The Material Girl’s Battle For MATERIAL GIRL

The trademark lawsuit story du jour was the complaint filed by L.A. Triumph, Inc. (“LA Triumph”) against Madonna and her company, Material Girl Brand, LLC, over the trademark MATERIAL GIRL in connection with clothing. See L.A. Triumph, Inc. v. Material Girl Brand, LLC et al, Case No. 10-cv-6195 (C.D. Cal. Filed August 19, 2010). Complaint can be viewed here (via Courthousenews). Multiple news outlets, blogs and gossip sources ran stories about the suit today (ABC News, Fox News, Huffington Post, RadarOnline, and TMZ)

In short, the complaint alleges that a California company named OC Mercantile Corporation started selling a line of MATERIAL GIRL clothes in 1997 – and even registered the name as a trademark with the California Secretary of State that same year (Reg. No. 102808 for women’s apparel). In 2003, LA Triumph became the successor-in-interest to OC Mercantile and purportedly has continued using the mark in connection with the sale of clothing items to the present day and claims that its clothing line has received national exposure. [Interestingly, LA Triumph does not appear to have any online presence where it sells its clothing goods – Google search results only came back with the published stories about this lawsuit. Of course, LA Triumph might argue that MGB’s recent nationwide marketing blitz have overwhelmed LA Triumph’s use of the mark – so called, reversed confusion.]

The complaint goes on to state that sometime in 2010, LA Triumph became aware that the Defendants were going to start selling a line of young women’s clothing using the MATERIAL GIRL mark. The website promoting Madonna’s brand is found at http://www.materialgirlcollection.com/ (as opposed to the website promoting LA Triumph’s clothing which is found . . . umm, anybody have any idea where LA Triumph’s MATERIAL GIRL clothing is promoted online? The closest I could come – based on the fact that L.A. Triumph, Inc. does business in California under the name MedGear – is a website http://www.medgear.com/ which sells clothing for hospital and medical industry workers, but I did not see anything using the mark MATERIAL GIRL.)

LA Triumph also alleges that MGB improperly filed to register the mark MATERIAL GIRL with the United State Patent and Trademark Office (“USPTO”). Interestingly, MGB’s current application (the one cited in the case) was not the first application in line to register the mark MATERIAL GIRL. On May 11, 2009, Audigier Brand Management Group, LLC filed a trademark application for MATERIAL GIRL (covering 7 different classes of goods including clothing). The USPTO initially refused registration in a non-final office action dated August 13, 2009, but only because the description needed some clarification and not based on a Section 2(d) likelihood of confusion refusal.

Subsequently, the Audigier application was assigned to MGB on December 1, 2009. And within days of this assignment, MGB then filed its own intent-to-use application for the mark MATERIAL GIRL (for 4 classes of goods including clothing) on December 4, 2009. This explains why MGB did not file a timely response to the PTO’s office action in the “Audigier” application, which went abandoned on March 26, 2010.

So why, you ask, would MGB file a new intent-to-use application for MATERIAL GIRL when Audigier’s earlier filed MATERIAL GIRL application had already been assigned to MGB? Most likely because the Audigier application was an intent-to-use application and MGB was not really the successor to any kind of ongoing and existing business by Audigier to which the applied-for mark pertained. Under §10 of the Trademark Act (15 U.S.C. § 1060), an application filed under §1(b) (intent-to-use) may not be assigned before a statement of use has been filed except to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing. See 15 U.S.C. §1060(a)(1). The law is quite clear that the assignment of a §1(b) application to an entity that is not the successor to the applicant’s business, before filing an allegation of use, renders the application and any resulting registration void. See The Clorox Co. v. Chem. Bank, 40 USPQ2d 1098 (TTAB 1996). By MGB filing a brand new application, MGB could start fresh without having to be concerned about any resulting registration being deemed void on the basis of improper assignment of a §1(b) application.

Of course, once MGB’s own application was published for opposition on July 20, 2010, LA Triumph timely filed an opposition – filed the same day that LA Triumph’s district court lawsuit was filed. See L.A. Triumph, Inc. v. Material Girl Brand, LLC, Opposition No. 91196172 (T.T.A.B. Filed August 19, 2010). [As a sidenote, another party, Rwachsberg Holdings Inc., filed an Extension of Time to oppose registration of MGB’s mark. Rwachsberg owns the mark MATERIAL GIRLS for cosmetic products and nutritional food products. ]

But the real question is this – why didn’t either OC Mercantile or even LA Triumph seek to register the mark MATERIAL GIRL in connection with clothing with the USPTO?

While one could speculate that neither company bothered to register because they weren’t actively using the mark on clothing and thus the instant lawsuit would be an attempt by LA Triumph to claim trademark rights that were likely minimal at best and/or long since abandoned, another very likely answer was that the mark could not have been registered by either company with the USPTO because there was already an existing trademark registration for the identical mark for the identical goods. A Canadian company name Les Ventes Universelles S.H. Inc. had a trademark registration for MATERIAL GIRL in connection with clothing (registered July 8, 1997) based on the company’s foreign registration of the same mark (dating back to May 1990). The company filed the necessary Section 8 Declaration of Use at the 5 year mark, but did not renew the mark by the 10 year renewal deadline and the mark was canceled April 12, 2008.

So the natural follow-up question is this – why didn’t LA Triumph run out right away and seek to file a federal trademark application to register the mark once Les Ventes’ registration was canceled – during the window between April 12, 2008 and May 11, 2009 (when Audigier filed its first application)? Again, perhaps it was because LA Triumph was not really actively using the mark in connection with clothing, and thus the instant lawsuit would be an attempt by LA Triumph to claim trademark rights that were likely minimal at best and/or long since abandoned – but again that would be just pure speculation. [Did I neglect to mention that according to the California Secretary of State’s records the state registration for MATERIAL GIRL expired August 9, 2007?]

So where can I buy LA Triumph’s MATERIAL GIRL clothing again?

Trademark Battle Over the Fame of “Atlantis” for Casino Services Headed to Trial In Nevada District Court

Two casino companies fighting over the right to use the service mark ATLANTIS in connection with casino services are heading for trial after two Nevada District Court orders ruled on multiple motions filed by the parties and set the stage for the parties to proceed to trial. See Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116622 (D. Nev. December 14, 2009); Kerzner Int'l, Inc. v. Monarch Casino & Resort, Inc., 2009 U.S. Dist. LEXIS 116624 (D. Nev. December 14, 2009).

Atlantis Resort & Casino - Paradise Island, Bahamas

On one side are Kerzner International Limited and Kerzner International Resorts, Inc. (together “Kerzner”), the owners of the Atlantis Resort and Casino on Paradise Island in The Bahamas. On the other side is Monarch Casino & Resort, Inc. and Golden Road Motor Inn, Inc. (together “Monarch”) which own and operate the Atlantis Casino Resort Spa in Reno, Nevada.

Atlantis Casino Resort in Reno, Nevada

The origins of the dispute date back to a trademark registration for the mark ATLANTIS for lodging services which was originally registered with the U.S. Patent and Trademark Office by Atlantis Lodge, Inc. (“Lodge”) on October 11, 1994. Lodge had been using the Atlantis mark in connection with lodging services in North Carolina since June 6, 1963. Lodge’s subsequent licensing of its Atlantis mark to both Kerzner and Monarch set the foundation for the eventual dispute between Kerzner and Monarch.

Monarch had been offering lodging services in Reno, Nevada since 1972 and casino services since 1986, but when Monarch first used the Atlantis mark in 1992, it was in connection with restaurant, bar, lounge, and nightclub services, not lodging or casino services. In February 1996, Monarch entered into a license agreement with Lodge for the exclusive right to use the Atlantis mark in connection with lodging services in all of Nevada. In April 1996, Monarch Reno casino resort (which at the time was operating under the “Clarion” mark) began operating under the name “Atlantis Casino Resort.” In July 1997, Monarch obtained a Nevada state trademark registration for the mark “Atlantis Casino Resort” for casino services, but never sought federal registration of the Atlantis mark for casino services.

