Single Source, Related Companies and Section 2 (d) rejections for Trademarks!

The USPTO will typically issue a section 2 (d) rejection for any mark that is confusingly similar to the mark described in your trademark (“TM”) application. Often times, through a merger, sale, acquisition or reorganizations companies have different names and structures, but maintain a unity of interest in their intellectual property (such as a TM). 

However, unless a proper assignment or transfer is recorded with the USPTO, a derivative version of a mark owned by a prior company will be the basis of section 2(d) rejection.  Fortunately, the Federal Circuit has stated that if the applicant and the prior company are related companies that qualify as a single source of a good or service, then there is no likelihood of confusing the consumer.  In re Wella A.G., 787 F.2d 1549 (Fed. Cir. 1986). 

An examiners section 2(d) rejection may be overcome by filing an affidavit from the appropriate owner(s) asserting that the prior company and the applicant are related and share unity of control over their trademarks.  Unless there is contradictory evidence, the Examiner will usually accept the affidavit and withdraw the USPTO’s objection to registration of your mark under section 2(d).

Understanding how to properly apply for intellectual property (trademark) rights in the face of a merger, acquisition, sale or reorganization is often crucial to the continued growth of a business enterprise.

The Antitrust side of IP Litigation

Antitrust counterclaims are once again viable options for defendants involved in Intellectual Property (IP) litigation.  Often a Plaintiff is utilizing a patent infringement suit as a method of interfering with the business relationship of a competitor. 

However, if the patent was obtained by knowing and willful fraud or the lawsuit is a sham for interfering with competitors’ business relationships, then the patent may be invalid and subject the Plaintiff to an antitrust violation.  Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172, 177 (1975);  In re Independent Service Organizations Antitrust Litigation, 203 F.3d 1322, 1326 (Fed. Cir. 2000); and Hazelquist v. Guchi Moochie Tackle Co., 2004 U.S. Dist. Lexis 13991 (W.D. Wash. May 12, 2004). 

The risk of an antitrust violation and counterclaim is not limited to sham patent litigation.   Plaintiffs attempting to utilize trademark infringement suits to maintain a monopoly (price control) or restrict competition face a similar risk of an antitrust violation.  In Marketing Displays, Inc. v. TrafFix Devices, Inc., 200 F.3d 929, (6th Cir. 1999), the court permitted an antitrust counterclaim against a plaintiff asserting trade dress infringement after the expiration of patent. 

If the litigation is objectively baseless in the sense that no reasonable litigant could expect success on the merits, then it may be the basis for a antitrust violation.  Professional Real Estate Investments, Inc. , v. Columbia Pictures Industries, Inc. , 508 U.S. 49, 60 (1993).  However, this does not mean that a product’s different qualities cannot be protected simultaneously, or successively by more than one statutory means for protection of intellectual property.  Kohler Co. v. Moen, Inc. , 12 F.2d 632, 638-39, (7th Cir. 1993). 

Understanding the nuances of the scope of intellectual property protection that can be obtained for a product is crucial to your ability to protect your market and your investments.

Tricky Settlement Agreements in Seventh Circuit…

If you are a litigator in Illinois, the Seventh Circuit decisions in Lynch, Shapo, and Blue Cross have just made your job a lot more difficult.  Especially, if your practice involves business, employment or intellectual property matters, where settlement agreements often contain a payment plan for royalties, profits, backpay or future earnings. 

It used to be that based on Kokkonen you could simply enter a dismissal order with prejudice that allowed the court to retain jurisdiction to enforce the settlement agreement.  However, based on the 7th Circuit’s recent rulings in Lynch, Shapo, and Blue Cross entering such an order will deprive the court of jurisdiction to enforce the settlement agreement. 

In which case, your client may be standing outside the courtroom trying to find a way back in by filing a new lawsuit for a breach of contract.  The other common alternative is to enter a dismissal order without prejudice to allow the court to retain jurisdiction to enforce the settlement agreement. 

Unfortunately, entering such an order may deprive your client of the res judicata effect of a dismissal order that is with prejudice.  In this scenario, your client will be back in the courtroom defending against claims that it believed were resolved, and may have helped fund its opponent’s lawsuit. 

Understanding how the drafting of settlement agreements has changed in light of the US Supreme Court’s decision in Kokkonen and the Seventh Circuit’s decisions in Lynch, Shapo, and Blue Cross is crucial to properly representing your client’s interests. 

