Battle of the "Bays": Tradebay vs. eBay

[Post by Mark Borghese]

Does an intent-to-use trademark applicant, faced with a trademark office opposition proceeding, have the right to seek declaratory relief in federal court? Or, does the fact that the applicant has not yet used the mark in commerce prevent a federal court from exercising jurisdiction?

Those are the legal question a federal court in the District of Nevada will have to answer in Tradebay v. eBay, Case No. Case 2:11-cv-00702-ECR -PAL.

This dispute began almost two years ago when, on January 6, 2009, Tradebay filed a trademark application with the United States Patent and Trademark Office for the mark TRADEBAY for various services including "computerized online ordering" and "operating online marketplaces for seller and buyers of goods and/or services."

When Tradebay's trademark was approved by the trademark office and published for opposition, eBay immediately opposed the mark claiming that consumers would confuse Tradebay and eBay. In support of this opposition, eBay cites Perfumebay.com Inc. v. eBay Inc., 506 F3d 1165 (9th Cir., Nove. 5, 2007) where the Ninth Circuit Court of Appeals stated that the term "BAY" was the dominant portion of the eBay mark. From this ruling, eBay argues that any "generic" + BAY mark in the internet marketplace space is likely to cause confusion and dilute eBay's distinctive mark.

After the opposition was filed, on May 3, 2011, Tradebay filed a declaratory relief action in the United States District Court, District of Nevada. Tradebay wanted a federal court to make the determination as to whether its mark, Tradebay, was likely to be confused with the famous eBay mark. The Trademark Trial and Appeal Board proceeding was thereafter stayed in light of the District Court lawsuit.

On June 28, 2011, eBay filed a motion to dismiss Tradebay's District Court lawsuit alleging that no case or controversy existed for the court to decide. The motion argues that dismissal pursuant to Fed. R. Civ. P. 12(b)(6) is the appropriate remedy as no trademark infringement can exist when Tradebay has not yet used the Tradebay mark in commerce.

Courts enforcing Rule 12(b)(6) curtail this risk by weeding out complaints that fail to give rise to a plausible inference of harm to the plaintiff. Neither eBay nor the Court should be required to expend the resources necessary to litigate the merits of claims of trademark infringement and dilution and unfair competition based on nothing more than vague and conclusory allegations that fail to evince the specific and concrete steps to use the mark that might give rise to a controversy of sufficient immediacy and reality to warrant the issuance of a declaratory judgment. Dismissal is the appropriate remedy here.

Tradebay filed an opposition to the motion on August 2, 2011, arguing that the "case or controversy" standard has been met and pointing out that as early as January 30, 2009 Tradebay received a cease and desist letter from eBay accusing it of infringing and diluting eBay's trademark rights.

Tradebay’s complaint presents an "actual controversy" within the meaning of the caselaw. Specifically, almost immediately after Tradebay filed its trademark application, eBay sent a cease and desist letter. If Tradebay refused eBay's demands, eBay threatened to "take whatever actions eBay deems necessary to protect its rights." Exhibit 2-A. eBay reaffirmed the identical threat a few days later. Exhibit 2-B. Once Tradebay’s application was accepted for publication, eBay opposed it in the USPTO. Exhibit 3-A.

In its reply brief filed August 25, 2011, eBay argues again that no case or controversy exists as Tradebay has not taken any concrete steps to actually use its Tradebay mark, such as developing a product line, conducting market research, or creating packaging and advertising.

Tradebay makes no attempt to show that it has alleged, let alone actually undertaken, any concrete steps to actually use the TRADEBAY mark in connection with any goods or services. At best, Tradebay has alleged nothing more than a vague and indefinite desire to use the TRADEBAY mark at some future date. That does not come close to showing a real and immediate controversy. Tradebay's utter failure to allege the requisite concrete steps can only lead to the conclusion that it has not engaged in any such activity. Under these circumstances, it would be a waste of the Court's (and eBay's) time and resources to render what would amount to an impermissible advisory opinion as to whether activities Tradebay may or may not undertake in the future would infringe or dilute eBay's trademarks.

Under the facts in this case, eBay argues that Tradebay is simply requesting that the court issue an improper advisory opinion rather than settle an actual trademark infringement dispute involving two competing marks being used in commerce.

