Prompt:
Trademark and Unfair Competition LawProfessor Beebe – Spring 2012I. Introduction: Foundation of Trademark and Unfair Competition LawA. Theoretical Perspectives: TM serves to (1) IDENTIFY and (2) DISTINGUISH/DISTINCTION of SOURCEThemesConsumer protectionMovement towards owner-protection Avoiding implementation of international agreements Circuit splits/SCOTUS confusion Territorial nature of US trademark rights Move from designation of factory/artisan to brand recognition Significance of TrademarksEconomic Significance of BrandsConsumer drives economy v. agrarian society of trade / industrial production  Brands are not about the product, but about the quality and reputation of the brandProducts have 3 Characteristics:Search: e.g., color, price  inspected prior to purchaseExperience: e.g., taste  verified through use of productCredence: e.g., durability  confirmed over timeInformation Economy: De-materialization of the economy  intangible, intellectual value, and value in meaningCultural Significance of BrandsSell products based on whether it enhances the image  Nike selling lifestyle and image, not just sneakersStatus Goods: signaling status/identity  “Veblen” goods (Rolex, NYU)Pro-Football, Inc. v. Harjo (DC Cir. – 2009): Washington Redskins; told PTO it was racialized/scandalous  turned on latches, can be brought againMattel + Barbie: M argued against using “Barbie” in book title  confusion of association possible Parody – Smith v. Wal-Mart (ND Ga. 2008): Wal-ocaust; Wal-Qaeda (20% confused)  First Amendment ConcernsPolitical Significance of BrandIP in TM doesn’t fit quite as nicely into political party preferences as other IP like copyright (supported by Dems) Gorgeous Irreverence to US Brands: China  KFG/KFC; Blockberry/BlackberryPurposes of Trademark LawPublic Protection  Consumer buys a product and knows it is what they are looking forInformation Asymmetry: Sellers have better information about products / services offered than buyers can uncover w/o buying the product Integrity of Market – AkerloffMark Owner’s Protection  Investment of time, money, and energy presenting mark to public; goodwill built with consumersIP = reward + incentive	Locke: property = person + labour of body + work of handsEurope: personhood, moral rights approachHistorical Periods of Trademark Scholarship1870 – 1915 – Property Rights: TMs are corporate property and should be protected as such1915 – 1930s – Protect Consumers from TM: TMs persuade people to buy things they don’t need; DOJ hostile to expand TM protection on federal law; part of Lanham delay1980s – Protect Consumers WITH TMs: TMs help by minimizing search costs and ensuring consistent quality levels  Scandia Down Corp. v. Euroqulit (7th Cir. 1985 , Easterbrook)Anonymous Source Theory: no longer identify particular factor or geographic location  product with same ID would have same quality2000 – TMs as Products Themselves: Product an afterthoughtIP Economy Changes due to: (1) internet, (2) WTO, (3) EU, and (4) Rise of ChinaDe Beers branding diamonds to continue scarcity despite ability to mass produce diamondsB. Early CasesThe Trade-Mark Cases (1879): 1st TM case to reach SCOTUSStatute at Issue: Act of 1870“An Act to revise, consolidate, and amend the statutes relating to patents and copyrights.”“An Act to punish the counterfeiting of TM goods, and the sale or dealing in, of counterfeit TM goods”Holding: Court STRUCK DOWN Act as beyond Congress’s powerTAKEAWAY: The Constitutional authorization for federal TM law COMES LATER through Commerce Clause and 3 Constitutional Clauses 1.8.8: “The Congress shall have Power… to promote the progress of science and useful arts, by securing for limited time… the exclusive right to their respective writings and discoveries.”1.8.3: “The Congress shall have Power… to regulate commerce with foreign nations, and among the several States, and with the Indian tribes.”1.8.18: “The Congress shall have Power… to make all Laws which shall be N&P.”Hanover Star Milling Co. v. Metcalf (SCOTUS 1916)TAKEAWAY: This is the first case to point out that TMs are meant to protect GOODWILL by allowing consumers to know what they are buyingMishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co. (SCOTUS 1942)TAKEAWAY: TMs are “merchandising short-cuts” through which a symbol induces a purchaser to select what he wants; the law protects TMs bc it recognizes the power of symbolsYale Electric Corp. v. Robertson (2d Cir 1928)TAKEAWAY: A TM is the owner’s seal through which the owner’s goods are vouched for; one may not divert customers from another by representing what he sells as coming from another sellerPrestonettes, Inc. v. Coty (SCOTUS 1924)TAKEAWAY: TMs only confer the rights to prohibit its use by another in order to protect the mark’s owner’s good will against the sale of another’s products as his/hersC. Statutory SourcesThe Lanham Act – USC Title 15, Chapter 22BackgroundPassed in 1946: extended federal protection to marks used in commerce, which meant the Act fell under Congress’s power1988: Lanham Act revised1995: Congress added §43©, codifying DILUTIONDistinction between Trademarks and Trade DressTrademark: refers to word marks or 2-dimensional image marks; perhaps can extend to sound, fragrance, etc.Trade Dress: product packaging or configuration, often 3-D in natureProduct Packaging: may be inherently distinctiveE.g., box  TM protection, packaging may be torn off and thrown awayProduct Configuration: must always show secondary meaningE.g., shape  TM protection because distinctive of sourceNot functional in a way that offends TM lawImportant Lanham Act Sections§1: Bases for registration§1(a)  ACTUAL USE§1(b)  INTENT TO USE§2: The subject matter of the Lanham Act  what can be registered as TM, unless:§2(a)  immoral, deceptive, scandalous matter§2(b)  flag, coat of arms, insignia of US or other State/municipality§2(c)  portrait of former POTUS without consent of widow during her life§2(d)  will cause confusion with mark already registered at PTO or in use§2(e)  unless mark consists of mark; merely descriptive or deceptively misdescriptive§2(e)(1): will not register because merely descriptive; no source denotative information; descriptive of product only§2(e)(3): geographically misdescriptive (e.g., “Russian” Vodka)§2(e)(4): surname§2(e)(5): functionality§2(f)  Statutory basis for idea that mark is merely descriptive may nevertheless receive protection if secondary meaning as orign of sourceRedeems certain marks otherwise excludable by §2(e)Does NOT redeem functional or intentionally misdescriptive marks§3-4: Service and collective/certification marks§8: Duration§15: A mess concerning incontestability of a mark§32: Remedies, infringement, and “innocent infringement”§43(a): Very broadly allowing protections to unregistered marksTrade Dress: design and packaging of materials, and even design / shape of product itself, if packaging or product configuration serve same source-identifying function as TMs§45: DefinitionsService Mark: like TM, but identifying services of one person, including a unique service, from the services of others and to indicate source of services, e.g., character names, distinctive features of radio and TV shows Trade Names: cannot be registered under Lanham Act unless they actually function to identify the source of particular goods or services, rather than merely identifying a companyGenerally registrable in state offices and state / federal common law may provide protection against confusingly similar company namesCertification Marks: used by trade associations or commercial groups to identify a particular type of good  may not be limited to single producer; must be open to anyone who meets standards set for certificationLevy v. Kosher Overseers Assoc. of America (SDNY 11995/ 2d Cir 1997): plaintiff sued another for infringing well-known kosher cert. markCollective Marks: used by members of a cooperative, association or collective group or organization, or such with bona fide intention to use the markAloe Crème Labs v. American Society Aesthetic Plastic Surgery (TTAB 1976): denying opposition to registration of collective markAttached to goods/services: useful to franchising, related agreements  treated the same as ordinary TMsEU Trademark Directive Articles 2 & 3(1)(a)-(d)Defines TM differently than Lanham Act  must be represented GRAHICALLYA directive is BINDING, as to the result to be achieved upon each Member State to which it is addressed, but shall leave to the national authorities the choice of forms and methodsIt is NOT directly and entirely applicable like a regulationRecommendation and opinions shall have no binding forceTRIPS Article 15(1)Different than Directive and Lanham  allows for anything ‘visually perceptible’While US allows for smells, tastes, and soundsLouis Vuitton v. Warner Brothers (Hangover II) (SDNY 2011): LVM luggage in airport scene  knock off and no permission Tarnishment & Dilution v. Parody / Satire Fair UseChrstian Louboutin v. Yves Saint Laurent (SDNY 2011):Red soles registered in PTO; YSL released all red shoe with red solesConsiderations: Identifies the origin?Confusion?Point of saleInitial InterestPost-sale confusionN.B.  everything in TM law turns on court’s perception / consumer’s perception on the signifier of source  TMs distinguish & ID sourceRed soles are distinctiveRed soles are aesthetically functional because they make the shoe pop TAKEAWAY: Marks MUST (1) be distinctive of source; and (2) NOT be functionalEssential Question: would competitors be at a significant non-reputation-related disadvantage if Louboutin was allowed to assert exclusive rights (Qualitex)II. Establishment of Trademark RightsA. What can be Protected as a Trademark?Elements of a trademarkTrademark must be (1) Distinctive and (2) non-functional to be protected Distinctiveness: (A) Inherent (Abercrombie/Seabrook) or (B) Acquired (Zatarains)The MAIN function of a mark is to be distinctive of source; no protection if it will not be protectedNon-functional: Non-reputation related competitive advantage/ Essential to use/purpose or Increased cost or qualityLanham Act can be read broadly  human beings might use as a ‘symbol’ or ‘device’ almost anything capable of carrying meaning Shape (Coca-Cola bottle)Sound (NBC’s 3-chimes; Tarzan yell) (but not Harley Davidson because functional)Scent (plumeria blossoms on sewing thread)Color (green-gold Qualitex) + secondary meaning as brand ID of sourceTouch/Sensory: (velvety touch on wine bottle)But, functionality argument that touch can help you grip the bottle - especially if utilitarian aspects advertised as being helpful.NOT Taste: don’t get to taste until you’ve purchased, so hard to be a source identifier; could also be functional and seems more suited for patent / trade secret Must not be functional (would be grant of monopoly unlike patent that expires): essential to the use or purpose of the article or if it affects the cost or quality of the article putting competitors at significant non-reputation-related disadvantage (Inwood Labs) Kellogg: pillow-shaped wheat biscuit post-patent)Europe: requires visual depiction (some national TM offices may register smell, just not ECJ level)Ralf Sieckmann v. Deutches Patent: ECJ approved smell markQualitex Co. v. Jacobson (1995): Qualitex sought TM registration for color of green-gold dry cleaning pads in 1991 - use since 1950s; Jacobson (rival) began to sell it too in 1989Holding: no special legal rule prevents color alone from serving as TMConsiderations: color scarcity?  Aesthetic value may be function (RST 3d)In re Organon (TTAB 2006): affirms PTO examining attorney’s refusal to register ‘an orange flavor’ as TM for quick-dissolving antidepressantsNot distinctive of source = failure to function as mark + Functional purpose Taste cannot be tasted in advanceIn re Clark (TTAB): high-impact plumeria scent in embroidery thread; only person to produce thread with scent; claims inherently distinctive + secondary meaning  wants TM particular scent and leave others free to use other scents; PTO says scents are inherently unregistrable when arbitrary and non-utilitarianTTAB Holding: Scented fragrance DOES function as TM for thread and embroidery yarn  (1) emphasized scent in ads; (2) prima facie case of distinctivenessFocused on acquired distinctiveness and not inherent distinctivenessTAKEAWAY: There is NO ontological bar (Qualitex), so something need only distinguish source and be non-functional (which it is here)Note: Very few marks ACTUALLY registered on Clark groundsTMEP §§ 1202.13-1202.15ScentPerfume and air freshener  functional, utilitarian purposeMay be registered under §2(f)  can NEVER be inherently distinctiveSubstantial evidence required to establish that the scent functions as a markFlavorNEVER inherently distinctive  would require SUBSTANTIAL showing of acquired distinctivenessBoard has observed that it is unclear how flavor can function as source indicator because flavor or taste generally performs a utilitarian function  consumers have no access to product’s flavor prior to taste to purchaseHologramMust show that it’s being used as a mark and is perceived as mark; 2+ views  should be denied on grounds that seeking to register more than 1 markSoundMust create in hearer’s mind an association with goods / servicesMust be unique, different or distinctive sound, not commonplace sound that listeners are accustomed toSound marks for goods that make a sound in normal course of their operation must show secondary meaningB. DistinctivenessSpectrum of Distinctiveness - OverviewInherently Distinctive: immediately capable of identifying a unique product source, rights to mark determined solely by priority of useArbitraryFancifulSuggestive MarksSecondary Meaning: buyers need not know identity of source, only that product or service comes from a single sourceDescriptiveSecondary functions as the TM “fair use” doctrine; fact-specific, relies on reactions of consumers to the mark, tested with surveysGeographicBalance merchant’s interest in accurately describing location against interest of senior users and consumer  junior user must confine / adapt geographical usage to avoid likelihood of confusionPersonal NameMay require junior user to issue negative disclaimer; See, Basile (DC Cir. 1990); Gucci (SDNY 1988)Abercrombie & Fitch Co. v. Hunting World, Inc. (2d Cir 1976): Π + ∆ both have clothing lines with label “Safari,” Π sues for infringementHolding: Term “Safari” as related to clothing is GENERIC and as related to boots is MERELY DESCRIPTIVE  Complaint DismissedRegistration: Registration creates a PRESUMPTION OF VALIDITYArbitrary, Fanciful, and suggestive marks CAN be registeredDescriptive marks CAN be registered upon a showing of “secondary meaning” (acquired distinctiveness)CIRCUIT APPLICATION: Abercrombie Spectrum is used by ALL circuitsBut less influential when it comes to scopeNOTES:Advantages of inherent distinctivenessEasier registration (no need to show secondary meaning)Scope (infringement side): strength is af actor in analysisAlways analyze in terms of consumer thoughtsImportance is more between inherent/acquired or not, rather than within eachInherent v. Acquired Distinctiveness – Restatement 3d of Unfair Competition: A mark is inherently distinctive because of nature of designation and the context, prospective purchasers are likely to see it as a designation that identifies goods or services produced or sponsored by a particular person, even if source is unknownA mark that has acquired distinctiveness has become distinctive thru use because purchases have come to perceive it as a designation that IDs goods/servicesTMEP §1209.03 – Determining if Mark is Descriptive (rather than suggestive/arbitrary)1209.03(a) – Third-Party Registrations: each case must stand on own merits, not conclusive1209.03(b) – No Dictionary Listing: term has well understood/recognized meaningIn re Orleans Wines (TTAB 1977): “Breadspred” merely descriptive of jellies + jams1209.03(c) – First or Only User: does not justify registration if term is merely descriptive even if first/only user1209.03(d) – Combined Terms: two descriptive terms combined; ask whether combination of terms evokes new/unique commercial impression or if it itself is descriptiveIn re Oppendahl (Fed Cir 2004): “Patents.com” merely descriptive of computer software for managing database of records/tracking records on Internet1209.03(e) – More than One Meaning: descriptiveness must be determined in relation to goods/services for which registration is soughtE.g., In re Chopper Industries1209.03(f) – Picture or Illustration: not if merely illustration of goods or article important feature / characteristic of goods/services1209.03(g) – Foreign Equivalents/Dead or Obscure Languages: foreign equivalent of merely descriptive English word no more registrable than English word itself; dead languages on case-by-case basis if translation doesn’t make sense since non-identifiable1209.03(h) – Incongruity: arbitrary/incongruous combination of English + foreign language registrableE.g., In re Johanna Farms (TTAB 1988): La Yogurt for yogurt1209.03(i) – Intended Users: merely descriptive if just IDs group for whom intendedE.g., In re Planatlytics (TTAB 2004): GASBUYER merely descriptive for gas buyers1209.03(j) – Phonetic Equivalent: merely descriptive if just slight misspelling1209.03(k) – Laudatory Terms: merely descriptive if just attribute quality/excellence1209.03(l) – Telephone Numbers: number + word = rejected under §2(e)(1)1209.03(m) – Domain Names: must function as ID of source of goods/services1209.03(n) – America / American: if in phrase/slogan, look if merely descriptive as laudatory or incapable1209.03(o) – National / International: merely descriptive of services1209.03(p) – Function / Purpose: merely descriptive §2(e)(1)Strange MarksSurnames: Mostly arbitrary, but require a showing of secondary meaning (Lanham §2(f) / TMEP §1211)TTAB TestWhether surname is rareWhether term is surname of anyone connected with applicantWhether term has recognized meaning other than surnameWhether it has the ‘look and feel’ of surnameWhether stylization of lettering is distinctive enough to create separate commercial impressionBut see, Peacable Planet v. TY (7th Cir. 2004): treating the personal name rule as a prohibition against ever using a personal name as a TM absent secondary meaning would lead to ABSURD results; good reason to press rule to logical limitsForeign Words – Doctrine of Foreign Equivalents: if easily recognizable foreign terms, translate to English equivalent and then analyze THAT translation under Abercrombie (TMEP §1207(b)(vi))E.g., In re Optical Int’l (1977): “Optique” is merely descriptiveE.g., Oriental Daily News (1986): Conclusion that Chinese characters SHOULD be translated to English because sufficient number of Mandarin speakers (BB – stretch)E.g., In re Tokutake Ind. (2008): Japanese characters translated  outer boundsAcronyms: Generally, acronym or initialism CANNOT be considered descriptive unless the wording it stands for is merely descriptive of goods/service, AND acronym/initialism is readily understood by relevant purchasers to be ‘substantially synonymous’ with merely descriptive wording it represents	E.g., Intel Corp v. Radiation (TTAB 1984): ROM is generic because conveys same meaning to listener as “read-only memory”NotesiPhone: PTO decided it had secondary meaning even before it was used because of family of marks  family of marks so strong that it had instant secondary meaningAdvantage of Suggestive/Arbitrary/FancifulDon’t have burden of showing secondary meaning; stronger mark for likelihood of confusion (LOC) testSome judges say descriptive marks can’t receive dilution protection regardless of how famous  2d Cir. 1995, but unclear if this happened in 2006 lawMay see what section TM is registered under with PTO, e.g., 2(f) = descriptive + 2nd meaningC. Descriptiveness + Secondary Meaning – DetailedRalston Purina Co. v. Thomas J. Lipton, Inc . (SDNY 1972): To establish secondary meaning, it must be shown that the primary significance of the term in the minds of the consuming public is not the product but the producer May be an anonymous producer  consumers often buy goods without knowing the personal ID or actual name of the manufacturer (AJ Canfield v. Honickman (3d Cir. 1986))Three Basic Types of Evidence may be used to establish Acquired Distinctiveness under §2(f):A claim of ownership of one or more prior registrations on the Principal Register of the same mark for goods or services that are the same as or related to those named in the pending applicationA statement verified by the applicant that the mark has become distinctive of the applicant's goods or services by reason of substantially exclusive and continuous use in commerce by the applicant for the five years before the date when the claim of distinctiveness is made Actual evidence of acquired distinctivenessZatarains, Inc. v. Oak Grove Smokehouse, Inc. (5th Cir. 1983): Secondary Meaning FactorsFacts: Π sold prouct under name “Fish Fri” and claimed infringement against competitors who used term “Fish Fry” to describe their productHolding: “Fish Fri” is DESCRIPTIVE, but it HAS developed SECONDARY MEANINGBut! “Chick Fri” is merely descriptiveTAKEAWAY: Most important – Factors for Finding Secondary Meaning (TMEP §1212.06)FIRST, how a court determines whether Descriptive or Suggestive/Arbitrary: whenever word/phrase conveys an immediate idea of qualities, characteristics, effect, purpose or ingredients of a product or service  descriptiveDictionary Definition: in English language if debatedImagination Test: does the term ‘require imagination, thought, and perception?’ E.g., suggestive term requires consumer to imagine conclusion as to the nature of the goods/servicesCompetitive Need: would competitors find term useful to describe their similar products?Third-Party Uses: an in-practice examination of competitive needSECOND, if descriptive, how to decide whether it has SECONDARY MEANING, factors:Amount and Manner of Advertising: how much they have been exposed can influenceVolume of SaleLength and Manner of Use: longer time, exclusive use, volume of sales, media useSurvey Evidence: may strike against, but if not can be the ‘most direct and persuasive way of establishing’ Additional Restatement Factors:Testimony from individual consumersProof of actual consumer confusionPhysical manner in which usedIntentional copyingNOTES on the FactorsUnknown how much each factor weighs comparatively, other than surveysRead “Fri” as “Fry”  about consumer perception, same rationale as foreign equivalents; see also, 1209.03(j) – phonetic with slight misspellingIn re Oppedahl & Larson, LLP (Fed. Cir. 2004): Anti-dissection ruleFacts: Efforts to register ‘patents.com’ as trademarkHolding: Whole is actually MORE descriptive than separate  no protectionTAKEAWAY: Anti-dissection Rule  can’t chop a mark into pieces, must analyze it as a whole; combination of two will not make it non-descriptive (TMEP §1209.3(d)):TLDs (.com, .net, .org, etc.)  don’t hold meaningCompare to Corp., Co., Inc., and similar designations  TLDs give more information (type of association with internet)But!  BB says ridiculous to think .com has no ID significance; e.g., “Half.com” never identified as “Half”Patents alone  descriptiveAs a whole  even more descriptive as the sum of its partsAdray v. Adray-Mart (9th Cir. 1996): geographic issues related to secondary meaning; rival operators of electronics stores in Southern Cal., Adry-Mart was expanding from LA to Adray’s turf in Orange County  no national secondary meaning, no bad faith; overlap of sales/ads in areas, so likely neither had secondary meaning C.f., Fuddruckers, Inc. v. Doc’s BR Others (9th Cir. 1987): ∆s (Doc’s) negotiated with Fuddruckers franchise, but fell through  Fuddruckers announces expansion to AZ, Doc’s opened restaurant with same trade dress  trade dress not inherently distinctive, so Π required to how secondary meaning, but didn’t have to show it in AZ because nationwideSecond Circuit – “NY Rule”: Π doesn’t have to prove secondary meaning if intentional deception/ copying can be demonstratedD. Generic TermsNever registrable + Can’t be saved with Secondary Meaning: not distinctive of sourceGeneric term indicates what type or category a product belongs to, rather than indicating the producer or other source of product  “tells buyer what is, not where it come from” (McCarthy Treatise 1992/1996)Product Configuration and Trade Dress may also be generic (though most often word marks)  grape leaves on wine bottle are generic (Kendall-Jackson Winery)Primary Significance Test in Filipino Yellow Pages (below)Birth + DeathBorn Generic (refused PTO registration)  Never becomes distinctiveRudolph Int’l v. Realys (9th Cir. 2007): rejected ‘disinfectable’ for nail filesBorn Distinctive  “Genericide” becomes generic with useDonald Duncan, Inc. v. Royal Tops, Mfg.: “yo-yo” generic in minds of public, and Π itself did much to educate the public in this respectBut!! May be saved from becoming generic or return from the deadE.g., Singer was used as generic for sewing machines, but saved; Firestone for rubber, and Thermos (maybe)Tension: be powerful, but not so powerful that you become generic!Resisting GenericideAdvisable to use TM along with generic description of goods to preserve the TMDilution cases may be used to prevent TMs from becoming genericPressure on dictionary publishersAdvertisingPolicing: cease/desist letters; statements of usageAt Risk of Genericide“App Store” – Apple fighting Amazon  sought preliminary injunctionBut, Steve Jobs quoted using “AppStore” generically“Google” – Google is fighting the verb of web searching  permissions page“Botox” – just not “Botox” without the ®“Xerox” – “there are two R’s in Xerox”“Windows” – Windows v. Lindows: case settled, but Windows paid $20M for Lynix OS to stop using Lindows logo for shell softwareAlternative Theories to ConsiderSecond Circuit  suggested that even generic marks are entitled to protection against some forms of unfair competitionGenesee Brewing v. Stroh Brewing (2d Cir. 1997): Π’s “Honey Brown Ale” mark is generic, but ∆ may be liable if it idd not use “every reasonable means to prevent confusion”Stephen Carter: desirability of “just compensation” being paid for a “taking” when court declares TM generic because destroys right built up in considerable investment  private property expropriated by publicRochelle Dreyfuss: questions whether TM doctrine has kept-up with developments in pop culture  extend traditional concepts of genericness to encompass realm of expressive (as opposed to commercial / “competitive”) uses of TMsTMs serve more expressive role in addition to original function of IDing source for commercial product  used as taglines in conversation without attempt to ID source; e.g., Barbie, cultural saturationCyberspace: generic term + suffix (.com)  domain names can begin with descriptive terms and build source ID and goodwill overtimeNetwork Externalities: users benefit from fact that others use the network  success of the TM results from collective labor of users, not just creatorFilipino Yellow Pages v. Asian Journal Publications (9th Cir. 1999):Facts: FYP charged infringement against AJP for “Filipino Consumer Yellow Pages” to describe their directoryHolding: Because mark was not registered, burden on Π to DISPROVE genericness, which it did not  Complaint dismissedTAKEAWAY: Generic  PRIMARY SIGNIFICANCE TESTWho are you v. What are you TestIdea: How the term is understood by the consuming public  “if the primary significance of the TM is to describe the TYPE OF PRODUCT rather than the PRODUCER, the TM is generic”Factors for Test: Use by Π as generic termsUnchallenged Third-Party Generic uses (even in different region)Unchallenged generic uses by the Media (try cease/desist letter)TAKEAWAY 2: Burdens of ProofIf NOT registered, BOP falls on Π to DISPROVE genericnessIf REGISTERED, BOP on ∆ to show genericEvidence of genericness is ick compared to Mil-Mar, but BOP decidesTAKEAWAY 3: Anti-Dissection Rule AdvancedSurgiCenters case REJECTED  combination of 2 generic terms is not automatically generic and should be analyzed as a whole (“holistic approach”) (D. Ct. misapplied)SurgiCenters: deviation from normal uses in generic + generic phrase or unusual, unitary combination may trigger finding of not genericBB: Court breaks anti-dissection rule ALL THE TIME  not very strongMil-Mar Shoe Co. v. Shonac Corp. (7th Cir. 1996)Facts: Π “Warehouse Shoes” sued for PI against ∆ “DSW Shoe Warehouse” claiming infringement on term ‘warehouse’ – said it was descriptive + secondary meaningHolding: In retail context, term “warehouse” is GENERICTAKEAWAY: Another application of PRIMARY SIGNIFICANCE TestGeneric if primary significance of the term is to describe the TYPE OF PRODUCT rather than the particular producerSignificant use by competitors denotes mere descriptivenessNot being a primary definition in dictionary does not imply secondary meaning (e.g., “Light” v. “Lite” are generic for beer)Look to common usage of term, not whether it’s the most common use of the termMurphy Door Bed v. Interior Sleep Systems (2d Cir. 1989):Facts: Murphy originated term “Murphy bed” for a pivot bed, others called it disappearing/ concealed/wall beds.  PTO denied registration in 1981 because became generic; defendants entered into agreement with Murphy Co. to be exclusive distributor in FL and stop using term generically; after PTO decision, ∆s formed corp. with term in name  suedHolding: “Murphy bed” is generic term, having been appropriated by the public to designate generally a type of bed  ∆s couldn’t infringe on Π’s TM When public is said to have expropriated a term established by developer, burden is on ∆ to prove genericnessGenerally, burden on Π to show unregistered mark is not genericLearned Hand: aspirin generic because so adopted by public as to become genericTAKEAWAY - Factors:PTO/TTAB afforded great wightDictionaries have “Murphy bed” defined  reflect general public’s perceptionNewspapers/magazine usagePolicing of Mark  convinced lower court to side with Π, but not CircuitPilates, Inc. v. Current Concepts, Inc. (SDNY 2000): How a court decides GENERIC v. DESCRIPTIVE?Holding: Pilates is undoubtedly genericTAKEAWAY: Gives factors for when generic v. descriptiveDictionary definitionsGeneric use by competitorsΠ’s own generic useGeneric use by mediaConsumer surveys, forms:Thermos Survey: asks respondent how s/he would ask for the product at issue  if respendents generally use the brand name (“Thermos”) rather than product category name (“Vacuum Bottle”), survey evidence brand name has become genericTeflon Survey: Gives short course in generic v. descriptive  survey runs participant thorugh a number of terms asking whether they are common names or brands (a little more authority than Thermos because can see if the rest make sense)Competitor need for term (not mentioned in case!)Kellogg v. Nat’l Biscuit (1938, Brandeis): elements of functionality and descriptiveness / secondary meaning; “shredded wheat” must show primary significance in consuming public  failed, so only right to have ∆ take reasonable care to inform the public of source of its productSUMMARY OF CHOOSING WHICH ABERCROMBIE SPOT YOU ARE ATPilates + Zatarains: Generic?-Descriptive?