Back in April, we were among the first to write about an absolutely horrible bill in the California Assembly, giving various government entities not just the ability, but strong encouragement to copyright and trademark whatever they could. As we noted, this was a very confused and poorly thought out kneejerk reaction to a weird dispute involving Yosemite National Park and its former concession vendor, which had trademarked a variety of famous names at Yosemite, and then tried to sell them back to the park after losing its contract. That was a crazy situation, but the proper response is not granting bad trademarks, not suddenly encouraging the government to copyright and trademark all the things. As a simple example of why this was such a bad idea, it was easy to point to the City of Inglewood which tried to sue a critic for posting videos (plus commentary) of city council meetings. The lack of copyright in those videos helped get that case tossed.
And, of course, as you probably know already, copyright law bars the federal government from getting copyright in any works created by federal government employees (it does not bar the federal government from getting copyrights on works done by others where the copyright is then transferred to the government, but that's a different situation). Following some of the criticism of the bill, the state Assembly made a minor modification that stopped local governments (e.g., city governments) from getting these rights, reserving that unnecessary power just to state agencies. This was likely in response to everyone pointing to the Inglewood example. But, again, this is a really short sighted view. The state does not need more copyright, and as we've seen, granting them will be abused.
It probably goes without saying that the word "emoji" is now a full member of the popular lexicon. So popular, in fact, that Sony is apparently going to release an animated film called The Emoji Movie, which will follow the "lives" of a bunch of emojis, for reasons I cannot possibly fathom. But, as the release of the film is currently in the works, Sony is also apparently preparing to fend off a trademark claim from Marco Husges, a game developer and emoji creator.
According to The Hollywood Reporter, however, the studio may also be preparing for a legal battle as one former game developer says he owns the merchandising trademarks for more than 3,000 emoji.
Marco Husges, who worked on the MMO Shadowbane, and on Starbreeze Studios'Enclave, filed for commercial trademarks of the word "emoji" back in 2013. As such, Husges doesn't own the rights to the emoji images people use on their iPhones (which are trademarked to Apple) or Android devices (trademarked to Google), but he does own the rights to his own designs. He also owns the rights to certain words, like "emojitown" and "emojiworld."
Now, were Sony to be insane enough to pilfer unique creatively designed emojis and simply use them in its film, Husges would appear to have a straightforward copyright and/or trademark claim. But there's almost zero chance that Sony would do that, as well traveled as the company is in intellectual property dispute circles. What appears to be more at issue here is Sony's production of a movie with "emoji" in the title at all, not to mention should it attempt to do any merchandising around the film.
"I am curious how Sony would want to produce a movie under that name and do accompanying merchandising, especially given the fact our brand has already been successfully established with license partners and retailers all over the world," Husges told The Hollywood Reporter.
Husges added that the reason he trademarked certain aspects of emoji back in 2013 was to eventually adapt the pictograms for film and television use. He said he believed emojis could be the next Teenage Mutant Ninja Turtles or Minions if the right stories were applied.
Sony has indicated that it will move forward with the movie, with Husges responding that he's ready to take the film studio on in court. Sony, for its part, has begun working with a licensing firm to ensure that the film's characters themselves won't run afoul of any IP issues.
But what of the title of the film itself, or the use of the term "emoji" on merchandise? Can that word really be the subject of a trademark action when it is clearly descriptive? The etymology of the word "emoji" will travel you down the path of the Japanese language and the portmanteau of the terms for picture and character. Emoji is a literal descriptive term for a picture-character. How does that limited use of the word qualify for trademark protection?
To be clear, longer film titles like The Emoji Movie might qualify for trademark protection for films and merchandise, but that isn't what Husges is arguing. Even were Husges to make good on his promise of his own emoji-based animated productions, that doesn't itself render emoji non-descriptive. Given its recent emergence in popular language, it will be interesting to see how the courts view this dispute, should it ever get that far.
Usually when we talk about professional or college sports participants running into trademark issues, it has to do with the nicknames they have taken on and either attempted to trademark for themselves, or prohibit others from using. But the case of soccer coach Jose Mourinho is different in that respect: at issue is his own, natural name. And, to truly see how trademark has been perverted from its original purpose, one can simply watch Mourinho, who was supposed to take the helm of Manchester United, have his hiring delayed because another team he formerly coached holds the trademark for his name.