In October 1994, Kerzner entered into a license agreement with Lodge for use of the Atlantis mark at its casino resort in The Bahamas (which at the time was under the name “Paradise Island Resort and Casino”). Kerzner began advertising the rebranding of its casino resort under the Atlantis name in October 1994 with the officially reopening occurring in December 1994.

In July 1996, Kerzner entered into an assignment and license agreement with Lodge whereby Kerzner acquired the ATLANTIS trademark registration for lodging services from Lodge and licensed the mark back to Lodge for use in North Carolina. The license agreement between Lodge and Monarch was attached as an exhibit to the Lodge/Kerzner assignment agreement, and Lodge’s representations of its right to assign the Atlantis mark were made subject to Monarch’s exclusive license to use the mark for lodging services in Nevada.

In February 1997, Kerzner filed an intent-to-use application to register the mark ATLANTIS in connection with, among other things, providing casino facilities, which issued on February 3, 2004, after Kerzner filed a Statement of Use in September 2003, claiming a first use date of October 1994.

The parties apparently coexisted in their respective markets without any problems until each side started taking steps towards expanding their respective Atlantis brand into the Las Vegas market.

Kerzner’s first amended complaint against Monarch was filed on February 14, 2006, and sought declaratory judgments that Monarch’s use of the Atlantis mark infringed Kerzner’s trademark right. Monarch fought back by filing counterclaims on December 28, 2006, seeking cancellation of Kerzner’s trademark registration and its own declaratory relief with respect to its own trademark rights to the Atlantis mark that Monarch had developed in connection with casino services. Monarch also filed a cancellation petition with the Trademark Trial and Appeal Board to cancel Kerzner’s trademark registration. See Monarch Casino & Resort, Inc. et al v. Kerzner International Resorts, Inc., Cancellation No. 92045869 (T.T.A.B. Filed May 31, 2006). The TTAB proceeding is stayed pending the outcome of the civil action.

In one of Monarch’s Motions for Partial Summary Judgment, Monarch claimed that it was entitled to a judgment as a matter of law that it had priority of use of the Atlantis mark for casino services. Monarch argued that its use of the Atlantis mark for casino services dated back to 1992 – the date when it first used the mark in connection with restaurant services (and which was before the date Kerzner began to use the Atlantis mark in The Bahamas).

The court, however, rejected Monarch’s argument that its use of the Atlantis mark for a restaurant gave it priority of use in connection with casino services under the “related goods” or “natural expansion” doctrine. The court concluded that restaurant services and casino services are not closely related and that Monarch only began to develop trademark rights in the Atlantis mark for casino services when it actually began using the mark in connection with casino services in April 1996.

Monarch also argued that its April 1996 had priority over Kerzner’s first use of December 1994 under the territoriality principle – Kerzner’s use was outside the United States and thus it use was not use of the Atlantis mark for casino services in the United States.

The court rejected Kernzer’s counterargument that activities conducted by it in the United States which are “integral” to its casino services in the Bahamas constitutes use of the Atlantis mark in the United States in connection with casino services. Since Kernzer’s “casino services” were clearly rendered outside the United States, Kerzner had to rely upon an exception to the territoriality principle to claim that its use of the Atlantis mark outside the United States gave it trademark rights in the United States..

With respect to one noted exception to the territoriality principle – described in International Bancorp, LLC v. Societe des Bains de Mer et du Cercle des Etrangers a Monaco, 329 F.3d 359 (4th Cir. 2003) where the court found that use of a mark in advertising or sale of services in the United States, coupled with the rendering of those services abroad to United States citizens, is sufficient to give rise to trademark rights in the United States – the court noted that the decision was not binding in the Ninth Circuit and, in light of the fact that the Ninth Circuit had even explicitly declined to adopt the reasoning and noted that the decision had been called into question, the Ninth Circuit would decline to adopt such reasoning if presented with the question. Thus, the district court declined to adopt it as well.

As for the other exception to the territoriality principle, that would be the “famous marks” exception to the territoriality principle which was recognized by the Ninth Circuti in Grupo Gigante SA de CV v. Dallo & Co., Inc., 391 F.3d 1088, 1093 (9th Cir. 2004), and thus binding precedent on this district court.

Grupo Gigante describes a two-step analytical process to determine whether a mark falls under the famous-mark exception. First, the district court must determine whether the mark has achieved the level of recognition that would be necessary in a domestic trademark infringement case. Id. at 1098; see also id. at 1106 (Graber, J., concurring). Second, “where the mark has not before been used in the American market, the court must be satisfied, by a preponderance of the evidence, that a substantial percentage of consumers in the relevant American market is familiar with the foreign mark. The relevant American market is the geographic area where the defendant uses the alleged infringing mark.” Id. at 1098. Thus, the standard for famous marks is an intermediate one: “[t]o enjoy extraterritorial trademark protection, the owner of a foreign trademark need not show the level of recognition necessary to receive nation-wide protection against trademark dilution. On the other hand, the foreign trademark owner who does not use a mark in the United States must show more than the level of recognition that is necessary in a domestic trademark infringement case.” Id. at 1106 (Graber, J., concurring).

The district court clarified that Kerzner must show that its mark was “famous” as of April 1996 – the date when Monarch began to use the Atlantis mark in connection with casino services.

And while Kerzner performed some surveys which tended to show that a “substantial percentage of consumers” surveyed were familiar with Kerzner’s use of the Atlantis mark (especially in the Las Vegas market, which was the more relevant market at issue in the case), the survey, conducted in 2007, did not ask questions about when the consumers became aware of the mark, and thus the survey lacked probative value about whether the mark qualifies for the famous-mark exception as of April 1996. The court did note that there was some evidence of the extensive promotional campaign that Kerzner engaged in to promoted its remodeled Atlantis casino resort, which could be reasonably inferred to have penetrated the Las Vegas market.

In the end, the court concluded that there was a genuine issue of material fact regarding when, if ever, Kerzner’s casino resort acquired the status of a famous mark in the meaning of Grupo Gigante. The court found that taking all reasonable inferences in Kerzner’s favor, a jury could conclude that by April 1996 a substantial percentage of consumers in the Las Vegas market were familiar with Kerzner’s mark based on the evidence of Kerzner’s substantial national advertising campaign and media coverage of the opening., and thus Kerzner might have priority of use in the Atlantis mark for casino services in the United States under the Grupo Gigante famous marks exception. Based on this finding, the court denied Monarch’s motion.

For similar reasons, the court also denied Monarch’s Motion that Kernzer does not have standing to bring its trademark infringement lawsuit.

Monarch filed another summary judgment motion arguing that Kerzner cannot show that it is entitled to injunctive relief as a matter of law.

Monarch first argued that Kerzner never had any plans to develop a casino resort in Las Vegas, much less one using the Atlantis mark, and thus Kerzner cannot demonstrate a likelihood of irreparable harm if the injunction did not issue. However, the court disagreed finding that, taking all reasonable inferences in Kerzner’s favor, the evidence submitted by Kerzner could demonstrate that Monarch had relatively immediate intentions either to open a casino resort under the Atlantis mark in Las Vegas or to sell rights in the mark to someone who would, and thus an injunction might well be an appropriate remedy after the conclusion of this lawsuit if Kerzner convinces the jury that it has senior rights in the mark.

Monarch next argued that since it is undisputed that Monarch has the exclusive right under its license agreement with Kerzner (as Lodge’s assignee in interest) to use the Atlantis mark for lodging services in Nevada (including Las Vegas), a Las Vegas resort hotel and casino under the Atlantis mark would create no greater likelihood of confusion than a facility which offers only lodging services, and thus Kerzner cannot demonstrate any additional likelihood of confusion that Kerzner might be entitled to enjoin.