-Suggestive?Pilates: When is something GENERIC v. DESCRIPTIVE?Dictionary definitionsGeneric use by competitorsΠ’s own generic use Generic use in mediaConsumer surveysZatarains: When is something DESCRIPTIVE v. SUGGESTIVE/ARBITRARYDictionary DefinitionImagination TestCompetitive NeedThird-Party UsesE. Distinctiveness of Nonverbal Identifiers: Logos, Packages, Product Design, & ColorsMain Question  Can we analyze graphic marks under the Abercrombie spectrum, or do we need some other standard?Different Tests; Different Standards?Star Indus., Inc. v. Baccardi & Co. (2d Cir. 2005)Facts: PTO denied registration of “Georgi O” then Star tried to register just stylized “O”  protectable, but no LOC with BacardiStar relies on inherent distinctiveness Holding: O-Design satisfied inherently-distinctive analysis; however, protection mark is THIN and therefore limited protectionTAKEAWAY: Stylized shapes or letters may qualify as marks if the design is unique or unusualSeabrook Foods v. Bar-Well (1977): Seabrook factors as an ALTERNATIVE to Abercrombie spectrum (Inherently Distinctive)!Facts: Vine/leaf design with “Seabrook” and “Arctic Gardens” insideHolding: Seabrook Farms logo IS distinctiveTAKEAWAY: Established factors for INHERENTLY DISTINCTIVE graphic marks!  (compared to Abercrombie categories for non-graphic marks!)Whether design is a “common” basic shape or designUnique or unusual in a particular fieldMere refinement of a commonly adopted and well-known form of ornamentation for the goodsCapable of creating a commercial impression distinct from the accompanying wordsUsed only for product packaging (Wal-Mart v. Samara Bros. – design/configuration can never be inherently distinctive)Note: can receive protection for a font, even if a generic term – exclusive right to use generic term in a particular fontSecond Circuit  Insists that they use Abercrombie test for image and designs, BUT! Seabrook Factors keep slipping inNot explicitly used by 2nd Circuit, but they will consider them and then come to conclusion that the trade dress fits somewhere on the Abercrombie SpectrumFun-Damental Too, Ltd. V. Gemmy Industries Corp. (2d Cir. 1997): “We see no reason to abandon Abercrombie distinctiveness spectrum in this case.”Nora Beverages, Inc. v. Perrier Group of America, Inc. (2d Cir. 1998): Applying word-mark spectrum to packaging trade dressBut, compare: Landscape Forms, Inc. v. Columbia Cascade (2d Cir. 1997): “We are not so confident [as the Fun-Damental court] that the Abercrombie analysis is more naturally fit for direct application to product packaging case than configuration cases.” Amazing Spaces v. Metro Mini Storage (2d Cir. 2010): Π alleged infringement of a star design that Π claimed as a service mark   SJ for ∆ aff’d in part where:Many similar/identical 5-pointed stars, raised and set in circles   no reasonable jury could find that the star symbol was even a mere refinement of this commonly adopted and well-known form of ornamentation; and Π failed to raise a fact issue of secondary meaning wrt the symbol  judgment is rev’d in part so Π can introduce trade dress claims evidenceThree Supreme Court Cases Describing Product ConfigurationExpanding the Types of Nonverbal MarksTwo Pesos, Inc. v. Taco Cabana, Inc. (SCOTUS 1992)Facts: Taco Cabana adopted a unique trade dress for restaurants and charged infringement against Two PesosTAKEAWAY: Trade dress CAN be inherently distinctive without secondary meaning“An identifying mark is distinctive and capable of protection if either (1) is inherently distinctive or (2) has acquired distinctiveness through secondary meaning.”Even when mark is unregisteredDoes NOT limit it to product packaging/design distinctionTrademark and Trade Dress serve same purpose  Same Analysis with Abercrombie spectrum, may have inherent distinctiveness in trade dressPullback: Later pulled-back by Samara  case went too far; doesn’t make sense with old ideas where primary meaning of TD is decoration + secondary meaning is to point to the sourceDo the Hustle v. Rogovich (SDNY 2003): decade-themed bar, Π wants to define as broadly as possible, ∆ as narrowly as possible  Evaluates under Abercrombie and finds no good evidence of inherent distinctiveness and not enough use to develop secondary meaningRationales:Policy  Court worried about protection of small businessINCENTIVE: “Adding a secondary meaning requirement could have anticompetitive effects.”  requiring secondary meaning might be anticompetitive allowing competition to appropriate originator’s dress in other markets and deter originator from expandingMORAL: protect against intentional copyingPUBLICITY RIGHTS (Posner): existence of congestion externality provides argument that rights of publicity should be perpetual and inheritable  form of information/expression less valuable in public domainDoctrinal  Court notes expansiveness of subject matter included in §43(a) protectionJustice Stevens notes how §43(a) has morphed over the years  not objection, but wants to point it out“There is no persuasive reason to apply to trade dress a general requirement of secondary meaning which is at odds with the principles generally applicable to infringement suits under §43(a).”Aftermath  Toys Mfrs. Of America . Helmsley-Spear (SDNY1997): holding Π’s “unique” registration process, forms, and location of toy fair (taken together) constituted protectable trade dress which the ∆s had infringedQualitex Co. v. Jacobson Products Co., Inc. (SCOTUS 1995)Facts: Green-gold dry cleaning padsHolding: Not inherently distinctive, but did show secondary meaningTAKEAWAY: Ontological things (color, shape, fragrance, sign) CAN be protectable, but MUST show secondary meaning because they are never inherently distinctiveAn allowance, but a pullbackAllow: protection for ontological things generallyPullback: cannot go as far as inherent distinctivenss  must show secondary meaning for colors, etc.!DO NOT do inherently distinctive test for this!! (from Seabrook / Abercrombie)Rather  DO apply secondary meaning factors from Yankee/ ZatarainsRationale (Similar to Two Pesos): Lanham §45 defined what can be used as a mark very broadly, so color includedRationale for limiting: color may be a form of functionality; high bar for things like color that can be functional!TMEP §1202.05 – Color As Mark:Color marks are never inherently distinctive, and can’t be registered without showing of acquired distinctiveness under §2(f) (Samara Bros.)Color can function as a mark if it is used in manner of TM / service mark and if it is perceived by the purchasing public to ID / distinguish goods or servies on or in connection with which it is used and to indicate their sourceFunctional color marks are not registrable, e.g., yellow or orange for safety signs, black to make something look smaller, colors needed for color coding, even something like color coral for earplugs functional because visible during safety checksMay be functional if (1) cheaper to make; (2) aesthetic functionality if evidence indicates color at issue provides specific competitive advantages that, while not necessarily categories as purely ‘utiltitarian’ in nature, nevertheless dictate what color remains in public domainThe Design/Packaging DistinctionWal-Mart Stores, Inc. v. Samara Bros., Inc. (SCOTUS 2000)Issue: What must be shown to establish that a product’s design is inherently distinctive for purposes of Lanham Act trade-dress protection (of unregistered TD)Holding: In action for infringement of unregistered TD under §43(a), a product’s deign is distinctive, and therefore protectable, only upon a showing of secondary meaningTAKEAWAY1: Product-packaging TD CAN be inherently distinctive, BUT! Product configuration TD CANNOT be inherently distinctive!If product design/configuration  MUST show secondary meaning (Zatarains / Yankee)If product packaging  Test for inherent distinctive (Seabrook / Ambercrombie)SCOTUS pulls back on Two Pesos (limits holding to packaging!)Only TRULY inherently distinctive nonverbal marks are inherently distinctiveCritiques: (1) just about everything today in post-industrial world part of design(2) Tertium quid: there is something between the 2 (design / packaging)TAKEAWAY 2: Assume product DESIGN/CONFIGURATION if it’s unclear!!  A presumption for making them show secondary meaning - cautiousRationale:Packaging and word marks have purpose of identifying source / telling customers that they refer to a brand /sourceProduct Design – no consumer predisposition to equate design feature with source or see as indication of sourceDesign intended not to identify source but to make the product itself more appealingApplication of inherently distinctive test in product design cases could deprive consumers of “the benefits of competition with regard to the utilitarian and aesthetic purposes that product design ordinarily serves”Rock and Roll Hall of Fame & Museum v. Gentile Productions (6th Cir. 1998): photographer took photos of Museum’s building with Cleveland skyline; rev’d D. Ct. and found the building is not TD  design is fanciful but not in TM sense, doesn’t function as TM and not recognized by public as such, owner’s inconsistent use of design as source-ID functionHerman Miller v. Palazetti Imports/Exports (6th Cir. 2001): genuine issue of material fact as to whether lounge chair and ottoman had acquired secondary meaningBUT! McNeil Nutrition v. Heartland Sweeteners (EDPA 2008): yellow packaging of Splenda sugar substitute was arbitrary and thus inherently distinctiveBaker v. Selden (SCOTUS): foreclosed competition under copyright law for acconting systems  high burden for establishing a product feature or configuration that has been the subject of utility patent can ever qualify for TD protection (See TrafFix)Fashion Originators Guild v. FTC (2d 1940, Hand): clothes, useful articles, are not copyrightableTMEP §1202.02(b)Regardless of whether mark is functional, must also determine whether it’s distinctive  use Samara Bros. distinction and use Seabrook factors to determine if packaging is inherently distinctiveTrade Dress Protection After Wal-MartIn re Slokevage (Fed. Cir. 2006): Further defining what is configurationFacts: “flash dare” jeans – crazy designs on back pocketsHolding: Mark is part of the product  CONFIGURATION!  Secondary meaning is required. (BB thinks packaging argument used is ridiculous)Argument that consumers recognize the butt pockets as identifying the source of the garment and her designs are more akin to a label being placed on garment, but court disagrees  design incorporated into garment itselfTAKEAWAY: If it has a utilitarian or aesthetically functional purpose, it is PRODUCT CONFIGURATION and requires showing of secondary meaning!In re Chippendales: The Tertium Quid problemFacts: Bowtie and cuffsTAKEAWAY: If you are selling something, there is design and packaging.  Whether it is distinctive of the source is the only question.Yankee Candle Co., Inc. v. Bridgewater Candle Co. (1st Cir. 2001)Facts: YC display system has shelves, store layout, and most centrally – jars + labels  “total look and feel” (alternatively, claims only in the labels)Holding: Court finds no inherent distinctiveness NOR secondary meaning evidenceTAKEAWAY: Applying Samara, where TD rests somewhere between product packaging and design  we assume design!Configuration is design/configuration  needs secondary meaningUnlike Two Pesos, not the whole store, but particular elements YC points outProduct Configuration v. Packaging Analysis:Bridgewater: this is configuration because they relate to non-reputation valueYankee: this is packaging – paying for the experience, not the candleCourt: this falls somewhere between product packaging and configuration; assumed configuration (under Samara Brothers) and conducted test for secondary meaning Factors for Finding SECONDARY MEANING (use with Zatarains Factors)***NOTE: Secondary meaning requires STRONG EVIDENTIARY SHOWINGCourt Cites Seabrook (Citing Chippendales):Whether design is a “common” basic shape or designUnique or unusual in a particular fieldMere refinement of a commonly adopted and well-known form of ornamentation for the goodsCapable of creating a commercial impression distinct from the accompanying wordsConsumer surveys/testimony of actual consumersCircumstantial evidence: length/manner of use, nature/extent of advertisingNOTE: ads should feature elements claiming as TD!Indication that consumers associate TD with sourceLabels are packaging, but don’t’ rise to level of inherently distinctive under Abercrombie  court found it appropriate to supplement bare-boned Abercrombie categories with Seabrook Factors“While particular combination of common features may indeed be arbitrary, we do not think any reasonable juror could conclude that these elements are so unique and unusual that they are source-indicative in absence of secondary meaning.”No Secondary Meaning  Π points to ∆’s copying as evidence of secondary meaning, but court says this may be the copier exploiting desirable feature that than seeking to confuse as to the source  bad intent is to pass off, not just copyRECAP: Tests for Protectability of Trade Dress(1) Product Packaging or Configuration?What is the product?Does the claimed TD come off before you use the product (packaging) or is it part of the product itself (configuration)?(2)(a) Product Packaging: Is it inherently distinctive?Second Circuit: after considering Seabrook factors, put it somewhere on Abercrombie spectrumIf not inherently distinctive, then need secondary meaning(2)(b) Product Configuration: Secondary meaning is needed, is it there?Same analysis for color(3) Functionality can defeat finding of distinctivenessUtilitarian (Inwood)Purist: Essential to use/purpose of the product?Effect on cost/quality forcing competitor to design around it?Non-reputational competitive disadvantage?Non-Purist: Competitive alternatives?Aesthetic FunctionalityIs this feature necessary for competitors to effectively compete in marketplace?F. FunctionalityGeneralLanham Act 2(e)(5): No trademark …shall be refused registration…unless it consists of a mark which comprises any matter that, as a whole, is functionalA product feature cannot serve as a trademark if it is essential to the use or purpose of the article or if it affects the cost or quality of the articleRegardless of distinctiveness, a mark cannot receive protection if it is functionalKey is determining if it is a non-reputation related useRationalesStops TM law from allowing a producer to control a useful product feature (patent law)Would allow for indefinite expansion of patent protections which are time-limitedTrafFix shows SCOTUS limiting scope of TM law after expanding it in Two Pesos & QualitexFunctionality is a question of fact – consumer perception is not taken into accountProblem today  in determining which test to applyEssential to the use or purpose test (TrafFix Devices/Inwood) – SCOTUS/5th cir.Competitive Necessity multi-factor test (Morton-Norwich) – Federal Cir.Restatement (3) 17: Ultimate inquiry simply whether it hinders competitionStatutory SectionsGoals of functionality doctrine:Preserve integrity of patent lawPreserve “effective” competitionTMEP §1202.02(a) – FunctionalityTrade dress is functional, and cannot serve as a trademark, if a feature of that trade dress is “essential to the use or purpose of the article or if it affects the cost or quality of the article.” (Qualitex – quoting Inwood)Introduction to the Concept of FunctionalityFunctionality Overview  Doctrine is a total mess!  Federal courts don’t know which test to employSCOTUS is narrowing scope of TM subject matter after expanding in Dos Pesos + QualitexFunction = non-reputation relatedFunctionality Questions Would protection restrict he right o compete effectively?Will protection hinder the competitor in competition?Would protection inhibit competition?Is the availability of the design “essential to effective completion?Would protection put competitors at significant non-reputation related disadvantage?Utilitarian FunctionalityMorton-Norwich: establishes 4 Morton-Norwich factorsMost important Morton-Norwich factor is 3rd factor (availability of alternative designs)Qualitex: equates Inwood’s “essential to use or purpose” with competitive needTrafFix Devices: emphasizes Inwood’s “essential to use or purpose” test and minimizes importance of availability of alternative designs (essential = cost/quality)If a feature is essential, it is functional, even if there are competitive alternativesIf feature is NOT essential, and yet there are no competitive alternatives, it is nevertheless functional (“competitive advantage” test, perhaps)Circuit Court split after TrafFix DevicesValu Engineering: essentially ignores TrafFix and returns to M-NEppendorf: seeks to follow TrafFix and focuses on “essential to use or purpose test”; if product feature is “essential to use or purpose,” no need to consider whether product feature is a “competitive necessity”Aesthetic FunctionalityWallace Int’l Silversmiths: Rejects Pagliero’s “important ingredient in commercial success” test, and embraces “availability of alternative designs test”Pagliero: China patternTrafFix Devices: claims that Qualitex was an aesthetic functionality caseIn cases of aesthetic functionality, “it is proper to inquire into a ‘signficant non-reputation-related disadvantage”   Courts should apply the availability of alternative designs / competitive necessity testTwo Test Summary(1) Inwood/TrafFix – “Essential to the Use or Purpose” TestHow you define the market will in realty affect the outcomeInwood: blind to competitors, looks at product in isolation  may ignore cost / quality effects because everything effects cost or quality(2) Competitive Necessity Morton-Norwich Factor TestIs there an availability alternative design (3rd Factor)?  If so, likely to give protection even for expired patents (caused the problem in TrafFix)Morton-Norwich Products (CCPA 1982): Genesis of Functionality DoctrineFacts: Appellant tried to get registration for its spray bottle (container design)Holding: Spray bottle design NOT DE JURE functional under 4-Factors	De Jure v. De Facto FunctionalityDe Facto  The actual utilitarian function of the product or designMay be protected as an indication of soruceDe Jure  functionality as a matter of law (if protecting will impede competition, lack of alternatives, etc.) May NOT be protected as TM“Examination into the possibility of TM protection is not to the mere EXISTENCE of utility, but to the DEGREE of design utility.”Bottle shape has a function that can be performed by a variety of other shapes with no sacrifice to any functional advantage  not the best or one of few surperior designs availableTEST: M-N Factors to Establish if something has DE JURE FUNCTIONALITY (1) Existence of expired utility patentVornado Air Circulation v. Duracraft Corp (10th Cir. 1995): even if alternatives, expired patent will trump all  dispositive factorSCOTUS Response in TrafFix  Strong evidence, but NOT dispositive10th Circuit Wacky Test: If the asserted TM feature was an important part of patent document, there is a per se bar to TM regardless of competitive alternatives  poisoned the well with patentApplication: Georgia-Pacific Consumer Products v. Kimberly-Clark Corp: GA Pacific seeks patent protection in quilted design (central advance that diamond design was softest bulk + non-nesting)  enough to find utility(2) Utilitarian advantages touted in advertisingIn re Gibson Guitar Corp. (TTAB 2001): promoted shape as producing better music  denied protectionIn re Witco Corp: Advertised bottle as providing stability in pouring oilIn re Babies Beat (TTAB 190): small grasp of baby  functionalityBut see, In re Weber-Stephen (TTAB 1987): Weber claimed to have made up slogan “round for a reason” for advertising reasons and judge agreed it was MERE PUFFERY to say oblong shape would cause more uniform grilling(3) Availability of alternative designsIMPORTANCE: Historically  leading factor because patents rarely existIn re Zippo Mfr (TTAB 1999): Zippo itself could not tell if another company had made a counterfeit!   no competitively effective ways for competing lighter market except for Zippo shape, it’s perfectZippo went to PTO and showed 1000s of other lighter designs, alternatives appeared, so no longer competitively necessary shapeIn re American National Can (TTAB 1997): ribbed design significantly affected the strength of the can  does not require the best, design works just as well(4) Manufacturing advantages  does design result from competitively cheap or simple manufacturing method?Kellogg v. Nabisco: pillow design for shredded wheat found to be functional under this factor (also had expired patent)The Scope of the Functionality Doctrine – Expansion of M-N to Aesthetics?Wallace Int’l Silversmiths v. Goldinger Silver Art Co. (2d 1990): Baroque silverwareHolding: No TM right because aesthetically functional in this marketUse Inwood Test: product feature is functional if it is essential to the use / purpose of the article or if it affects the cost/quality of the articleFeatures are purely ornamental  aesthetic functionality appliesTAKEWAY: Turns on how relevant market is characterized  Functionality CAN apply to aesthetic things as well“Though a producer does not lose a design TM just because the public finds it pleasing, there may come a point where the design feature is SO important to the value of the product to consuemrs that continued TM protection wold deprive them of competitive alternative,” (quoting Posner – WT Rogers)Π doesn’t seek protection in precise expression of decorative style but for the basic elements of the style that is part of the public domain (sounds like CR) but if he were able to show secondary meaning in a precise expression of the style, competitors might be excluded from using identical/virtually identical designInteresting way market and effective competition defined  to be able to compete in Baroque market, have to use it, but not just silverware market!Brunswick Corp v. British Seagull (Fed Cir. 1994): color black for outboard enginesFacts: sought to register black for outboard enginesHolding: Functional  it would impede competitionBoard said no, found to be de jure functional because of competitive need  doesn’t make them function better as engines, but exhibits color compatibility with lots of boat colors and makes motors look smallerModern Supreme Court Approach to FunctionalityInwood Labs. v. Ives Labs. (SCOTUS 1982): TAKEAWAY: A product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the articleQualitex Co. v. Jacobson Prods. (SCOTUS 1995): TAKEAWAY: Functional if it is essential to the use or purpose of the article OR if it affects the cost or quality of the article, that is, if use of feature puts competitors at significant non-reputation-related disadvantageExpands Inwood Idea  Equates “essential” with “non-reputation-related disadvantage” (later decisions cabin this to aesthetic functionality only)Basically saying Inwood test is THE SAME as M-N Factors / competitive advantage testTrafFix Devices, Inc. v. Marketing Displays, Inc. (SCOTUS 2001):Facts: MDI had expired utility patent on 2-spring withstand wind design for road signs and TrafFix copiedHolding: No infringement because MDI spring design is functionalUtilitarian Functional – Look at Design in Isolation: look as a matter of physics or architectureTrying to push all de facto functionality to de jure  any purpose that isn’t strictly reputation related is functionalBrings up market/audience question  who thinks the item is an indicator of source?  Highly specialized or average consumer?TAKEAWAY 1 – TWO-STEP TEST!!!: J. Kennedy tries to get rid of the ‘competitive alternative’ branch of M-N Test by putting forward a new test because that factor is hard to apply  Focus on “essential use or purpose” rather than competitive alternatives!Two-Step Test: A product feature is functional if “it is essential to the use or purpose of the article OR if it affects the cost or quality of the article,” even if competitive alternatives are availableIf a feature is essential, it is functional, even if there are competitive alternativesSomething is essential  if it affects the COST OR QUALITY of an itemIf feature is NOT essential, and yet there are no competitive alternatives, it is nevertheless functional (“competitive advantage” test, perhaps)TAKEAWAY 2 – Prior Patent: prior patent is STRONG EVIDENCE of functionality and places a HEAVY BURDEN on Π to show the feature is not functional!Can show not functional by demonstrating it is merely ornamental, incidental, or arbitraryChanges Vornado  an expired patent is no longer dispositiveFor unregistered marks, Π has burden of showing non-functionalFor federally registered mark, shifts the burden to ∆  functionality is a statutory defense to an incontestably registered markPost-TrafFix Functionality  CIRCUIT SPLITFIRST LINE: ValuEngineering Line (includes In re Organon (TTAB-PTO) and In re Kong Company)  have virtually ignored TrafFix decision (except to cite it for the nearly overwhelming significance of expired utility patents) and gone back to Morton-Norwich FactorsValuEnginering v. Rexord (Fed Cir. 2002): Valu  conveyor belt rails were configuration  ISSUE: Whether the design of these things can get TM protection“The availability of alternative designs can be a legitimate source of evidence to determine if the first instance if a particular feature is in fact ‘functional’Concerned about COMPETITIVE ALTERNATIVES/ NECESSITYPost-Valu they apply the OVERALL INWOOD STANDARD and then go to M-N FactorsTEST: If the product feature is essential the use or purpose (or affects cost / quality):Expired patent?Utilitarian advantages touted in advertising?Availability of alternative designs?Manufacturing advantage?SECOND LINE: Eppendorf Line  applies Inwood formally, but uses Traffix TestEpendorf-Netheler-Hinz v. Ritter GmbH (5th Cir. 2002): If you can satisfy Inwood, you do not need to go to the M-N Factors!Facts: Pipette with supporting features; claimed distinctive to Eppendorf, probably identifiable to people in the industry, but fins are supportive feature, so become necessary to the productHolding: The fins are design elements and necessary to the operation f the product.”  not a ‘competitive necessity’ but necessary to the operation of the productLook at this in a vacuum  if we removed the features, would it junction just as well? No because product feature performs a function – keep it stable and prevents breakage!!!Traffix Test   tries to DISCOUNT competitive alternatives; no real need to consider themSecond Circuit: looks like tending toward Eppendorf/TrafFix, but unclear, so generally argue bothThis is unclear, and can’t say for certain In re the Kong Company, Serial No. 78259826 (TTAB 2006) (Valu-Line): dental hygiene dog toy patent expired; went to TM side of PTO asking for exclusive rights to product configuration as their TMHolding: functional  rejected(1) expired patent; (2) own website advertises and totes dental advantages; (3) no alternative designsDippin’ Dots v. Frosty Bites Distribution (11th Cir. 2004): microball structure/ configuration is functional; color too is aesthetically functional  color for flavors correspond with natural association (orange = orange; brown = chocolate; red = strawberry)Eco Mfg v. Honeywell Intern (7th Cir.): company showed 30-40 designs to make a thermostat cover because wanted to TM the round  many competitive alternativesDe Facto functionality is applied! If it does something other than designate source, then we will not give TM.Functionality trumps designation of source  easy to think of 3 ways in which round would be functional (decorative choices, injuries, arthritis)  Aesthetic Functionality (use Eppendorf line) M-N factors don’t really work in aesthetic cases. Only the 3rd factor (availability of alternative designs) really makes sense in this contextTherefore, apply competitive necessity testAbercrombie & Fitch Stores v. American Eagle Outfitters (6th Cir. 2002)Facts: Discussion of functionality of catalogue; a combination of individually functional traitsTAKEAWAY: Illustrates danger of far-reaching scope; easy for judge to find no infringementAu-Tomotive Gold v. Volkswagen of America (9th Cir. 2006): D. Ct. found Porshe TM functional wrt keychains and floor mats2-Step Test  Correct reading of TrafFix (1) Essential to the use/purpose?(2) If no, are there competitive alternatives?No   functionalYes  non-functionalFord Motor v. Lloyd Design: like Auto-Motive Gold, but D. Ct. said they couldn’t use Ford design on floor matsProblem!  M-N remains the leading approach (competitive alternatives)Eppindorf is the minority approachAutomotive Gold is a strain Functionality OverviewUtilitarian FunctionalityMorton-NorwichEstablishes 4 M-N FactorsMost important is 3rd Factor (availability of alternative designs)Qualitex: equates Inwood’s “essential to the use or purpose” test with competitive needTrafFix: emphasizes Inwood’s “essential to the use or purpose” test and minimizes importance of availability of alternative designsIf product feature is “essential to use or purpose,” no need to consider alternative designsImplies that a product feature can be “essential to use or purpose” and thus functional even if there are alternative designsCircuit Split after TrafFixValue Engineering: essentially ignores TrafFix and returns to MNEppendorf: seeks to follow TrafFix and focuses on “essential to use or purpose test;” if product feature is “essential to use or purpose,” no need to consider whether product feature is “competitive necessityAesthetic FunctionalityWallace Int’l SilversmithsRejects Pagliero’s “important ingredient in commercial success” testEmbraces availability of alternative designs testTrafFix DevicesClaims that Qualitex was aesthetic functionality caseIn cases of aesthetic functionality, “it is proper to inquire into a ‘significant non-reputation-related disadvantage’ that is, courts should apply the availability of alternative designs/comeptiive necessity testAuto-Motive Gold v. Volkwagen: 2-Step Test  Correct reading of TrafFix Essential to the use/purpose?If no, are there competitive alternatives?G. Marks that May not be RegisteredExclusions from Registration – Lanham Act §2 Scandalous, Disparaging, and Deceptive Marks under §2(a)SCANDALOUS AND DISPARAGING TESTS  Two 2-Part Tests for Scandalous + Disparaging (Harjo v. Pro-FootBall)SCANDALOUS  2-Part Test(1) What is the meaning of the matter in question as it appears in the marks and as those marks are used in connection with services identified in registration?(2) During the period when the mark(s) was registered, would the mark be SHOCKING TO THE SENSE of truth, decency, or propriety to, or give offense to the conscience or moral feelings of, excite reprobation or call out for condemnation by a SUBSTNTIAL COMPOSITTE OF THE GENERAL POPULATIONNOTE: evaluates by contemporary attitudes because what was once scandalous (“Bubby Trap” brassieres) is quaint, but Old Glory Condom is scandalous (with flag)DISPARAGEMENT  2-Part Test(1) What is the meaning of the matter in question as it appears in the marks and as those marks are used in connection with the services identified in the registrations?