Fundamentals of Trademark Law in the Global Marketplace...

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Fundamentals of Trademark Law in the

Global Marketplace 2016

INTELLECTUAL PROPERTYCourse Handbook Series

Number G-1278

Co-ChairsLynn S. Fruchter

Jeffery A. HandelmanAnne Hiaring Hocking


1

“Key Principles of Trademark Law and Unfair Competition”

Jeffery A. Handelman

Brinks Hofer Gilson & Lione

If you find this article helpful, you can learn more about the subject by going to www.pli.edu to view the on demand program or segment for which it was written.

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DEFINITION OF TRADEMARK

The U.S. Trademark Act, also known as the Lanham Act, contains a broad definition of “trademark,” which includes “any word, name, symbol, or device, or any combination thereof [used or intended to be used] to identify and distinguish [a producer’s] goods . . . from those manufactured or sold by others and to indicate the source of the goods . . . .” Lanham Act § 45, 15 U.S.C. 1127. Under this expansive definition, a trademark can include not only a word mark such as SONY, MICROSOFT, or McDONALD’S, but also design marks such as the Nike “swoosh” symbol, the Coca-Cola bottle design, and Owens-Corning’s pink color for insulation, to give just a few examples. a) trademark is used for goods (e.g., FORD for automobiles). b) service mark is used in association with services (e.g., HYATT for

hotel services).

PURPOSES OF TRADEMARKS

Despite changes in culture and advances in technology over the years, the basic functions of trademarks have remained the same: a) trademarks reduce consumer search costs and contribute to transac-

tional efficiency in the marketplace; b) trademarks make companies accountable for their products; c) trademarks provide an incentive to produce high-quality products; d) trademarks promote competition by allowing consumers to

differentiate among products on the basis of source; e) trademarks protect the investment and goodwill of the trademark

owner; f) trademarks promote fair dealing and commercial honesty in the

marketing and sale of products; and g) in the case of prestigious trademarks, they can be used to reflect the

wealth, status and taste of the purchaser. These complementary trademark functions benefit both consumers and

sellers, while also serving important economic and social purposes.

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CLASSIFICATION OF TRADEMARKS

Courts have developed five categories for determining whether a term is entitled to trademark protection. These categories, from lowest to highest in distinctiveness, are as follows: (1) generic, (2) descriptive, (3) sugges-tive, (4) arbitrary, and (5) fanciful.

A “generic” term is a common name that the relevant purchasing public understands primarily as describing the class or genus of goods or services being sold. A generic term is not entitled to registration under any circumstances (e.g., soft drink, computer).

A term is “descriptive” if it directly conveys information concerning the characteristics, ingredients or qualities of the underlying goods or services. (e.g., RICH ‘N CHIPS for cookies). When initially adopted, a descriptive term generally does not identify a particular source and therefore does not qualify as a trademark. If used over a period of time, however, a descriptive term may acquire “secondary meaning” that will allow it to be protected and registered. Lanham Act § 2(f) provides that a descriptive term that otherwise could not be registered under the Act may be registered if it “has become distinctive of the applicant’s goods in com-merce.” Lanham Act § 2(f), 15 U.S.C. § 1052(f).

The remaining three categories of marks – suggestive, arbitrary and fanciful – are deemed “inherently distinctive” because their intrinsic nature serves to identify a particular source of a product or service.1

A “suggestive” term suggests rather than describes the characteristics of the goods or services (e.g., COPPERTONE for suntan lotion).

A “fanciful” term is a coined term invented solely for use as a trade-mark (e.g., EXXON for gasoline).

An “arbitrary” term is an ordinary word that is applied in an unfamil-iar way (e.g., CAMEL for cigarettes). These types of marks automati-cally qualify for trademark protection and are entitled to registration without any proof of secondary meaning.

SECONDARY MEANING

Secondary meaning arises when a term or a design feature that was not inherently distinctive at the time of its adoption later becomes distinctive

1. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768, 23 USPQ2d 1081, 1083-

84 (1992).

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through use, such that the term or design feature “has come through use to be uniquely associated with a specific source.”2

A term or design feature that has acquired secondary meaning may serve as a trademark or service mark and be protected even though the mark was not distinctive at the time of its adoption.3

The terms “secondary meaning” and “acquired distinctiveness” are used interchangeably – both refer to the issue of whether a party’s use and promotion of the word mark or design feature in question over a period of time has been of such a nature and extent that the primary sig-nificance of the term or design feature is as an indication of the source of the underlying product or service.

BENEFITS OF TRADEMARK REGISTRATION

An applicant can file an application for registration of a mark based on either actual use of a mark or intent-to-use a mark.