In essence, Monarch argued that its license for lodging services gave Monarch leeway to create a certain likelihood of consumer confusion through providing lodging service, and only activities that would create an additional likelihood of consumer confusion could give rise to liability sufficient to merit an injunction. The court noted the obvious with respect to lodging services – to the extent that a consumer might believe that such a hotel is associated with Kerzner’s Atlantis mark, that consumer would not be confused at all given that Monarch is Kerzner’s licensee of the Atlantis mark for lodging services. The court then rejected Monarch’s argument by noting that Monarch’s license did not give it any rights to use the Atlantis mark in connection with both casino services and lodging services. Moreover, a consumer who believed casino services provided at a Monarch Atlantis casino resort in Las Vegas to be associated with Kerzner would be confused in a way that the consumer making the same association with regard to lodging services alone would not be, and if Kerzner prevails at trial, it may be entitled to an injunction to prevent such consumer confusion.

Monarch’s last argument in an attempt to persuade the court that injunctive relief should not be issued was the “Dawn Donut” rule and Kerzner’s lack of plans to offer casino services to consumers in Las Vegas. The Dawn Donut rule comes from the Second Circuit Court of Appeals decision in Dawn Donut Co., Inc. v. Hart’s Food Stores, Inc. 267 F.2d 358 (2d Cir. 1959):

Under the Dawn Donut rule, even if a federal registrant has rights in a mark, it is not necessarily entitled to an injunction against an unauthorized user: “if the use of the marks by the registrant and the unauthorized user are confined to two sufficiently distinct and geographically separate markets, with no likelihood that the registrant will expand his use into the defendant’s market, so that no public confusion is possible, then the registrant is not entitled to enjoin the junior user’s use of the mark.” Dawn Donut, 267 F.2d at 364 (footnote omitted); see also Fairway Foods, Inc. v. Fairway Markets, Inc., 227 F.2d 193, 198 (9th Cir. 1955) (vacating injunction issued to prevailing plaintiff on essentially the same basis as later became known as the Dawn Donut rule). Only once the federal registrant has expanded its use of the mark, so that the market areas of the two users are no longer separate and distinct, will the registrant be entitled to an injunction. Mister Donut of Am., Inc. v. Mr. Donut, Inc., 418 F.2d 838, 844 (9th Cir. 1969) (citing Dawn Donut).

However, in rejecting Monarch’s argument, the court noted that the Grupo Gigante famous marks exception to the territoriality principle necessarily implies an exception to the Dawn Donut rule – the court in Grupo Gigante recognized that consumer confusion can occur with respect to a famous mark abroad even if the user of the mark has no intention of ever using the mark in the United States. The court held that an injunction in the U.S. where a mark used exclusively abroad is determined to be famous under Grupo Gigante would be appropriate to prevent the consumer confusion.

Monarch also filed a motion seeking summary judgment on its counterclaim for a declaratory judgment that Monarch’s Nevada state trademark registration is valid and enforceable. While there was no dispute over the validity of Monarch’s state registration, there was a dispute over Monarch’s position that its state law rights trump Kerzner’s federal rights.

Monarch argued that its Nevada state trademark rights do not yield to Kerzner’s rights reflected in its federal registration because Kerzner could not use its Atlantis mark in Las Vegas under Nevada law. Monarch’s unique argument comes from the fact that under Nevada law, in order to obtain an unrestricted gaming license in a county of more than 100,000 population (i.e., Las Vegas), the casino must be associated with a hotel with at least 200 rooms. And since Monarch has the exclusive right to use the Atlantis mark for lodging services in Nevada (pursuant to its agreement with Kerzner), Kerzner could not build a casino resort which includes both a casino and a 200-room hotel in Las Vegas under the Atlantis mark, and could not use the Atlantis mark for casino services in Las Vegas or anywhere else in Nevada where the 200-room hotel requirement applies. Monarch’s position is that if Kerzner cannot use the Atlantis mark in Nevada, then Monarch is not blocked from doing so by any federal trademark rights Kerzner may have outside of Nevada.

For similar reasons described above, the court rejected Monarch’s argument based on the Grupo Gigante famous marks exception. Even if Kerzner is unable or unwilling to operate a casino in Nevada, it may still have federal trademark rights enforceable in Nevada under the famous marks exception. And those federal trademark rights would preempt Monarch’s state trademark rights.

The court also rejected Monarch’s invocation of the “natural zone of expansion” doctrine to argue that Monarch is entitled to statewide rights in the Atlantis mark because Las Vegas is within its “natural zone of expansion,” and therefore Monarch should be treated as if Las Vegas is within the territory where it has already used the mark in connection with casino services, even though Monarch does not actually operate a casino in Las Vegas.

In rejecting Monarch’s argument, the court noted the following about the “natural zone of expansion” doctrine:

The doctrine is normally invoked by senior users seeking to expand their federal statutory trademark rights into areas where a junior user is already using the mark under the protection of the common law. See 5 McCarthy, supra, § 26:20. Here, Monarch turns the doctrine on its head, seeking to leverage its state trademark rights to expand the geographic area in which it is entitled to trademark protections in derogation of Kerzner’s federal rights. Monarch has not cited, nor have we discovered, any authority for so applying the natural zone of expansion doctrine.

So while the court granted Monarch’s motion to the extent that the state registration was found to be valid and enforceable under Nevada law, it denied the motion to the extent that there are genuine issues of material fact about whether Kerzner’s mark falls within the Grupo Gigante famous marks exception (and when it became famous) in which case Kerzner would have federal trademark rights which preempt Monarch’s state trademark rights.

The court’s decision in a parallel order dealt with additional motions to exclude certain evidence and motions for summary judgment by Monarch and Kerzner. While I won’t go into detail regarding that order in this blog post (isn’t this one already long enough?), the court did decide as a matter of law that Monarch has continuously used the Atlantis mark for casino services from April 1996 to the present and that Kerzner’s trademark application date (and thus its constructive use date of the mark in the United States) was February 1997.

The court’s decisions now push the case towards trial on the issue of whether Kerzner acquired priority of use in the Atlantis mark under the Grupo Gigante famous marks exception.

Two Las Vegas Adult Film Companies Battle Over “Deep Throat”

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Bill introduced in Nevada Legislature to Update Nevada’s trademark laws

Nevada’s state trademark laws will get a significant makeover if a recently introduced bill (Assembly Bill No. 115) is passed by the Nevada Legislature during its feverish 120 day session (the Nevada legislature, by law, meets biennially and its session is limited to 120 calendar days) and signed into law by the Governor. A copy of the bill as introduced can be viewed here (HT: John Krieger).

Nevada’s current laws for state trademark trade names and service marks (NRS 600.240-600.450), like the state trademark laws in many other states, is based on the International Trademark Association’s (“INTA”) Model State Trademark Bill (“MSTB”).

In 2007, the INTA proposed several amendments to its MSTB, mostly to account for legal changes that occurred in the area of trademark dilution. The MSTB had not been changed since 1996 when it was amended by the INTA to reflect the Federal Trademark Dilution Act of 1995 (“FTDA”). However, when the U.S. Supreme Court decided in Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003) that the FTDA required evidence of actual dilution, Congress in 2006 passed the Trademark Dilution Revision Act of 2006 (“TDRA”), Pub.L.No. 109-312, 120 Stat. 1730 (2006) (now codified at 15 U.S.C. § 1125(c)), effective October 6, 2006, thereby enacting a likelihood of dilution standard for claims of dilution under federal law. So in 2007, INTA amended its MSTB to incorporate the changes to dilution law made by the TDRA (a summary of the 2007 amendments is posted on INTA’s website).

However, there is an additional significant change being proposed by the bill that will change the way in which Nevada state trademarks are obtained. Presently, Nevada’s system of registering trademarks, service marks, and tradenames (like many other states) has been mostly a “rubber stamp” process – a registration is almost always granted so long as no other party currently has a similar mark already registered with the Nevada Secretary of State (“NV SOS”). No formal examination (as is done at the federal level with the U.S. Patent and Trademark Office) is done at the state level for state registration applications (even though NRS 600.330 does set forth grounds for refusing to register marks similar to the grounds for refusal under 15 U.S.C. §1052).

It looks like all of that is going to change under this new legislation. In addition to making the state’s dilution provisions consistent with the TDRA, the bill will implement a formal system of examination of state registration applications that is consistent with the federal system of registration of trademarks under federal law, including a full application submitted for examination (Section 13) (which may include the requirement for disclaimers of unregisterable components), a process for appealing to the District Court final refusals to register by the NV SOS (Section 14), and even provisions for cancellation proceedings for senior users who want to cancel a junior user who was first to file (Section 15).

