1999 INTELLECTUAL PROPERTY LAW INSTITUTE RECENT DEVELOPMENTS IN TRADEMARK LAWMichael D. Hobbs
JoAnn Holmes
Daniele Raziano
© 1999 Troutman Sanders LLP
All rights reservedI. INTRODUCTION
Less than two months before the new millennium, the state of trademark law in the United States remains in certain areas unsettled, yet overall remarkably organic and alive and a vital part of our commercial society. Undoubtedly, the Internet leads all driving forces in creating these changes, as lawyers, judges and the public all attempt to make sense of this new technology and how it fits within traditional trademark concepts such as trademark usage, unfair competition, jurisdiction, geographic use, and how to make sense of new concepts, such as domain names, cybersquatters and metatags. The following cases reflect the these efforts, as certain trends have already started to appear and case law in certain areas is starting to become more developed.
In other trademark areas, the issue of trade dress continues to draw a tremendous amount of legal and judicial resources, culminating recently with the Supreme Court agreeing to hear arguments in Wal-Mart Stores Inc. v. Samara Brothers, Inc. to address the issue of inherent distinctiveness. Although the Supreme Court has not granted any arguments related to the Federal Trademark Dilution Act, this cannot be far in the future as circuit courts are already developing splits regarding the fame and distinctiveness a trademark owner must prove as will as the damage a plaintiff must suffer to receive redress under the Act. Similarly, Section 43(a) of the Lanham Act remains an active and much debated tool for combating unfair competition in a never ceasing variety of forms.
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II. PROTECTABLE TRADEMARK RIGHTS
A. No Protection For Generic Drug Name To Identify Product; However, Defendant Must Distinguish Its Product From Those Of Plaintiff
The U.S. District Court for the Northern District of New York denied a preliminary injunction motion brought by Plaintiff Hoffman-La Roche, Inc. based upon a finding that there is no likelihood of confusion between the generic name for the active ingredient in Plaintiff’s its product and the brand name that a competitor uses to identify the same drug. The court recognized that genericness precludes a producer’s exclusive rights to use a mark, but agreed with plaintiff that it does not preclude all avenues of relief under the Lanham Act. However, the court found that in order for plaintiff to succeed in its claim for likelihood of confusion between its product and its competitor’s product, the plaintiff must demonstrate that the generic name for its active ingredient has come to be associated with Hoffman-La Roche Inc. Upon doing so, defendant must take reasonable steps to distinguish its product from plaintiff’s. The court noted that defendant had taken reasonable means to distinguish the two products. Hoffman-La Roche v. Medisca, Inc., No. 99-CV-163, 1999 U.S. Dist. LEXIS 2380 (N.D.N.Y. Mar. 3, 1999).
B. Junior Trademark Registrant Found to Have Superior Trademark Rights
Over Claimed Senior User
The U.S. Court of Appeals for the Sixth Circuit held that Circuit City Stores, Inc., ("Circuit City") which owns a federal registration for the mark "CarMax," has superior rights in the mark over a used car dealership identified by the same name. The dealership began use of the name in 1990; Circuit City registered the "CarMax" mark in 1993. However, the Court of Appeals reasoned that the defendant’s evidence of use, which consisted of testimony from both an owner of the used car lot and from radio station executives, did not show sufficient actual use of the mark to warrant its common law ownership based upon defendant’s repeated failure to use the "CarMax" mark in basic commercial context such as phone listings, store signs, and newspaper advertisements. Circuit City Stores, Inc. v. Carmax, Inc., 165 F.3d 1047, 49 U.S.P.Q.2d (BNA) 1507 (6th Cir. 1999).
C. Defendant Allowed to Use Generic "Hog" Mark for Motorcycle Services, But Only Within a Limited Trading Area
In refusing to enjoin a defendant’s use of the mark "The Hog Farm," the U.S. Court of Appeals for the Second Circuit held that use by the plaintiff of the generic term "hogs" for large motorcycles does not save Harley Davidson’s trademark rights in that term. Harley Davidson first used the word "hog," for motorcycles in the 1990’s, later registering the term. Defendant Grottaneli had used the term "hogs" since 1981 for merchandise and events in association with his business called "The Hog Farm." In refusing to protect the plaintiff’s trademark rights in the generic term "hog," the Court noted Harley Davidson’s earlier aversion to the word "hog" because of its association with groups such as the Hell’s Angels. Moreover, the Court highlighted that Harley Davidson did not begin to use the term until long after it had become generic to describe large motorcycles. Nonetheless, the court declined to allow defendant to use the hog bar-and-shield logo associated with, and registered to, Harley Davidson, Inc. and precluded him from using the word "hog" in reference to any other product or services. The Court permitted Grottanelli to continue use of that name in his limited trading area. Harley-Davidson, Inc. v. Grottanelli, 164 F.3d 806 (2d Cir. 1999).
D. "Signature Song" Does Not Merit Trademark Protection
The U.S. District Court for the Southern District of New York ruled against a plaintiff in her false implied endorsement claim and dilution under Sections 43(a) and (c) of the Lanham Act where the Frito-Lay Company used the plaintiff singer’s version of the well-known composition The Girl From Ipanema as background music in a Frito-Lay commercial. The court found that plaintiff’s "signature song" is not entitled to trademark protection, noting that songs are protected by copyright, not trademark. Moreover, the court denied plaintiff’s dilution claim for her song, holding that she failed to meet her burden of showing that her "version of the song" is famous or distinctive for purposes of dilution protection under the Lanham Act, that the song is unregistered, and that it is not used in commerce to identify and distinguish goods. On this basis, the court dismissed plaintiff’s Lanham Act claim for dilution as well as her various state law claims. Oliveiro v. Frito-Lay, Inc., 50 U.S.P.Q.2d 1152 (S.D.N.Y. 1999).
E. Foreign Journal Publisher Retains Superior Rights to Title of Magazine Over Its English Version Translation.
The U.S. District Court for the District of Columbia determined that a Russian magazine publisher, the Russian Academy of Sciences ("Academy"), retained trademark rights in the English translation of its magazine’s title in a suit against the English language publisher of the magazine. The American Geophysical Union ("AGU") was licensed to translate and publish the English version of the magazine Geomagnetism and Aeronomy within the United States. When the Soviet Union dissolved, copyrights were held by individual journalists rather than by the state agency. The Academy then chose MAIK as its new English language translator and granted that organization exclusive rights to translate for the magazine. Despite this action, the AGU proceeded to obtain translating rights from individual Russian authors and announced a new publication, Geogmagnetism and Aeronomy International. The Academy and MAIK sued AGU for violations of Section 43(a) of the Lanham Act and AGU counterclaimed for copyright infringement. Each party moved for a preliminary injunction. The court granted a preliminary injunction against AGO, determining that the Academy owns the trademark rights in the magazine’s title because it controls the content with which readers associate the mark. Russian Academy of Sciences v. American Geophysical Union, No. 98-2165, 1998 U.S. Dist. LEXIS 20598 (D.D.C. Dec. 16, 1998).
F. Foreign Meaning of Mark is Relevant to U.S. Trademark Protection
Otokoyama Co. Ltd. (OCL), which distributes Japanese sake in the U.S. under the name "otokoyama," brought an infringement and unfair competition suit against Wine of Japan Import Inc. (WOJI) for using the name "Mutsu Otokoyama" on the sake it sold in the U.S. WOJI argued that the word "otokoyama" is a generic term in Japanese for a type of sake. Applying the doctrine of foreign equivalents, whereby a word’s foreign meaning should be taken into account for confusion purposes, the U.S. Court of Appeals for the Second Circuit determined that OCL is not entitled to U.S. trademark protection for a Japanese generic term. The Second Circuit also found that the district court erred in not considering the Japanese Patent Office’s decision not to register the generic name as a mark, as the decision was sufficient proof of a relevant fact. Otokoyama Co. Ltd. v. Wine of Japan Import, Inc., 175 F.3d 266 (2d Cir. 1999).
G. Judge Properly Charged Jury on Common Law Rights
In this battle between two magazines publishers, Time Inc., publisher of People magazine, sued Peterson Publishing Co. L.L.C., publisher of Teen magazine, when both decided to introduce new Teen People magazines. Both parties claimed that the other’s use of the name Teen People would infringe their mark. In the interim, Peterson changed the Teen magazine logo, which was the subject of Peterson’s challenge. The judge, in a supplemental instruction, left to the jury the decision of Peterson’s rights in the new logo. Although Peterson challenged the supplemental instruction on grounds that it led the jury to disregard its rights in the old logo, the U.S. Court of Appeals for the Second Circuit found that the instruction was proper. Time Inc. v. Petersen Pub. Co., 50 U.S.P.Q.2d (BNA) 1865, 173 F.3d 113, 1474 (2D Cir. 1999).
H. Services Must Benefit Others for Valid Service Mark Under Lanham Act
Morningside Group, Ltd. (Group), a financial investment company, sued Morningside Capital Group (Capital), a private equity investment group, for service mark infringement and trademark dilution. The Second Circuit held that the district court erred in holding that "Morningside Group" is not a valid service mark because Group’s services were intended to benefit only itself and its founders. While services under the Lanham Act must benefit others, the owner of a service mark need only in fact benefit others, not be inspired by a hope to benefit others. The district court further erred in determining that Group’s mark, was weak, that the marks are dissimilar and by not giving full consideration to evidence of actual confusion. Morningside Group Ltd. v. Morningside Capital Group L.L.C., 182 F.3d 133 (2d Cir. 1999).
I. Phrase "You Have Mail" is Generic
The Eastern District of Virginia held that the phrases "You Have Mail," for Internet e-mail services and "I M" for a real-time chat component are generic according to the primary significance test. Under the primary significance test, in order to obtain trademark rights a plaintiff must show that, in the public’s mind, the primary significance of the term is the producer, not the product. America Online Inc. (AOL), in its trademark infringement suit against AT&T for use of "You Have Mail" and "I M Here," failed to prove its protectable trademark rights under the primary significance test and was denied preliminary injunctive relief. The court further found that the phrase "Buddy List," for another real-time chat component, is also generic. America Online Inc. v. AT&T Corp., 51 U.S.P.Q.2d (BNA) 1865 (E.D.Va. 1999).
