In a long and hard fought battle, the Second Circuit Court of Appeals has given renowned fashion designer, Joseph Abboud, a chance to reclaim his name.

Issuing a sweeping injunction in June 2008, a Southern District of New York court enjoined Abboud from using his name to sell, market or promote his own business, goods and/or services, finding Abboud’s intended use constituted a breach of contract and would constitute trademark infringement. The Second Circuit, in J.A. Apparel Corp. v. Abboud, et al No. 08-3181-cv (Second Cir.) found here reversed and remanded.

J.A. Apparel Corporation (“JA”), a former joint venture of Joseph Abboud, sued the designer in federal court alleging breach of contract, trademark infringement, and related claims over Abboud’s plans to use his name in the marketing and advertising of his then new JAZZ line, which he intended to promote using with such phrases as “a new composition by designer Joseph Abboud.”

Underlying the dispute, in 2000 JA entered into a sales agreement with Abboud, paying Abboud 65 million dollars for the exclusive rights to the ABBOUD label and related JOSEPH ABBOUD trademarks. While Abboud claimed the agreement only transferred rights in the ABBOUD trademarks but not the rights in his name, JA asserted the contract sold both the trademarks and the exclusive rights to use the Joseph Abboud name for commercial purposes. The district court ruled Abboud had unambiguously conveyed to J.A. all of Abboud’s rights to use his personal name, trademarks, and trade names for commercial purposes and also found Abboud’s planned use of his name would constitute trademark infringement, as it was likely to cause consumer confusion.

Vacating the injunction, the Second Circuit remanded the case, ruling the district court: 1) erred in ruling the sales agreement unambiguously conveyed all of Abboud’s rights to use his name commercially; and 2) erred in rejecting Abboud’s fair use claim as a defense to trademark infringement. The appellate court specifically found that given the conflicting interpretations of the sales agreement, the district court should have considered the parties’ extrinsic evidence to more fully understand the parties’ intent and that the district court should have examined Abboud’s actual or proposed use to resolve his fair use defense.

COMMENTARY: This case highlights the risks inherent in licensing or selling a brand name which also happens to be an individual’s name. Because the parties failed to clearly and precisely define the scope of their agreement, Joseph Abboud stands to lose the right to his very valuable name. Granted, he was paid 65 million dollars, which may seem like more than adequate compensation….but how much is your name worth, and what would it take for you to sell it? As some might say, “priceless.” Take the time to get it right.

St. Louis Cardinals manager Tony La Russa has sued Twitter, the popular micro-blogging service in San Francisco Superior Court alleging: Trademark Infringement, False Designation of Origin, Trademark Dilution, Cybersquatting, Misappropriation of Name, and Misappropriation of Likeness. In the Complaint, Mr. La Russa states the defendant owns the domain name twitter.com, and pursuant thereto, twitter.com/TonyLaRussa. Mr. La Russa contends an unknown user, pretending to be La Russa, began posting updates as Mr. La Russa. One line of the “profile” suggested it was all a fake: “Bio Parodies are fun for everyone.”

According to the San Francisco Chronicle, La Russa’s attorney tried to contact Twitter before filing the lawsuit, but got no response. Hours after the lawsuit was filed, Twitter removed the fake La Russa page and its postings. It is being reported that the case has already settled. “La Russa said Friday [6/5/09] that Twitter has agreed to pay legal fees and make a donation to his Animal Rescue Foundation. The organization is likely to take control of the name www.twitter.com/TonyLaRussa. However, the Wall Street Journal is reporting the opposite.

The truth is out there.

Trademark Note: Using a trademark and then simply claiming “parody” is not a “get outta jail free card.” In trademark cases, when a parody defense is raised, the defendant justifies his use on the grounds of humorous social comment. Funny or not, a defendant’s use may still be enjoined if it is likely to cause confusion with plaintiff’s trademark. Courts must balance the public interest in poking fun at trademarks and the institutions they represent, with the trademark owner’s investment and good will. Courts must also protect consumers from likely confusion.

As of last Saturday, Facebook users have been able to register personalized URLs of their choice for their Facebook home page (e.g., facebook.com/myusername). Approximately 5.75 million users signed up for their own URL over the weekend (also called “Vanity URLs”).

These new usernames could potentially be anything, including someone else’s trademark. To help trademark owners prevent hijacking of their marks, Facebook put in place a temporary procedure for trademark owners to “reserve” their registered trademarks with Facebook in advance and prevent the creation of URLs associated with those marks. Facebook has now closed this reservation period.

