Neal.

In 1999, One Industries developed the “One Icon” mark, which it describes as two interlacing number ones (pictured above), and also developed an angular version of the word “One” in its name (the “One Angular” mark) (pictured below). One Industries uses both of these marks on motorcycle-related apparel and headgear.

In 2006, O’Neal accused One Industries of infringing the 2003 Angular O’ mark as well as the O’NEAL mark. One Industries believed that O’Neal was misrepresenting the length of time that it had been using its O’ mark and that the One Icon and One Angular marks, which were created and registered in 1999, were actually senior to the Angular O’ mark created in 2003. One Industries filed a declaratory judgment action that its One Icon and One Angular marks did not infringe O’Neal’s trademarks. O’Neal in turn asserted counterclaims for trademark infringement.

Before discovery commenced, One Industries moved for a more definite statement under Federal Rule of Civil Procedure 12(e), arguing that O’Neal’s complaint did not identify the particular O’ mark that it claimed was allegedly infringed. O’Neal claimed that the O’ mark, with some slight changes over the years, was always the same mark.

The district court granted One Industries’ motion for a more definite statement reasoning that the two of the marks appear to be more than slightly different. O’Neal then amended its counterclaims to assert infringement of the 1997 Rounded O’ mark (in order to get around One Industries’ 1999 priority date for its own marks). The district court subsequently granted summary judgment to One Industries on all claims and O’Neal appealed.

O’Neal maintained that the district court erred by refusing to “tack” the different versions of the O’ mark dating back to 1991 since, according to O’Neal, each iteration of the O’ mark constituted a continuation of the same mark rather than a creation of a new mark.

As the Court of Appeals explains,

Tacking matters because One Industries first used the One Icon in 1999 -- after O’Neal developed the 1997 Rounded O’ mark but before O’Neal created the 2003 Angular O’ mark. It is a cardinal principle of federal trademark law that the party who uses the mark first gets priority. See Brookfield Commc’ns, Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1047 (9th Cir. 1999) (“It is axiomatic . . . that the standard test of ownership is priority of use . . . [T]he party claiming ownership must have been the first to actually use the mark in the sale of goods or services.” (internal quotation marks omitted)). Thus, if the Rounded and Angular O’ marks are the same mark, then the district court should have compared the One Icon with the 2003 Angular O’ mark; if the marks are different, however, then the district court correctly compared the One Icon with the 1997 Rounded O’ mark.

One issue raised by O’Neal was the fact that the district court resolved the issue on a Rule 12(e) motion for a more definite statement rather than in the context of a summary judgment motion. O’Neal felt that summary judgment was premature because discovery had not yet been completed and O’Neal had been deprived of the opportunity to demonstrate that evolving versions of the O’ mark created the same, continuing commercial impression to consumers. While the Ninth Circuit acknowledged that “tacking requires a highly fact-sensitive inquiry” and that the “better practice is to resolve it on summary judgment, after full discovery,” in this case, the court was persuaded that there was no reversible error because O’Neal failed to ask the district court to postpone ruling until after discovery and did not move for reconsideration. “Having acquiesced in the resolution of the issue in the disposition of the Rule 12(e) motion, O’Neal cannot now complain that the district court should have acted differently.”

As for the merits of O’Neal’s tacking claim, the court laid out the legal standard as follows:

A trademark owner may “claim priority in a mark based on the first use date of a similar, but technically distinct, mark--but only in the exceptionally narrow instance where the previously used mark is the legal equivalent of the mark in question or indistinguishable therefrom such that consumers consider both as the same mark.” Brookfield, 174 F.3d at 1047-48 (internal quotation marks omitted). Tacking is a question of fact. See Quiksilver, Inc. v. Kymsta Corp., 466 F.3d 749, 759 (9th Cir. 2006). “A question of fact may be resolved as a matter of law if reasonable minds cannot differ and the evidence permits only one conclusion.” Id.

“The standard for ‘tacking’ . . . is exceedingly strict: [t]he marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked.” Brookfield, 174 F.3d at 1048 (internal quotation marks omitted). Our precedent demonstrates that tacking is allowed only in narrow circumstances. In Brookfield, we concluded that “moviebuff.com” cannot be tacked onto “The Movie Buff’s Movie Store.” Id. at 1049. There, we reasoned that “ ‘The Movie Buff’s Movie Store’ and ‘moviebuff.com’ are very different, in that the latter contains three fewer words, drops the possessive, omits a space, and adds ‘.com’ to the end.” Id. Similarly, in Quiksilver, we held that the district court erred in tacking “QUIKSILVER ROXY” onto “ROXY.” Quiksilver, 466 F.3d at 760. We reasoned that “a reasonable jury could easily conclude that ‘QUIKSILVER ROXY’ and ‘ROXY’ did not create the ‘same, continuing commercial impression’ at the time the ‘ROXY’ brand was introduced.” Id.