It has emerged that Chelsea still own his name as a trademark and could demand a six-figure sum from United before any deal is concluded. However, the issue will not scupper his appointment at Old Trafford. Chelsea registered 'Jose Mourinho' and his signature as a European trademark in 2005, which means they can use it to sell merchandise such as toiletries, technology, clothing and jewellery.
Sports lawyer Carol Couse told BBC Sport it was "really unusual" for an individual not to own the trademark to their own name.
"If United had a brand of Mourinho clothing, it would be in breach of the trademark Chelsea currently own," said Couse, of law firm Mills & Reeve.
And, when leaned upon the original purpose of trademark law, that's bullshit. When considering the use of a mark as a source identifier, the idea that someone might think that a Manchester United jersey emblazoned with that team's coach's name might instead have come from a team he'd first coached over a decade ago is plainly ludicrous. And, as the post notes, nobody thinks that this trademark issue is in any way going to sink Mourinho's hiring. In fact, he's already coached other teams after he left Chelsea.
Couse pointed out that Mourinho has managed Inter Milan and Real Madrid since the trademark was registered, suggesting the Italian and Spanish clubs both found a way around the sticky issue.
"They have either acquired the rights from Chelsea or managed the use of his name," she said.
If it's the former, then we can congratulate Chelsea on its shrewd business dealings in holding a man's name hostage for the purposes of sweet, cold, hard cash. But we can also ding the team for taking trademark beyond its purpose and instead wielding it as a weaponized profit-maker. Couse says she believes Man-U will simply pay a six-figure sum to license its own coach's name because it will be worth it to sell merchandise. Which is probably true, except that avoids the question of what any of this has to do with consumer confusion in the first place.
Because the answer is nothing. Yet this is what trademark has become in entirely too many circles: a hostage negotiation with any concern for the public good entirely ignored.
Whenever we talk about trademark bullies, especially those aggressively pursuing smaller businesses on shaky claims of brand confusion, a common question arises: what can we do to make this kind of thing stop? There are potentially several answers to this question, but one of the most simple is to behave in a way that makes trademark bullying a bad business decision.
Take Caribou Coffee, for instance. America's second-largest coffee retailer recently sued a tiny Michigan business called Blue Caribou Cafe, which is exactly the kind of small-market coffee and diner that you're picturing in your head right now. Caribou Coffee won its lawsuit, meaning that Blue Caribou Cafe will have to change its name, its branding, its storefront signage, and pay some $5,000 in attorney's fees. The basis for the lawsuit was the claim by Caribou Coffee that customers would be confused by the similar nature of the two names.
Well, those same customers are now speaking up, as they are mighty pissed off at Caribou Coffee's actions.
Comments on social media show that fans of the cafe and of small businesses generally are unhappy with Caribou Coffee for bringing the legal action, and some said they would boycott the company’s stores and products. Some of the strongest criticism has been posted on Caribou’s own Facebook page.
Those comments posted on Caribou Coffee's own Facebook page are about what you'd expect.
So, the question is whether this trademark bullying was worth it for Caribou Coffee. We can dispense with any debate over the validity of the company's legal action, I think. Pimping some kind of customer confusion between the massive retailer and a local coffee shop and diner is beyond silly. The company trotted out the tired excuse claiming that trademark law required them to do all of this, which isn't true. So, in light of all that, and in light of what has been a pretty clear public backlash from the very people whom it claimed would be confused, was the bullying worth it for Caribou Coffee?
It's hard to imagine that it was. Already the company is doing some scrambling to try to put a PR lid on this whole thing. For example, the business formely known as Blue Caribou Cafe started a GoFundMe campaign to get funds for all the rebranding it must now do, and Caribou Coffee contributed to it. That's nice, but all that does is add more to the cost of taking the unnecessary legal action to begin with. Here's the question to ask: how many customers did Caribou Coffee gain with its trademark lawsuit, and how many did it lose?
It seems clear B is greater than A in this case, which makes this whole thing a net negative for Caribou Coffee. Perhaps next time it will think twice before trying to bully a local small business.
This month features not only a stupid patent, but also a stupid trademark to go along with it.