The briefing on this issue is now closed and an order from the court is expected within the next ninety days. This ruling will be an interesting one to watch.

About the author
Mark Borghese is a Las Vegas internet attorney with the law firm of Borghese Legal, Ltd.

California Milk Processor Board Threatens PETA with trademark infringement over "Got Pus?"

After years of allowing numerous parodies (and even some similar third party trademark registrations) of its famous "Got Milk?" trademark, the California Milk Processor Board ("CMPB") is threatening to sue People for the Ethical Treatment of Animals ("PETA") over its use of the phrase "Got pus? Milk does." on T-shirts, mugs, and other merchandise. See Associated Press article here.

In response to CMPB's cease and desist letter, PETA's lawyer wrote:

Your client cannot seriously contend that an appreciable number of consumers who see a T-shirt bearing the "Got Pus? Milk Does" slogan would be confused into thinking that your client is the source of the T-shirt, attempting to sell milk by letting the public know that when they drink milk they are also consuming pus.

So apparently, CMPB is ok with the myriad of "Got Milk?" ripoffs -- so long as you don't bash milk.

Got Trademarks?

Starbucks suing another small coffee shop over logo.

I half expected Seattle Trademark Lawyer to cover this one before me – never one to miss a story about Seattle-based coffee behemoth Starbucks threatening to file trademark infringement lawsuits against mom-and-pop coffee shops using a name or logo similar to the Starbucks name or famed green encircled siren logo (pictured above – not that you didn't already know what it looked like). Click here to read STL's many blog posts on Big-Green’s past trademark enforcement efforts (with mixed results).

This current story has apparently been brewing (pun intended) since late October. New stories ran in The Macomb Daily on October 28th and in the Detroit Free Press on the 9th.

On October 22, 2007, Conga Coffee & Tea (“Conga”), a coffee shop in Mt. Clemens, Michigan, apparently received a cease and desist letter from counsel for Starbucks Coffee Co. (“Starbucks”) about Conga’s logo – a green circle with a black elephant silhouette in the middle (pictured below). Conga is owned by Michael Dregiewicz, who purchased the 11-year-old store back in February.



Starbuck’s counsel, Hope Shovein of Brooks Kushman, P.C., stated in her letter to Dregiewicz that Conga’s logo is "likely to cause consumers to think that Conga is an authorized licensee of Starbucks." The letter gives Conga a two week deadline to stop using the logo or face legal action. The letter also states that Starbucks is willing to negotiate a reasonable phase out the logo.

Dregiewicz has hired Melanie Frazier, of Romain, Kuck & Egerer, P.C., to defend Conga’s use of the logo. Dregiewicz has estimated the cost of changing his logo would cost up to $5,000 for reprinting business cards, paper cups, and other products as well as changing the store’s awnings.


Vegas™Esq Comments:

If Starbucks chooses to file an infringement action, it will likely include both infringement based on likelihood of confusion (under §32 and/or §43(a)) as well as trademark dilution by blurring under §43(c).

Dilution
With respect to the possibility of Starbucks using a §43(c) dilution claim against Conga, I’ll defer to “dilution-guru” Michael Atkins for comments. Check out his recent post entitled “How Courts Have Interpreted the Trademark Dilution Revision Act” on the uncertain status of trademark dilution jurisprudence.

Perhaps Starbucks may have been emboldened by its recent victory by the Second Circuit in Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 477 F.3d 765 (2nd Cir. 2007), where the court applied the Trademark Dilution Revision Act of 2006 (with its likelihood of dilution standard) rather than the Federal Trademark Dilution Act of 1996 (with its actual dilution standard) to Starbuck’s injunctive relief claim. If the new standard applies in the 6th Circuit, Starbucks may have an easier case to make for dilution by blurring than it would if it had to prove actual dilution.

If Starbucks chooses to pursue dilution, one wonders if Conga’s use in commerce of its logo was before Starbuck’s logo became famous? Conga has apparently been using its logo for 11 years, which would put its initial use in commerce around 1996. While Starbucks was founded in 1971 and went public in 1992, the current incarnation of Starbuck’s famous logo was applied for federal registration on January 15, 1993 – a Section 1(a) application claiming date of first use as August 30, 1992 for retail services (among other goods and services) with the color green claimed as a feature of the mark. The logo was registered on January 11, 1994. It is very likely that Starbuck’s logo became famous during this four year time period before Conga started using its logo, but it is an issue nonetheless.