Federal trademark registration provides substantial advantages to the trademark owner. a) Registration on the Principal Register secures a nationwide right of

priority for the trademark owner and constitutes prima facie evi-dence of the validity of the registered mark, registrant’s ownership of the mark, and of the registrant’s exclusive right to use the mark in commerce. Lanham Act § 7(b), 15 U.S.C. § 1057(b).

b) Registration also serves as constructive notice to the public of the registrant’s ownership of the mark and thus prevents another user of the mark from claiming that he adopted the mark innocently after issuance of the registration. Lanham Act § 22, 15 U.S.C. § 1072.

c) An aggressive approach to trademark enforcement has a deterrent effect. By asserting one’s rights and obtaining a favorable decision in a trademark proceeding, the trademark holder sends a message to would-be infringers.

d) The trademark registration system also provides important benefits to the business community and to consumers. One of the aims of the Lanham Act is to enhance the reliability of trademark searching by

2. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 766 n. 4, 23 USPQ2d 1081,

1082 n. 4 (1992) (quoting Restatement (Third) of Unfair Competition § 13, Comment e (Tent. Draft No. 2, Mar. 23, 1990)).

3. G.H. Mumm & Cie v. Desnoes & Geddes, Ltd., 917 F.2d 1292, 1294, 16 USPQ2d 1635, 1637 (Fed. Cir. 1990).

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facilitating the presence on the trademark register of marks that are currently in use.

ABANDONMENT

Section 45 of the Lanham Act, 15 USC Lanham Act § 1127, defines aban-donment of a trademark. Specifically, a mark shall be deemed to be “aban-doned” when either of the following occurs: (1) When its use has been discontinued with intent not to resume such

use. Intent not to resume may be inferred from circumstances. Nonuse for 3 consecutive years shall be prima facie evidence of abandon-ment. “Use” of a mark means the bona fide use of such mark made in the ordinary course of trade, and not made merely to reserve a right in a mark.

(2) When any course of conduct of the owner, including acts of omis-sion as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark. Purchaser moti-vation shall not be a test for determining abandonment under this paragraph.

Most commonly, abandonment claims arise in the following circumstances: (a) abandonment based on non-use of the mark; (b) abandonment based on a material alteration of the mark with discon-

tinued use of the mark in the original form; (c) abandonment based on naked licensing of the mark with a lack of

quality control; (d) abandonment based on failure to police the mark; and (e) abandonment based on a naked assignment or assignment “in gross”

of the mark, without any transfer of the goodwill associated with the mark.

LIKELIHOOD OF CONFUSION

Courts often use the DuPont factors in assessing whether a likelihood of confusion exists. These factors are listed below: Factor 1: The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.

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Factor 2: The similarity or dissimilarity and nature of the goods or services as described in an application or registration or in connection with which a prior mark is in use. Factor 3: The similarity or dissimilarity of established, likely-to-continue trade channels. Factor 4: The conditions under which and the buyers to whom sales are made, i.e. “impulse purchasing” vs. careful, sophisticated purchasing. Factor 5: The fame of the prior mark (sales, advertising, length of use). Factor 6: The number and nature of similar marks in use on similar goods. Factor 7: The nature and extent of any actual confusion. Factor 8: The length of time during, and conditions under which, there has been concurrent use without evidence of actual confusion. Factor 9: The variety of goods on which a mark is or is not used (house mark, “family” mark, product mark). Factor 10: The market interface between applicant and the owner of a prior mark: (a) a mere “consent” to register or use. (b) agreement provisions designed to preclude confusion, i.e. limita-

tions on continued use of the marks by each party. (c) assignment of mark, application, registration and goodwill of the

related business. (d) laches and estoppel attributable to owner of prior mark and indicative

of lack of confusion. Factor 11: The extent to which applicant has a right to exclude others from use of its mark on its goods. Factor 12: The extent of potential confusion, i.e., whether de minimis or substantial. Factor 13: Any other established fact probative of the effect of use.

LEADING U.S. SUPREME COURT DECISIONS REGARDING TRADEMARKS

Expansion of Trademark Protection

Limitations on Trademark Rights

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Reconciling Patent and Trademark Protection

Dilution

EXPANSION OF TRADEMARK PROTECTION

Expansion of Trademark Protection: Case # 1

Park ‘N Fly Inc. v. Dollar Park and Fly, Inc., 469 U.S. 189 (1985).

When a trademark registration has become incontestable, defendant cannot attack the registered mark as merely descriptive.

Strong enforcement tool. “Congress determined that ‘a sound public policy requires that trade-

marks should receive nationally the greatest protection that can be given them.’”

The Lanham Act provides national protection of trademarks in order to: a) secure to the owner of the mark the goodwill of his business

and b) protect the ability of consumers to distinguish among compet-

ing producers. National protection of trademarks is desirable, “because trademarks

foster competition and the maintenance of quality by securing to the producer the benefits of good reputation.”

Expansion of Trademark Protection: Case # 2

Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 1244 (1992).

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If trade dress is inherently distinctive, plaintiff need not show sec-ondary meaning.

Facilitates enforcement of rights Expansion of Trademark Protection: Case # 3

Qualitex Co. v. Jacobson Products Co., 514 U.S. 159 (1995)

The term trademark includes any word, name, symbol or device . . . . “Since human beings might use as a symbol or device almost any-

thing at all that is capable of carrying meaning, this language, read literally, is not restrictive.”

Trademark protection granted in green-gold color used for laundry press pads

LIMITATIONS ON TRADEMARK RIGHTS

Limitations on Trademark Protection: Case # 1

KP Permanent Make-Up, Inc. v. Lasting Impression I Inc., 543 U.S. 111 (2004).