So what can trademark owners do who did not register their trademarks with Facebook and discover unauthorized URLs? They can request removal by contacting Facebook via this notice form. The procedure is fairly straightforward. You do not need to be registered on Facebook to use it.

So go to Facebook, check possible URLs containing your marks and, if you discover unauthorized uses, take action sooner rather than later.

A new website has launched whose purpose is to connect potential buyers and sellers of trademarks. Trademarks are words, signs or symbols used by businesses as a source identifier of goods and and services. Trademarks are valuable not only for the consumer goodwill they engender (see, MCDONALD’S, GOOGLE, BMW, HBO), but also as a barrier to market entry of similar products (or services) with confusingly similar trademarks.

According to its press release:

USTrademarkExchange.com was launched earlier this month as a dedicated trademark sales portal . . . Owners can list and promote their registered trademarks, while potential buyers including investors can easily search through a variety of available trademarks in one location.”

Sounds like a great idea, right? Hmmm, not so fast. There are a few basic, but important concepts worth noting. When a trademark is assigned (ownership transferred) from one party to another, the purchasor generally succeeds to all of the previous owner’s rights (e.g., dates of first use, etc.). However, a maxim of trademark law states a valid trademark assignment must include the goodwill of the business. What is goodwill?

A trademark stands for a certain standard of quality. The mark symbolized that level of quality that the public has come to associate with the products bearing the mark. That said, an assignee (or purchasor) of a trademark must be sure she has the implements necessary to maintain this quality. If she does not, the trademark becomes separated from its goodwill. When goodwill does not accompany the mark, the assignment may be called an assignment in gross or a naked assignment. Generally speaking, an assignment without goodwill is invalid.

It is too soon to tell how USTrademarkExchange.com intends to handle its trademark assignments and how potential buyers and sellers will see the benefits of their respective bargains. Like many things in life, “an ounce of prevention is worth a pound of cure.” When it comes to assigning or purchasing trademarks, conferring with competent trademark counsel is always a good bet.

Linden Labs, the host of the immensely popular site Second Life, an online virtual world, has been sued in an Arizona district court for trademark infringement and unfair competition. The complaint, filed by Taser International, makers of non-lethal (and sometimes lethal) weapons, claims Linden Labs allows third parties to sell TASER guns inside the virtual world.

Just so we’re clear, no one on Second Life is actively selling real TASER guns; rather Taser is suing Linden (who doesn’t sell anything), for letting people sell virtual (digitally created) guns that look like TASER weapons, and that use the TASER brand. The suit also alleges unfair competition, trade dress infringement, and false designation of origin, among other claims.

For those uninitiated few, users of the Second Life world can use their credit card to buy digital currency (“Linden Dollars”). They can then use that currency to make purchases in Second Life. For instance, if a user would like to dress up his/her avatar in a ball gown, s/he can use the Linden Dollars to shop at a virtual prom store. Similarly, if a user wants “protection” (you know, from digital thugs), s/he can buy a virtual weapon. Linden gets its revenue from a small percentage taken during the currency exchange.

It’s not the first time a company has sued Linden; neither is it the first time a company has sued a hosting site for trademark infringement by third parties (think: Google). It may, however, be the first time a company has sued another company for hosting a site where third parties selling products that aren’t even real. Is it time for a Digital Millennium Trademark Act?

Practice Note: Notwithstanding the fact that there is no DMTMA, companies may want to consider adopting a policy that allows them to stay an arms length away from disputes between users when it comes to trademarks. It’s not a fail-safe method of safe harbor protection, but it may make would-be plaintiffs feel they have an option short of filing a lawsuit, for getting hard-to-find users to stop using their marks.

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OpBiz, LLC hearts The TTAB, which ruled recently that OpBiz’ application to register HEART for “cocktail lounges, restaurant and bar services” was not confusingly similar to the registration KOKORO for “restaurant service.” In deciding the matter, the TTAB underscored a position it has taken in the past, namely, that the doctrine of foreign equivalents may not apply when the foreign word has more than one meaning. In this case, although the KOKORO registration identified the translation as “heart,” evidence submitted by the Applicant showed the term has multiple meanings. It was not sufficient for the examiner to rely solely on the translation identified in the application.

The case does not present particularly new law, but is a cavalcade of great procedural reminders. First, the Board finds a good deal of evidence otherwise submitted by the examining attorney was not timely filed, holding her to the same rigorous standard to which it holds the applicant (TBMP 1207.01 (2d ed. Rev. 2004)).

