Showing posts with label trademarks. Show all posts
Showing posts with label trademarks. Show all posts

Friday, April 12, 2013

Yankees Successfully Oppose Registration of “BASEBALLS EVIL EMPIRE” Trademark

On February 8, 2013, the Trademark Trial & Appeal Board (“TTAB”) sustained the opposition filed by the New York Yankees Partnership (“Yankees”) against the registration of “BASEBALLS EVIL EMPIRE” filed by Evil Enterprises, Inc., on likelihood of confusion grounds and on the ground that the mark falsely suggests a connection with the Yankees baseball team.  New York Yankees Partnership v. Evil Enterprises, Inc., Opp. No. 91192764 at 25 (TTAB Feb. 8, 2013) (non-precedential).  The Yankees did not succeed on its claim that the mark would be disparaging.  Id.

Evil Enterprises (the “Applicant”) filed its application for registration of the mark BASEBALLS EVIL EMPIRE in connection with clothing (Class 25) on July 7, 2008, alleging a future intent to use the mark in commerce.  On its website, Applicant indicated that the goods would be directed to consumers who were looking for Yankees-related merchandise:  “If you are passionate about the New York Yankees then you have come to the right place.”  Id. at 5.

Record evidence also indicated that the Yankees had come to be known as the “evil empire” over the years, and even played the “ominous music from the soundtrack of the STAR WARS movies at baseball games.”  Id. at 5, 12.  Since being coined by a rival baseball club to refer to the Yankees, the “term EVIL EMPIRE has . . . been taken up by the media, Yankees’ fans, and detractors as a reference to the Yankees.” Id. at 5.

It was because of this implicit adoption of the phrase by the Yankees that the portion of its opposition alleging disparagement was denied.  Id. at 25.

In connection with the claims of likelihood of confusion under § 2(d) and false suggestion of a connection between the applicant’s goods and the Yankees under § 2(a), however, the Yankees’ opposition succeeded.

Likelihood of Confusion (§ 2(d))

In its opposition, the Yankees alleged that the applicant’s mark so resembled the mark “EVIL EMPIRE which has come to be associated with opposer [the Yankees] as to be likely to cause confusion.”  Id. at 8.  The court based its analysis on the du Pont factors, noting that not all of them would be relevant in every case, “and only factors of significance to the particular mark need be considered.”  Id. (citing In re E.I. du Pont de Nemours & Co., 476 F.2d 1357 (C.C.P.A. 1973).

The Yankees, as the Opposer, bore the burden to introduce sufficient facts to allow the fact finder to conclude that confusion, mistake or deception was likely.  Id. at 9 (citations omitted).  Notably, however, the Yankees were not required to actually use the mark in commerce in order to establish their rights to the mark.  All that was required was that the public associate that mark with their goods and services.  Id.  “[T]he public’s adoption of [the mark] to refer to [opposer] is enough to establish trade name and service mark use.”  Id. (quoting Martahus v. Video Duplication Servs., Inc., 3 F.3d 417, 27 U.S.P.Q.2d 1846, 1845 n.9 (Fed. Cir. 1993)).

In support of their position, the Yankees introduced hundreds of news articles, stories and blog entries, as well as admissions by applicant showing that the phase “Evil Empire” had come to be known by the public to refer to the Yankees Ball Club.  Id. at 11.  Applicant even included the following sales pitch on its web site:  “Baseballs Evil Empire takes pride in our merchandise and our great task of alerting all baseball fans and the like to send the message out loud that the Yankees are Baseballs Evil Empire.”  Id. at 12.

The court went on to analyze whether the mark had become famous, the level of similarity between the goods, channels of trade and classes of consumers, as well as that of the marks themselves as to “appearance, sound, connotation and commercial impression” and the remaining duPont factors.  Id. at 17.

Notwithstanding the many duPont factors weighing heavily against its position, the applicant also argued that its use of the mark was a “spoof and parody of the New York Yankees baseball club, and thus no likelihood of confusion can be established . .  .,” an argument that the court rejected when it held that “[p]arody . . . is not a defense to opposition if the marks are otherwise confusingly similar, as they are here.”  Id. at 20 (citations omitted).  The court found that a likelihood of confusion had been shown.

False Association (§ 2(a))

To establish a claim of falsely suggesting a connection between the mark and the opposer, the opposer must prove “(1) that the applicant’s mark is the same or a close approximation of opposer’s previously used name or identity; (2) that applicant’s mark would be recognized as such by purchasers, in that the mark points uniquely and unmistakably to opposer; (3) that opposer is not connected with the goods that are sold or will be sold by applicant under its mark; and (4) that opposer’s name or identity is of sufficient fame or reputation that when applicant’s mark is used on its goods, a connection with opposer would be presumed.”  Id. at 20-21 (citations omitted).  Considering all of the evidence previously discussed in the opinion, the court concluded that the Yankees demonstrated that the mark falsely suggests a connection with the Yankees.

Summary

As mentioned above, the court concluded that there was a likelihood of confusion, that the mark falsely suggested a connection with the Yankees, and that the disparagement claim could not stand.  As a result, the court sustained the opposition on two of the three grounds, and registration was refused.

For more information about this decision, the following links may be of interest:

John L. Welch, “Yankees Win!  TTAB Sustains Opposition to BASEBALLS EVIL EMPIRE on Confusion and False Association Grounds,” TTABlog, Feb. 21, 2013.

Eric Goldman, “N.Y. Yankees Block Clothing Manufacturer's "Baseball's Evil Empire" Trademark Registration,” Techn. & Marketing Law Blog, Mar. 22, 2013.

Joan Schear, “TTAB Rules NY Yankees Baseball's Only “Evil Empire,”” Boston College Legal Eagle Blog, Mar. 22, 2013.

Sunday, February 3, 2013

Webinar Scheduled for February 12, 2013

Please join me for a webinar to be broadcast live by Thomson Reuters on February 12, 2013, entitled “Brand Protection: Ten Tips to Managing Trademark Rights Effectively.”  In this webinar, I will be joined by two of my colleagues, Christina N. Scelsi (Scelsi Entertainment and New Media Law, PL, Port Charlotte, FL) and Sharra Brockman (Verv, Pittsburgh, PA).

Our panel will address protecting trademark rights from conception to renewal and beyond, provide audience members with a basic grounding in trademark rights in the U.S. We will discuss areas where strategic thinking and planning ahead are beneficial, and give audience members some pointers in protecting their brand portfolios. This session will include a discussion of some recent opinions from the Trademark Trial and Appeal Board to provide some examples of common pitfalls.
Our panel will address the following topics:

1. Picking a Good Brand Name
2. Pre-Application Clearance Searches
3. Benefits of Federal Registration
4. Use and Bona Fide Intent to Use
5. Corrections to a Federal Application/Registration
6. Coping with Initial Refusals
7. Continued Consistent Use
8. Abandonment
9. Proper Use of a Trademark
10. Policing for Infringement/Enforcement


I hope you can join us.  If you are interested in joining us, please register through Thomson Reuters’ official site: http://westlegaledcenter.com/program_guide/course_detail.jsf?courseId=100004202.   