(2) Whether, at relevant times, SUBSTANTIAL COMPOSITE OF THE TARGETED GROUP may perceive the subject matter as disparaging of their group?NOTE: Both tests are applied to the words at the TIME of registration, as social standards and perceptions may change – want to give companies some certaintyCan use to show meaning: dictionary, common usage at the time, printed publications, survey evidence (questions must be appropriate)Harjo v. Pro-Football (DC Cir. 2003) (Scandalous/Disparaging Tests)Facts: Petitioners, Native Americans, brought cancellations proceeding against ∆, Redskins, claiming violated §2(a) as being BOTH disparaging AND scandalousHolding: Enough evidence to find mark is DISPARAGING, but NOT scandalousBarred by Laches  Redskins survived because of laches, but will likely be struck from Register soonAdditional Examples of §2 Disparaging RejectionsIn re Heeb (TTAB 2008): applicant wanted to register “HEEB” for apparel; historically disparaging to Jewish peopleHolding:  Refusal Aff’dApplicant: context (magazines – not in app., so not considered); mainstream support (Hillel); cooption; generational; other disparaging marks are registered (TTAB doesn’t buy it)TTAB: Dictionary entries; anti-defamation league; testimony; public viewing; older generation / disparate views; intent doesn’t matter  balance interestsSubstantial Composite: not necessarily a majority (McGinley)No 1A violation to refuse registration  still free to speekDykes on Bikes (Filed 2003) (self-disparagement): rejected, but then allowed  cooptation/appropriation Jesus Jeans: some countries refuse, but US allowedTrash bin Laden: US refused registration, disparaging to individualDECEPTIVE TEST  In re Budge Mfg. (Fed. Cir. 1988):Three-Part Test for when mark is deceptive (for NON-GEOGRAPHIC MARKS)   ALL THREE MUST BE YES!!(1) Is the term misdescriptive of the character, quality, function, or composition of the use of the goods?If NO  term either (1) merely descriptive and registered with secondary meaning showing, or (2) inherently distinctive and can be registeredIf YES  move on(2) Are the prospective purchasers likely to believe that the misdescription actually describes the goods?If NO  term is probably inherently distinctive, go to functionalityIf YES  move on(3) Is the misdescription likely to affect the decision to purchase?If NO  term is “deceptively misdescriptive” under §2(e)(1) and MAY be registered upon a showing of secondary meaning under §2(f)If YES  mark deceptive under §2(a)  cannot be registeredIn re Budge Mfg. (Fed. Cir. 1988):Facts: Applicant appeals TTAB rejection of registration of its mark for synthetic fiber automotive seat covers with the name “Lovee Lamb” on grounds it was deceptive under §2(a).Holding: Held mark was deceptive  rejection was fineE.g., “Cafeteria” Restaurant in Chelsea is not a cafeteriaGeographic Marks Under §§2(e)(2)-(3)General§2(e)(2): registrable unless…when used in connection with the goods of the application, the mark is primarily geographically descriptive of themMust be able to show secondary meaning!§2(e)(3): registrable unless…used on or in connection with the goods of the applicant is primary geographically deceptively misdescriptive Cannot register, even with a showing of secondary meaning We treat geographically misdescriptive and geographically deceptively misdescriptive marks differently than we treat non-geographic deceptively misdesciptive marks Treat geographically deceptive marks in exactly the same way that we treat geographic misdescriptive marks Need secondary meaning where a mark is geographically descriptiveTEST FOR GEOGPRAHIC DESCRIPTIVENESS (TMEP 1210.01(a)): Test to establish prima facie case for refusal to register a mark as primarily geographically descriptive, examining attorney must show:Is the primary significance of the mark is a generally known geographic location (TMEP §§1210.02 et seq)?No  not geographic markYes  move onIf so, do the goods or services originate in the place identified in the mark (TMEP §1210.03)?; andNo  probably inherently distinctiveYes  move onIf so, would the purchasers would be likely to believe that the goods or services originate in the geographic place identified in the mark (TMEP §§1210.04 et seq)If YES to all 3 Questions  Mark is ‘geographically descriptive’ and MAY BE REGISTERED upon showing secondary meaning, in accordance with 2(e)(2) read with §2(f)If YES to 1 and 2, but NO to 3  go on to NOTE: If the mark is remote or obscure, the public is UNLIKELY to make a goods/place or services/place association (TMEP §12010.404(c))TEST FOR GEOGRAPHICALLY DECEPTIVELY MISDESCRIPTIVE MARKS (TMEP 1210.01(b) (like California Innovations – Fed. Cir. 2003): To support a refusal to register a mark as primarily geographically deceptively misdescriptive, examining attorney must show:Is the primary significance of the mark is generally known geographic location (TMEP §§1210.02 et seq)?No  not a geographic markYes  move onIf so, do the goods or services NOT originate in the place identified in the mark (TMEP §1210.03)?No  See above analysisYes  move onIf so, would purchasers would be likely to believe that the goods or services originate in the geographic place identified in the mark (TMEP §§1210.04 et seq)?No  mark probably inherently distinctiveYes  move onNOTE: If the mark is remote or obscure, the public is unlikely to make a goods/place or services/place association (TMEP §1210.04(c)); andIf so, would the misrepresentation is a material factor in a significant portion of the relevant consumer’s decision to buy the goods or use the services (MATERIALITY)(TMEP §§1210.05(c) et seq)YES  Mark is geographically deceptively misdescriptive, and CANNOT be registered in accordance with §2(e)(3)NO  Mark is “geographically misdescriptive,” and STILL cannot be registered if the mark is note registered before 1993-post NAFTANOTE (HOWEVER) that leading scholar has suggested that if geographically deceptively misdescriptive mark is arbitrary, then it may be treated as such and registered as inherently distinctive with no requirement of secondary meaning RECAP  INCREDIBLY FUZZY LAW:(1) Geographically Deceptive – §2(a): same as descriptive generally, central point is materiality and deceiving consumer  can NOT be overcome with secondary meaningAlthough unclear and may be treated as arbitrary and registrable as inherently distinctive with no requirement of secondary meaning(2) Geographically Descriptive – §2(e)(2): can be overcome with secondary meaning(3) Geographically Deceptively Misdescriptive – §2(e)(3): possibly treated same as deceptive (post-NAFTA) and requires showing that goods/place association is material to purchase  If it is  DECEPTION then POSSIBLY can NOT be overcome by secondary meaningA place being well-known or renowned for the goods supports a finding of materialityMisdescriptive but not material  just arbitrary  may be inherently distinctive and require no showing of secondary meainingAdditional Cases:In re Spirits Int’l, NV (Fed. Cir. 2009): Spirtis appeals TTAB refusal of “MOSKOVSKAYA” for Vodka  TTAB said “geographically deceptively misdescriptiveHolding: The materiality test of subsection (e)(3) incorporates a requirement that a significant portion of relevant consumers would be deceived  not wheher any absolute number or particular segmentApplied doctrine of foreign equivalents  “Moscow”In re Joint-Stock Company – “Baik” – (TTAB 2007) (PRECEDENTIAL): “Baikal” is geographically descriptive and known location; satisfies 3 prongs, so must show secondary meaning for geographic descriptivenessNantucket Nectors: geographically descriptive because HQ in Nantucket even if not produced there (other courts would rule the other way)Societe Genenerale (Vittel) (Fed. Cir. 1987): geographically known location, but obscure place in France, so unknown to cosmetics buyers  arbitrary or fancifulIn re Gale Hayman (Sunset Blvd) (TTAB 1990): perfume; refers to street in LA  goods/services do not originate in the place, so no finding of geographically descriptivenessName Marks –Marks that are Primarily Surnames:  Name Mark Rationales Names are not really source identifiers  they are commonFunctionality: want to preserve surnames with respect to others unless they have made an effort to show secondary meaningTest for whether barred from Registration because Surname with no Secondary Meaning (In re Bentham (TTAB 1995, name used as symbol – not just the word)):Degree of the surname’s “rareness”Whether anyone connected with applicant has the mark as a surnameWhether the mark has any recognized meaning other than as a surnameWhether the mark has the “look and sound” of a surnameWhether the manner in which the mark is displayed MIGHT negate any surname significance In re Joint-Stock Company – “Baik” (TTAB 2007): Applicant filed to register BAIK for vodka on ITU; examining attorney refused as “merely surname”   Benthin Factors applied, REVERSEDSurname extremely rareNo connection  neutralOther meanings  applicant says ‘coined term’ – evocative of “Baikal” – no famous people with surnameLook and Feel  very rare name, can’t assume public will know; Yahoo People Search shows <3000 people with similar nameH. PriorityGeneralFor any action to be brought as trademark infringement, plaintiff must be able to show “use”Actual trademark use is a prerequisite for obtaining common law rightsActual OR constructive use prerequisite for registration“Use” comes up in several contexts:Demonstrating use In commerce requirement - very broadDetermining Priority  Actual use for common law Actual or constructive use for Lanham Act registration  Determining OwnershipDetermining Abandonment Actionable Use (“google” or use in movies) – see Google case – does search engine “use” the TMFair use defense Surrogate UsePublic use of a term can create TM rights for company (“Coke” and “Bug’)Affiliate use – right to continue to use if continuous involvement & control Use in Commerce Requirement§1(a) – Requires “use in commerce” to be registered§45 - use in commerce” means bona fide use of a mark in the ordinary course of trade and not made merely to reserve right in a markGoods: (1) placed in any manner on the goods or containers (or similarly) AND (2) goods are sold or transported in commerce Services: used or displayed in advertising AND those services are used in commerce or in more than one state Intent to Use Registration (TLRA)§1(b) - allows registration of mark that a person has “a bona fide intention, under circumstances showing the good faith of such person, to use a trademark in commerce”§1(d) – registrant under 1(b) has 6 months to show, with evidence, actual use in commerceAvailable only to inherently distinctive marks; can receive extensions not longer than 24 monthsRationale: bring US in line with the rest of the world; notice to competitors Secondary meaning, by nature, requires prior useNon-inherently distinctive marks can show use of other goods and services referenced in the application that have developed secondary meaning that will transfer to new useRationales:Provides constitutional authority for federal trademark lawEnsures that competitors cannot reserve brand names to make competition more costlyOpen question: websites – not clear what is “use” for websites Relevant Statutory Sections§7(c): application to register mark considered constructive useIf after date of application, someone starts to use your mark  ENJOINABLE after you have perfected your mark (Subject to Dawn Donut)Senior Common Law User: someone in the country has used it before you applied for registration at PTO§22: date of registrationBecomes less and less important over the yearsCommon Law Priority: Where nothing has been registered at the federal levelTheodore Rectanus (1918) (STILL GOOD LAW) (concurring use)Facts: United Drug is senior user of drug wrt US-overall; United sells product under REX in MA (1777); Recantanus uses REX in KY (1883); United Registers in State, federal, and then ships REX to KY for first time in 1912TAKEAWAY: If the use is remote and undertaken in good faith, then we will allow that use to continue!!Good Faith: MA user was first user and then Rectanus took a train up to MA and decided to apply drug (REX) idea in KY  may question good faithIf not acting in good faith  lose local priority if clearly trying to take advantage of good willRemote junior may continue use in locality if adopted in good faithExceptions to Common Law Rule(1) TM Owner entitled to exclusive use of mark in any geographic area in which mark’s reputation established, even if product is not sold in that geographic areaTM owner entitled to protect mark in territory that he is expected to reach in normal expansion of his business, even if there is no current LOC in area (Hanover Star Milling)(2) TM owner is entitled to prevent anyone from intentionally trading on her goodwill, even outside her established geographic area  only innocent (good faith) use of same mark is protectedLanham Act: Exercising Priority and Obtaining an Injunction to Stop Junior User’s UseTo obtain an injunction, Senior User must show:1) Priority, and 2) Likely to cause consumer confusion as to sourceIf registrant has not entered and has no immediate plans to enter competitor’s geographic area  EXCEEDINGLY HARD TO SHOW LOCDawn Donut v. Hart’s Food Stores (2d Cir 1959): Requirement of Actual use for InjunctionsFacts: MI Company sues NY company that adopted Dawn in good faith; Dawn Donut had licensed out its mark a few times early on, but MI company had ceased operations in NY (retreated) by 1950sHolding: MI company could not enjoin NY company for using word “Dawn” for donuts until it could show that it was expanding into NY area even though it had nationwide senior rightsTAKEAWAY 1: Even though nationwide priority, you MUST show ACTUAL use where you seek injunctions to suppress other people’s useHow relevant today when everything is online?Applications of Dawn DonutSnelling & Snelling v. Snelling & Snelling (DPR 1970): federal registrant has not entered the Puerto Rico market  complaint dismissedPizzeria Uno v. Temple (4th Cir. 1984): court denied present injunction against user in “remote” territory without prejudice to registrants right to renew claim when it enters the territoryComidas Exquisitos v. O’Malley & McGees (8th Cir 1985): Atlanta restaurant could not obtain present injunction against use in IA because of lack of reputation in IA and no present plan to expand thereMinnesota Pet Breeders v. Schell & Kampeter (8th Cir. 1994): If TM owner not entitled to an injunction in ∆’s trade area because, under Dawn Donut Rule, Π has not shown a LOC there, then no profits should be awarded as to that areaLone Star Steakhouse & Saloon v. Alpha of Virgnia (4th Cir. 1995): registrant had already expanded into junior user’s Washington, DC trade area, and thus entitled to injunctionBUT SEE, Circuit City Stores v. CarMax (6th Cir. 1999)What-a-Burger VA v. Whataburger TX (4th Cir. 2004): Facts: Started in TX 1954, federally registered, then junior Waterburger started in VA, disappeared – then Waterburger begins to expand in mid-Atlantic, and finds Waterburg Stand in VA because had opened new shopsLatches Argument: Waited 30 years, sat on rights, junior user wants to continue useTX Lawyers: Dawn Donut  no basis to enjoin VA use because we had not expanded to the area yetHolding: Latches does not apply under Dawn DonutBurger King of Fla. V. Hoots (7th Cir. 1968): Π (BK) started use of BK mark in FL; ∆ (Hoots) opened BK restaurant in Mattoon, IL (1957); ∆ registers in IL (1959); Π gets federal registration (1961)  mid-60s Π had 38 outlets from FL to KYHolding: ∆ had 33(b)(5) defense for a 25-mile radius around MattoonNote: May have been different if BK had plans to expand earlierThrifty Rent-A-Car System v. Thrifty Cars (D. Mass. 1986)Facts: Thrifty began use of mark in OK (1958) applied for federal registration (1962); Thrift began use in MA (1962); Thrifty receives registration (1964); Thrifty enters MA and seeks to enjoin Thrift (1967)Holding: Because 7(c) was not yet in effect, only §22 (date of registration) applied  Thrift could continue to use its zone as of date of registrationBUT NOW!!  §7(c) in effect, Thrifty would have nationwide priority as a date of application, and Thrift would have to stopGeneral ApplicationsSenior uses  Junior uses  Senior applies for and receives registrationSenior sues Junior and vice-versa: Under 33(b)(5), Junior is frozen to its area of use as of the date of applicationSenior uses  Junior uses and then applies for and receives registration  Junior files suit against Senior, Senior Counterclaims: Junior has nationwide priority except in Senior’s zone of use as of the date of application or registration (unclear which)Zazu Designs v. L’Oreal (7th Cir. 1992, Easterbrook) (pre-TLRA registration)Facts: Cosmair (L’Oreal in US) developed ‘hair cosmetics’ (wash-out pink hair dye) called ZAZU and sold in stores (1985), flopped in late-1980s; Zazu Hair Designs (ZHD) registered with IL 1980 – said no products under name, but had been trying to enter market; ZHD applied for registration of ZAZU after L’Oreal applied to register mark and began to sell nationwideHolding: Slight sales insufficient for priority; ZHD didn’t register ZAZU federallyPotential users shouldn’t have to wait until other firms decide whether to market a productDissent:Serious issue of good faith  Good faith user is simply one that begins using a mark without knowledge of another party’s preexisting use; L’Oreal knew ZAZU had registered service mark, and that can be infringed upon by closely related product because of LOCTest for use was satisfied because more than de minimusZazu should have exclusive rights in Local AreaIf case were decided today, §22 doesn’t matter at all anymore, §7(c) is where it’s at  CONCERNED with date of APPLICATION, NOT date of registrationPriority and Bad FaithCannot receive priority where there is a showing of bad faith use to establish such priorityBell Inc v. Farah (5th Cir. 1975) – although race is to the swift in trademark law, race must be run cleanly if a firm wants to prevailHere, put new labels on old jeans in order to use first in commerce and apply for registration (before intent to use registration under 1(b); court determined priority by first sales date, not by individual shipments and discussions with customers Priority DisputesResolved by TTAB through oppositions or interferences  §13 provides, “any person who believes that he would be damaged by the registration of a mark upon the principal register may… file an opposition in the PTO, stating the grounds therefore.”  §1062(a): TM applications must be published before issuance, so that interested parties may have the opportunity to search for / oppose potentially damaging applicationsMay be opposed by showing mark is not entitled to registration – e.g., because others made use of it before applicant didChance v. Pac-Tel Teletrac (9th Cir 2001): ∆’s pre-launch marketing campaign (press releases/presentations, soon followed by launch of service established analogous use priority  May establish priority through ‘use analogous to TM use,” provided user makes actual use of mark within a reasonable period of time following analogous usePriority by Contract: may may covenants not to sue and the like; powerful second-comer may pay-off senior user  economic efficiencies theoryProperty Rationale/Incentives v. Consumer Protection Rationale: What do you do when consumers develop the TM uses – e.g., Volkswagen “Bug” started in the public, so how much protection do consumers need here?Priority v. Secondary MeaningDescriptive marks are not entitled to protection until owner can prove secondary meaning in minds of consumers, but priority suggests TM is presumptively owned by first person to use it in commerce (barring federal registration)Laureyssens v. Idea Group (2d Cir. 1992): trade dress infringement suit by makers of “Happy Cube” 3-D puzzles against makers of “Snafooz” puzzles; no question of actual secondary meaning existing (low sales, low ad spending), evidence of imitation, but not copying of trade dress  reject doctrine of secondary meaning in the making under §43(a), rev’d injunction because there are alternative forms of protectionIntentional copying is persuasive evidence of secondary meaning Secondary meaning can develop quickly to prevent knock-offsNY CL unfair competition: producer’s trade dress protected without proof of secondary meaning against bad faith practicesCourts virtually unanimous in rejecting idea of protecting “secondary meaning in the making”I. Registration: Trademark Office ProceduresGeneralBases under which you can file an applicationActual use 1(a)Bona fide intent to use 1(b)Use/registration/application in a Paris Convention CountryForwarded application from Home Country Madrid Protocol  if you’re a national of one country belonging to MP, you can file TM application in your home country and request your application be forwarded to the WIPO, and request that WIPO forward to other member countries asking them to registerForwarded application from home country under Madrid Protocol Advantages to Registration (Not required to Register) (Taken from §33)Provides prima facie evidence of validity, ownership, and registrant’s exclusive rights (§§7(b), 33)  BB: easy to burst this bubble with some evidenceUnclear how much weight courts actually place on §33 presumption of validityEstablishes nationwide priority at time of application (§7(c))Nationwide constructive use and constructive notice  cuts off rights of other users of same or similar marks (§22)Start clock running for purposes of incontestability: after 5 years  eliminates many defenses (§§15, 33), and limits on cancelation (§14)Registration procedures dependent upon basis under which TM is being registeredStatutory SectionsBasic Registration Actions:Unlike previous sections, registration is mainly statutory with some supplementation by PTORegistration requires examination in the USRationale for allowing Intent-To-Use applications  effective in 1989 (TLRA)Foreign companies had unfair advantage under § 44Uncertainty Token use process not available to small companies and certain manufacturersPost-Registration Actions – Maintaining RegistrationsDeclarations and ApplicationsContinuing Use (§8)Declaration of Incontestability (§15)Renewal Application (§9)During 6th year from date of registration:Registrant must file §8 Declaration of CONTINUING USERegistrant may (SHOULD) also file §15 Declaration of INCONTESTABILITYDuring the 10th year from date of registrationRegistrant must file §8 Declaration of CONTINUING USERegistrant must also file §9 RENEWAL APPLICATIONExclusions from Registration – Lanham Act §2 (see above for analysis)Disparaging, Scandalous, Deceptive, Etc…J. Incontestability – §§ 14, 15, 33§14 Gives immunity from cancellation (TIME LIMIT)  for the first 5-years after mark is registered, someone can come in and seek to cancel your registration on any grounds on which someone could have opposed registration in the first placeAFTER the 1st 5-years, grounds for cancellation are restricted to exceptions in §§14(3)-(5)§15 Goes further: Additional benefits given to mark over time  a mark becomes INCONTESTABLE if:Mark registered for 5 yearsFiled §15 affidavit showing that not only registered but also continuously used for 5-yearsNo pending claim against your mark or right to useMark can’t have become generic§33 – Nine Exceptions to Incontestability§§33, 15 Together – Incontestability of exclusive right to use the mark in federal courts (§§15, 33(b))After 5-years, cannot bring challenge by showing lack of distinctiveness; 5-years of registration serves as uncontested evidence of distinctivenessCAN bring a challenge that mark has become genericTriggered for all registrations, regardless of whether registrant files 6-year declaration under §15ProblemΠ’s registration is 5+ years old, but Π fails §15 declaration  ∆ counterclaims seeking to cancel Π’s registration on grounds that would, at TTAB, be barred by §14’s SOLRead §15  look at §33(b)  then look at §14  TM lawyers don’t know how these all relateBB: overstated and difficult to apply or predict how it will protect you  unstable doctrine and so many exceptionsOnly real protection is Park and Fly  against claims of no secondary meaning outside of 5-year windowFrom McCarthy: “The structure of the Act is to list those defenses or challenges which are not foreclosed.  While §33(b) lists nine exceptions to incontestability, it seems clear that §33(b) incorporates exceptions of §15 by reference, and §15 in turn incorporates §§14(c), (e), and §14(c) in turn incorporates the exceptions of §§2(a)-(c) and §4.  As many as 21 possible exceptions to incontestability have been listen, although this may involve some double counting.”Park ‘N Fly v. Dollar Park and Fly (SCOTUS 1985) (not in class)Facts: Π filed infringement action against respondent for using “incontestable mark”  respondent argued mark is merely descriptive and therefore not contestableHolding: Under §§14, 15, 33, incontestable marks CANNOT be challenged on ground of MERE DESCRIPTIVENESS because incontestable registered marks are presumptively valid due to the fact that they were registeredTAKEAWAY: Incontestability allows TM owner of descriptive mark to avoid having to show secondary meaningIII. Trademark InfringementA. Structure of AnalysisSubject matter – Owner / Property Right?Protectable?Packaging/configuration?Distinctiveness?Seabrook – common in industry?2d Cir – Abercrombie?Has this been infringed?LOC?Polaroid FactorsLOD?Blurring/Tarnishment∆’s fair use of TM?B. Use as a TrademarkUse of owner’s mark by defendant – actionable use requirement For a use to be actionable today, it must meet the definition of “commerce” and not of “use in commerce”This is a higher standard and means that fewer uses will be actionable by ownersMeans in some places, will win if not commercial (commerce)*Beebe does not focus much on use – mention and analyze quickly!*§45 – deemed used in commerce…when it is used or displayed I the sale or advertising of services and the services are rendered in commerce Six Aspects of “Use in Commerce” – bona fide use of a mark in ordinary course of trade  not merely to reserve right in a mark (no warehousing marks in US – maybe in Europe)(1) Commerce clause limitation(2) Establishing priorityCommon Law Rights  Actual UseFederal Registration Rights  Actual or Constructive Use (3) Establishing ownership  who is the user?(4) Determining whether a mark has been abandoned (when does “use” stop?)(5) Determining types of actionable use(6) Determining “fair use”Rescuecom Corp. v. Google (2d Cir. 2009)Facts: Rescuecom is national computer service company; registered TM since 1998; 17-30k visitors to site/month; advertises on Google; people search and Google shows links and ads (“sponsored links”); Google makes 97% revenue from AdWords  upon ∆’s advice, Π’s competitors purchased Π’s TM as a keyword triggering their adsD.Ct: Not ‘use in commerce’ because ads triggered didn’t exhibit Π’s TmHolding: Use of mark in ∆’s internal algorithm could constitute an actionable TM useNot like “product placement” in a grocery storeDistinguished 1-800 CaseGoogle is recommending and selling Π’s TM to its advertisersGoogle displays, offers, sells Π’s TM to advertising customersGoogle encourages purchase of Π’s mark through Keyword Suggestion Tool1-800 Contacts v. WhenU.com (2d Cir. 2005) (distinguished in Rescuecom): Facts: pop-up ad software has WhenU.com ad appear on Π’s wesbite; ∆ uses similar, but not identical TM for ΠHolding: For ∆ to infringe, it would need to have put the actual TM on the list, and not the similar addressTAKEAWAY: “Use” is a thresfhold matter; separates the 3-elements  “USE” + “In Commerce”+ “LOC” Network Automation v. Advanced Systems Concepts (9th Cir. 2011): The use of a trademark as a search engine keyword that triggers the display of a competitor’s advertisement is a “use in commerce” under the Lanham Act.”BUT SEE, Daimler Chrysler v. Bloom (8th Cir. 2003): telecommunications company did not use the term “Mercedes” in a TM sense merely by licensing a vanity phone number “1-800-Mercedes”Bosley v. Kremer: “use as a mark” concept focuses on language in §32 (use in connection with sale, distribution, or advertising of any goods or servicesHolding: ∆ is not selling anything in connection with Bosley.com, so not using as a markC.f., Bad faith cybersquatters like PETAHoliday Inns v. 800 Reservations (SCOTUS 1997): Holiday Inns used number 1800-holiday and ∆ used 1800-h0liday; Holiday Inns charged unfair use of Π’s TMHolding: ∆ did NOT “USE” Π’s mark and there was no confusion  no infringementToday: This would be considered typo-squatting, and find for ΠCriticism of the “Use in Commerce” Doctrine:Dogan & Lemley: TM use doctrine services important limiting function  prevent TM holders from asserting generalized right to control language (like newspaper’s use and generic drug manufacturers placing drugs near brand names)  may make money off the TM, but they are not TM uses and therefore, outside the ambit of the statute (Hous. L. Rev. 777 – 2004)McCarthy: doctrine does not exist and likelihood of confusion is the only requirement for infringement  post –hoc creation rather than actual requirement of the statuteC. Confusion-Based Trademark Infringement: Likelihood of ConfusionGeneralThree-Part Process(1) Π owns the mark (2) The mark is valid and protectable: If you have a registered mark (§32 Registered - PF case that it is valid and protectable just by showing registration/§43(a) - Unregistered)(3) ∆’s use in commerce is likely to create confusionUse + In Commerce + LOC (in some courts)Apply the POLAROID FACTORSTwo-prong test for infringement (Gruner):  Is the plaintiff’s mark entitled to protection If yes, is the defendant’s use likely to cause consumer confusionForms of Confusion-Based Claims Point of saleInitial Interest ConfusionPost Sale ConfusionReverse ConfusionIndirect and Vicarious TheoriesEarly History of Trademark Infringement Cause of ActionEarly 20th Century – Competing Goods RestrictionOrigin-1900s: Courts would only enjoin others’ use of Π’s mark on goods directly competitive with Π’s goodsBorden Ice Cream v. Borden’s Condensed Milk (7th Cir. 1912): Junior use of “Borden” for ice cream did not infringe senior use of “Borden” for milkModern –Consumer Confusion Replaces Direct Competition in Product Market IdeaYale Elec. v. Robertson (2d Cir. 1928): Junior use of “Yale” for flashlights and batteries infringed senior use of “Yale” for locks and keys  Statutory Sections Factors Analysis for Likelihood of ConfusionMultifactor Test – Basic Test for Infringement  Whether an appreciable number of reasonably prudent purchasers are likely to be confused, that can be decided through direct and circumstantial evidence, based on the factors applicable in the relevant circuitsVaries Circuit-to-Circuit2d Circuit – Most Important Here  Polaroid FactorsMultifactor Test dates back to 1938 RST of TORTS, but now circuit dependent8 POLAROID FACTORS  SUMMARY(1) Strength of senior user’s mark(2) Degree of similarity between the two marks(3) Proximity of the products(4) Likelihood that the prior owner will bridge the gap(5) Actual confusion(6) Junior user’s good faith in adopting its own mark(7) Quality of ∆’s product(8) Sophistication of buyersTwo-Dimensional Model of Trademark ScopeDetailed Polaroid Factor Analysis – Polaroid Corp. v. Polaroid Elec. (1961), reaffrirmed Playtex Prod. V. Georgia-Pac. (2004): BB Order of Analyzing (5 Factors + 3 Tossed-out)(1) Degree of Similarity between the Two MarksOverview For Π, similarity is NECESSARY, but not sufficientIf No  ∆ wins65:192 PI and Bench Trial Opinions found not similar  each opinion found in favor of ∆ in overall testEasterbrook (Top Tobacco): If so dissimilar that there is no LOC, no need to go through other factors when we know there is no confusionIf Yes  Necessary, but not sufficient, so move onCharacteristics and NotesVery flexible analysisAnti-dissection principles No side-by-side comparison, unless products are frequently near each other on shelves (LVM v. Burlington)Sound, sight, and meaning (RST 3d)  can shift among all types to establish identity / similarityFamily of Marks (e.g., McDonald’s): recognizable common feature, used together such that public association is common feature with owner and common feature is distinctiveIf goods/services are virtually identical  level of similarity needed declinesVerbal Similarity Coca-Cola v. Essential Products (CCPA): Coca-Cola v. Coco Loco soft drinks  no LOC, drinks sufficiently different notwithstanding similarity of mark because may not be next to each other in the aisleJohnson & Johnson v. Colgate-Palmolive (DNJ 1972): Shower-to-shower body power v. Hour-after-hour aerosol deodorant  no LOC, dissimilarity of marks (discounting sound in sound, sight, meaning test)Wrenn v. Boy Scouts of American (NDCAl. 