My Health, Inc. is the owner of U.S. Patent No. 6,612,985, which is entitled "Method and system for monitoring and treating a patient." My Health also holds a trademark in the term "My Health." My Health claims that it is "the only person or entity entitled to use... ‘My Health' in commerce."
Since getting patent and trademark rights, My Health has been pretty active in federal court. It has sued at least 30 companies for patent infringement and has been involved in another three lawsuits involving allegations of trademark infringement. But regardless of what type of case it is, we think both the patent and trademark are stupid.
First, My Health's stupid patent. The patent is generally directed to "a method and system for monitoring and treating a patient who has one or more diagnosed conditions and is located at a remote location from a treatment processing system." If that sounds mundane, that's because it is.
Here is claim 1 of the patent, annotated for clarity:
1. A method for tracking compliance with treatment guidelines, the method comprising:
[a] determining a current assessment of one or more diagnosed conditions in a patient based on data about each of the diagnosed conditions from the patient who is at a remote location and on one or more assessment guidelines for each of the diagnosed conditions;
[b] updating an existing treatment plan for each of the diagnosed conditions based on the existing treatment plan, the current assessment, and on one or more treatment guidelines for each of the diagnosed conditions to generate an updated treatment plan for each of the diagnosed conditions;
[c] reviewing the updated treatment plan for each of the diagnosed conditions;
[d] determining if one or more changes are needed to the reviewed treatment plan for each of the diagnosed conditions;
[e] changing the reviewed treatment plan if the one or more changes are determined to be needed;
[f] providing the patient with the reviewed treatment plan for each of the diagnosed conditions; and
[g] generating and providing compliance data based on the updated treatment plan and the reviewed treatment plan for each of the diagnosed conditions.
This claim is essentially TeleHealth, with the addition of "generating and providing compliance data" at the end. This patent is almost surely invalid under the Supreme Court's decision in Alice, which held that abstract ideas are not patentable, absent something more. Here, My Health is claiming little more than the idea of remotely diagnosing and treating a medical patient. This is not a new idea, and the patent doesn't even claim how to do it, but only the idea of doing it (albeit with a bunch of patent-speak to make it look complicated). This 1998 episode of Star Trek: Deep Space Nine shows how the ideas in this patent are routine and conventional enough to be a plotline in a TV series.
We're not the first to reach the conclusion the patent is invalid. In a lawsuit from last year, a defendant sued by My Health asked the court to rule the patent invalid. Unfortunately, the court said it was too early in the case to decide that issue and the parties later settled.
Along with being abstract, we doubt that this patent described anything new or nonobvious in 2001. In fact, the Patent and Trademark Office has twiceagreed that there are serious problems with the patent's validity in light of what people already knew and were doing in 2001. It instituted 2 different "inter partes" reviews, meaning on two different occasions someone was able to show that there was a reasonable likelihood that the claims were invalid. But on both occasions, the parties settled before the Patent and Trademark Office decided whether the patents should be cancelled.
My Health recently sued again based on its stupid patent, and we wouldn't be surprised if this case also settles. By settling quickly with various parties before a court can make a decision as to the merits of it claims, My Health can continue to collect on its stupid patent.
But it's not only a stupid patent that's causing problems. My Health's stupid trademark is prompting a whole other stream of litigation. Not surprisingly, plenty of other companies have used the term "My Health" to describe services that provide health information to their users. So My Health is going after them, too.
In February 2015, My Health sued General Electric (GE), and alleged that GE's use of the term "myHealth" in connection with its online employee portal infringed My Health's trademark. My Health claimed that it "invested substantial time, money, and goodwill in advertising and promoting [My Health] in commerce and in the healthcare and technological services sectors." My Health further claimed that "GE is attempting to use [myHealth]...in order to take advantage of and capitalize on My Health's efforts to market and popularize My Health."
Given these statements, you might think My Health was an actual company with an actual business to protect. Indeed, My Health was required—under the penalty of perjury—to claim that it was using the term "My Health" in commerce in order to register it at the Patent and Trademark Office.
However, in February of this year GE told a very different story. According to a GE's motion for summary judgment (asking the court to rule in its favor as a matter of law), My Health "did not [have] a single document showing the actual sale of any goods or services under the purported MY HEATLH mark." That is, from the evidence GE was able to gather, "[My Health] simply obtained a patent, obtained a trademark registration, and proceeded to extract settlements based on threats of infringement litigation."