Friday, November 9, 2012

Rosetta Stone and Google Announce Settlement of Trademark Infringement Suit

On Oct. 31, 2012, Rosetta Stone and Google announced their decision to settle their trademark infringement case relating to the sale and use of AdWords in Google's search engine results. Rosetta Stone's 10/31/12 Press Release.  The companies have agreed to work together to "combat online ads for counterfeit goods and prevent the misuse and abuse of trademarks on the Internet." Id. The companies hope that by working together, they can "improve detection methods, and better protect from abuse brands like Rosetta Stone, advertising platforms like Google AdWords, and ultimately consumers on the Internet." Id.
    

As a consequence of the settlement, the lawsuit Rosetta Stone Ltd. v. Google, Inc., Civ. A. No. 1:09-cv-00736-GBL-TCB (filed July 10, 2009) has been dismissed. Doc # 238 (Oct. 31, 2012) (Order and Stipulation to Dismiss), available on Justia. The complaint originally alleged claims of direct trademark infringement (15 U.S.C. § 1114(1)(a)); contributory trademark infringement; vicarious trademark infringement; trademark dilution (15 U.S.C. § 1125(c)(1)); and unjust enrichment.

Related Information


Tuesday, November 6, 2012

Recent E.D. Pa. Case: No “Likelihood of Confusion” from Competitor’s Marks in AdWords

In CollegeSource, Inc. v. AcademyOne, Inc., Civ. A. No. 2:10-cv-03542 (MAM), slip op. (E.D. Pa. Oct. 25, 2012), the U.S. District Court for the Eastern District of Pennsylvania analyzed a claim of trademark infringement based on the purchase and use of a competitor's trademarks in AdWords to increase search engine results. (The case dealt with other issues such as contract formation under Pennsylvania law, trademark cancellation due to fraud on the PTO, false advertising, violation of the Computer Fraud and Abuse Act, and others. This blog post will focus solely on the AdWords issue.)
 

The court ultimately concluded that in an environment of increasingly sophisticated Internet advertising, a claim of trademark infringement based on the use of a competitor's marks in sponsored links fails, when those marks do not appear in the actual advertisement and when the advertisements are set off in a separate section of the search results (under the heading "Sponsored Links," set off with a different color than the rest of the search engine results). In these cases, modern Internet users are unlikely to be confused by this type of use.

In order to prove trademark infringement and unfair competition under the Lanham Act, plaintiffs must demonstrate that they own the mark in question, that the mark is valid and legally protectable, and that the defendant's use of its own mark is likely to create confusion. Id. at 39 (citing Checkpoint Systems, Inc. v. Check Point Software Tech., Inc., 269 F.3d 270, 279 (3d Cir. 2001)). In the CollegeSource case, the defendant did not dispute the ownership of the mark or its validity, but instead challenged whether its mark was likely to create confusion.

The Lapp Factors

In the Third Circuit, the likelihood of confusion analysis is governed by Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983) – the so-called "Lapp Factors." These factors are: 

(1) the degree of similarity between the owner's mark and the alleged infringing mark;
(2) the strength of the owner's mark;
(3) the price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase;
(4) the length of time the defendant has used the mark without evidence of actual confusion arising;
(5) the intent of the defendant in adopting the mark;
(6) the evidence of actual confusion;
(7) whether the goods, though not competing, are marketed through the same channels of trade and advertised through the same media;
(8) the extent to which the targets of the parties' sales efforts are the same;
(9) the relationship of the goods in the minds of consumers because of the similarity of function; and
(10) other facts suggesting that the consuming public might expect the prior owner to manufacture a product in the defendant's market, or that he is likely to expand into that market.
 
Id. at 463. Originally adapted from Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492, 495 (2d Cir. 1961), these factors were applied in the Lapp case for the very limited purpose of considering likelihood of confusion where the products did not directly compete. Id. at 462-63; see also A&H Sportswear, Inc. v. Victoria's Secret Stores, Inc., 237 F.3d 198, 206 (3d Cir. 2000) ("In Interpace Corp. v. Lapp, Inc., 721 F.2d 460, 463 (3d Cir. 1983), this Court established a ten-factor test (the 'Lapp' test) to determine the likelihood of confusion for direct confusion claims between goods that do not directly compete in the same market, but we have never decided what factors should be considered in the case of directly competing goods."). 

In a later opinion, the Third Circuit applied these factors more broadly, including in cases where the goods competed in the same channels of trade. A&H Sportswear, 237 F.3d at 207 ("Though a court need not look beyond the marks when goods are directly competing and the marks virtually identical, we conclude that the factors we have developed in the noncompeting goods context are helpful tools and should be used to aid in the determination of the likelihood of confusion in other cases."). The Third Circuit made clear, however, that the "ten-factor Lapp test [was developed] only as a guide" and the Lanham Act does not require that each of the ten factors must be evaluated in every case. Id.

Application of the Lapp Factors to Use of Competitor's Trademarks as AdWords
   
In the CollegeSource case, the court relied on a Ninth Circuit opinion that identified the "key" factors to consider in cases where the goods directly compete and where a competitor's trademarks were purchased as AdWords to generate search engine hits. Id. at 40 (discussing Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1154 (9th Cir. 2011). Specifically, the Network Automation case held that in the context of AdWords cases, four of these factors were most relevant: "[1] strength of the mark, [2] evidence of actual confusion, [3] types of goods and degrees of care likely to be exercised by the typical purchaser, and [4] the labeling and appearance of the advertisements." Network Automation, 638 F.3d at 1154.

The CollegeSource court agreed with this conclusion, and focused primarily on these four factors in determining whether the defendant's use of the mark was likely to confuse. CollegeSource, No. 2:10-cv-03542, slip op. at 41. With respect to the first two factors, the CollegeSource court concluded: 1) the plaintiff's mark (COLLEGESOURCE) was suggestive and commercially strong; and 2) plaintiff failed to provide significant evidence of actual confusion. Id. at 40-43. The court addressed the last two factors in reverse order, but these two provided the crux of the court's analysis.

With respect to factor 4 (labeling and appearance of the advertisements), the court focused on the placement of ads in search engine results, noting that these ads are generally partitioned under a section of "sponsored links" and appeared separately from regular search results, sometimes in shaded boxes. Id. at 43-44. The plaintiff's mark did not appear in the language of the advertisement. In this context, the court concluded that the offset of sponsored ads decreased the likelihood of confusion. Id.
With respect to factor 3 (types of goods and degrees of care exercised by typical purchasers), the court considered "whether an ordinary consumer seeking college transfer information via the Internet is expected to exercise diligence in his research." Id. at 44-45. The court concluded that Internet users are exercising increasing care as the "novelty of the Internet evaporates and online commerce becomes commonplace." Id. at 45. "Modern Internet users 'are accustomed to such exploration by trial and error.'" Id. This increasing level of experience with search sites (i.e., the increasing sophistication of the targeted consumer) decreases the likelihood of confusion with respect to Internet advertisements like these. Id.

The Court continued to evaluate the remaining Lapp factors, finding that there was no evidence of an intent to confuse, that the Internet is not an obscure marketing channel, and that AdWords are an increasingly prolific form of advertising. Id. at 46-49. The Court ultimately concluded that plaintiff failed to introduce sufficient evidence to demonstrate a likelihood of confusion; the Court then granted defendant's motion for summary judgment on the trademark infringement claim.