Which raises the obvious question – if filing for a Nevada trademark is essentially going to be treated the same as a federal trademark registration application, why bother with filing a state application where the scope of your trademark rights are limited to just the state – why not go for the federal trademark registration and get exclusive rights nationwide? After all, if you are refused registration at the PTO on the basis of likelihood of confusion with an existing registered mark, why would you take the risk of adopting that mark for use in the state when the federal registrant could sue for trademark infringement? And if you are refused registration at the PTO level for one of the other Section 2 grounds for refusal, then, in theory, those same reasons would block a state trademark registration as well. Part of the new law states that the NV SOS may require the applicant to disclose whether an application has been filed with the PTO and if the application was refused registration, the reasons for refusal.

One possible benefit might be in the case where your research shows that a registered mark might actually be abandoned even though it is still on the Principal Register. If such a registered mark were to preclude registration of your proposed mark at the federal level and yet you are certain that the mark has been legally abandoned, then rather than going through the process of petitioning to cancel the registered mark, a state registration would buy you some degree of protection over your mark (assuming the mark is not already registered at the state level). Of course, if you are that serious about the mark and that certain of the registered mark's abandonment, you should hire an attorney to file a cancellation petition. If the registered mark is truly abandoned, then no one will respond to the petition and the mark will be cancelled. And if the registrant happens to step forward to claim that the mark has not been abandoned, then you can reconsider whether you want to use the mark in the first place.

The one benefit the state system does have over the federal system – no opposition period. So perhaps for those owners who apply to register a mark with the PTO but whose efforts are quashed by an opposition filed by some overzealous company that seeks to stop any federal registrations containing a word that the company sees as being exclusively their own (say, an innocent word like “Virgin” -- see my post from Monday), the state system offers another avenue towards obtaining some level of protection for the owner’s mark. Of course, if a company was so eager to oppose registration at the federal level, one should think twice about whether to use such mark at all and possibly bear the wrath of a trademark infringement lawsuit from the overzealous company (see the aforementioned blog post).

Self-Described Patent Expert Ronald Riley Sued for Trademark Infringement

This is one of those stories that intertwines the worlds of patents, copyrights, and trademarks.

Those in the patent world, especially those who follow the subject of patent law reform, know the name Ronald Riley. Riley, who describes himself as an inventor, entrepreneur, patent consultant, and independent inventor advocate, is well known for his comments about the patent system, patent reform, and lawyers representing inventors and large companies (click here for a blog that has chronicled some of Riley's more controversial comments among blogs and other online forums).

Well, Riley has been sued by Dozier Internet Law, PC – the law firm which is most widely known among the blogosphere as the law firm that claimed that its cease and desist letter was copyrighted and thus could not be posted online by the recipient (Techdirt article here).

The complaint (posted here), which was filed on September 4, 2008, in Virginia State Court (the Circuit Court for Henrico County, Virginia), is mostly focused on shining a light (in very unflattering terms) on Riley’s promotional activities that have made him the personality he is. See articles on the lawsuit at Richmond.com and Techdirt. Dozier’s own blog also writes about the filing.

The complaint describes Riley’s “marketing” campaign approach as follows:

These campaigns are executed under a three tactic approach: attacking competitors through the publication of defamatory and outrageous accusations on blogs, forums and social networking sites; launching "sucks" sites against competitors programmed so his websites appear when the company is searched, and often containing trademark infringing uses of the competitor's name; and launching "sucks" websites attacking non-inventor or entrepreneur industry businesses for the purpose of generating attention, which leads to a higher ranking on the search engines, more traffic to Riley's sites, and more "marks" for him to solicit.

It should be noted that among Riley’s “suck” sites is http://www.cybertriallawyer-sucks.com/ (Dozier’s official website is http://www.cybertriallawyer.com/). It should be noted that some of Riley’s criticism of Dozier relates to the aforementioned copyright claims by Dozier with respect to its cease and desist letters (in which case I think most people would side with Riley).

The complaint summarizes Riley’s activities as follows:

In summary, Riley concocts credentials in a highly sophisticated way, hijacks and steals the identity and goodwill of organizations, uses inventor and entrepreneur forums, blogs and other online social networking sites for the commercial purpose of locating prospective clients or customers and driving traffic to his sites, and fends off his detractors, and those attempting to spread the truth about Riley to novice inventors and entrepreneurs, by attacking relentlessly the right to speak anonymously, and the right to speak in general. Riley attacks by asserting a broad range of outrageous and false misconduct impugning the reputation of the speakers when identifiable, threatening to track down anonymous posters through lawsuits, and threatening to obtain log files and IP addresses of those exercising their free speech rights to anonymity.

However, in the end, the only causes of action set forth in this complaint are for trademark infringement (state trademark infringement and common law trademark infringement). Specifically, Dozier has a state trademark registration for its name “Dozier Internet Law, P.C.” (having registered the name with the State Corporation Commission's, Division of Securities and Retail Franchising, of the Commonwealth of Virginia).

The crux of Dozier’s trademark infringement cause of action is:

The Riley Businesses have launched a page on the web that contains twelve (12) different instances in which the trademark "Dozier Internet Law" is exclusively used as anchor text in a hypertext link. An anchor link is supposed to describe the destination a visitor will reach when clicking on the link, and functions much like a road map with a shortcut. These anchor links, however, do not take a visitor to the Dozier Internet Law website. Rather, the links send the party clicking on them to the main website used by the Riley Businesses that offer services which directly compete with Dozier Internet Law.

Dozier argues that Riley’s conduct in having such anchored text links leading to a website of Dozier’s competitors has caused initial interest confusion and is likely to cause consumer confusion, mistake and deception as to the source or origin of the goods or services of Dozier Internet Law since the link to Dozier Internet Law leads to a website other than Dozier’s website. In addition, by Riley having such links in the text of his web pages, Riley’s own websites appear whenever a client does an internet search for Dozier Internet Law on a major search engine.

Given the fact that most of the complaint sets forth allegations that have little to nothing to do with the alleged trademark infringement, this lawsuit appears to be just another part of a larger ongoing “personal” dispute between Dozier and Riley. Of course, anybody who knows Riley knows that he is not the type who will back down from what is for the most part a personal attack on his character as well as an attack on his First Amendment rights to free speech – under the guise of a trademark infringement lawsuit.

The Girls of Glitter Gulch go after Unauthorized “Glitter Gulch” Website

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Victoria’s Secret Files Lawsuit Over Bizarre Nevada Trade Names

This falls into that category of trademark infringement lawsuits called “What were they thinking?”

Last week, Victoria’s Secret filed a trademark infringement lawsuit against several named individuals and purported corporations in the U.S. District Court for the District of Nevada. See Victoria's Secret Stores Brand Management, Inc. vs John Shortt and Family and Cesar E. Batres and Nazir Akhtar and Families, et al, Case No. 08-cv-394 (D. Nev. July 18, 2008). A copy of the complaint can be downloaded here.

The Defendants filed three separate trade name registrations with the Nevada Secretary of State – all of which mention “Victoria’s Secret.”

But what is bizarre is the specific trade names that were registered by the Defendants. Keep in mind that under Nevada law, a “trade name” as “a word, symbol, device, or any combination of them, used by a person to identify his business, vocation or occupation and distinguish it from the business, vocation or occupation of others.” See Nevada Revised Statutes (N.R.S. §600.310. While this may sound similar to a trade mark or service mark, it is technically different because it identifies the business itself whereas a trademark is “any word, name, symbol or device, or any combination of them, adopted and used by a person to identify goods made or sold by him and to distinguish them from goods made or sold by others” (N.R.S. §600.300) while a service mark is “mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others.” (N.R.S. §600.290).