J. Despite Move from Los Angeles, Team Maintained Rights to "St. Louis
Rams" Mark
Johnny Blastoff, a cartoon creator, sued the Los Angeles Rams Football Company (Rams) when the team announced in April 1995 that it was moving to St. Louis and intended to use the mark "St. Louis Rams." Two months before the Rams’ announcement, Blastoff had filed a Wisconsin state trademark application for the "St. Louis Rams" mark for a cartoon sports team. One month later, in March 1995, Blastoff filed two federal intent-to-use applications for the same mark. In Blastoff’s suit, he sought a declaratory judgment of non-infringement of the Rams’ mark. The U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s grant of summary judgment for the Rams, concluding that Blastoff’s trivial use of the mark was insufficient to demonstrate a connection between its products and the mark. The court further held that, despite "urban affiliation," the Rams’ long-time use of the name gave it priority in association with the professional football team and, since trademark applications are always subject to formerly ascertained common law rights, Blastoff was not entitled to use the mark. Johnny Blastoff v. Los Angeles Rams Football Co., 188 F.3d 427 (7th Cir.1999).
K. State Law Limits Incontestable Federal Registrations
On a matter of first impression, the U.S. Court of Appeals for the Sixth Circuit held that under § 15 of the Lanham Act, state law applies in determining the extent of a senior user’s rights with respect to an incontestable junior user registration, not federal common law. Advance Stores Co. Inc. (ASC), which obtained a federal service mark registration in 1988 for ADVANCE AUTO PARTS, sued Refinishing Specialties Inc. (RSI), which had used the same name since 1974 in Kentucky, for a declaratory judgment of non-infringement, that it may use the name throughout the U.S., except in the county where RSI used the name, and that its incontestable mark should not be canceled. The court affirmed the district court’s summary judgment for ASC after applying Kentucky law to determine RSI’s rights as against ASC’s federal registration. Advance Stores Co. Inc. v. Refinishing Specialties Inc., 51 U.S.P.Q. 2d (BNA) 1785 (6th Cir. August 16, 1999).
III. TRADEMARK REGISTRATION
A. Unrelated Individual Granted Standing To Oppose "O.J. Simpson" Marks
The U.S. Court of Appeals for the Federal Circuit granted a professor standing to oppose federal registration for the marks "O.J. Simpson," "O.J.," and "The Juice" based upon his personal offense to the marks because he is a "Christian family man," and based upon petitions from people across the United States who also allegedly deemed the marks to be scandalous and immoral. Standing before administrative agencies does not have the same case or controversy requirement necessary for standing in a court. However, an opposer to a trademark registration must have a real interest or a direct and personal stake in the proceeding, along with a reasonable basis for his belief of damage in order to be granted standing to oppose a mark’s registration. In granting Professor Ritchie standing, the court noted that "the crux of the matter is not how many others share one’s belief that one will be damaged by the proposed registration, but whether that belief is reasonable and reflects a real interest in the issue." Accordingly, the court reversed the TTAB’s decision to dismiss Ritchie’s opposition and the case was remanded for further proceedings. Ritchie v. Simpson, 170 F.3d 1092, 50 U.S.P.Q.2d (BNA) 1023 (Fed. Cir. 1999).
B. Foreign Generic Term For Product Not Eligible For Trademark Registration in The United States
The U.S. District Court for the Southern District of New York held that an olive importing company is not entitled to exclusive use of the mark "Bella di Cerigonla" because that name, in Italian, is generic to describe a particular type of olive grown in Italy. The court decided that granting a single owner use in the name would prevent other producers from accurately describing their product. The court recognized that there is case precedent that the genericness of a mark is determined by considering only its use in this country. However, the Southern District declined to follow that line of reasoning. Instead, the court decided that to grant a single producer exclusive rights in the name would allow a competitive advantage that trademark law should not support. Nonetheless, the court did allow the defendant to continue using its stylized artistic version of the mark. Orto Conserviera Cameranse d Giacchetti Marino & C. s.n.c. v. Bioconserve, s.r.l., 49 U.S.P.Q.2d 2013 (S.D.N.Y. 1999).
C. Native Americans Win Cancellation of Federal Registration for "Redskins" Mark
The Trademark Trial and Appeal Board canceled all federal registrations for the mark "Redskins" owned by Pro Football, Inc., the owner of the National Football League Washington Redskins, deeming the mark disparaging against Native Americans. In evaluating the cancellation action brought pursuant to Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a), the TTAB considered the distinct differences between canceling a mark under 2(a) due to its scandalous nature versus canceling a mark because it is disparaging, noting that disparagement includes "persons, living or dead, institutions, beliefs or national symbols." Particularly, disparagement usually requires a degree of intent to cause offense, which may be inferred from circumstances and from evidence regarding the acceptability of the language or imagery used. Unlike scandalousness, disparagement is not determined by the understanding of a substantial composite of American society as a whole, but instead is determined by the views of a referenced group. Under the restatement, a disparaging trademark casts doubt on the quality of corporate goodwill as perceived by "a reasonable person of ordinary sensibilities."
The court took into consideration the Native American imagery which Pro Football, Inc. used in connection with the "Redskins" mark and noted that the petitioner representative for the Native American community clearly established, by a preponderance of the evidence, that the word "Redskins" may disparage Native Americans as perceived by a substantial composite of that group. Moreover, the court noted that the term "Redskin" is often associated with "savage enemies," "a primitive people," and "wild and indolent tribes." Despite a finding of disparagement, however, the TTAB refused to determine that the mark "Redskins" is scandalous because the evidence did not establish scandalousness during the relevant time periods, and the word "Redskins" would not be "shocking to the sense of truth, decency, or propriety" of a substantial composite of the general population. Harjo v. Pro-Football, Inc., 50 U.S.P.Q.2d 1705 (TTAB 1999).
D. Trademarks Using "XXXX" are Unregisterable
International Flavors & Fragrances Inc. (IFF) violated the Lanham Act’s one mark per application requirement when it tried to register "LIVING XXXX FLAVORS," "LIVING XXXX FLAVOR" and "LIVING XXXX," seeking to have the XXXX filled in with the names of specific fruits, herbs, vegetables, plants and flowers. While the PTO has registered so-called "Phantom" marks in the past, this situation differed in that IFF was attempting to register numerous marks in one application, it filed a use based application when not all marks had been used in commerce and, because of all the possible variations, IFF’s registration would not give adequate notice to the public and other trademark users. In re International Flavors & Fragrances Inc., 183 F.3d 1361 (Fed. Cir. 1999).
E. Must Look to Public’s Understanding of Whole Mark to Determine Genericness
In In re American Fertility Society, the U.S. Court of Appeals for the Federal Circuit held that the TTAB applied the wrong test for genericness in upholding an Examiner’s rejection of an application for SOCIETY FOR REPRODUCTIVE MEDICINE on the Supplemental Register. The Examiner determined, after citing dictionary definitions for the word "society" and finding the remainder of the phrase to be descriptive, that the entire mark was generic and, therefore, must be disclaimed. The court, however, held that the test for genericness requires proof, not that each component of a phrase is generic, but that the entire mark represents, to the public, the genus of goods or services. Given that the PTO only produced evidence of the genericness of the components of the mark, and not of the mark as a whole, it applied the incorrect legal test and failed to meet its burden. In re American Fertility Society, 51 U.S.P.Q.2d (BNA) 1832 (Fed. Cir. 1999).
F. TTAB May Not Amend Actual Use Date After Application is Approved for Publication
G.D. Searle & Co. (Searle) filed an intent-to-use application for the mark CELEBRA and subsequently amended the application to include the dates of first use in commerce. Upon publication in the Official Gazette, Forest Laboratories Inc. opposed the registration arguing that Searle had not actually used the mark in commerce. Searle responded to the opposition by trying to amend its application to delete its dates of first use. The TTAB held that, though the Commissioner has authority to waive 37 C.F.R. § 2.76(h), which requires that an alleged use amendment must be withdrawn before approval of the mark for publication, the Board does not have such authority and, therefore, denied Searle’s motion to amend. Forest Laboratories Inc. v. G.D. Searle & Co., 52 U.S.P.Q.2D (BNA) 1058 (TTAB 1999).
IV. LOSS OF TRADEMARK RIGHTS
A. BellSouth Loses Trademark Rights In The "Walking Fingers" Logo
The District Court for the Middle District of North Carolina held that BellSouth has no rights in the "Walking Fingers" logo. In tracing the history of the designation back to AT&T, the Court found that AT&T had denied any trademark interest in the "Walking Fingers" logo, encouraging others to use the mark as a product source. BellSouth claimed it obtained rights to the mark in 1984 when AT&T was divested of its operating companies including BellSouth. While the District Court recognized survey evidence indicating the public’s association between the mark and BellSouth, it nonetheless ruled that the logo is a generic indication for yellow pages and ruled that the public’s association between the mark and its source is insufficient to grant the generic term trademark status. The court also noted that no genuine issue exists as to whether the Walking Fingers logo is in the public domain, because "it had been so for over 30 years." BellSouth Corp. v. White Directory Publishers, Inc., 42 F. Supp.2d 598, 49 U.S.P.Q.2d (BNA) 1801 (M.D.N.C. 1999).
B. Recording Trademark Assignments with the PTO is Insufficient to Perfect a Trademark Owner’s Security Interests under Article 9 of the UCC
The U.S. Bankruptcy Court for the District of Massachusetts held that a plaintiff who failed to perfect his security interest with the Connecticut Secretary of State could not rely upon the financing statement that he filed with the Patent and Trademark Office to perfect his interest in trademark rights. Accordingly, when the plaintiff’s debtor was authorized by the bankruptcy court to sell all of its assets, including its trademark, the plaintiff lost his rights in the company’s trademark assets. In Re Together Dev. Corp., 227 B.R. 439 (Bankr, D. Mass. 1998).
C. After More than 20 Years Notice, Handbag Producer Estopped From Infringement Claim Against Knock-Off Producer; However, No Abandonment
The U.S. District Court for the Southern District of New York held that plaintiff, Hermés, was is estopped by laches from obtaining monetary and injunctive relief against a producer of knock-off handbags. The president of Hermés had been aware of knock-off versions of its products since the 1970’s, but the company only recently filed suit against the knock-off manufacturers. As reason for its delay in instituting litigation against the defendant, the plaintiff asserted that the defendant had only recently begun selling products of comparable quality and price in direct competition with Hermés. However, the court was unpersuaded by that argument and found prejudice by plaintiff’s delay in instituting litigation because the defendant had changed its position in a way that would not have occurred if the plaintiff had not delayed filing suit.