2008): Boy Scouts for boys v. Youth Scouts for boys and girls  no LOC, strength of Boy Scouts so distinctive consumers would detect any slight differenceHancock v. American Steel & Wire (CCPA 1953): Cyclone v. Tornado for wire fencing  LOC! Marks are identical in ORDINARY meaning, and likely to result in confusion without verbal similarityTGIF v. Int’l Restaurant Group (MDLa. 1975): TGI Friday’s v. EL Saturdays for restaurants  No LOC, good faith/intent (surprising decision)Quality Inns v. McDonald’s (D. Md. 1988): LOC of confusion with McSleep highway-side hotels because of McDonald’s strong FAMILY  e.g., McDentist  if not to source, but association, sponsorship, connection, endorsement, or authorization∆ survey evidence about ads  not conclusive (16.3% confused); NYU Jacoby – low level of likelihood of confusionΠ 30-40% confusedQuality Inns used qualifying language; but even still 20+% confusedNonverbal Similarity ExamplesHansen Beverage v. Nat’l Beverage (9th Cir. 2007): Monster v. Freek energy drinks  No LOC, Circuit re’v’d D. Ct’s preliminary injunction: (1) low consumer sophistication because low price/impulse purchase; (2) color of font, size of cans, products, and meaning of names similar but not enough, crowded energy drink market; some bad faith/evidence of actual confusion (surprising decision)AutoZone v. Strick (7th Cir. 2008): AutoZone v. Oil Zone  appellate remanded saying reasonable jury could find AutoZone sufficiently strong and similarity of word “zone” could create FAMILY of MarksConopco v. May Dept. Stores (Fed. Cir. 1994): Vaseline brand location v. Venture Skin Care lotion; No LOC, consumers conditioned to know store brands look similar to name brand, so when side-by-side on shelf, there is low LOC  sophistication of consumerYamaha v. Yamoto: ∆ knocking-off Π’s trade dress, agreed to stop(2) Junior User’s Intent / Good Faith in Adopting its own MarkBB says ask this SECOND (65:67 finding bad faith  LOC)If Yes  Π wins if they win both this + similarityIf No  court will move on to other factorsSome circuits don’t think this is important, but still in PolaroidE.g., Judge Levall (2d Cir.): should not matter because ∆’s intent does not affect consumerCharacteristics and NotesRelevance to empirical question of LOC: Multifactor testing isn’t purely fact-finding analysis  legal rules and realism weave inIn practice, this factor tends to stampede othersFinding of bad faith strikes against ∆; however, NO bad faith doesn’t favor ∆Rolls-Royce v. A&A Fiberglass (NDGa 1976): modification kit for VW Bug  enough that motivation is association to Rolls-Royce (today more likely tarnishment / blurring case) (3) Actual Confusion  moderate weight given according to BBThird InquiryIf yes  highly likely that Π will winIf no  then go on to next factorsAnecdotal Evidence of Confusion: CAN be enough to show actual confusion!Testimony of consumersEmails of consumersTestimony of operator for the company (people calling thinking they are ∆)Survey Evidence: Routine and good to have, although rarely presented, and even more rarely credited   In survey battle, look at methodologies to see how much weight to give!!16% had evidence, 35% credited, and if credited, only 7% ruled in favorTAKEAWAY: don’t believe hype of survey experts that you HAVE to have one, especially in preliminary injunction hearing  BUT! May be helpful to get a settlementSquirt Format: Place side-to-side, ask if it’s made by the same company  Criticism: may be leading; context implies answering yesEver-Ready Format: Putting out just ∆’s product and saying, “what company might have put this out?”Criticism: Leading again; they have to say a company made itE.g., Starbuks v. Lessbucks Coffee, Quality Inn v. McDonald’sExxon Format: just show ∆’s product and ask, “what is the first thing that comes to mind when you see this?Criticism: generates high confusion results, so generally not given much weightDamages REQUIRES Actual Confusion or Willful Intent  Injunction Requires LOCCasesLeSportsac v. K Mart (2d Cir. 1985): no confusion at point of purchase, post-sale confusionWalmart / Wal-O-Caust: 7:10 consumers surveyed thought Wal-Mart sponsored Walocaust; 3:10 Wal-Qaeda(4) Sophistication of Buyers/Consumers  Moderate weight (BB)Characteristics and NotesStampeding Factor  Π argues consumers are dumb, ∆ argues consumers are smartMixed Population: most courts averageMay have different class of consumer for Π & ∆, average, but some courts will go with ∆’s consumerExpensive items may entail assumption of greater sophistication by prudent purchasersExtreme Cases: children; professional buyersAtomic Energy of Canada v. AREVA Canada (209 FC): No LOC  All AECL’s experts acknowledged in cross-examination that the relevant consumers would not be confused into purchasing the wrong nuclear reactor – despite great similarity of the marks and products(5) Proximity of the Product – Moderately Important (BB)This is a highly flexible analysis; often combined with bridging the gap analysis Very policy-laden; difficult to have actual fact-finding here Arguably, ALL policy  no fact-finding at allReplaced ACTUAL competition of Production notion from Borden caseIf goods are in same category  Π usually wins, and vice versaWhen 2 users are operating in different areas of commerce, consumers are less likely to assume similarity But does not have to be that similar: CDs and phones seen as similar (Virgin Enterprises); also likelihood of bridging the gap here Death Tobacco v. Black Death (Cal. 1993) – court placed considerable weight in finding confusion on the fact that the products were sold to the same class of consumers & most owners had the products next to each other on the shelf Physical proximity in stores carries less weight when consumers are used to it (ex: generic drugs -  Conopco v. May Dep’t Stores), c.f., internet consumer expectations side-by-side (6) Strength of Senior User’s Mark  Not that important (BB) (but used in all circuits)Two forms of Strength: More emphasis on ACTUAL than Abercrombie StrengthConceptual/Inherent Strength (Abercrombie spectrum)Actual / Acquired Marketplace Strength (Zatarains)Abercrombie Spectrum not very strong hereCourts increasingly focus more on acquired to show strength of mark in the communityRationale: in looking at confusion, key is strength to the actual consumersCounter: the more famous the mark, the greater the likelihood that consumers are sophisticated wrt that mark and will not be confused/tricked (Beebe believes)Example: Under Abercrombie, IORMYX should conceptually get more strength than COCACOLA because Coke is actually descriptive and the former is fanciful, doesn’t make sense in practiceVirgin Enterprises (2d Cir. 2003): almost all Polaroid factors favored Π, but clear that strength of mark weighed heavily in favor of ∆ to winEmpirical strength trumps theoretical strengthCourts explicitly found Π’s mark to be inherently weak, but commercial strong in 23 of opinions sampled  22:23, court found strength factor favored confusionBut!  Courts explicitly found Π’s mark to be inheres strong, but commercial weak n27 of opinions sampled, and 24:27, court found strength factor did not favor LOC.Policy Problem  big strong marks actually favored over smaller, weaker onesVirgin Enterprises v. Naqab (2d Cir. 2003):Facts: Virgin Enterprises sues Virgin Wireless for TM infringementHolding: Almost all of the Polaroid factors favored Π and therefore  LOCTAKEAWAY: The more famous, the less important the proximity of the goods factor(7) Likelihood that prior owner will bridge the gap  Not that important (BB)Courts widely ignore this factorWhy would we care?  If likelihood of confusion is empirical, then why does it matter if trying to bridge the gap?(8) Quality of Defendant’s product  Not that important (BB)BB  idiotic favor  more of a dilution factor than proximity issueThis factor will always favor Π.  If the same quality, then confusion.  If worse quality, then injures Π.Applying the Multi-Factor Test in Unique ContextsThe internet  internet actually increased LOCGoTo.com v. Walt Disney Facts:  GoTo sought preliminary injunction against Disney for use of the mark GoToHolding: In 9th Circuit there are only three factors, the Troika Factors; but this is extremely pertinent in the internet context!Takeaway: Internet “Troika” SimilarityRelatedness of GoodsUse of Web as market channelNote: In 2000, internet consumers seen as very unsophisticated  may have changed since thenPrivate Label / Promotional Goods  generic versions of goods often get found not tbe confusing as policy matter; facilitating generics trumps the testImplications of the Multi-Factor Analysis on POLICY Test-wide Questions:Which factors drive the outcome?  Which factors are irrelevant to the outcome?How do the factors interact?  Do the factors typically “stampede”?Inter-Circuit Variation?Specific Factors:What is the significance of evidence of actual confusion, particularly survey evidence?How do courts typically assess trademark strength?Judge-Specific Questions:Is there any relation between the ideology, age, gender, tenure of the judge, and the outcome of the test or of specific factors?Multifactor Theoretical Questions:How does legal analysis use multifactor tests?Extension of model to fair use factors in copyright law?Modes of Confusion: Can have more than One in Each Confusion Analysis(1) Point of Sale Confusion (most common)Most common, traditional form of likelihood of confusion analysis (2) Initial Interest Confusion  Classic Bait-and-SwitchWhere Junior user plays on goodwill of senior user in order to draw consumers inMcDonald’s sign on highway, but no McDonald’sArises most frequently on the internet, but movement away from finding initial interest confusion because it is so easy to correct  bad buttonPlayboy Enters v. Netscape (9th Cir 2004)Facts: Netscape “keyed” the TMs “playboy” and “playmate” to other Netscape advertisers and Playboy sued claiming initial interest confusionHolding: SJ can NOT be granted to web advertiser who uses a registered mark to key to other advertisersTAKEAWAY: Important part of case is concurrence  stating initial interest confusion is not found simply because consumer is given an alternative choiceLabeling not good enoughInitial Interest Confusion is rarely found by courts, ESPECIALLY on the internet because it is easy to click the back buttonGibson Guitar v. Paul Reed Smith Guitars (SCOTUS 2006)Facts: Gibson has TM on design of single-cutaway guitar bodyTAKEAWAY: Not available to product shapesBut note, 2d Cir. Would adopt Kennedy dissent/concurrence Shape must be an indicator of sourceCompare: different than BK putting up sign that says “McDonald’s Next Exit”Rather, Smoky-Bar Theory here: would someone be confused when looking across a smoky barroom to see the guitar?Rationale: Would make doctrine too expensive -> don’t want to give shape monopoly rights(3) Post-Sale Confusion  harm is “dilution of distinctiveness”Confusion created in third parties who will think that the products are the sameThis is somewhat similar to a delusion theory)Lois Sportswear v. Levi Strauss (2nd Cir. 1986) – Lois sold product with clearly different labels but an identical stitching pattern on the pocket2nd circuit found that this 3rd party confusion could influence stitching patternsSome courts still require point of sale confusion (see, e.g. Gibson v. Paul Reed Guitar), but moving towards allowing more post-sale confusion claimsRationale:Senior user still hurt in that some will buy the product in order to have other think they bought senior user’s productSales can go down out of concern that they are buying knockoffs as well People get sick of LVM because too many people have knockoffs!Ferrari v. Roberts (SCOTUS 1992)Facts: ∆ produces replicas of Ferraris using half fake partsHolding: 6th Cir. Found this would be post-sale confusionTAKEAWAY: Post-sale confusion CAN be found if, as owner is driving a ha fake Ferrari, OTHER PEOPLE will think it is a real Ferrari, and if it loks bad it will demean Ferrari’s imageCritique: isn’t this a tarnishment dilution claim?  Dissent says it’s basically anti-dilution by other means of of post-sale confusionToday: courts will rely on dilution in these casesMastercrafters Clock v. Vacheron & Constantin: Status symbol atmos clock v. electric version  INFRINGMENT,  not LOC at point of purchase, Πs trying to reap financial benefits from poaching goodwill (motivation of appropriation)Additional types of confusionConfusion as to Source: 2 products bearing similar TMs are likely to be confused only if both companies actually sell the same or similar productsE.g., Windows Paper Towels; Zazu Designs v. L’OrealConfusion as to Sponsorship/Affiliation: Use of TM may confuse consumers to believe TM-holder sponsors a particular unrelated productE.g., Olympics Sponsored Soup if TM is on soup canReverse ConfusionOverview: A senior (David) confronts a junior (GOLIATH)  Senior user that nobody really knows about is overwhelmed by advertising or other monster junior userHarm: consumers will think senior David’s product is coming from junior GoaliathDuel Use Exception – where the public and not the defendant appropriates a trademark for a larger use, trademark law will not stand in the wayIll. High School v. GTE Vantage (7th Cir 1996) – Ill. HS had trademark for “March Madness”; 7th Circuit refused to grant protection under reverse confusion doctrine because it was the public and not any junior company who appropriated the termNow NCAA has the right to use the mark, as does the HSA&H Sportsweawr v. Victoria’ Secret Stores (3d Cir. 2000)Facts: A& registered the mark “Miracle-Suit” for its swimsuit in 19992, Victoria junior user who by 1995 used its mark “miracle bra” in connection with swimsuits  A&H sued for reverse confusionHolding: 3d Cir. Reversed no finding of reverse confusion and remanded – so possible it will be foundTAKEAWAY: The Polaroid Factors (or Frisch Factors in 3d Cir.) STAY THE SAME when dealing with reverse confusion, yet some treated differentlyFactors that Remain – Frisch FactorsConsumer attentivenessDegree at channels overlapSimilarity of ProductsSimilarity of targets of parties’ sale effortFactors Treated DifferentlySimilarity of MarksDisclaimer by senior user may reduce confusion, but same disclaimer for junior goliath will have the different effect  may do the opposite or consumers will forget when looking at the senior user’s markPutting the “housemark” on junior goliath’s products will further aggravate, rather than mitigate reverse confusion because consumers will associate the housemark with “miracle”Strength of MarkCommercial Strength  in direct confusion case a commercial strong mark will work in favor of senior Π, in reverse confusion a commercially weak mark of Π will benefit Π  LOOK AT:Commercial strength of junior COMPARED to seniorAcquired Strength: Any advertising or marketing by junior goliath that resulted in public saturationConceptual Strength  Conceptually strong (Fanciful or arbitrary) weighs in favor of Senior David the same way as in direct confusionIntent of the ∆Though intent to confuse is less likely in reverse confusion, if intent is a factor (like wanting to push senior out of industry) will favor ΠFactors relating to Actual ConfusionLook at confusion where consumer thought senior was juniorHarlem Wizards v. NBA (DNJ 1997): NBA renames their DC basketball team “Wizards,” but the Harlem Wizards are a senior, but small basketball entertainment company  No LOC (but BB says could have gone either way)Dreamwerks Sci-Fi Conferences v. Dreamworks (9th Cir. 1998): Dreamwerks Conventions infringed by junior giant DreamworksPump v. Colins Mgt (D. Mass. 1990): Aerosmith album “Pump” and “Pump” band  No infringementLabo Enterprises v. Tunnel (SDNY 1988): senior “Tunnel Bar” sues junior “Tunnel”  NO infringementAndy Warhol Enterprises v. Time (SDNY 1988): senior interview magazine and jnior “interview” section of Time Magazine  No infringementD. Trademark DilutionGeneralTest Under TDRA (Lanham 43(c)) – owner of a famous mark entitled to an injunction or other remedy…against another’s use in commerce if such use (1) begins after the mark becomes famous and (2) dilutes the distinctiveness of the mark by blurring or tarnishment Can get damages upon showing intentional dilution§45 – dilution: lessoning of the capacity of a famous mark to ID & distinguish goods or servicesRecognizes the importance of the advertising function of a markOdal Decision (1924) – complainant has the utmost interest in seeing that its mark is not diluted; it would lose in selling power is everyone used it as the designation of his goods Marketing recognizes two important aspects of a brandBrand dominanceProbability that a brand will be recalled given its category as a retrieval cueBrand typicalityProbability that a category will be recalled given the brand name as a retrieval cueDilution cases (blurring in particular) focuses on stopping dilution of brand typicalitySearch cost rationaleA trademark seeks to economize on information costs by providing a compact, memorable and unambiguous identifier of a product or service. The economy is less when, because the trademark has other associations, a person seeing it must think for a moment before recognizing it as the mark of the product or servicePosner’s search-cost/efficiency theory Irony: some brands cannot claim dilution because they are too strong (Jacoby)But doctrine is meant to protect strong/famous brandsMust be famous to qualify under 43(c)May be a weakened claim today:Mattel case (Barbie Girl) – Court found parody exception applies to blurring or tarnishment whenever it is not purely commercial speech Statutory Sections	Paris Convention, Article 6bisTRIPS Art. 16(2)-(3)EC Trademark Directive, Art. 5(2)Development of Dilution Cause of Action Protection for famous marks from unauthorized users that attempt to trade upon goodwill and established renown of such marks  diluting distinctive qualityBorn in Germany  came to US through Frank Schecter  rational basis of TM protectionNo diversion of trade or harm upon which TM Π can sue  say that confusion itself (even for a second) is a harm that courts should seek to solve1946: Lanham Act contained NO anti-dilution provision1947: Mass. Enacts first state anti-dilution statutory provisionCurrently 36 states provide this, including NY1996: Federal TM Dilution Act2006: Trademark Dilution Revision Act (TDRA –§1125(c)(2))Included major reformsPro-ΠEstablished likelihood of dilution standardProvides that non-inherently distinctive marks may qualify for any protection2nd Circuit does not accept this!Explicitly states that blurring AND tarnishment are forms of dilutionPro-∆Rejects doctrine of “niche fame” – famous amongst consumers in local area or a particular line of products (e.g., Lexis – lawyers market – v. Lexus).Expands scope of exclusions: must be widely recognized by the general consuming public of the USExpanded scope of exclusions under 43(c)(3)Fair useAll forms of newsNon-commercialNeutralReconfigures fame factorsSets forth factors for determining blurring43(c)(2) – Dilution by Blurring or Tarnishment:Factors for “fame” prerequisite – §43(c):Duration, extent, and geographic reach of advertising and publicity of the markCourts will take into account ads by owners and by third partiesAmount, volume, and geographic extent of sales of goods offered under the markExtent of actual recognition of the mark Niche fame no longer counts!Whether the mark was registered THE CURRENT TEST  Π must show (prerequisite if FAME! – Factors  above!)(1) Association (Nikepal factors below)(2) That arises from similarityCannot be the similarity of the products or sales methods, but of the MARKS themselves(3) Between the ∆’s mark and the Π’s famous markThere also appears to be a USE OF A MARK requirement built into TDRA, but not all courts follow this(4) That impairs the distinctiveness of the famous markRead literally, mere associations is NOT enough  MUST impair“Dilution by Blurring” TDRA §43(c)(2)(B)  is an association arising from similarity between mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.  (1) Demonstrating association and Similarity,  consider factors, Nikepal):Similarity between mark or trade name and famous markApplied a heightened standard – identical or nearly identical Heightened similarity standard now obsolete! (Levis-Strauss, 9th Cir)Would place undue weight on this factor in the analysisStatute does not say “very” or imply a heightened standard Degree of inherent or acquired distinctivenessInherently distinctive marks will be more evidence for plaintiffBut extremely famous marks may not be blurrable! (Jacoby study)Haute Diggity Dog – first example of an appellate court making this finding, but may be limited to parody cases Counter argument: the mark may be too strong for an individual defendant to dilute it, will create a slippery slope that will eventually dilute the markExtent that Π has substantially exclusive use of markDegree of recognition of famous markWhether ∆’s use is intended to cause associationNational Pork Board v. Supreme Lobster (TTAB 2010) – found likelihood of dilution for “other red meat” by lobster group in copying “other white meat”Here, ALSO liable for confusion; can be liable for both blurring & confusionActual AssociationNote: Some courts require 6 Factors PLUS Impairment (Factor 3), others only require Association2d Cir: leaning towards requirement BOTH  so move on(4) Demonstrating that distinctiveness of the famous mark is likely to be diminishedLouis Vuitton v. Haute Diggity Dog (4th Cir. 2007) – created dog chew toys “Chewy Vuitton”Did not impair/diminish because the copies were imperfect and signaled to consumers that they were copies/were not created by Louis VuittonAlso focused on strength of Louis Vuitton – would be hard to dilute!Also see this as an example of parody (below)Focuses also on areas of exclusion from liability under 43(c)(3):Any fair useDoes not really apply here but court bends over backwards to show parodyNewsNon-commercial Key: most courts today do NOT require showing of impairment, only require showing of association, applying the factors above2nd seems to require showing BOTH association and blurring (Starbucks)“Dilution by Tarnishment” TDRA §43(c)(2)(C) is association arising from similarity between mark and famous mark that harms the reputation of the famous mark (no factors in statute)Arises where a junior user undermines the image that consumers hold of a famous mark by using the mark to advertise unsavory productsDallas Cowboy Cheerleaders v. Pussycat Cinema (2nd Cir, 1979) – found dilution where pornographic movie implied Dallas Cowboy cheerleaders were participatingExclusions (Haute Diggity Dog)(a) fair use  nominative or descriptive, or facilitation of fair use, using mark other than as a designation of source for ∆’s own good or services, including use in comparative advertising or parody/criticism(b) news reporting and commentary(c) noncommercial use43(c)(6): ownership of valid registration by ∆ is complete bar to actionWhamo v. Paramount Pictures (Slip n’ Slide in Dickie Roberts) – silly use of the mark, but not capable of tarnishing it; was the actual productDilution by generitizationNo court has endorsed this theoryEvolution of Federal Dilution Cause of ActionRingling Bros. v. Utah Div. of Travel Dev. (SCOTUS 1999)Facts: Ringling coined “greatest show on Earth,” sued UT use of phrase  claimed dilution under §43(a)Holding: 4th Cir held only showing of likelihood of dilution need be shown under then state statuteTAKEAWAY: Example of early dilution case  no federal law on point, and inconsistency among statesAbout half of states had no anti-dilution protection, while in some only required “likelihood of dilution”Rationales for Non-Confusion Based Liability TheoriesFrank Schecter: problem of bad faith actors attaching famous marks on products and said that “selling power” of actual TM and brand differentiation is actually what awe are protectionLimitations of confusion claims as to source and COAIf there is no competition, there can be no unfair competition (Carroll v. Duluth Superior Milling – 8th Cir. 1916)Schecter: anti-confusion COA can’t reach all casesΠ would lose in sling power if everyone used it as a designation of his goods (even if no LOC) (Odal, 1924)Vagaries of Consumer-Perception Basis for LiabilityUnpredictability of the outcome for confusion based doctrinesSchecter: “This psychological element is in any event at best an uncertain factor, and the so-called ordinary purchaser changes his mental qualities with every judge.”Want more formal test to protect famous marks (get rid of intent, confusion, etc.)Current Anti-Dilution Theory  You have to THINK for a moment, and thinking is INEFFICIENT (economic argument)Search costs explanation (Posner)“A TM seeks to economize on information costs by providing a compact, memorable and unambiguous identifier of a product or service.  The economy is less when, because the TM has other citations, a person seeing it must think for a moment before recognizing it as the mark of the product or service.”Peterson, et. al. (1999): Brand Dominance v. Brand TypicalityBrand Dominance: probability that a brand will be recalled when its category is a retrieval cueTruck?   Ford.  Watch?  Rolex.Brand Typicality (this is more blurring): probability that category will be recalled given brand name is a retrieval cueFord?   Truck.  Rolex  Watch.Actual Dilution v. Likelihood of DilutionMoseley v. V Secret Catalogue (SCOTUS 2003)Facts: Moseley owned “Victor’s Little Secret” and VS sued for dilution  COA was TM infringement under §32, infringement under §43(a), and Dilution infringement under §43(c), plus state law causesHolding: SCOTUS held that the FTDA (prior to TDRA) through Lanham §43(c) requires showing of “actual dilution” in order to win and that §45 says NOTHING about “likelihood of dilution”TAKEAWAY: For a claim under FTDA, owner of FAMOUS mark MUST show ACTUAL dilution  cannot be likelihoodCreated Circuit Split: in order to show actual dilution, Π would have to either show (1) only that junior and senior marks are identical; or (2) that junior and senior marks are identical ALONG with circumstantial evidenceTODAY! TDRA allows for likelihood of dilutionLevi Strauss v. Abercrombie & Fitch (9th Cir. 2011): Plain language of §1125(c) does not require that Π establish junior mark is identical, nearly identical or substantially similar to the senior mark in order to obtain injunctive relief  RATHER, Π must show, based on factors in §1125(c)(2)(B), including degree of similarity, that a junior mark is likely to impair the distinctiveness of the famous mark  TDRA Case Law – BLURRING §43(c)(2)(B)Case LawNike v. Nikepal (ED Cal. 2007):Facts: NikePal provides products/services to science labs; survey evidence of actual association by Nikepal customers of Nikepal with Nike  what they would think of website called nikepal.comHolding: Nike prevails on feral and state dilution by blurring claims  Nikepal permanently enjoined from using NIKEPAL in connection with goods/services in commerce Federal Exp. V. Federal Espresso (2d Cir. 2000): Marks must be “very” or “substantially similar”  affirmed denial of PI based in part on holding that FED ESPRESSO was not sufficiently similar to FedExNat’l Pork Board v. Supreme Lobster (TTAB 2010) [PRECEDENTIAL]: “The Other Red Meat” for fresh and frozen salmon dilutes “The Other White Meat” for pork.”Hershey v. Art Van Furniture (ED Mich. 2008): unregistered trade dress  must be shown to be non-functional under §§43(a), (c); truck with image of Hershey-like wrapper unwrapping brown leather sofa and wrapper said “Art Van”Holding: finding no confusion, but blurringLouis Vuitton Malletier v. Haute Diggity Dog (4th Cir. 2007): LVM sues HDD alleging TM infringement, TM dilution; HDD manufactures plush dog toys – one is “Chewy Vuitton” little handbag  D. Ct. found parody – aff’dHolding: No LOC; more prominent a mark, the less susceptible to dilution by blurring (PETA cited)  LVM failed to make-out cases of TM dilution by blurring  failing to show distinctiveness of marks was likely to be impaired y HDD and productsTAKEAWAY: Focuses on TDRA 43(c)(3)Three main areas of exclusion from liability of dilution:(A) Any fair use including nominative or descriptive NOT used as designation of sourceHere, use as designation of source, so HDD doesn’t qualify (“TM-Like Uses”)  but account for parodic nature of ∆’s use in assessing likelihood of dilution(B) all forms of news(c) NoncommercialMead Data Cent. v. Toyota Motor Sales (2d Cir. 1989): Lexis used Lexus for dilution  considered COA for dilution under NY lawHolding: Lexis mark enjoyed only “niche fame” among lawyers, and thus not famous enough to qualify for anti-dilution protectionEmpirical StudiesMorrin & Jacoby: very famous marks apparently immune to dilution  calls TDRA protection justification into questionStandard Π Response: while ∆’s act alone may not dilute mark, if court allows ∆’s conduct, will create a slippery slope that will eventually dilute markBB: dealing with very small results; crazy way to measure distinctiveness by response timeE. Extension by Contract: Franchising and MerchandisingTMs are the “Cornerstone of a Franchise System” (Susser v. Carvel – SDNY 1962)TMs of franchisor is the identifiable symbol of continuity; presence of national brand at each location  franchisor + franchisee will come to TM license agreementFranchising mix of contractual and integrated characteristicsFranchisee may be tempted to “free-ride” off quality investments of franchisor and other franchisee by selling inferior products (customers come from far away, not repeaters)  but agreements prevent such outcome (ingredients, inspections, profit-sharing, etc.)Substantial rents or profits left to franchisee after franchisor’s cut  Incentive  system in franchise contracts is workingTurning Logos into Profit Centers: sports team logos, universities, other badges of affiliation and prestige  TMs were historically symbols representing, but now the product themselvesDe-materialization of products Consumers are buying an image; TM owner possesses rights in