Transcript From Barnum & Bailey to Victoria's Secret and Beyond

TRADEMARKS 2002-03
Lingerie to Lawn Care
Austin Intellectual Property Law Association
May 14, 2003
Steve Meleen
Fulbright & Jaworski
2002 Trademark Cases
An Overview
Another Busy Year

Over 40 Cases Discussed in TIPLJ Article


Supreme Court Continues to Show Interest in
Trademark Cases
Victoria’s Secret decision (March 4, 2003)
 Dastar oral arguments held April 2, 2003
Lots of Dilution and Trade Dress Cases
Internet Cases Down Overall, But Still Some
Important Developments



Special thanks to Susan Hightower and Martin
Hernandez
The Cases … Why Should You Care
About This Particular Case?
 Well-known,
or Someone Might
Ask You About It
 Helpful Analysis or Part of a Trend
 Interesting Facts
 Most Importantly, What Can You
Cite It For?
Moseley v. V Secret Catalogue, Inc.
537 U.S.

(2003)
This Just In: FTDA Requires Actual Dilution
VICTORIA’S SECRET vs. “Victor’s Little
Secret” for a store selling adult products
 District court found tarnishment and Sixth
Circuit affirmed, without requiring a showing
that dilution had occurred
 Circuit Split:
 Actual Dilution - 4th, 5th
 Likelihood of Dilution - 2nd, 6th, others

Moseley v. V Secret Catalogue, Inc.
537 U.S.

(2003)
Without much discussion, the Court determines
that the FTDA requires “actual dilution”
FTDA provides relief against a use that “causes
dilution of the distinctive quality” of the famous
mark (emphasis by the Court)
 Contrasts with state dilution statutes, which
“repeatedly refer to a ‘likelihood’ of harm, rather
than to a completed harm.”
 “This text unambiguously requires a showing of
actual dilution, rather than a likelihood of dilution.”

Moseley v. V Secret Catalogue, Inc.
537 U.S.

Court explicitly stops short of the 4th Circuit
Ringling Bros. standard


(2003)
“Of course, that does not mean that the
consequences of dilution, such as an actual loss of
sales or profits, must also be proved.”
Also makes clear that “mental association” is
not sufficient to establish actionable dilution
(“at least where the marks are not identical”)

“such mental association will not necessarily reduce
the capacity of the famous mark to identify the
goods of its owner”
Moseley v. V Secret Catalogue, Inc.
537 U.S.

Reversed and remanded


(2003)
“There is a complete lack of evidence of any lessening of
the capacity of the VICTORIA’S SECRET mark to
identify goods or services”
Court is unsympathetic to the difficulty of obtaining
evidence of actual dilution


“Whatever difficulties of proof may be entailed, they are
not an acceptable reason for dispensing with proof of an
essential element of a statutory violation.”
But, “direct evidence of dilution such as consumer
surveys” may not be necessary if “actual dilution can be
reliably proven through circumstantial evidence--the
obvious case is one where the junior and senior marks are
Moseley v. V Secret Catalogue, Inc.
537 U.S.

(2003)
Intriguing dicta - language arguably supporting
contentions that:
1) FTDA protection is confined to identical uses of famous
marks; and
2) The FTDA only covers blurring, not tarnishment (because
it refers only to “dilution of the distinctive quality of a
trade name or trademark” and omits “injury to business
reputation”)
3) The dilution doctrine should only protect arbitrary, coined,
or fanciful marks (based on Schecter article)

Note to Congress: When you fix “causes dilution,”
take a look at these issues also.
Moseley v. V Secret Catalogue, Inc.
537 U.S.

(2003)
Why You Care:
Another Supreme Court trademark decision
(remember when that used to be a big deal?)
 39,000 copies of Victoria’s Secret catalog
distributed each year in Elizabethtown,
Kentucky (population 22,000)


Just My Opinion:

A temporary setback for trademark protection,
a victory for statutory interpretation, and
probably good for everyone in the long run
Dastar Corp. v. Twentieth Century Fox
Film Corp.
No. 02-428 (S.Ct.)

From an unpublished Ninth Circuit opinion
in a reverse passing off case



20th Century Fox owns rights to “Crusades In Europe”
TV series, based on Dwight Eisenhower’s book
Dastar essentially repackaged (with minor additions)
the series and sold it as “Campaigns in Europe”
Ninth Circuit:


This was a “bodily appropriation,” without proper
attribution, so no need to show likelihood of confusion
The Lanham Act permits doubling the profit award “to
deter future infringing conduct”
Dastar Corp. v. Twentieth Century Fox
Film Corp.
No. 02-428 (S.Ct.)