Beyond GE's claims, this is a trademark that never should have issued. Using the term "my health" to describe products and services related to—you guessed it—your health, is something the entire world should be able to do without fear of a trademark lawsuit. In fact, GE presented evidence that it had been using the term "myHealth" to describe its employee portal at least three years before My Health even applied for the trademark. (You can see GE's use yourself at the Internet Archive's Wayback Machine). It's not surprising GE was using this term: it is a completely predictable way to describe GE's service.
From what we can tell, My Health didn't oppose GE's motion. Instead, My Health settled with GE and the court never determined whether My Health was even entitled to hold a trademark in the term "My Health." This is unfortunate, because if My Health's patent infringement activity is any indication, My Health will continue to assert its trademark despite the serious doubts about its validity raised by GE.
My Health, armed with a stupid patent and a stupid trademark, has sued numerous companies, imposing costs on both those companies and the public at large. For that, it more than deserves this month's award.
Earlier this year, we wrote about an ongoing trademark dispute between the Navajo Nation and Urban Outfitters. The clothier had released a line of clothing and accessories, most notably women's underwear, with traditional Native American prints and had advertised them as a "Navajo" line. The Nation, which has registered trademarks on the term "Navajo", had sued for profits and/or damages under trademark law and the Indian Arts and Crafts Act, which prohibits companies from passing off goods as being made by Native Americans when they were not. In that post, I had focused on whether or not the term "Navajo" was deserving of trademark protection at all, or whether it ought to be looked at in the same way we consider words like "American", "Canadian" or "Mexican", as generic terms to denote a group of people.
Interestingly, the first ruling has come down in the case. It's in favor of Urban Outfitters, although admittedly not in the form that I would have expected. The court has granted partial summary judgment in favor of the company on the claims of blurring and tarnishment by use of the trademark, stating that the term "Navajo" is not famous by the dilution standards.
"While plaintiffs' evidence may be relevant to their infringement claim, it is not legally sufficient to establish a 'famous' mark and, hence, to defeat defendants' motions for partial summary judgment on the claims for dilution by blurring and garnishment," said US District Judge Bruce Black in New Mexico, according to The Fashion Law. "'Famous' requires more than just widespread distribution and significant advertising expenditures," he said, though he acknowledged that "very few courts have found a mark legally 'famous.'"
Which is true. The standards set within the Federal Trademark Dilution Act reserve relief for dilution and tarnishment for what it considers famous marks. The idea between this and the generic nature of a trademark are similar: if nobody is associating the use of the mark with the trademark holder in the first place, then there is no dilution or tarnishment being done. For either to occur, consumers need to make that connection to begin with.
I'll say, separately, I'm a bit surprised by this. Off the cuff, if someone had asked me if I considered the term "Navajo" to be of a level of fame to be widely known by the average person, I would have said yes. I would have added a caveat in that its widespread usage and understanding is an exact example of why I would consider it to be generic and not a source-identifier in the first place, however.
This doesn't end the lawsuit, of course, and there is still potential trademark infringement to be considered, just not the claims of dilution and tarnishment.
A search for the word "Navajo" on Urban Outfitters' site no longer turns up any results, but the Navajo Nation claims that the retailer has sold more than $500 million worth of Navajo-branded goods. The case is not yet over, though, so there's still time for some of those earnings to change hands: six counts are still pending against Urban Outfitters, including trademark infringement, unfair competition, and false advertising.
Yet it seems clear to me that the same reasoning that brought about the rulings on the dilution and tarnishment claims are easily translated to the remaining claims. If the trademark is brewing confusion, due either to a lack of notoriety or its generic nature, then the rest of the claims may fall as well.
Another day, another story of abusing trademark law to try to silence speech. Paul Levy has the story of how the city of Mesa, Arizona, has sent a ridiculous cease and desist letter to Jeremy Whittaker, who is running for city council. Apparently, his opponent in the election is the preferred choice of many current city officials, suggesting that they don't really appreciate Whittaker's candidacy. But the city took things a ridiculous step too far in sending that cease and desist, arguing that Whittaker's campaign signs violate the city's trademark on its logo.