Fair use permits non-trademark use of descriptive terms. Prevents “commercial monopolization” of descriptive language. Some confusion can be tolerated. A competitor should not be permitted to impoverish the language

by preventing others from fairly describing their own goods.

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The Court emphasized “the undesirability of allowing anyone to obtain a complete monopoly on use of a descriptive term simply by grab-bing it first.”

Limitations on Trademark Protection: Case # 2

Traffix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 32 (2001).

Functionality Doctrine

Limits what is eligible for trademark protection; Utilitarian features cannot be protected as trademarks; Preserves effective competition; Parallel to generic terms.

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Functionality Defined

A design is functional if— It is essential to the use or purpose of the device, or It affects the cost or quality of the device.

Effect of Utility Patent under TrafFix

A utility patent is “strong evidence” that the features claimed in the patent are functional.

Makes it more difficult for plaintiff to establish trademark rights Limitations on Trademark Protection: Case # 3

Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000)

Product packaging may be inherently distinctive or protected through secondary meaning.

Product design is never inherently distinctive; can only be pro-tected with secondary meaning.

Makes it more difficult for plaintiff to establish trademark rights.

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SUMMARY OF SUPREME COURT’S TRADEMARK DECISIONS

The Supreme Court generally has tended to expand trademark protection.

However, the Court has also been sensitive to preserving effective competition.

Court has recognized limits on trademark protection:

Generic or descriptive terms;

Functional design features; and

Subject matter that is not traditionally viewed as source-identifying.

HOT TOPIC: EFFECT OF UTILITY PATENT ON ALLEGED TRADEMARK RIGHTS

As discussed above, in TrafFix, the Supreme Court addressed the effect that a utility patent can have on the assertion of trademark rights in a prod-uct’s design. The Supreme Court held that a utility patent that discloses

Trade Dress

If Functional—Not protectable

Nonfunctional

Product Design Product Packaging

Secondary Meaning Inherently Distinctive

Secondary Meaning

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utilitarian advantages of a claimed design is “strong evidence” that the design is functional and therefore not entitled to trademark protection.4

In light of this authority, a party should clearly delineate which aspects of its product, if any, are claimed in its utility patents, and which are the subject of trademark protection. By avoiding overlap, the party can use patent law and trademark law in combination to achieve maxi-mum protection.

The profound impact that a utility patent can have on a trademark claim is vividly illustrated in a recent case involving toilet paper. Georgia-Pacific brought suit against Kimberly-Clark for trademark infringe-ment based on its alleged rights in the “Quilted Diamond Design” embossed on its QUILTED NORTHERN toilet paper. Georgia-Pacific’s claims were directed against Kimberly-Clark’s use of allegedly similar embossed designs appearing on the surface of its COTTONELLE ULTRA and SCOTT toilet paper. Georgia-Pacific owned incontestable trademark registrations for its asserted designs. But there was more. Georgia-Pacific also owned several utility patents covering the same designs.

To illustrate, the design illustrated in Figure 5 of Georgia-Pacific’s U.S. Utility Patent Nos. 5,597,639 (’639 Patent); 5,436,057 (’057 Patent); and 5,874,156 (’156 Patent) is the same design depicted in its U.S. Trade-mark Registration No. 1,806,076 (’076 Registration):

Figure 5 ’639, ’057, and ’156 Patents

’076 Registration

Similarly, the design illustrated in Figure 1 of Georgia-Pacific’s U.S.

Utility Patent Nos. 5,620,776 (’776 Patent) and 5,573,830 (’830 Patent) is the same design depicted in its U.S. Trademark Registration No. 1,979,345 (’345 Registration):

4. TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 29, 58 USPQ2d 1001, 1002 (2001).

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Figure 1 ’776 and ’830 Patents

’345 Registration

The specifications in the utility patents explained that the asserted

designs provide many utilitarian advantages for toilet paper, including increased bulk, improved softness, and better roll quality and structure. The U.S. Court of Appeals for the Seventh Circuit concluded as a matter of law that the asserted designs are functional and therefore not entitled to trademark protection. The court placed significant weight on the admis-sions contained in the utility patents:

Georgia-Pacific, whether intentionally or not, patented their Quilted Diamond Design and claimed it to be functional. They must now live with that choice and can benefit only under the protection of a patent, not that of a trademark.5

RECONCILING PATENT AND TRADEMARK PROTECTION

TrafFix involved a utility patent, not a design patent. Should trademark rights and design patent rights be permitted to exist in the same subject matter?

PATENT v. TRADEMARK

Utility Patents

Utility patent clashes with trademark rights. The patent bargain. Utility patent is strong evidence of functionality (TrafFix case).

5. Georgia-Pacific Consumer Products LP v. Kimberly-Clark Corp., 647 F.3d 723, 731,

99 USPQ2d 1538, 1544 (7th Cir. 2011).

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Design Patents

Design patent does not clash with trademark rights. Design patent covers “ornamental” design. Design patent actually supports finding that patented design is orna-

mental and nonfunctional.

THE COCA-COLA BOTTLE

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THE MOGEN DAVID BOTTLE

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Extending Trademark Rights Beyond Patent Term

One can have trademark rights in the shape of a bottle that was cov-ered by a design patent.

