Last week, Abercrombie & Fitch CEO Mike Jeffries admitted he didn’t make A&F clothes in larger sizes. His reasoning: beautiful thin people attract other beautiful people to wear A&F’s clothing; and unattractive fat people detract from his stores. Then came the immediate firestorm of fury on social media sites like Twitter and Facebook, encouraging people never to shop there. One consumer even bought A&F merchandise and handed it out to the homeless (his idea of a brand readjustment).

For A&F’s part, it remained silent. No doubt Mr. Jeffries got a tongue lashing lecture on tact from his board of directors, but nary an official comment came from HQ, and Mr. Jeffries is now noticeably out of the press. Regardless of what can be gleaned from the company’s silence, it probably did the right thing. A brand owner’s response to its detractors can become part of the brand if not deftly handled. Worse, attacking the messengers, no matter how unfair the criticism, is liable to bring out the worst in all of us. Amy’s Baking Company learned that lesson this week.

Like thousands of people across the country, many at this law firm were riveted this week by the story of Amy and Samy Bouzaglo, whose bizarre television appearance and on-camera behavior on Gordon Ramsay’s Kitchen Nightmares catapulted them to infamy overnight. Although the buzz on the couple has not died down, and the lessons learned are still trickling in, one thing is sure: in the social media age, more than ever, a brand embodies the personality of those at the helm, and social media magnifies their warts and, thereby, those of the brand. How you respond in a digital world is as important as the product you put out.

Amy and Samy Bourzaglo appeared on an episode of Kitchen Nightmares, asking for help from television chef and restaurant turnaround king, Gordon Ramsey, to rejuvenate their failing restaurant. At the outset, the couple believed all their problems stemmed from some unfair and vicious reviews on Yelp! It didn’t take long, however, for the cameras and Ramsey to light on the real problem: poorly prepared – and often bizarre – food, a painfully slow kitchen, abusive owners who admit to stealing tips from the wait staff and serving store-bought food, and who verbally abuse and eject customers who complain about undercooked pizza or long wait times.

Watching the married restaurateurs make one public relations blunder after another on national television, in newscasts, and on social media sites made most of us wince and laugh at the same time. No doubt, the Bourzaglos episode will be among the highest rated. Yet, it’s not likely the couple or their brand will recover from it, largely because in the face of harsh criticism it chose to lash out. Here’s what their gaffes can teach us.

Social Media Is Difficult To Control: Companies cannot always control the messages of consumers and should not try.

Numerous websites and news organizations have covered what has now become known at “The Meltdown, ” in which Samy and Amy, owners of Amy’s Baking Company, lash out at Facebook users’ messages that take issue with them for bad food and stealing their servers’ tips. In response, Samy and Amy hurl vitriol at their users, calling them losers, haters, morons, and liars, hurling epithets, and using profanity and shouting (through the use of ALL CAPS) to punctuate their points.

When it became clear they were on the losing end of a media battle, the couple removed their vitriolic postings (which also removed the 10,000-plus comments), and claimed their page had been hacked. This significantly slowed down the hate-traffic on Facebook, but it did something worse, it moved people to Yelp!, where Samy and Amy could not manually remove the posts.

While Facebook has some tools that allow internal management of one’s online presence, other sites, such as Twitter (in which individual users can aggregate tweets using hashtags) do not allow for interference from third parties. Companies should recognize the potential damage that can be caused to a brand before trying to quash bad press with censorship attempts. In the end, it could leave them playing “whack-a-mole” with other, less controllable sites. And leave them explaining not only their comments, but their attempts at censorship.

The Dog Catcher Shouldn’t Call the Vet a “Hairball:” People will stop at nothing to undermine your message if you undermine them, so don’t.

When Abercrombie’s CEO dipped his foot in the holier-than-thou water of beauty, he probably realized people would call out his own lack of attractiveness, but people dug deeper still to hurt the brand that hurt them. For example, former employees responded by revealing A&F’s policy to intentionally damage clothes with scissors rather than make them a available for donation to the poor.

Similarly, when Amy Bourzaglo began a flame-throwing digital tirade against the criticism she received for stealing her employees’ tips, calling online fans fakes, morons, frauds, and thieves, they struck back with a vengeance. It didn’t take long for the public to learn she was the fraud. The deep-digging public was quick to disclose Amy (her real name, Amanda) was convicted of using a fake social security number and sentenced to 14 months in prison. Soon after that revelation, likely in response to Amy’s continuing sound-off,, one concerned member of the public started an online petition to have the federal government investigate her for illegally taking the tips of her waitstaff. Query whether a simple apology from Amy for her objectively bad behavior rather than an attack might have left her in a better position.

Perhaps Amy should have taken a page from the PriceChopper book. In 2010, a shopper at Price Chopper sent out a negative tweet and photo when she saw a pile of garbage in one of the aisles. The PriceChopper social media employee might have replied to the tweet with an apology about the store’s condition, but instead, in a move that makes one wonder whether Amy was at PriceChopper at the time, called the tweeter’s employer and demanded disciplinary action. Unthinkable. Finding itself in the midst of a customer relations nightmare entirely of its own making, the company got wise and issued an apology, going so far as to agree to participate in a social media conference to discuss how the situation escalated. Amy has yet to have such a revelation and make any attempt to make up for her objectively inappropriate actions.