Next, in considering whether the evidence can come in under the judicial notice standard, the Board determines that the examiner has not met her burden. Her dictionary references do not rise to the level of online dictionaries for which the Board will take judicial notice (see, eg, In re Hotels.com L.P., 87 USPQ2d 1100, 1103 (TTAB 2008)). The Board also reminds the examining attorney that her Wikipedia submissions are “not proper subject matter for judicial notice because of its inherent lack of trustworthiness” and are not admissible because the applicant had no opportunity to rebut the evidence. ( see, In re IP Carrier Consulting Group, 84 USPQ2d 1028, 1032 (TTAB 2007)).

With the examining attorney’s record fairly gutted, the Board reviewed the issue under both a likelihood of confusion standard (for which confusion is arguably found) and a doctrine of foreign equivalent standard. Because the mark KOKORO has multiple meanings, and the examiner did not submit evidence that Japanese is routinely spoken in U.S. households, the Board ultimately found for Applicant and reversed the decision of the examiner.

Practice Note: In addition to the foregoing, the final lesson here is “Thank Your Paralegal.” As with many TTAB decisions, the case itself does not particularly espouse new law, but the decision nevertheless is worth reading because the Board reminds us how important procedure, protocol, and immaculate record keeping can be to the final decision. The examiner in this case raises the objection that the evidence submitted by applicant in the appeal should not have been considered because it was not filed prior to the appeal. In fact, there was a computer glitch and the evidence was filed, but did not get uploaded to the TDR. A thorough review of the paralegal’s record-keeping convinced the Board of this fact and the evidence submitted was sufficient for the Board to render a decision in favor of the applicant. The Board also found that the Examiner had been negligent in not notifying the Applicant that she had never received the exhibits, notwithstanding the fact that they were referenced in the Office Action Responses.

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On March 16, 2009, Parfums Nina Ricci filed suit against National Entertainment Collectibles Association, Hot Top, and others, for design patent infringement, trade dress infringement, and other common law unfair business practices, stemming from Nina Ricci’s rights in an apple-shaped bottle containing the fragrance “Nina” (the “Nina Bottle”), for which it has a U.S. design patent.

Ricci took the first bite, alleging defendants began marketing their Twilight perfume using an exact replica of the Nina Bottle without Ricci’s permission, thus infringing Ricci’s patent rights and trade dress rights in the bottle. Judging from the pictures above, one of these actors appears to be a rotten apple.

The Nina Bottle, on the right, was the first market entrant and, and Nina Ricci protected its unique apple design with a design patent. It also claims common law trade dress rights in the appearance. A brief online search revealed upwards of 6 other perfume bottles with the apple design, but none (other than the defendant’s) particularly similar to the Nina Bottle.

This suit presents an interesting question regarding the issue of whether one can protect identical intellectual property elements under both patent and trademark. Perry Saidman of Saidman Design Law Group, which specializes in design patents, notes that the prevailing view is that an owner can get design patents for market-entry protection, and later, when secondary meaning attaches, secure trade dress protection for roughly the same configuration. Saidman also commented that the issue of whether an owner can get both patent and trademark protection for a design is ripe for the Supremes, who have thus far side-stepped the issue in other patent cases.

On March 19, 2009, The Hershey Company, et al. filed suit in the Northern District of West Virginia against Reese’s Nursery and Landscaping, alleging federal trademark infringement, false designation of origin, federal trademark dilution, and unfair competition. At issue is the Defendant’s alleged use of the REESE’s trade dress, i.e., “the REESE’S brand name in distinct yellow script letters outlined in brown.”

In its Complaint, Hershey alleges it has used its distinctive trade dress in commerce for “nearly 100 years in connection with REESE’S brand candy.” At the rich, creamy center of this controversy is Hershey’s allegation that Defendant has adopted a business logo that is nearly identical to the Reese’s trade dress.

What really sticks to the roof of Hershey’s mouth is its belief that Defendant adopted its logo in “a deliberate attempt to trade on the valuable trademark rights and substantial goodwill established by Hershey.” Moreover, Hershey contends Defendant has “traded on and profited from the enormous goodwill an d reputation established by Hershey.” Where “the rubber hits the road” in this Complaint, or more aptly, where “the peanut butter meets chocolate,” is the following allegation: Defendant has “continued to use REESE’S trade dress despite previously representing to The Hershey Company that [it] would cease use of the REESE’S trade dress.”

The Defendant has not yet filed a responsive pleading, but a quick review of its website, reveals a new black and white logo.