However, there are rigorous evidentiary requirements for proving sec-ondary meaning in a design or product shape.

Difficult Burden

Bottle shape was not promoted separate from word mark Mogen David.

Without brand name, secondary meaning difficult to prove. Bottle shape itself did not signify a single producer. No secondary meaning found. Image Advertising

Create a conscious connection between mark and producer. “Look for” distinctive [shape or design]. “The [shape or design] is a trademark of [company name].” Product success alone insufficient to establish secondary meaning.

NON-TRADITIONAL TRADEMARKS

Subject matter of a trademark has expanded: Words and symbols (e.g., IBM, COKE) – immediately recog-

nized as an indication of source; Packaging; Product design itself; Sensory branding.

Smell (floral scent for sewing thread) Flavor (orange flavor for antidepressant tablets) Color (pink insulation from Owens-Corning) Sound (Intel jungle) Touch (velvet-textured covering on wine bottle) Shape (Coca-Cola bottle design)

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Brand Sense, by Martin Lindstrom

“Singapore Airlines introduced Stefan Floridian Waters, an aroma that has been specifically designed as part of the Singapore Airlines experience.”

“The patented aroma has since become a unique trademark of Singapore Airlines.”

“General Motors has introduced a special scent, a new-car smell, which is processed into their leather seats.”

“The scent – sort of sweet, sort of subliminal – was created in a lab, chosen by focus groups, and is now a part of every new Cadillac put on the road. It even has a name. It’s call Nuance.”

Sound Marks

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INTEL JINGLE:

Oliveiro v. Frito-Lay, Inc. 58 USPQ 2D 1767 (2d Cir. 2001)

“We can see no reason to doubt that … musical compositions serve as marks, protected as such by the Lanham Act.” Color Marks

Cannot be inherently distinctive. Can be protected based on showing of secondary meaning.

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OWENS-CORNING INSULATION

TIFFANY BLUE

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Scent Marks

TMEP Section 1202.13 “Scents that serve a utilitarian purpose, such as the scent of perfume, would be functional and not registrable.”

“When a scent is not functional, it may be registered. The amount of evidence to establish that a scent or fragrance functions as a mark is substantial.”

TTAB Holding:

Smell of floral blossoms can be registered for sewing thread and yarn.

Taste Marks

Can a flavor serve as a trademark for a pharmaceutical product? Applicant sought to register “an orange flavor” for “antidepressants

in quick-dissolving tablets.” TTAB refused registration. Industry practice of flavoring medications. Advertised “a pleasant orange taste.”

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Orange flavor did not make the drug more effective, but improved patient compliance.

Competitive advantage. Board held orange flavor functional. Because orange flavor is functional, not eligible for trademark

protection. Alternative Holding:

Like color, flavor can never be inherently distinctive; No evidence of secondary meaning.

PRODUCT DESIGNS

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REGISTERED TRADEMARK SHAPES

Perfume bottle with concave and convex sides

Award winning design

Unique in its field

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Bottle of liquid drain cleaner resembles drain pipe, is unique and creates a distinct commercial impression.

To enforce a non-traditional trademark, plaintiff must establish:

1. Nonfunctional. 2. Inherent distinctiveness or secondary meaning. 3. Likelihood of confusion or dilution. Dual aims of a plaintiff asserting rights in a non-traditional mark:

Establishing that the non-traditional trademark is not functional. Establishing that consumers associate the non-traditional trademark

with a single source. Party claiming non-traditional trademark rights should show:

No other companies use the symbol/device for the goods. The symbol/device is arbitrary in that it has no logical relationship

to the goods. The symbol/device adds to cost of manufacture. There are a multitude of other symbols/devices available for others

to use. The symbol/device serves no utilitarian purpose for the goods. Trademark Function

A distinctive symbol/device for the goods does not confer a “monop-oly” or act as a barrier to entry in the market.

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It serves the classic trademark function of indicating the origin of the goods, and thereby protects the public.6

CONSUMER SURVEYS

Secondary meaning. Likelihood of confusion. Secondary Meaning Survey

Plaintiff asserted rights in shape of Zebco Model 33 fishing reel. Defendant began selling similar-looking fishing reel. 80% of respondents identified unmarked Zebco Model 33 fishing reel

as coming from Zebco. Secondary meaning found. Likelihood-of-Confusion Survey

Respondents shown defendant’s fishing reel with the defendant’s name “Spinit” on the product.

Respondents were asked “who makes this fishing reel?” 60% of respondents identified Zebco, even though defendant’s name

was shown. Likelihood of confusion found. Survey Recap In secondary-meaning survey, Zebco name was removed.

isolates product shape In likelihood-of-confusion survey, defendant’s name was displayed.

replicates marketplace conditions

TRADEMARK FRAUD

In its celebrated Bose decision, the Federal Circuit clarified the standard governing fraud claims in trademark cases. To prove fraud, one must show that the accused party “knowingly makes a false, material representation with the intent to deceive the PTO.”7 It is not sufficient to show that the

6. In re Owens-Corning Fiberglas Corp., 774 F.2d 1116, 1123 (Fed. Cir. 1985). 7. In re Bose Corp., 580 F.3d 1240, 1245, 91 USPQ2d 1938, 1941 (Fed. Cir. 2009).