The digital age, the easy availability of decidedly personal and embarrassing information, all coupled with the ability to disseminate the information through social media should be warning enough that defending oneself online by attacking the messenger is a bad idea.

Whoever is at the Helm is at the Heart: Social Media Means Every Action Affects the Brand.

There was a time when a comment from a spokesperson might be isolated to a tiny news story that only a handful of people saw. The scuttlebutt about “last night’s comments” would end at the water cooler, and at worst, the company could issue a statement distancing itself from whatever embarrassment happened the day before. In all likelihood both would go unnoticed.

Today, a company spokesperson IS the brand and the likelihood than anyone will not have heard whatever faux pas he or she uttered is zero. Moreover, because social media has the tendency to amplify a statement, perhaps beyond its original intent, a brand can quickly go from riches to rags over the smallest infraction.

Consider the 2010 case of the Susan G. Komen Foundation, in which Karen Handel became the face of the organization after she announced the Foundation’s decision to defund Planned Parenthood. Although it was a decision she was not solely responsible for making, she became the brand identity overnight. Against a stream of bad press, Handel was forced to resign in order to offer the brand any hope of rehabilitation. 20 years ago, her comments might have been a blip on the radar. Social Media has changed the intensity of the spotlight.

Mike Jeffries’ recent statements are not likely to destroy the Abercrombie brand, largely because his brazen manner and off-the-cuff remarks are not foreign to consumers and Abercrombie has not fanned the social media flames to push consumers away. Some might argue his comments which were global in nature and not personal attacks are even consistent with a brand whose goal is to remain patrician and elite. Amy and Samy may not be so lucky. Amy’s Baking Company – through its owners’ words and actions – is now synonymous with deceit at best and mental illness at worst, forcing would-be restaurant patrons to consider whether a visit is worth the predicted abuse. If the company is to come back from the disaster the coupled fomented, their contrition should come quickly.

The World Loves a Comeback: Social Media Can Be a Brand’s Salvation.

Contrition goes a long way. Just ask Gilbert Gottfried who got a second chance after a heartfelt apology for making insensitive jokes about the Japanese after its horrific earthquake. While AFLAC quickly terminated his duck-spokesperson contract after the incident, his apologies got his fan base to urge the insurance company to bring him back.

Similarly, when a rogue tweet made the Red Cross appear as if its volunteers were drinking on a disaster site, the Red Cross took quick action. The company’s quick response (which included a humble note that it had confiscated the keys) was so heartfelt and human, the guffaw went from a PR nightmare to a compassionate call to action, with consumers using social media to call for and collect donations to support the nonprofit’s mission.

Time will tell whether Amy and Samy will admit their mistakes – social media and otherwise – and seek forgiveness from their fan base. That the company claimed the horrific comments made on their Facebook page were the result of being hacked when clearly they were not does not bode well for their turnaround. That said, if they decide on brand rehab, the very tools that brought them down could make them stars.

Nike sued competitor Already (dba Yums) in New York federal court for infringement of its registered trade dress in the super popular Air Force 1 footwear, an example of which is shown above. Yums filed counterclaims for declaratory relief that there was no infringement and that Nike’s Air Force 1 trade dress was invalid, seeking cancellation of the USPTO federal registration in the process. Upon conducting discovery, Nike determined that Yums’ conduct did not rise to the level of infringement and issued a fairly broad covenant not to sue — by which Nike agreed not to file any claim for trademark infringement or related claims “based on the appearance of any of [Yums'] current and/or previous footwear product designs, and any colorable imitations thereof, regardless of whether that footwear [was] produced, distributed, offered for sale, advertised, sold, or otherwise used in commerce before or after the Effective Date” of the covenant. The covenant also covered Yums’ distributors and customers.

Naturally, the court dismissed Nike’s claims and Nike subsequently sought to dismiss defendants’ counterclaims. In an aggressive move, Yums opposed, claiming it had the right to proceed with its request for cancellation of the Nike trade dress registration.

On January 9, 2013, the Supreme Court affirmed the Second Circuit’s dismissal of defendants’ counterclaim. The broad scope and breadth of the covenant not to sue removed any “case or controversy” between the parties, such that the court no longer had subject matter jurisdiction over the matter. Nevertheless, Yums could still pursue cancellation at the Trademark Trial and Appeal Board.

Practice Notes :

Setting aside the interesting procedural issues in this case, we believe Already v. Nike highlights the following practical considerations for trademarks owners and practitioners:

1. Seek trade dress registration when you can: regardless of the result in this particular case — and whether Yums successfully seeks to cancel Nike’s trade dress registration– companies sometimes overlook seeking proactive protection for their unique packaging or product design or the distinctive appearance and characteristics of their product or service offerings.

2. Refrain from pursuing a potential infringer unless you are reasonably certain your claims rely on strong, compelling senior rights and that any of your underlying registrations are not vulnerable to cancellation. Of course, it’s always possible certain facts will not be revealed until discovery is conducted, but it’s a good idea to slow down and carefully weigh all the facts available before throwing valuable corporate resources into a trademark dispute that could backfire.