And yes, that is a version of the Mesa city logo that he's using:
But to claim this is "trademark infringement"? That's crazy.
Your use of City of Mesa trademarks in your political campaign ads, whatever your reason for
including them, is trademark infringement. It implies an endorsement of your candidacy by the
City of Mesa and must stop immediately. The City of Mesa does not publically endorse any
candidate for Mesa City Council and has received complaints from the public and from other
candidates of your improper use of the trademarks. The City hereby demands you immediately
take down and replace all signs and advertisements that include City of Mesa trademarks.
There are several reasons why this demand is wrong — Whittaker is making a purely noncommercial use of the logo which is therefore outside the scope of the Lanham Act and, indeed, protected by the First Amendment, and, in any event, nothing about his material suggests that the city is behind his campaign. Beyond that, the logo is used to identify the city as the subject of his campaign for office, which is fair use.
The lawyer who sent the demand letter is the same one who submitted the trademark registration a few years ago, claiming that it was only for limited specific programs and services. At the same time, the city's publicist was describing the graphic as “a new logo to replace the stylized ‘M’ that has branded the city for a generation.” By identifying the symbol at issue as the city’s official insignia, its lawyer might have unwittingly put his client’s trademark registration at risk.
And, on top of that, Levy has sent a response letter to Mesa's lawyers raising these issues. As with pretty much any letter Levy sends, this one is worth reading. Here's part of it:
First, your effort to invoke the trademark laws to limit noncommercial political expression
is barred by the Ninth Circuit's decision in Bosley Medical Institute v. Kremer, 403 F.3d 672 (9th
Cir. 2005). That case involved the use of the plaintiff trademark as the domain name for an
Internet "gripe site" in which Michael Kremer was criticizing the plaintiff company. The district
court dismissed Bosley's claims for trademark infringement and dilution, and the court of appeals
affirmed because "trademark infringement law prevents only unauthorized uses of a trademark in
connection with a commercial transaction in which the trademark is being used to confuse potential
consumers." ... Like Kremer, Whittaker is not using the City's various
logos to sell any goods or services, but only to identify the government body whose policies and
operation he hopes to improve by being elected to public office. Consequently, "[Mesa] cannot use
the Lanham Act either as a shield from [Whittaker]'s criticism, or as a sword to shut [Whittaker]
Second, even if your client could show a commercial use of its marks, Whittaker has
employed the marks to identify the subjects of his commentary, and is thus protected by the doctrine
of nominative fair use, which has been recognized by the Ninth Circuit since New Kids on the Block
v. News America Publishing, 971 F.2d 302 (9th Cir. 1992). Whittaker cannot meaningfully identify
his candidacy without making clear that it is for the Mesa City Council that he is running, just as the
artist whom Mattel sued for his parody of the Barbie doll had to use her likeness to make the point
of his parody clear. See Mattel v. Walking Mountain, 353 F.3d 792 (9th Cir. 2003). The city's
success in letting its logo stand in as a shorthand for the city provides as well the necessity to use the
logo so that members of the public driving by his lawn signs or seeing his campaign literature
understand at a glance that he is a candidate for office in their city.
Third, your letter asserts that the placement of the city's logos on campaign material "falsely
encourag[es] a public belief that [Whittaker is] endorsed by the City of Mesa." We see no likelihood
of confusion, and the fact (recited in your demand letter) that some "other candidates" have
complained about the use of the logo does not show any likelihood of confusion about source or
sponsorship. It is, indeed, regrettable that your letter shows so little confidence in the intelligence
of your client's constituents. The citizens of Mesa are surely used to the fact that there are periodic
elections for city offices and that, even if some candidates are supported by the incumbent officials
who employ you and support Whittaker's electoral adversary (and who, indeed, are displayed on that
candidate's web site wearing lapel pins bearing the city logo), candidates are not sponsored or
endorsed by the city government itself.