Practice Note: Although early in the litigation process, there is much to learn from Hershey’s Complaint. First, it appears as though Hershey previously reached out to the Nursery, seeking a modification of its logo. When Defendant’s (likely multiple) assurances that it would modify its logo went unfulfilled, Hershey filed its suit. The lawsuit appears to have gotten the attention of Defendant, as it has now removed color elements from its logo. Time will tell whether this change will satisfy Hershey’s.

Hershey’s Complaint does a nice job of laying out facts necessary to establish that its trade dress is “famous” under the Lanham Act. Finally, the case may negatively impact Hershey’s public image. For example, what was once a legal filing in West Virginia, is now a blogosphere entry, and may be written about by others in less than glowing terms. Some may view this lawsuit as a “big guy v. little guy” case and not feel as fondly for Hershey as they once may have. Moreover, one has to ask how much damage Hershey has really suffered here? To this eye, the Nursery logo reminds me of the Reese’s logo, but I’m not confused as whether the nursery is a business venture of the chocolatier. In fact, it makes me want to walk to my reception desk and pluck a REESE’s peanut butter cup out of our candy dish!

Have you ever had one of those really good soft oatmeal cookies that comes in the pretty red package that looks like this:

Well, the company, Archway Bakeries, LLC, invested a lot of time and money in creating and marketing its trade dress (i.e. the look and feel of it packaging) and was piping hot when it discovered that a competitor, Voortman Cookies Limited, began packaging its cookies like this shortly after Archway filed for bankruptcy:

Prior to Archway’s bankruptcy filing, Voortman’s packaging creating a completely distinct commercial impression and looked like this:

Pulling the plug on Voortman’s activities, Archway and Lance Manufacturing, the company that purchased Archway’s assets (including all intellectual property rights) during the bankruptcy proceeding (collectively “Archway”), filed suit against Voortman for trademark infringement and related claims in Lance Mfg., LLC v. Voortman Cookies (WD NC 3/24/09).

In a bittersweet ruling against Voortman, the North Carolina district court issued a preliminary injunction prohibiting Voortman from advertising, distributing, selling, or offering to sell its cookies in the Voortman packaging. Carefully measuring the arguments, the court found that Archway’s trade unregistered trade dress was: 1) non-functional – i.e. not essential to the use or purpose of the product; and 2) created an overall distinctive impression.

Voortman attempted to stir things up by arguing that the case was moot because it had already ceased using the packaging and had begun production of a modified packaging following a cease and desist letter it received from Lance; however, the court wouldn’t bite. It noted that the allegedly infringing packaging still remained on the shelves and and that Voortman could, at any time, re-release the packaging.

The court also found that Archway was likely to succeed in proving the Voortman packaging was likely to cause confusion with Archway’s packaging. The packages were virtually identical in many respects. Moreover, Archway presented evidence that the Voortman packaging was an intentional copy and nearly identical to its trade dress. In light of the overall evidence, the court found that Archway had made an adequate showing of a likelihood of confusion.

In its narrowly tailored injunction, the court did offer Voortman a nice-sized crumb by refusing to require Voortman to remove, destroy and/or recall the existing packaging from the marketplace. Citing the financial hardship to Voortman and relatively short shelf life of the existing cookies inventory, the court ruled that Voortman could sell-off its remaining inventory in the existing packaging. Voortman fans better get them while they’re hot!

This article from the Daily Princetonian reports that the University “grossed roughly $266,000 [in] 2008… for the commercial use of Princeton trademarks and logos.” The University reportedly has over 100 licensing agreements with third parties, which grant limited rights to produce, use and/or sell products under the University’s marks (anything from baseball caps to mugs), in exchange for quality control and a royalty. As it should, the University owns and maintains a number of trademark registrations at the U.S. Patent and Trademark Office.

Practice Note: As Lezlie pointed out in her excellent post last week, a company’s IP is often it’s most valuable asset, especially in these tough economic times. This story is an example of a trademark owner (Princeton in this case) “doing it right.”

Trademarks can be a valuable income-generating asset, if properly maintained and managed. With reasonable policies and proper oversight procedures in place, licensing and co-branding deals represent great opportunities for generating regular revenue, as well as strengthening your client’s brand.