3. When issuing a covenant not to sue, make it sufficiently broad in scope, as in this case. Also keep in mind Justice Kennedy’s dissent: covenants not to sue should not routinely be used in an effort to moot litigation that a trademark owner initiated.

The shape Nestlé’s iconic Kit Kar bar has been found to be distinctive, so says the appeal board at the Office for Harmonization in the Internal Market in the United Kingdom (“Office”). Denying Cadbury’s claim that the shape of the chocolate bar was not protectable on the grounds that it was too commonplace a shape, the Office opined that the “four bar” shape had been in such exclusive use for so many years in the UK, consumers had come to recognize it as being part of the Nestle family of marks.

Cadbury has, since 1935, sold the candy bar, Carmello, which also uses the 4-bar shape. Unfortunately, the English candy company does not sell the bar in the United Kingdom; only in other EU countries. Despite the fact that Cadbury provided evidence of its long-standing use of the “four-bar” shape outside the UK, such evidence did nothing to melt the Office’s chocolate heart. Cadbury is considering its options at this time, and may appeal that decision, which itself was an appeal from a lower decision finding Cadbury’s position that the “four-bar” shape was generic.

Practice Note: This case is important because it underscores two very important trademark principles. First, trademark rights are national in scope, and a company does not have a registration, it should have use. Although many courts will allow the introduction of evidence that a trademark is used in another country, it may not be determinative at the end of the day. The case also makes clear that trademark owners should consider all aspects of their product for trademark coverage. Companies often only look to the name and the packaging to determine whether trademark protection is warranted. The shape of the product may also provide some protection opportunities.

The TTAB recently released a non-precedential opinion cancelling registration of this mark,

and rejecting registrant’s parody defense. Where will this opinion fall in the lineup of parody cases?

The opinion arose out of Polo Ralph Lauren Corporation’s cancellation proceeding against Thread Pit, Inc.’s registration of the above-referenced mark in connection with t-shirts and collared polo shirts. Thread Pit sells $5 t-shirts on line. Based on the facts supporting fame in the opinion, I think you know what Ralph Lauren sells. Ralph Lauren alleged likelihood of confusion and dilution and that its mark:

is famous.

The Board’s opinion gave short shrift to Respondent’s argument, “[i]f Petitioner’s Polo Player mark is so famous and recognized, it is unlikely that consumers would believe goods bearing Registrant’s mark came from the same source.” The Board referred to this argument as academic hogwash and failed to even footnote Chewy Vuiton, a 4th Circuit case; in fact, the Board went out of its way to mention its reviewing court, which as we all know, is not the 4th Circuit. The Board stated: “Respondent’s argument . . . is counter to legal precedent of the Board and the Board’s primary reviewing court, the Court of Appeals for the Federal Circuit. As stated by the Federal Circuit: While scholars might debate as a factual proposition whether fame heightens or dulls the public’s awareness of variances in marks, the legal proposition is beyond debate. The driving designs and origins of the Lanham Act demand the standard consistently applied by this court – namely, more protection against confusion for famous marks.”

After an analysis of the parties’ goods (identical), channels of trade (same), classes of purchasers (same), and similarity of marks (similar in commercial impression), the Board returned to the parody defense. Ralph Lauren’s pony definitely came out ahead.

“Parody is not a defense if the marks are otherwise confusingly similar” the Board wrote, quoting Boston Red Sox Baseball Club LP v. Sherman, 88 USPQ2d, 1581, 1592 (TTAB 2008). This argument seems reasonable and even supported by statute: parody is a defense as long as your parodying mark is not a source indicator says the Lanham Act. In that way, the Lanham Act allows traditional trademark principals such as likelihood of confusion, prior use, and restraints on trade to trump first amendment concerns. But the Board didn’t go that far in explaining its reasoning. Instead, the Board relied more fully on a different basis. Basically, the Board did not believe Respondent was parodying Ralph Lauren’s pony but was instead parodying “a lifestyle.” Indeed, Respondent argued it was parodying the “social elite as embodied by the sport of polo, which is perceived to be a sport reserved for the elite. The rider falling off the horse is the parody of that elite, luxury lifestyle. And of the humor in seeing someone fall off a horse, somewhat like slapstick comedy.” Where Respondent lost its way was in its failure to connect the POLO brand, a symbol of that “elite lifestyle,” to the rest of its argument. Isn’t the Ralph Lauren polo player emblazoned on an $85 polo shirt a symbol of the “elite lifestyle” Respondent is parodying? And wasn’t that the target of Respondent’s parody? Failing to take the argument one step further left the field open for the Board to say, “parodying a lifestyle is not a parody of a trademark” and rely on Elvis Presley, a case with a substantially dissimilar parody versus trademark set of facts.

Even if Respondent had connected those dots, would the Board have been able to rely on the recent TTAB decision in Crackberry to reject the parody argument? In Crackberry, full opinion here, the parody defense didn’t work because the applicant’s services, “online retail store services featuring consumer electronics and telecommunications products,” were found to be “closely related” to the opposer’s handheld devices. As such, the opposer’s goods were not a “juxtaposition of the similar and dissimilar.” In other words, you can’t parody a product when you provide support services for it—that would be akin to making fun of the popular kids while simultaneously ironing their cheerleading uniforms. The Crackberry Board, the Board cited Chewy Vuiton where a $10 dog chew toy was found to be a legitimate parody of Louis Vuitton’s $1190 handbags.