And, of course, Levy also points out the possible problems with the trademark itself, which the city of Mesa might want to take note of:
But there is one more important reason why your client should withdraw its claims: litigating
the claims could result in the cancellation of your client's trademark. In my letter so far, I have
indulged the assumption that your client has consistently made, and on which your letter rests: that
the three-tier logo is effectively Mesa's city insignia. But your demand letter performs a clever
sleight of hand--you say that you are writing on behalf of the "City of Mesa Municipal Development
Corporation," which you say will be referenced as "City of Mesa"; then you go on to talk about how
the logo belongs to the City of Mesa. But it does not, and it cannot. Section 2(b) of the Lanham Act,
15 U.S.C. § 1052(b), provides that no mark may be registered if it "consists of or comprises the flag
or coat of arms or other insignia of . . . any State or municipality." That is no doubt why, instead of
seeking to register the three-tier logo on behalf of the City of Mesa as a city insignia, you secured
Registration No. 4,073,776 as counsel for the City of Mesa Municipal Development Corporation,
and only for such specialized services as construction planning, library services, utility services and
the like. You made no claim that this would be a mark for political campaign purposes, and no claim
that it would be a general city logo. Yet the repeated contentions by Mikkelsen and Smith, and
indeed by your own letter, that this is the city's logo, are flatly inconsistent with the limited purposes
for which this logo was registered. If we have to litigate this case, the record will only draw public
attention to how your client is trying to expand the rights conferred by the federal registration beyond
what the Lanham Act allows, and, indeed, in a manner that runs afoul of the First Amendment.
"Trademark law is not properly employed to stifle discussion." Renna v. Cly. of Union, NJ, 88 F.
Supp. 3d 310, 322 (D.N.J. 2014)
Indeed, I suggest you pay careful attention to the Renna decision, which discusses the reasons
why First Amendment limits on govemment's right to suppress speech about itself make trademark
rights inappropriate for municipal insignia, whether asserted as registered rights or unregistered
Believe it or not, the letter goes on to twist the screws even more tightly. One hopes the city of Mesa and its attorneys get the message and rethink their decision.
The nominative use doctrine allows third party references to trademark owners using the trademarks they chose as their preferred descriptors. Without a robust and well-functioning nominative use doctrine, trademark owners can have too much control over their brands -- they can shut down the advertisement of complementary or competitive offerings and potentially even critical scrutiny of the brands. Unfortunately, Congress never adopted a statutory nominative use doctrine for trademark infringement, and the doctrine seemingly baffles the courts. As a result, the circuits have created a patchwork of nominative use doctrines. A ruling this week from the Second Circuit exacerbated this problem.
The lawsuit itself is so ridiculous that it's hard to discuss with a straight face. The plaintiff owns the certification mark "CISSP" for certifying information security professionals. I've blogged about them before (1, 2). The defendant, Security University (SU), earned the CISSP designation and then ran ads self-referring to itself as "Master CISSP" or a "CISSP Master." When the certification mark owner challenged the "master" reference, the defendant responded "SU will continue to use the word Master. Master Clement Dupuis is a Male Teacher [and] thus he is a Master according to the dictionary." Oh come on, this is off the BS charts. Nevertheless, the district court dismissed the lawsuit because the defendant earned the CISSP certification and therefore could make a nominative use of it.
Trademark law isn't well-equipped to deal with an issue like this. The defendant's "master" usage implies the defendant has a superior knowledge compared to other CISSP. That's more of a false advertising issue than a trademark issue, and courts struggle when pressing trademark law to regulate broader advertising law issues. Furthermore, the way certified parties advertise themselves is best addressed by the terms of the certification, i.e., the certification should include restrictions on making superlative claims, forming combination marks or otherwise creating the impression that there are new certification flavors. I think contract principles, incorporated through the certification part of a certification mark, would be more efficacious than primary trademark doctrine.
Still, this case presented itself as a trademark case to the courts, so they address it using the tools of trademark. The Second Circuit reverses the district court's nominative use determination, remanding the case back to the district court to apply the legal principles it lays out in the opinion.
Regarding the nominative use doctrine, the court makes two major moves. First, the court could have adopted the legal articulation used by other circuits, such as this venerable language from the Ninth Circuit's New Kids on the Block case from a quarter-century ago:
First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.
Instead, the court chose to re-articulate the doctrine in its own words:
(1) whether the use of the plaintiff's mark is necessary to describe both the plaintiff's product or service and the defendant's product or service, that is, whether the product or service is not readily identifiable without use of the mark; (2) whether the defendant uses only so much of the plaintiff's mark as is necessary to identify the product or service; and (3) whether the defendant did anything that would, in conjunction with the mark, suggest sponsorship or endorsement by the plaintiff holder, that is, whether the defendant's conduct or language reflects the true or accurate relationship between plaintiff's and defendant's products or services.