Wednesday, October 3, 2012

U.S. PTO Seeks Comments on Draft Examination Guide on Webpage Specimens

The U.S. Patent & Trademark Office has released a draft version of its examination guide on webpage specimens, and seeks user comments before releasing it in final form. The U.S. PTO reports that comments will be accepted through October 31, 2012, using its online collaboration tool, IdeaScale®.
 

You can also leave comments on the following other sections: The Format of the TMEP; Chapter 500 Change of Ownership; Chapter 900 Use in Commerce; Chapter 1900 Madrid Protocol and the subject of this particular notice: Webpage Specimens as Displays Associated With the Goods (including subsections: Webpage Specimens as Displays Associated With the Goods; Webpage as a Display Associated with the Goods; Picture or Description of the Goods; Show the Mark in Association With the Goods; Ordering Information; Grounds for Refusal; and Appendix: Examples of Webpage Display Specimens).

The U.S. PTO maintains a list of its recent requests for user comments, which can be found here: http://www.uspto.gov/trademarks/notices/user_input.jsp.

Tuesday, May 22, 2012

A Study in Counterfeiting Remedies – Denmark’s Approach


This is the first in a series of articles on remedies considered for online counterfeiting and piracy, in light of the dismantling of the proposals set forth in the Protect IP Act (PIPA) and the Stop Online Piracy Act (SOPA) from earlier this year. For more on PIPA and SOPA, please see the prior posts on these topics.

The purpose of these articles is to explore potential ways to combat online counterfeiting and piracy, and in particular the type of counterfeiting and piracy that occurs overseas, but is directed at a U.S.-based audience. The most notable example in recent months is Megaupload, which has been taken down in a cooperative effort of seven countries. (For more on the Megaupload take-down, visit The Guardian (UK)'s Megaupload Page and the US Department of Justice's news release announcing the indictment. For more about the U.S. Immigrations and Customs enforcement take-downs, see ICE's news releases about its intellectual property enforcement efforts.)   

However, cooperative effort across borders is only possible with countries that share the U.S.'s protection of intellectual property rights. Not all countries do. So, what are trademark and copyright owners to do to protect their IP rights in the online world, where geographic borders mean very little?

This series will examine enforcement efforts in other countries as an illustration of possible enforcement mechanisms that might be available, depending on how new legislation on this topic might be written.

Danish Maritime & Commercial Court Decision

A few days ago, Norsker & Co. (a Danish law firm) posted an article about a recent case, Hublot SA Geneve v. Bronsztejin in the Maritime and Commercial Court (May 3, 2012). According to the article, Danish purchasers ordered counterfeit Hublot watches from a Chinese online service. They paid Dkr$2,250 (USD $2,664.41) for these five watches. When the watches arrived at Danish customs, they were seized, pending proof that they had been purchased for private use. The purchasers did not provide such proof and the counterfeits were destroyed. 

The court then punished the purchasers of these counterfeit watches, by assessing monetary fines and destroying the counterfeit watches. There does not appear to be any action taken against the sellers or any other entities in the distribution chain. The purchasers were required to pay the Danish Customs Office's cost to destroy the counterfeit goods (Dkr2,500 = USD $438.34), damages for the trademark violation (presumably paid to the trademark holder) in the amount of Dkr5,000 (USD $ 859.49) and "costs" (presumably the court costs) in the amount of Dkr15,500 (USD $ 2,664.41). (Currency converter used here was accessed on May 22, 2012).

As a result, it appears that in Denmark, the courts have chosen to punish the purchasers of the counterfeit goods, and not the intermediaries in the distribution chain. The summary did not mention any other defendants – such as the payment processor who processed the credit card payment, or the shipping service that carried the goods across borders.

Future Articles

The articles to follow in this series will consider enforcement mechanisms imposed in other countries – and perhaps competing types of enforcement within the same jurisdiction – to see what other enforcement possibilities have been considered. Please note that I take no position on the effectiveness or fairness of any of these measures, but instead am collecting a laundry list of possible sanctions and targets of those sanctions for research purposes.

Tuesday, January 24, 2012

SOPA – Dying on the Vine?


I, for one, hope not. While we in the intellectual property law community may differ as to the best method to combat foreign online counterfeiting and piracy, the basic fact is that this type of theft is not currently enforceable using existing U.S. law. The conduct itself is illegal under the Lanham Act (15 U.S.C. § 1116(d)) and the Copyright Act (17 U.S.C. §§ 501, 512, 1201), and rights holders today can enforce these rights against U.S. based infringers. However, obtaining jurisdiction over a foreign entity is the challenge that bills like SOPA, PROTECT IP and OPEN are aiming to address.

In light of the online protests – in the form of site blackouts – that occurred on January 18, 2012, both the Senate and the House have tabled their bills pending additional communications with the technology community to find solutions that the community can support. (Note that the OPEN Act is proceeding under a different format – and appears to be continuing on its path to a vote.)

PROTECT IP Act – Current Status

The Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011 ("The PROTECT IP Act") (S. 968) had been scheduled for cloture (see prior post explaining process) on January 24, 2012. Sen. Harry Reid has confirmed that the vote has been postponed. A new date has not yet been set.

In announcing the postponement, Sen. Reid made the following statement (emphasis added):

"In light of recent events, I have decided to postpone Tuesday's vote on the PROTECT I.P. Act.
    There is no reason that the legitimate issues raised by many about this bill cannot be resolved. Counterfeiting and piracy cost the American economy billions of dollars and thousands of jobs each year, with the movie industry alone supporting over 2.2 million jobs. We must take action to stop these illegal practices. We live in a country where people rightfully expect to be fairly compensated for a day's work, whether that person is a miner in the high desert of Nevada, an independent band in New York City, or a union worker on the back lots of a California movie studio.
    I admire the work that Chairman Leahy has put into this bill. I encourage him to continue engaging with all stakeholders to forge a balance between protecting Americans' intellectual property, and maintaining openness and innovation on the internet. We made good progress through the discussions we've held in recent days, and I am optimistic that we can reach a compromise in the coming weeks." (Jan. 20, 2012)

Sen. Leahy issued several public statements just before – and in the wake of – the Jan. 18 protests:
SOPA – Current Status

The Stop Online Piracy Act ("SOPA") (H.R. 3261) was the bill most clearly targeted by media coverage and the Internet blackouts in the last few days. The bill is currently on hold, and no hearings are currently scheduled to finish the markup process, in which a Manager's Amendment had been proposed, followed by several amendments to it. The amendments would have modified the Manager's Amendment, which would then be introduced formally as a new version of SOPA.