Would Respondent’s $5 t-shirt have been a sufficient “juxtaposition of the similar and dissimilar” when compared to Ralph Lauren’s $85 polo shirt?

Practice pointer: Parody is tough to argue successfully. You better make the judges laugh, and you better have an actual paradoxical product or service, otherwise, you’re just infringing. Cobalt thinks a good tag line making your point clear wouldn’t hurt either:

Watch the 1% Fall

Recently, news of California medical marijuana dispensaries selling a strain called “Linsanity” set loose Jeremy Lin’s lawyers—demand letters a flurry allegedly seeking apologies. This isn’t the first time a celebrity name has been used in connection with medical marijuana—does Tom Cruise Purple, aka Purple Cruise ring a bell?

Lin’s trademark attorney, Pamela Deese, commented to the media that, “You can’t file a trademark when there’s a clear connection to someone else’s name . . . [i]n this case, Jeremy Lin has the right to his name and related names and marks, as well as his signature, voice and likeness. That’s all part of his intellectual property.” See here

Certainly using a famous name without permission on any product, much less medical marijuana, is sure to raise some eyebrows. There are several bases on which to form a claim. To put an end to LINSANITY brand medical marijuana, Ms. Deese could assert Mr. Lin’s protected right of publicity. In California, the right of publicity protects the unknown and well-known from impermissible uses of their name or likeness. Although the claim does not have to be based on use of an actual name or picture, the alleged impermissible use must at least identify the plaintiff.
Nicknames, cars, even robot likenesses have been found to satisfy the requirements. Is Linsanity a nickname for Mr. Lin or a reference to his explosion onto the basketball scene? Does it make a difference?

Ms. Deese’s assertions also might be referring to a claim for false endorsement under the Lanham Act, which does not require a trademark as the basis of the claim. A claim under the Lanham Act may be based on the “celebrity” of the plaintiff. No one wants to insult Mr. Lin by suggesting he isn’t famous enough to raise this cause of action . . .

Ms. Deese also might be referring to garden-variety trademark infringement based on Mr. Lin’s pending application to register the mark LINSANITY for various goods including, duffel bags, cups, mugs, clothing, action figures, sporting goods, and sports drinks. Likelihood of confusion with medical marijuana? How about tarnishment of Mr. Lin’s famous mark? Things are getting personal again.

Practice Note: Cobalt has been talking about this issue for some time; in fact, we’ve dedicated two different Cobalt Academy sessions to copyright and trademark issues related to medical marijuana. March 2011 Academy.

What do we think? For starters, don’t use a famous name without permission. And don’t think that trademark protection isn’t a viable strategy in the world of medical marijuana—for instance, we’ve proposed measures such as seeking state registrations and ensuring that your brand strategy is law-abiding. In unchartered waters, treading legally is the best step toward protecting yourself and your customers’ best interest.

As we have blogged before, many companies are currently taking advantage of Sunrise Period B (which expires on October 28, 2011) to block .xxx domains containing their registered trademarks. People for Ethical Treatment of Animals (PETA) has taken a dramatically different tactic that is worth noting to spread the word about their message.

Taking advantage of Sunrise A Period for companies who wish to register, not merely block, .xxx domains, PETA has registered the PETA.XXX domain name. In doing so, PETA, known for its “I’d Rather Go Naked Than Wear Fur” anti-fur advertising campaigns featuring tastefully covered nude celebrities, stated its intent to launch a nudity and erotic-based website in the name of animal rights. PETA reportedly intends to launch its own .xxx website in order to appeal to a new audience it normally does not reach and shock them with graphic images of animal cruelty – images these individuals did not expect to see when accessing a .xxx website. In addition to pornographic content, PETA adds that the site will be interspersed with undercover photos and footage of animals being mistreated, as well as vegetarian and vegan recipes. The foregoing strategy may not be an entirely surprising move for PETA. The organization has never been shy about using images or methods with shock value to create publicity –both positive and negative — to emphasize their message in favor of humane animal treatment.

The tactic is novel and worth noting as an example of how companies may use the domain name reservation process for marketing and publicity purposes. That said, it is also interesting to note that Sunrise Period A was uniquely designed for adult-industry trademark owners, not mainstream entities. As a result of PETA’s potential misuse of the process, issues will likely arise regarding reserving domain names. For example, as the .xxx domain name process is currently set up, a legitimate adult-industry trademark owner will have priority over a Sunrise Period B should the two companies register for an identical domain, regardless of who filed first. In addition, if a conflict arises between two trademark owners who have reserved the same domain during Sunrise Period A, the domain name will be auctioned among all qualified Sunrise A applicants. Accordingly, if other mainstream companies follow PETA’s example, it will be interesting to see how the Registry, as well as legitimate adult-industry trademark owners, will handle those demands and potential conflicts.
Practice Tip: Needless to say, PETA’s registration of an .xxx domain name may not necessarily be appropriate for other organizations. Many companies may not welcome the additional expense (about $300-400 per domain) or the perceived negative attention of not merely blocking but actually registering an .xxx domain. One might be concerned that PETA’s move will lead other companies and nonprofits to consider registering .xxx domains when the more appropriate action would be to simply block the domains. It is judicious to counsel clients about all the options available and their respective pros and cons with respect to the .xxx domain registration process, removed from the hype surrounding PETA’s move.