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accused party “should have known” that the statement in question is false. A knowing and deliberate misrepresentation must be present. “Subjective intent to deceive,” the court explained, “is an indispensable element in the analysis.”8

In the course of its opinion, the Federal Circuit disapproved of a series of cases in which the Board applied a “should have known” standard in finding fraud. Most of these cases arose in the context of fraud claims based on nonuse of a mark. For example, in the often-cited Medinol case,9 and several cases following Medinol, the Board found fraud where the appli-cant included goods or services in an amendment to allege use or a state-ment of use, when no use of the mark had been made for one or more of the listed goods or services.

In Medinol, an intent-to-use trademark application was filed for the mark NEUROVASX covering “medical devices, namely, neurological stents and catheters.” A statement of use was submitted, and a registra-tion issued for the goods as originally set forth in the application, i.e., “medical devices, namely, neurological stents and catheters.” In response to a petition for cancellation, registrant admitted in its answer that the mark had not been used on stents. This admission resulted in a claim of fraud based on nonuse. Regarding the issue of fraud, the Board stated:

The fraud alleged by petitioner is that respondent knowingly made a material representation to the USPTO in order to obtain registration of its trademark for the identified goods. There is no question that the statement of use would not have been accepted nor would registration have issued but for respondent’s misrepresentation, since the USPTO will not issue a registration covering goods upon which the mark has not been used.10

The Board granted summary judgment against the respondent on the basis of fraud, stating: “The undisputed facts in this case clearly establish that respondent knew or should have known at the time it submitted its state-ment of use that the mark was not in use on all of the goods.”11

8. In re Bose Corp., 580 F.3d 1240, 1246, 91 USPQ2d 1938, 1942 (Fed. Cir. 2009). 9. Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205 (TTAB 2003). 10. Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205, 1208 (TTAB 2003). 11. Medinol Ltd. v. Neuro Vasx, Inc., 67 USPQ2d 1205, 1209–10 (TTAB 2003). Sev-

eral cases decided after Medinol likewise employed a “should have known” stand-ard in finding fraud based on nonuse, including the following: Herbaceuticals Inc. v. Xel Herbaceuticals Inc., 86 USPQ2d 1572, 1578 (TTAB 2008) (finding fraud based on applicant’s failure to use the marks on many of the goods identified in the statements of use at issue); Standard Knitting Ltd. v. Toyota Jidosha Kabushiki Kaisha, 77 USPQ2d 1917, 1926 (TTAB 2006) (granting applicant’s counterclaim to cancel opposer’s pleaded registrations on the basis of fraud, in opposition pro-ceeding when the record showed that opposer made no use of its mark on most of

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In Bose, the Federal Circuit criticized the Board’s “should have known” standard as applied in Medinol, finding it to be inconsistent with “the established rule that intent to deceive is required to find fraud.”12 The court explained: “By equating ‘should have known’ of the falsity with a subjective intent, the Board erroneously lowered the fraud stand-ard to a simple negligence standard.”13

Drawing from its teachings in patent cases, in which deceptive intent is an element of an inequitable conduct claim, the court emphasized that fraud requires more than mere negligence:

We have previously stated that “[m]ere negligence is not sufficient to infer fraud or dishonesty.” Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 1582 (Fed. Cir. 1991). We even held that “a finding that particular conduct amounts to ‘gross negligence’ does not of itself justify an inference of intent to deceive.” Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc). The principle that the standard for finding intent to deceive is stricter than the standard for negligence or gross negligence, even though announced in patent inequitable conduct cases, applies with equal force to trade-mark fraud cases. After all, an allegation of fraud in a trademark case, as in any other case, should not be taken lightly.14

Given that direct evidence of deceptive intent rarely exists, the court recognized that such intent can be inferred from indirect and circumstan-tial evidence. To justify an inference of deceptive intent, however, the indirect or circumstantial evidence must be clear and convincing. The court emphasized the need for a solid evidentiary basis underlying fraud claims:

Of course, “because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. But such evi-dence must still be clear and convincing, and inferences drawn from lesser

the apparel products identified in the applications that matured into opposer’s registrations); J.E.M. International, Inc. v. Happy Rompers Creations Corp., 74 USPQ2d 1526, 1529 (TTAB 2005) (registration cancelled on the basis of fraud when the record showed that applicant made no use of its mark on over 100 of the approximately 150 clothing items identified in its statement of use). For a pre-Medinol case in which the “should have known” standard was applied to a fraud claim, see General Car & Truck Leasing Systems, Inc. v. General Rent-A-Car Inc., 17 USPQ2d 1398, 1400 (S.D. Fla. 1990), aff’g, General Rent-A-Car, Inc. v. General Leaseways, Inc., Cancellation No. 14,870 (TTAB May 2, 1988). In affirm-ing the Board’s finding of fraud in that case, the district court stated: “proof of specific intent to commit fraud is not required, rather, fraud occurs when an appli-cant or registrant makes a false material representation that the applicant or regis-trant knew or should have known was false.”

