Tag Archives: trademark

Verizon obtains damages, injunction against regsitrar under ACPA

[This is a guest post by contributor Brian Beckham]

Plaintiff Verizon California, Inc. (Verizon) recently obtained a default judgment in the U.S. District Court for the Northern District of California, San Jose Division, in its favor against Defendant, the registrar OnlineNIC, Inc. (press release).

Despite repeated attempts, Verizon was not able to serve notice on OnlineNIC; the court ultimately approved Verizon’s application to serve process with the California Secretary of State. OnlineNIC was alleged to have engaged in the bad faith registration of 663 identical or confusingly similar domain names incorporating one of Verizon’s family of marks (e.g., <bestverizon.net>, <myprepaidverizon.com>, <verizonflios.com>, <vzwactivate.com>, etc.) inter alia, in violation of the ACPA. Verizon’s unchallenged, well-pleaded allegations were accepted by the court as true; OnlineNIC’s liability was thus established.

In addition to OnlineNIC’s default, significantly, the court noted that OnlineNIC had refused to alter its behavior (presumably after a cease & desist letter) and had purposefully attempted to avoid detection (e.g., by providing false contact information). However, given the default, the court was reluctant to impose the full statutory damages provided for under the ACPA ($100,000 per infringement), but imposed damages of $50,000 per violation (totaling $33.15 million). It remains to be seen whether Verizon will successfully collect, nonetheless, Verizon obtained a transfer order in its favor for all of the 663 infringing domain names. OnlineNIC (including any related entity) was further enjoined from directly or indirectly (i) registering, trafficking in or using any domain name that is identical or confusingly similar to the Verizon marks and (ii) assisting, aiding or abetting any other person or business entity in engaging in or performing and of the said activities.

This injunction seems to leaves open the question of whether the seemingly common registrar practice of actively suggesting alternate domain names available for registration (e.g., those that add alphanumerical strings, e.g., <new____4u.com>, <buy____.net>, <your____.org>, <my____pro.com>, <best____.com>, etc.) would be covered by the “assisting, aiding or abetting” language in the injunction.

Case is: 2008 U.S. Dist. LEXIS 104516

Disclaimer in trademark registration sinks UDRP action

Ideation Unlimited, Inc. v. Dan Myers, Case No. D2008-1441 (WIPO November 12, 2008).

A trademark owner who notices that someone else has registered a domain name incorporating the owner’s mark can file an arbitration action under the Uniform Domain Name Dispute Resolution Policy (UDRP for short). This often serves as a quicker and less expensive alternative to pursuing the cybersquatter in court.

To be successful under the UDRP, the “Complainant” has to show all of the following three elements:

(a) the registered domain name is identical or confusingly similar to a trade mark or service mark in which the Complainant has rights; and

(b) the “Respondent” has no rights or legitimate interests in respect of the disputed domain name; and

(c) the disputed domain name has been registered and is being used in bad faith.

Ideation Unlimited, Inc. uses a logo with the word PRESCRIPTION COSMETICS. It has a United States and United Kingdom registrations for this logo. But in the U.S. registration the term “prescription cosmetics” is disclaimed. (Trademark applicants are required to “disclaim” any exclusive rights to use terms within their marks that are generic or merely describe the products.”) In the U.K. registration the word “prescription” is disclaimed.

The panel concluded that “[i]f the Complainant has willingly disclaimed any trade mark rights in the entire term ‘Prescription Cosmetics’, it cannot and should not claim to have trade mark rights in that term by virtue of its . . . registration.”

But what about common law rights, you ask? After all, one can support a UDRP action even without a trademark registration. The panel noted as follows:

Of course, it is not necessary for the Complainant to establish registered trade mark rights – it would be sufficient for the purposes of these proceedings under the Policy for the Complainant to demonstrate common law trade mark rights in the term PRESCRIPTION COSMETICS. However in the Complaint, the Complainant relies heavily on the three device marks, and provides little evidence of common law rights or reputation.

The decision underscores the importance of keeping trademark registrations up to date. Presumably, the mark in question here could have acquired distinctiveness by now (it’s been in use since the mid-70′s) so the disclaimer probably isn’t necessary anymore. And the decision also shows the importance of submitting evidence (at least a declaration) showing what common law or unregistered rights the complainant has.

Results of Internet searches helpful in earthworm trademark case

Cascade Mfg. Sales, Inc. v. Providnet Co. Trust, 2008 WL 4889716 (W.D. Wash. November 12, 2008)

Cascade Manufacturing makes and sells composting bins in which earthworms “enhance and accelerate the composting process.” Cascade owns a federal trademark registration for WORM FACTORY. It sued its competitor Providnet Co. for trademark infringement over Providnet’s use of the mark GUSANITO WORM FACTORY. Cascade moved for a preliminary injunction against Providnet’s use of its “worm factory” mark. The court granted the motion.