In a decision handed down by the Court of Justice of the European Union on July 12, 2011, eBay has been found to be potentially jointly liable for trademark infringement along with individuals selling infringing goods on the eBay auction site because it had prior knowledge of the infringement.  Paris-based cosmetics company L’Oréal brought the complaint against eBay arguing that it is liable for trademark infringement because it is involved in the pre-sale, sale and after-sale processes of selling infringing products.  The Court agreed and held that an operator of an electronic marketplace that has provided active assistance in the sale of products rather than just taking a neutral position between the buyer and seller cannot be protected by the European Union’s e-commerce law exemption which applies only to parties playing a neutral online role.

eBay purchased keywords from online advertising services, such as Google Adwords, that included registered trademarks in order to direct potential customers seeking to purchase those goods to its website.   However, the goods being sold included both legitimate goods as well as counterfeit and unpackaged goods from non-European Economic Area (EEA) countries thereby infringing upon L’Oréal’s trademarks.  eBay implemented its own precautions against infringement by incorporating a take-down notification system and operating a Verified Rights Owner Program (VERO), however L’Oréal was not a member of the VERO program and rather turned directly to eBay for assistance with handling the infringing goods.  However, unsatisfied with eBay’s response, L’Oréal pursued its action before the High Court of England and Wales which referred several questions to the European Court.

In addition to joint liability, the Court considered the extent of injunctive relief that intellectual property owners could obtain against online intermediary websites, such as eBay, whose services are used as tools to infringe upon the IP of others.  The Court found that it could impose injunctions against online marketplaces requiring them to suspend accounts of those utilizing the site to sell fraudulently-marked goods or to employ measures which would make it easier to identify infringers.  However, the injunction would not require the website to actively monitor all activity of the website or prevent the sale of all goods bearing a particular trademark.

By finding eBay liable for joint liability, the European court differs from cases upheld in the United States.

In the Tiffany (NJ) Inc. v. eBay, Inc., cases in the federal district courts in New York, the federal courts rejected Tiffany’s argument that an intermediary website may have secondary liability thrust upon it if it has “generalized” information that its website was being used to sell infringing merchandise.  The court deduced in Tiffany that even though eBay had general knowledge of infringement by various sellers, it did not require eBay to prevent the same sellers from selling goods via their eBay accounts because general knowledge of infringement is insufficient to determine that actual infringement occurred.  eBay would have been liable, based upon Inwood Labs., Inc. v. Ives Labs., Inc. 456 U.S. 844 (1982) if it continued offering its services to sellers it knew or had reason to know were infringing on the mark’s holder’s marks.

Practical Considerations

What does this decision mean for clients who operate websites used or accessed from the European Union?

This decision suggests that, in the E.U., website owners might consider taking a more active role in addressing and preventing infringement upon learning of potential infringement from a trademark holder.  Indeed,  although an exemption from liability exists under the European E-Commerce Directive, any active role by the website owner in promoting items for sale by users may negate this exemption.

Tecnimed SRL v. Kidz-Med, Inc. (S.D.N.Y., Jan. 18, 2011)

Tecnimed is the manufacturer of a non-contact thermometer. Kidz-Med, Inc. had the exclusive right to distribute this non-contact thermometer. The complaint alleges that the defendants are now marketing and selling a competing non-contact thermometer despite the distribution agreement which prohibits the defendants from marketing and selling a competing non-contact thermometer for two years The plaintiff also alleges that the defendants are marketing their new product under a confusingly similar name with confusingly similar trade dress to the plaintiff’s product. The complaint alleges specific instances of confusion among consumers and cites a review on Amazon.com as evidence of such confusion.

The court held that an injunction is warranted; and, “Tecnimed will also derive benefit from a recall. At present, the Thermofocus directly competes against Kidz-Med’s product both in “brick and mortar” stores and over the Internet. Given Kidz-Med’s misleading promotional efforts and the high likelihood of consumer confusion, the harm resulting to Tecnimed from Kidz-Med’s continued sale of its product is likely to be substantial. Because consumers are likely to buy only one non-contact thermometer, a Kidz-Med sale obtained at Tecnimed’s expense will not be recouped in the future Accordingly, the Court finds that the balance of hardships favors a recall of the Kidz-Med product.” (p. 30)

The court found likelihood of success on the merits, irreparable injury; the balance of hardship in Plaintiff’s favor; and that the public would not be disserved by the issuance of the injunction. The court ordered both a recall and an injunction with bond posted in the amount of $130,000.

Dear Mr. Olson,

We are in receipt of your letter (below) in which you demand that we cease or you will sue.

We are a law firm; and we are reporting news in our blog. Clearly is that stated under the category on ‘News’ as you acknowledge in paragraph two of your letter.

We acknowledge that your client has trademark rights. However, protection for trademark rights under the Lanham Act is limited to protection against another’s use of a designation to identify its business, or in marketing its goods or services in a way that causes a likelihood of confusion. Such trademark rights do not override First Amendment rights.