On January 12, 2005, one of the Defendants registered the following trade name (Reg. No. TN00370012):

The AAmerican Awinv Js Victoria's Secret Mfg Vip Fashions Garments Worldwide Franchise For Europe,Asia,United Statcs,E.E.C Countries, … [additional countries omitted] Papua New Guinea,New Zealand,New Caledonia,Kiribati,Nauru,Franch Polynesia, All the Above Countries 100% Franchise From The Above Corporations Ownership 100% Only Mr,Mohammed Ali El Mansouri and Mohammed Ali EI Mansouri Familys,And Also Son Ahmed Mohammed Ali EI Mansouri Projects of Plants of A/Z Category Manufacturing and Trading in Worldwide International and Domestoc,Also A/Z Projects Plants of all Kinds OfReady Made Garments,Vips,Fashions Garments, Footwear, Manufacturing,Manufactures, Products,Produces,and Trading In Worldwide,Above Names have 100% Full Right To Issued The Any One or Any Corporations,Companys,Or To Any Manufacturing, Manufacturers, Products, Worldwide International Marketing and Business Link to Above Corporations Franchise in Above Countries,Only Have 100% Full Rights To Set Up In Above Countries Above Corporations Branch Offices, Or Make Shareholders,Or Workers Partners,Or Commission Agents,Only In Above Countries,Mr,Mohammed Ali El Mansouri Familys have 100% Fun Right') To Issued The Above Corporations Franchise or Set Up Above Corporations Branch Offices in any Of The Above countries,or Make Shareholders, Workers Partners, Commission Agents in Above Conturies Only, Mr., Mohammed Ali El Mansouri Son Ahmed Mohammed Ah El Mansouri Have 100% Full Rights From The Above Corporations Can Issued The Above Corporations Franchise,OrSet Up Branch Offices,Or Make Shareholders,Workers Partners, Or Commission Agents inAbove Countries Only, By Above Corporations Have Seucred Up to Thirty Five Millions United States Dollars For Manufacturing and Trading in Projects Plants Above to Sponsored and Secured by The Above Corporations Building Societes Mohammad Khan Worldwide Banking Service E.E.C. Countries Mr. Mohammed Ali El Mansouri and Mohammed Ali El Mansouri Familys and Son,Ahmed Mohgammed Ali El Mansouri and Mohammed Ali El Mansouri Familys and Mr. Mohammed Ali El Mansouri Son Ahmed Mohammed Al El Mansouri Have 100% A/Z Full Rights To Signed Any Official Documents,for the Names of The Above Corporations, By Official With Full Rights To Signed for the Names of The Above Corporations, By Official With Full Rights To Signed for the Above Corporations, in The Above Countries, in Setup Branch Offices, Governments Offices Governments Departments, With 100% Full Power from The Above Corporations Until Next Notice From The Above Corporations Board of Directors,and Chairmans,Nazir Akhtar,Sultan Mohammad,Ref.Numbers,00034884-April,29,2000..

(errors in original).

On June 29, 2006, one of the Defendants registered the following trade name for “knited [sic.], netted; and textile fabric” (Reg. No. E0489502006-9):

Mohamed Ali A.Salem Al Mansouri Worldwide International. Eyurvpean,Asian,Arab The Mansouri The INlWALI EWlMAAM International Arab European Middle East,United Arab Emirates,World Islamic Countries World The International Victoria's Secret Wor1dwide European Arab Industries Mills of China Hong Kong Manufacturing and Trading In All Types of Woman's Garments Vip Fashions,Ladies Under Clothing A/Z Products and Manufacturers,Manufacturing, Manufacturing Manufacturers,Productions Women's Fashions Garments E.T.C Since,jULY,2000 Up Date,Mohamed Ali El Mansouri and Familys have Full Rights To Set Up any Countries of the World Branch Offices and have Full Rights to Make Worldwide Agents With Commission Bases OnlyWorkers Partners With On Commission Bases Only,Shareholders ann Workers mohamed Ali Al Mansouri and Son Ahmed Mohammed Al EI Mansouri and Familys Sponsored and Secured For Five Years From June,19,2005 To Five Years Up To Seventy Five Millions English Pounds Only Also Plants Projects Manufacturing Women's Fashions Garments Under Clothing FromThe Bank of England Until Next Notice 100% Ownership Is Mohammed Ali EI Mansouri and Familys All The Rights Are Reserved By The Mohamed Ali EI Mansouri and Son and Familys Only All Legal, Activities Worldwide Thousand Thousand Types of Manufacturing of Women's Fashions Garments

(errors in original).

Finally, on March 27, 2005, one of the Defendants registered the following trade for the business of “knitted, netted; and textile fabric and substitutes therefor” (Reg. No. E0226492006-9):

Worldwide European International Mohamed Ali AI-Mansouri WEIMAAM Worldwide European Asian, Middle East Victoria's Secret Manufacturing,Manufacturers,Products,Productions,Mfg Vip Fashions Garm All Types of Ladies, Fashions Garments,E,t,c All Women's,Ladies A/Z Items,Productions,Products,and Manufacturing,Exporters,lmporters,General Dealers,General Contractors,Buyers and Suppliers All Kinds of Items of Ladies,and Women's Wear Manufacturing and Trading In All Items of Ladies Wear Fashions of European Products of Brand of Awinveimaam Victoria's Secret Manufacturing,Manufacturers Women's Fashions Garments Et,c Since,July,2000 Up Date Goodstanding,AlI E,E,C Countries,All Asian Countries,All Middle East Countries,United Arab Emirates,All Islamic Countries World,With Full A/Z 100% Rights Up To Five Years From The Date Signed March,25,2006, The Above Corporations Ownership Is Only Mr,Mohammed Ali EI Mansouri and Mohammed Ali El Mansouri Familys and Also Son Ahmed Mohammed Ali El Mansouri,Above Names Have Full Rights To Set Up Any Countries of The World Branch Offices and Have Full Rights To Make Worldwide Agents, With Commission Bases Only,Workers Partners,with Only Commission Bases Only,Shareholder and Workers,Above Corporations Secured Up To FiftyFive Millions English Pounds Also Plants Projects Industries Mills and Mr,Mohammed Ali EI Mansouri and Son Ahmed Mohammed Ali El Mansouri and Familys Sponsored and secured For Five Years From March,25,2006 From Bank of England London E,C2 England Time of The Starting Sponsored and Secured Above Corporations 6 Months Times After The Set Up Above Business In The United Arab Emirates or Any Countries of The World, Workers Partners Listing For Five Years From March 25,2006 Under (5) Names of Workers Partners Working On Only Commission Bases Only Until The Next Notice From The Above Corporations Owners Mr,Mohammed Ali EI Mansoun and Son Mr,Ahmed Mohammed Ali El Mansouri Names of Workers Partners,Mr,Naresh Prasad,Mrs,Kusum Lata,P,O,Box 4156 Nabua Suva Fiji Island,460492/641751,Miss,Kuldip Kaur,Mr,Harpushpinder Singh,Mr,Sarban Lal Dass, C/o Kamiljit Singh Permar Fatehgarh Rahimpur Road Saroop Nagar Street#5 Hoshiarpur Punjab India,Colony Bahliwwal Kdhia P,O,Jallandhar Punjab India,Mr,Tahim Ali Shah,660763,Mrs,Meharoma Sharidun Nisha,551733,Son,Tazeem Zuhyar Shah,551734.P.O.Box949 Lautoka Fiji Islands,Above Corporations 100% Owners Is Mr,Mohammad Ali El Mansouri and Familys and Son Mr,Ahmed Mohammed Ali El Mansouri All Legal Activities Worldwide

(errors in original).

There are so many things one can say about these truly bizarre trade name filings.

First, they demonstrate that the Nevada Secretary of State, like all other states, merely file whatever is provided to them – no matter how ridiculous it may seem to file – so long as it does not conflict with a name already registered in their own database. One wonders what the specimen looked like that the Defendants filed with the paperwork to show use of the mark as a "trade name" – if there was even a specimen beyond what appears to be a poor translation of some kind of fabric manufacturing agreements.

Second, it is not clear why the Defendants felt it necessary to file these agreements as “trade names.” It’s obvious that they are not a “trade name” under which they intend to operate – try fitting all of that on a billboard. Did they get some bad legal advice? Did they not seek legal counsel and misunderstand what a “trade name” filing is for? Were they really afraid someone was going to start using a confusingly similar name, especially given that the “name” itself is confusing enough. Were the parties attempt to officially “record” these agreement with the notion that they would be made more enforceable?