Responding to the defendant’s argument that the plaintiff’s activity also constituted abandonment of its trade dress for the handbags, the court distinguished abandonment from estoppel by laches on the basis that laches is a personal defense while abandonment is a "loss of rights against the whole world." In the instant case the Plaintiff, had not lost its rights to protect its product in total. Finally, in deciding for the defendant, the court noted that high-end customers who purchase the plaintiff’s product are not likely to be confused with the defendant’s product at the point of sale. Hermés Int’l v. Lederer De Paris Fifth Avenue, Inc., 50 F. Supp.2d 212, 50 U.S.P.Q.2d (BNA) 1257 (S.D.N.Y. 1999).
D. "The Platters" Founder Maintains Superior Rights in the Group’s Name
The U.S. Court of Appeals for the Ninth Circuit concluded that the widow of a former member of the group "The Platters" was not entitled to use the name upon its assignment to her after her husband’s death. Affirming a district court opinion, the Ninth Circuit ruled that Paul Robi, who was a member of the group from 1954 to 1965, did not maintain rights to use the group’s name because, after leaving the group, he was not in a position to control the quality of its services. Upon his death, Robi assigned his rights in the group’s name to his widow, Martha, who has since managed a group also called "The Platters." Group member Herb Reed, who founded the original group and has consistently performed under "The Platters" name since 1953, sued Martha Robi for rights to the group’s name. In 1956, group members assigned their rights in the name to "The Five Platters." However, a California court later ruled that the assignment was invalid, and "The Five Platters" could not enjoin Robi’s use of the name. Provided with this history, the Ninth Circuit affirmed that, because the group’s assignment to "The Five Platters" was ineffective, group members maintained rights in the name. Moreover, because Reed consistently used the name and founded the group, he is entitled to superior rights in the name over Martha Robi. Robi v. Reed, 173 F.3d 736, 50 U.S.P.Q.2d (BNA) 1315 (9th Cir. 1999), petition for cert. filed, (No. 97-16909).
E. Transfer of Trademark "In Gross" Because Buyer and Seller Did Not Offer Similar Services
Sugar Busters L.L.C., authors of the book "SUGAR BUSTERS! Cut Sugar to Trim Fat," sued its former consultant, Ellen Brennan when she released a cookbook named "Sugar Bust For Life!" In the same year, Sugar Busters purchased from the "SUGAR BUSTERS" an Indiana store for diabetics trademark and relied upon its priority in the purchased mark. Brennan argued that, because Sugar Busters’ and the store’s services differed, the assignment was "in gross" (without the goodwill) and, therefore, invalid. The court held that, though the sale of physical inventory is not required in a trademark assignment, the assignment here was "in gross" because Sugar Busters’ authoring and publishing of books is not similar to the Indiana store’s services. Sugar Busters L.L.C. v. Brennan, 177 F.3d 258 (5th Cir. 1999).
V. INFRINGEMENT OF TRADEMARK RIGHTS
A. "Likelihood of Confusion" Upheld as Proper Standard for Infringement Liability
The U.S. Court of Appeals for the Third Circuit held that Victoria’s Secret, Inc. did not infringe on A&H Sportswear Inc.’s "MiracleSuit" trademark in its use of the mark "Miracle Bra." After being denied registration for the "Miracle Bra" mark to be used on bikini swimwear, Victoria’s Secret proceeded to introduce the line of swimwear anyway. Plaintiff sued for preliminary injunction and damages based on an infringement claim. The district court determined that "where a party moves into the territory of an established concern, the likelihood of confusion standards should be lowered to a possibility of confusion." However, the Third Circuit reaffirmed the Lanham Act "likelihood of confusion" standard, explaining that other circuits unanimously agree upon the "likelihood of confusion" standard in infringement cases, not the "possibility of confusion" standard adopted by the district court. Moreover, the Third Circuit affirmed a defense judgment for Victoria’s Secret, finding that the defendant’s prior knowledge of the "MiracleSuit" mark showed no evidence of bad faith or intent to infringe with its "Miracle Bra" swimwear mark, and that the two products were not likely to be confused because the consuming public would see that the products were not produced by the same source. A & H Sportswear Inc. v. Victoria’s Secret Stores, Inc., 166 F.3d 191 (3rd Cir. 1999); A & H Sportswear Inc. v. Victoria’s Secret Stores, Inc., 166 F.3d 197 (3rd Cir. 1999).
B. Product Distribution Confusion Raises Likelihood of Confusion Issue
In Carnival Brand Seafood Co. v. Carnival Brands, Inc., the U.S. Court of Appeals for the Eleventh Circuit held that, due to customer overlapping at the distribution stage, the likelihood of confusion prior to the products reaching end consumers raises fact questions for purposes of determining priority. Carnival Brand Seafood Co. (CBSC) purchased the "CARNIVAL" mark from two different companies who used the mark in conjunction with the distribution of fresh and frozen seafood. CBSC brought a trademark infringement suit against Carnival Brands Inc. (CBI), when CBI began offering pre-cooked seafood items. Although the district court determined that there may be some confusion among distributors, restaurants and retail outlets who receive boxes of the seafood with the mark, it discounted the potential confusion because the end consumers only see the products in seafood counters, not in connection with the mark. The Eleventh Circuit disagreed with the district court’s opinion, holding that such potential confusion is a factor to be considered. Carnival Brand Seafood Co. v. Carnival Brands, Inc., 187 F.3d 1307 (11th Cir 1999).
C. Trademark Infringement Found In Third Party’s Use of Cartoon Character Costume
The U.S. District Court for the Eastern District of New York found trademark infringement and a likelihood of confusion where a subcontractor impermissibly hired out performers wearing costumes of a cartoon character that was afforded trademark protected under the Lanham Act. Upon learning that defendant, It’s Entertainment, Inc., was using unlicensed Arthur costumes, the creator of the popular "Arthur" children’s cartoon characters sent a letter demanding that defendant cease and desist that practice and surrender the unlicensed costumes. Nonetheless, defendant continued use, and plaintiff sued for direct and contributory copyright and trademark infringement and for trademark dilution.
The court found that defendant’s subcontracting of the costumes to a third party constitutes contributory infringement if, indeed, the defendant knew that such use constituted infringement. The court decided that a distributor who intentionally induces another to infringe a trademark or who continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement is contributorily liable for any injury suffered. Ultimately, the court also found in favor of plaintiff on its famous mark dilution claim and granted plaintiff’s motion for a preliminary injunction. Brown v. It’s Entertainment, Inc., 34 F. Supp.2d 854, 49 U.S.P.Q.2d (BNA) 1939 (E.D.N.Y. 1999).
D. "Lean ‘N Tasty" Mark Is Not Likely To Be Confused With "Lean Cuisine" Mark.
The U.S. Court of Appeals for the Eighth Circuit held that the mark "Lean ‘N Tasty" is not likely to be confused with the mark "Lean Cuisine" for frozen entrees. The Court of Appeals affirmed summary judgment for the defendant after deciding that while both marks mean "dietary but tasty," they are not automatically confusingly similar simply because they incorporate identical prominent words. The standard test for trademark infringement, "likelihood of confusion," requires that the overall impression of marks must be evaluated. In deciding that the two marks are not likely to be confused, the court noted that they look and sound differently, the words "tasty" and "cuisine" have different meanings, the trade dress of the two products are visually distinct, and that consumers of low fat products are not likely to be confused because while they purchase quickly, they also purchase with care. Finally, the court discerned that plaintiff could not prevail based on a dilution argument because it could not prove that the "Lean ‘N Tasty" mark caused consumers to associate the "Lean Cuisine" mark with something other than Stouffer’s frozen entrees. Luigino’s, Inc. v. Stouffer Corp., 170 F.3d 827, 50 U.S.P.Q.2d (BNA) 1047 (8th Cir. 1999).
E. "Webzine" Version of Print Magazine Found Not to be Confusingly Similar
Plaintiff Primedia Internet Corp. ("Primedia") filed suit against Technology Marketing Corp. on the basis that the defendant’s magazine, called Internet Telephony, is confusingly similar to plaintiff’s magazine of the same name. The plaintiff has published its print magazine Telephony since 1901, and since June 1996, has produced an Internet version of its magazine, titled Internet Telephony. However, the Defendant had begun in March 1996 to produce a magazine also called Internet Telephony.
The plaintiff argued that its previous use of the name Telephony for print magazines had "transferred naturally" to its Internet Telephony mark. The U.S. District Court for the District of Kansas disagreed, refusing to enter injunctive relief for the plaintiff. The court was also unpersuaded by the plaintiff’s assertion that it was entitled to protection under the "family of marks" doctrine. In rendering its holding, the court considered the two entities use of different media to represent editorial contents, visual differences between the products, the fact that the parties attached different meanings to the same name, and the different channels of trade for the respective magazines. Primedia Intertec Corp. v. Technology Marketing Corp., 35 F.Supp.2d (BNA) 809, 50 U.S.P.Q.2d 1079 (D. Kan. 1998).
F. Court Finds Likelihood Of Confusion Between Internet Domain Name Registrant and Its Competitor
The U.S. District Court for Eastern District of Virginia found a likelihood of confusion between the Web site "washingtonspeakers.com" and a plaintiff’s trademark for "Washington Speakers Bureau." The defendant registered the domain name "washingtonspeakers.com" in 1998. However, the court found that the plaintiff’s mark had achieved secondary meaning prior to 1998 and that the defendant’s use of that domain name was likely to cause confusion as to the source or sponsorship of the Web site. Moreover, the court agreed with the plaintiff that the defendant showed a bad faith attempt to siphon business from its competitors. The court noted that use by both parties of the Internet as a facility for advertising increases the likelihood of confusion between the mark and the domain name. Accordingly, the court granted plaintiff judgment on its infringement claim. Washington Speakers Bureau, Inc. v. Leading Authorities, Inc., 33 F.Supp.2d 488, 49 U.S.P.Q.2d (BNA) 1893 (E.D. Va. 1999).