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.

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.

Fiat Group Automobiles S.p.A. v. ISM, Inc., 94 USPQ2d 1111 (TTAB 2010) [precedential]

While FIAT is quite a well-known brand in Europe and other regions of the world, cars made by the Italian company aren’t all available in the U.S.… yet (Fiat reportedly has plans to bring more of its small car models to the U.S. market by the end of 2010). In truth, unless they are foreign car aficionados, most American consumers might not have heard of the brand, at least not extensively; at best, some may remember the tiny Fiat 500 fondly from European movies from the 50s and 60s (or the Pixar film “Cars;” Luigi, the tire shop owner was a 1959 Fiat 500). I personally remember (not so fondly!) the Fiat shown below as my very first car but, again, I grew up in a European country.

In the present case, Fiat filed an opposition at the Trademark Trial and Appeal Board (“TTAB”) against an applicant who filed to register the mark PANDA in conjunction with “automobiles,” based on, among other claims, dilution of Fiat’s “internationally famous” identical mark. Fiat owned a pending intent-to-use application at the PTO for the mark (not a registration) and used it internationally in conjunction with its hugely popular Fiat PANDA model, However, the Italian company was not using the mark in the U.S. commerce quite yet.

Applicant filed a motion to dismiss under FRCP 12(b)(6) for failure to state a claim upon which relief can be granted, arguing that Opposer Fiat had “no reasonable basis for damage in the absence of an allegation of ‘continuing prior use of any form of ‘Panda’ in the United States.’”

While the TTAB notes that activity solely outside of the U.S. is generally ineffective to create or maintain rights in marks within the U.S., it recognizes the possibility “in unusual cases” that activity outside of the U.S. could result in a mark becoming well-known within the U.S., even without actual use in commerce in the U.S.

Here, the TTAB found that Fiat failed to allege “any particular type of use or specific facts which could be proved at trial as demonstrating widespread recognition of its mark in the United States.” The TTAB gave Fiat 30 days to amend its dilution claim accordingly.

Practice Note: Pleading the dilution claim properly was key in this case. The TTAB makes clear that a foreign company seeking to oppose a U.S. mark but hasn’t yet started to use its mark in the U.S. market will need more than mere fame outside of the U.S. to be successful. In this case, the TTAB required:
1) specific pleading of intent to use;
2) filing of an application for registration; AND
3) some basis for concluding that recognition of the mark in the U.S. is “sufficiently widespread as to create an association of the mark with particular products or services, even if the source of the same is anonymous and even if the products are not available in the United States.”
Luckily for Fiat, it was given a second chance to meet all three requirements.

The Trademark Trial and Appeal Board has sustained Opposer, shoe maven Kenneth Cole’s contention that LE TIGRE for clothing is confusingly similar to Applicant’s use of LE TIGRE for pens.

Cole failed to establish that its LE TIGRE mark was famous. The Board pointed out that Cole had not provided sales data or advertising information sufficient to show that the mark was famous. Nevertheless, Cole did provide the Board with evidence of its vast licensing program and unsolicited newspaper articles relating to its LE TIGRE brand, as well as an article entitled “Licensing Seen as a Key to Strong Brand Presence.”

The rather rambling decision serves as a reminder that procedure is as important as argument at the TTAB. Not until page 12 of the 23-page report does the Board begin to address the merits of the case, spending the prior pages addressing issues related to the admissibility of evidence and objections raised by both parties.

On the basis of its 23 year use of the mark LE TIGRE for clothing, coupled with its licensing program and the fact that numerous leather companies also have lines of writing instruments, the Board determined the weight of the evidence suggested consumers would likely believe pens and clothing bearing the LE TIGRE mark emanated from the same source.

The case underscores the convergence of industry that companies and their lawyers are facing when trying to clear trademarks for use. Given the diversity that some companies maintain in their product offerings, the ability to predict whether a mark is confusingly similar is becoming more difficult.

Practice Note The lengthy discussion in this case related to procedure is worth noting, if only as a reminder to check (and re-check) what is admissible under a notice of reliance and what requires a deposition; and further, how to properly time objections

Abadin v. Marvel Entertainment Inc. got its final ZOW-POW! from a federal judge in New York who dismissed the action for copyright infringement and Lanham Act violations on a number of technical grounds, including no standing to sue. In a case that works as a “what not to do” checklist for plaintiff’s, it appears it’s safe to walk the streets again for Stan Lee.

Plaintiffs purchased Stan Lee Entertainment in 1999, which Stan Lee (the purported creator of many of the Marvel Comics characters) formed as a management company for his characters. In its lawsuit, Plaintiff claimed Stan Lee had transferred his most famous characters, including Spider-Man, Iron Man, Hulk, and the X-men (the “Characters”) to Stan Lee Entertainment prior to Plaintiff’s purchase of Stan Lee Entertainment. Plaintiff’s claim that Stan Lee Entertainment – and not Stan Lee himself – owned the Characters at the time that Stan Lee entered into an agreement to sell them to Marvel.

Defendant Marvel Entertainment and Stan Lee himself claimed that although Stan Lee had planned to transfer the Characters to Stan Lee Entertainment, the deal fell through, and instead Lee entered into an agreement in 1998 with Marvel – a year before Plaintiff’s purchased Stan Lee Entertainment – wherein Lee, as owner of the Characters, transferred the rights to the characters to Marvel.