Finally, while I certainly understand and appreciate Victoria’s Secret efforts to go after a business that has incorporated its famous mark into a “trade name” without its consent, is there really any likelihood of confusion (or even dilution) here? I seriously doubt there is any other evidence out there that these Defendants are even operating under these “trade names” – if you can even call them that. And assuming that these filings were to somehow constitute legitimate trade names, there may be an argument that the defendants’ use of “Victoria’s Secret” is nominative fair use if the defendants are indeed manufacturers of Victoria’s Secret lingerie (although arguably they could identify their product or service without using the Victoria’s Secret’s mark).

The complaint filed by Victoria’s Secret indicates that attempts were made to send cease and desist letters to the Defendants, but that all of the addresses on record are mail forwarding services which did not have any information on where any mail to defendants would be forwarded.

Anybody else have any thoughts explaining these unusual trade name filings?

An "ALASKA GROWN" trademark dispute

An Alaska Superior Court judge has ruled against an Alaskan farm organization in a dispute between the State of Alaska and the organization over the right to print the ALASKA GROWN logo (the “Logo”) on T-shirts and other clothing items. See State of Alaska, Dept. Of Natural Resources, Div. of Agriculture vs. Mat-Su Chapter-Alaska Farm Bureau Inc., Case 3AN-06-05292CI (Alak. Sup. Ct.). Most news outlets reported the AP story (link here) which seemed to gloss over some of the interesting (from a lawyer’s perspective) details in the case.

The lawsuit was brought by State of Alaska, Dept. Of Natural Resources, Div. of Agriculture (the “Division”) to stop Mat-Su Chapter-Alaska Farm Bureau, Inc. (“Mat-Su”) from continuing to print the logo on T-shirts and to squash Mat-Su’s pending trademark application for the mark ALASKA GROWN.

The story goes back to the mid-1980s, when the State of Alaska, Dept. Of Natural Resources, Div. of Agriculture first developed the Logo as part of its ALASKA GROWN program established in 1985 with the purpose of promoting locally-grown Alaska farm products.

According to Mat-Su, its predecessor organization – the Alaska Farmers and Stockgrowers Association (“AFSA”) – helped push for the adoption of a logo to help promote Alaska’s agriculture. AFSA had been using a circular logo around a silhouette of the State of Alaska with the slogan “Alaska Farmers and Stockgrowers Feeding Alaskans” since the early 1980s. According to Mat-Su, the idea of an ALASKA GROWN label was first proposed in a funding request from AFSA to the state – a proposal that was ultimately non funded.

AFSA later asked the Division for help in classifying their products so that consumers could easily identify them. The Division rose to the challenge, and eventually adopted the current ALASKA GROWN logo (the “Logo”) after a vote was taken by 385 farmers and agriculturalists among six proposed drawings.

The Logo was first used on December 20, 1985, but formally unveiled to the public in on January 16, 1986. Around this same time, the Division filed three Alaska state trademark registrations for the Logo – one on January 14, 1986 (for foods and ingredients in foods), one on April 18, 1986 (for merchandise not otherwise classified), one on May 22, 1986 (for thread and yarn). All of the registrations have been continuously maintained.

According to the Division, as part of the program, the Division grants non-exclusive, no-fee licenses to authorized Alaska growers to use the Logo as a certification mark on locally-grown farm products meeting the Division’s standards. The Division has around 283 authorized users of the Logo for certification of Alaska grown products.

The Division also promoted the program with various promotional items, including clothing items such as T-shirts and sweatshirts. The Division granted non-exclusive, no-fee licenses to authorized non-profit entities affiliated with Alaska’s agricultural industry to use the Logo on promotional clothing. One such licensee was Mat-Su, which had been authorized since 1986 to make and sell clothing with the Logo. Mat-Su, in its filings related to the lawsuit and opposition, contested the Division’s position about granting non-exclusive no-fee licenses to users of the Logo.

On April 24, 2004, Mat-Su sent a letter to the Division requesting that it be made the sole distributor and exclusive licensee for the manufacture and sale of clothing items with the Logo on it. According to its letter, Mat-Su felt that there were some retailers who were placing the Logo on inferior products, and so Mat-Su set forth its position why it was the best company to be the sole authorized manufacturer and seller of clothing using the Logo. As the Division points out, however, this same letter also has Mat-Su acknowledging the Division’s rights over the Logo.

The Division never responded to the letter. On March 1, 2005, Mat-Su sent a second letter to the Division once again making its case (this time in much greater detail) for why it should be the sole distributor and exclusive licensee for the manufacture and sale of clothing items with the Logo on it. From Mat-Su’s perspective, AFSA entered into an “informal” agreement with the Division soon after the Logo was introduced to use the Logo on clothing items to promote the Division’s agriculture promotion efforts. The AFSA promised that all proceeds would go into Alaska agriculture promotion. Mat-Su also stated that AFSA discontinued using its own logo on clothing in favor the “new, cooperatively generated, label.”

Mat-Su apparently felt that it deserved to the be the exclusive maker of clothes sporting the Logo because of the great deal of time and money it had invested to help promote the ALASKA GROWN logo through its sale of promotional clothing. “It is extremely unfair that our carefully nurtured clothing promotion is threatened with extinction or dilution now that Alaska Grown shirts are finally popular.” Mat-Su also believed that its longtime use of the Logo on clothing with the Division’s approval constituted a “legal claim.” Mat-Su was the first to do so and the only one for ten years. The remainder of its March 1st letter addresses the importance of the ALASKA GROWN logo and the need to ensure its integrity.

What this March 1st letter did not divulge, however, is that on January 3, 2005, Mat-Su filed a Section 1(a) use-in-commerce application with the United States Patent & Trademark Office to register the mark ALASKA GROWN (and Design) for “Clothing, namely, hooded sweatshirts, adult short-sleeved T-shirts, adult long-sleeved T-shirts, youth T-shirts, infant T-shirts, aprons, baseball-style caps, women's tank tops, men's tank tops, work shirts and shorts.” The drawing of the mark submitted with the application was identical to the Logo. The date of first use claimed was February 15, 1986 and the date of first use in commerce was August 15, 1986. Mat-Su is an Alaska non-profit corporation that was formed in 2002, although as previously stated, Mat-Su claims to be the predecessor organization of AFSA.

Mat-Su filed a second application on October 19, 2005 to register the mark ALASKA GROWN (and Design) for “fresh vegetables”; however, this application was later expressly abandoned on March 22, 2006, for reasons unclear.

Meanwhile, in mid-November 2005, Mat-Su supposedly announced its attention to form a new corporation to take over ownership of the ALASKA GROWN program and Logo. On December 21, 2005, Mat-Su followed through by incorporating Alaska Farmers and Stockgrowers, Inc.

Whether in response to Mat-Su’s trademark applications or public threats to take over the ALASKA GROWN program and Logo, the Division, on November 18, 2005, wrote a letter notifying Mat-Su that its actions amounted to trademark infringement, that its license to use the Logo was being terminated, and that Mat-Su was to cease and desist from any further use of the Logo. In early December 2005, a representative of Mat-Su supposedly contacted the Division to indicate that Mat-Su would comply with the Division’s letter and would not sell any more clothing with the Logo on it until the trademark dispute was resolved.

According to the Division, however, Mat-Su continued to sell clothing with the Logo. The Division filed a lawsuit seeking injunctive relief on February 16, 2006. A first amended complaint was later filed on July 21, 2006, setting forth some additional alleged sales in 2006 by Mat-Su of clothing using the Logo. The counts of the complaint include state and common law trademark infringement, unfair trade practices, breach of implied covenant of good faith and fair dealing, and declaratory relief regarding the trademark rights to the Logo given Mat-Su’s pending application.