G. Enhancing and Modifying "Rolex" Watches Without Consent Constitutes Trademark Infringement
The U.S. Court of Appeals for the Fifth Circuit held that defendant Meece’s enhancing new "Rolex" watches and modifying used watches for sale to retail jewelers constituted trademark infringement and trademark dilution. Rolex asserted that adding non-genuine parts to genuine "Rolex" watches bearing original "Rolex" trademarks voided consumers’ warranties on the merchandise. "Meece, not Rolex, stood behind the watches, but the trademark suggested otherwise," the appellate court decided.
Also, the appellate court overruled the district court and determined that Rolex was entitled to treble damages and attorney’s fees because Meece’s $80,000 profits derived from enhancing Rolex watches was not de minimus. However, the appellate court overruled the district court’s determination that Meece’s use of a crown design was direct infringement of the Rolex trademarked five-pronged crown design analyzing that Rolex’s sophisticated customers could distinguish the crown design based on the "Made in Italy" stamp that appeared on Meece’s bracelets. Rolex Watch U.S.A. v. Meece, 158 F.3d 816, 48 U.S.P.Q.2d (BNA) 1589 (5th Cir. 1998), cert. denied, 67 U.S.L.W. 3716 (U.S. May 24, 1999) (No. 98-1674).
H. Reconditioned Watches May Not Bear "Rolex" Mark
Rolex Watch U.S.A. Inc., (Rolex) sued Micha Mottale d/b/a/ Michel Co. (Mottale), a company that reconditions and customizes used "Rolex" watches, for trademark counterfeiting and infringement. The district court, though finding Mottale’s use of the mark constituted counterfeiting, allowed Mottale to continue to use the "Rolex" mark so long as he also included an independent mark on the "non-Rolex" replacement parts and a disclaimer. On appeal, Rolex successfully argued that Mottale should not be allowed to use the "Rolex" mark on reconditioned watches, especially given that the repairs were so fundamental and extensive that "it would be a misnomer to call the resulting article by its original name." Rolex Watch U.S.A., Inc. v. Michel Co., 179 F.3d 704 (9th Cir. 1999).
I. Unauthorized Use of Certification Marks Constitutes Infringement
The U.S. District Court for the District of Maryland granted summary judgment for plaintiff National Board for Certification in Occupational Therapy, Inc. ("NBCOT") in its claim upon finding that defendant, a member of its trade organization, used its certification mark, without permission, by persons who did not meet the NBCOT’s requirements. In 1986, defendant American Occupational Therapy Association ("AOTA") separated from the American Occupational Therapy Certification Board ("AOTCB"), and AOTCB became the organization responsible for certifying occupational therapy practitioners. The AOTCB was later renamed the NBCOT, and per agreement between itself and the AOTA, NBCOT retained rights to the certification marks "OTR" and "COTA." NBCOT then entered into a license agreement whereby it allowed AOTA to use its certification marks on promotional materials in sales to qualified individuals. When, in 1996, NBCOT established more stringent recertification standards, AOTA opposed those standards and continued to permit individuals who are no longer NBCOT certified to continue use of the certification marks. In finding for plaintiff, the District Court of Maryland found that such use constitutes both breach of contract and is likely to cause confusion. National Board for Certification in Occupational Therapy, Inc. v. American Occupational Therapy Ass’n, 24 F. Supp.2d 494, 49 U.S.P.Q.2d (BNA) 1010 (D. Md. 1998).
J. Approval of Product, Not Approval to Use Logo, is Proper Likelihood of Confusion Test
Medic Alert Foundation United States Inc. (Medic Alert) brought suit against Corel Corp. (Corel) claiming Corel’s inclusion of Medic Alert’s logo in its clip art software constituted infringement and dilution. The court held that the appropriate likelihood of confusion test is not whether consumers will perceive that Medic Alert approved of Corel’s use of its logo, but rather whether consumers would understand Medic Alert endorsed Corel’s software. Given that Medic Alert’s logo was one in thousands in the clip art program, the court found there is no likelihood of confusion and therefore, that Corel did not infringe Medic Alert’s trademark. Medic Alert Found. United States, Inc. v. Corel Corp., 43 F. Supp.2d 933 (N.D. Ill., 1999).
K. "Generic Descriptive" Characterization Improper
A plaintiff gets a second chance to prove likelihood of confusion after a district court judge categorized its mark as "generic descriptive." Express Services Inc. sued Careers Express Staffing Services claiming a likelihood of confusion between its mark "Express Personnel Service" and Defendant’s use of "Career Express," both for employment agencies. It is well known in the trademark field that the four separate categories along the spectrum of distinctiveness are: (1) arbitrary, (2) suggestive, (3) descriptive and (4) generic. While the lines between each category are by no means clear, the third circuit held that characterizing the mark in this case as "generic descriptive" improperly influenced the district court’s likelihood of confusion determination and hence, its decision to dismiss the suit. Express Servs., Inc. v. Careers Express Staffing Servs., 176 F.3d 183 (3d Cir. 1999).
L. Despite Relationship Between Foreign and Domestic Owners of Mark, Gray Market Goods Enjoined Because of Claimed Differences Between Products
Defendants in this case purchased and distributed "Marlboro" cigarettes in the U.S. purchased from Phillip Morris Products (PMP), Phillip Morris Inc.’s (PMI) foreign manufacturer, distributor and owner of the "Marlboro" marks internationally. When PMI sued for trademark infringement, defendants argued that, because PMI and PMP are affiliated, the Lanham Act does not apply and that, even if the Lanham Act does apply, it did not infringe PMI’s trademarks because there was no material difference between domestic "Marlboros" and those foreign manufactured cigarettes it sold. The court held that, though the question of whether the Lanham Act applies where foreign and domestic trademark owners are affiliated is still unsettled, PMI showed a "better than negligible chance" that the Lanham Act does apply. The court then entered a preliminary injunction based on the differences between the domestic and imported cigarettes. Phillip Morris, Inc. v. Allen Distribs., Inc., 48 F. Supp.2d (BNA) 844 (S.D. Ind., 1999).
M. A.N.U.S. Held Merely Descriptive
William Nassau, who registered the name "American National Unimotorcyclists Association" and the acronym "A.N.U.S." in Florida, brought suit against his competitors, the Unimotorcyclists Society of America (USA), seeking protection of "Unimotorcyclists" and "Unimotorcyclists Society." The court held that "unimotorcycle" is generic for a "one-wheeled motorized vehicle" and, hence, not entitled to trademark protection. The court further held that "Unimotorcyclists Society," the name "American National Unimotorcyclists Association" and the acronym "A.N.U.S." were merely descriptive of Nassau’s organization. Although the court found that "American National Unimotorcyclists Association" and "A.N.U.S." had acquired secondary meaning, it declined to find infringement because of the weakness of Nassau’s marks, the dissimilarity of the marks, USA’s lack of intent to gain a competitive advantage and lack of actual confusion. Nassau v. Unimotorcyclists Soc’y of Am., Inc., 51 U.S.P.Q.2d (BNA) 1261 (M.D. Fla. 1999).
N. Different Sight and Meaning Between Two Marks Weigh Against Confusion
In King of the Mountain Sports Inc. v. Chrysler Corp., the U.S. District Court for the Tenth Circuit held that Chrysler’s mark "Jeep KING OF THE MOUNTAIN DOWNHILL SERIES," used to advertise ski races, was not confusingly similar to King of the Mountain Sports Inc.’s "KING OF THE MOUNTAIN" mark for outdoor and mountaineering accessories. The court based its decision on the difference in sight and meaning, or "visual impact" invoked by the marks. The court specifically looked at the contrast in lettering, color, the mountain outlines used as a background and Chrysler’s inclusion of a ski racer on the mountain outline to find that, although both marks include the phrase "KING OF THE MOUNTAIN," they were not likely to cause confusion. King of the Mountain Sports Inc. v. Chrysler Corp., 51 U.S.P.Q. 2d (BNA) 1349 (10th Cir. 1999).
O. Summary Judgment of No Infringement Remanded for Court to Consider All Likelihood of Confusion Factors
Following Epix’s request for removal of the "epix.com" domain name based on its incontestable EPIX mark, Interstellar Starship Services, Ltd. (ISS) was required pursuant to the dispute policy of Network Services Inc. (NSI) to seek a declaratory judgment of noninfringement. The district court entered such a judgment of noninfringement after concluding that the sophistication of Epix’s purchasers outweighed the sight, sound and meaning similarities as well as the use by both parties of the Internet as its primary marketing channel. On appeal, the U.S. Court of Appeals for the Ninth Circuit reversed and remanded the case for consideration of the remaining likelihood of confusion factors, especially given the great possibility of initial interest confusion presented in this situation. Interstellar Starship Services Ltd. v. Epix Inc., 51 U.S.P.Q.2d (BNA) 1535 (9th Cir. 1999).
VI. DEFENSES AND LIMITATIONS
A. Presumed Validity of Mark not Defeated by Meager Surname Evidence
Lane Capital, an investment company, sued Lane Capital Management (LCM), a stock portfolio management company providing investment advice, for Lanham Act violations when LCM refused to change its name. When the district court granted a summary judgment for Lane Capital, LCM argued on appeal that Lane Capital’s mark is "primarily merely a surname." The U.S. Court of Appeals for the Second Circuit held that because "lane" also has a dictionary definition, LCM failed to meet its burden of showing that the Mark is "primarily merely a surname. Further evidence presented by LCM that use of surnames is common in the financial services industry did not persuade the court. Lane Capital Mgmt., Inc. v. Lane Capital Mgmt., Inc., No. 98-9173, 1999 U.S. App. LEXIS 22965 (2d Cir. Sept. 22, 1999)
B. Use of Trademark For Customer Complaint Web Site Protected Under The First Amendment
The U.S. District Court for the Central District of California held that the Internet web site "Bally-Sucks" neither infringes nor dilutes the registered "Bally" trademark for health clubs. The court noted that the defendant prominently communicates on its Web site that it is not authorized by the trademark owner, and that the "Bally" trademark for health services and defendant’s use are not related. The court also noted that the defendant’s Web page prominently displays the term "unauthorized" to inform consumers that it is not related to the "Bally" services in concluding that no reasonably prudent consumer would believe that "Bally-Sucks.com" is an officially sponsored site of the Bally Total Fitness Holding Corporation, rejecting the plaintiff’s trademark infringement claim.