Rep. Lamar Smith, Chairman of the Judiciary Committee, similarly issued several press releases on SOPA recently that explain further the progress of this bill through the Committee:
  • Dec. 15: SOPA Has Strong Support
  • Dec. 16: Markup Shows Strong Support for SOPA
  • Jan. 13: Smith to Remove DNS Blocking from SOPA
  • Jan. 14: SOPA Meets White House Requirements
  • Jan. 17: Stop Online Piracy Act Markup to Resume in February
  • Jan. 19: OPEN Act Increases Bureaucracy, Won't Stop IP Theft
  • "The problem of online piracy is too big to ignore. American intellectual property industries provide 19 million high-paying jobs and account for more than 60 percent of U.S. exports. The theft of America's intellectual property costs the U.S. economy more than $100 billion annually and results in the loss of thousands of American jobs.  Congress cannot stand by and do nothing while American innovators and job creators are under attack. 
        The online theft of American intellectual property is no different than the theft of products from a store.  It is illegal and the law should be enforced both in the store and online.
        The Committee will continue work with copyright owners, Internet companies, financial institutions to develop proposals that combat online piracy and protect America's intellectual property.  We welcome input from all organizations and individuals who have an honest difference of opinion about how best to address this widespread problem.  The Committee remains committed to finding a solution to the problem of online piracy that protects American intellectual property and innovation.
        The House Judiciary Committee will postpone consideration of the legislation until there is wider agreement on a solution."
The House Committee on the Judiciary maintained an Issues page on its web site focusing on rogue websites. Among other things, the website contains an article entitled, "Dispelling the Myths Surrounding SOPA," which provides a cogent summary of the arguments in favor of the SOPA bill.

 OPEN Act – Current Status

The Online Protection and Enforcement of Digital Trade Act ("the OPEN Act") was introduced in the Senate by Senator Wyden on December 17, 2011 as S. 2029. A nearly identical version (with minor changes) was introduced by Rep. Issa in the House on January 18, 2011 as H.R. 3782. At present, the bills have been referred to committees for further consideration. The House bill has been "[r]eferred to the Committee on Ways and Means, and in addition to the Committee on the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned." Status Report for H.R. 3782.

Most recently, Sen. Wyden made the following public statements:
Similarly, Rep. Issa, the Chairman of the House Oversight Committee, has issued a few public statements, but the OPEN Act was only introduced in the House six days ago, leaving him little time to comment in the interim:
CONCLUSIONS

It appears, therefore, that the debate about the right mechanism to combat foreign online piracy and counterfeiting is not completely off the table, although it is hard to imagine the PROTECT IP Act or SOPA proceeding unaltered. Any debate on the issue – regardless of what bill is associated with the debate – will raise questions of effectiveness of the solution, ability to enforce the bill, if enacted, against foreign entities, and whether there is unintended harm that must be avoided. At base, however, this is a problem that warrants a legislative solution.

Monday, January 23, 2012

Common Questions: So You’re Starting a New Business, How Do You Protect your Brand?


In addition to the other concerns you may have about starting a new business, you will also be deciding how to brand your new products or services. Perhaps you've had a team of people working on identifying a good brand name – perhaps you're working on it yourself. Either way, you want to make sure that no one else adopts the same (or substantially similar name) and competes with you. How do you do this?

Choosing a Name

From the perspective of telling the public what you do in as few words as possible, perhaps you've picked a very descriptive name – such as Women's Clothing, Inc. (if you sell women's clothing), on the theory that people will come to you for your products if they can see automatically what you sell. However, from the perspective of developing a unique brand name that your customers and competitors will come to associate with only your products or services, you really should create a name that does not describe or suggest what products/services you provide , or serve as a generic term for them. Good examples of strong marks are Kodak for photo paper or Google for Internet searching services.

In the trademark world, if you've made up the name completely from scratch, and there's no descriptive quality to the name, you can develop a very strong brand which will allow customers to think of you automatically when seeing your mark. You are also more likely to be able to achieve federal trademark registration and to keep others from trying to trade on the good will you develop if they use a name that is confusingly similar to yours.

Protecting Your Mark

Protecting your valuable trademark requires a multi-pronged approach. Under current trademark law, you obtain trademark rights under "common law" the moment you begin using the mark in commerce in connection with certain goods or services. There are benefits to federally registering your trademark (such as the availability of treble damages for willful infringement of a registered mark, ability to obtain "incontestable" status after five years, etc.), so consider whether applying for registration makes sense for you.

There are also things you should do to police your mark: for instance, you should research what new products or services your competitors are delivering, and what new brand names they may use. You should periodically search both the Internet and any relevant trade periodicals that are important in your industry to ensure that no one else is using marks that are similar to yours for similar products or services. You should also periodically search the USPTO database to ensure that no competing applications are filed covering similar marks or goods/services. You can engage a commercial search service (such as Thompson Compumark or CT Corsearch among others) to watch for new applications for a fee.

A recent study by the Secretary of Commerce confirms that trademark owners are obligated to police their markets to ensure that infringement does not occur, but the report also suggests that any single enforcement tool may not be enough on its own. Similarly, recent cases suggest that you cannot delegate this burden entirely to a third party, but instead must rely on a variety of enforcement tools. Tiffany v. eBay, Civ. A. No. 08-3947, 600 F.3d 93 (2d Cir. April 1, 2010) (rejected on appeal by the U.S. Supreme Court (see also this explanation)). In that case, Tiffany tried to hold eBay liable for accepting listings of counterfeit products that appeared to be Tiffany knockoffs. This case has been read to require that eBay would be obligated to take down any listings that were demonstrably counterfeit and about which the rights holder complained. And, while it had every incentive to remove counterfeit products it learned about, it was not responsible for pro-actively policing new listings to ensure that no further knockoffs were listed. This, instead, is the burden of the trademark owner.

Where to Go for Further Information

The US Patent and Trademark Office has some good resources to get you started in determining what creation and enforcement options may be right for you. You can also contact a trademark attorney for advice. Several bar associations for trademark attorneys are the American Bar Association's Intellectual Property Law Section, International Trademark Association, Intellectual Property Owner's Association and the American Intellectual Property Law Association. Each of these organizations provides information relating to trademark law that may be of interest to you.

Tuesday, December 6, 2011

‘Tis the Season for . . . Anti-Counterfeiting Legislation?


In the past several weeks, several major legislative proposals have been introduced in both the House and the Senate to provide additional anti-counterfeiting enforcement tools for law enforcement and private rights holders alike. Two of these bills – the PROTECT IP Act (S. 968) and the Stop Online Piracy Act (H.R. 3261) – have already been discussed in detail in this blog. (See posts under the Online Piracy tag.)