As a starting point, clients may want to keep in mind these basic guidelines to maximize these licensing opportunities:
- Register your marks domestically, as well as in the countries where you intend to do business. Being pro-active about trademark protection saves money and headaches in the long run. Also think about keeping your trademark counsel in the loop of new marketing and branding strategies, to make sure you’re covered;
- Maintain your marks and use them properly and consistently; be practical but don’t be lazy or you may lose rights (and licensing opportunities) over time. Your trademark counsel is there to assist you in this process, for example by talking with your marketing staff about proper trademark use and ways to create strong brands;
- Police your marks consistently, which may include having an enforcement plan in place and following it. If you don’t enforce your trademarks, you may lose rights. A pro-active policy is also a good way to establish your rights without having to send a demand letter every time.
- Explore licensing and royalty-generating opportunities and have those agreements vetted by your intellectual property counsel. Contracts that don’t include certain “magic (legal) words” (for example, quality control provisions) may weaken your rights significantly.

It’s tempting to do, but according to the Federal Circuit, use just ain’t use in commerce until it’s a bona fide offer for sale to the actual intended purchasing public. Theoretical ability to provide the service, brochures that never got sent, and business plans showing intent are not sufficient to establish use.

Aycock Engineering, Inc., founded under a previous name in the 1940’s, was created for the purpose of offering a chartered air transportation service under the mark AIRFLITE. The business plan suggested that the company would need at least 300 air taxi operators in the U.S. to make a go of the enterprise.

In March of 1970, through brochures and letters advertising the AIRFLITE service, Aycock invited all FAA certified air taxi operators to join his AIRFLITE service. In August of 1970, Aycock filed a service mark application to register AIRFLITE, and attached as specimens of use the brochures he used to entice pilots to join his network. Ultimately, in 1974 after a lengthy prosecution fight with the examiner, Aycock’s mark was registered on the Supplemental Register for “[a]rranging for individual reservations for flights on airplanes.”

Aycock continued to market his service to the pilots who would charter his planes, but never actually marketed the service to the general public, notwithstanding his establishment of a customer toll-free number listed on the brochure and a collection of 12 pilots (far short of the 300 the business plan said were necessary to run the service). The evidence did not show that Aycock ever arranged a flight for a passenger.

In 2001, Airflite, Inc. (“Petitioner/Appellee”) filed a petition to cancel Aycock’s registration on the ground of nonuse. The TTAB found that Aycock has failed to offer the services listed in the application and on appeal, the Federal Circuit affirmed.

Although the court addressed numerous factors that led it to affirm the TTAB ruling, its primary focus was on the offer of the service listed in the application. It noted the service was simply not offered to those who would ultimately buy it – the purchasing public. It was not enough to establish a toll-free number and collect pilots to ferry people as intended. Neither was it sufficient to use the mark on the brochure that could eventually go to consumers. The fact that Aycock had never marketed the actual service to the intended consumer was sufficient to establish nonuse of the mark for those services, and subsequently, to cancel his registration.

Practice Note: Many practitioners tell their clients that printing business cards and creating stationery is sufficient to show use in commerce. Still others advise that the creation of brochures that contain a price list are sufficient to establish use. This case suggests (and this firm has always maintained) that there is a distinction between use anywhere and actual bona fide use in commerce. Use in commerce, to be above reproach, must be a bona fide offer for sale of the product for which you are claiming use to the target consumer.

If we didn’t learn the Trademark Trial and Appeal Board was prickly when it comes to procedure from the Blue Man case, we just got another lesson. The Board is handing out some more tough love on counsel. In the precedential decision, Syngenta Crop Protection, Inc. v. Bio-Chek, LLC (Opposition No. 91175091, March 12, 2009), the Board tossed out Opposer’s 2(d) claim on the ground that it had improperly submitted its registration. Without considering its registration for AGROMETER, Opposer was unable to produce sufficient evidence at common law to show priority over applicant’s AGMETER mark, and thus was unable to sustain the 2(d) opposition.

Opposer submitted a photocopy of its licensor’s original registration certificate, dated 2004. A photocopy of a registration certificate may not be adequate proof of the current status of a registered mark. Under Trademark Rule 2.122(d)(2), a trademark registration document submitted should be “issued by the Patent and Trademark Office and show both the current status of and current title to the registration.” The 2004 copy did not confirm the status of the mark in 2007 or 2008.

In addition, Opposer, did not properly introduce the registration, as specified in the Trademark Rules. It did not attach the copy to the opposition; neither did it did not introduce it during testimony; and because applicant never admitted or stipulated to the current ownership and validity of the registration, the registration was not authenticated by waiver.

Because the Board did not consider the registration as prima facie evidence of ownership and first use, the Opposer was forced to rely solely on proof of its prior common law rights, which, the Board established, it had not done sufficient to establish priority.