Because the district court decided the tacking issue as a matter of law, the court was faced with deciding whether O’Neal’s Rounded O’ mark, developed in 1997, and the Angular O’ mark, developed in 2003, differ to such a degree that no reasonable jury could conclude that they create the “same, continuing commercial impression.”

In affirming the lower court’s decision, the Ninth Circuit panel stated the following regarding O’Neal’s two marks:

We recognize that this is a close case, but we agree with One Industries and with the district court that O’Neal cannot meet the “exceedingly strict” standard for tacking. Although both marks consist of a styled O followed by an apostrophe, the similarities largely end there. The apostrophes are markedly different: in the Rounded O’ mark it is entirely separated from the O and appears to be a standard apostrophe. In contrast, the Angular O’ mark’s apostrophe is connected to the main image and looks like a triangle. The lower and upper horizontal lines on the Rounded O’ mark are thinner than the corresponding lines on the Angular O’ mark. While the Rounded O’ mark is boxy, the Angular O’ mark looks like the outline of a lemon. These differences, in our view, establish that the two marks are not “indistinguishable.” Brookfield, 174 F.3d at 1047. Like the marks at issue in Brookfield and Quiksilver, the Rounded O’ mark and the Angular O’ mark differ in several material respects.

The court also noted that cases from other circuits and from the Trademark Trial and Appeal Board have only allowed tacking when the marks are “virtually identical.” As such, the court concluded that the district court properly granted One Industries’ motion for a more definite statement because the differences between O’Neal’s Rounded O’ mark and Angular O’ mark are so material that they do not meet the “exceptional” instances where tacking should be allowed.

The remainder of the court’s decision addresses the district court’s decision finding no likelihood of confusion with O’Neal’s marks. The court, reviewing the lower court’s summary judgment decision de novo and applying the eight factor test used by the Ninth Circuit for determining “likelihood of confusion” set forth in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979), concluded that there was no likelihood of confusion in this case – primarily based on the dissimilarity of the marks, the lack of evidence of actual confusion, and the weakness of the mark given the presence of other similar O marks in the marketplace. “In the absence of evidence of actual confusion or intent to deceive, we decline to grant O’Neal a virtual monopoly on the use of the letter “O” on motorcycle helmets. The mere fact that the two companies are direct competitors and happen to use the same letter on their products is not sufficient to show infringement.” The same was true for the claims that One Industries’ marks infringed on O’Neal’s O’NEAL mark (marks were entirely different). And such lack of confusion also refuted O’Neal’s claims of trade dress infringement (which were based on the position of the O’NEAL on a helmet).

Accordingly, the Court of Appeals affirmed the district court’s granting of the motion for more definite statement and motion for summary judgment in favor of One Industries.

Judge Graber, concurring in part and dissenting in part, believed that the district court erred in resolving the tacking question as a matter of law in a motion for a more definite statement:

In my view, it was inappropriate for the court to decide that O’Neal was not permitted to tack its 2003 mark to its older marks as a matter of law in a pre-discovery Federal Rule of Civil Procedure 12(e) order. At that stage in the litigation, it would have been impossible for the district court to conclude that reasonable minds could not differ and that the evidence permitted only one conclusion regarding tacking. Indeed, the court made no such finding, and the majority itself concedes that this is a “close case.” Maj. op. at 11609. The order granting the motion states only that the “Court is unpersuaded by O’Neal’s claim that it uses only one mark that has been slightly altered over the years.” That conclusory statement, unsupported by any evidence in the record at that time, is not enough to decide the highly fact-dependent question of tacking as a matter of law. I would therefore reverse and remand.

Anytime Fitness Sues Las Vegas Franchisee

noreply@blogger.com (Ryan Gile) — Fri, 21 Aug 2009 21:30:00 +0000

On August 20, 2009, Anytime Fitness, Inc. (“Anytime Fitness”) filed a lawsuit in Minnesota Federal District Court against Las Vegas residents Lawrence Fagan and Linda Fagan and several of their Nevada limited liability companies (Rainbow Fitness, LLC; Fort Apache Fitness, LLC; and Blue Diamond Fitness, LLC) for breach of contract and trademark infringement. See Anytime Fitness, Inc. v. Rainbow Fitness, LLC et al, Case No. 09-cv-02185 (D. Minn.). A copy of the complaint (but without the over 100 pages of exhibits) can be downloaded here. [Update: The full complaint with exhibits can be downloaded here.]