Turning to the dilution claim, the Plaintiff pointed out that the defendant maintains, on the same Web site as the "Bally-Sucks" reference, photos of nude males and information about the gay community, arguing that defendant’s use would cause the public to associate the "Bally" mark with pornography. The court also rejected this argument, noting that an essential element of a trademark dilution claim is commercial use: but defendant’s use of its Web site is not commercial. The court also rejected plaintiff’s tarnishment claims, recognizing that "at no time was any pornographic material contained on the actual "Bally -Sucks" page. Finally, the court noted the First Amendment prevents consumer commentary from being barred by a tarnishment claim. Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp.2d 1161, 50 U.S.P.Q.2d (BNA) 1840 (C.D. Cal. 1998).
C. False Advertising Suit Barred by Laches Even Within Limitations Period
When Turtle Wax Inc. advertised its car wash sprays as "wax" when they did not consist of wax, Hot Wax Inc. sued for false advertising. The U.S. Court of Appeals for the Seventh Circuit granted summary judgment for Turtle Wax on grounds of laches because Hot Wax was aware of Turtle Wax’s claims in 1970, but did not bring suit until 1997. The Court disagreed with Hot Wax’s argument that laches applies only in equitable relief cases and held that laches can arise even if the statute of limitations period has not run. Hot Wax, Inc. v. Turtle Wax, Inc., No. 98-3981, 1999 U.S. App. LEXIS 22344 (7th Cir. Sept. 15, 1999)
D. Insurance Coverage Denied In Service Mark Infringement Suit
The U.S. Court of Appeals for the Sixth Circuit affirmed that Traveler’s lawfully refused to indemnify a defendant for a service mark infringement suit filed against it by SF Hotel Co. The underlying policy guaranteed that the insurer would defend and indemnify Show Lodge for claims of "advertising injury" related to advertising its goods or services. The policy defined "advertising injury" as including misappropriation of advertising ideas or style of doing business, as well as infringement of copyright, title or slogan. The court rejected the insured’s assertion that the policy was vague and therefore open to interpretation, noting in its opinion that there is no express reference to trademark infringement in the policy that would require Travelers to indemnify the plaintiff. Sholodge, Inc. v. Traveler’s Indem. Co., 168 F.3d 256, 49 U.S.P.Q.2d 1694 (6th Cir. 1999).
E. Use of Trademark at End of Abstract Found to Be Fair Use
The U.S. Court of Appeals for the Second Circuit ruled that the use of a trademark at the end of an abstract in the manner of a note or bibliography is fair use and does not constitute trademark infringement. The appellate court also observed that, while defendant Comline’s behavior in other respects did constitute copyright infringement, there is no basis for a finding of bad faith in its use of plaintiff’s mark to identify plaintiff’s work. Nihon Keizai Shimbun, Inc. v. Comline Bus. Data, Inc., 166 F.3d 65, 49 U.S.P.Q.2d (BNA) 1516 (2d Cir. 1999).
F. Incontestable Marks Not Protected From Functionality Defense
Littlefuse, Inc., a manufacturer of "plug-in blade fuses for automobiles," owns two incontestable registrations as trade dress for the shape of its fuses. After receiving a cease and desist letter from Littlefuse, Wilhelm Pudenz GmbH (Pudenz), who also manufactures plug-in blade fuses, sought a declaratory judgment of non-infringement and argued that Littlefuse’s registrations were functional. While it is true, as Littlefuse argued, that functionality is not one of the enumerated defenses in § 33(b) of the Lanham Act, the U.S. Court of Appeals for the Eleventh Circuit refused to read the statute so narrowly. The court reasoned that, since functionality is not expressly referred to in the Lanham Act, it was not purposefully excluded from the list of defenses to incontestability. Also, given the absence of legislative history and congressional intent to prohibit functionality as an incontestable defense, the court found that the list is not exhaustive and that functionality is a proper defense to incontestability. Wilhelm Pudenz, GmbH v. Littlefuse, Inc., 177 F.3d 1204 (11th Cir. 1999).
G. Strength of Mark is Not as Relevant in Parody Case
When the "San Diego Chicken" beat up "Barney" in a comic skit, the purple dinosaur’s creator, Lyons Partnership L.P. (Lyons) was not laughing. Lyons sued the "San Diego Chicken" creator Ted Giannoulas for copyright and trademark infringement. Although Lyons argued that the skit was an attempt to profit from "Barney’s" success rather than a parody, the court disagreed. The court further held that, while a strong mark is advantageous for a likelihood of confusion and infringement claim, a strong mark makes a situation like the one presented here even more believable as a parody. Lyons Partnership v. Giannoulas, 179 F.3d 384 (5th Cir. 1999).
H. Four Years Held Sufficient for Laches
Hubbard Feeds Inc. (Hubbard) owns an incontestable trademark for the configuration of a half-barrel container used to package its animal block feed products. When Hubbard realized Animal Feed Supplement Inc. (AFS) continued to sell animal block feed in half-barrel containers after expiration of a license between the parties, it waited over four years before bringing suit. The U.S. Court of Appeals for the Eighth Circuit held that four years is sufficient for laches and that Hubbard was not likely to succeed on its infringement claim because: (1) it presented no evidence of actual confusion, (2) AFS places a large label on its barrels, and (3) paints them a different color. Hubbard Feeds Inc. v. Animal Feed Supplement Inc., 182 F.3d 598 (8th Cir. 1999).
I. Zoning Ordinance Limitation on Outside Sign Color Does Not Violate Lanham Act
Lisa’s Party City Inc. sued the Town of Henrietta under § 39(b) of the Lanham Act, which prohibits requiring "alterations" of registered marks, when it was forced to comply with a local ordinance allowing only red signs in a particular plaza. The U.S. Court of Appeals for the Second Circuit held that the "red sign only" requirement does not force trademark owners to alter their actual marks. Rather, the ordinance merely controls the outside display in this specific plaza, leaving trademark owners free to use their marks in every other presentation, including billboards, point-of-sale displays, advertisements, etc. Lisa’s Party City Inc. v. Town of Henrietta, 51 U.S.P.Q.2d (BNA) 1523 (2nd Cir. 1999): Note: This holding directly contradicts the Ninth Circuit’s holding in Blockbuster Videos Inc. v. Tempe, 146 F.3d 1245 (9th Cir. 1998).
VII. TRADE IDENTITY LAW
A. False Advertising/Unfair Competition
1. False Claims of EPA Approval Actionable Under § 43(a)
Cottrell Ltd. sued Biotrol International Inc. and Pro-Dex Inc. (collectively Biotrol) for false advertising when Biotrol claimed on its cleaning product labels that the product was approved by the Environmental Protection Agency (EPA). Although Cottrell’s first claim that Biotrol violated an EPA statutory provision was appropriately dismissed because only the EPA can enforce the provision, the U.S. Court of Appeals for the Tenth Circuit held that Cottrell alleged facts sufficient to maintain a false advertising claim under the Lanham Act. Cottrell, Ltd. v. Biotrol Int’l., Inc., 1999 U.S. App. LEXIS 21645 (10th Cir. September 10, 1999).
2. Section 43(a) Allows Only Direct Competitors or Their Surrogates to Stand as Plaintiffs in False Advertising Claims.
The U.S. Court of Appeals for the Third Circuit held that an automotive parts retailer lacked standing to bring a Section 43(a) false advertising claim against a manufacturer that produced competing products. Although the retailer based his standing on behalf of "all persons in the United States who, at any time between when Slick-50 was marketed to the public, up to the present, have offered for sale, either as retailers or wholesalers, motor oil products that compete directly with Slick-50," the Court of Appeals affirmed the district court’s dismissal of the complaint on the grounds that the plaintiff, lacked standing under the Lanham Act false advertising statutes. The Court of Appeals also pointed out that traditional standards for standing generally require: (1) that a litigant assert its own legal interest, (2) that courts refrain from adjudicating abstract questions amounting to generalized grievances, and (3) that the plaintiff’s asserted interest be within the zone of interest intended to be protected. Conte Bros. Auto v. Quaker State-Slick 50, Inc., 165 F.3d 221, 49 U.S.P.Q. 2d (BNA) 1321 (3d Cir. 1998).
3. Competitor’s Claims Regarding Product Deficiencies Constitute "Commercial Speech"
Porous Media Corp., a producer of disposable box filters, sued Pall Corp., its competitor, for false advertising and libel related to an alert Pall sent to Porous’ customers regarding the deficiencies in Porous’ filters. The U.S. Court of Appeals for the Eighth Circuit affirmed the district court’s holding that, because there was no evidence that Pall acted with malice, Porous’ libel claim failed. The Eighth Circuit further held that Pall’s conduct fell under the Lanham Act as it was "commercial speech" and was sufficiently circulated. Porous Media Corp. v. Pall Corp., 173 F.3d 1109 (8th Cir., 1999.
4. Improper Credit on Recording Without Injury Did Not Violate Lanham Act
Wanda King, daughter of late blues musician Freddie King, brought suit against Roy C. Ames after terminating a license between them for three of her father’s recordings. She claimed, among other things, that Ames’ improper credit as a producer on the recordings constituted false advertising. The U.S. Court of Appeals for the Fifth Circuit held, though, that absent evidence that potential consumers were deceived or that a real producer was harmed, Ames’ improper credit did not violate the Lanham Act. King v. Ames, 179 F.3d 370 (5th Cir. 1999).
5. Improper Credit on Recording Without Injury Did Not Violate Lanham Act. No Lanham Act Violation for True-But-Misleading Advertising,, if No Actual Deception
The American Council of Certified Podiatric Physicians and Surgeons (ACCPPS) sued the American Board of Podiatric Surgery Inc. (ABPS) and the American Podiatric Medical Association (APMA) under the Lanham Act for false advertising arising from ABPS’ and APMA’s advertising statements. In order to collect money damages for false advertising under the Lanham Act, Plaintiff must show that Defendant’s statements were actually false or true, but misleading. If the statements are true, but ambiguous or misleading, Plaintiff must further show actual deception. The U.S. Court of Appeals for the Sixth Circuit found AMPA’s and ABPS’ statements about the ACCPPS, though misleading, not to be a violation of the Lanham Act, as ACCPPS did not present evidence of actual deception because the intended audience, including hospital administrators, managed care organizations and insurance companies, is considered sophisticated. American Council of Certified Podiatric Physicians and Surgeons v. American Board of Podiatric Surgery Inc., 51 U.S.P.Q.2d (BNA) 1481 (6th Cir. 1999).