Questions Presented (abridged):
1. Does Section 43(a) of the Lanham Act require
an independent showing that consumers will
likely be confused by a defendant’s false
designation of origin?
2. Does Section 35(a) authorize enhancement of
a monetary award solely for deterrent purposes?
Dastar Corp. v. Twentieth Century Fox
Film Corp.
No. 02-428 (S.Ct.)
AIPLA and INTA amicus briefs agreed:
(1) likelihood of confusion is required


Likelihood of confusion is an explicit requirement
of Section 43(a)(1)(a). That requirement also
prevents the constitutional problem that could arise
from a potentially perpetual copyright
(2) a profits award cannot be enhanced for
solely deterrent purposes

A sum awarded under Section 35(a) “shall constitute
compensation and not a penalty.” Thus, while an
award may have a deterrent effect, it must have
some compensatory purpose as well.
Toro Co. v. ToroHead, Inc.
61 USPQ2d 1164 (TTAB 2001)
First Substantive TTAB Decision on Dilution

Sets high standard for showing fame
“In effect, an owner of a famous mark is attempting to
demonstrate that the English language has changed.”

Also looks at uniqueness
The term must be “now primarily associated with the
owner of the mark even . . . outside the context of
the owners goods or services.

TORO not a famous mark
Despite $1.3 billion annual sales and much advertising
Toro Co. v. ToroHead, Inc.
61 USPQ2d 1164 (TTAB 2001)

Why You Care:
TTAB’s first substantive dilution case
 Citable for: Defending a dilution claim, where
the fame or uniqueness of plaintiff’s mark is
questionable

Bose Corp. v. QSC Audio Products
293 F.3d 1367, 63 U.S.P.Q.2d 1303 (Fed. Cir. 2002)

Federal Circuit reverses TTAB finding of no
likelihood of confusion


Unlike TTAB in Toro, relies on evidence of
sales volume, advertising, and critical acclaim
as evidence of strength and fame of Bose’s
WAVE marks
Why You Care:
Citable for proving fame through indirect
evidence
Te-Ta-Ma Truth Foundation - Family of
Uri, Inc. v. World Church of the Creator
297 F.3d 662 (7th Cir. 2002)

CHURCH OF THE CREATOR is
descriptive (with secondary meaning), not
generic

Why You Care:

This is the trademark case where the defendant
was arrested for trying to have the judge killed.
Karl Storz Endoscopy-America v.
Surgical Technologies Inc.
285 F.3d 848, 62 U.S.P.Q. 2d 1273 (9th Cir. 2002)

Repaired/rebuilt surgical endoscopes
If rebuilding is so significant that it’s really a
new product, it is an infringing use of the
product’s original mark
 Includes a four-part test to determine whether a
different product results


Why You Care:
Really only if you have a case involving
remanufactured goods
 Also citable for post-sale confusion

Herbko Int’l, Inc. v. Kappa Books, Inc.
38 F.3d 1156, 64 USPQ 1375 (Fed. Cir. 2002)

“Analogous Use” may support a priority
date, but a book title is still not a mark
Single use may create priority, if (1) designed
to create an association with goods or services
and (2) timely followed by trademark use
 Here, no priority because the first use was for a
book title
 Reiterates Federal Circuit law that the title of a
single book is never source-identifying


Why You Care:

Good discussion of analogous use doctrine
Promatek Indus. v. Equitrac Corp.
300 F.3d 808 (7th Cir. 2002)

Servicer of COPITRAK equipment used
that mark in metatags on its website


7th Cir. Affirms preliminary injunction
requiring disclaimer and hyperlink to plaintiff’s
website
Why You Care:
Citable for a plaintiff alleging initial-interest
confusion (with good quotes)
 Injunction requires hyperlink to plaintiff’s site
(somewhat unusual)

Mattel Inc. v. MCA Records Inc.
296 F.3d 894, 63 U.S.P.Q. 2d 1715 (9th Cir. 2002)

“Barbie Girl” song parodying the doll was
not actionable
Barbie doll was the target of the parody, unlike
Dr. Suess
 9th Cir. found use was not “commercial”




Analysis under First Amendment doctrine, even
though “Barbie” was used to sell copies of the song
“inextricably intertwined with expressive elements”
Why You Care:
Citable for a significant expansion of
“noncommercial use” exemption to FTDA
 Free lyrics sheet included!

