A recent ruling by the Trademark Trial and Appeal Board (“TTAB”) serves as a good reminder of the importance of ensuring proper and sufficient trademark use on the goods and services for which a registration is sought. Albeit a seemingly simple concept, it threatens to be the achilles heel for many trademark owners who find their registrations canceled, refused, and/or in jeopardy due to inadequate or improper trademark use.

Take for instance, the case of In re Foster’s Wine Estates Americas Company. Serial No. 77018496 (June 16, 2010) [not precedential]. In support of its application to register the mark CELLAR 360 for wine, the company submitted as a specimen of use its retail catalog (which depicted applicant’s wine throughout) with the mark CELLAR 360 prominently displayed on front cover.

Rejecting applicant’s argument that the specimen served as a display associated with the goods, the TTAB refused registration of the mark. It found that the specimen showed use of the mark CELLAR 360 as a service mark for retail store services but not for wine.

Relying on the fundamental tenets of trademark law regarding what constitutes a trademark, the TTAB explained, the relevant issue is not simply whether applicant produced wine but rather whether consumers would recognize the mark CELLAR 360 as a source indicator for applicant’s wine (a trademark must identify the source of the goods).

Virtually sealing its own fate and guaranteeing a refusal of the registration, applicant did not use the mark on its wine bottles but rather on its retail catalog. This, the TTAB held, was insufficient to support a registration for wine (as the mark did not serve as a source identifier for wine). Accordingly, the board upheld the refusal to register the mark, finding that the specimen did not show use of the applied-for mark as a trademark for the goods.

Practice Note: Prior to seeking a trademark registration, clients should be counseled to carefully evaluate and consider the branding strategy that will be used in connection with the desired products/services and to, where possible, involve legal counsel in the marketing decisions regarding the manner in which the trademark will be used. Here applicant clearly intended to produce wine and was desirous of obtaining a registration for wine; however, in not using the mark on its wine labels, it failed to implement a branding strategy that would assure registration for wine. Problems such as these can often be avoided with careful planning, oversight and foresight.

The FTC and Nestle have come to an agreement: Nestle will stop making health claims about its BOOST probiotic product, and the FTC won’t fine the company for false advertising.

Nestle had previously claimed in its BOOST advertising, that the nutrition drink would boost children’s immune systems, prevent illness, and even speed up the recovery of certain symptoms, like diarrhea. The website, and advertising material now states, “Many countries worldwide have a tradition of introducing live active cultures (bacteria) to infants and children early in life, in fermented foods, such as yogurt. In adequate amounts [probiotics] provide specific health benefits to the host.”

This case marks the FTC’s first foray into health claims based upon probiotics and suggests this is a new area of concern for the regulatory agency.

Practice Note: While the US has only recently been looking at probiotic food claims, the European Food Safety Authority has been heavily regulating the industry for the better part of a year. According to published reports, the EFSA has rejected 80% of the advertising claims involving probiotics. Attorneys should advise clients to be careful about health benefit claims under the current administration.

Last week, according to the Promotions Marketing Association, state legislators in North Carolina ratified House Bill 80, which bans the “use of electronic machines and devices for sweepstakes purposes.”

The bill is intended to fully foreclose the use of video poker machines (and other gambling machines); the language contained in previously passed legislation presented a loophole: sponsors could still offer “sweepstakes” using the gambling machines (free method of entry), but still entice players to use a pay-to-play options for betting.

The bill specifically excludes consumer-owned electronic devices that could be used to enter sweepstakes, such as home computers, mobile smart phones, and mobile phones.

Practice Note: Video Poker is considered a “game of skill” in some states, and a “game of chance” in other states. Clients should seek careful legal analysis relating to online poker before setting out gaming machines or creating an interactive internet presence.

Click here for text of bill.

Nothing says “economic depression” so much as when scam artists run con-games on the weakest citizens: the infirm, the old, and now, unemployed students and recent graduates without money.

The FTC issued a release last week, suggesting confidence games against unemployed students are back in vogue, in the form of “secret shopper” scams. Sites, similar to this Mystery Shopper site, entice students by touting an hourly wage in excess of $20.00/hour, “just for shopping and dining out” and writing reviews (the foregoing site has not been targeted by the FTC and the author makes no claims as to the legitimacy or illegitimacy of the site; this site serves as example only).

Here’s the catch: in order to start collecting money, students have to either pay a membership fee, or deposit a bogus check sent to them (as “advance”). In the former case, the membership fee is collected, but no money is forthcoming (“No one wants your review. Sorry.”). In the latter scenario, the company’s check bounces, and gets returned with the depositer’s account information on it, and money is removed from the account. The FTC found that Independent Marketing Exchange, Inc. engaged in such fraudulent business practices.