6.
Survey Evidence to Prove Implied Falsehood Falls Under Present State of Mind Exception to HearsaySchering Corp., manufacturer of Claritin, sued Pfizer Inc., promoter of Zyrtec, for false advertising when, through surveys, Schering determined that Pfizer was misrepresenting Zyrtec’s sedation levels. The district court denied preliminary injunctive relief on the ground that the submitted survey evidence was inadmissible as hearsay. The U.S. Court of Appeals for the Second Circuit vacated and remanded the district court’s judgment, holding that surveys are admissible to show a pattern of implied falsehoods under the "present state of mind" exception to the hearsay rule. The court further held that memory surveys, used to prove remembered facts, are admissible under the residual hearsay rule to prove literal falsehoods. Schering Corp. v. Pfizer Inc., 51 U.S.P.Q.2d (BNA) 1705 (2d Cir. 1999).
B. Dilution
1. Niche Market Fame Enough to Base Dilution Claim
Syndicate Sales, Inc., producer of plastic baskets for floral bouquets, sued Hampshire Paper Corp. ("Hampshire") for dilution and trade dress infringement when Hampshire began offering plastic baskets similar to Syndicate’s for use in the wholesale and retail florist market. While the U.S. Court of Appeals for the Seventh Circuit affirmed the district court’s grant of summary judgment in favor of Hampshire on the trade dress infringement claim, it held that the district court erred on Hampshire’s dilution claim in finding that Syndicate’s trade dress was not famous due to the narrowness of the market. Although "niche" market fame is generally considered insufficient in cases where the parties are using the marks in different markets, where the marks are being used in the same market, Plaintiff’s distinction in such a "niche" market is a factor which should be balanced in the fame determination. Syndicate Sales, Inc. v. Hampshire Paper Corp., 52 U.S.P.Q. 2d (BNA) 1035 (7th Cir. 1999).
2. Tests for Dilution Are More Rigorous Than Tests for Trademark Infringement
The U.S. Court of Appeals for the Sixth Circuit affirmed summary judgment for defendant Sewage Aeration Systems, holding that the marks "Jet" and "Aerob-A-Jet" are not similar enough to cause confusion in the marketplace. In rejecting the plaintiff’s dilution claim, the court reasoned that "the purpose of anti-dilution laws is to provide a narrow remedy when the similarity between two marks is great enough that even a non-competing, non-confusing mark is harmful to the senior user." Moreover, the degree of similarity required for a dilution claim is greater than that required in a likelihood of confusion analysis. The Sixth Circuit Court determined that, while the parties both share the term "Jet" in their respective marks, the most prominent feature of the "Aerob-A-Jet" mark is its beginning "Aerob-A" portion. The Court also distinguished between the two marks visually and verbally in finding for defendant. Jet, Inc. v. Sewage Aeration Systems, 165 F.3d 419, 49 U.S.P.Q.2d (BNA) 1355 (6th Cir. 1999).
3. Federal Dilution Act Does Not Apply Retroactively To Marks Where Began Use Before The Statute Was Enacted
The U.S. District Court for the Northern District of Illinois granted summary judgment to dismiss Nike, Inc.’s dilution claim suit against Nike Securities L.P. Nike, Inc. filed suit to prevent the defendant from continuing to use the "Nike" name. After noting a split in authority between courts that retroactively give effect to the Federal Dilution Act and those that decline to do so, the court held that because the defendant had used the mark as early as August, 1993, before the federal dilution act’s effective date of January 1996, the statute could not fairly be used to force the defendant to abandon its investment in the mark. Nike, Inc. v. Nike, Sec. L.P., 50 U.S.P.Q.2d (BNA) 1202 (N.D. Ill. 1999).
4. Actual Dilution, But Not Mere Likelihood of Dilution, Is Protected Under Section 43(c) of the Lanham Act
In Ringling Bros. dispute against the State of Utah based on its claim that its mark, "The Greatest Show On Earth" is diluted by Utah’s mark "The Greatest Snow On Earth," the U.S. Court of Appeals affirmed the district court’s rejection of the plaintiff’s federal dilution claim the Fourth Circuit rejected the plaintiff’s contention that mere "likelihood of dilution" is insufficient grounds to assert a claim against a defendant under Section 43(c) of the Lanham Act. The court also held that Section 43(c) requires proof of harm to a mark’s selling power, not merely to its "distinctiveness" alone. The Fourth Circuit suggested three general means of proving actual harm to the senior mark’s selling power, including: (1) proof of an actual loss of revenues and of disproving other possible causes unrelated to the dilution; (2) a consumer survey designed to demonstrate both mental associations and consumer impressions from which harm can be inferred; and (3) contextual factors such as the junior mark’s exposure, mark similarities, and the firmness of the senior mark’s hold. Ringling Bros.-Barnum and Bailey Combined Shows, Inc. v. Utah Div. of Travel Dev., 170 F.3d 449 (4th Cir. 1999), cert. denied, 1999 U.S. LEXIS 6565 (U.S. Oct. 4, 1999)
5. Unauthorized Use of "aol.com" Header in Bulk E-Mail Messages Constitutes Dilution and False Designation
The U.S. District Court for the Eastern District of Virginia held that a defendant’s actions constituted false designation and trademark dilution through tarnishment when he sent America Online ("AOL") customers unsolicited bulk e-mail advertisements, known as "spam mail," that included the words "aol.com" in the message header. AOL complained to the court that it was forced to defend its network against defendant’s messages after receiving more than 50,000 complaints from its subscribers. In finding for the plaintiff, the district court determined that the "aol.com" headers led message recipients to believe that the source of the messages was AOL, and that the company sponsored or approved of the messages. America Online, Inc. v. IMS, 24 F. Supp.2d 548, 48 U.S.P.Q.2d (BNA) 1857 (E.D. Va. 1998).
6. Standard of Fame and Distinctiveness for FTDA Protection
Higher Than for Trademark Infringement Protection
Analyzing the Federal Trademark Dilution Act, the U.S. Court of Appeals for the First Circuit ruled that federal dilution protection requires a higher standard of strength and distinctiveness for the plaintiff’s mark than that required for trademark infringement protection. The First Circuit further held that a plaintiff, to prevail in a federal dilution claim, must prove non-functionality and that its mark has achieved the significant level of fame and national renown that Congress intended under the Act. Applying these standards, the court affirmed the district court’s ruling that the plaintiff’s faucet product failed to meet this threshold, holding it is not inherently distinctive pursuant to the proper test for inherent distinctiveness: "whether the design, shape or combination of elements is so unique, unusual or unexpected in this market that one can assume without proof that it will automatically be perceived by customers as an indicator of origin - a trademark." I.P. Lund Trading ApS v. Kohler Co., 163 F.3d 27, 49 U.S.P.Q.2d (BNA) 1225 (1st Cir. 1998).
7. No "Actual Harm" Required under FTDA
Pepperidge Farm, maker of "Goldfish" crackers, was not required in its dilution suit against Nabisco Inc. to prove actual harm from Nabisco’s proposed use of a fish-shaped cracker in conjunction with its "CatDog" crackers. The U.S. Court of Appeals for the Second Circuit, in affirming a preliminary injunction against Nabisco, applied a multi-factored test much like the likelihood of confusion analysis and, rejecting Nabisco’s argument, found no reason to refuse to allow a dilution action against competing products. Finally the court disagreed with the Fourth Circuit’s decision in Ringling Bros.-Barnum &Bailey Combined Shows Inc. v. Utah Division of Travel Dev., 170 F.3d 449, 50 U.S.P.Q.2d 1065 (4th Cir. 1999), that proof of dilution requires actual harm, arguing that such a requirement would harm all those involved since the senior user would have to wait for proof of loss and the junior user would have to actually launch its new product without knowing whether its proposed mark is permissible. Nabisco, Inc. v. PF Brands, Inc., 51 U.S.P.Q.2d (BNA) 1882 (2d Cir. 1999).
8. No Per Se Dilution for Use of Another’s Mark as a Domain Name
Hasbro Inc., owner of the "CLUE" trademark, sued Clue Computing Inc. for trademark infringement and dilution for Clue Computing Inc.’s use of "clue.com" as its Web site. The U.S. District Court for the District of Massachusetts held that Clue Computing Inc.’s valid use as a domain name variant of Hasbro’s "CLUE" mark does not constitute trademark dilution per se. Refusing to recognize use of a trademark as a domain name as a third "per se dilution" type (in addition to: 1) tarnishment and 2) dilution), the court held that a dilution plaintiff must show more than similarity of marks and fame of the senior mark, which Hasbro failed to do, in order to prove dilution. The court further held that, although Clue Computing Inc. began using "clue.com" before the Federal Trademark Dilution Act became effective, applying the statute to Clue Computing Inc. was not impermissibly retroactive. Hasbro, Inc. v. Clue Computing, Inc., No. 97-10065-DPW, 1999 U.S. Dist. LEXIS 13848 (D. Mass. Sept. 2, 1999)
9. Dilution Act Plaintiff Must Show More Than Distinctiveness To
Prove Existence Of A Famous Mark
Under the Dilution Act, to be entitled to injunctive relief, a Plaintiff must prove: "(1) its mark is famous, (2) the defendant is making commercial use of the mark in commerce, (3) the defendant’s use began after the plaintiff’s mark became famous, and (4) the defendant’s use presents a likelihood of dilution." The U.S. Court of Appeals for the Ninth Circuit held that, though Avery Dennison Corp. had secondary meaning in its "AVERY" and "DENNISON" marks, it did not prove its marks were famous and, therefore, was not entitled to an injunction against Jerry Sumpton, who registered the names "avery.net" and "dennison.net" through his Internet e-mail supplier company. The court further held that because Sumpton registered the names for their surname purposes, and not to capitalize on the trademark status of the marks, he did not "use" the marks in commerce as required to find dilution under the Dilution Act. Avery Dennison Corp. v. Sumpton, 51 U.S.P.Q.2d (BNA) 1801 (9th Cir. 1999).