You can see similarities to the Ninth Circuit test, but notice the differences. The Second Circuit's first factor requires a "necessity" of the trademark reference, a seemingly higher bar than the Ninth Circuit's "not readily identifiable" requirement (a phrase which nevertheless confusingly modifies the word "necessary"). In the second factor, the Second Circuit omits the "reasonably" qualifier from the identification necessity. In the third factor, the Second Circuit requires that the description be "accurate."
All told, the Second Circuit's modifications make it just a little harder for defendants to qualify for the nominative use case. Why did the Second Circuit toughen up the nominative use standard compared to the Ninth Circuit? The court provides no explanation, but I suspect it's an overreaction to the defendant playing semantic games ("bad facts make bad law," etc.), plus the overall misfit of using trademark law to govern what's really a false advertising issue.
Second, the Second Circuit addresses when a court should do its nominative use analysis. In the Ninth Circuit, the three-factor nominative use test substitutes for the standard multi-factor likelihood of consumer confusion test. In the Third Circuit, nominative use is an affirmative defense. Rejecting both approaches, the Second Circuit says that, "in nominative use cases," judges should add the three nominative use factors to the standard eight-factor Polaroid consumer confusion test -- in other words, an overlong eight-factor test now becomes an even longer 11-factor test. Any ideas how that's going to work out? (Recall Judge Walker's cogent and pithy critique: "Every circuit uses some n-factor test for likelihood of confusion, where n is an integer that is almost certainly too large for the task at hand").
By adding factors to the multi-factor test, the court makes it effectively impossible for defendants to establish nominative use on a motion to dismiss (a possibility under the Ninth Circuit's approach, even if unlikely), and it will inhibit judges from ruling for the defense on summary judgment. Judges can resolve consumer confusion analyses on summary judgment, but some judges are reluctant to do so because the factors encode so many factual questions. Adding three more factors to the test, each with additional factual predicates, will make judges that much more reluctant. So the court's ruling implicitly adds to the costs of a successful nominative use defense.
As I mentioned before, courts can't figure out how to deal with the nominative use doctrine. This is a problem because the nominative use doctrine plays a critical role in the successful functioning of markets, something I emphasized in my 2005 Deregulating Relevancy article. To facilitate socially beneficial nominative uses, we need doctrinal and procedural fastlanes that provide certainty and cheap resolutions to secondary users. The Second Circuit decision moves us further away from that direction.
A nomenclature note: there is some disagreement about whether to call the doctrine "nominative use" or "nominative fair use." The Second Circuit opinion uses the term interchangeably but seems to prefer "nominative fair use" -- that gets 34 references in the opinion, compared to 11 for "nominative use."
It's a mantra I've been repeating for some time now, but the alcohol and brewing industry has a trademark problem on its hands. We've seen instance after instance of the explosion in the craft brewing industry being hampered and harassed over trademark concerns, both from within the industry and from the outside. Most of these disputes lay bare the fact that trademark law has moved well beyond its initial function of preventing consumer confusion into a new era of corporate bullying and protectionism. But at least in most of these instances, the victim of all this is a victim once. Larry Cary, on the other hand, must be starting to feel like a punching bag, having had to now twice change the name of his alcohol-making business over trademark concerns.
Cary opened North Coast Distilling on Duane Street in 2014. In October, he was sued by California-based North Coast Brewing, and spent about $10,000 changing his name to Pilot House Spirits. Then Cary was sued in January by House Spirits Distilling, which claimed his new name violates "established valuable trademark rights and goodwill throughout the United States." The distillery, known for Aviation American Gin, has registered "House Spirits" and "House Spirits Distillery" with the U.S. Patent and Trademark Office.
His business will become Pilot House Distilling as part of a settlement with House Spirits Distilling.
To be fair, in the current climate, both of these trademark disputes ring as fairly valid from the complainant's perspective. The names in both instances were similar enough that I can understand the concern. That the solution the second go around was a name nearly indistinguishable from the name that had so offended House Spirits Distilling at once raises the question as to just how injurious the original was in the first place, but can also be seen as House Spirits Distilling behaving in an accommodating way. In other words, I can't really say there are any bad guys in this story.