a symbol associated with certain qualitiesUpsurge and increased recognition since 1970s:Boston Professional Hockey . Dallas Cap & Emblem (5th Cir. 1975): finding unauthorized sales of team emblems violated Lanham Act, and granting permanent injunction  improper to permit anonymous 3rd party to profit from Π’s logoLouisiana State v. Smack Apparel (5th Cir. 2008): enjoining sale of t-shirts in university colors that didn’t include any TMs from universitiesFranchising and Dilution TheoriesAbility to sell mark/contract through franchise is one of the more important rights of TM owners But once mark is franchised, mark may be harmed if franchisee sells inferior quality goodsLogos pose difficult questions for trademark lawTrademark law protects marks only insofar as they are emblematic of the goodwill behind a productLogos make the mark the product themselves (ex: NBA); the consumer is buying an imageLending the mark to diverse products connects those products to the feelings the symbol evokesCourts began to accept logos as protectable in the 1970’sBoston Professional Hockey v. Dallas Cap (5th Cir. 1975) – found infringement where a company placed sports emblem on clothing without permissionDid not require a showing of consumer confusion as to source!F. Domain Names and CybersquattingGeneralCybersquatting: registering a domain name of a famous mark not to use the domain, but to sell it to the mark’s owner for a price in excess of the cost of initial registration Trademark law remains inept at dealing with this problemBefore ACPA, courts would sometimes find liability for cybersquatting under 43(C), which arguably had a bad effect on dilution law under the FTDA43(d) still not very helpful and most plaintiffs use UDRA instead Generally, internet reseller of product is okayTrademark law is not in the business of ensuring domain names go to proper ownersLooking only to single out the few cases in which the registration is clearly problematicAnti-Cybersquatting Consumer Protection Act (ACPA): Lanham §43(d)Basics – §43(d) enacted in 1999Pre-ACPA: Courts stretched meaning of “dilution” to protect TM ownersTwo Cause of ActionIn personam against the cybersquatterIn rem against the actual domain name where jurisdiction or just locating the cybersquatter are not possiblePETA v. Doughney (4th Cir. 2001): bad faith intent very easily shown; ∆ registered multiple other infringing domain names and offered to sell peta.org, both of which are very significant red flags triggering finding of bad faithMost Πs now use UDRP rather than §43(d) because significant faster and cheaperBad Faith Intent – §43(d)(1)(i)(I) the TM or other IP rights of the person, if any, in the domain name; (II) the extent to which the domain name consists of the legal name of the person or a name that is otherwise commonly used to identify that person;(III) the person's prior use, if any, of the domain name in connection with the bona fide offering of any goods or services; (IV) the person's bona fide noncommercial or fair use of the mark in a site accessible under the domain name; (V) the person's intent to divert consumers from the mark owner's online location to a site accessible under the domain name that could harm the goodwill represented by the mark, either for commercial gain or with the intent to tarnish or disparage the mark, by creating a LOC as to the source, sponsorship, affiliation, or endorsement of the site; (VI) the person's offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use;(VII) the person's provision of material and misleading false contact information when applying for the registration of the domain name; (VIII) the person's registration or acquisition of multiple domain names which the person knows are identical or confusingly similar to marks of others that are distinctive at the time of registration of such domain names; and (IX) the extent to which the mark incorporated in the person's domain name registration is or is not distinctive and famous within the meaning of §43(c)(1)PETA v. Dougherty (4th Cir. 2001) – Doughterty registered peta.org and set up a page “People Eating Tasty Animals” that was a parody of PETA and its goals; found for PETAEasy case for the courts because of clear evidence of two key factors of bad faith intent to profit under 43(d):Dougherty did this with other names as well (factor 8)Dougherty offered to sell the domain name to PETA at a hefty price (factor 6)Also found clear intent to confuse/mislead consumers into going to his site where there was harmful information to the mark’s ownersLamparello v. Falwall (SCOTUS 2006)Facts: ∆ maintains website critical of Jerry Falwall (slight misspelling of name in domain); considers TM through LOC and cybersquatting; considers if §§32 and 43(a) cover noncommercial speechHolding: No TM infringement; no LOC and no commercial intent/bad faith to profit Struggles to distinguish PETA  finds Lamparello different when use considered in full context because intent is to lampoon Falwall, and PETA was pretextualTAKEAWAY: Must have intent to PROFIT (Factor IV)  allow for “gripe” sitesUniform Dispute Resolution Policy (UDRP) + (ICANN)Domain name holders are subject to UDRP through terms of domain name registration contract with domain name registrarsRegistrars must require the UDRP in order to qualify with ICANN as domain name registrarsUDRP Paragraph 4:4(a) – Complainant must prove: (1) identity or confusing similarity; (2) respondent has “no rights or legitimate interests in respect of the domain name,” and (3) respondent has registered domain name and is using it in bad faith4(b) – Bad FaithTelstra.org case: Australian company named Telstra and some guy registered the name, but was not doing anything with it  not using it in bad faith (just waiting – perhaps for money but no proof)Holding: this itself constituted bad faith USE of domain name  very important finding on behalf of Πs in these casesMost Common Dispute Resolution Service – WIPOWIPO’s statistics show very high complainant win rate  say there are very clear cybersquatting casesΠ selects the arbitrator  Πs will usually win in UDRP contextNo damages  Only transfer of registration of domain nameResellers’ Use of Marks in Resellers’ Domain NamesToyota Motor Sales v. Tabari (9th Cir. 2010):  “buyorselltoyota.com”  uses are generally nominative fair uses Seems to settled scattered case law on subjectTy v. Perryman (7th Cir. 2002): “bargainbeanies.com” for site that sold beanie babies  nominative fair useG. Indirect InfringementGeneralThere is no statutory support for contributory/vicarious liability Courts have accepted it as a form of statutory interpretation/policyMust have primary liability in order to have secondary liability!Two forms:Contributory liability:when a defendant who does not control the direct infringer purposefully induces or assists his infringing actionMust have knowledge and material contribution!Vicarious liability:Defendant somehow controls the direct infringer Based on theory of respondeat superior Less common in trademark contextKEY: There can be no secondary liability without primarily liabilityYou MUST first test for primary infringementThere are two main types of secondary liability (some courts use interchangeably)(1) Contributory Liability: arises when ∆ who does not control the direct infringer purposefully induces or assists his infringing actionsIntentional inducement, ORE.g., bribing pharmacist, advertising “they won’t know the difference” .v. merely suggesting (Ives)Knowledge and material contributionShowing has/dad knowledge of primary infringing acts and makes/made a material contribution to those acts(2) Vicarious Liability: involves situation in which a ∆ somehow controls the direct infringerControl (“right and ability to supervise”), ANDE.g., Hard Rock Café v. Concession Services (7th Cir. 1992): applied Inwood test for contributory test for contributory TM liability to operator of flea market  found operator would be liability for copyright infringement of vendors if it permits on its premises of knows/has reason to know vendor is acting / will act tortuouslyDirect financial benefitWhy does difference matter  Historically, vicarious liability was based upon the idea that master was responsible for servant (respondant superior), where contributory was built up next to and came laterE.g., Google v. Rosetta Stone Inwood Labs v. Ives Labs (SCOTUS 1982)Facts: Π had expired patent for cyclopasmol and ∆ manufactures generic drug in similar shape and similar colors which were sometimes distributed by pharmacists in bottles saying they were ΠS and were the same color as ΠsHolding: NO infringement under §32 derivatively or under §43(a) for copying the colorTAKEWAY: Case stands for proposition that if a manufacturer or distributor (1) INTENTIONALLY induces another to infringe a TM, or (2) continues to supply product to one whom they have knowledge is infringing TM, they are CONTRIBUTORILY LIABLETiffany v. eBay (2d Cir. 2010)Facts: widespread counterfeit Tiffany jewelry on eBay; question was whether eBay  had “knowledge” to trigger contributory liability – Tiffany argued “general knowledge” enoughHolding: eBay must have specific and contemporary knowledge of individual acts of infringement in order to fall within knowledge requirement  eBay was NOT contributorily liable for its refusal to take such preemptive steps in light of their reasonable anticipation (not willfully blind like Hard Rock  implemented policing policies)Πs must show the primary liability of auction sit users in order to assert secondary liability against the auction site itselfTAKEAWAY: Restates Contributory Liability framework seen in Inwood  also states vicarious as (1) the right to control, AND (2) direct financial benefitContributory liability framework requires SPECIFIC knowledge in second prongPOLICY: Relied on who was the lowest-cost avoider was for economic efficiency  judge ultimately decided it was TiffanyBB: unfair and unjust as most efficient outcome; consumer is lowest cost avoider  personal responsibility libertarian idealTiffany Response: can’t rely on consumer sophistication when issues of goodwill and product qualityEuropeans: would have put responsibility on eBay GEICO v. Google (ED Va. 2005): Π could not demonstrate that mere sale of keyword confused consumers, BUT  left open possibility that advertisers themselves might be liable for infringement if the text of ads were confusing, and that Google might be liable for contributory infringementIV. Defenses to Trademark InfringementA.  GeneralEven where a Π can show likelihood of confusion or dilution, a ∆ can escape liability by showing one or more affirmative defenses Affirmative defenses include:AbandonmentLachesAccepted UseFair useNominative Use (Non-Trademark use)ParodyB. Abandonment, Assignments in Gross, Laches3 Major Forms(1) Abandonment (MLB)(2) Failure to Supervise Licenses (Dawn Donut)(3) Rule Against Assignments in GrossStatutory SectionsDetails of Abandonment(1) Intent not to resumeRarely expressed, so may infer from circumstances3 consecutive years of non-use is prima facie evidence, but NOT conclusiveOwner may overcome presumption by presenting evidence that notwithstanding 3-years of nonuse, it nevertheless intends to resume useNOTE: §45 does not establish a requirement that the owner use the mark at least once in any three-year period  owner may not use the mark for a longer period of time, but still retain ownership provided that owner intends to resume at some point in the reasonably foreseeable future (Silverman)Silverman v. CBS (2d Cir. 1989): CBS claimed intent to resume use of TM “Amos ‘n Andy” when no longer demeaning to African Americans  abandonment of TM - must be sometime in the reasonably foreseeable future(2) Mark becomes generic / loses significance as mark / loses control of markIf it licenses the mark out to others without any attempt to control the quality of goods bearing the markQuality control requirements in US TM law are surprisingly lax  example of sufficient quality control is inspecting the manufacturing facility once/year or requiring licensee to send specimens annually to the licensorDawn Donut v. Hart’s Food Stores (2nd Cir. 1959) – found no abandonment by plaintiff in licensing out the mixturesDissent: true that Dawn Donut’s contracts gave them control over how the donuts were baked, etc but they did not ex. actual control – did not inspect the factories, etc. Must police, etc.Discussion in the dissent is the primary rule today.Assignments in Gross (see below)Applications of Abandonment DefenseHypo Facts:2000:  A begins using a mark and registers it2001: A stops using the mark2006: B starts using the markQuestions to ask here:Did A use the mark within the three consecutive years?  NOCan A show evidence of intent to resume use during the three-year period?Sports teamsThere will be a strong presumption in favor of the franchise owner for priority (Colts v. Metropolitican Baltimore Football Club, also see Rams Case)Major League Baseball v. Sed Non Olet Denarius (SCOTUS 1993): Facts: Brooklyn Dodgers moved to Los Angeles; MLB sues ∆ (corporate operators of 3 restaurants – “Brooklyn Dodger”) for infringement of Π’s TM; Looks at: (1) ∆’s use intentional copying in logo; (2) Π’s use limited to occasional retrospectives, never pub/restaurant; (3) Abandonment Affirmative Defense (preponderance of evidence) – TM is “Brooklyn Dodgers” not just “Dodgers” – Πs can’t show intent to resume use since leaving NY; (4) resumption would be limited to type of use since resumption (apparel, etc.)Holding: Court declines to enjoin ∆’s very limited use of TM by ∆’s for use in connection with local restaurant for older Brooklyn Dodgers fans in NYTAKEAWAY: You cannot warehouse a TM  even if you continue to renew registration, it must be used in a SUBSTANTIAL wayDawn Donut v. Hart’s Food Stores (2d Cir. 1959)  UNSUPERVISED LICENSESFacts: Dawn Donut alleged TM infringement by Hart; Hart counterclaimed to cancel Π’s registration of “Dawn” and “Dawn Donut” on ground that Π abandoned mark due to inadequate quality control and supervision on part of its licensees – retail bakeries that sold donuts made from Dawn’s mixHolding:  No abandonment by Π of its registrations, and ∆ not entitled to cancel TMsDissent: would instruct D. Ct. to investigate policing and cancel if insufficientTAKEAWAY: naked licensing (grant of licenses without retention of control) is invalid!  (DuPont v. Celanese)Requires: (1) Sufficient policing; (2) inspection of licensee’s operationsContracts may be sufficient, but cancel if operations not adequately policedRule against Assignment in GrossLanham §10: “A registered mark or mark for which application to register has been filed shall be assignable with the goodwill of the business by which the mark is used, or with that part of goodwill of the business connection with the use of and symbolized by the mark.”Assignment in Gross: Assignments of TM alone without any underlying assets or goodwillOriginally  very strictRecently  relaxedContemporary Rule: Operating in cases involving assignment of “soft” TM-related assets (customer lists, production formulas, and amorphous “goodwill)In re Roman Cleanser (6th Cir. 1986): validating transfer of TM in satisfaction of security interest in it, together with formulas and customer listsMoney Store v. Harriscorp Finance (7th Cir. 1982): assignment of Money Store TM by senior user for $1 not invalid  nominal recitation of “goodwill” in assignment contract, without any other assets was enoughC.f., Richard Posner & William Landes (1987): “assignment in gross” doctrine makes sense only in “final period” cases, where sellers of goods are leaving the market and hence do not care if consumers are disappointed by the low quality of the assignee’s goodsC.f., Japan: Private property rights in the TM itself  assignments in gross are valid even if totally divorced from any goodwill; TM rights are severable  may be assigned by class, providing goods of remaining classification would not cause confusion with goods assigned to the classLaches DefenseLanham Act has no SOL  ∆’s who might otherwise use that turn to lachesLaches: equity aids the vigilant and not those who slumber on their rights (NAACP v. NAACP Legal Def. – DC Cir. 1985)Requires Proof of… (Passenger Corp. v. Morgan – SCOTUS 2002)(1) Lack of diligence by party against whom the defense is asserted, AND(2) Prejudice to the party asserting the defense∆ must do more than merely show that it has continued to use its infringing mark during the delay period Tap Pub. V. Chinese Yellow Pages NY (SDNY 1996): mere continuing use of infringing mark without expansion does not satisfy requirementGenerally require expansion  substantially increased level of investment in promotion of the markProgressive Encroachment  Laches UnavailableProgressive Encroachment: ∆ formerly used Π’s mark to goods unrelated to Π’s, but has since expanded its use of the mark to goods related to the Π’sWestchester Media v. PRL USA Holdings (5th Cir. 2000): Π’s obligation to sue was triggered only when ∆ Polo Magazine expanded its content beyond news of the sport of polo and began to feature mainstream fashion and travel news closer to Π’s market (D. Mass – Π waited until some viable impact on its business is excusable delay)E.g., Harjo v. National Football: Disparagement challenge to “Redskins” failed because of Redskin’s laches defenseResidual GoodwillVery minor issue in US TM law  company abandons its mark or engages in 3-consecutive years of nonuse, but goodwill outlasts the use of the TM in commerceC. Fair UseClassic/Descriptive Fair Use: ∆ uses Π’s mark to describe the ∆’s goodsDefense provided that the name, term of device is a use  3 Prongs!Other use than as mark (advertising, packaging, slogan  but NOT goods identifier)Descriptive of the individual name of own business, party, or term Dictionary definition, commonness, no significant alternativesUse in good faith / Intent (KP Permanent Makeup)KP Permanent Make-up v. Lasting Impression (SCOTUS 2004)Facts: Lastings TM is “microcolors” for permanent make-up; 9th Circuit: cannot be held in good faith if consumers are confusedDefense of descriptive fair use can only succeed where there is NO LOC as to source  But!  That is the only situation in which ∆ would need to use the defense  can never be used!  SCOTUS says “defies logic”Holding: ∆ can win on fair use even if Π can show some likelihood of consumer confusion as to source; can still be found to have been fairly used in good faithTAKEWAY: If you can make out a FAIR USE DEFENSE, you DON’T have to prove NO LOC in order to win  even if some confusion, you can still potentially get fair useSteps for analyzing use of defenseFactsLOC TestIf no LOC  no need to go onIf LOC< then turn to affirmative defense of descriptive fair use under §33(b)(4)(1) used other than as mark; (2) accurately descriptive of individual name of business/party/term; (3) good faithApplicationsWonder Labs v. P&G (SDNY 1990): ‘“The dentists’ choice for fighting cavities” for toothbrushes is fair use of Π’s TM “Dentist’s Choice for toothbrushes”’Western Publishing v. Rose Art Industries (SDNY 1990): “golden” describing gold color of children’s writing slate not infringement of Π’s mark “golden” for children’s books an toysPlayboy Enterprises v. Terri Welles (9th Cir. 2002): ∆ was Playboy’s “Playmate of the Year” in 191; her use of words “playmate of the year” in title on homepage and in her advertising banners fell within class fair use  “Public persona is based on tittles and they accurately describe her.  Court can’t say she took more than was necessary to merely ID herself or her goods.”Car-Freshner v. SC Johnson & Son (2d Cir. 1995): image mark case  image marks can also have fair useKelly-Brown v. Winfrey (SDNY 2012): Oprah sued by “Own your power” for workshops and seminars after saying “Own your Power” on magazine coverNominative Fair Use: Where ∆ makes commercial use of Π’s mark to refer to Π’s productJudge Made Law  no statutory sectionRG Smith v. Chanel (9th Cir. 1968) (Seminole Case):Facts: Advertisement for knock-off perfumes, and recommends blindfold test between Chanel 5, and knock-offHolding: No statutory basis on the confusion side of TM law, but OK with this judge-made defenseRationales for nominative fair useNaming the TM owner – using the only word is the only reasonably available way to name the product/ownerConcern that TM owner’s rights not to hamper other’s access to languageNinth Circuit Test  New Kids on the Block v. News America Publishing (9th Cir. 1992, 900# voting for favorite NKOTB member): (1) Product or service in question must be one not readily identifiable without use of TM (like functionality),(2) Only so much of the mark or marks may be used as is reasonably necessary to identify the product or service, AND(3) User must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the TM holderHere, this was a newspaper and while they made money, there was no source identification function But ultimately, this makes confusion part of the analysis (rejected by 3rd cir)Second Circuit  Analysis Order: No clear doctrine on this, but 2d Cir. D. Cts have done:Polaroid LoC test FRIST (burden on Π) (no confusion  stop)If confusion found, turn to Fair Use, and apply New Kids Test (burden on ∆)Note: 2d Cir has not officially adopted New Kids factors, but still go through factors in practice balancing them outC.f., 9th Cir. Has ∆ claim fair use first, skips LOC; if they lose on Fair Use, they lose LOC by defaultThird Circuit Test  Century 21 Test (3d Cir.)  Multifactor Two-Step AnalysisPart One  Truncated LOC Factors(1) price of goods and other factors indicative of the care and attention that may be expected of consumers when making a purchase(2) Evidence of actual confusion(3) Length of time if any of use without actual confusion (4) intent of ∆ in utilizing the markPart Two  Modified New Kids Factors(1) Challenged use of Π’s mark is necessary to describe both Π’s product or service and defendant’s products service;(2) ∆ has used only so much of Π’s mark as is necessary to describe Π’s products or services; AND(3) ∆’s conduct or language reflects the true and accurate relationship between Π and ∆’s products or servicesFed. Cir. Applies DuPont Factors for LOCParodyGenerallyRecent trend has been an increase in allowing parody defense E.S.S. Entertainment v. Rock Star Videos (9th Cir. 2008) – Video game mocking “Pay Pen” with “Pig Pen”Develop a practice of allowing this and has become so common that there is no likelihood that players will see it as an endorsementCould easily have gone the other way (so rare that it is an endorsement)Satire vs. ParodySatire: targeting something external Will never be protected/not a defenseParody: uses of the work to target the work itselfProtected under trademark law unless it is purely commercial speech (Mattell)Inringement-based causes of action Apply one of the doctrines below, but all incorporate Rogers Analysis Rogers v. Grinaldi:  artistic titles to do violate trademarks unless:No artistic relevanceSome artistic relevance and specific misleading as to source or content Expanded beyond titles to all infringement based causes of actionDilution: apply Mattel’s commercial speech testMattel v. MCA Record (9th Cir. 2002) – BarBi Girl lyricsApplied Rogers v. Grinaldi to infringement claim If speech is not purely commercial, then it is entitled to full first amendment protectionIf there is ANYTHING other than the offer of a commercial transaction, non-commercial use exception applies and there can be no tarnishment or blurring under 43(d)One drop rule is not followed in all circuitsRepresents a huge weakening of dilution doctrineUnclear which approach any given federal court will take to parody doctrine – DISCUSS ALLDoctrinal Approaches to ParodyElement of Traditional LOC Test (primary approach) Most common test but certainly not a given that a federal court will apply this testSimply go through the normal Polaroid Factors, considering the use of the mark as a parodyRationale: a working parody will not create confusion!Hard Rock Café v. Pacific Graphics (WD Wash 1991) – parody is another factor to consider in the likelihood of confusion analysisTrue parody will be so obvious and heavy-handed…clear distinction is preservedCounter: making the parody strong-armed enough to avoid all likelihood of confusion will run the parody and make the point meaningless (Beebe)Different approaches to this:In some cases (9th Circuit, especially) – Rogers v. Grimaldi will replaced Polaroid where there is parodySome cases (2nd circ) – engage in Polaroid analysis and then look at Rogers as a defense If very clear, will not address because of strength of the affirmative defense ESS Entertainment 2000 v. Rock Star Videos (9th Cir. 2008): Grand Theft Auto video games sued by LA strip club claiming game infringed on club’s TM and TD  Court applies Rogers v. GrimaldiHolding: No TM infringement  when TM right clashes with 1st Amendment, 1A wins wrt artistic/creative judgmentMake it so people would never imagine it was endorsedSecond-Life Games  uncharted TM worldSmith v. Walmart Stores (ND 2008) – Smith made Wal*Ocaust and other offensive shirts based on the Walmart name and symbols shirts to mock Walmart Court found no likelihood of confusion because it was a clear parody and no actual confusion Never reached first amendment discussionMasterCard v. Nader 2000 (SDNY 2004): MasterCard sues Nader campaign for ad spoofing their “priceless” da campaignApplies LOC analysisDallas Cowboys v. Pussycat Cinema (2d Cir. 1979): porn featuring Dallas Cowboy cheerleader; action under 43(a)  got injunction (disparaging)LVM v. Haute Diggity Dog (4th Cir. 2007): parody is unlikely to confuseParody as Trigger of “Alternative Avenues of Communication” Analysis:Consider BOTH LOC and 1st Amendment Interest INDEPENDENTLY, then BALANCE these interestMutual of Omaha Ins. v. Novak (8th Cir. 1987): “We believe, however, that protection afforded by 1A does not give Novak license to infringe on rights of Mutual.  Mutual’s TM’s are form of property, and Π’s rights therein need not ‘yield to the exercise of 1A rights under circumstances where adequate alternative avenues of communication exist.”  Today this would be dilution claim and non-commercial speechBB: example of court reaching the conlucion it wants to reachApproach is borderline obscoleteParody as Trigger of First Amendment Balancing Test: FIRST, consider Multifactor Polaroid test, and THEN talk about expressive use balancing 1st Amendment interest with result  Even if some confusion, 1A can trumpNote: Make note of the Cause of ActionTest is in decline, but may be applied as a secondary prong after the court goes through a likelihood of confusion test (Cliff Notes)Rogers v. Grimaldi Test (2d Cir.) (Parody in Titles, Infringement-Based COA): involved Italian movie Ginger and Fred with 2 dancers clearly meant to be Ginger + FredHolding: No infringement because movie title was related to the movie  no artistic relevance to the title of the song and not misleadingTAKEAWAY: Literary titles do not violate unless:(1) No artistic relevant(2) Some artistic relevance and specific misleading to the source or contentDoes NOT apply to the dilution COAMattel v. MCA Records (9th Cir. 2002, Kozinski, Dilution-Baesd COA): Fact: Mattel sued over Aqua’s song “Barbie Girl”  - clear blurring,Holding: Barbie Girl is not purely commercial speech, and is therefore fully protected3 Statutory Exceptions: 2 don’t apply, but the 3rd ‘noncommercial use’ may  1-drop rule to dilution may have hugely weakened TMs often fill in gaps in our vocabulary and add contemporary flavor to our expressionsRogers Test:Use of Barbie in song title relevant to underlying workSong did not explicitly mislead as to the source of workTAKEAWAY: Where an artistic work targets the original and does not merely borrow another’s property to get attention, First Amendment interests weigh more heavily in the balanceCliff Notes v. Bantam Doubleday Dell Pub (2d Cir. 1989): Cliffs and Spy Notes  satire, but mad eSpy Notes put “A Satire” on the coverAppropriation of speech most effective when not-obviousLOC factors at end of multifactor test  taking into account that somewhat more risk of confusion is to be tolerated when TM holder when TM holder seeks to enjoin artistic expression such as parody”Degree of risk of confusion between Spy Notes and Cliffs Notes does not outweigh the well-established public interest in parody Appropriationist Speech: punchline is told at the end with appropriation  heavy-handed parody; estranging shows something and then slowly becomes clear that it’s appropriationProtect Marriage v. Courage Campaign: non-straight marriage organization pro-Prop 8 appropriated and changed same-sex marriage group’s logo to 2-women; same-sex marriage group sued over infringement of unregistered property rightTAKEAWAY: No LOC because parody  parody is not technically a defense, but aspect of confusion because successful parody will not confuseSmith v. Wal-Mart (ND Ga. 2008): battle of experts in LOCPossible Fourth: E.S.S. EntertainmentSeparated Rogers v. Grimaldi test from the First Amendment and applies it on it ownSimply asks:Is it a parody?Was it explicitly misleading? If not, parody defense applies Parody/Expressive Use – Walk ThroughThreshold Question: Is this SATIRE or PARODY?Satire  use of work to target something external  not protectedParody  use of work to target work itself  this IS protected under TM lawIs it a literary title?No  move onYes  Rogers v. Grimaldi TestDoes the title have artistic relevance to the work?Does it mislead as to the source of the contents of the work?Parody Infringement Analysis (state that this is probably 2d approach):Combine the Polaroid Factors with Rogers v. Grimaldi TestParody itself should not confuse consumers  Court can find some confusionParody Dilution AnalysisIs it purely commercial speech? (sole purpose to propose commerce transaction from Mattel)No  PROTECTED under §43(c)(4)(B) exceptionYes  NOT protectedV. International Issues in TrademarkA. OverviewMadrid System: procedural to make the process of TM registration more efficient around the world  submit application and it can be forwarded to other countries for registrationVI. Right of Publicity A. OverviewGeneralProtects an individual’s marketability or persona No federal right of publicity under the Lanham Act§43(a) – used to create a right of publicity but applies ONLY to the famous (celebrities) for whom there can be an argument that the name has achieved secondary meaningRight of publicity under state law Most states have either a common law or statutory right of publicity (or both)Rights fall into two main categories (detailed below):Property-based right of publicity (California)Descendible like propertyPrivacy-based right of publicity (New York)Not-descendibleMore applicable to non-celebrities TN special rule: descendible for 10 years and then continues indefinitely (Elvis!)Sources of LawThere is NO federal right of publicity statueBut, §43(a) – Closest we come: only applies to celebrities because it is a means of identifying a person’s identity with a product Can argue that name/image has acquired secondary meaning States have granted Rights of Publicity15 States have Codified Right of Publicity in Statute Including NY and CACommon Law16 States Recognize Common Law Right of PublicityNot in NY (Robertson v. Rochester Folding Box Co (1992))CA has both Statute and Common LawNew YorkNY Civil Rights Law §§50-51: privacy-based, non-descendibleAny person whose name, portrait, picture or voice…Used within the state for advertising / trade purposes …Without prior written consent…May …Seek equitable remedy to restrain useSue for damages for any injuriesIf ∆ knowingly used Π’s NPPV, jury may award exemplary damagesNote: Voice added in 2005 because of Midler and similar casesUnder statutory basis, courts rely on the language of the statute, not a general conception of rightsVanna White v. Samsung Electronics (9th Cir. 1992) – robot used in advertisement that looked similar to Vanna White, had the wheel (concept of things not really changing in the future)This was a CA case but how would it come out in New YorK?Robot was not her “name, portrait, picture or voice” – it was only creating the inferenceName, portrait, picture and voice do not come together to create “persona”Onassis v. Christian Dior-New York (1994) – she is in the backShe won because they actually used her faceClearly show privacy-function of New York law – in no way did this indicate endorsementCaliforniaCaliforniaStatutory and Common LawCal. Civ. Code §3344: property-based, descendible, assignableAny person who knowingly uses another’s name, voice, signature, photograph, or likeliness…In any manner, on or in products, merchandise, goods…For purposes of advertising/selling/soliciting purchases of products, merchandise, goods/services….Without prior consent, or consent of parent/guardian…Shall be liable…For any damages sustained by person/s, and$750 or actual damages suffered by unauthorized use, and profits not taken into account with original damagesMidler v. Ford (9th Cir. 1988) – Midler would not do Ford commercial so used a “sound-alike”Statutory right – CA civil code does not include a voice-sound alike provisionCourt took a highly restrictive interpretation; no property interest in sound of the voice, only in OWN voiceCommon law right – Midler won because voice was very distinctiveNancy Sinatra did not win in similar case (voice not distinctive enough)Property right basis much broader than privacy basisVanna White v. Samsong Electronics – she won in CAUnder New York privacy conception, could not have wonKazinski dissent: Insane to give property rights to celebrities based on the slightest indication of their celebrity First amendment protections should apply hereParody is key and protected (see above)Rationales for Right of PublicityPrivacy ArgumentsWarren & Brandeis (1890): lamenting technological/cultural developments in private sphere, advocated right of privacy to forbid publication of idle gossip and restore propriety and dignity to the pressNY (1903): banned unauthorized use of “name, portrait or picture of any living persons” for “advertising purposes, or for purposes of trade.”Very limited  celebrities exploit their image, so can’t stop other usesO’Brien v. Pabst (5th Cir. 1941): nationally famous football play who disapproves of alcohol had no claim against beer distributor that used his photos on calendar advertising product because Π had actively sought publicity in ther contexts2d Cir. – NY (1953): found right of publicity in NY common lawStephano v. News Group Pub. (1984): no right of publicity independent of privacy protections in NY Civil Rights Laws §§50-51.Economic ArgumentsLabor: people invest labor into creating a memorable “persona”  rewardBut!  