Playboy Enters., Inc. v. Welles
279 F.3d 796 (9th Cir. 2002)

“Nominative fair use”
Terri Welles really was “Playmate of the Year”
in 1981
 Did not imply any current sponsorship
 Had to remove stylized “PMOY ‘81” wallpaper
from site


Why You Care:

Playboy, a relatively new trademark doctrine,
… people are going to talk
Cohn v. Petsmart Inc.
281 F.3d 837 (9th Cir. 2002)

Same mark + same services = summary
judgment for Defendant
Local veterinarian: “Where Pets are Family”
 Petsmart: “Where Pets are Family” (national
pet supply store with an in-store animal clinic)
 9th Circuit affirms summary judgment





Similarity of the marks favors defendant, because
both parties use with their house mark
Pet owners are selective in choosing vet
Six years without actual confusion*
Why You Care:

So you can explain to me how this can be right
(looks like classic reverse confusion to me)
Could it be another . . .
? ? ?
Or just another 9th Circuit Trademark Case?
New York Stock Exchange Inc. v. New York,
New York Hotel LLC
293 F.3d 550, 62 U.S.P.Q.2d 1260 (2d Cir. 2002)
Deere & Co. v. MTD Products, Inc.
2002 WL 1837402 (S.D.N.Y. 2002)

“The Second Circuit Two-Step”
Equal parts Wal-Mart (color mark is never
inherently distinctive) and TCPIP (in 2nd Cir.,
mark must be inherently distinctive for FTDA)
 Thus, Deere’s green and yellow color mark is
not eligible for dilution protection
 But thanks for playing - lovely parting gifts


Why You Care:

You probably don’t want to bring a color-based
dilution case in the Second Circuit
Eppendorf-Netheler-Hinz HMBH v.
Ritter HMBH
289 F.3d 351, 62 U.S.P.Q.2d 1534 (5th Cir. 2002)

Fifth Circuit applies TrafFix
Alleged trade dress of plaintiff’s pipette tips
was functional
 Reverses $1.75 million award
 Availability of alternative designs is irrelevant
after TrafFix


Why You Care:

It’s the Fifth Circuit - you need to know this
stuff
Abercrombie & Fitch Stores Inc. v.
American Eagle Outfitters Inc.
280 F.3d 619, 61 U.S.P.Q.2d 1769 (6th Cir. 2002)

Abercrombie’s alleged store trade dress is
functional


included the A&F clothing designs, advertising
displays, and the use of college students as sales
associates
Why You Care:

So you don’t argue that using college students as
sales associates is part of protectible trade dress
Porsche Cars North America, Inc. v.
Porsche.net
302 F.3d 248, 64 U.S.P.Q. 2d 1248 (4th Cir. 2002)

Ongoing saga of Porsche domain names
After ACPA enacted, Porsche re-filed in rem
action against 128 domain names
 British citizen who owned two names
consented, on eve of trial, to jurisdiction in CA
 District Court said this destroyed in rem
juisdiction


Fourth Circuit: in rem jurisdiction
determined at time of filing

Also, challenge to in rem jurisdiction waived
Harrods Ltd. v. Sixty Internet Domain
Names
302 F.3d 214, 64 U.S.P.Q. 2d 1225 (4th Cir. 2002)

ACPA in rem jurisdiction is available not
only for ACPA claims, but any Lanham Act
violation


ACPA: may file in rem action if domain name
violates “any right” of the owner of a mark
registered or protected under 43(a) or (c).
Why You Care:

very helpful if you need to rely on in rem
jurisdiction, but are concerned about ability of
prove “bad faith” element of ACPA
Nissan Motor Co., Ltd. v. Nissan Computer
231 F. Supp.2d 977 (C.D. Cal. 2002)

Another ongoing saga





Uzi Nissan registered nissan.com for his computer
company in 1994. In prior decision, court found for
Nissan Motor on dilution claim.
No transfer of domain names - noncommercial speech
on site does not violate FTDA
But, no “disparaging remarks or negative commentary”
about Nissan Motor -- that use is “sufficiently
commercial” to invoke FTDA
So, Uzi keeps his sites but must be nice
Why You Care:

Citable for (controversial) proposition that criticism
may be commercial speech
Barcarmerica International USA Trust v.
Tyfield Importers Inc.
289 F.3d 589, 62 U.S.P.Q. 2d 1673 (9th Cir. 2002)

LEONARDO DA VINCI wine

Plaintiff licensed mark to a third party


Summary judgment of abandonment affirmed


no quality control provision in license, and plaintiff
not familiar with quality control efforts
whether licensee’s wine was objectively “good” is
irrelevant - Barcamerica had no role
Why You Care:

