CompetingI

Group 4 Presentation: 

Group 4 Presentation Competing Marks: Incontestability, Good Faith Use, and Problems of Priority Group 4: Ann Katsetos Dan Haskell Jack Keleher

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TABLE OF CONTENTS: Part I Geographic Limitations State Trademark Registration Concurrent Use Part II Scandalous Marks Part III Incontestability Part IV Problems of Priority Intent to Use Filing Note: Certain paragraphs have been highlighted with a . We used the symbol to highlight those paragraphs we considered particularly informative. The Group 4 Staff

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Part I. Geographic Limitations State Trademark Registration Concurrent Use

TRADEMARKS: GEOGRAPHIC LIMITATIONS: General Principles: 

TRADEMARKS: GEOGRAPHIC LIMITATIONS: General Principles Common-law rights are recognized as property rights in the mark and are based on prior use. Common-law rights exist independently of statutory provisions for registration. Anyone appropriating and using a TM in commerce has, by virtue of that appropriation and use, a common-law right in the mark. Using a mark in commerce means to use the mark in good faith in the ordinary course of trade. Activities like soliciting and accepting sales orders or other conduct integral to the sales process may be sufficient Common-law rights may accrue through purely intrastate use, unlike rights protectable under federal law that require interstate use. Common-law rights include the right to prevent subsequent use by another of the same or similar mark if the subsequent use is likely to cause confusion as to the origin of the business or service.

General Principles cont.: 

General Principles cont. Common-law rights may only be enforced to the extent people are made aware of it and placed on notice. The common-law mark is usually only enforceable in those areas in which the mark has been used and into which use of the mark is likely to expand. Senior user’s common-law rights may also extend into uses in related products. This means that the owner of a common-law TM may use its mark on related goods and services. A junior users use of the same or similar mark on related items may be actionable by the senior. The “related use” doctrine gives TM owners protection against the use of its mark on any product or service that would reasonably be thought by the buying public to come from the same source or thought to be associated with, connected with, or sponsored by the owner.

Hanover Star Milling Co. v. Metcalf 240 U.S. 403: 

“Since it is the trade and not the mark that is to be protected, a TM acknowledges no territorial boundaries . . . but extends to every market where the traders goods have become known.”  Junior user adopts same mark in good faith and without notice of plaintiff’s prior use on the same product offered for sale in different areas. Plaintiff sues for TM infringement seeking to prohibit defendant from using the mark anywhere in the U.S. Hanover Star Milling Co. v. Metcalf 240 U.S. 403 Defenses for junior user: done in good faith (not done with bad faith, i.e., no appropriation or palming-off) use is in a geographically remote area senior user abandoned or relinquished rights due to diminishing trade area “But the mark, of itself, cannot travel to markets where there is no article to wear the badge and no trader to offer the article.” (no protection for same goods in different markets or different goods in same market)

STATE TRADEMARK REGISTRATION : 

STATE TRADEMARK REGISTRATION Most states have enacted statutory schemes permitting state TM registration. The rights afforded by state registration stop at a state’s borders. State registration is adequate only if the mark is confined to intrastate commerce.   Rights granted by state registration are analogous to common-law rights and are determined by the geographic areas in which the mark is actually used in commerce. The Lanham Act effects a limited preemption of state law, resolving the conflict in favor of the federal registrant’s right: While priority of use establishes common-law rights in a mark, the rights are geographically constrained and restricted to the locality where the mark is used and including a “zone of natural expansion” Factors for finding the zone of expansion include: previous business activity; previous expansion or lack thereof; dominance in contiguous areas; presently planned expansion; possible market penetration based on volume, growth, customer base, and advertising. However advertising alone generally can not establish common-law rights. Common-law rights may also accrue within the mark’s “reputation zones” or areas where the marks reputation precedes it even in the absence of advertising. A senior user of a mark is therefore entitled to exclusive use of the mark in those areas where it establishes a legally sufficient market penetration plus all areas encompassed by its natural zone of expansion.

Burger King of Florida, Inc. v. Hoots, 403 F.2d 904: 

Burger King of Florida, Inc. v. Hoots, 403 F.2d 904 Congress intended the Lanham Act to afford nation-wide protection to federally-registered marks and, once afforded, no person can acquire additional rights superior to those obtained by the federal registrant. (provides rights against competitors) Defendant (state registrant) appeals lower courts ruling restraining their use of name “Burger King” outside Mattoon, IL and restraining plaintiffs from using their TM in the market area of Mattoon, IL Owners of federally registered TM have the “incontestable” right to use the mark in commerce except to the extent that such use infringes valid right the defendants have acquired by their continuous use of the same mark prior to the plaintiffs’ federal registration. Federal certificate of registration is “conclusive evidence” of exclusive right to use mark. Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358 Plaintiff may later, with a proper showing of intent to use the mark in the defendant’s area, be entitled to enjoin the defendant’s use of the mark. Plaintiff, a federal registrant, seeks to enjoin defendant from using same mark even though plaintiff has not exploited the mark in defendants area for 30 years Plaintiff’s failure to license its TM in the defendants trade area does not work an abandonment of its rights in that area. Abandonment for non-use applies only if the registrant fails to use the mark in commerce anywhere in the United States.