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Amendments to Trademark Rules of Practice

The USPTO has adopted some new rules of practice that will impact the way attorneys can register your business name or logo for trademark or servicemark registration.  The following is a summary of some of the new Amendments: 

1) an application under section 1 or section 44 must be in English to receive a filing date;

2) if more than one good or item is specified within a particular class of goods or services in section 1 (a) application, then only 1 date of use is required (as long as the corresponding good or item is provided); and

3) the filing of an amendment to allege use does not extend the deadline to respond to an Office Action, an appeal to the Trademark Trial and Appeals Board (“TTAB”) or a Petition to the Director.    

These and other Amendments will have both a substantive and procedural impact on the registration of a trade or service mark.  For the exact language and additional amendments, please see attached: Amendments to Trademark Practice with USPTO

If you have any additional questions or concerns, then please feel free to contact me.

Trademark Law Treaty Implementation Act-Summary

The Trademark Law Treaty Implementation Act (TLTIA) has several important changes that trademark owners, practitioners and litigators should know.  The following are important provisions of the act that can impact your mark(s):

1) the requirement in section 1(a) and 1(b) for the applicant to state the mode or manner in which the mark is to be used or in connection with goods is eliminated;

2) an application based on foreign trademark no longer has to be accompanied by a certificate or certified copy of the foreign registration at the time of filing is eliminated;

3) to revive an application under 12 (b) the applicant must now demonstrate an unintentional delay in filing a untimely response to an Office Action instead of showing an unavoidable delay; and

4) a section 8 affidavit of continued use or excusable nonuse must be filed in the 9^th year of mark’s registration and every ten years thereafter.   Section 9 no longer requires a declaration of continued use or excusable nonuse in a renewal application. Thus, every tenth year, the owner of a registration must file both a §8 affidavit and a §9 renewal application. However, a section §8 affidavit must still be filed between the fifth and sixth year after the date of registration.

For additional changes see:  tlt_summ

On-line Auction Sites and Trademark Infringement!

On-line auction sites have become a popular method for selling, buying or bidding for many consumer items.  This raises questions about the sale of counterfeit or infringing goods being provided by anonymous sellers via on-line auction sites.  Often the on-line auction site is sued for direct and contributory trademark infringement. 

However, this raises concerns about shutting down an entire on-line auction site due to a few bad actors or anonymous sellers.  In Tiffany v. E-bay, the court dealt with this scenario and found that E-bay was not liable to Tiffany on its claims of direct trademark infringement, contributory trademark infringement, dilution, unfair competition or false advertising. 

The Court focused on E-bay’s extensive policies for investigating, reporting and removal of infringing or counterfeit goods from its sites.  The Court also went to on to find that the sale of actual Tiffany goods was protected under the nominative fair use defense.  Thus, on-line auctions sites were protected assuming they met their affirmative duty to police the sale of infringing and counterfeit goods. 

This ruling will provide for an increase in the number of on-line auction sites and allow for numerous resell opportunities.  Whether you are the trademark owner, a consumer or an on-line auctioneer, understanding trademark law and how it impacts your business practices or purchasing behavior is crucial to avoiding liability for trademark infringement. 

If you have any concerns or questions regarding these matters, then please feel free to contact us.

New Amendments to USPTO Trademark Filing Requirements

The United States Patent and Trademark Office (USPTO) passed several new rules that became effective in January 2009 relating to filing for trademark or servicemark rights in the United States (U.S.).  The amended rules will impact how trademark attorneys may apply for protection of marks used by individuals, entrepreneurs, small business owners, partnerships, joint ventures, foreign and domestic corporations. 

Some examples of the requirements of the new rules are illustrated below:

1) All international applications filed under section 1 or 44 of the Trademark Act must be written in English;

2) Domestic Partnerships filing for trademark rights must have the name and citizenship of all general partners;

3) Domestic Joint Ventures filing for trademark rights must have the name and citizenship of all active members of the Joint Venture;

4) If the mark includes a foreign word, then the application must have a English translation for the foreign word; and

5) The application no longer requires a verified statement that the applicant has “adopted and is using the mark shown in the drawing.”  Instead a statement that “the mark is in use in commerce” will be sufficient.

There are several other amendments that may be found here:  http-wwwagstateilus-pressroom-2009_03-20090305

Should you have any concerns or questions regarding the amendments or filing for trademark or servicemark rights in the U.S., feel free to contact us.