Details about the remaining legislative proposals follow (listed chronologically):
  • Protect American Innovation Act of 2011 – introduced in the Senate on November 8, 2011 as S. 1830 by Sen. Deborah A. Stabenow (D-Mich.)
    • Focuses on the Treasury Department, and particularly U.S. Customs and Border Protection ("CBP") and U.S. Immigration and Customs Enforcement ("ICE")
    • Contains provisions relating to coordinating IP rights enforcement, enhancing training in the Treasury Department and amending 19 U.S.C. § 1526 (Tariff Act; Merchandise Bearing American Trademark) to expand prohibitions on importation, exportation and transshipment of counterfeit or pirated goods.
    • Of particular note are the following provisions:
      • Coordination of IP Rights Enforcement (Subtitle B)
        • Requires coordination of CBP and ICE IP enforcement efforts through a new Director of IP Rights Enforcement (within the U.S. Department of the Treasury) (§ 111)
      • Regulatory and Policy Improvements re Combating Counterfeiting and Piracy (Subtitle C)
        • Allows CBP to set up regulations about making information and samples of seized goods available to IP owners for purposes of inspection and analysis. (§ 123)
        • Creates a system to identify "low risk importers" who could be subject to reduced inspections by CBP. (There would be a self-certification and third-party verification process put in place.) (§ 125)
        • Creates a "watch list" database of participants in import, export and transshipment process "whose activities [CBP] determines merit special scrutiny at ports of entry because of the risk of importation or transshipment of goods that violate" IP rights or exclusion orders. (The Secretary of the Treasury will have 180 days from enactment to develop a plan to implement the database.) (§ 126)
        • Provides that civil fines imposed by 19 U.S.C. § 1526(f) may not be mitigated, dismissed or vacated except in extraordinary cases or when ordered by the court. (§ 127)
      • New Legal Tools for Border Enforcement (Subtitle E)
        • Amending 19 U.S.C. § 1526 (Tariff Act) to apply the definition of counterfeiting that comes from the crimes code (18 U.S.C. § 2320) and to provide for enhanced penalties for counterfeiting (§ 141)
        • Makes conforming amendments to copyright law to include "exports and transshipments" along with imports as regulatable conduct (§ 141(b)).
        • Enhances the requirements for declarations required under the Tariff Act (§ 142)
        • Permits the seizure and forfeiture of devices designed to circumvent intellectual property rights protections (§ 143)
      • Administrative Provisions (Subtitle F)
        • Requires establishment of an advisory committee to provide advice to the Secretary of the Department of Treasury, to CBP and ICE on all matters involving the enforcement of import safety standards and IP rights by CBP and ICE (§ 151)
        • Requires the advisory committee to submit an annual report describing the operations of the Committee in the past year and set forth any recommendations about the enforcement of import safety standards and IP rights by CBP and ICE (§ 151).
        • Allows for staffing enhancements at both CBP and ICE (§§ 152 and 153)
      • Title II – Increased Penalties for Certain Unfair Trade Practices
        • Expands the exclusion orders. In addition to banning the importation of certain goods into the U.S. this provision also provides that the Secretary of State shall deny a visa to the U.S. and the Secretary for Homeland Security shall exclude from the U.S. "any alien that is an officer or member of the board of directors of the person that violated this section or an exclusion order under this section." (§ 201)
        • Enhances penalties for each day on which the importation or sale of counterfeited goods occurred (19 U.S.C. § 1337(f)) from "$100,000 or twice [the domestic value of the articles entered or sold on such day in violation of the cease and desist order]" to "$500,000 or three times [the same domestic value]." (§201(b))
    • Status: Referred to the Committee on Finance on November 8, 2011.
       
  • American Growth, Recovery, Empowerment and Entrepreneurship Act ("AGREE Act") – introduced on November 15, 2011 in the Senate as S. 1866 by Sen. Chris Coons (D-Del.) (text, as introduced, is here) and on November 18, 2011 in the House as H.R. 3476 by Rep. Richard L. Hanna (R-NY) (text, as introduced, is here).
    • Amends the Trade Secrets Act to explicitly allow U.S. Customs and Border Patrol to share suspected counterfeit materials with rights holders in order to determine authenticity.
    • Specifically, these bills provide:
      • if U.S. Customs and Border Protection ("CBP") suspects a product of being imported or exported in violation of 15 U.S.C. § 1124, the Secretary of Homeland Security would be authorized to "share information on, and unredacted samples of, products and their packaging and labels, or photos of such products, packaging and labels, with the rightholders (sic) of the trademark suspected of being copied or simulated, for purposes of determining whether the products are prohibited from importation under that section." § 601(1).
      • Further, once items are seized by CBP under 17 U.S.C. § 1201(a)(2) or (b) (both relating to devices allowing users to circumvent digital rights management information), the Secretary of Homeland Security is "authorized to share information about, and provide samples to affected parties, as to the seizure of material designed to circumvent technological measures or protection afforded by a technological measure that controls access to or protects the owner's work protected by copyright under such title." § 601(2).
      • Both of these provisions are made "subject to applicable bonding requirements."
    • Under current law, these materials could not be disclosed for any purpose to rights holders.
    • Current Status of Each Bill:
      • The Senate Bill was referred to the Committee on Finance on November 15, 2011. Senator Coons' remarks in introducing the Bill appear in the Congressional Record at pages S7594-7596.
      • The House Bill was referred to the House Committee on Ways and Means, Committee on the Judiciary and Committee on Financial Services for consideration. No hearings have yet been announced.
         
  • National Defense Authorization Act for Fiscal Year 2012 – introduced in the Senate on November 15, 2011 as S. 1867 (H.R. 1540 in the House). (Text of the current version of the Senate bill as passed has not been published yet.)
    • The majority
      of this Bill has nothing to do with counterfeiting, and in fact is an appropriations bill relating to military spending.
    • However, Amendment No. 1092 (text available here at S7966-7967) was agreed to in the Senate by Unanimous Consent on November 29. This Amendment inserted a provision (based closely on S. 1228 (Combating Military Counterfeits Act of 2011), which was reported favorably by the Senate Judiciary Committee in July) entitled "Detection and Avoidance of Counterfeit Electronic Parts."
    • Among other provisions, this Amendment adds the following requirements:
      • Secretary of Homeland Security shall "establish a risk-based methodology for the enhanced targeting of electronic parts imported from any country . . ." (§ 848(b)(1) – S7966).
      • If CBP "suspects a product of being imported or exported in violation of section 42 of the Lanham Act [15 U.S.C. § 1124], and subject to applicable bonding requirements, the Secretary of the Treasury is authorized to share information appearing on, and unredacted samples of, products and their packaging and labels, or photographs of such products, packaging and labels, with the rightholders of trademarks suspected of being copied or simulated, for purpose of determining whether the products are prohibited from importation pursuant to such section." (§ 848(b)(2) – S7966).
      • Amends 18 U.S.C. § 2320 by adding provisions relating to military goods or services such that
        • If a qualifying offense is committed (by trafficking or attempting to traffic in goods or services and knowingly uses a counterfeit mark, the use of which is likely to cause confusion, to cause mistake or to deceive), AND
        • The good or service "malfunctioned, failed or was compromised" AND
        • Could reasonably be foreseen to cause serious bodily injury or death, disclosure of classified information, impairment of combat operations or other significant harm to a member of the Armed Forces or to national security AND
        • The offender had knowledge that the good or service was falsely identified as meeting military standards or is intended for use in a military or national security application;
        • THEN the following penalties will apply:
          • Maximum fines increased from $2 million to $5 million or maximum sentence is increase from no more than 10 years to no more than 20 years, or both (for individuals)
          • For subsequent offenses, individuals would be subject to fines up to $15 million, imprisoned for not more than 30 years, or both.
          • Or, if the offender is other than an individual, the maximum fine remains at $15 million.
          • For subsequent offenses, non-individual offenders would be subject to a fine of up to $30 million.
      • Sentencing Commission required to determine whether Federal Sentencing Guidelines should be amended to reflect the "intent of Congress that penalties for such offenses be increased for defendants that sell infringing products to, or for the use by or for, the Armed Forces" or law enforcement or "for use in critical infrastructure or in national security applications." § 848(f)(2).
      • This Bill did not provide a definition for "counterfeit electronic part," instead requiring the Secretary of Defense to provide such definition. § 848(g)(1).
    • Status: S. 1867 as amended was agreed to in the Senate by a vote of 93-7 on December 1, 2011.
       