Worms enhance and accelerate composting

Worms enhance and accelerate composting

One of Providnet’s arguments against the injunction was that “worm factory” is a generic term for the types of products being sold under the respective marks. To refute this contention, Cascade introduced evidence of Internet searches supporting its claim that the products at issue are referred to as “worm bins,” and that “worm factory” refers to Cascade’s particular product. The court found this evidence to be instructive.

Earthworm picture courtesy Flickr user Rick Harris under this Creative Commons license. Redistributed here under the same license.

He was a trademark owner, she was a competitor, he would take her to court over keyword advertising.

In a lawsuit filed recently, Plaintiff Rosetta Stone Ltd. claimed that Defendants Rocket Languages Ltd. et al. infringed Rosetta Stone’s trademarks and engaged in unfair competition. The Plaintiff provides foreign language educational software under the registered mark: Rosetta Stone, and is probably most famous for their clever “farmboy supermodel” ads.

Rosetta Stone claims that the Defendants and their affiliates (competitors of Rosetta Stone) use the Rosetta Stone mark as a keyword in Google and Yahoo! targeted / keyword advertising. Thus, Rosetta Stone contends that “when a consumer [searches for a variation of] ‘ROSETTA STONE’, he is confronted with a list of advertisements from Defendants that either directly offer Rocket Languages products or purport to offer information and reviews of various foreign language software products [, and that the Rosetta Stone mark appears] in the header and text of the resulting sponsored links”. Rosetta Stone also alleges that the Defendants have tarnished the Rosetta Stone mark by running advertisements which state, inter alia, “Rosetta Spanish A Scam?” or “Read These Reviews Before Buying Rosetta Spanish!” Rosetta Stone also alleges that “comparison reviews” of the Defendants are biased and fail to disclose their true source. Finally, Rosetta Stone contends that several hyperlinks on affiliate sites appear to link users with Rosetta Stone, but in fact, link users to Defendants products.

Rosetta Stone alleges that if these actions are permitted to continue, significant monetary and trademark goodwill damages will occur. Rosetta Stone is asking the Court to enjoin the Defendants, inter alia, from using the Rosetta Stone mark in its advertising. Additionally, Rosetta Stone seeks a Court Order that the Defendants remove the Rosetta Stone mark from their keyword advertising.

Given several recent rulings, blogged here, the Court may enter an injunction in favor of Rosetta Stone, though this case may present some interesting comparative advertising questions.

Company’s own website provided evidence of claimed trademark’s genericness

Boston Duck Tours LP v. Super Duck Tours LLC, —F.3d—, 2008 WL 2444480 (1st Cir. June 18, 2008)

Boston Duck Tours has been providing tours of Boston in amphibian vehicles (called “ducks” but spelled DUKWs) since 1993. After a competitor moved into town in 2007 calling itself Super Duck Tours, Boston Duck Tours filed suit for trademark infringement. The district court enjoined Super Duck from using its mark and logo. Super Duck sought review with the First Circuit Court of Appeals. On appeal, the court reversed.

It held that the lower court erred in finding that the term “duck tour” was not a generic term outside the protection of trademark law. In reaching this decision, the appellate court reviewed evidence of Boston Duck’s own use of the term in a generic sense, including on its website. For example, a sentence read, “[c]ontrary to local belief, the unique idea of a [d]uck [t]our did not originate in Boston.”

The case should serve as a warning to brand owners to ensure (apart from not selecting a generic term in the first place) that they use their marks in a manner that avoids “genericide”.

No initial interest confusion in metatag and sponsored listing case

Designer Skin, LLC v. S & L Vitamins, Inc., No. 05-3699, 2008 WL 2116646 (D. Ariz. May 20, 2008)

It’s always a bit nerve wracking to write about decisions when I know that counsel of record is probably going to be reading the post. That’s the situation with the recent Designer Skin v. S & L Vitamins case. Law blogger Ron Coleman (whom I consider a friend though we’ve never met) is defense counsel in the case, and he has been a longtime supporter of Internet Cases with encouragement back when I started in 2005, and with frequent links to here from his blog Likelihood of Confusion.

Ron’s good reputation is in apparent proportion to his lawyering skills, as his client S & L Vitamins was largely victorious in summary judgment proceedings in a trademark infringement matter before the U.S. District Court in Arizona. The case exemplifies a modern issue concerning the use of trademarks on the Internet.

Plaintiff Designer Skin sells indoor tanning products. Designer Skin is pretty selective about who it allows to resell its goods. Defendant S & L Vitamins – a web-based reseller – is not on Designer Skin’s list of permitted resellers. But S & L sells the products anyway. And it gets traffic to its website in part by using Designer Skin’s trademark in metatags, in page HTML, and as a keyword to trigger sponsored search results.