Celebrities’ fame is product of fans, managers, agents, etc.Incentives: utilitarian purpose of providing an incentive for people to invest in creating and publicizing some sort of public good (Zacchini – SCOTUS 1977)Failure to protect celebrity’s image could produce congestion externality  value of image can be inefficiently depleted by oversaturation in the marketplace, which an exclusive right to exploit can preventFalse Endorsement: prevent unauthorized use of person’s name or other indicia of identity in connection with products or services where the use would generate among consumers the false impression that Π endorses the product or service AutonomyMark McKenna: publicity rights protect individual’s interest in preserving his/her ability to exercise autonomous self-definitionKantian/Hegelian view of private property as being invested with owner’s inalienable will/personalityWho is entitled to Right of Publicity?Non-celebrities (privacy): protecting persons from unwanted publicity (early cases)Eick v. Perk Dog Food (Ill. App. 1952): recognizing claim for unauthorized use of non-celebrity’s photo in dog food adRST 3d Unfair Competition §§46: evaluation of relative fame of Π is more properly relevant to determination of appropriate relief  private persons may recover  damages measured by value of use at market price ∆ would have had to payCelebrities (economic): persons whose names and likeness are commercially valuablePoliticians: Once they become public figures, they lose all right to publicity, except in VERY limited situationsObama: Weatherpoof image in Times Square, stopped when White House calledSchwartzeneger: used OH company over Governator bobbleBob Dole: without consent of ViagraPeople to whom rights have been assigned (economic): may require conflict of laws principles because not all states allow for descendibilityMarilyn Monroe: Mizrahi inherited Monroe LLC (MMLLC) license Monroe’s publicity rights; conflict of laws between CA/NY1970s  Courts said CL and statutory publicity rights terminate at death 1984/1999: Statutory response conferring post-mortem publicity rightsB. Indicia of IdentityRST 3d of Unfair Competition, §46 (d) – most commonly name/likenessRight of publicity is infringed by an appropriation of another’s identity for purposes of trade; use must be  Sufficient to identify the person whose identity ∆ is alleged to have appropriatedUnderstood by audience as referring to Π If visual likeness  Π must be reasonably identifiable from photo/depictionRelevant EvidenceNature/extent of identifying characteristics used by ∆∆’s intentΠ’s fameActual identification made by third personsSurveys indicating perceptions of the audienceTypes of LikenessVoice: Only Widely Known (professionals) with Distinctive VoiceMidler v. Ford Motor (9th Cir. 1988):Facts: Ford hired sound-alike to sing like Bette in commercialHolding: Only when a distinctive voice of a professional signer is widely cmt. appropriated what is not theirs and committed a tort in CA Π loses on statutory grounds, but wins under CA Common Law CA Civil Code  very restrictive: must be ACTUAL voice, but voice used was Hedwig’s  not all states would find this wayNOTE: presented LOC evidence (issue of TM LOC being read in  consumer confusion over Midler’s purported endorsement)Nancy Sinatra v. Goodyear: Goodyear used “Boots are made for Walking” with sound-alike for Nancy Sinatra  Nancy loses because does not have enough identity in her voiceVoice was not distinct enough to trigger right to identityPicture/PortraitOnassis v. Christian Dior-NY (NYS 2d 1984): Jackie sued for appropriation of right of publicity because face is hidden in background of ad with many well-known people in itAllison v. Vintage Sports Plaques (11th Cir. 1998) – First Sale Defense: ∆ purchased authorized sports trading cards and posted for sale  ∆ may lawfully resell images of celebrities that he lawfully purchased LikenessWhite v. Samsung (9th Cir. 1992, Kozinski Dissent): Vanna White robot in ad, but just a wig and letters, posture  not name, picture/portrait, voice  triggers right of publicityCL Persona Approach to right of identity/publicity  anything can evoke personaGoes too far with right of identity given to celebritiesAdds extra burden on creators of works to draw on celebrity attributesAllows celebrities to veto parodyWendt v. Host Int’l (9th Cir. 1997): animatronic robots representative of characters from TV show Cheers placed in barstools  actors retained publicity rights in their portrayal of fictional characters under CA law and NOT the producersPossibilities: Mere Evocation of a Celebrity  Hugely broadWalk/running style; characteristic gesture (Eastwood’s sneer); signature joke (take my wife); style of chess opening by grand master; shot/move/ technique by professional athlete (Tiger’s fist pump)  no end?False EndorsementRight of publicity claims are sometimes coupled with Lanham Act claims alleging false endorsement(1) Claim may amount to false advertising if all elements are met(2) Claim may violate Lanham Act §43(a)(1)(A):(1) Imitation of distinctive attribute of celebrity’s identityStandard would overlap with indicia of identity analysis(2) Connection with goods or services, or container for goods(3) ∆’s use in interstate commerce, and(4) LOC among substantial portion of relevant class of purchasers, regarding celebrity’s endorsement of goods/services; FACTORS:Level of recognition that Π has among segment of society for whom ∆’s product is intendedRelatedness of fame or success of Π to ∆’s productSimilarity of likeness used by ∆ to actual ΠEvidence of actual confusionMarketing channels usedLikely degree of purchase care∆’s intent on selecting the ΠLikelihood of expansion of the product linesDowning v. Abercrombie & Fitch (9th Cir. 2003): Πs (professional surfers) asserted right of public and false endorsement claims against A&F for including their pictures in A&F catalogue without consent  genuine issue of material fact on LOC, set forth factors aboveBut, Kournikova v. General Media (CD Cal. 2003): mere possibility that consumers may be misled is insufficient to prevail on an endorsement claimWaits v. Frito Lay: upholding false endorsement under 43(a) for ∆’s use of lookalike in TV commercial; $2.4M damagesOliveria v. Frito-Lay (2d 2002): not well-known enough to winWoody Allen v. National Video (SDNY 1985): didn’t endorse  won $11MC. Right of Publicity + the First AmendmentOverviewContent-Based Regulation TheoryContent-based Regulations of noncommercial speech  strict scrutinyExpressive Merchandise  t-shirts, photos, newsContent-based Regulations of commercial speech/content-neutral  intermediate scrutinyCommercial Speech Analysis  (1) whether speech is misleading/ promotes illegal transactions; 2) whether regulation serves important governmental interest; (3) whether regulation directly advances government interests; (4) whether regulation is narrowly tailored to achieve goals and doesn’t abridge more than needed.Economic Theory – First Amendment Rarely AppliesPublicity rights are a form of property1A doesn’t guarantee speakers right to use another person’s property to express speaker’s point of vCriticism: this would allow states to restrict expression merely be characterizing certain interests as propertyMore like IP Rights – No Strict ScrutinyIncidental Use DoctrineCourts say: “fleeting,” “incidental,” “insignificant,” or “de minimus” uses of names or other indicia of identity are not actionable because they are likely to have no commercial impactAligo v. Time-Life (ND Cal. 1994): Rolling Stone put photo of Officer Aligo holding club over student protester on cover, and Time-life aired 29-min infomercial with Aligo’s image on screen for 4seconds  Rationale: Incidental use has no commercial value; limiting would unduly burden expressive activity(1) whether use has unique quality/value that would result in commercial profit for ∆(2) Whether use contributes something of significance(3) Relationship between reference to Π and purpose/subject of work(4) Duration, prominence, or reposition f name/likeness relative to the rest of the publicationRestatement (Third) of Unfair Competition §47“The name, likeness, and other indicia of a person’s identity are used ‘for purposes of trade’ under §46 if used in advertising user’s goods/services, or placed on merchandise or in connection with services.”“For Purposes of Trade”  does not ordinarily include use of person’s identity in news reporting momentary, entertainment, works of fiction/ nonfiction, or in advertising that is incidental to such uses.” But, CA: does not explicitly except unauthorized use of living perosn’s identity in books, movies, and audiovisual worksSuggest some circumstances in which use of person’s identity in expressive work will violate person’s right of publicityIf name or likely used solely to attract attention to work that is not related to the person (e.g., Rosa Parks v. LaFace Records (6th Cir. 2003)(OutKast’s song)Appropriation of Modeling Services  use of photograph of Π in place of professional modelFirst Amendment and the Right of Publicity:  The Transformation RuleOften, defendants will raise First Amendment defense to the right of publicity Where First Amendment protections do apply, apply intermediate scrutiny (Central Hudson):Is it misleading?Regulation serves important government interests?Regulation advances government interest directly?Narrowly tailored?Test: is the work transformative?Zacchini v. Scripps Howard Broadcasting (SCOTUS 1977) (Read Narrowly):Facts: Π is entertainer who does 15-second human cannonball act – family business 50+ years; ∆ reporter filmed without permission and showed whole act on TV; Π claimed unlawful appropriation of Π’s professional propertyHolding: No violation of 1A/14A if state law were to prevent news from showing clips of this length of entertainment acts  1A/14A do not prohibit bars of news broadcasts showing things like full length of his act  like showing a whole movie in the theaterNon-celebrity v. Performer: here, economic concerns Broadcast of Π’s entire act poses substantial threat to economic value of his performanceAbility to reap rewards of endeavors – less reputational  “exclusive control over publicity given to his performance” – media can’t give it away for freeDissent (Powell): He made decision to be publicly known  can’t complain of routine news coverage consistent with 1A (privacy-based protection)TAKEAWAY: Publicity rights = incentive / economic value + exclusive control Problem with the transformative test: elitism (Jireh, McFarlene)ETC Corp. v. Jireh Pub. (6th Cir. 2003): painting of Master’s program showing Tiger Woods with previous winners looking down at him  limited edition serigraphs and lithographs had sufficient transformative elements to outweigh Woods’ assertion of right of publicityHoepker v. Kruger (SDNY 2002): museum reproductions of works of art incorporating Π’s photographic image – even on T-shirts and magnets, did not violate Π’s right of publicity under NY law because reproductions retained “essential nature of artistic expression” Simoneov v. Tiegs (NY City. Civ. Ct. 1993): sculptural work depicting model  artist may make a work of art that includes recognizable likeness of a person without his/her written consent and sell at a limited number of copiesBrinkley v. Casablancas (NY App. Div. 1981): unauthorized distribution of mass market posters depicting model Brinkley violated her right to publicityBlanche v. Koons (2d Cir. 2006): Breaking down distinction between satire and parody  satire acceptable as fair use in copyrightDoe v. McFarlene (MO Ct. 2006): hockey enforcer’s identity appropriated in form of a comic book “Spawn”  comic book loses, $15M damages and injunctionsLooking for Plus-Factors: Are there enough different evocations to bring to mind celebrity’s identity for sufficient number of people?Character named after Π; spin off merchandise to hockey fans; tough guy sports association; Affiliation with spawn character Comedy III Products v. Saderup (SCOTUS 2001): Facts: Comedy III owns all rights to 3 Stooges (deceased personalities), and ∆ is artist making charcoal drawings to create lithographs for t-shirts – earned $75kHolding: The right of publicity prevails against insufficient creative elements of transformation  must be transformed into something more than mere celebrity likeness or imitation (can’t merely supersede  must be new/transformative)T-shirts depicting 3 Stooges were noncommercial speech; reproductions are entitled to 1A protection, but must be balanced with right of publicityRight-of-publicity holder has monopoly on production of conventional, fungible images of celebrity (Cardtoon v. MLB – 10th Cir. 1996).1A Tension: (A) market place of ideas; (b) respect for individual development and self-realizationTAKEAWAY: When artistic expression takes form of literal depiction or imitation of celebrity for commercial gain, directly trespassing without adding significant expression, the publicity interest outweighs imitative art’s expressive interestsHoffman v. Capital Cities/ABC (9th Cir. 2001): Magazine article “Grand Illusions” had celebrities photo-shopped to wear spring fashions; Hoffman in drag; he sued  9th Cir. Reversed $3m+ award Holding: Π (public figured) need (and failed) to show “actual malice” in sense that ∆ knew/ recklessly disregarded that depiction was false Magazine appropriation of Π’s identity was ‘communicative’ not purely ‘commercial’ = highest 1A protectionNo falsity element in cause of action  Court assumed consumer confusion is proper rationale for right of publicityToffoloni v. LFP Publishing (11th Cir. 2009): brief newsworthy article incidental to private, nude photographs of pro wrestler’s murdered wife; photos unrelated to time / concept of current public interest news  photos outside newsworthiness exception to right of publicity VII. False Advertising, Product Disparagement, and Related Claims A. Economics of Advertising  Theories + Policy Implications: Mad Men v. the Suits (Culture Clash)1920s – Economic Theory of Monopolist Competition: advertising enables sellers to differentiate products  but may allow them to discourage market entry and raise pricesSuspicious of ads suggesting incorrect differentiationPolicymakers would want to strictly regulate even truthful advertising  but regulation is costly and 1A implications; if false and rampant, consumers will be less likely to rely on ads1960s – Chicago School (most influential): advertising provides social benefit providing consumers with valuable information (quality/durability/cost)  and lowers search costBut, how can this justify Super Bowl lavishness?Policymakers would want to target only false advertisingToday, academics pointing to confusion seen as weak (actually misogynistic)omplementary Theory (Bagwell/ Miller): consumers may value ‘social prestige’ and consumption of a product may generate greater social prestige when product appropriately advertisedBut, signaling effects of purchases are often socially wastefulResponses to False AdvertisingRegulation: FTC, Baby FTC, CL  Private Legal Response: Πs class actionsMarket Response: no repeat purchases if defraudedIndustry Self-Regulation: NAD + CARU responsible for receiving or initiating complaints / questions from any source of truth / accuracy of national advertising  monitoring and resolving disputesRationales for Advertising and Policy Implications of False Advertising LawConcern for over-deterring advertising and minimizing benefits of advertising B. The Common Law Approach to False AdvertisingCommon LawRequires “intent to deceive” (RST §761 – 1939) (unlike Lanham Act)Early Case – American Washboard . Saginaw Mfg. (6th Cir. 1904): absent proof that ∆ was deceiving customers into thinking that source of ∆’s product was Π (“passing off”), Π had no viable COASome allowed for misstatements of geographic originRestatement §761 – 1939One who diverts trade from a competitor byFraudulently representing goods which he markets haveIngredients or qualities which in fact they do not have but competitor does haveIs liable to competitor for harm caused if:(a) when making representation intends that it should / knows that it’s likely to – divert trade from competitor(b) competitor is not marketing his goods with material fraudulent misrepresentation of themEly-Norris Safe v. Mosler Safe (2d Cir. 1925, Hand): Π manufactured/sold safes with explosion chambers to stop burglars, public values this chamber; ∆ manufactured without chamber, but said  metal frame around door was to cover the chamber (deceptive)Holding: Competitor may not use deceit (geographic or descriptive) to attract customers; it’s as if Π had monopoly of explosion chambers and ∆ falsely represented that its safes had such chambersTAKEAWAY: Unlawful to lie about quality of wares in market  subject to action by buyer and competitors  no difference that ∆ sold goods as his ownConsumer would have gone to Π but for ∆’s deceitSingle-source theory to prove loss of salesMosler Safe v. Ely Norris Safe (SCOTUS, 1927, Holmes)Holding: If representation that safes had chamber is true, ∆ had perfect right to say that; but, if false, there is nothing to show that customers had they known facts would have gone to Π rather than other competitors in the market, or to lay foundation for claim of loss salesCompetitor in position to enforce; incentives uproot false advertising  better to eliminate or modify requirement that they prove actual harmC. False Advertising Under the Lanham ActStatutory Sources of False Advertising: Lanham Act §43(a)(1)(B)BackgroundAt time of Lanham Act, movement to “likelihood of injury” standard from “actual harm” standard was in full force Initially, courts read 43(a) as allowing for false advertising at all, even with its broad language 1954 – 3rd Circuit held that 43(a) applies to False Advertising	No actual harm requirementDid not extend to disparagement1988 revisions: included false advertising in 43(a)(1)(B) and includes commercial disparagementElements(1) False or misleading(2) Description or representation of fact(3) Regarding nature, characteristics, qualities, or geographic origin(4) Of Π’s or ∆’s goods (5) in commercial advertising / promotion, which(6) either actually deceives or has tendency to deceive a substantial segment of intended audience;(7) is material, and(8) used in interstate commerce, such that(9) Π has been / is likely to be injured as a resultDetailsNote: No “intent to deceive” requirement (unlike CL)False or Misleading + Statement of Fact2 separate sub-elementsStatements of fact  NOT mere puffery; must go to the heart NOT: opinions and omissions But! Omissions actionable if forms half-truth that communicates an untrue factBut!  Opinions if they are interpreted as stating / implying a proven factInsignia v. News Am (D. Minn. 2007) – Four Factors(1) statement’s precisions and specificity(2) statement’s verifiability (**May be most important)(3) social and literary context in which statement as made(4) statement’s pubic contextNature, Characteristics, Qualities, or Geographic Origin2d Cir: actionable statement must relate to an ‘inherent quality or characteristic of the product’Actually Deceived/ Tendency: Grouped with false/misleading element; survey evidencePresumed in most courts if statement is literally falseBut! Sanfield v. Finlay (7th Cir. 2001, Easterbook): requiring proof of actual or likely injury resulting from actual or likely consumer deception, even if statement is literally falseMateriality: but-for impact on buyingMay be entitled to rebuttable presumption if literally falseRepresentation is likely to influence prospective purchasers to some substantial degreeModes of False Advertising Liability(1 + 2) Literally False: Two Options – highly technical term of art(A) Literally False: False on its faceΠ is not required to present extrinsic evidence of consumer deception/ misleadingness or materiality  presumedSurdyk’s Liquor v. MGM Liquor (D. Minn. 2000): Test for Literal Falsity(1) Whether challenged ad conveys an explicit factual message, and (2) whether that explicit message is false Evaluate in full context of ad  the more suggestive message is, less likely there is to be literal falsity(B) False by Necessary ImplicationGrouped with above; may require contextual evidence to prove literally false, but does not require extrinsic evidence wrt deception and materialityClorox v. P&G (1st Cir. 2000): Considering the ad in entirety, audience would recognize claim as readily as if it had been explicitly stat4ed  necessary implication of statement E.g., “Longer engine life and better engine protection” – necessarily implies than competitorsUnited v. Clorox (8th Cir. 19998): Commercial claims that are implicit, attenuated, or merely suggestive cannot fairly be characterized as literally falseKey: determine by considering the ad in its entirety  Can be very difficult to distinguish between literally false & literally false by necessary implicationCashmere v. Saks (1st Cir. 2002) – demonstrates that determination of false by necessary implication is a very fact-intensive inquiryHere, assume they meant “virgin cashmere” making it false by necessary implication because the practice in the industry was to point explicitly state when it was recycled  NOTE: Literally false may be rendered true by context Schering-Plough Health v. Schwarz Pharma (7th Cir. 2009, Posner): ∆ made generic and FDA required using identical label as drug, including “Rx” despite getting FDA approval to sell OTC  No one is deceive, so no injury… if no one is or could be fooled, no one would be hurt (same rationale as puffery)  may have result of limiting (1)(B) to “bald-faced, egregious, undeniable, over the top” literally false by necessary implication claims(3) Impliedly False  Literally True/Ambiguous but Misleading by Implication:  Requires extrinsic evidence of consumer deception and materiality (survey)Johnson & Johnson Vision v. 1-800-Contacts (11th Cir. 2002): tying in with element (6) actual/likely deception, question is whether ‘substantial portion of audience’ for whom ad was intended would likely be deceived by statementMead Johnson v. Abbott Labs (7th Cir. 2000, Easterbrook): infant formula ads “1st Choice of Doctors” misinterpreted by consumers  TEST(1) literally true statements are misleading when they imply something that is false(2) whether claim is false or misleading is a question of act, law; and (3) on facts presented, Π’s evidence must support a conclusion by reasonable person that ∆’s claim was false or implied a falsehoodDetermine falsity/misleading with reference to the group to which it is addressed!Key: most courts will assume other elements are satisfied for both forms of literally false adsTrue or ambiguous statements that are misleading, courts will not make presumptionNote: courts generally do not require substantiation of defendant’s claims under 43(a)(1)(B)Plaintiff must instead demonstrate that statement is literally false or misleadingException: Establishment claims (surveys show…) require pre-existing substantiationCompare w/ FTC: Must have evidence substantiating all claims!Time Warner Cable v. DirecTV (2d Cir. 2007)Facts: Jessica Simpson “For picture quality this good, you’ve got to get DirectTV” but false because quality is the same; Shatner “(“settling would be illogical”); Internet ads grossly distorted poor quality of competitionFindings: Simpson statement is literally false; Shatner’s ad is false by necessary implication “unambiguously made false claim that competitor’s quality is inferior; But!  if language or graphic is susceptible to more than one reasonable interpretation, the ad cannot be literally false”Internet ads: “explicitly and literally false” but are not representation of factPuffery in Two Forms: (1) Opinion; (2) Overly boastful statement no consumer is justified in relying uponPizza Hut v. Papa John’s (5th Cir. 2000):Facts: Pizza Hut sues Pap John’s over slogan “Better ingredients.  Better Pizza.” Major issue is whether slogan has been ‘tainted’ by comparative adsSlogan Alone: puffery and all pizza companies do it; can’t rely on itHolding: Slogan used in connection with statements about sauce/dough comparisons takes on characteristics of statement of fact, but this is not materialNote: if you want damages in addition to injunction, courts will require more of a showing AT&T v. Verizon: AT&T claimed Verizon ad made it look like AT&T has no wireless coverage, but Verizon said it emphasizes 3G CoverageTambrands v. Warner-Labert (SDNY 1987): fast pregnancy test commercial; impliedly false claim (10 min if pregnant, but 30 if not pregnant)  challenged and found to be misleading with survey evidence  commercial enjoinedLiterally false statements that are not representations of fact are not actionable under 43(a)Not statements of fact:Three Non-FactsOpinionsActionable if they can reasonably be interpreted as stating/implying provable factOmissionsPuffery 4 Factors Distinguishing Puffery from Statement of Fact:Precision and Specificity of the statementVerifiabilitySocial or literary contextPublic contextExamples: “best in the world”Note: Puffery/opinions can become tainted by other elements of the ad and become a statement of factPizza Hut v. Papa Johns – slogan; found it to be SO tainted, that the lower court issued an injunction against the slogan forever, even outside of that context  had become a statement of fact!Note: found no evidence of materiality Must relate to goods/services/commercial activities in advertisementsSome courts have construed this to mean it must be a core element of the productOthers are more lenient: claiming hold a patent, etc is actionable Rationale for “fact” requirement:Purpose of false advertising provisions of the Lanham Act is to protect the sellers from having their customers lured away from them by deceptive advertising If no one can be fooled, no one is hurt!Actual Deception/Tendency to Deceive Literally false: courts will presume deception Misleading: Plaintiff must offer some evidence of actual or likelihood of deception Generally use same survey evidence used to show misleadingKey: whether a substantial portion of the relevant audience is likely to be deceivedGenerally seen as a reasonable person standard Note: Pizza Hut court conflated actual deception factor with materiality factor; also often combined with actual/likelihood of injury MaterialityWeakened materiality standardNeed to show that false/misleading statement likely influenced perspective buyersDo not need to show that customers would have changed their purchasing decisionsMixed question of law and fact (commenters; Courts have not said)Rebuttable Presumption of materiality for literally false claims onlyPizza Hut v. Papa Johns – though statement found to be misleading, plaintiff showed no evidence that it was material to consumersKey: Court indicated that if the statement was literally false, rather than misleading, plaintiffs would have been entitled to a rebuttable presumption of materiality Used in Interstate CommerceBecause it is an ad, usually easy to satisfy Establishment Claims + Substantiation:Most §43(a) actions: ∆ not initially required to come forward with evidence substantiating its claims, but MUST for establishment claimsException: Establishment claims (“Surveys show…”) require the ∆ to have pre-existing evidence substantiating establishment claims (surveys, data)In FTC actions, ∆ must have evidence substantiating all claimsD. False Advertising under the Federal Trade Commission ActOverviewFTC has authority to challenge anti-competitive practices as (1) “unfair methods of competition,” and  (2) to challenge “unfair trade practices” and “deceptive practices” that affect interstate commerceUnfair trade practices: wide variety of practicesDeceptive Trade Practice: more narrowly to false advertisingMay investigate matters and issue Civil Investigative demands, may propose consent order, if rejected,  then vote whether to issue a formal complaint  goes to ALJ  appeals to Full Commission and then to appellate courtSeeks remedy in cease and desist but may seek other injunctive relief such as compelling firm to provide consumers with refundsMay request firm take out corrective ads or be assessed civil penaltiesNo PRAStatutory Authority – FTC Act §§5 and 12Elements of FTC Action: (1) REPRESENTATION; (2) MISLEADING: (3) MATERIALITYThe respondent must make a (1) representation, omission or practice that is likely to be misread (2) consumers acting reasonably (3) in a way that is material to such consumers’ purchasing decisions.Representation: FTC does not generally require extrinsic evidence to establish interpretation of representation; relies on expertiseFocus on expertise rather than survey evidenceMust substantiate representation ex ante (no presumption of validity)Focus on entire advertisement, not just words in question (FTC Policy Statement)True advertisement may not cure a false headline where a reasonable consumer (see below) will only glance at the headlineCuring disclosures must be clear and may not be detracting from my other elements Includes omissions: Key difference with 43(a)(1)(B): Most common in “bait and switch” cases where offer is not bona fideReasonable Consumer: If one of multiple meanings is false, then seller is liable for that false meaning; judge wrt target groupWhen consumers can evaluate product or service, it is inexpensive, and frequently purchased  little incentive for sellers to misrepresent because incentives to encourage repeat purchasesCurrent Standard: Reasonable Consumer Standard (FTC Policy paper, Cliffdale Assoc. 