12. In re Bose Corp., 580 F.3d 1240, 1246, 91 USPQ2d 1938, 1942 (Fed. Cir. 2009). 13. In re Bose Corp., 580 F.3d 1240, 1244, 91 USPQ2d 1938, 1940 (Fed. Cir. 2009). 14. In re Bose Corp., 580 F.3d 1240, 1244-45, 91 USPQ2d 1938, 1940-41 (Fed. Cir.

2009).

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evidence cannot satisfy the deceptive intent requirement.” Star Scientific, Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008). When drawing an inference of intent, “the involved conduct, viewed in light of all the evidence . . . must indicate sufficient culpability to require a finding of intent to deceive.” Kingsdown, 863 F.2d at 876.15

Applying these principles to the facts of the case, the Federal Circuit reversed the Board’s decision, finding no substantial evidence that Bose intended to deceive the PTO.

A brief summary of the facts in Bose frames the specific issue that the court addressed. Bose filed an opposition against an application by Hexawave, Inc. (“Hexawave”) to register the mark HEXAWAVE, alleg-ing, among other things, likelihood of confusion with Bose’s previously used and registered trademarks, including WAVE. In response, Hexawave counterclaimed for cancellation of Bose’s WAVE registration, asserting that Bose committed fraud in its registration renewal application when it claimed use on all goods in the registration while knowing that it had stopped manufacturing and selling certain goods.

Specifically, on January 8, 2001, Bose filed a combined Section 8 affidavit of continued use and Section 9 renewal application (“Section 8/9 renewal”), which was signed by Bose’s general counsel, Mark E. Sullivan. In the Section 8/9 renewal, Bose stated that the WAVE mark was still in use in commerce on various goods, including audio tape recorders and players. The Board found, however, that (1) Bose stopped manufacturing and selling audio tape recorders and players sometime between 1996 and 1997, and (2) Mr. Sullivan knew that Bose discontinued those products when he signed the Section 8/9 renewal.16

Bose argued that the filing of the Section 8/9 renewal was proper, because owners of the goods in question would send their previously purchased goods to Bose for repair, and Bose would then ship the repaired goods back to the owners. Some of these goods were still under warranty. Mr. Sullivan testified that he believed the WAVE mark was used in commerce because “in the process of repairs, the product was being transported back to customers.”17 The Board disagreed, concluding that the repairing and shipping back did not constitute sufficient use of the mark to maintain a trademark registration for goods. Moreover, the Board found fraud on the basis of its conclusion that Bose could not rea-sonably have believed that the repair services constituted use of the mark

15. In re Bose Corp., 580 F.3d 1240, 1245, 91 USPQ2d 1938, 1941 (Fed. Cir. 2009). 16. Bose Corp. v. Hexawave Inc., 88 USPQ2d 1332, 1334-35 (TTAB 2007). 17. Bose Corp. v. Hexawave Inc., 88 USPQ2d 1332, 1335 (TTAB 2007).

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in connection with the goods.18 Based on its finding of fraud, the Board ordered the cancellation of Bose’s WAVE registration in its entirety.

On appeal, the Federal Circuit reversed. The court concluded that the statement in the renewal application that the WAVE mark was in use in commerce on all the goods, including audio tape recorders and players, was false. However, given that Mr. Sullivan testified under oath that he believed the statement about use of the mark was true at the time he signed the renewal application, and given that there was no evidence of deceptive intent, the court found no fraud. The court noted that the fraud determination does not turn on whether the affiant or declarant “reasona-bly believed” that the statement in question was true; the issue of reason-ableness “is not part of the analysis.”19 Absent intent to deceive, there is no fraud under the Lanham Act.20

Because Hexawave (the original appellee) did not appear, the PTO was granted leave to participate as the appellee. In that role, the PTO urged the court to hold that making a submission to the PTO with “reckless disregard” of its truth or falsity satisfies the intent to deceive requirement. Concluding that there was no basis for finding Mr. Sullivan’s conduct reckless, the court declined to resolve that issue.21 Thus, the court left for another day the question whether acting with reckless disregard for the truth may be treated as equivalent to intent to deceive for purposes of finding trademark fraud.

The court, however, did direct that “audio tape recorders and play-ers” be deleted from the registration since the evidence showed that the WAVE mark was no longer in use on those goods. The registration was restricted “to reflect commercial reality.”22 The court allowed the regis-tration to remain in force as to the goods that were still in use, noting: “[i]t is in the public interest to maintain registrations of technically good trademarks on the register so long as they are still in use.”23

The practical effect of the court’s holding in Bose is that, going for-ward, it will be more difficult for parties to establish fraud in Board pro-ceedings. Nevertheless, it remains important for applicants and registrants to

18. Bose Corp. v. Hexawave Inc., 88 USPQ2d 1332, 1338 (TTAB 2007). 19. In re Bose Corp., 580 F.3d 1240, 1246, 91 USPQ2d 1938, 1942 (Fed. Cir. 2009). 20. In re Bose Corp., 580 F.3d 1240, 1246, 91 USPQ2d 1938, 1942 (Fed. Cir. 2009). 21. In re Bose Corp., 580 F.3d 1240, 1246 n. 2, 91 USPQ2d 1938, 1941 n. 2 (Fed.