To make matters worse, the Opposer improperly submitted notices of reliance for some of its documents, such as press releases, internet articles, and sales and marketing materials it wanted to produce. The Board noted that notices of reliance are strictly limited and may be used to introduce only discovery deposition, interrogatory responses, admission or written disclosures of an adverse party, and printed publications or official records. Other evidence must be authenticated by testimony. Accordingly, much of Opposer’s evidence common law evidence was not considered.

As a result of the limited evidence Opposer was allowed to submit, the Board found that it has not established priority and dismissed the case.

Practice Note: This case presents a veritable cavalcade of interesting issues and can serve as a laundry list for what not to do. That said, it’s important to note that even good and careful attorneys can get tripped up on the rules regarding submission of documents and evidence in a TTAB proceeding. There but for the grace of a good associate go any of us.

Non-trademark attorneys, more accustomed to fighting in federal court assume (and tell their clients), that the process at the TTAB mirrors that of federal court proceedings. While the basis of that statement is true, there are myriad distinctions that must be taken into account, as this case illustrates. Counsel should learn those distinctions and advise clients that availing itself of TTAB proceedings is no “walk in the park,” and federal court methods cannot simply be cloned. The good news is, failures by parties work both ways. If your opponent has been sloppy in its submission of evidence, the TTAB has shown that it will not consider it. Careful reading of pleadings, discovery, and motions can be a gold mine for a summary judgment motion.

Procedurally, the Opposer in this case can do what Blue Man Group did in its own matter and appeal the decision in district court. In all likelihood, like Blue Man, it will be able to properly introduce its evidence and – at the very least – establish priority in its mark. Then the question will hinge on confusion.

Finally, this case underscores the importance of a valid federal registration for clients’ important marks. When push comes to shove, a registration, properly introduced, saves time and money, because it is prima facie evidence of a first use date. Moreover, after 5 years of continuous use of the mark after a registration is issued, the mark’s registration becomes incontestable, except under limited circumstances (fraud, abandonment, genericness).

The new logo (shown above next to the old one) is representative of the phone company’s radically new “so very Verizon” campaign.

Further images of the clever campaign are available here.

No word yet on whether the old CAN YOU HEAR ME NOW? tagline will be replaced by the VERY awesome: IS IT HOT IN HERE?

Practice Notes: Rebranding efforts can be effective for companies to update their image and gain new consumers (although they can sometimes backfire, as Tropicana learned recently). Clients should involve their trademark counsel in the rebranding and marketing efforts, so as to assess potential risks (such as likelihood of confusion with existing marks, say, in this case, the SKYPE logo) and protect the new marks, including new trade dress, if applicable.

Tsan’s Comment: Naturally, rebranding efforts that take place on April Fool’s Day and are gone the next day should be suspect (unless you’re introducing New Coke).

Inhale, Inc., makers of hookahs and the INHALE vaporizer believes Oglesby & Butler was smoking something other than tobacco when it adopted the name I-INHALE for its vaporizer product, and Inhale put down its own hookah long enough to file suit in the Central District of California for trademark infringement of its name. Inhale has several federal trademark registrations for INHALE for smoking devices “used by individuals to smoke herbs such as tobacco” (not that anyone remembers).

It took less than 10 days for Oglesby & Butler to come out of its fog and change its name to iolite. After all, looks like Inhale had Oglesby head to rights.

It’s no secret: U.S. and international markets are in deep turmoil. Massive layoffs, historic stock market declines, and institutional failures remind us this no ordinary time. Even while companies look for ways to cut back and streamline institutional costs, now may be the best time to strengthen your intellectual property (IP) portfolio.

Although frequently overlooked, a company’s IP, including its trademarks, copyrights, and patents, is often its most valuable asset. There are several reasons why strengthening an IP portfolio now, even during the recession, not only makes good business sense but may be the key to a company’s future economic growth and recovery:

1. IP Assets May Be A Significant Source Of Revenue During (And After) The Recession.

Licensing or selling of IP assets has always been a way for companies to generate additional revenue. For example, during 2006 Neo-Magic recorded a $3.5 million gain on the sale of its unused patents, representing over 37% of the company’s total yearly revenue. A recent article in the Chicago Tribune reports “amid the recession, a growing number [of companies] are looking to generate cash by selling or licensing their dormant trademarks and patents.” If protected and maintained properly, your IP assets can offer significant revenue now and into the future. In fact, many lending organizations look to a company’s trademark portfolio as a means for determining the foundational strength of the organization.