The problem instead is one of bloat. For the alcohol industry, there is at once an era of increased trademark protectionism, an era in which the bar for originality and uniqueness to get the USPTO to approve a trademark has clattered to the floor, and an era of explosion in participation in the industry. That's a recipe for strife and confusion over who is allowed to enter the market using what language and under what circumstances. Some might fairly point out that these trademark protections have contributed to the explosive market to begin with. I would argue vehemently with them, but even for those on that side of the argument there must certainly be an acknowledgement that we're quickly approaching the level of diminishing returns. If the industry wants to continue to grow, it should be paying attention to the hurdles its placing in front of startup participants.
Cary said he'll have to spend another $10,000 to $15,000 changing the name on all his products and properties to Pilot House Distillery, adding that every time he names his business or products, he checks trademarks.
"What I've learned is even if you do everything right and you trademark it… if someone has bigger pockets than you, they can do whatever they want," he said.
What happens when we're faced with more stories of business folk playing brand-name musical chairs, all because there is too little language left available?
You may not be aware of this, but apparently Teresa Earnhardt, widow of Dale Earnhardt Sr., the NASCAR driver who died mid-race in 2001, is a staunch protector of her deceased husband's name. I was one of those not aware of this, primarily because NASCAR is every bit as foreign to me as curling (hi, Canadians!). Her latest attempt to block the use of the Earnardt name is particularly interesting, since those she is opposing are her dead husband's son and his son's wife.
That couple? Dale Earnhardt's son Kerry Earnhardt and Kerry's wife, Rene. Kerry and Rene helped design and promote the "Earnhardt Collection" of homes built by Schumacher Homes. They also plan to add furniture to the Earnhardt Collection brand.
Teresa Earnhardt, Kerry's stepmother and Dale's widow, doesn't want the couple to use the name Earnhardt Collection and filed an appeal last week in federal court over a U.S. Patent and Trademark Office ruling that denied Teresa's challenge to the "Earnhardt Collection" trademark applied for by Kerry Earnhardt Inc.
The details here display what appears to be a very untidy family relationship issue. Teresa is Kerry's stepmother, not his mother, and Kerry had taken his mother's married name, upon her re-marrying, several years after the divorce from Dale Sr. Teresa is actually Dale Sr.'s third wife, meaning there was another one in the middle of this divide. None of that is meant to cast any shade on Teresa, to be clear, but the fact of the matter is that Kerry was born an Earnhardt and even reverted to his born last name after beginning a relationship with Dale Sr. in his teenage years. As Game-of-Thrones-ish as this all sounds, the fact is that Kerry, and by extension his wife, are Earnhardts at least as much as Teresa is.
It's also a strain to understand how much confusion is going to be caused by Kerry using his last name for a home and furniture business. Teresa's filing attempts to assert that there will be plenty, but the USPTO didn't buy it.
Teresa Earnhardt didn't testify in the case but states in her appeal that the name Earnhardt Collection is likely to deceive or cause confusion among people that the homes and products are endorsed by Dale Earnhardt or by her.
I wish there was a more delicate way to state this, but nobody is going to mistake Kerry's use of his own last name as meaning that Dale Earnhardt Sr. endorsed the products... because he's dead. Were he to endorse anything at all, the world would be having a very different conversation than one about a trademark dispute, likely having to do with building an entire religion around the now-resurrected Dale Sr. That's what tends to happen, after all. As for anyone thinking that Teresa was doing the endorsing? Look, I already said I'm no racing fan, but how many racing fans could even pick Teresa Earnhardt out of a police lineup if they had to? If you listed the most famous Earnhardts, where would she rank? Third at absolute best? Why would anyone make that connection?
Based on comments from Kerry, this all actually sounds like a messy family engaging in petty squabbling.
Kerry said he has no relationship with Teresa. He was fired from Dale Earnhardt Inc. in 2011 at around the time he began working with Schumacher Homes, he said in testimony.
"Just me and my wife trying to build a brand for our family and everything, and then for her to come and oppose it -- I don't think if you had a relationship that any family member would do that," Kerry said in his testimony.
I would expect Teresa's appeal to fail. There's no customer confusion here.