Cir. 2009). 22. In re Bose Corp., 580 F.3d 1240, 1247, 91 USPQ2d 1938, 1942 (Fed. Cir. 2009). 23. In re Bose Corp., 580 F.3d 1240, 1247, 91 USPQ2d 1938, 1942 (Fed. Cir. 2009) (quot-

ing Morehouse Mfg. Corp. v. J. Strickland & Co., 407 F.2d 881, 888, 160 USPQ 715, 720 (CCPA 1969)).

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take reasonable steps to ensure that all statements made in papers filed with the PTO are true and accurate. This includes statements about the use of marks made in applications and during the maintenance of registrations.

DILUTION LAW

Moseley v. V Secret Catalogue, Inc., 537 U.S. 418 (2003)

Likelihood of dilution insufficient Actual dilution must be shown Congress Responds:

Trademark Dilution Revision Act of 2006 Signed into law by President Bush on October 6, 2006 Expanding Dilution Protection

“Likely to cause dilution” of famous mark is enough. Famous marks may either be inherently distinctive or have acquired

secondary meaning. Dilution by blurring and by tarnishment covered. Scaling Back Dilution Protection

No “niche” fame - Famous marks must be “widely recognized by the general consuming public of the United States.”

Specific exclusions for:

Fair use;

News reporting;

Noncommercial use of famous marks. Trademark Trial and Appeal Board Cases Involving Dilution The Trademark Trial and Appeal Board (“TTAB”) is the administrative tribunal of the U.S. Patent and Trademark Office that decides trademark registration issues. The TTAB has been called upon in several cases to address dilution claims. The following discussion highlights some of the important TTAB decisions addressing dilution.

In one case, Supreme Lobster and Seafood Company, a wholesale seafood distributor, filed an intent-to-use application for registration of the mark THE OTHER RED MEAT for “fresh and frozen salmon.” National Pork Board (“NPB”) and National Pork Producers Council

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(“NPPC”) opposed the application on the basis of their prior rights in the mark THE OTHER WHITE MEAT used for various goods and services including “association services, namely, promoting the interests of mem-bers of the pork industry.” Opposers alleged that registration of applicant’s mark THE OTHER RED MEAT was likely to cause dilution of their mark THE OTHER WHITE MEAT under Section 43(c) of the Lanham Act, 15 U.S.C. § 1125(c).

Opposers had used the mark THE OTHER WHITE MEAT for many years to promote the consumption of pork and pork products throughout the United States. The aim of opposers’ campaign was to create positive con-sumer attitudes about pork amid growing concerns about the health risks of eating red meat.24 The mark THE OTHER WHITE MEAT signified that campaign, and was extensively used and supported with significant adver-tising and promotional expenditures.

Market research studies showed that the mark enjoyed a high degree of consumer and general public recognition. For example, semi-annual tracking surveys conducted through independent research firms demon-strated public awareness of the mark THE OTHER WHITE MEAT at or above eighty-five percent of consumers nationwide.25 In addition, in a study conducted in the year 2000 under the auspices of the School of Integrated Marketing & Communications at Northwestern University (the “Northwest-ern Study”), researchers found that the mark THE OTHER WHITE MEAT was the fifth most recognized advertising slogan in America among the general adult population at that time.26

Opposers also submitted a dilution survey in support of their claim. In the survey, respondents listened to a recording of applicant’s slogan THE OTHER RED MEAT, and then were asked the following questions: (1) “Thinking about the slogan you just heard [THE OTHER RED

MEAT], do any other advertising slogans or phrases come to mind?” [If answered “yes” continue to Q2]

(2) “What other advertising slogan or phrase comes to mind?” More than thirty-five percent of the survey respondents associated applicant’s slogan THE OTHER RED MEAT with opposers’ slogan THE

24. National Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479,

1487 (TTAB 2010). 25. National Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479,


1489 (TTAB 2010).

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OTHER WHITE MEAT or the pork products that they promote.27 In com-menting on the survey, the Board stated: “Opposers’ use of a well-designed telephone survey in this context appears to us totally appropriate.”28

Based on all the evidence, the Board ruled in favor of opposers on their dilution claim, making the following findings: First, the Board found that the evidence demonstrated that THE OTHER WHITE MEAT is famous among a broad spectrum of the general consuming public.29 The Board noted that opposers spent in the neighborhood of $25 million every year for almost twenty years on demand enhancement advertising and market-ing prior to the filing of the involved application. Additionally, the record showed an extensive amount of third-party advertising, in-store retail promotions, and unsolicited, national news media coverage featuring the mark.30

Second, the Board found that the majority of the evidence about the renown of opposers’ mark predated the February 4, 2004, filing date of the opposed application, and that opposers’ mark became famous prior to the filing date.31

Lastly, the Board concluded that applicant’s mark was likely to blur the distinctiveness of opposers’ famous mark. In support of this finding, the Board noted that opposers’ mark is inherently distinctive, that opposers’ use of the mark had been “virtually exclusive,” and that the mark had attained a high degree of recognition in the marketplace, becoming “part of the fabric of popular culture in the United States.”32 The Board also found that the parties’ marks are “highly similar,” and that opposers’ dilu-tion survey highlighted the association between the marks, showing that more than thirty-five percent of the survey respondents associated appli-cant’s THE OTHER RED MEAT mark with opposers’ THE OTHER WHITE MEAT mark (or with the pork being promoted by the mark).33

27. National Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479,





1496–97 (TTAB 2010). 32. National Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479,

1497-98 (TTAB 2010). 33. National Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479,

1497 (TTAB 2010).