2. IP Assets Are The Building Blocks To A Flexible Business.

The recession has brought significant restructuring and reorganizing of businesses. Mergers, acquisition, spin-offs, and new business units are a sign of the times, and strong IP portfolios are the building blocks for new business opportunities as companies transform their products and market positions. Perhaps this is why, historically, certain IP filings and litigation tends to increase during times of recessions (click here and here for historical figures). As a business continue to change, adapt and grow, so too must its IP assets.

3. IP Assets Will Set Companies Apart From The Competition.

Brand recognition by consumers not only increases product and service sales, but creates a significant barrier to entry for new competitors. Thus, the strengthening of a brand position in a downturn (through both IP filings and consumer marketing), provides an opportunity for companies to stand out when there is a smaller competitive market. Strong IP assets, such as trademarks, will help ensure brand recognition and differentiate companies from their competition.

4. IP Assets Have A Lifetime That Will Extend Well Beyond The Recession.

Perhaps the only thing we know about this recession is that it will end. Innovation, creation and entrepreneurism will continue to drive our economy forward, and as we emerge into the next profitable market cycle, IP assets will remain one of most valuable company assets. Failure to protect them now may have severe consequences for the future.

Toughlove American LLC (”TLA”) filed suit this month against MTV High Noon Productions, and Drew Barrymore’s Flower Films (”Defendants”) claiming trademark infringement and false designation of origin based upon the production of a new reality show, TOUGH LOVE.

TLA, founded by two therapists, claims to have been using the mark TOUGHLOVE for peer-to-peer, self-help, and psychological counseling programs, along with educational materials about self-help since the last 70’s and gained national acclaim after its services were recommended in an Ann Landers column. It also claims to be in the development process for a television talk show. TLA has registrations for the mark TOUGHLOVE in the appropriate categories.

Notwithstanding the lawsuit, the show TOUGH LOVE aired on March 15, 2009. The show has a romance theme, and centers around several women who have had a bumpy dating life and who, for the most part, blame the opposite sex for it. The host uses a “tough love” approach to address the root of the women’s problems.

author’s note: As luck would have it, I was privy to the pilot episode of this train wreck of a show. Fans of reality dating shows will no doubt salivate over the level of public humiliation doled on these women. Perhaps TLA should add tarnishment to the claim.

With U.S. President Barack Obama in the White House a change in U.S. - Cuba relations may be on the horizon. According to a recent Reuters story, U.S. companies have an estimated 5,000 products trademarked in Cuba, “waiting for the day they might finally land on the island separated from the United States by the Florida Straits and a vast ideological gulf.” Indeed, as recently as December 2008, the Cuban Office of Intellectual Property registered trademarks for new products for Coca-Cola, Google, and Ford Motor Co.

Hasn’t the United States imposed a commercial, economic, and financial embargo against Cuba since the early 1960s? Yes, but under the Clinton administration an exception was enacted exclusively for the protection of trademarks, patents, commercial names, copyrights belonging to U.S. individuals or corporations. Thus, U.S. trademarks and other IP is can be protected under Cuban law. Likewise, U.S. government will protect intellectual property assets belonging to the Cuban government.

While trademark applications filed in Cuba by U.S. companies fell by 36 percent during the George W. Bush administration, under Mr. Obama’s administration U.S. companies are sensing new market opportunities. Mr. Obama is the first U.S. president in half a century who has evidenced a willingness to talk with Cuba’s leaders, and he has promised to ease the trade embargo.

Right now, U.S. trade groups are trying to avoid a repeat of events that occurred in South Africa, following the end of apartheid. There U.S. companies found their trademarks had been registered by someone else. Fortunately, Cuban authorities have honored trademarks and awarded rights to legitimate owners.

For those U.S. companies believing “change” may involve a thawing of economic relations between the governments of Cuba and the U.S., then further discussions with your trademark counsel is warranted.

This is big news in the world of internet domain names. Trademark holders have expressed concerns about ICANN’s decision to soon allow custom Top-Level Domains (e.g., .google, .disney, .newyork, .cars, etc.). Companies and other interested parties now have a bit more time to prepare for the change and decide whether to apply for new Top-Level Domains themselves, including domains that may contain their trademarks. The public will also have an opportunity to make further comments to the proposal this Summer.

Top-Level Domains (TLDs) are the portion of a domain name that is to the right of the dot (e.g., .net, .com, etc.). TLDs that are not country codes (e.g., .cn or .uk), are called generic TLDs (gTLDs). ICANN is the body that approves and recommends new gTLDs.