Mat-Su’s first trademark application was published for opposition on December 7, 2005. After several extensions of time, the Division, on June 23, 2006, filed its opposition to Mat-Su’s application. See State of Alaska, Dept. Of Natural Resources, Div. of Agriculture vs. Mat-Su Chapter-Alaska Farm Bureau Inc., Opposition No. 91172432 (TTAB). The opposition resembled the complaint that the Division had already filed in Alaska Superior Court. The Division argued that Mat-Su’s application be denied on the grounds of the Division’s prior use, licensee estoppel, that Mat-Su is not a valid owner of the mark, that the application was not signed by a proper signatory, and fraud (i.e. knowingly false statements including that Mat-Su is the owner of the mark, the dates of first use given that Mat-Su was formed in 2002, that Mat-Su has exclusive right to use the mark).

As reported by the AP, Anchorage Superior Court Judge Jack Smith ruled last week that the Division owns the Logo and the licensing rights to the Logo. It’s not clear the extent to which the injunction also enjoined Mat-Su from using the Logo in any way, but one can probably assume that if the Divison was found to own the rights to the Logo, the court also enjoined Mat-Su from any infringing activity.

The judge also ordered an injunction against Mat-Su enjoining them from "threatening, intimidating, harassing, coercing, or otherwise interfering with the sale of Alaska Grown apparel." This is apparently in response to accusations that Mat-Su had made against Alaska Future Farmers of America of stealing sales from Mat-Su by selling its own line of clothing with the Logo. Mat-Su apparently feels that such other organizations do not adequate support Alaska’s agricultural industry. The Division maintains that Mat-Su was interfering with an authorized licensor’s sale of "Alaska Grown" clothing.

A hearing has been set for May to determine damages the Division may be entitled to based on Mat-Su’s infringing use.

Vegas™Esq. Comments:
What I found most surprising about this whole case was that Mat-Su was able to get its application published in the first place. In particular, I am surprised that Mat-Su was able to get around an “ornamental” refusal for its mark. Apparently, the Examiner may have thought that the speciments and other evidence submitted (namely an explanatory card handed out with each shirt describing the spirit of the Alaska Grown program) showed that the mark would be recognized by the public as a trademark through applicant’s use of the mark with goods or services other than those identified in the application (i.e., the mark is an indicator of secondary source or sponsorship). However, Mat-Su admitted in its correspondence that it only produces the clothing and not the farm products itself. With Mat-Su admitting that it is not using the mark on any other goods or services other than what it identifies in the application, how was it able to get around an ornamental refusal?

Also, I find it somewhat surprising that the Examiner did not raise any Section 2(e)(2) “primarily geographically descriptive” rejection. The mark names a geographic location, purchasers are likely to believe the goods originate in Alaska, and the goods do originate in Alaska.

It’s not clear whether Mat-Su was really concerned about the goodwill behind the Logo or whether its concern was about its own financial bottom-line in the face of competition from other clothing manufacturers producing clothes using the Logo. Regardless, Mat-Su felt entitled to be the exclusive producer of clothing bearing the Logo based on its good intentions and long-time involvement with the ALASKA GROWN program.

Mat-Su either misunderstood its trademark rights or may have been misled by someone into believe that it had legitimate rights to the Logo simply by its long-time involvement. Notably, the trademark applications were filed by officers of Mat-Su, and not a trademark attorney, who undoubtedly (after doing even a modicum of due diligence) would have informed Mat-Su of its tenuous legal position.

Finally, Mat-Su seems to feel that the Division is not properly running the program, which serves to harm the goodwill behind the Logo. However, to the extent Mat-Su believes that the Division is doing harm to the Logo by allowing cheaper clothing to be produced bearing the Logo, then Mat-Su should create and invest time and money into creating its own certification mark. A few off the top of my head suggestions: “ALASKA FOOD …From Alaska For Alaska.” “Alaska Preferred,” and “A Taste of Alaska” (which worked for Iowa). Before doing so, however, Mat-Su should also keep in mind that one issue which typically arises with respect to geographic region certification marks is the authority of the owner to control the use of the mark. The USPTO will normally look for the applicant to be a government agency or quasi-governmental organization with power and authority in the named geographic region because such governmental bodies are perceived as being in the best position to fulfill the duties of ensuring the right of all persons in the region to use the term and preventing improper uses of the mark by those not entitled to do so.

IN-N-OUT BURGER sues local Las Vegas tire and auto repair company for trademark infringement.

This lawsuit caught the eye of both myself and Marty Schwimmer today. I noted the case because my wife loves In & Out Burger. Marty note the title alone in his Trademark Blog and filed it in his “cheap laugh from the name of the case" file (post here). For myself, I probably would have filed it under “Are they serious?”

On November 20, 2007, In-N-Out Burgers (“INOB”) (supposedly a California corporation although the Nevada Secretary of State (link here) shows the company as a domestic corporation rather than a foreign corporation qualified to do business in Nevada) filed a lawsuit against In & Out Tire & Auto, Inc. (“IOTA”) in the U.S. District Court for the District of Nevada. See In-N-Out Burgers v. In & Out Tire & Auto, Inc., Case No. 2:2007cv01556 (D. Nev.). A copy of the complaint can be downloaded here (courtesy of myself).

INOB’s complaint alleges trademark infringement under federal law (15 U.S.C. §1114) and Nevada law (NRS 600.430), unfair competition under 15 U.S.C. §1125(a) and Nevada common law, and dilution under Nevada law (NRS 600.435).

According to the complaint, INOB was the first drive-through hamburger restaurant in the United States – opening in 1948 – and continues to focus its business on drive-through business and does not choose locations that would “not be conducive to the drive-in culture and experience.” INOB currently has over 200 locations throughout Nevada, California and other states in the southwestern United States, with apparent plans to expand its restaurant operations in those and to other states. INOB has ten restaurants in Nevada – seven of which are in Las Vegas.

INOB holds several federal trademark and service mark registrations on the mark IN-N-OUT including restaurant services, hamburgers & cheeseburgers, French fries, and even watches, decals, mugs, and shirts (but not for anything relating to car repair services). Furthermore, INOB also holds two Nevada state trademarks on IN-N-OUT BURGER FOUNDATION (290274 and 290275). And while not mentioned in the complaint, INOB also holds several federal registrations for the mark IN-N-OUT BURGER.

The complaint also asserts that INOB has been engaged in financially sponsoring auto race cars since 1985. While the complaint cites to three service mark registrations that supposedly describe the goods or services as “Financial Sponsorship of race cars and race car drivers,” only one of the actual registrations cited states as such – and its status is currently dead See Registration No. 2,291,183 for IN-N-OUT BURGER (and design). The other two LIVE registrations cited are both for “charitable fundraising and distribution of funds” (IN-N-OUT BURGER FOUNDATION CHILDREN'S BENEFIT and IN-N-OUT BURGER FOUNDATION) and not specifically directed to “race cars” as the complaint would have one believe.

INOB appears to be arguing that its drive-through operations, its “car culture business model,” its promotions which sell apparel featuring cars, and its “extensive” sponsorship of race cars create a close enough association between INOB’s marks and the “automobile culture in Nevada, California, and throughout the country” that INOB is entitled to claim trademark rights over its mark with respect to anything automobile related (or, at least, auto repair services).

Defendant IOTA operates a tire, automobile, and truck repair service center in Las Vegas. The corporation is owned by Shahram and Maria Mashoud. Some of INOB's seven Las Vegas locations are apparently a close drive away from IOTA’s business location.

The primary issue, of course, is IOTA’s name, specifically the words IN & OUT. INOB alleges that IOTA’s name is a “colorable imitation” of INOB’s marks and is likely to cause confusion as to the affiliation of IOTA with INOB and as to the origin, sponsorship, or approval of IOTA’s services by INOB.

In addition to IOTA’s choice of name, INOB does not like IOTA’s advertisements. IOTA has apparently been advertising its name in bright yellow lettering on a brick red background or with the words IN & OUT in brick red block letters alongside brick red arrows. INOB infers that these ads are meant to resemble INOB’s registered marks where “In-N-Out Burger” is in brick red letters superimposed over a bright stylized arrow or where “In-N-Out Burger” is superimposed over a bright yellow stylized arrow on a brick red background. INOB also alleges that IOTA’s use of its name in such advertisements misrepresents the nature, characteristics, qualities of IOTA’s services. INOB sent a cease and desist letter to IOTA, but thus far IOTA has refused to stop using the name.