10. Use of Name "Dairy Queens" for Movie Title Enjoined as Trademark Dilution Violation
The American Dairy Queen Corp. ("Dairy Queen") brought suit against New Line Productions, Inc. to enjoin the defendant’s use of the title Dairy Queens for a movie satirizing beauty contests in rural Minnesota. The court found that plaintiff met the burden of irreparable harm required for a preliminary injunction because the film contains humor that might be offensive to some audiences. Based upon plaintiff’s assertion that its mark could be diminished by defendant’s use, the court also found that the movie’s proposed use of the "Dairy Queen" name would tarnish the plaintiff’s mark. By contrast, a loss to the defendant would only require finding a new title for its movie at a point when no marketing had yet occurred.
Although the Defendant asserted that the "Dairy Queen" mark is descriptive and that the Dairy Queen restaurants do not sell queens, the court reasoned that because the chain of restaurants and the Dairy Queens proposed movie name sound and look alike, consumers would probably be confused as to the film’s source. Moreover, the court was unpersuaded by defendant’s claim that it is entitled to use the mark under a First Amendment argument, deciding that defendant’s right to First Amendment expression was outweighed by the likelihood that the two marks would be confused by the public. American Dairy Queen Corp. v. New Line Productions, Inc., 35 F.Supp.2d 727 (D. Minn. 1998).
C. Trade Dress
1. Patent Does Not Prohibit Trade Dress Protection Unless Configuration is Functional
The U.S. Court of Appeals for the Federal Circuit, in deciding to apply its own law to determine whether patent law forecloses Lanham Act and Iowa state trademark claims, held that disclosures in a patent do not prohibit trade dress protection for a product configuration unless the configuration is utilitarian or functional. On this basis, the Federal Circuit held that, even though a curved winch post for trailers was mentioned in a plaintiff’s patent claim limitation, there was no proof that the post is functional, making it eligible for trade dress protection. Midwest Industries, Inc. v. Karavan Trailers, Inc., 175 F.3d 1356 (Fed.Cir. 1999).
2. Consistent Look Required for Trade Dress Protection for "Family of Products"
The U.S. District Court for the District of New Jersey held that in order to receive trade dress protection, a family of products must have a consistent overall look, even though slight variations in package design are acceptable. Applying this test, Plaintiff, Rose Art Industries Inc., was denied trade dress protection for its claimed family of marks because consumers cannot conclude that the product comes from a single source because variations in the plaintiff’s package design represent "a kaleidoscope of color combinations and design formats." Citing Landscape Forms, Inc. v. Columbia Cascade Co., 113 F.3d 373, (2d Cir. 1997), the district court, also held that to receive trade dress protection, distinctive characteristics of a design, must convey a single and continuing commercial impression, the trade dress must be inherently distinctive, nonfunctional, and not likely to be confused with similar products. Rose Art Industries Inc. v. Raymond Geddes & Co., 31 F. Supp.2d 367 (D. N.J. 1998).
3. Cookbook and Children’s Book Trade Dress Not Sufficiently Unusual or Unexpected to be Perceived as Indication of Source
Despite Plaintiff Publications International Ltd.’s assertion that its cookbook’s size, gilded edges of its pages, and book covers are trade dress features, however, the U.S. Court of Appeals for the Seventh Circuit held that these features are functional and are likely to be shared by different producers of the same product. Accordingly, those functional features cannot be used as an indication of source for any one particular product because a producer cannot, in the name of trade dress protection, prevent competitors from making their products visually appealing. The court applied the same functionality analysis to the plaintiff’s children’s books, holding that they were no more distinctive than its cookbooks. Publications Int'l Ltd. v. Landoll, Inc., 164 F.3d 337, 49 U.S.P.Q.2d 1139 (7th Cir. 1998), cert. denied, 119 S. Ct. 1498 (U.S. Apr. 26, 1999) (No 98-1492).
4. Copying Seersucker Children’s Clothing Line Held to be Trade Dress Infringement
The U.S. Court of Appeals for the Second Circuit held that Wal-Mart infringed on Samara Bros. design for a line of clothing that features seersucker fabric. In support of the court’s decision, it observed that the Samara Bros. consistent design for its clothing line is inherently distinctive and created a trade dress image. Specific design elements of this trade dress include: (1) seersucker fabric, (2) large gold appliqués, (3) large collars with the appliqué generally integrated into the garment’s collar and pockets, (4) general absence of printed images, black outlines, alpha numeric characters, three dimensional features or heavy ornamentation frequently used in children’s clothing, and (5) full-cut one-piece conservative bodies. The Second Circuit noted that there was ample evidence to support a finding that Wal-Mart’s marketing of a knock-off line of children’s clothing that is very similar to the Samara Bros. Clothing line was willful piracy with an intent to deceive consumers as to source. Samara Bros. Inc. v. Wal-Mart Stores Inc., 165 F.3d 120 (2d Cir. 1998), cert. granted in part, 1999 U.S. Lexis 6583.
5. Incontestable Trade Dress Registration Can Be Canceled as Generic
The U.S. Court of Appeals for the Federal Circuit remanded a case to the TTAB for a determination of whether defendant’s trade dress is capable of serving as a source identifier, or, in the alternative, whether it is vulnerable to cancellation based upon genericness. Defendant Fred’s S.A. ("Fred’s") received federal trademark registration in 1990 for a metallic nautical rope design used on clocks, watches, and precious metal jewelry. In May 1995, Fred’s filed a Section 7 and 15 Affidavit, which includes a statement that no proceeding involving its rights at issue was pending in either the PTO or the courts. In June 1995, Plaintiff petitioned the PTO to cancel Fred’s registration asserting that Fred’s statements in its incontestability declaration were fraudulent and that the mark was generic.
By definition, something that is generic cannot serve as a trademark because it cannot function as an indication of source. The Federal Circuit held that the term "generic name" had to be read expansively to encompass not just words, but anything that failed to serve as an indicator of source, such as names, words, symbols, devices, or trade dress. The appellate court also affirmed the Board’s holding that Fred’s did not commit fraud in filing its trade dress incontestability statement because, at the time that it filed it’s incontestability statement, no challenge to its registration existed and defendant was not required to keep the PTO informed of subsequent developments. Sunrise Jewelry Mfg. Corp. v. Fred S.A., 175 F.3d 1322, 50 U.S.P.Q.2d (BNA) 1532 (Fed. Cir. 1999).
6. Intentional Copying of Non-Functional Color Scheme Constitutes Trade Dress Infringement
The U.S. District Court for the Eastern District of Virginia held that Black & Decker’s yellow and black color scheme for power tools is non-functional, has secondary meaning, and was infringed by competing power tools. In presenting its argument that its color scheme had acquired secondary meaning, Black & Decker presented: (1) survey evidence showing that eighty-five percent (85%) of professional tool users polled identified the yellow and black colors with Black & Decker products; (2) evidence of intentional copying; and (3) introduced instances of actual consumer confusion to confirm likelihood of confusion between the two companies’ products.
The district court noted that even without the poll evidence, proof that Defendant Protek intentionally and directly copied the Black & Decker power tool color scheme created a presumption of secondary meaning. In rejecting the defendant’s defense, the Court held out that laches may not be invoked to deny injunctive relief for the plaintiff there is strong proof where the defendant’s infringing use is likely to cause confusion. Black & Decker (U.S.) Inc. v. Pro-Tech Power, Inc., 26 F.Supp.2d 834 (E.D. Va. 1998).
7. Plaintiff Enjoined from Using Famous Fish Shape for Cheese Cracker
The Southern District Court of New York rejected a declaratory judgment action brought by PF Brands, Inc. asserting that it has the right, under the Lanham Act, to use a fish shape in making its cheesecake cracker product because the shape is descriptive, explaining that the cracker in a fish shape would be descriptive if, for example, the cracker were fish flavored. The judge explained, however, that the goldfish shape is essential to the existing Pepperidge Farm product that already features a fish shape. Noting the standard for dilution under the Federal Trademark Dilution Act, the court determined that blurring occurred between the plaintiff’s and the defendant’s goods because the two products are substantially similar and because the Pepperidge Farm’s goldfish is "famous and distinctive." Also, the court noted that the plaintiff could have exercised options to create the cracker in shapes other than that of a fish. Finally, in enjoining Pepperidge Farm Brands, Inc. from selling the fish shaped product in its present form, the court considered the five month time span between when the plaintiff decided to use the fish shape in its product line and the date when it filed its declaratory judgment action against defendant. Nabisco, Inc. v. PF Brands, Inc., 50 F. Supp.2d 188 (S.D.N.Y. 1999); aff’d 51 U.S.P.Q.2d (BNA) 1882 (2d Cir. 1999).
8. Color Coating For Eyeglass Colors And Styles Denied Trade Dress Protection
The Federal Circuit Court rejected an assertion that the color coating system used by Magnivision’s hangered tag labels is worthy of trade dress protection. The court decided that, because Magnivision changes its coloring system periodically, it lacks "a stable appearance" and accordingly, no reasonable juror could conclude that Magnivision’s stripe of color is a trade dress which has acquired secondary meaning. The court also ruled that defendant VSI’s "Magna.Dot" mark does not infringe the mark "Magnivision." The court based that ruling upon differences in the marks, absence of actual confusion, the absence of evidence that VSI intended to copy Magnivision’s mark, and the descriptiveness of the "Magnivision" mark. Al-Site Corp. v. VSI Int'l, Inc., 174 F.3d 1308, 50 U.S.P.Q.2d (BNA) 1161 (Fed. Cir. 1999).
9. Classifying Organization’s Advertising Was Not False
Blue Dane Simmental Corp. (Blue Dane) claimed the American Simmental Association (ASA) falsely advertised certain animals as "fullblood." Because: (1) courts give deference to classifying organizations’ decisions, considering them conclusive; (2) the classifying rules were not illegally adopted; and (3) Blue Dane presented no evidence of actual deception, the court held that ASA’s ads were not implicitly false. Blue Dane Simmental Corp. v. American Simmental Association, 178 F.3d 1035 (8th Cir. 1999).
VIII. JURISDICTION AND REMEDIES
A. Merely Posting Information on a Website Insufficient Grounds to Exercise Jurisdiction Over a Non-Resident Defendant
The U.S. District Court for the Southern District of New York held that a California resident did not subject himself to New York’s long-arm jurisdiction simply by registering a domain name. The plaintiffs asserted that the defendant had attempted to extort them by asking a $15,000 selling price for a domain name related to plaintiff’s product, thus subjecting him to New York’s jurisdiction. In support of its extortion claim, plaintiffs asserted that the defendant did not intend to use the Web site for legitimate business purposes, as evidenced by the fact that the Web site was not operational, but was merely registered to the defendant’s name. Reasoning that likelihood of jurisdiction is directly proportionate to the nature and quality of commercial activity that an entity conducts over the Internet, the court decided that merely posting information on a Web site does not create jurisdiction over an out-of-state defendant. However, defendants who purposefully use the Internet to reach out to audiences beyond their state do avail themselves to jurisdiction in foreign states.