Working as a bone fide “secret shopper” is a legitimate undertaking and some companies are actively seeking — and paying — shoppers for real reviews. The money, however, is typically not of the sort that will net anyone a full time income. Moreover, according to the FTC, legitimate “secret shopper” companies do not ask for money up front and do not ask members to deposit checks prior to conducting any work. While not dispositive of a bogus company seeking to defraud people, these “red flags” should be heeded by those looking into this line of work.

Practice Note: Advise clients who run such a business to steer clear of deceptive business practices such as charging membership for a secret shopper program, even if the business is a legitimate one. Such practices may subject a business to FTC investigation and complaints.

Just when he thought it was safe to go back in the water (or the boxing ring as the case may be), it appears that Mike Tyson’s legal troubles continue to fight on. The latest contender is Michael Wayne Landrum, a former boxer (turned paralegal according to his complaint) who probably wouldn’t last long in the ring with Mike Tyson but is suing the former champ for $115,000,000 for trademark infringement based on Tyson’s use of the name “Iron Mike”.

In round one of the recently filed complaint with the California Central District Court, Landrum, who is duking out his own legal representation, contends he owns trademark rights in the name “Iron Mike.” Although Landrum claims to have a federal trademark registration for the mark IRON MIKE, the court is likely to call foul as Landrum appears to have confused his California state trademark registration (which he does apparently own) with the national protection of federal registration (which he does not appear to own).

While Landrum does attach a 1996 letter from the California State Athletic Commission, which states his professional ring name was “Iron Mike Landrum,” and his California state registration (which claims a date of first use of November 1983), it remains to be seen whether such evidence will be enough to deliver TKO.

Stay tuned as the two contenders duke it out over several issues. Did Mike Tyson use the mark IRON MIKE to offer good/services or was it just a nickname bestowed upon him by his fans? Who used the mark first and in connection with what goods/services? Does Mike Tyson’s fame make confusion unlikely? Did Landrum wait to long to bring these claims? Are Landrum’s rights limited to California only?

If the author were of the betting type, the wager would certainly be placed in Tyson’s corner! Stay tuned for round two.

The song “Down Under” by the band “Men at Work” has been hugely popular since the early 1980s, even becoming the unofficial anthem of Australia (it was played during the closing ceremony of the Sydney Olympics). The whimsical lyrics affectionately celebrate Australian culture, “where women glow, and men plunder.”

The song also features a famous flute riff, which was at issue in this copyright infringement case decided under Australian law.

Larrikin Music, who acquired the rights to the traditional children’s song “Kookaburra Sits in the Old Gumtree” in the 1980s, sued the band “Men at Work”, claiming that the flute tune in “Down Under” infringed their work. “Kookaburra” was written in 1932 by an Australian teacher, Marion Sinclair, for a girl scout competition and became a favorite around campfires from New Zealand to Canada.

A few months ago, a Federal Court in Sydney agreed with plaintiffs that, under Australian law, the flute melody did in fact infringe the copyright in “Kookaburra”. However, when ruling on damages earlier this month, the Court rejected plaintiffs’ demand of 60% of royalties as “excessive, overreaching and unrealistic.” Instead, the court ordered defendants to pay a reduced 5% of royalties collected for “Down Under”, and only those royalties collected in Australia (not worldwide) since 2002; probably not the millions plaintiffs expected…

Interestingly, defendants admitted that “Down Under” made “unconscious” reference to the children song. The band member who wrote the flute melody said he did so to inject some “Australian flavor” into the song. He reportedly admitted to have heard “Kookaburra” growing up in the late 1950s and was “pretty sure” that “Kookaburra” was in his school’s song book.

Comments: This case reminds us of the landmark copyright opinion in Tunes Music Corp. v. Harrisongs Music, Ltd., 420 F. Supp. 177, 178 (S.D.N.Y. 1976), in which the U.S. judge found that George Harrison had “subconsciously” infringed the Chiffon’s song “She’s So Fine” when writing ” My Sweet Lord.”

On a different note, it is worth noting that, if the “Down Under” case had been decided under U.S. law, laches might have been an available defense. After all, the song has been almost inescapable hit for over 30 years. Why didn’t the plaintiffs move quicker? Larrikin claimed that it wasn’t until a quiz show in 2007 that it became aware of the songs’ similarities… That claim may not have been sufficient to overcome a laches argument under U.S. law. (As a reminder, laches is an equitable defense that plaintiff has “slept on its rights” and is no longer entitled to the claim.)

Practice Tip: Even though this case was decided under Australian, not U.S., law, it provides a universal reminder that traditional works (such as childhood songs or rhymes) might not always be in the public domain. Under the U.S. Copyright Act, works published or registered before 1923 are the only works clearly in the public domain. For more recent works, advice your clients not to assume the work is out of copyright and to clear rights if needed.