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As another example, the Board found that applicants’ mark CRACK-BERRY was likely to dilute the distinctiveness of opposer’s mark BLACK-BERRY used for handheld devices and related goods. As a threshold matter, the Board found that opposer’s BLACKBERRY mark qualified for dilution protection and “should be ranked among the most famous and valuable trademarks in the world.”34 The Board then found that there was “a high degree of similarity” between the applied-for mark CRACK-BERRY and opposer’s mark BLACKBERRY, and that BLACKBERRY is inherently distinctive and enjoys a high degree of recognition. Further, the evidence showed that, before applicants filed their applications for CRACKBERRY, the public at large had already been using the term “Crackberry” to refer to the view that users of BLACKBERRY products were addicted to the devices. Thus, in adopting the mark CRACKBERRY, applicants intended to create, and did create, an association with opposer’s famous mark BLACKBERRY.35

In another illustrative case, applicants Peter and Patricia Maher sought to register the mark JUST JESU IT for various clothing items. Nike, Inc. opposed the application, alleging that the proposed registration was likely to cause dilution of its mark JUST DO IT previously used and registered for shoes, clothing items, and related goods.

Nike had used the JUST DO IT mark extensively since 1989, achiev-ing widespread popularity and recognition. Nike had advertized JUST DO IT on a massive scale, including in network and cable television com-mercials and print advertising. In addition, Nike had significant sales of products bearing the mark, including shoes, apparel, and related items.36

In concluding that dilution was likely, the Board first found that the JUST DO IT mark is famous and became famous prior to August 5, 2008, the filing date of applicant’s intent-to-use application. The Board noted that JUST DO IT is inherently distinctive, and that Nike has vigilantly enforced its rights in the mark. The Board also determined that there was an association between the parties’ marks that would impair the distinctive-ness of opposer’s famous JUST DO IT mark. The Board noted that appli-cants’ mark JUST JESU IT is sufficiently similar to opposer’ mark JUST

34. Research in Motion Ltd. v. Defining Presence Mktg. Group, Inc., 102 USPQ2d

1187, 1197 (TTAB 2012). 35. Research in Motion Ltd. v. Defining Presence Mktg. Group, Inc., 102 USPQ2d

1187, 1198-99 (TTAB 2012). 36. Nike, Inc. v. Maher, __ USPQ2d __, Opposition No. 91188789 (TTAB Aug. 9, 2011).

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DO IT to “trigger consumers to conjure up” opposer’s famous mark.37 The Board also found that, upon encountering applicants’ mark, “consumers will be immediately reminded of opposer’s JUST DO IT mark and associ-ate applicants’ mark with opposer’s mark.”38

In another notable dilution case, the Board held that opposer’s mark MOTOWN, used in connection with musical recordings and musical entertainment, was famous and likely to be diluted by applicant’s mark MOTOWN METAL for “toys, games and playthings, namely, toy vehi-cles and accessories therefor.” The Board noted that opposer’s MOTOWN mark was inherently distinctive and enjoyed substantial recognition in the marketplace based on almost 50 years of use, extensive sales, and wide-spread media attention. 39 Applicant’s mark MOTOWN METAL was found to be substantially similar to opposer’s mark MOTOWN, such that “consumers encountering applicant’s mark will be immediately reminded of opposer’s famous MOTOWN mark and associate the two marks.”40

A contrary result was reached in a case involving the ROLEX trademark. Although ROLEX used for timepieces was found to be famous for dilution purposes, applicant’s proposed mark ROLL-X for medical and dental X-ray tables was not likely to dilute or “blur” the distinctive-ness of opposer’s mark. The Board found that applicant had no intent to create an association with opposer’s mark, and that the parties’ respective marks were different in appearance, meaning, and commercial impression.41

37. Nike, Inc. v. Maher, __ USPQ2d __, Opposition No. 91188789 (TTAB Aug. 9, 2011)

(quoting National Pork Board v. Supreme Lobster and Seafood Co., 96 USPQ2d 1479, 1497 (TTAB 2010)).

38. Nike, Inc. v. Maher, __ USPQ2d __, Opposition No. 91188789 (TTAB Aug. 9, 2011).

39. UMG Recordings, Inc. v. Mattel, Inc., __ USPQ2d __, Opposition No. 91176791 (TTAB Sept. 30, 2011).

40. UMG Recordings, Inc. v. Mattel, Inc., __ USPQ2d __, Opposition No. 91176791 (TTAB Sept. 30, 2011).

41. Rolex Watch U.S.A. Inc. v. AFP Imaging Corp., 101 USPQ2d 1188, 1194-97 (TTAB 2011).

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