The court further held that the Panavision Int'l L.P. v. Toeppen, 141 F.3d 1316 (9th Cir. 1998) decision was not directly relevant in the instant matter. In the Panavision case, the Ninth Circuit had applied an "effects test" to find jurisdiction over a "cyber squatter" defendant. However, the court noted that under New York law, in order to exercise jurisdiction over a defendant based on an out-of-state tort, the defendant must either regularly conduct or solicit business in the state or derive substantial revenue from interstate and international commerce. The defendant herein had not derived any revenue from the Web site whatsoever. The court also recognized that unlike the defendant in the Panavision decision, the defendant in the instant case was not sufficiently shown to be a "cyber pirate"; having registered only four domain names with only a single name being famous. By contrast, the defendant in Panavision, had registered over 100 domain names for famous trademarks. K.C.P.L. Inc. v. Nash, 49 U.S.P.Q.2d (BNA) 1584 (S.D.N.Y. 1998).
B. No In Rem Actions Against Domain Names
Porsche Cars North America Inc. (Porsche) sued 128 domain names that were variants of its "Porsche" and "Boxster" trademarks under the Trademark Dilution Act. Two of the defendants, "Porsche.net" and "Porscheclub.net" argued, among other things, lack of jurisdiction. After analyzing the Trademark Dilution Act, the court held that in rem proceedings are not permitted against domain names themselves, and that Porsche must obtain personal jurisdiction for the owners of the marks. Porsche Cars North America v. Porch.com, 51 F.Supp.2d 707 (E.D. Va. 1999).
C. Competitor's Failure to Conduct A Full Trademark Search Is Insufficient Grounds for Willful Infringement Claim
The U.S. Court of Appeals for the Third Circuit held that a finding of willful infringement through deliberate indifference to a trademark owner’s rights requires more than a defendant’s mere failure to conduct a full trademark search. In making its determination, the court looked at three factors. First, the plaintiff failed to establish that the defendant knew it was copying the plaintiff’s name. Second, the plaintiff’s trademark had not been registered. And third, there is no evidence that defendants’ attorneys had advised them to conduct a full trademark search prior to using the mark. Moreover, the court ruled that the defendant’s refusal to discontinue the use of the trademark name after receiving a cease and desist letter did not constitute willful infringement. Ultimately, the court also denied plaintiff’s request for profits and treble damages. Securacomm Consulting Inc. v. SecureComm Inc., 166 F.3d 182, 49 U.S.P.Q.2d 1444 (3rd Cir. 1999).
D. Required to Enjoin Innocent Infringement by Magazine to Actual Malice Standard
In a trademark infringement and dilution suit brought by the National Basketball Association Properties (NBAP), Untertainment Records LLC (Untertainment) was enjoined from using an altered NBA logo in which the famous silhouetted basketball player of the NBA logo is holding a gun with the words "Sports, Drugs, & Entertainment." Untertainment ran the ad in Blaze magazine, published by Vibe Ventures LLC. Although the court granted injunctive relief based on its dilution and infringement analysis, it denied NBAP’s motion to recall the magazine page on which the ad appeared. After balancing the hardships of a recall, the court found Vibe to be an innocent infringer because its behavior had not reached the "actual malice’ standard of scrutiny. NBA Properties v. Untertainment Records LLC, No. 99 Civ. 2933 (HB), 1999 U.S. Dist. LEXIS 7780 (S.D.N.Y. May 25,1999).
E. Notice of Registration Not Required for Statutory Damages in Counterfeiting Suit
Playboy Enterprises Inc. (Playboy) was awarded statutory damages in its trademark counterfeiting suit against Universal Tel-A-Talk Inc. (Universal), whose Web site included sexually explicit pictures classified by the term "Bunny," one of Playboy’s trademarks. Universal argued that, because Playboy failed to include a registration symbol on its Web site, Playboy was not entitled to statutory damages under 15 U.S.C. 1117(c). Although lack of notice may rule out an award of damages in an infringement suit, there is no notice requirement in 15 U.S.C. 1114(1)(a), which acknowledges that counterfeiting is a form of infringement. Playboy Enters., Inc. v. Universal Tel-A-Talk Inc., No. 96-6961, 1999 U.S. Dist. LEXIS 6124 (E.D. Pa. Apr. 26, 1999).
F. Court May Use Neutral, Secular Principles to Resolve Religious Order’s Trademark Dispute
Maktab Tarighe Oveyssi Shah Maghsoudi Inc. (Shah Maghsoudi) sued Ali and Nahid Kianfar, former members of the Sufi Islamic religious order, for trademark infringement after Defendants began using Shah Maghsoudi’s marks and claiming they are the successors to the religious order. While civil courts may not, under the First Amendment, decide debates of religious doctrine, they may apply neutral, secular principles of property law, such as the trademark infringement principles. Maktab Tarighe Oveyssi Shah Maghsoudi Inc. v. Kianfar, 179 F.3d 1244 (9th Cir. 1999).
IX. INTERNET ISSUES AND REGISTRATION
A. Domain Name Registrant Fails in Claim That NSI and Trademark Owner Engaged in Civil Conspiracy
The U.S. District Court for Northern District of California ruled in an intentional interference with business relations suit against Defendant Network Solutions, Inc. ("NSI") Reed Publishing BVV, and Reed Elsevier, Inc. (collectively "Reed"), that the Defendants did not engage in civil conspiracy when NSI suspended the plaintiff’s domain registration for the name "www.whoswhointheworld.com." Reed objected to the plaintiff’s use of that Web site because it owns a previously registered federal trademark for the name "Who’s Who In The World." Under NSI policy, trademark owners can have allegedly infringing domain names suspended if that domain name’s registrant cannot prove that its rights to a domain name precede those of a federal trademark owner. The court denied plaintiff relief on the intentional interference with business relations claim, recognizing that NSI’s actions were not intentional and that under its dispute policy, the plaintiff maintained an option to mitigate any inconvenience caused by suspending the domain name through choosing another domain address and using it concurrently with the already registered "whoswhointheworld.com" Web site. Beverly v. Network Solutions, Inc., 49 U.S.P.Q.2d (BNA) 1567 (N.D. Cal. 1998).
B. Domain Names Are Garnishable Property Upon Default Judgment
When Umbro Corp. ("Umbro") sought to obtain rights to the domain name "www.umbro.com" for its company, it found that the name was already registered to an unrelated party. After that party requested $50,000 in cash, a $50,000 donation to a favorite charity, and athletic gear for life in return for the "www.umbro.com" domain name, Umbro filed suit in South Carolina for trademark infringement and dilution. After being granted a default judgment, Umbro instituted a garnishment proceeding against NSI because the defaulting party had no available assets in the United States to satisfy the judgment other than the Umbro domain name. The Virginia Circuit Court, Fairfax County, held that after a default judgment is entered, domain names become garnishable property, subject to judicial sale to the highest bidder. Umbro Int’l, Inc. v. 3262851 Canada, Inc, No. 174388, 1999 WL 117760 (Va. Cir. Ct., Feb 3, 1999).
C. NSI’s Dispute Resolution Policy Held Better Option Than Judgment Lien
In a trademark infringement suit brought by Rose Marie Dorer, Brian Arel was enjoined from using "writeworld.com" as a domain name and ordered to pay $5000 in damages. Dorer attempted to fulfill the judgment from Arel’s personal property, including the domain name, sought a judgment lien when Arel failed to pay. The U.S. District Court for the Eastern District of Virginia, in circumventing the question of whether a domain name is personal property, held that Network Solutions Inc.’s dispute policy provides "an avenue of self-help" that is a better solution than a judgment lien in this situation. Dorer v. Arel, 1999 U.S. Dist. LEXIS 13558 (E.D. Va. September 3, 1999).
D. Use of Another’s Trademark in Web Site Metatag Causes Confusion
The U.S. Court of Appeals for the Ninth Circuit held, that, although Defendant’s use of Plaintiff’s trademark in its Web site metatag does not cause source confusion, it is likely to cause initial consumer confusion. Brookfield Communications Inc. (Brookfield) offers an entertainment related information database under the registered mark MOVIEBUFF. Brookfield sued West Coast Entertainment Corp. (West Coast), owner of moviebuff.com, for trademark infringement based on West Coast’s use of "MovieBuff’ in its Web site metatag. Despite West Coast’s argument that it should be allowed to tack use of its mark "The Movie Buff’s Movie Store" to claim priority for moviebuff.com, the court held that the two marks are too different to allow tacking. The court further held that West Coast did not establish "use" for trademark priority purposes by simply registering moviebuff.com as a domain name or by using it in email correspondence.
In addition, the court found that the marks were similar in sight and sound, noting the addition of ".com" is irrelevant. Given that domain names serve as an indicator of source, Brookfield’s mark and West Coast’s domain name are similar and the goods and services are related, consumer confusion is likely. By including moviebuff.com or "MovieBuff" as keywords in its hidden HTML codes and metatags, Internet search engines redirect web surfers to West Coast’s site, causing initial interest confusion among those looking for Brookfield’s "MovieBuff" information. Brookfield Communs, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036 (9th Cir. 1999).
E. No Stay Pending Appeal for Infringing Domain Names
When the Washington Speakers Bureau Inc. (WSB) succeeded in its infringement suit against Leading Authorities Inc. for the defendant’s use of infringing domain names, the court ordered Leading Authorities to return the domain names to Network Solutions Inc. (NSI). Because of the risk that the names might be registered by a third party in the interim of the appeal, the court initially granted a stay pending appeal. On WSB’s Motion to Reconsider Grant of Stay Pending Appeal, the court ruled that because Leading Authorities showed neither a substantial legal question nor irreparable harm if the stay were not granted, the requirements for a stay pending appeal, it was ordered to relinquish the infringing domain names back to NSI. Washington Speakers Bureau, Inc. v. Leading Auths., Inc., 49 F.Supp.2d 496 (E.D. Va. 1999).