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CONCURRENT USE -         After an application for registration on the Principal Register has passed initial scrutiny, the mark is published in the Official Gazette (published by the PTO for the use of the public). Any person, including a senior user relying on common-law rights, who believes he may be damaged by registration of the mark may commence opposition proceedings. Typically the first step is a cease and desist letter. This preserves the senior users entitlement to monetary damages. An alternative remedy for a senior user may be to seek a concurrent-use registration. This allows a senior user and a junior user/prior registrant to use a mark concurrently in different prescribed geographic areas, as determined by the Commissioner with one exception. A senior user who is also the first federal registrant may preempt all subsequent junior users once the senior expands into the remote trade area -         If the junior user/prior registrant resists a consensual concurrent registration, the senior may proceed with a concurrent-use application. The applicant for a concurrent-use registration has the burden of proving entitlement to it. The ultimate use of concurrent use proceedings is to arrive at an equitable resolution of the conflict between federal recognition of the rights of the two users of a mark in different territories, while at the same time insuring against a likelihood of confusion of buyers when two sellers use the same mark -         As a general rule, a prior user of a mark is entitled to a registration covering the entire United States limited only to the extent that the subsequent user can establish that no likelihood of confusion exists and that it has concurrent rights in its actual area of use, plus its area of natural expansion subject to three exceptions. These are (1) where the parties agree to leave an area open; (2)where it is the junior user who obtains a federal nationwide registration; and (3) if the only way to avoid likelihood of confusion from concurrent use is to leave parts of the united States granted to no one as respects federal registration.

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Application of Beatrice Foods Co., 429 F.2d 466 -         Beatrice (prior user) adopted a mark for margarine and filed an opposition to Fairways subsequent application for registration of the same mark for dairy products. -         Beatrice appeals from the decision of the board refusing to permit its registration to cover that portion of the United States lying outside both the territory of Fairway and the area where Beatrice has made actual use of the mark prior to filing its application. -         The language of the Lanham Act sets out two requirements for the issuance of concurrent registration: entitlement to the mark due to lawful use in commerce prior to the earliest of the filing dates of pending applications and it must be determined that confusion is not likely. Concurrent federal registrations do not create any new right to use the mark or to assert rights based on ownership. Rights must be based on actual use and can be enforced only in areas of existing business influence (i.e., current use area or probability of expansion). -         The starting point for any determination as to the extent the registrations are to be territorially restricted should be the conclusion that the prior user is prima facie entitled to a registration covering the entire united States . . . and that his rights should only be limited to the extent that any subsequent user, who can establish existence of prior rights, can also prove a likelihood of confusion, mistake, or deception.

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Part II. SCANDALOUS MARKS

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Plain Definition of Scandalous   ·        The dictionary meaning of "scandalous" is "shocking to one's sense of decency of propriety" and gives "offense to the conscience or moral feelings." Federal Statutes on Scandalous Marks   ·        "Immoral" and "scandalous" marks were prohibited by federal law since 1905. See Act of Feb. 20, 1905, ch. 592, §§ 1-3, 33 Stat. 724 (1905) (previous version at 15 U.S.C. §§ 81-109) (repealed 1946).   ·   The Lanham Act subsequently barred immoral and scandalous trademarks. See 15 U.S.C. § 1502(a). o   What does the Lanham Act seek to accomplish with these limitations? Policy of conserving federal government time, services and money. Historical Context: Past Courts Interpreted “Scandalous” Conservatively   ·        Rejected QUEEN MARY for the name of a line of women's underwear. Ex parte Martha Maid Mfg. Co., 37 U.S.P.Q. 156 (1938). o   No sexual reference present.   ·   Rejected MADONNA for the name of wine. In re Riverbank Canning Co., 95 F.2d 327, 37 U.S.P.Q. 268 (1938). o  Christians would associate the Virgin Mary with the term.   ·  Rejected BUBBY TRAP as a mark for women’s underwear. In re Runsdorf, 171 U.S.P.Q. 443 (1971). o Too vulgar.   In contemporary society, these marks would likely be considered humorous, suggestive or innocuous, rather than scandalous.

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Modern Courts Consider Other Factors · The entire context of the mark’s use. O Examples of non-scandalous marks: BIG PECKER BRAND – name of T-shirt line – used with an image of a bird, despite being slang term for male genitals. In re Hershey, 6 U.S.P.Q.2d 1470 (1988). BADASS – a word that had a double entendre yet had an innocent explanation, i.e. it was an acronym. In re Leo Quan Inc., 200 U.S.P.Q. 370 (1978). · The context of modern moral values, conduct and attitudes of a substantial composite of the general public. o   o Examples of non-scandalous marks: §   WEEK-END SEX – name for an adult magazine -- uses the word “sex.” In re Madsen, 180 U.S.P.Q. 335 (1973). §         Cartoon of man staring at his private parts for the LEGEND LENGTHENER brand male genitals enlarger. Key fact -- man’s private parts were hidden. In re Thomas Laboratories, Inc., 189 U.S.P.Q. 50 (1975).   · Since the standards for determining whether a mark is scandalous are vague and highly subjective, any doubts should be resolved in favor of accepting the mark. In re In Over Our Heads, Inc., 16 U.S.P.Q.2d 1653 (1990).