AFI is the franchisor of the international Anytime Fitness franchise of small-scale 24 hour fitness centers. AFI owns the U.S. registered trademark ANYTIME FITNESS for “health and fitness club services.”

In April 2008, the Fagans, through their LLCs, entered into five year Franchise Agreements with AFI to open Anytime Fitness centers at three Las Vegas valley locations. The agreements each contained a forum selection clause choosing Minnesota as the sole forum for litigating disputes under the Agreement.

According to the complaint, as a franchisee of the Anytime Fitness “System,” the Fagans received information and know-how about operating a largely unstaffed 24-hour co-ed fitness center (with a limited “menu” of services that purportedly allows AFI’s business model to succeed where others have failed).

The Agreements included a covenant not to compete whereby the Fagans agreed that during the term of the Agreements, they would not start a competing fitness center business in their protected territory or within five miles of any Anytime Fitness location. The Agreements also gave the Fagans the right to use AFI’s trademarks in the promotion of their franchised locations.

Apparently, sometime in April 2009, AFI showed Lawrence Fagan a closed Anytime Fitness center location at 6300 West Charleston Blvd. in Las Vegas to see if he would be interested in taking over that location. The landlord had purchased the equipment from the former franchisee and had apparently been speaking with Fagan about reopening the center. Fagan declined AFI’s offer to open an Anytime Fitness location at this Charleston location.

Then, according to AFI, the Fagans turned around and began operating a fitness center at this location on Charleston under the name Lifestyle Fitness 24/7 (“Lifestyle Fitness”). Of course, according to the City of Las Vegas, the business license for the Lifestyle Fitness located on Charleston is in the name of Anthony Pasquale and was issued on July 23, 2009. [Of course, his own Linked-In page states that he is a co-owner and the City of Las Vegas’ records also reflect his title as President 100% although there is no indication of a corporation as owner].

AFI claims that Lifestyle Fitness is using AFI’s “System” including the same membership agreement, the same keyless entry system, same equipment layout, the same limited menu of services, and has been using materials and equipment obtained from AFI’s suppliers. [Query – if a third party came in and took over a location that was formerly an Anytime Fitness just as it was before it was closed but simply changed the name, wouldn’t one expect that the same equipment, keyless entry system, services menu, etc. would simply be part of what was left over to purchase.]

AFI also claims that the Fagans intend to open another fitness location (currently under construction) under the Lifestyle Fitness name at the intersection of Warm Springs Road and South Durango Drive in Las Vegas. AFI further claims that the Fagans are promoting their Lifestyle Fitness locations using AFI’s registered mark. AFI also claims that the “key fobs” located at the fitness center locations which allow patrons 24 hour access to the fitness center were purchased through an affiliate of AFI and use AFI’s proprietary software. [Weren’t the key fobs already installed at the Charleston location?]

AFI further alleges that the Fagans are planning on allowing members of its three Anytime Fitness locations access to their two Lifestyle Fitness centers. AFI also asserts that the Fagans are informing the members at their Anytime Fitness locations that they will either be converted to Lifestyle Fitness centers or closed down (and such members transferred to their Warm Springs & Durango location). Finally, AFI claims that the Fagans are soliciting employees and members at their existing Anytime Fitness locations to come over to their Lifestyle Fitness locations.

AFI sent a letter to the Fagans on August 7, 2009, reminding them of their non-compete obligations under the Franchise Agreements and demanding that they cease any competition. The Fagans responded to AFI’s letter with an e-mail on August 17, 2009, but apparently did not address the issue of whether they were competing with AFI. AFI responded to this e-mail with two specific questions about any involvement by the Fagans with the Charleston location or any other fitness center in Las Vegas. The Fagans answered “No” to both questions on August 19, 2009. Apparently, AFI did not believe the Fagans’ answers.

AFI’s causes of action are for breach of contract, federal and common trademark infringement, federal and common law unfair competition, violations of Minnesota’s deceptive trade practices act and unlawful trade practices act, unjust enrichment, misappropriation of trade secrets, and tortious interference with contractual relations and prospective economic relations. AFI is seeking the usual injunctive relief and damages (actual and treble), as well as costs and attorneys fees.