In addition to finding that Plaintiffs were barred from their claims by the statute of limitations (“Plaintiffs cannot wait a decade to enforce their rights”), and further finding that procedurally, Plaintiff’s had failed to timely file its amended complaint (the 4th one), the Judge Crotty found that Plaintiffs did not have standing to sue because, a “plaintiff must have owned stock in the corporation throughout the course of the activities that constitute the primary basis of the complaint.” Since Plaintiffs did not purchase Stan Lee Entertainment until a year after the transfer to Marvel was complete, they did not have standing to sue.

Practice Note: Intellectual property due diligence at the outset of this deal might have avoided this suit altogether. Plaintiffs had a duty to carefully conduct the appropriate due diligence to determine what intellectual property was actually owned by the company they were purchasing and further, to request specific representations about what they were buying. In this case, a simple review of the PTO assignment database, freely accessible by the public reveals no fewer than 17 assignments of one SPIDER-MAN trademark, and Mavel’s involvement dating as far back as 1972.

Like Verizon did last year on the same day, Google has announced that it is changing its company name to Topeka. From a trademark law perspective, Google is acutely aware that the public must be educated on proper use of its new mark, so as to lower the risk that TOPEKA might become generic and lose its trademark status as so many marks have before it (such as cellophane, escalator or aspirin). To that end, the Google has posted these helpful trademark usage guidelines:

Further information about the TOPEKA re-branding effort is available here.

Musicians, retailers, music labels, songwriters, and managers have united under a new collective named Music Matters designed to educate consumers about the value of music and to encourage and assist consumers in identifying and purchasing online music from legal sources.

With such partners and supporting sites as iTunes, Rough Trade, Spotify and Play.com, and even former music pirate Napster, Music Matters carries out its mission through two main avenues, the first of which is providing a series of short animated films by several renowned artists regarding what inspired them to make music, and the second is the launch of the MUSIC MASTTERS trustmark (or certification mark) which uses a elaborate certification regime to identify legitimate legal music services for consumers. The gold e-badge MUSIC MATTER mark functions as stamp of approval for music retailers who display the mark on their websites to identify themselves as certified provider of legal music.

Certification marks, however, are neither new nor exclusive to the music industry and should be an important consideration for brand owners. Unlike a trademark, which is used to identify the commercial source of goods and services, a certification mark is used to certify the nature, quality, regional origin or characteristics of the goods or services and/or that the provision of services was by members of a union or other organization that meet certain standards. Examples include the GROWN IN IDAHO mark (owned by the Idaho Potato Commission), the UL logo (owned by Underwriters Laboratories) and the GOOD HOUSEKEEPING SEAL OF APPROVAL (created by the Good Housekeeping Institute).

Certification marks are of great value to both their owners as well the merchants who display them, allowing consumers to identify products that meet certain criteria and allowing brand owners to set themselves apart in the industry. There are, however, significant legal considerations and requirements which should be carefully explored and understood before seeking a certification mark. For instance, for the owner of certification mark cannot use the mark in connection with its own goods and services for which is it certifying others. Moreover, the owner is required to create and implement objective testing standards and criteria against which goods and services may be measured and may not discriminate against those who meet the criteria. Additionally, the owner must monitor and control other’s use of the mark to ensure its proper use.

Whether Music Matters will have any significant effect on the wave of pirated music remains to be seen…but in this author’s humble opinion, it’s a good start and serves to remind us all that music really does matter. You can read more about the collective here.

Unless you’ve been living under a rock lately, you probably know that in a matter of days, Apple will be releasing its much anticipated iPad tablet. What you may not know, however, is up until now, there has been a feud simmering in the background over who owns the rights to the IPAD trademark in the U.S.

At the time Apple filed its U.S. trademark application for IPAD, Fujitsu owned a pending application for the IPAD trademark for a wireless handheld retail inventory management device, filed in March 2003. The application went abandoned in April 2009 after Fujitsu failed to respond to a request for additional information. Fujitsu successfully revised the application in June 2009, and shortly thereafter, the application was published for opposition.

In what looked to be a looming trademark battle, Apple filed multiple extensions of time over several months to oppose Fujitsu’s pending application. Fujitsu, seemingly prepared for a fight, explaining through its director of public relations in January of this year that the company was consulting its lawyers because “[i]t’s our understanding that the name is ours.”

In a rather anti-climatic end, however, the battle is seemingly over before it really got started. On March 17, Fujitsu assigned the IPAD application and trademark to Apple, leaving plenty of speculation such as how many zeros were at the end of Apple’s check or did Fujitsu’s legal team conclude that its right in the mark paled in comparison to Apple’s (not likely since Fujitsu claimed rights in the mark dating back to January 2002).

Apple is no stranger to the name game as it had a similar dispute with Cisco over the IPHONE mark after it introduced the phone in 2007, resulting in a lawsuit which eventually settled with the companies agreeing to share the name on their respective products.