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Trademarks that are NOT Scandalous A mark that is playful, humorous or suggestive will likely not be denied registration. LIBIDO -- name for perfume. Ex parte Parfum L'Orle, Inc., 93 USPQ 481 (1952). · Plain meaning of "libido" is "sexual desire." · Most perfumes use sexually suggestive names. A logo with a bad frog making a suggestive gesture – In re Bad Frog Brewery, Inc. 1999 WL 149819 (1999). ·  A realistic-looking frog is “giving the finger," not a humanized frog. BLACK TAIL -- name of African-American adult entertainment magazine -- In re Mavety Media Group Ltd., 33 F.3d 1367 (Fed. Cir. 1994). ·   Examiner denied registration. o  Relied on dictionary reference defining "tail" as "SEXUAL INTERCOURSE--usu. considered vulgar." ·  Mavety argued for the Board to reconsider the Examiner’s conclusion since the words “black tail” had a non-sexual primary meaning, despite sexual innuendo: o The primary meaning of "tail" was “the rear end.” o Black Tail also means tuxedo. ·  The Board affirmed the Examiner. · Held that the Board erred in concluding that the mark BLACK TAIL comprises scandalous matter. Vacated and remanded. o  The court stated that the record did not support the Board’s belief that "[r]ather than as a 'playful' reference to the buttocks of an African-American woman, the mark would be viewed as a purely vulgar, sexual reference to African-American women as sexual objects".

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Trademarks that are Scandalous A mark that is blatantly sexual, vulgar or profane will be denied registration as scandalous.   BULLSHIT – name of bags, belts and wallets – In re Tinseltown, Inc., 212 U.S.P.Q. 863 (1981). Word is not sexual, but profane. Shirt company’s logo of defecating dog – Greyhound Corp. v. Both Worlds Inc., 6 U.S.P.Q.2d 1635 (1988). ·  Feces as part of a mark is vulgar. Dick Heads’ bar and restaurant services mark with graphic logo -- In re Wilcher Corp., 40 U.S.P.Q.2d 1929 (1996). ·   The Examiner refused registration of a bar/restaurant’s logo comprised of the words “Dick Heads’”and a person's head in the shape of male genitals. Specifically, the scrotum served as the chin, the penis as the nose, and the pubic hair as hair on the head. ·  Richard Heads argued that he was using the possessive form of his nickname. He also argued that the caricatured face design was “cute” and “endearing” with glasses. ·  The court denied registration of the mark by stating: o “There can be no doubt that this design has vulgar significance, and that because of its inclusion in the mark, it is the vulgar, anatomical significance of the mark which first strikes the viewer and dominates the commercial impression created by the mark as a whole.”

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Part III. INCONTESTABILITY

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An incontestable registration becomes “conclusive” evidence of the registrant’s “exclusive “ right to use the mark subject only to defenses: *Fraud/Abandonment/Mark becomes generic Incontestable (adj.)— Impossible to question because obviously true. Incontestability Lanham Act—Once a mark is used for 5 years subsequent to registration, “the right of the registrant to use such registered mark shall be incontestable.” Park ‘n Fly v. Dollar Park and Fly, Inc. Petitioner received a service mark for Park ‘n Fly and later filed and received incontestable status for mark. Respondent challenged infringement action, seeking cancellation because mark was merely descriptive. O’Connor, J.: “a sound public policy requires that trademarks should receive nationally the greatest protection that can be given them.” Incontestable Marks cannot be challenged as “merely descriptive” because that would not lend any additional protection to having an incontestable mark.

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Part IV. Priority of Use and Intent to Use Filing

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Problems of Priority Blue Bell v. Farah Mfg. Dispute over timing of use of the “Time Out” logo for a clothing line—how do you determine who came first? Key points: * A TM is a symbol to identify goods and distinguish them from others. * Ownership requires appropriation and use in trade. * Ownership accrues when goods are placed on the market. What is needed to establish placement on the market: Note: This is about protection of goodwill and reputation. You have to HAVE it before it is worthy of protection. * Sales to customers (not dispositive) * Public Distribution

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United States District Court for the Southern District of New York held that until an intent-to use ("ITU") application matures to registration, the applicant may not rely on its filing date either to obtain a preliminary injunction or to defend against a motion for a preliminary injunction sought by a third party, whose use is junior to the applicant's ITU filing date Intent to Use WarnerVision Entertainment Inc. v. Empire of Carolina Inc., The Trademark Trial and Appeal Board permits an ITU applicant to employ its filing date defensively in opposition proceedings. the Court declined to apply the TTAB's rule to infringement actions. In fact, the Court noted that the Board, in adopting its rule, specifically differentiated between civil suits and oppositions. In contrast to civil suits, the ITU legislation expressly permits the Board to defer the entry of a final judgment in an opposition proceeding pending issuance of an ITU pending application to registration. Question is about granting an injunction AGAINST someone already holding ITU privilege. This goes against the purpose of ITU.