Designer Skin sued S & L asserting a number of causes of action, including trademark infringement. The parties cross moved for summary judgment. One main issue was whether S & L’s conduct resulted in “initial interest confusion” a la Brookfield Comm. Inc. v. West Coast Entertainment Group, 174 F.3d 1036 (9th Cir. 1999). The court ruled in favor of S & L, holding that Designer Skin’s arguments for initial interest confusion failed as a matter of law.

The court ascertained that Designer Skin was arguing initial interest confusion based on (1) S & L’s use of Designer Skin’s marks in metatags, HTML and as keywords, (2) higher placed search results (presumably because of the metatags and use of the mark in HTML), and (3) the appearance of Designer Skin’s marks on S & L’s web pages.

The first argument – said the court – misstated the law. The mere fact that S & L used the marks in this way was not enough for initial interest confusion. Missing was the notion of “bait and switch”. The court emphasized that “[d]eception . . . is essential to a finding of initial interest confusion.” When web users clicked on links to S & L’s pages which indicated Designer Skin products were being sold, they were taken to pages which, not deceivingly, sold Designer Skin products.

The second argument for initial interest confusion failed essentially because it wasn’t plausible. Even if Designer Skin had presented evidence (which the court found it hadn’t) that S & L was showing up higher in search results for “Designer Skin,” only “the naive few” would be deceived. And fooling any less than an appreciable number of users would not be enough for the claim to survive.

As for the third argument, the court found it impossible for initial interest confusion to arise based on what appeared on the site. A searcher could not be tricked into initially visiting a site by the look of the site itself – by that time he or she would already be there.

In short, the court held that because there was no deception on the part of S & L, there could be no initial interest confusion. S & L was using Designer Skin’s marks to truthfully inform searchers what they could find at the S & L site – authentic Designer Skin products.

Former band members’ use of service mark is not so Chic

Rogers v. Wright, No. 04-1149, 2008 WL 857761 (S.D.N.Y. March 31, 2008)

The U.S. District Court for the Southern District of New York has issued a permanent injunction restricting the use of the service mark CHIC in connection with musical performances by two former members of the musical group of the same name.

Plaintiff Rogers (founder of the music group Chic) claimed that Defendants Wright and Martin (former Chic singers) infringed his rights in the service mark CHIC for music and vocal entertainment services. Rogers formed the group in 1977 and obtained service mark registrations for the band name in 1982 and 2004.

Chic

Wright and Martin, who previously performed on Chic albums and in live televised performances, had been performing in the U.S. and abroad since 2003. At various times, and without permission, they operated a Web site at www.ladiesofchic.com, and billed themselves as “First Ladies of Chic”, “Chic”, “The Original Ladies of Chic”, “Chic: Live!”, and “Les Chic”. They were billed by one venue as “original artists singing all the original hits.”

The court first found that Rogers had valid rights in the CHIC mark — regardless of whether those rights arose from the 1982 or 2004 registrations or from common law rights. The court then found a likelihood of confusion between Rogers’s mark and Wright and Martin’s use of the same using the 8-factor Polaroid test.

Specifically, the court found: (1) the CHIC mark was “at least moderately strong” in that it had created a tendency in the minds of consumers to associate it with Rogers’s band; (2) the defendants’ uses of the Chic mark (as noted above) were “sufficiently similar” to cause confusion; (3) the parties competed directly in the same market; (4) an analysis under “bridging-the-gap” was not required because of the third factor; (5) there was some evidence of actual confusion; (6) the defendants intended to take advantage of the plaintiff’s reputation and good will in adopting their various uses of his mark; (7) there was little evidence of the quality of defendant’s product; and, (8) similarly, there was little evidence of the sophistication of the relevant consumer group, i.e., concert attendees or promoters. Taking all of these factors together, the court found “little difficulty” in finding Defendants’ use of Plaintiff’s mark was likely to cause confusion.

The court was not persuaded by the defendants’ attempted fair use defense. The defendants had certainly used CHIC as a mark (and not, for example, mere comparative advertising or other descriptive purposes – see, e.g., Playboy Enters., Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002). Moreover, the defendants’ promotional materials used the CHIC mark in a prominent manner. The court was similarly unpersuaded by the defendant’s argument that the Lanham Act did not apply to acts outside of the U.S.

Apple vs. the Big Apple charity over apple-shaped logos

Apple, Inc. is seeing red over New York City’s attempts to register a trademark for green-friendly services, and the dispute challenges one of Apple’s trademark registrations for its ubiquitous logo.