1984))Key: reasonable consumers acting reasonably in the appropriate contextFocus on targeted group: different standard for children vs. professional (drug advertisement to doctors, less easily deceived)If there are several reasonable interpretations, only one must be misleading for liability Note: Cliffdale Assoc. represents the end of 1960’s visceral reaction to advertising Materiality: representation pertaining to certain categories (express claims; pertaining to central character) are presumptively material; may require evidence that claim or omission is likely to be considered important by consumersInjury: finding materiality  is also finding that injury is likely  different names for same concept because injured if would have chosen differentlyFTC Policy statement: material if it: is likely to affect the consumer’s conduct or decision re: product or serviceOld rule: anything consumer would find important, regardless of reliance Some cases it can be inferred; in others will have to be shown with evidence Intent to convey the message brings presumption of materiality (Kraft)“Wayfaring Fools” Test – Charles of the Ritz v. FTC (2d Cir. 1944):Commission may “insist upon the most literal truthfulness” in advertisements,” and should have undisturbed discretion to insist if it chooses upon a form of advertising clear enough so that “wayfaring men, though fools, shall not err therein.”Today – FTC “Deceptive” Definition Policy: Practice is deceptive if.(1) has tendency/capacity to mislead;(2) substantial number of consumers (more rigorous than “wayfaring fools”)Old Figure: about 20-25% consumers likely to be deceived is okayNow: reasonable Consumer Standard (Chicago Influence)(3) Material way  Southwest Sunsites v. FTC (9th Cir. 1986): Each of 3 elements of new standard imposes a greater burden on FTC to show violation of §5(1) FTC must show PROBABLE not possible deception(2) FTC must show potential deception of “consumers acting reasonably in the circumstances” and not just any consumers(3) Only deceptions that are likely to cause injury to reasonably relying consumer are material (unlike old standard not requiring reliance)Kraft v. FTC (7th Cir. 1992, Flaum) (BB: Weak Case)Facts: FTC found Kraft violated §§5, 12 with ad; 2 claims (1) milk equivalency claim (5oz of milk), and (2) imitation superiority claim (more milk than other slices)Holding: Order is enforced; finding of violations is supported by the evidenceFTC Policy  Net Impression + 3-Part Inquiry for Reasonable Consumer: (1) What claims are conveyed in the ad; (2) are those claims false or misleading; and (3) are those claims material to prospective customers?Relies on “reasonable consumer” (average) (Cliffdale Assos.)Grants presumption of materiality (1) Express claims; (2) implied claims where evidence that seller intended to make the claim; (3) claims that significantly involve health, safety, or other areas of concern for reasonable consumer Evidence of consumer reliance  materiality/injuryEvidence of Kraft’s increase in market share  infer imitation superiority message, as central theme of ads, contributed to increased salesConcurring: Concern that FTC can avoid extrinsic evidence by simply concluding that deceptive, implied claim is facially apparent  questionable expertiseTAKEAWAY: Even literally true statement s can have misleading implicationsAdvertising Substantiation – FTC Policy, Appended to Thompson MedicalMay be brought under §5 “Deceptive trade practices” or “Unfair Trade Practices” Unfair Trade Practices: contemplates cost-benefit analysis; 3 Factors - Sperry & Hutchinson:(1) Whether practice injures consumers- MOST IMPORTANTSubstantial (not speculative); not outweighed by competitive benefits (2) Whether it violates established public policyPolicy established by statue, common law, industry practice(3) Whether it is unethical or unscrupulous Immoral, oppressive = UNFAIR; such practices will almost always injure consumers and violate public policy tooReasonable Basis RequirementFailure to possess reasonable basis  unfair and deceptive act/practice in violation of §5 Advertisers / ad agencies must  have reasonable basis for claims before disseminatedVigorous enforcement of existing legal requirement  substantiate express and implied claims, however conveyed, that make objective assertions about the item or service advertisedObjective claims represent explicitly or by implication that advertiser has reasonable basis for claims  consumer relianceThompson Medical v. FTC (DC Cir. 1986) (BB: Crazy Outcome): Facts: Thompson sells OTC pain reliever cream (Aspercreme) for arthritis; no aspirin but ads suggests they’re related – shows aspirin tablets; ALJ reviewed 6500 pages evidence and issued 127 page finding Thompson liable  lacked reliable and credible information for reasonable basis for efficacy claims; represented better than aspirin and scientifically proven efficacyReasonable basis: Establishment claims: must have level of proof claimed in adFTC would require 2 clinical studiesQuestion of fact within FTC’s expertiseNon-Establishment (e.g. efficacy): more flexible analysisGenerally no pre-existing substantiated neededFTC downplays distinction, but no prior case requiring clinical testing to support non-establishments FTC has expertise to gauge what’s needed to substantiate claimsFTC: actual deception need not be shown; tendency to deceive determined by net impression it is likely to make on viewing public; literally true can be deceptive if misleadingMay rely on own reasoned analysis without consumer surveysHolding: FTC adequately considered a large mass of technical evidence and reasoned analysis reached proper finding of deceptive ads TAKEAWAY: MUST REFRAIN from saying it’s EFFECTIVEStandards for Prior Substantiation: Needed for Establishment ClaimsFactors:Type of claimProductConsequences of false claimBenefits of truthful claimCost of developing substantiation for the claimAmount of substantiation experts in field believe is reasonableExtrinsic evidence: expert testimony or consumer surveys is helpfulAdvertisers on notice that must have reasonable basis even for implied claimsProcedures for Obtaining SubstantiationNonpublic requests for substantiation directed to individual companies or civil investigative demand, if necessaryRelevance of Post-Claim Evidence in Substantiation Cases: Flexible EnforcementRely on post-claim evidence to…Evaluate appropriate policy of enforcement / public interestAssess adequacy of substantiation at time claim was made exposing deficiencies in materials Determine need or scope of order to be entered against firm lacking reasonable basisSelf-Regulation Groups and Government AgenciesClose working relationships with self-regulation groups and government agencies Will not necessarily defer to finding of self-regulation groupCommission makes its judgment independently, evaluating each case on meritsMay rely on expertise and findings of other groups and government agencies Endorsements and TestimonialsBackground  rules have become much stricter1970’s: FTC published first set of guidelines1980: AmendedSeen as created safe harbor for “results my vary”Ex: Jared the subway guy2000 AmendmentEliminates safe harborConcern: will limited ability for advertisers to create aspirational adsDiscusses blogging  OK if telling of own opinion or experiences factually2009 Guidelines  comprehensive attempt to address internet advertising and viral marketingFTC Guides Concerning use of Endorsements and Testimonials in Advertising (2009)Endorsements must reflect the honest opinions, finding, beliefs, or experience of the endorserRequirements for Permissible EndorsementEndorsements may not convey deceptive representationsCan’t convey any express/implied representation that would be deceptive if made directly by advertiserSubject to Substantiation“An advertiser may use an endorsement of an expert or celebrity only so long as it has good reason to believe the endorser continues to subscribe to the views presented.” (§255.1(c))E.g., building contractor loves house paint  must confirm still believes it’s great / bona fide user before userE.g, administrative assistant of 10 years may be expert endorsement of keyboard Endorser Liability – §225.1(d)Experts and celebrities (and BLOGGERS) may be personally liable for any misrepresentations they express (Garvey – actual opinion)E.g., celebrity + 30 min chicken cooker that takes 60 minBloggers: To limit potential liability, advertiser should ensure advertising service trains bloggers concerning need to ensure statements are truthful and substantiated  advertiser has responsibility too!Advertiser Liability – Consumer Endorsements – §255.2Consumer endorsements must be substantiatedEndorsement MUST disclose “generally expected performance” (“typicality”)Use of actors must be “clearly and conspicuously disclosed” If ad says “actual consumer,” MUST be ACTUAL consumer or discloseMUST DISCLOSE if circumstances to obtain endorsement would materially affect the weight/credibility of endorsementE.g., Restaurant “spontaneous” patron, but informed of potential interviews before entering, but do NOT have to disclose if informed of hidden camera only after interviews completed even if compensatedDisclosure of Material Connections – §255.5Pharmaceutical researchCelebrity EndorsementsTV Commercials  do NOT need to disclose ($ is assumed)Social Networking  MUST disclose (consumers might not realize $)Physicians (financial motivation shouldn’t materially affect credibility)ActorsBloggers, forum posters (receive merchandise / compensation for reviews)Viral marketers (kids with SWAG on playground)RECAP:Don’t say anything through endorsement that advertiser couldn’t say directly“Actual” must be ACTUALFocus on TYPICALITY for resultsThink about consumer impressions  Social media v.  TV commercials; street teams/bloggers; medical field If there are incentives that would materially affect the weight or credibility of endorsement  CLEARLY AND CONSPICUOUSLY DiscloseFTC v. Garvey (9th Cir. 2004):Facts: Weight loss system by Enforma – 2 dietary supplements – hired Modern Media for 2 infomercials – hired Garvey (retired 1st basement LA Dodgers) to star and be spokesperson  gave him and wife supply for 4 weeks, he lost 8 lbs and wife lost 27lsb  received script 2 days before filming, read from script; aired 48k times across US over 18 months; also made radio/TV appearances to promote  FTC said violated §§5 and 12D. Ct.  Garvey can’t be liable as ‘endorser’ because no evidence showing statements not good faith belief/opinion, and reasonable substantiationHolding: Not liable as ‘endorser’ or ‘direct participant’ under the GuidesDirect Participant Liability: Injunctive Relief: individual may be subject to injunctive relief if direct participation or authority to control them; Restitution: requires actual knowledge of material misrepresentations or reckless indifference to falsity; or awareness of high probability of fraud and intentional avoidance of truthReasonable basis collapses into knowledge requirement for restitution  what did individual know when making claims?Garvey’s experience  REASONABLE BASIS for claimsEndorser Liability / Endorsements: must reflect honest opinions, findings, beliefs or experience  Garvey only shared his actual experiences with weight loss with Enforma, so substantiated TAKEAWAY – ENDORSER LIABILITY: No intent requirement; no need to show ∆ intended to deceive customers  STRICT LIBAILITY COATAKEAWAY – DIRECT PARTICIPANT LIABILITY:Actual Knowledge or Recklessly Indifference to truth of statementsAware that fraud was highly probably and intentionally avoided truthE. “Little” or “Baby” FTC ActsState Statutes Targeting Unfair and Deceptive Trade Practices (rise in 1960s)Most have State AG public enforcement (like FTC)Many (not all) provide for private enforcement by competitors / businesses (like Lanham)Typically confer PRA upon consumers who purchased for personal use for practices, including false ads (UNLIKE FTC + Lanham), MAY ALSO:Enhance RemediesMake it easier for consumers to proceed than if using common law claimsProvide claims based on violations of state administrative regulationsState Regimes differ along 3 Critical DimensionsStanding to sueScope and extent to which they look to applicable federal law (Lanham/FTC)RemediesChoosing Baby Acts over Federal Acts: State Acts are NOT PreemptedStanding easier under Little FTC than under LanhamLanham Act requires actionable conduct in interstate commerceRemedies may be easier, and Lanham does not provide PUNITIVE damagesFDA Preemption – REJECTED: ∆s may argue that Food, Drug, and Cosmetic Act (FDCA) preempts state (or even federal advertising laws)  REJECTED (Altria Group v. Good (SCOTUS 2009))Lanham Act claims should not (generally) be precluded on basis of FDCA law as long as Lanham claim can be resolved without reference to that body of lawSchwarz Farm v. Breckenridge Pharm (ED Wis. 2005): mere FDA regulation of a term does not necessarily bar all Lanham Act claims that pertain to that term F. Commercial Disparagement and False AttributionOverviewCommercial Disparagement: publication of false statements about another’s personal property or business AKA: Product disparagement, business disparagement, injurious falsehood, slander on title, and trade libelTwo BranchesCommon Law (older):Offshoot of False Advertising (newer):Common Law Commercial Disparagement – Important because §43 is limitedRST 2d Torts – Defamation Elements:(1) ∆ published(2) Defamatory Statement(3) Concerning ΠOld Common Law Defamation  strict liability with truth as defense∆ shouldered burden of proving statement was trueDamages could be presumed for statement that was defamatory on its facePer se Defamatory: Π’s character for dishonesty, fraud, unchastity, reprehensible personal characteristics, or professional incompetenceInjurious statements about a person’s reputation/character seriousCurrent Defamation Standard: Officials or public figure Πs must prove falsity + “actual malice” by clear and convincing evidence (NYT v. Sullivan – SCOTUS 1964)Actual malice = knowing falsity or reckless disregard for the truthCommercial Disparagement: More difficult to prove than defamationInvolves statements about important things Higher bar for Πs commercially because business bad mouth each otherΠ must prove (1) Intent, (2) Falsity, (3) Special DamagesSTEPS for COMMON LAW Commercial Disparagement(1) Elements Π Must Prove (Paidar – Minn. 2000)Publication by ∆Disparaging wordsOf and concerning the ownership, quality, or other characteristics of Π’s goods, services, or propertyFalsityIntentSpecial Damages: Pecuniary loss resulting directly + immediately from effect of conduct of third persons and expense of measures reasonably necessary to counteract the publicationSpeculative damages precluded, BUT, evidence that Π lost specific sales or growth opportunities can support damages award“Malice” – varies by state, some presume after showing first 6 (burden shifts to ∆), some states require Π to proveRST 2d Torts §623A - Malice: (1) ∆ knew falsity / acted recklessly wrt falsity; (2) ∆ motivated by ill will towards Π; (3) ∆ intended to interfere with economic interest of Π in unprivileged fashion(2) ∆ Qualified/Conditional PrivilegesProduct comparisons: puffery, unless false wrt unfavorable factsRival claimant: ∆ claims he not Π owns property  must be subjectively honest and in good faithCommon interest: speaker reasonably believes publication protects/furthers common interest – reasonable + good faithSpeaker’s interest: sufficiently important interest + reasonably believes publication necessary to protect/further interestRecipient’s interest: reasonable belief that information affects important interest of recipient + obligation to inform recipient Fair Comment: privilege limited to statements of opinion  today, opinions absolutely privileged, so little applicability(3) Π can prove ∆ abused privilegeProof of malice: negates ALL conditional privileges, except for product comparisonExcessive (more than reasonably necessary) PublicationLanham Act §43(a) – “Depictions or Representations concerning His or Another’s Goods, Services, or Commercial Activities”  Elements the same as False Ads, but Π’s goods “Commercial Activities” of Π  - Should be construed broadly (P&G)Congress did not intend to narrowly limit term, but indeed to encompass those activities which do not solely involve provision of services / production of goods “Commercial Advertising or Promotion” by ∆  – Gordon & Breach (SDNY 1994)(1) Commercial speech(2) by ∆ who is in commercial competition with Π(3) for purpose of influencing consumers to buy ∆’s goods or services, and(4) disseminated sufficiently to the relevant purchasing public to constitute advertising/promotion within that industry Need not be classic advertising campaign; may consist of informal promotion7th Cir: form of promotion to anonymous recipients, as distinguished from face-to-face communication and relies on prefabricated promotional material Note:Reactive badmouthing of a competitor over the counter does not rise to commercial speech (Fendi)Mere fact that speech contains other elements does not transform it from commercial speech (P&G)False statements alone not sufficient absent commercial advertising/promotion (Oprah)Major CasesP&G v. Haugen (10th Cir. 2000): Facts: Haugen (Amway rep) spread rumor about P&G (competitor) supporting Lucifer over industry distribution networkHolding: SJ improvidently granted for ∆  P&G has claim for commercial disparagementCommercial Activities: extends to association with Lucifer claimsCommercial Speech: Yes, Gordon & Breach factors + message’s promotion of ∆’s products at expense of P&G’s  patently fallacious message here = commercial speech, okay by 1A On remand, D. Ct. later awarded $19.25MFashion Boutique of Short Hills v. Fendi (2d Cir. 2002)Facts: Π alleges commercial disparagement – former seller of Fendi products, ruined when Fendi opened on Madison Ave, claimed Fendi employees told customers Π sold bogus bags – in-person and rumorsHolding: Π failed to prove ∆s actions constituted “commercial advertising or promotion”  more than traditional ads, but not so broad as to encompass all commercial speech; not face-to-face communication unless Proactive policy to disparage, or Reactive to customers and ∆ maintains well-enforced policy to disparage its competitor each time mentioned by a customerSpecial Issue – False Statements about Health Risks of Food – “Food Disparagement”Some states devised their own statutes after food industry fall-outsAuvil v. CBS “60 Minutes” (9th Cir. 1995): JMOL for ∆s because Πs didn’t prove statements made during broadcast were false (Alar chemical may cause cancer)Texas Beef v. Winfrey (5th Cir. 2000): JMOL because Πs failed to show ∆s had not knowingly disseminated false information  didn’t show her comment was ‘commercial advertising or promotion;’ reserved judgment whether TX statute applied to fed cattle as “perishable food product” Commercial Disparagement Claims based on False Accusations of Infringement∆ falsely accused Π of infringing a patent or other intellectual property rightForms of AccusationCease + Desist letterForms of communication warning others against using/buying Π’s infringing goodsCommon Law  claims are privileged and non-actionable if in good faith Kenmart v. Printing Arts (9th Cir. 1959): qualified privilege is recognized in cases where publisher and recipient of publication have a common interest which might be reasonably believed to be protected / furthered by publication, and publication is made in good faithPatent Policy Approach Once patent granted, presumption of validity only overcome by proof of invalidity by clear and convincing evidence (Ariad Pharm – Fed. Cir. 2009)Patent-holders may give notice to public that it holds patent  would be undermined by allowing commercial disparagement But, Π would have to prove falsity anywaysFirst Amendment Approach  patent monopolist may enforce monopoly on patentException-Sham Litigation: where persons use governmental process as opposed to outcome of process as anticompetitive weapon  baseless claims of infringement against competitor merely to raise competitor’s costs of production  must prove by clear/convincing evidence, difficultFederal Circuit: substantial obstacles for unfair competition claims premised on false assertion of patent or other IP claims  federal patent law preempts state law commercial disparagement claim absent proof of bad faithNo preemption if claim is federal under Lanham commercial disparagement	G. False Attribution BackgroundConcerned with Passing Off (TM Infringement) v. Reverse Passing Off (Plagiarism)Copyright law in most other countries confer a “moral right” of attribution to their workMoral Rights of Attribution – French & German Law:(1) against misattribution: name on another’s work or another’s name on your work(2) against non-attribution: omission of one’s name from one’s own work(3) right o publish anonymously or pseudonymously (4) right to void promise to publish anonymously or pseudonymously (sometimes)1970’s began to see this idea in the US:Federal cases seemed to accept expansive readings of the law to allow this (Gilliam, below)State laws in CA & NY allowed for limited moral rights re: certain visual artsFederal Visual Artists Rights Act (VARA, see below)Limited to: paintings, drawings, prints, sculptures or photos existing in a single copy for exhibition, single copy signed by the author, or certain limited editionsLicensing arrangements often used in lieu of Lanham Act US Visual Artist’s Rights Act (VARA): Federal Statute after Berne Convention Qualifying “works of visual art” rights of attribution and integrity(1) paintings, drawings, prints, sculptures in single/limited copy/copies(2) still photographic images produced for exhibition purposes only, single/limited copy/copies(3) created after enactment (6/1/91)(4) OUTSIDE SCOPE: all other works (movies, literary works, works for hire), reproductions of visual art not in limited edition copies; pre-6/1/91Alternatives to VARAContractual or licensing arrangements; binding promises But, bargaining power problem, courts reluctant to enforce promises running with chattel beyond initial purchasersCreative Commons: license conditions use of copyright works on proper attributionDirectors Guild has collective bargaining agreements for motion picturesCopyright: confers upon authors exclusive right to prepare derivative worksState Laws: NY and CA created limited moral rights protection for qualifying visual artFalse advertising: if misrepresentation meets all false advertising elementsUnfair Competition: Lanham §43(a) – false designation of origin, or false description or representationLanham §43(a) – Unfair Competition Protection against False Attribution Passing Off: B sells B’s product labeled as A’s product (c.f., trademark infringement)RST 3d Unfair Competition §4: “If in  marketing of goods or services, actor makes a representation likely to deceive or mislead prospective purchasers by causing the mistaken belief that the actor’s business is the business of the other, or that the actor is the agent, affiliate, or associate of the other or that the goods or services that he actor markets are produced, sponsored or approved by the other”Injury: consumers misled into buying wrong product  B benefits from A’s goodwillNOTE: If Π’s name amounts to a TM (e.g., “Monty Python”), the unauthorized use of that name in connection with goods or services might amount to trademark infringement and false endorsement  LOC in consumers viewing programBut, reverse passing off claims are less likely to dovetail with TM infringement or false endorsement claims, insofar as they remove source-identifying characteristics of originalReverse Passing Off: B sells A’s products labeled as B’s Product (c.f., plagiarism)RST 3d Unfair Competition §5: “If in marketing goods or services manufactured, produced, or supplied by the other, the actor makes a representation likely to deceive or mislead prospective purchasers by causing the mistaken belief that the actor or a third person is the manufacturer, producer, or supplier of the goods or services if the representation is to the likely commercial detriment of the other.”E.g., Teller (Magician’s Shadow Rose): magicians formerly self-policed, but European magician began performing US-magician’s trick and passing off as European’s own.Gilliam v. ABC (2d Cir. 1976)  Providing Moral Rights-Like Remedies with §43(a)Facts: Π (Monty Python) have copyright on scripts, retain artistic rights in agreement with BBC to veto any alterations prior to recording; BBC deal with ABC to air, but ABC cut 24 of 90min to make room for ads  Theory: ABC mutilated work to such extent that ABC falsely identified Π as author of the work violating §43(a)!!Holding: Πs have valid COA for distortion that impairs integrity of Π’s work and represents to public product that is mere caricature of their talents§43(a): invoked to prevent misrepresentation that may injure Π’s business or personal reputation even where no registered TM is concerned Sufficient if representation of product, although technically true, creates false impression of product’s origins (like passing off)Deforming work and presenting artist to public as creator of work that is not his own makes him subject to criticism for work he hasn’t done   artist would suffer consequences of mutilationUnauthorized editing of underlying work, if proven, would constitute infringement of copyright exceeding license granted by copyright ownerBBC can’t give rights it doesn’t have; legal protection for artists increase production and dissemination (public interest)Concurrence: No need to reach Lanham Act  not substitute for moral rights; so long as ABC makes clear ABC version is not approved by Monty Python  no misdescription of originDastar v. 20th C. Fox Film (SCOTUS 2003, Scalia):  Goods = TANGIBLEFacts: Eisenhower’s bio; Fox ended-up derivative rights (Crusade) of public domain material  fell out of copyright, Dastar used film to make Campaigns and for less than Crusade; Fox alleged copyright infringement, and then said “reverse passing off” because sold without crediting Crusade in violation of Lanham §43(a) Holding: Lanham doesn’t require search for Nile and all its tributaries  “Origin” of “Goods” refers to where tangible goods originate§43(a) does not have boundless application: Dastar didn’t ‘merely repackage’ the videotapes; took public domain creative work, copied it with minor modifications and produced own videotapes  ORIGIN refers to PHYSICAL goods; CANNOT trace origin of communicative productsLanham Application too difficult for communication because potential liability for giving credit (passing off/mutilation) or not giving credit (Dastar/reverse passing off)  Catch 22: liability for failing to designate (reverse passing off) and for designating and implying endorsement (passing off)Lanham subbing for plagiarism conflicts with Samara (clothing knock-offs) finding product-design trade dress never inherently distinctiveWould make VARA superfluous TAKEAWAY: “Origin of Goods” refers to the producer of tangible goods that are offered for sale, and NOT to the author of any idea, concept or communications embodied in those goodsTAKEAWAY: If advertising/promotion for Campaigns implies substantial difference from Crusades, then may have §43(a)(1)(B) misrepresentation of nature/characteristics/ qualities AFTERMATH:BB: §43(a) may survive if strong Gilliam-like factsCourts have construed broadly, see below:Zyla v. Wadsworth (1st Cir. 2004): cookbook co-author fall-out; Zyla wants her name off 4th edition  DASTAR controls  false authorship claims should be pursued under CopyrightBretford v. Smith Mfg (7th Cir. 2005, Easterbrook): no passing-off when competitor (∆) used some of Π’s pieces to sell ∆’s A-frame computer tables“ORIGIN” was Smith (∆)  doesn’t matter who made component partsRudovsky v. West Publishing (ED PA 2010): refused to do their part of treatise without more money, but published with professors’ names (reverse passing off claim)  Dastar was forward passing off, but applied here!Consumers only care about physical origin of physical good!Policy Note: Destar represents a very “American” view; contrast w/ moral rights viewBB: this is tragic; in an ideal world, we would have a sense of the tradition thinkers leading up to current ideas; instead we treat it like a product False Advertising Claims premised on ∆’s Falsely Advertising Π’s authorship, performance in, or substantial involvement with, a creative workStephen King v. Innovation Books (2d Cir. 1992): Author assigned producer rights to short story, and film billed as “Stephen King’s Lawnmower Man” (“possessory credit”) and as being “based upon” Π’s story  King filed §43(a) claiming film departed from story too much that both credits were literally falseHolding: Π likely to succeed on possessory credit, but not “based upon” credit because more leeway with that claimPPX Enters v. Audiofidelity (2d 1987): misattribution of Jimi Hendrix as feature performer in recording where Hendrix either didn’t participate at all or only in background violated §43(a)De minimus non Curat Lex (Get over it):Choe v. Fordham Law (SDNY 1995): dismissed former law students §43(a) claim based on Journal publishing note with tons of errorsStratta v. George Duke Enterprises (SDNY 1997): dismissing conductor’s §43(a) claim premised on ∆’s release of CD with Π’s name misspelledH. First Amendment Constraints  §43(a)(1)(B) + Freedom of ExpressionTwo Important Speech-Protecting Limitations in §43(a)(1)(B)“In Commercial Advertising or Promotion”P&G v. Haugen (10th Cir. 2000)Fashion Boutique v. Short Hills v. Fendi (2d Cir. 2002)“False or misleading description of fact”  not “mere statement of opinion”Four-Step Balancing Test – Central Hudson Gas v. Public Service Comm’n (SCOTUS 1980)(1) Whether speech is misleading (or promotes illegal transactions)States may ban this speech entirelyDoesn’t apply to Dilution (Blurring/Tarnishment)  BLURRING not misleading by definition; tarnishment may be just an opinion, and opinions can’t be misleading(2) Whether asserted government interest is substantialWide array of government interests considered for restrictions on purely commercial speech(3) Whether regulation directly advances the important government interestLeast restrictive means not required  reasonable fit(4) Whether regulation is narrowly tailored to achieve its goals + does not restrict more speech than necessaryLeast restrictive means not required  reasonable fitRegulation of SpeechContent-Based: regulates on the basis of content Strict Scrutiny  compelling state interest + narrowly tailored to achieve that endContent-Neutral: justified without reference to the content of regulated speech  Intermediate Scrutiny  substantial government interest + do not unreasonably limit alternative avenues of communicationNon-Speech: such low social value that outside scope of 1AObscenity; fighting words; “true threats;” incitement of imminent lawless action, and child pornography (Miller v. California  - SCOTUS 1973)Commercial Speech: strong public interest in the free flow of commercial information  protected by lesser 1A (VA Bd. of Pharmacy v. VA Citizens Consumer Council – SCOTUS 1976)Less, but Substantial 1A Protection: justification for protection is providing accurate information to consumers + it’s “objective,” “more easily verified,” and more “hardy” than other speech and less likely to be chilledDifferent Treatment Justifications (US Healthcare): (1) Contribution to marketplace of ideas; (2) Durability of comm. speech; (3) Sophisticated speakers; (4) Avoid diluting 1ACourts will bend and manipulate tests to reach desired resultTEST (Bolger – 1983): (1) ads; (2) specific product; (3) ∆’s economic motivationTEST (Mattel – 9th Cir.): ∆-friendly  commercial speech is speech that does no more than propose financial transactionOne-Drop Principle (VA Pharmacy): if one drop of something other than transaction-speech, then non-commercial speech deserving 1A protectionTEST (US Healthcare): purpose is financial, and differentiate from other speech (Bending Virginia Pharmacy) Statement of Opinion does NOT Fall under §43(a)(1)(B)Boule v. Hutton (2d 2003): Π art collectors claimed ∆’s questioning in ARTnews of authenticity of Khidekel works in Π’s collection violated §43(a)(1)(B)  Comments were OPINION, and were NOT commercial speechTest for “Commercial Advertising or Promotion” (Fashion Boutique): (1) Commercial Speech(2) For the purpose of influencing consumers to buy ∆’s goods or services; and(3) Although representations less formal than those made as part of classic ad campaign may suffice, they must be disseminated “sufficiently to the relevant purchasing public”Test is 3 of 4 Prongs from Gordon & Breach: 4th prong (Π and ∆ competitors) not necessary to find commercial ads/promotion here Gmurzynska v. Hutton (2d Cir. 2004): Art experts’ opinions on authenticity of certain art works, solicited by an art collector and museum, are not commercial advertising or promotion for ∆ art gallery and NOT within §43(a)(1)(B)Groden v. Random House (2d Cir. 1995): ∆ published ad stating Π was “Guilty of misleading the American public”  Statements of opinion are not generally the basis for Lanham liability  subject of manifest public interest (like Kennedy assassination)  needs ample leeway to advertise books by expressing opinions, no matter how extravagantly worded, about merits of opposing viewpoints.Anti-SLAPP Statutes (CA) (Strategic Lawsuit Against Public Participation)If Π tries to silence ∆’s speech Allows ∆s to dismiss early and get attorney’s feesFalse Advertising v. Commercial Disparagement  Current Law Treats them the SameFalse Advertising  false information about ∆ Commercial Disparagement  false information about Π Sounds more like defamation which could trigger 1A Sullivan – Actual Malice standard, but NO!  