The complaint’s only request for relief is a permanent injunction against IOTA from using its name.

Vegas™Esq. Comments:
To summarize (without sounding too critical), INOB is attempting to expand the scope of its well-know IN-N-OUT mark to cover products/services that have nothing to do with restaurant services on the grounds that consumers associate the IN-N-OUT mark with INOB’s drive-through restaurant services (and how else do you drive-through a drive-thru except in a car) and with INOB’s sponsorship of car racing.

It would appear that most of the Sleekcraft factors for likelihood of confusion would favor IOTA. While INOB certainly has a strong mark, the goods and services are not closely related (INOB’s activities remotely related to cars, such as its sponsorship of a race car, does not mean that consumers identify the mark in connection with such car related activities and certainly not car repair services). Additionally, the marks are only remotely similar (the IN & OUT portion) and, when viewed in their entireties, are dissimilar (especially given the additional words TIRE & AUTO appearing in IOTA's name). INOB’s complaint does not cite any actual confusion, but surveys may show otherwise, so this factor is inconclusive. Given the type of services involved in IOTA’s operations, most patrons exercise a strong a degree of care before having repairs done on their car. I doubt people will see IOTA’s advertising and rush in to get new tires from the company because they like its “burgers.” As for IOTA’s intent in selecting the mark, it is obviously meant to be suggestive of the expediency at which IOTA performs its tire and auto repair services – and not meant to create an association with the burger chain. Finally, I doubt that INOB has any legitimate plans to expand its products and services into the tire and auto repair business (car sponsorship notwithstanding).

Unfortunately, IOTA is a small business and may not want to bother fighting this out in court with INOB. Given that IOTA only has a single location, changing the name would probably be less arduous and less expensive than litigating the case through summary judgment – because I do not see the case going much further without stronger evidence from INOB.

TM/SM versus ® --- State versus Federal Trademark Registration

Several years ago, I was speaking with the publisher of a local Las Vegas restaurant guide “Taste of Vegas” (Disclaimer: the communications were not as attorney-client, but rather … well that’s a longer story for another time).

Maybe it’s the natural instinct of a trademark attorney, but when I saw the ® symbol next to his logo TASTE OF VEGAS, my first instinct was to go online to the USPTO’s TARR database to view the registration. To my surprise, the PTO did not have any records of any such trademark registration. The closest registration was A TASTE OF LAS VEGAS, which is owned by Ethel M. Chocolates and covers the goods “candy.” When I spoke to the publisher again, I inquired about his trademark registration. He informed me that he did file a trademark registration. After further inquiry, I figured out that what he had done was register the mark TASTE OF VEGAS with the Nevada Secretary of State and not the USPTO. He was confused when I explained to him that obtaining a state trademark registration does not provide the same benefits as filing for a federal registration – most notably, a trademark owner cannot use the ® symbol unless the mark is federally registered.

I thought about this business owner when I came across a recent article written by Paul E. Thomas, an attorney with Manatt, Phelps & Phillips, LLP , entitled “Unclean Hands Accusation Makes Trademark Owner Take Notice.”

The article describes a trademark opposition by Barbara’s Bakery, Inc., which holds the registered mark BARBARA’S (and design) for bakery goods (note: Barbara’s Bakery in its recent Section 8 filing cancelled the remaining goods that remained in IC 29 as well as some goods in IC 30, leaving only bakery goods), BARBARA’S for food products in two different classes, and has a pending application for BARBARA’S BAKERY (and design) for potato chips and processed organic foods. Barbara’s Bakery filed an opposition against Barbara Landesman, who was seeking registration of the trademark BARB’S BUNS BAKERY, INC. for printed recipes, recipe books, and newsletters containing recipes.

While Barbara’s Bakery, Inc. successfully opposed Landesman’s registration (see the TTAB decision here; see also John Welch’s TTABlog entry on the decision here), one interesting argument raised by Landesman was that Barbara’s Bakery, Inc. had “unclean hands” through its misuse of the ® symbol on its BARBARA’S BAKERY mark before it had been registered.

The evidence tended to support Landeman’s argument, including the fact that the original drawing that Barbara’s Bakery submitted with its application contained the ® symbol rather than the TM symbol for unregistered trademarks where owners believe they have common law trademark rights. On September 29, 2002, the PTO informed Barbara’s Bakery that the ® symbol “may not be used until a valid registration is obtained” and instructed Barbara’s Bakery to provide a new drawing without the ® symbol, which it subsequently did.

The PTO thereafter suspended prosecution on the application on May 8, 2003 while the opposition was pending (which was not decided until January 23, 2007). Landesman also submitted evidence that Barbara’s Bakery was still using the BARBARA’S BAKERY mark with the ® symbol on the packaging in grocery stores in 2004 and 2005.

Barbara’s Bakery argued that the misuse of the ® symbol was not a deliberate attempt to mislead the public or to create the misimpression that Barbara’s Bakery had a registered mark when it did not. Barbara’s Bakery maintained that the mistake arose because Barbara’s Bakery has a federal registration for the word mark BARBARA’S, which was part of the design mark at issue. The TTAB accepted this explanation and ruled that Landesman failed to show that Barbara’s Bakery had deliberately misused the ® symbol.

On the one hand, I agree with the TTAB’s decision because if you look at the design mark, the ® symbol is clearly after the name BARBARA’S and not anywhere indicating that the whole logo itself is registered. Looking at it myself, I did not have the impression that the whole design was registered, but rather just the name BARBARA’S. On the other hand, Barbara’s Bakery was put on notice in 2002 about the impropriety of the ® symbol in that location, and yet continued to use it on its packaging. Can the company maintain that it was just a mistake to continue to display the design mark with the ® symbol even after being put on notice by the PTO’s office action (and later by the TTAB proceedings) that it was wrong to have it there.

If Barbara’s Bakery indeed corrected the problem, as its Vice President of Sales & Marketing told the TTAB it would, the company likely incurred great expense when it had to correct all of the printed packaging that had the ® symbol. I say “if” because a quick look at the design mark on the company’s website suggests that they never corrected this “misuse.” A close look seems to reveal that the ® symbol is still in the same location as the sample of the mark first submitted to the PTO. As of today, the BARBARA’S BAKERY (and design) mark has still not been registered, although it was published for opposition on July 31, 2007, so it should be registered sometime soon (unless some other company decides to start their own opposition).

So what are the lessons learned in the above stories.

First, state trademark registration is not the same as federal registration. While every state issues their own trademarks, getting a state trademark does not buy you much in the way of protection of your mark. While the process is often faster than federal registration, the state registration will only serve as evidence of use of the mark in commerce and the geographic area of use. If another party gets a federal registration, then such registration is constructive notice that the registrant has the right to use the mark throughout the entire country (even if the registrant is not using it in a specific geographic area) and can prevent others from using the same or similar mark anywhere in the U.S. unless the mark was in use before the date of first use of the registered mark, in which case the prior user may have some rights to use the mark but limited to a certain area. State registrations can serve as evidence for a prior user to help establish rights to the mark in those states where such a registration was obtained.

Second, the ® symbol can only be used when the trademark owner obtains a FEDERAL trademark registration, and not after receiving a state trademark registration and not after simply filing a federal trademark application. Instead, a trademark holder must continue to use the superscript TM or SM (for service marks), the same as would be used if there was no registration at all and the owner wished to proclaim to the world that the owner consider the mark to be a trademark protected under common law. In addition, “[d]eliberate misuse [the ® symbol] can have serious consequences. It can lead to the PTO’s final refusal to register a mark. It can give rise to claims of false advertising. And it can seriously injure a trademark owner’s enforcement rights in an infringement action: misuse of the ® symbol has led courts to deny requests for injunctions or damages. In most cases, however, both the TTAB and federal courts have been reluctant to divest trademark owners of rights and, absent persuasive evidence of a deliberate intent to deceive, have accepted reasonable explanations for inadvertent misuse of the ® symbol.” Thomas, supra.