  • Counterfeit Drug Penalty Enhancement Act of 2011 – introduced in the Senate on November 17, 2011 as S. 1886 by Sen. Patrick J. Leahy (D-Vt.) (text, as introduced, is here) and in the House as H.R. 3468 by Rep. Patrick L. Meehan (R-Pa.)
    (text, as introduced, is here)
    • Amends 18 U.S.C. § 2320(a) to double the maximum fine to be assessed for trafficking in "counterfeit drugs" (defined under the Food, Drug and Cosmetic Act, 21 U.S.C. § 321(g)(2) to the following: 1) $4 million for individual defendants; and 2) $10 million for "persons other than individuals" (e.g., entities of any sort, including corporations, companies, associations and organizations).
    • Both bills provide that repeat offenses incur increased penalties of $8 million, with a 20 year prison term (individuals) and $20 million (entities), respectively.
    • Differences between the House and Senate Bills
      • The Senate Bill recommends increasing the maximum prison sentence of 20 years, and mandates that the U.S. Sentencing Committee re-evaluate the recommended sentences for all counterfeiting crimes.
      • The House bill recommends that the prison sentence be increased to "life or any term of years." The House bill does not direct any evaluation by the Sentencing Commission.
    • Current law provides that these limits are 1) $2 million with a maximum prison sentence of 10 years for individuals; and 2) $5 million for entities. Repeat offenders incur a maximum fine of $5 million and 20 years imprisonment for individuals, and $15 million for entities. 18 U.S.C. § 2320.
    • Current Status of Each Bill
      • The Senate Bill is scheduled to be considered by the Senate Judiciary Committee on December 8, 2011, at 10:00am in SD-226. (Hearing notice is here – with a link to the webcast, when it's prepared.)
      • The House Bill has been referred to the House Committee on the Judiciary, but a hearing has not yet been scheduled.
Clearly, both houses of Congress have "counterfeiting" on the mind, and it will be interesting to see where these various proposals go. Of course, only if one can keep up.

Sunday, November 27, 2011

Stop Online Piracy Act Introduced to Combat Online Piracy and Counterfeiting


This is the second in a series, discussing the two new Bills proposed in Congress to deal with online pirates and counterfeiters. (View the first article relating to the PROTECT IP Act here.)

On October 26, 2011, Representative Lamar Smith introduced the Stop Online Piracy Act (H.R. 3261) ("SOPA"). Other sponsors of the Bill upon its introduction were Ranking Member John Conyers, IP Subcommittee Chairman Bob Goodlatte, Rep. Howard Berman, Rep. Marsha Blackburn, Rep. Mary Bono-Mack, Rep. Steve Chabot, Rep. Ted Deutch, Rep. Elton Gallegly, Rep. Tim Griffin, Rep. Dennis Ross, and Rep. Lee Terry.

The Bill followed several public hearings this year alone (one in the Senate and two in the House), each focused on the problems created by unfettered counterfeiting and piracy, including by foreign web sites, of U.S. rights holders' marks and copyrighted works and aimed at crafting mechanisms to combat that significant loss in U.S. income.

SOPA proposes two additional sections that were not included in the PROTECT IP Act. First, it provides "savings clauses" that mandate that this bill should not be construed to enlarge or diminish the legal obligations or liabilities imposed by 1) the First Amendment; or 2) copyright law (Title 17 of the U.S. Code). Notably absent is a similar provision relating to trademark law (Title 15 of the U.S. Code).

Second, it provides a new mechanism to require qualifying plaintiffs seeking to initiate a private action against the piratical/counterfeiting web site to provide pre-suit notification to certain Internet intermediaries. (More on this is below, in the section on the private right of action.)

INJUNCTIONS PERMITTED

The SOPA provides for injunctions against any continued activities by an owner of a domain name used by an Internet site found to be engaging in prohibited activities. Under the Attorney General's cause of action, this site must be a "foreign infringing site" while under the private right of action, this site must be "dedicated to the theft of U.S. property." There are different tests for each type of site that must be analyzed separately. Once an order is obtained declaring the Internet site in question to qualify for action under this Bill, the order can be served upon the owner, operator or registrant of the site, but also upon certain Internet intermediaries requiring them to stop doing business with these sites.

Under the private right of action section, qualifying plaintiffs must provide pre-suit notification (which recipients are required to act on within 5 days), followed by a formal complaint and a motion for an injunction.  This pre-suit notification can only be provided to two of the four intermediaries:  Internet advertisers or payment network providers.

ATTORNEY GENERAL'S ACTION (Section 102)

The U.S. Attorney General may only obtain injunctions against "foreign infringing sites," which are: 1) "U.S.-directed sites used by users in the United States," 2) have owners/operators who: traffic in counterfeit or illicit labels, or counterfeit documentation/packaging; commit criminal copyright infringement; traffic in counterfeit goods or services; or steal trade secrets in violation of the Economic Espionage Act; and 3) would be subject to seizure if they were domestic.

Once the Attorney General obtains an injunction against a site deemed to be a foreign infringing site, it may serve the injunction order on service providers (i.e., domain name registrars), Internet search engines (called "information location tools" under the PROTECT IP Act), payment network providers (i.e., MasterCard, Visa or PayPal, called "financial transaction providers" under the PROTECT IP Act), and Internet advertising services (i.e., Google or Yahoo!) requiring that they prevent access by subscribers located within the U.S., prevent the site from being served as a direct hyperlink in a search result, refuse to process payments from users of the site, or decline to distribute advertising to U.S.-based Internet users.

PRIVATE RIGHT OF ACTION (Section 103)

The most notable difference between the PROTECT IP Act and SOPA is the pre-suit notification requirement in order to invoke a private right of action. Under SOPA, a qualifying plaintiff must provide advanced notification to the designated agent of a payment network provider or Internet advertising service before filing suit. The payment network provider and Internet advertising service then has 5 days in which to disable payment transactions from U.S. users or refuse to deliver advertising relating to the Internet site in question to U.S. users.

There is a counter-notification system that allows a defendant to accept jurisdiction in a U.S. court and then to proceed to litigation. If no counter-notification is received, the qualifying plaintiff may simply file suit against the registrant (although if he/she cannot be located, the qualifying plaintiff may take action directly against the web site in an in rem action).

Private rightsholders can obtain injunctions against either foreign or domestic sites, but may only serve the resulting court orders on payment network providers and Internet advertisers as well as the owner, operator or registrant of the domain name – and only after the notification/counter-notification process has been completed.

Some immunity is provided to insulate these Internet intermediaries from liability for certain voluntary enforcement efforts. Monetary damages against either the intermediary or the web site owner/operator/registrant are not available, and monetary sanctions are not available if an intermediary ignores the initial court order and continues doing business with the site named in the court order.