Apple comparison

Apple has filed an Opposition (No. 91/181,984) with the United States Patent and Trademark Office’s Trademark Trial and Appeal Board against NYC & Company, Inc.’s attempts to register the “Infinite Loop Apple” design mark (shown above at left). Apple asserts that use of NYC’s mark would likely cause confusion with Apple’s famous logo (shown at right) especially given the presence of Apple’s flagship Manhattan retail location.

NYC’s application states the mark is to be used for, among other things, promoting “education on environmentally friendly policies and practices of the City of New York” (See Application Nos. 77/179,942 and 77/179,968). Apple claims that confusion would be likely because of the similarities in appearance and commercial impression between the marks, and because certain of the goods and services recited by NYC are identical or highly related to goods and services offered under the Apple mark.

NYC answered the Notice of Opposition and filed a Counterclaim seeking to cancel Apple’s registration for the logo as used in connection with “mugs, dishes, drinking glasses, and wine glasses.” NYC claims that Apple procured the registration through fraud, because it knowingly misrepresented that it was using the mark in connection with those goods on its Declaration of Use and Renewal Application under sections 8 & 9 of the Trademark Act, when it fact no such use was being made. If the Board finds such fraud, Apple faces cancellation of its entire registration for those goods. Fraud has been a recurring issue before the TTAB of late, as evidenced by this recent post from John Welch’s TTABlog.

Apple, of course, denies the allegations of fraud. In any event, if the cancellation is successful, Apple’s most important marks (i.e., for computer hardware) would remain intact.

Time will tell whether Apple’s efforts to protect its mark will bear fruit. The company probably feels even more incentive to keep others from trading on its reputation and goodwill after hearing about this recent study, which found that people who see the Apple logo may feel more creative.

Alienware goes after “free” computer offer

Alienware Corporation v. Online Gift Rewards, No. 08-1560, S.D.N.Y. (Filed February 14, 2008).

High-performance computer manufacturer Alienware has filed suit against an online marketer alleging trademark infringement, dilution, and other theories of unfair competition. Alienware claims that the defendant has “disseminated mass unsolicited electronic solicitations” and posted Web pages offering “free” Alienware laptops, when in reality, one has to perform some “onerous” tasks to get them.

According to Alienware, after accepting the offer, users must purchase a specified amount of goods from various other sites. And this obligation is not clearly communicated, but is “presented to the consumer, if at all, only after he or she expends significant time and effort in responding to inquiries and navigating the multiple prompts.”

One may be tempted to speculate that the defendant in this case could raise some kind of defense based on fair use of the trademark. (How could you let people know what you’re offering unless you tell them; and giving away actual Alienware computers also seems like it could be protected under the first sale doctrine.)

And Alienware may have anticipated this defense, by alleging that it’s only “Alienware” serving as the source identifier for the offer, and “[t]here is no other recognizable or identifiable indication of source.” The defendant is an entity called “Online Gift Rewards.” Alienware claims that the designation is “likely to be perceived as a generic description of the offering rather than a source indicator.”

[Download the complaint]

Sponsored listing trademark action survives motion to dismiss

T.D.I. Intern., Inc. v. Golf Preservations, Inc., (Slip Op.) 2008 WL 294531 (E.D.Ky. January 31, 2008)

Plaintiffs T.D.I. International and XGD Systems sued their former employee Samson Bailey and his company Golf Preservations for, among other things, violation of the Lanham Act, 15 U.S.C. §1051 et seq. Plaintiffs alleged that defendants’ purchase of plaintiffs’ trademarks to trigger competitive advertising on Google and Yahoo was trademark infringement and unfair competition.

Defendants moved pursuant to Fed. R. Civ. P. 12(b)(6) to dismiss the complaint, but the court denied the motion. It found that under the Twombly standard, plaintiffs had alleged facts sufficient to state a claim to relief that was plausible on its face.

Predictably, defendants had argued that the purchase of plaintiffs’ marks as keywords did not constitute a “use” of the marks as provided in the Lanham Act at 15 U.S.C. § 1127. They relied heavily on Interactive Products Corp. v. a2z Mobile Office Solutions, Inc., 326 F.3d 687, 695 (6th Cir.2003) (a case involving the appearance of a mark in the post-domain path of a URL), and 1-800 Contacts, Inc. v. When U.com, Inc., 414 F.3d 400 (2d Cir.2005) (involving pop-up advertisements triggered by page content and user activities).

Plaintiffs relied on a number of cases to argue that the purchase of keywords was a use as defined in the Lanham Act, and also (correctly) asserted that the scenario of buying keywords to trigger advertising is notably different from use in a post-domain URL (as in Interactive Products) and unseen triggering of pop-up advertisements (as in 1-800 Contacts). Given the split of authority and the corresponding “uncertain state of the law on the specific issue presented in [the] case,” the Court sided with plaintiffs and found that defendants’ arguments were not sufficient to warrant dismissal.