Treated the same.NYT v. Sullivan (SCOTUS 1964): DEFAMATION REQUIRES ACTUAL MALICE Holding: Officials or public figure Πs must prove falsity + “actual malice” by clear and convincing evidence  actual malice = knowing falsity or reckless disregard for the truthActual malice does NOT apply to commercial disparagement claims under the Lanham Act US Healthcare v. Blue Cross of Greater Philadelphia (3d Cir. 1990): Facts: BCBS started PPO and started PPO v. HMO ad campaign; US Healthcare responded with own ads and civil action against BCBS for commercial disparagement, defamation, tortious interference; BCBS counterclaimedHolding: Statements (ads pure and simple) are commercial in nature  1A requires no higher standard of liability than mandated by substantive law of each claim Commercial Speech: (1) ads; (2) refers to specific products; (3) desire for revenue motivated speechTAKEAWAY: commercial disparagement Πs need NOT show actual maliceActual malice standard likely applies to common law commercial disparagement claimsBose v. Consumers Union (1st Cir. 1982)(NOT Lanham):Facts: Bose designed Bose speaker system, CU engineers wrote a critical report in magazine describing sound as “wandering about the room”  sued under product disparagement; Π won damages, but liability reversed on appealHolding: Unable to find clear and convincing evidence that ∆ published statement with knowledge that it was false or with reckless disregard of falsity  guilty of imprecise language, but that is NOT actual maliceDebate: ∆ says statement is “merely the opinion” expert panel despite sounding scientific/factual; no such thing as a false idea  assume factual and false  applies NYT v. Sullivan and Π failed to prove actual maliceKey Note: Bose did not contest that it was a public figure and that actual malice standard appliedSupreme Court has NOT addressed the issue, though courts apply NY Times to all common law commercial disparagement H. International and Comparative Law ConsiderationsGeneralArticle 10 of the Paris Convention Operationalizes the agreementsOriginally, not way to force compliance from member states1995 – TRIPS art. 2(1) requires compliance But Art. 10 leaves most of the details of compliance up to the member states themselves §44 of the Lanham Act applies the Paris Convention to American law§44(h) – protection of foreign nationals against unfair competitionCourts have generally held that this does not create additional substantive rights, other than national treatment for foreign nationals Some but very few courts have found that it does create separate substantive rights §44(i) – citizens or residents of the US also entitled to benefit from §44In practice, just throw §44 in as an addition when raising other claims Where 2 US citizens: 44(i) does not to create substantive rights beyond what is already in 43(a) Includes dormant anti-competition clause that may become important in the future Paris Convention: International Treaty requiring member nations to recognize claims for false advertising and disparagement Lanham Act §44: Operationalizing Paris Convention, Art. 10Basically covered by §43(a), but toss it in with other actions§44  doesn’t confer any substantive rights other than national treatment Int’l Café v. Hard Rock (11th Cir. 2001): §44 incorporated Paris Convention, BUT!  Paris Convention creates substantive rights beyond those independently provide in Lanham Act  only requires “national treatment”No new COA for unfair competition in §44A few courts HAVE found incorporation of substantive provisions of Paris Convention GM v. Ignacio (ED Mich. 1996): creates fed law of unfair competition applicable in international disputesNational Treatment: foreign nationals should be given same treatment in each of member countries as that country makes available to its own citizensDormant unfair competition clause may become more important in the futureExtraterritorial Application: some case of ‘national treatment’ may require extraterritorial application, but courts can reject this (Int’l Café v. Hardrock)VIII. Remedies to Trademark Infringement and False AdvertisingA. Remedies to Trademark InfringementGeneralTrademark remedies are organized around a property ruleinfringers have no “right” to use the trademark by paying damages like under a liability rulekey difference with most property rules: TM owners cannot sell property rightPrimary method of relief is injunctions, but Lanham Act allows for some other remedies where appropriate Injunctive Relief – Lanham §34: Courts may grant injunctions “to prevent the violation of any right of the registrant of the mark … or to prevent a violation of §43(a).”  Πs may seek injunction as matter of course once infringement is proven 5-Part Test for TM Injunction (Pretty Girl v. Pretty Girl Fashion – EDNY 2011- eBay):(1) Likelihood of success on the merits (examination of LOC Polaroid Factors)(2) Π is likely to suffer irreparable injury absent injunction(3) Remedies at law (such as monetary damages) are inadequate to compensate for injury(4) Balance of hardships tips in Π’s favor(5) Public interest will not be disserved by issuance of preliminary injunctionRationalesTMs protect a unique good (Π’s business goodwill) that can’t be bought backProtect consumers from confusionInjunction Functions: (1) Stop sale or use of TM(2) Issue corrective ads or implement disclaimers PBM Products v. Mead (4th Cir. 2011): injunctive relief proper because PBM suffered irreparable harm based primarily on fact that Mead’s advertising misled customersProfits, Damages, Costs – Lanham §35: General ConceptsNo double-counting: If court awards Π’s losses, will NOT include ∆’s profitsNot to be a windfall for Πs (Bandag)  should only be made wholeCompensation not a penaltyDeterrence justification varies Deterrence is too week and too easily invoked a justification for severe / cumbersome remedy of profits award (Alpo Petfoods)Π must prove fact + amount of damage  measured by any direct injury Π can prove, lost profits which Π would have earned but-for infringementAccounting is to award profits only on sales attributable to infringing conductDifficult calculation, so may award damages based on ∆’s profits  unjust enrichment theoryWhere there is no actual competition between TM good and infringing product, some courts may allow injunction but NOT damages (Minn. Pets, 8th Cir 1994)Issue of IntentDisgorgement  may or may not require intent post-1999 (see below)Attorney’s Fees (Exceptional)  malicious, fraudulent, deliberate, willfulConsiderations: Strength of markActual confusionWillful Infringement: deliberate, false, misleading, fraudulentDisgorgementPreviously limited to fraud/palming off bad faith cases (Champion Spark – 1947)Post-1999 Lanham Amendment: no bright-line willfulness requirement1999: “With a violation under §43(a), or “willful violation under §43(c).” Factor-Based Approach (Banjo Buddies– 3d Cir. 2005, citing Quick Techs.)(1) ∆’s intent to confuse/deceive(2) Whether sales have been diverted(3) Adequacy of other remedies(4) Any unreasonable delay by Π in asserting rights(5) Public interest in making misconduct unprofitable(6) Whether case of palming offC.f., LVM v. Dooney & Bourke (SNDY 2007): McCarthy’s right  Bajo Buddies places too much weight on 1999 Amendment  willfulness is still required!Bad Faith – Requirement to Search for Mark’s Senior use before Junior Uses?Int’l Star Yacht v. Hilfiger (SDNY 1999): no bad faith with cursory search of TM bankBlair & Cotter: some level of search activity for TM should be required of ∆Enhancements: Courts may award enhanced damages for TM infringementMust be framed as compensation and not punitive damagesPunitive damages ONLY in the context of counterfeiting§35(a): “May enter judgment … above actual damages, not exceeding 3x amount.”Willful conduct  Market Distortion  Compensation for misconduct causing lost profits and continuing distortion in the market (but may not award interest and inflation) (Alpo)NOTE on Pre-Lanham – Mark Thurmon:Common Law Actions  Πs could recover their provable lost profitsEquity Actions  Courts would award injunctions and either Π’s lost profits or (more commonly) ∆’s profit attributable to infringement, but $ required willfulnessCourts retained discretion to raise/lower monetary awards, but not to award penaltiesBy mid-1900s, some courts had begun to award punitive damages when Π could prove actual damagesLindy Pen v. Bic Pen (9th Cir. 1993): Lindy sues Pic for TM infringement of “Auditor’s” pen  LOC wrt telephone orders because can’t compare side-to-sideHolding: Weak mark, no actual confusion, unintentional infringement  compensation not penalty calculated with loss of profits from infringing conduct; no attorney’s fees because not exceptional (willful, malicious)TAKEAWAY: Π must prove fact + amount (direct injury Π can prove + lost profits) or can prove unjust enrichment in form of ∆’s profitsExceptional Cases (Willfulness): treble damages + attorney’s feesTAKEAWAY: Merely needs to show general level of Πs and then ∆s must come up with specificity, and judges will determine profitsSpecificity typically required, but may estimate where ∆ has not maintained recordsADIDAS v. Payless (D. Or. 2008): awarding ADIDAS $31M as damages in form of reasonably royalty and $19.7M in Payless’ profits  denied Payless’ motion for new trial, conditioned on ADIDAS accepting remittitur of $15M punitive damages awardLVM v. Akanoc (9th Cir. 2011): vacating judgment/remanding with instructions that D. Ct. award statutory damages in amount of $10.5M for contributory TM infringement, and $300k for contributory copyright infringement, for which 2 ∆s jointly/severally liableRodgers v. Wright (SDNY 2011): finding infringement, but concluding Π is not entitled to damages for ∆’s infringement of his TM or attorney’s fees where ∆ did not act in bad faithCorrective AdvertisingΠs with money may begin combatting the ads and be reimbursed for expenditures Πs without resources are not disadvantaged  still compensated for cost of proportional corrective ad campaign (Big O)No requirement that ∆ engage in ‘passing off’  would grant big brands impunity in snatching small senior’s marksCase of reverse confusion, no intent to trade on Π’s goodwill = still may be compensated for corrective ad campaignCalculation of Corrective Advertising Award: Market-presence of Π (where Π must run corrective ads) to correct for ad campaign of ∆, take that percent of ∆’s ad expenditure, discount by 75% under FTC rule (award 25% of amount ∆ spent infringement)  Does not have to be a 1:1 ratio to correct!!E.g., Big O v. Goodyear (10th Cir. 1977):  Big O in 14:50 states Goodyear advertised (28%)  28% of %10M = $2.8M  25% of $2.8M = $680k capAlso awarded punitive damages of $4M Trademark Counterfeiting – Special Remedies:Trademark Counterfeiting Act of 1984: knowingly counterfeiting a mark in connection with sale of goods/service is a FELONY  FINES + IMPRISONMENT for offenders + Permissible DESTRUCTION of counterfeit goodsLanham §34(d): seizure of counterfeit goods/records of sale before trialLanham §35(d): award of treble damages + attorney’s fees and prejudgment interest against counterfeiters unless court finds ‘extenuating circumstances’Lanham §36: destruction of counterfeit goodsException to 1984 Act: those who are authorized to use TM “at time of manufacture or production” of goodsAnti-Counterfeiting Consumer Protection Act 1996: Amended Lanham §35(c)  statutory damages as alternative to actual damages in civil counterfeiting cases 2008 – Doubled statutory range: May award statutory damages “not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold,” and may award up to $2M if violation is “willful”Posner (LVM v. Lee – 7th Cir. 1989): Deterrence with multiple damages in counterfeiting because impossible for TM owners to police every retail store in nation + stop counterfeiting with injunctions Special Counterfeiting – Aerospace and pharmaceuticals: Especially dangerous  double penalties ($5M or 20 years in prison)US v. Giles (10th Cir. 2000): I’m not trafficking in goods because I only have labels/marks, and no purses!   Innocent because labels not attached, but NOW AMENDED!! B. Remedies for False Advertising  May treat the same, but note the different Cause of Action!!!Remedies: Doctrine is Basically the same as TM InfringementInjunctive Relief under LanhamMust show LIKELIHOOD of Deception/ConfusionDamages under Lanham Must show ACTUAL Deception/ConfusionElements of False Advertising Claim – Lanham §43(a)(1)(B)(1) False or misleading(2) Description or representation of fact regarding Π’s goods, which(3) Actually deceives or is likely to deceive consumers, and is(4) Material to the consumers purchasing decision, and(5) Injures the ΠModes of False AdvertisingLiterally False  Presumption of Deception (unclear if Likelihood or Actual)Literally False (Direct TV – Simpson)False by Necessary Implication (Direct TV – Shatner)Misleading (Impliedly False)Kraft – processing removes calciumInjunctive Relief – Overbreadth Arguments:	Courts must closely tailor injunctions to harm addressed (Gulf Oil – DC Cir. 1985)Redressing the harm, not suppression of speech (e.g., ALPO – Ralston barred from hip discussion in veterinary magazines  not related to harm)1A concernsAlso applies to FTC Cease & Desist Orders (Kraft – argument rejected by 7th Cir.)ALPO v. Ralston (DC Cir. 1990):Facts: Both sued under §43(a) about puppy food claims (Ralston – hip dysplasia; ALPO – 2:1 vets prefer); both violated §43(a), but ALPO awarded ∆’s profits ($10.4M)  VACATEDDamages Holding: Both entitled to actual damages (lost profits) and no attorney’s feesD. Ct. erred awarding ALPO Raston’s profits (no willful, targeted wrongdoing)  ALPO entitled to actual damages.  Since both violated §43(a),  §35(a) does not authorize damages to less blameworthy party  Ralston gets actual damages tooAttorney’s Fees  exceptional cases ‘willful/bad faith’ no found hereTAKEAWAY: Π may not get ∆’s profits (false ads or infringement) absent proof of ∆’s conduct was willfulInjunction Holding: Injunction too expansive (barring all hip claims even non-Ralston) D. Ct.  enjoined use of false ads, required to disseminate corrective releasesBalance Dynamics v. Schmitt Ind. (6th Cir. 2000) – Corrective Ads: Facts: Π (Balance) sued ∆ for false ads over use of ozone-depleting materials; Π had engaged in corrective ads to mitigate damage Holding: (1) Π can recover for control costs without showing false ads created actual confusion in marketplace or actual damages; (2) To recover damages to goodwill or disgorgement of profits, MUST show at least some damage and cannot rely solely on literal falsehood of adLiteral Falsity Proof: presumption of confusion, so Π doesn’t have to demonstrate, BUT! Can’t recover marketplace damages on this (Lindy)Literal falsity alone doesn’t raise inference of damage to goodwill, but may if accompanied by bad faith / deliberate intent  But!  Even though Schmitt targeted Balance, no damages to recoverDamage Control Costs must be reasonably necessary to counter ∆’s false adsTAKEAWAY: Marketplace damages require ACTUAL damages, but Damage control expenses different  LIKE INJUNCTION done to prevent lost sales/profits/goodwillNo requirement that Π wait to take action until actual damagesCashmere & Camel v. Saks Fifth Ave. (1st Cir. 2002):Facts: Cashmere manufacturers association sues Saks for saying (1) that goods sold contained cashmere, and (2) that it didn’t specify ‘recycled cashmere’ when industry assumption is it is virgin  manufacturers seek injunction (other Πs sought damages)Holding: A reasonable factfinder could conclude that ∆’s material mislabeling of their garments deceived the consuming public, enabled ∆s to lower garment prices and caused Πs to lose sales Statement (1)  literally false; Statement (2)  false by necessary implicationMateriality  likely to influence purchasing decision (prominent labels)LOC/LOD  presumption of deception for literally false statementsPresumption of Deception for Literal Falsity  Injunction + Damages!Some Circuits find when ad is literally false, for damages, Π need not prove any of its customers were actually persuaded by ads (EFCO v. Symons – 8th Cir. 2000)  may grant relief without evidence of consumer reaction if ads are literally falseInterstate commerce is clearInjury  usually goodwill/diversion of salesPorous Media v. Pall (8th Cir. 1997): Π suing to enjoin need not prove specific damage, but courts require heightened level of proof of injury to recover money damages (affirmed $1.5M award) IX. Trademark Infringement in the Age of the InternetRescuecom Corp. v. Google (2d Cir. 2009) – Use of Π’s mark in search = Use in CommerceSix Aspects of Use in Commerce – TM use for Targeting Search = Actionable Use(1) Commerce clause limitation(2) Establishing priority: CL = actual use; Federal = actual/constructive use (3) Establishing ownership: who is the “user”?(4) Determining whether a mark has been abandoned: when does “use” stop?(5) Determining actionable use(6) Determining “fair use”Network Automation v. Advanced Systems Concepts (9th Cir. 2011): Facts: Network (declaratory Π seeks judgment of non-infringement) sells “AutoMate,” and Systems sells “ActiveBatch”  Network paid for “ActiveBatch” keyword on search engines (Google/Bing) to serve sponsored links; D. Ct. ruled in favor of ∆ granting injunctionHolding: (1) Use of mark as search engine keyword was “use in commerce,” and (2) use of mark was NOT likely to cause initial interest confusionApplied 8-Factor (pliant/non-exhaustive) Sleekcraft LOC Test: (1) strength  inherently distinctive(2) proximity of goods  closeness bolsters confusion (Playboy); interchangeable products, so consider degree of labeling/ad appearancesAre consumers mislead or presented with choices?(3) similarity of marks  D. Ct. erred in treating keyword differently from System’s TM  artificial distinction doesn’t reflect what consumers ‘encountered in the marketplace ‘Consider labeling/appearance of ad, whether it identifies Network’s mark, care and sophistication of consumer(4) evidence of actual confusion  proof is difficult; diminished weight at injunction stage (more so in SJ)(5) market channels  less important when marketing channel less obscure; it would be rare for commercial retailer not to advertise online(6) types of goods/degree of care of purchaser  sophisticated consumer would shop for business software; growth of online marketplace(7) ∆’s intent in selecting mark  only relevant insofar as it bolsters finding that use of TM serves to mislead consumers rather than truthfully inform them of choice of products  must first find intent to deceive(8) likelihood of expansion into product lines  unimportant where direct competitors**(9) other relevant factors  what was seen on screen + what did consumers believe in context?D. Ct.  3-Factors Significant for Internet (Brookfield)(Internet Trinity / “Troika” Factors): (1) similarity of marks; (2) relatedness of goods or services; (3) simultaneous use of Web as marketing channel  all favored ∆Poor fit here!  Two Principles: (1) Non-exhaustive; (2) FlexibleSine qua non of TM Law is Consumer ConfusionUse of a TM as search engine keyword that triggers the display of a competitor’s advertisement is a “use in commerce” under Lanham ActImplies sufficient labeling of sponsored link to distinguish it from organic links  can’t make the finding of fact, LOC must be found by D. Ct.Google has persuaded courts that organic links are “objective”  may be an issue if Google had biased approach to search results Open to abuse/retaliation  if Google didn’t list site, online presence would be dead  Google = “Gateway to Internet”TAKEAWAY: LOC is KEY!  (1) Labeling / appearance of ads; (2) Sophistication/care of consumersNote: “We must be acutely aware of excessive rigidity when apply the law int eh Internet context; emerging technologies require a flexible approach.”Brookfield (2001): Π had entertainment database “MovieBuff” and ∆ registered domain for his movie store  LOC test is flexible; Π will likely succeed as senior user and LOCMetatags are different than domain names  used to attract people to the site, may be less likely to be confused, but found INITIAL INTEREST CONFUSIONPlayboy (2006): ‘keying’ practice by Netscape; sold  lists of terms to sponsors and ads would appear when keywords were searched; Netscape required advertisers from adult entertainment industry to link ads to list with 400 terms, including Playboy’s TM  reversed SJ for ∆ as inappropriate because issues of fact Analyzed initial interest confusion  banners for ads unlabeled = more likely to cause confusionPlayboy claimed Netscape misappropriated goodwill of marks by leading Internet users to competitor’s sites  expert study that ‘statistically significant number’ of internet users thought Playboy SPONSORED adsAnalyzing nature of goods + consumer  presumed average searcher seeking adult material online is easily diverted from a specific product s/he is seeking  especially if more graphic ones appear quicklyHearts on Fire v. Blue Nile (D. Mass. 2009): LOC will ultimately turn on what consumer saw on screen and reasonably believed given the contextAnalogies to Shopping in the StorePlayboy Concurrence: Shopping in Macy’s en route to CK, diverted by big Charter One ads, eventually reaches CK  can’t say that Macy’s infringed on CK’s TM by diverting customer with clearly labeled, but more prominent displayAssumptions about Consumers: familiar with grocery stores, assume they can distinguish between name brand/generic products (Conopco); varying degrees of skill/sophistication wrt InternetNot the store shelf, you may start on the right thinking it is a featured link (Network); Playboy assumption of unsophisticated consumersDematerialization of Economy  resisted in Dastar grounded in tangible goods; consumers don’t’ care what the origin is (fetishization of commodity)Rosetta Stone v. Google (4th Cir., 4/9/2012): Facts: Pre-2004 Google said 3rd parties couldn’t buy TMs that belong to others; Post-2004, Google changed allowing 3rd parties to bid on ‘keywords’ to prompt ads linked to search terms – ranging from few cents to $2 per click! Process can pit company against competitor for its own TM!  2009 Policy: (1) Sponsor/reseller of genuine TM product; (2) sponsor makes/sells parts for TM product; (3) sponsor offers compatible parts/goods for TM product; (4) sponsor provides info/reviews on TM product.   Π’s product best known in market by far, 150 countries, millions on ads.   Claims not only LOC, but actual confusion misleading internet users into purchasing counterfeits Rosetta Stone sues Google for direct + contributory + vicarious  TM infringement, and TM dilution.  SJ vicarious + unjust enrichment claims; vacate SJ wrt direct + contributory infringement and dilutionHolding:LOC (Haute Diggity Dog  Factors): (1) Π owns valid mark; (2) ∆’s use was use in commerce; (3) ∆ used mar (or imitation of it) “in connection with sale, offering for sale, distribution, or advertising” Of goods or services; (4) ∆’s LOC (9-Factor Test)D. Ct. didn’t address all LOC factors  Okay because in ‘referential or nominative type of use” application is difficult with all factors (e.g., mark will always be identical; strength of mark limited probative value)***NOT adopting position about viability of nominative fair-use doctrine as a defense to TM infringement or whether it should alter LOC test  save for another dayINTENT FACTOR: Google increased revenue from 2009 policy  solicited advertisers “you may now use TM terms in ad text even if you don’t own TM”EVIDENCE OF LOC: anecdotal and survey + Google’s in house surveySophistication of consumers  high (tech + educational)Contributory Infringement (Inwood Labs.): intentionally induces another to infringe TM or continues to supply product to one whom knows / has reason to know is engaging in TM infringementGoogle allowed keyword advertisers to continue after Π notified they were not authorized resellers / counterfeiters (200 times) Vicarious Infringement (Hard Rock v. Concession – 7th Cir. 1992): ∆ and infringer have apparent or actual partnership, authority to bind one another in transactions with 3rd parties or exercise joint ownership or control over infringing product  NOT the case wrt GoogleDilution (Mosely v. V Secret Catalogue – SCOTUS 2003): dilution not concerned with confusion, but concern over strong mark losing value through unauthorized use by othersFederal TM Dilution Act (FTDA, 1996): Owner of famous mark … shall be entitled to injunction against another person who … commences use of mark or trade name in commerce that is likely to cause dilution by luring or dilution by tarnishment of the famous mark, regardless of the presence/absence of actual/likely confusion, competition, or actual economic injury.D. Ct.  TM “FUNCTIONAL” when used by search engine to trigger sponsored links, and therefore, uprotectable based on function (VACATED BY CIRCUIT)BB: This is absolutely INSANE  could have called it ‘nominative fair use’ Tiffany v. eBay (2d Cir. 2010): eBay maintained “Verified Rights Owner (‘VeRO’) Program” which allowed TM owners to report potentially infringing items so eBay could remove the listings  eBay promptly removed challenged listingsBut, Rosetta Stone: Issue of whether continued supply after notice of confusion / counterfeiting.European Court of Justice: Google search engine is likely NOT liable for any confusion caused by sponsored links, BUT! Advertisers may potentially be found liable (and choose not to advertise with Google to avoid liability)TM of Domain Names: In re Oppendahl (Fed Cir 2004): “Patents.com” merely descriptive of computer software for managing database of records/tracking records on InternetTLDs (.com, .net, .org, etc.)  don’t hold meaningCompare to Corp., Co., Inc., and similar designations  TLDs give more information (type of association with internet)But!  BB says ridiculous to think .com has no ID significance; e.g., “Half.com” never identified as “Half”ConfusionLOC  Applying the Multi-Factor Test in Unique ContextsThe internet  internet actually increased LOCGoTo.com v. Walt Disney Facts:  GoTo sought preliminary injunction against Disney for use of the mark GoToHolding: In 9th Circuit there are only three factors, the Troika Factors; but this is extremely pertinent in the internet context!Takeaway: Internet “Troika” SimilarityRelatedness of GoodsUse of Web as market channelNote: In 2000, internet consumers seen as very unsophisticated  may have changed since thenInitial Interest Confusion: rarely found on the internet by courts, ESPECIALLY on the internet because it is easy to click the back buttonRecent movement away from finding initial interest confusion, especially in the internet context because it is easy for consumer to “correct” mistake Playboy Enterprises v. Netscape (9th Cir 2004) – concurrence by Berzon: initial interest confusion should not be found simply because consumer is given a choice (here, however, it was found!)

What is the test established in Inwood Labs v. Ives Labs for determining contributory trademark infringement, and how was this applied in the Tiffany v. eBay case?