This notification provision mirrors closely § 512 of the Digital Millennium Copyright Act (DMCA), but leaves out certain safe harbors that had been carefully negotiated as part of the drafting of the DMCA over a decade ago. For this reason alone, many copyright practitioners, copyright owners, educators and businesses have opposed the introduction of SOPA, claiming that the bill as currently drafted undermines the protections that have been part of copyright law for the last decade. Some have also claimed that the notification provisions fail to impose certain safeguards that could prevent frivolous litigation or blatantly baseless claims – yet still require the intermediaries to disable access within 5 days of receipt of the notification, perhaps leading to the irreversible loss of income and consumer goodwill by a U.S.-based commercial web site engaged in legitimate operations.

ADDITIONAL PROVISIONS (Title II)

SOPA also provides that unauthorized streaming of copyrighted works qualifies as a crime under Title XVIII, and provides enhanced criminal penalties for such infringement. The Bill also contains provisions relating to inherently dangerous goods (such as military counterfeits) and counterfeit pharmaceuticals. It also mandates the appointment of additional foreign service officers to aid in the enforcement of U.S. intellectual property rights around the world.

STUDY REQUIRED (Section 106)

Under SOPA, the Register of Copyrights, working together with other agencies, is required to issue a report on "the enforcement and effectiveness of this title and on any need to amend the provisions of this title to adapt to emerging technologies." (Note that the Director of the U.S. Patent and Trademark Office is not included specifically – although participation is implied because it would be one of the "other agencies" – in the development of the study.) This report is due to the judiciary committees of both the House and the Senate within two years of the enactment of this legislation.

NOTORIOUS INFRINGERS (Section 107)

SOPA also provides that the Intellectual Property Enforcement Coordinator ("IPEC") shall "conduct an analysis of notorious foreign infringers whose activities cause significant harm to holders of intellectual property rights in the United States." The IPEC shall "solicit" public input "and give consideration to the views and recommendations of members of the public." The IPEC shall provide the results of this analysis to the judiciary committees of both the House and the Senate within six months of enactment of this bill.

This report shall include the following:

(1) An analysis of notorious foreign infringers and a discussion of how these infringers violate industry norms regarding the protection of intellectual property.
(2) An analysis of the significant harm inflicted by notorious foreign infringers on consumers, businesses, and intellectual property industries in the United States and abroad.
(3) An examination of whether notorious foreign infringers have attempted to or succeeded in accessing capital markets in the United States for funding or public offerings.
(4) An analysis of the adequacy of relying upon foreign governments to pursue legal action against notorious foreign infringers.
(5) A discussion of specific policy recommendations to deter the activities of notorious foreign infringers and encourage foreign businesses industry norms that promote the protection of intellectual property globally, including addressing—
(A) whether notorious foreign infringers that engage in significant infringing should be prohibited by the laws of the States from seeking to raise capital United States, including offering stock to the public; and
(B) whether the United States Government should initiate a process to identify designate foreign entities from a list of notorious foreign infringers that would be prohibited raising capital in the United States.
HOUSE HEARINGS PRIOR TO INTRODUCTION OF BILL 

The House of Representatives Committee on the Judiciary, Subcommittee on Intellectual Property, Competition and the Internet has held two hearings on this topic. The first was held on March 14, 2011 entitled "Promoting Investment and Protecting Commerce Online:  Legitimate Sites v. Parasites, Part I." The testifying witnesses were (hyperlinks link to prepared statements provided by each witness in advance of the hearing):
  • Maria A. Pallante, then-Acting Register of Copyrights, U.S. Copyright Office
  • David Sohn, Senior Policy Counsel, Center for Democracy and Technology (CDT)
  • Daniel Castro, Senior Analyst, Information Technology and Innovation Foundation (ITIF)
  • Frederick Huntsberry (Chief Operating Officer, Paramount Pictures). 
The second hearing (entitled conveniently "Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part II") was held on April 6, 2011. Testifying witnesses during this hearing included:

·        Hon. John Morton, Director of the U.S. Immigration and Customs Enforcement
·        Floyd Abrams, a First Amendment expert who testified on his own behalf
·        Kent Walker, Senior Vice President and General Counsel for Google
·        Christine Jones, Executive Vice President and General Counsel for the GoDaddy Group.   
Chairman Lamar Smith's prepared remarks were published at the end of the hearing. A webcast of the hearing is available on the Senate Judiciary Committee's site.

HOUSE HEARING TO CONSIDER MODIFICATIONS TO BILL

The House Committee on the Judiciary also held a third hearing to consider the Bill on November 16, 2011, which lasted about three and a half hours. The webcast is still available on the Committee on the Judiciary's web site. The witnesses were:
  • Maria Pallante, Register of Copyrights, U.S. Library of Congress
  • John Clark, Chief Security Officer and VP of Global Security, Pfizer
  • Michael O'Leary, Senior Executive Vice President, Global Policy and External Affairs, Motion Picture Association of America (MPAA)
  • Linda Kirkpatrick, Group Head, Customer Performance Integrity, MasterCard
  • Katherine Oyama, Policy Counsel, Google
  • Paul Almeida, President, Dept. of Professional Employees, AFL-CIO
MasterCard was thanked repeatedly for its voluntary efforts at combating these criminals. Google was frequently lambasted for what the various legislators described as Google's participation in the counterfeiting system for its own financial gain.

The overall take-away from the session was that the efforts to involve various Internet intermediaries in the enforcement of U.S. intellectual property rights were a good start. Legislators asked the panelists for recommendations of specific fixes to the current bill, noting that the more participation by affected industries or businesses in the drafting process, the better the bill would end up being. For instance, Rep. Goodlatte asked Google, through Ms. Oyama, its Policy Counsel, to work with the technology committee to help fix the bill rather than referring broadly to alleged technical problems that the bill created.

He and others lamented the broad challenges to the bill that merely complained that the bill would "break the Internet" without providing any specifics about how it would be broken so that the Congressmen could address those issue. The congressmen overwhelmingly agreed that they did not want to break the Internet, but requested specific details so that they could redraft where appropriate and avoid any disruption to service.

It remains to be seen how the bill will be amended, but it seems as if the legislators are intent on "getting it right" before the bill is enacted so that the dual goals of the bill are effectuated: 1) enforcing U.S. intellectual property rights against erosion by criminals (both foreign and domestic) and 2) ensuring that due process of law and other U.S. constitutional rights are not abrogated by the effort. At the conclusion of the hearing, Chairman Smith indicated that a new version of the bill would be introduced as soon as possible, and would take into account the testimony given during the hearing as well as other comments received to date.

Friday, November 11, 2011

PROTECT IP Act Introduced to Combat Online Piracy and Counterfeiting


This is the first in a series, discussing the two new Bills proposed in Congress to deal with online pirates and counterfeiters.

On May 12, 2011, Senator Leahy introduced the PROTECT IP Act (S. 968 as reported), aimed at creating additional tools to combat rampant online infringement and counterfeiting. With some amendments, this Bill rocketed through the Senate Judiciary Committee, achieving unanimous bipartisan approval on May 26. The Bill was immediately placed on "hold" by Senator Wyden. It is unclear when or under what conditions the hold may be lifted, but this Bill still garners strong bipartisan support.