Currently, TLDs are limited to 21 generic top-level domains (like .net, .com, .org or .info). After allowing a few limited expansions (for example, .mobi), ICANN announced last year that it would dramatically expand this system and allow custom gTLD, subject to an elaborate application and evaluation procedure (and, of course, a fee). The new gTLDs can consist of almost anything, including trademarks, geographic locations and generic terms, as well as non-Roman characters. Applicants will have a limited time period to apply for new gTLDs.

The official launch of the program was originally planned for June 2009. After receiving a number of objections and comments from trademark holders and the business community, ICANN just announced that it will delay the program until at least December 2009. A committee is evaluating, and developing solutions in response to the “overreaching issues” with the program. Some of those concerns include: skyrocketing costs for trademark holders, and increased opportunities for malicious behavior and infringement online.

So what’s next? A further report and draft guidebook are scheduled to be published by ICANN in May and June 2009, at which point a new comment period will open. Under the current schedule, it appears that the publication of the “Final Application Guidebook” is planned for December 2009 or the first quarter of 2010. Applications for new gTLDs will be open for 45 days from that date.

Further information is available on the ICANN web site

The estate of rock legend Jimi Hendrix won a trademark infringement lawsuit against a Seattle, Washington-based businessman who used the star’s name and image to promote his brand of vodka. In Experience Hendrix LLC et al v. Electric Hendrix LLC et al, Case No. 2:07-cv-00338-TSZ (W.D. Wash. 2009). a U.S. District Court judge ruled HENDRIX ELECTRIC VODKA infringes on the estate’s trademarks.

Experience Hendrix and Authentic Hendrix, which owns and licenses Hendrix’s likeness and music won a $3.2 million judgment against Craig Dieffenbach and his Electric Hendrix Spirits. Electric Hendrix Spirits had described the liquor as inspired “by the innovative spirit of legendary musician Jimi Hendrix.”

A legal purple haze has surrounded the deceased guitarist for years. In this case, Hendrix’s sister Janie Hendrix, CEO of Experience Hendrix LLC, alleged trademark infringement and false advertising for its “tasteless promotion” of Hendrix Electric Vodka, sold in purple-tinted bottle. Plaintiffs further alleged that Hendrix’s name and likeness were used without permission. Janie Hendrix, however, isn’t the only Hendrix in this fight. Leon Hendrix, Jimi’s biological brother, who has been engaged in a long-running legal dispute with Janie Hendrix over Jimi’s assets, is a partner in defendants’ venture. Indeed, Mr. Dieffenbach, has helped Leon Hendrix finance his court fight over Jimi’s estate. Here’s a story about the lawsuit and the Hendrix family’s squabbles over who has the right to make money off the late rock star.

In its February 12, 2009 order, the District Court ordered the company to cease using Hendrix products for commercial purposes and ordered the vodka and any related advertising be withdrawn. And the beat goes on . . . .

Kia Motors America, Inc. v. Autoworks Distributing, Civil No. 06-156 (February 26, 2009).

Plaintiff Kia Motors America was none too pleased that Defendant Autoworks was selling “KIA” parts for below dealer net prices. It sued under the Lanham Act, claiming the parts were either gray market goods (parts authorized by Kia but not intended for the U.S. Market) or were counterfeit goods. Defendant filed for Summary Judgment on the grounds that its admittedly gray market goods were substantially identical to the Plaintiff’s goods and thus, their sale in the U.S. did not violate the Lanham Act.

Employing the Nestle test, the court looked at whether the goods being sold by Defendant were (1) not intended for the U.S. Market; and (2) materially different than those that were intended for the U.S. Market. Once both of these are established, the burden shifts to the Defendant to show that the difference is not the kind consumers would consider in purchasing a product.

The parties did not dispute that Defendant’s parts were not intended for the U.S. market; neither did they dispute that there was a difference between the warranties of each party. Defendant pointed out that its warranty covered all parts. Plaintiff’s warranty expressly excluded Defendant’s part. Thus, Defendant argued, the distinction was not one likely to affect the purchasing decision of its product. The court disagreed, finding that such a different (even though in Defendant’s favor) would be relevant to dealers purchasing the products for use in customers cars, and thus denied Defendant’s motion.

Practice Note: There is a distinction between parallel imports and grey market goods, though the terms are used interchangeably. Parallel imports are those goods that – while not intended for the U.S. market – are identical to the goods sold in the U.S. Courts have routinely held that if the goods are identical to those in the U.S. market, their sale in the U.S. will not constitute infringement. If, however, there is a material distinction between the goods sold elsewhere and those sold abroad, sale of those items may constitute trademark infringement because their sale creates a presumption of consumer confusion.