Likelihood of Confusion
As for likelihood of confusion, Starbucks undoubtedly has a very strong mark and the services at issue are identical. As such, there is a greater likelihood that the public may mistakenly assume an association between Starbucks and Conga. The greater the likelihood that the public may make such an association, the less similarity that is required among the marks to find likelihood of confusion. The issue will come down to similarity of the marks, in particularly the visual similarity of the two logos.

On the one hand, when you look at the logos side-by-side, there is very little similarity other than the green circle. However, if you are driving around and you notice a round green logo, you may be confused into believe that it is a Starbucks (until you get close enough to see the sign, in which case you drive another block to the actual Starbucks – there is one on every corner after all).

In addition, coffee drinkers, especially Starbucks loyalists, do exercise some degree of care when it comes to getting their Starbucks-fix, and thus I do not think that they would be confused into thinking that Conga is somehow going to provide them the same “decaf Grande half-soy, half-low fat, iced vanilla, double-shot, gingerbread cappuccino, extra dry, light ice, with one Sweet-n'-Low and one NutraSweet” (the famed Starbucks Test) that they have come to expect from Starbucks. Then again, I’m sure there are those mornings when consumers are so desperate for their java that they may head towards the closest “Green circular logo” they can find. But in Mt. Clemens, Michigan?

Arizona State University Alleging Trademark Infringement by High School Team Named the SunDevils

The Newport News Daily had an interesting article today titled “Hey ASU, it's called being generous” (link here) about the efforts by attorneys for Arizona State University to stop a Virginia Beach high school football team from using the name Sundevils for its football team. Similar articles also appeared from The Arizona Republic (here) and from ASU’s own online paper (here).

In a cease and desist letter sent to Salem High School, ASU alleges that the high school’s football team name, the Sundevils, infringes upon ASU’s registered trademark, SUN DEVILS. The Arizona Board of Regents, on behalf of Arizona State University, holds several trademark registrations on the word SUN DEVILS, including for T-shirts and other clothing; for mugs, cups, etc.; and for publications concerning the University. It is interesting to note that the one registration held by ASU which actually covers sponsoring athletic events is SUN DEVIL (no “S” at the end”).

The high school’s president, Donald Robertson, apparently wrote back to ASU arguing that there is no likelihood of confusion between ASU’s mark and the name of Salem’s high school team. The school uses the name as one word, SunDevil (as in the name of the street, SunDevil Street, where the school was built on) as opposed to ASU’s spelling using two words, Sun Devil (a reference to the weather phenomenon). The school’s logo is a red sun, which is far different than ASU’s famous “sun devil” mascot, nicknamed Sparky.

In addition, apparently several other schools use the name or a derivation of SUN DEVILS, including two California schools and one in Colorado.

The article notes that the name Sparky is not trademarked by ASU, but rather actually belongs to the National Fire Protection Association, Inc. for their own Dalmation mascot). With a little coaxing from the article’s author, Dietrich, the NFPA’s president said he would consider (with a slight grin and chuckle) sending ASU its own cease and desist letter.

But given that the SPARKY word mark held by NFPA covers promoting public awareness and understanding of fire prevention and protection, ASU could probably register the same name itself for its own goods and services – if not under §1, then certainly under §2(f) given the notoriety of the name as used in conjunction with ASU’s mascot.

While ASU may have overlooked registering the SPARKY name, they certainly did not overlook getting registrations for the Sparky logo (pictured above) covering the same categories as the SUN DEVIL mark: T-shirts and other clothing; mugs, cups, etc.; publications concerning the University; and sponsoring athletic events. In addition, ASU did obtain a registration for TEAM SPARKY (for sponsoring intramural, intercollegiate and exhibition athletic and sporting events).

While any trademark attorney can appreciate ASU’s position in policing the use of a team name that is much more distinctive than such common team names as Wildcats, Rangers, or Cowboys, one does have to wonder why ASU waited nearly 19 years to take action against the school. Is this really about protecting ASU’s valuable intellectual property or another case of a “brand name bully.” (Click here for a good article in The Southeast Texas Record by John G. Browning titled “Legally Speaking: Brand Name Bullies” talking about the growing trend of big companies wielding their trademark portfolios against individuals and small businesses).