The Bill followed several public hearings this year alone (one in the Senate and two in the House), each focused on the problems created by unfettered counterfeiting and piracy, including by foreign web sites, of U.S. rights holders' marks and copyrighted works and aimed at crafting mechanisms to combat that significant loss in U.S. income. It does not purport to fix all of the problems in this area and instead only addresses only the "worst of the worst" offenders.

The PROTECT IP Act provides for injunctions against any continued activities by an owner of a domain name used by an Internet site "dedicated to infringing activities" (or its registrant or operator). This order can be served upon the owner, operator or registrant of the site, but also upon certain Internet intermediaries requiring them to stop doing business with these sites.

ATTORNEY GENERAL'S ACTION (Section 3)

The U.S. Attorney General may only obtain injunctions against "nondomestic" domain names, but may serve the resulting orders on information location tools (i.e., search engines), operators (i.e., domain name registrars), financial transaction providers (i.e., MasterCard, Visa or PayPal), and Internet advertising services (i.e., Google or Yahoo!) requiring that they omit these sites from search results, block access to the site, refuse to accept payment from users of the site, or decline to distribute advertising to U.S.-based Internet users.

PRIVATE RIGHT OF ACTION (Section 4)

Private rightsholders can obtain injunctions against either domestic or nondomestic domain names, but may only serve the resulting court orders on financial payment processors and Internet advertisers as well as the owner, operator or registrant of the domain name.

Some safe harbors are provided to insulate these Internet intermediaries from liability for certain voluntary enforcement efforts. Monetary damages against either the intermediary or the web site owner/operator/registrant are not available, and monetary sanctions are not available if an intermediary ignores the initial court order and continues doing business with the site named in the court order.

SENATE HEARING PRIOR TO INTRODUCTION OF BILL 

The Senate Judiciary Committee held a public hearing entitled, "Targeting Websites Dedicated to Stealing American IP" on February 16, 2011. The witnesses were (hyperlinks lead to prepared statements submitted in support of the hearing, as available from the Senate Judiciary Committee):
Representatives for both Google and Yahoo were invited to attend, but declined to appear. At the end of the hearing, Senator Leahy announced that a new version of what had been introduced in the prior term as the Combating Online Infringement and Counterfeits Act (S. 3804) ("COICA") would be reintroduced during the current Congressional term.

A webcast of the hearing is available on the Senate Judiciary Committee's site.

SENATE JUDICIARY COMMITTEE ISSUED REPORT
After Sen. Wyden placed his hold on the Bill (by announcing that he would oppose any attempt to move the Bill to a floor vote under a unanimous consent), Sen. Leahy issued a committee report explaining the Bill and its purpose. S. Rep. 112-39 (issued July 22, 2011).

No further action has yet been taken on this Bill, but because a companion Bill (the Stop Online Piracy Act, H.R. 3261) has been introduced in the House, we may see some activity on the Senate's version shortly.

Monday, October 31, 2011

Common Questions: When Should I Enforce My Trademark Rights?


The short answer is: as soon as possible after you learn about potential infringement.

In the current economy, some trademark owners may be reluctant to incur litigation costs or to pursue enforcement actions against potential infringers, when they believe the cost of pursuit might outweigh the potential value of a license agreement or a settlement with the other party.

If trademark owners delay enforcing legitimate rights, however, they risk losing the ability to enforce their rights because of the delay. There are risks associated with a decision to not enforce the rights against a particular infringer, or to delay enforcement (generally). In other words, the trademark owner's claims could be dismissed for failing to take corrective action promptly.

There are three basic doctrines that result in a loss of enforcement ability, if they are alleged successfully: acquiescence, laches and/or waiver. These three doctrines usually appear as affirmative defenses to an infringement lawsuit when trademark owners try to sue a specific infringer.

Acquiescence

Acquiescence occurs when a trademark owner exhibits some measure of agreement or implied consent to a potential infringer's use of a substantially similar mark. See, e.g., Profitness Phys. Ther. Center v. Pro-Fit Orthopedic and Sports Phys. Ther. P.C., 314 F.3d 62, 67 (2d Cir. 2002) ("The elements of acquiescence are: (1) the senior user actively represented that it would not assert a right or a claim; (2) the delay between the active representation and assertion of the right or claim; and (3) the delay caused the defendant undue prejudice.") (internal quotations omitted); Bunn-o-Matic Corp. v. Bunn Coffee Service, Inc., 88 F. Supp. 2d 914, 925 (C.D. Ill. 2000) ("To establish acquiescence, Bunn-NY must show that Bunn-IL by word or deed conveyed its implied consent to Bunn-NY's use of the Bunn mark."). This implied consent can come in the form of refusing or declining to file suit against a specific infringer or failing to otherwise object to an infringing use of the mark.

Laches 

Laches is defined as "neglect to assert a right or claim which, taken together with lapse of time and other circumstances causing prejudice to adverse party, operates as bar in court of equity." Black's Law Dictionary. In other words, the delay caused harm to the defendant, and thus bars the owner's ability to sue the defendant for infringement.

In order to get a case dismissed successfully under a laches theory, a defendant is not required to prove any intent to consent to the defendant's specific use. Bunn-o-Matic Corp. v. Bunn Coffee Service, Inc., 88 F. Supp. 2d 914, 925 (C.D. Ill. 2000) ("Laches does not require proof of intent. . . . To prove laches, Bunn-NY must show (1) an unreasonable lack of diligence by the party against whom the defense is asserted and (2) prejudice arising therefrom."). Compared to acquiescence, where a defendant must show implied consent of a trademark owner, "laches implies a merely passive consent." Profitness Phys. Ther. Center v. Pro-Fit Orthopedic and Sports Phys. Ther. P.C., 314 F.3d 62, 67 (2d Cir. 2002) (citations omitted).

Waiver 

Finally, a defendant can assert that a trademark owner waived its right to sue for infringement in this specific case. Wavier generally requires "the intentional relinquishment of a known right." U.S. v. King Features Entm't, 843 F.2d 394, 399 (9th Cir. 1988). However, waiver is harder to prove than either acquiescence or laches because "it involves not sleeping on one's rights but intentionally relinquishing them." RE/MAX Int'l, Inc. v. Trendsetter Realty, LLC, 655 F. Supp. 2d 679, 711 n.12 (S.D. Tex. 2009). It also requires supporting evidence that "so clearly" indicates an intent to relinquish a known right that any other reasonable explanation is simply excluded. Allstate Fin. Corp. v. Dundee Mills, Inc., 800 F.2d 1073, 1075 (11th Cir. 1986).

Conclusion

Failure to oppose a junior user's similar trademark or simply failing to enforce one's own trademark rights in a timely manner can result in an inability to pursue infringement remedies against others. It can result in consumer confusion about the source of goods or services provided in connection with the similar marks, and undermine the value of the trademark owner's brand.

Because trademark owners necessarily have invested money and resources in developing their brands, and the consumer's good will associated with those brands, it's good practice to ensure that some enforcement mechanism is in place to protect these valuable assets. Trademark owners generally should avoid positioning themselves in any way that causes these defenses to become viable means to dismiss the lawsuit they've chosen to pursue.

(Note that there may be many reasons why enforcement of a trademark at a particular time should or should not be undertaken, each of which should be reviewed carefully with your attorney(s) in the context of the circumstances presented.)