This case reminds us of the benefits of fully exploring the risks and costs likely to be associated with a particular trademark prior to its selection and use. Here there is no doubt that Apple was fully aware of, contemplated (and even opposed) Fujitsu’s trademark application prior to filing its IPAD application. Indeed, Apple probably calculated the cost of acquiring the trademark from Fujitsu as part of its business expense.
Few of us, however, have the deep pockets of a Steve Jobs, and as such, would be wise to carefully consider the results of a search, and particularly any potentially problematic marks, when creating a trademark filing strategy.

Or “Cher,” or even “Carrot Top.” Either The Cobalt lawyers are not up on just how cool Lindsay Lohan is, or she needs to check back into rehab for delusional thoughts.

According to the Wall Street Journal Law Blog, Ms. Lohan has sued E-trade in New York Supreme Court for misappropriation of her name and characterization for one of its “baby” commercials in which a girl baby refers to another girl baby as “that milkaholic lindsay.” According to Lohan’s attorney, such a reference clearly is an attempt to trade off the good name of Lindsay Lohan.

A couple of things her attorney might want to think about: First, all roads do not lead to your client simply because her name is Lindsay. Second, publicly giving the defendants a defense by saying the commercial is a “parody” is probably not a good way to really drive home your own case. Finally, Lindsay may have a hard time establishing that she’s known only by her first name given the fact that she’s never advertised or marketed herself solely as Lindsay, there are over 300,000 women in the country with the name Lindsay. Besides, she was never and abuser of — oh wait, she’s got one strong piece of evidence.

We’re betting this case gets the New York Heave Ho.

Gary Benson might not remember Serpentine Fire, but he sure felt the heat when the Trademark Trial and Appeal Board sided with Maurice White and rejected Benson’s application to register “WE NEED A REBIRTH OF THE EARTH. EARTH, WIND, AND FIRE (and Design)”.

Benson applied to register the foregoing mark for arranging concerts with ecological themes. The examining attorney must have had her Reasons for passing the application to publication (perhaps she was living in a Fantasy), but in September, Maurice White, singer for the multi-platinum band, opposed the application on the grounds of likelihood of confusion with the band’s trademark for EARTH, WIND & FIRE. While the band was no longer actively producing records, they were still touring due to the incredible Devotion of its fans. The TTAB agreed to Rock That decision in favor of EWF. Sorry, Benson, That’s the Way of the World.

Practice Note: What is interesting about this case (besides the author’s age-revealing bad puns) is primarily procedural in nature. First, the Board notes that Applicant (representing himself) filed an answer that was “argumentative in nature, and does not actually respond to the notice of opposing by affirming or denying opposer’s allegations.” This is a violation of Rule 8(b) of the Federal Rules of Civil Procedure. The TTAB is generally more lenient to non-represented clients and often it does not make financial sense to file a motion asking the Board to strike the answer. That said, attorneys should review improperly filed answers to make certain information is not contained in the answer that is inappropriate (such as letters written in consideration of settlement). Even if the Board grants the applicant leave to refile its answer, the record is cleaner for the Opposer.

The decision also points out another important procedural misstep. Once an Opposition has proceeded to the trial stage, edits to the identification of goods by the Applicant will not generally be accepted unless agreed to by the Opposer (there are some exceptions). TBMP § 514.03. Such an amendment can therefore be used as a bargaining chip with Opposers in cases where the Applicant could refile and likely prevail, thus its significance should not be overlooked.

The Board also notes the applicant tried to introduce evidence in the case by attaching it to his brief. Notwithstanding the Board’s leniency toward pro per parties, it generally does not allow parties to blatantly disregard its rules. The consequence of improperly introduced evidence is to give it no consideration.

Finally, the Board here – and in many other cases – gives great weight to the fact that the Opposer’s mark is fully incorporated into Applicant’s mark. Clients should be advised that “adding” elements to an existing mark (especially one that is arbitrary or fanciful) is not likely to reduce confusion between a client’s mark and an existing mark.

Major League Baseball is calling foul on Don Mattingly and has let him know with their own sentiment: an opposition. MLB is not happy with Mattingly’s choice of logo, claiming in large part that the logo is confusingly similar to its well-recognized MLB logo.

This is not the first inning. In fact, MLB took its original swing against Mattingly’s company, Mattingly Hitting Products, Inc., in mid 2007, when it filed an opposition at the U.S. Patent and Trademark Office. Proceedings were suspended, however, until last month, when Mattingly filed his answer.

Mattingly, aka “Donnie Baseball,” who both began and ended his career with the New York Yankees and was purported to be as popular as Babe Ruth, had a career batting average of .307 and over 220 RBIs. Mattingly also holds the MLB Grand Slam record, His logo contains his retired number, 23, which Mattingly also used for his restaurant, Mattingly’s 23 (which closed down in the late 90s). Mattingly, also maintains an eBay store, called Don Mattingly’s 23.

Mattingly’s logo in question, features the trademark “23” in the shadow image of a player taking a swing. The MLB logo shows a shadow image of a player facing the same direction, and poised for a swing, begging the question of how many ways one can depict a hitter.

Surely, this matter is not over ‘til it’s over, but of note (and also called into question on the TTABlog), is Mattingly’s attorney’s first affirmative defense that “Opposer may have failed to mitigate losses and damages.” Must be American League rules, because that’s a new one for us.