Good reminder of the dangers of licensing with
no quality control
Tamko Roofing Products, Inc. v. Ideal
Roofing Co., Ltd.
282 F.3d 23 (1st Cir. 2002)

First Circuit affirms award of over $700,000
in profits and attorney fees

Willful infringement is sufficient, rejecting
defendant’s argument that fraud or bad faith is
required for a case to be “exceptional”


“willfulness short of bad faith or fraud will suffice
when equitable considerations justify an award and
the district court supportably finds the case
exceptional”
Why You Care:

Damages and attorney fees awarded
Quick Technologies, Inc. v. The Sage
Group PLC
313 F.3d 338 (5th Cir. 2002)

Willful infringement is not a prerequisite to
an award of profits
Contrary jury instruction was erroneous
 But, harmless error because equity did not
weigh in favor of award


Why You Care:
Citable to show that you can get monetary relief
without willful infringement
 But … cite it somewhere outside the 5th Circuit
because you’re not likely to get any $$ here

R.C. Bigelow, Inc. v. Liberty Mutual
Insurance Co.
287 F.3d 242, 62 U.S.P.Q.2d 1529 (2d Cir. 2002)

Second Circuit: Trade dress infringement
claim covered under “advertising injury”
policy provision
Based on specific policy definition: “copying”
advertising ideas or advertising style
 Also based on Connecticut duty-to-defend law
 Your mileage may vary (based on State and
policy provisions)


Why You Care:

Coverage cases have gone both ways - chalk
this one up for the insured
Waco International Inc. v. KHK
Scaffolding Houston Inc.
278 F.3d 523, 61 U.S.P.Q.2d 1460 (5th Cir. 2002)

Be careful what you seize

Fifth Circuit affirms award of over $1 million
for wrongful seizure under § 34(d)(11)



Products themselves bore no mark (infringement
claim based on invoices and promotional material)
KHK’s reference to Waco in claiming compatibility
is a fair use
Why You Care:

If you plan to seize counterfeit goods, be sure
you’re right
Barcelona.com, Inc. v. Excelentisimo
Ayuntamiento De Barcelona
189 F. Supp. 2d 367, 63 U.S.P.Q. 2d 1189 (E.D. Va. 2002)

ACPA protection extended to foreign marks

City Council of Barcelona awarded
“barcelona.com” under ACPA, based on
Spanish trademarks incorporating “Barcelona”


“It is untenable to suppose that Congress, aware of
the fact that the internet is so international in nature,
only intended for U.S. trademarks to be protected.”
Why You Care:
Also received a lot of publicity
 Interesting twist on extraterritorial application
of the Lanham Act

Fashion Boutique of Short Hills, Inc. v.
Fendi USA, Inc.
314 F.3d 48 (2d Cir. 2002)

Second Circuit adopts test for what
constitutes “commercial advertising or
promotion”

must be (1) commercial speech; (2) for the
purpose of influencing consumers to buy
defendant’s goods or services; and (3) although
representations less formal than those made as
part of a classic advertising campaign may
suffice, they must be disseminated sufficiently
to the relevant public.
Fashion Boutique of Short Hills, Inc. v.
Fendi USA, Inc.
314 F.3d 48 (2d Cir. 2002)

One store’s employees bad-mouthing
another’s (up to 27 incidents) is not
“advertising”

Why You Care:

Issue of first impression for 2nd Circuit
Scotts Co. v. United Industries Corp.
315 F.3d 264 (4th Cir. 2002)

Fourth Circuit vacates preliminary
injunction based on false advertising



File under “Helpful life information I learned
from trademark cases”: chemical crabgrass
killers only work before crabgrass sprouts, or
within four weeks after, not on mature plants
Defendant’s package had a picture of mature
crabgrass and claimed it “prevents” crabgrass
Scotts said that conveyed false messages
Scotts Co. v. United Industries Corp.
315 F.3d 264 (4th Cir. 2002)
Fourth Circuit disagreed: it does “prevent”
mature crabgrass, it just doesn’t kill it.
 Scotts’ survey evidence (two focus groups plus
survey of 40 customers) were “utterly
unreliable” on the relevant question
 Emphasizes importance of balancing harms; not
discounting defendant’s harm as “self-inflicted”

 Why


you care:
Good for defendant resisting preliminary injunction
If you want to prevent crabgrass, try again next year
TRADEMARKS 2002-03
Lingerie to Lawn Care
Austin Intellectual Property Law Association
May 14, 2003
Steve Meleen
Fulbright & Jaworski