Trademarks, Servicemarks and the Costs of Delay

In a recent opinion, Judge Shadur gave new life to the “laches” defense to trademark and servicemark infringement.  Judge Shadur granted summary judgment to the City of Chicago and dismissed Rudolfo Garcia’s claim for servicemark infringement of the name “Graffiti Blasters.”  See. Rudolfo v. City of Chicago, 2009 U.S. Dist. Lexis 7437 (N.D. Ill.).

Judge Shadur focused on the following facts: 1) Rudolfo was aware of the City of Chicago’s use of “Graffiti Blasters” for fourteen (14) years before filing suit; 2) Rudolfo waited ten (10) years  after his lawyer sent a Cease & Desist letter to the City of Chicago; 3) the City of Chicago immediately responded with a letter disputing Rudolfo’s rights to “Graffiti Blasters”; 4) the City of Chicago cleaned over 200,000 buildings and expanded the program by investing millions into it after Rudolfo’s delay; and 5) Rudolfo’s delay was approximately five times the three year statute of limitations for violations of the Illinois Consumer Fraud and Deceptive Business Practices Act. 

Judge Shadur held that considering these facts and circumstances Rudolfo had slept on his rights and unreasonably delayed in brining suit against the City of Chicago.  This ruling reaffirms the need for trademark and servicemark owners to police infringing uses of their mark and timely file claims to ensure the strength and validity of their mark. 

Attached is the case for your consideration: name_rudolfo_garcia_and_city

The PRO-IP Act: What is it and what does it mean for US business?

The PRO-IP Act, is a bill President Bush signed into law in October of 2008.  Its actual name is the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (the PRO-IP Act).  The PRO-IP Act provides for increased enforcement of IP laws domestically and internationally. 

The PRO-IP Act’s Trademark arm provides for increased statutory penalties ($1000 to $200,000) on both the importation and exportation of goods with counterfeit marks.  It also increases the maximum penalty for willful infringement from $1,000,000 to $2,000,000.   Finally, the trademark arm provides for treble damages where counterfeit marks are intentionally used or where goods or services are provided for the purpose of counterfeiting.   The Court is granted discretion to waive the trebling of damages only upon proof of extenuating circumstances. 

The Pro-IP Act’s Copyright arm provides for increased impoundment and seizure, including business records pursuant to an appropriate protective order.  The Copyright arm further directs the Court to ignore registration inaccuracies, unless the inaccuracy was willful, or if the Copyright Office would have refused registration based on knowledge of the inaccuracy.  Finally, the Copyright arm provides a tool for musical performers to register their works with the US Customs and Border Protection to receive notice of unauthorized copies entering the US. 

In general, the PRO-IP Act also increases coordination and enforcement of IP laws domestically and internationally by creating a White House Liaison (IPEC), providing stiffer criminal penalties, and providing $25 million dollars in annual funding to help state and local law governments combat IP theft and infringement crimes. 

It will be interesting to see how the PRO-IP Act impacts individuals, business owners, entrepreneurs, courts and IP practitioners.  However, the PRO-IP Act provides significant tools for IP owners to protect and enforce their rights.  Individuals and business owners with strong IP plans and strategies are well positioned to capitalize on the benefits that the PRO-IP Act provides.

What is the UDRP?

The UDRP is not some new rail system, but a method for resolving disputes relating to ownership of domain names.  The Uniform Domain Name Dispute Resolution Policy or UDRP is a process for Trademark  (TM) owners to assert claims to domain names that utilize their TM in violation of their rights.  Often domain names are registered by others to benefit from a TM owner’s goodwill or to acquire a domain name and attempt to sell it to the TM owner. 

The UDRP allows a TM owner to file a Complaint and a Brief in Support of the claim to the domain name based on the strength of their Trademark.  The UDRP process is a more easy and efficient vehicle for the owner of a famous trademark to avoid the needless costs and fees associated with a civil lawsuit against the domain name owner.  The UDRP is a limited process, whereby, a panel reviews the Complaint and the parties respective briefs to decide who has a superior claim to the domain name. 

Although the UDRP process is easier and more cost effective, it does not permit the TM owner to get fees or damages.  The UDRP process only permits the owner to sue to recover the rights to the domain name.  However, this process provides a TM owner the option to recover the domain name without having to buy the domain name from the owner.