Apr 302011

Yesterday I participated in “The TTAB comes to Boston” event at Northeastern University School of Law. I didn’t quite know what to expect from the invitation, but the event turned out to be an actual TTAB proceeding with actual attorneys and actual judges, the only unique aspect was that the arguments were held in Boston. Rather than focus on the case, which was Lockheed Martin v. Raytheon, arguing whether Paveway, a term associated with laser-guided bombs, is generic by virtue of its use, I wanted to talk about some interesting points that were raised in the couple of talks given immediately preceding the hearing.

Prior to the hearing, Pamela Chestek, gave a talk on the trademark issue of ownership. By the way, she has a blog (http://propertyintangible.com). She highlighted that unlike copyright or patent law, where the statute explicitly deals with ownership, the Lanham Act does not have a provision for determining ownership. Consider a group of people using a mark and then individuals within the group going off on their own to use the mark. This happens in family businesses, churches, and entertainment groups, where individuals splinter off from the original entity. How do you analyze the ownership issue? First use? Not really, because both parties were using the mark at the same time originally. Priority? No again. Dilution? Likelihood of confusion? It’s a stretch because both inquiries deal with an original standard from which both parties stemmed from. Trademark law is ill-equipped at handling ownership currently, but it is developing case law at the TTAB. Pamela cited to a few recent cases in particular. Please check out her blog for further information.

The next speaker was one of the judges for the hearing, David Mermelstein. He gave advice for those who would be arguing cases before the TTAB. He then talked about an interesting procedure that the TTAB allows, accelerated case resolution. Through this, parties can agree to certain procedural rules, which speeds up the case, reduces risk and reduces cost for both parties. I do not believe that the BPAI has a similar procedure, but I was really impressed with the program. Maybe the BPAI should look in to something similar.

Overall, it was a great event. Trademarks is an interesting area of IP, that I’d like to get more familiar with.

 Posted by at 1:18 pm
Mar 262011

Today I made it up to Concord NH for the IP Cafe, sponsored by the Patent Law Forum and IIPO student organizations. I hadn’t been back at UNH School of Law since December so memories flooded back to me as I walked the halls and sat in classrooms. I also noted the new addition to the school, which will soon be known as the Franklin Pierce Center for Intellectual Property.

It was really good to start off my Saturday in Concord NH at an IP-dedicated symposium with like-minded individuals.

Mary Wong started things off by explaining what the Franklin Pierce Center for Intellectual Property is or will be. The gist of the center will be to maintain global IP prominence.

Mark Solomon and Deirdre Sanders, from Hamilton Brook Smith Reynolds gave the first talk entitled, Top 10 Issues in Patent Law. Their remarks were basic, for the most part, I think because they were addressing a very diverse audience and they didn’t want to overwhelm anyone! But there were some interesting topics that were raised. Here are the issues they addressed, including my thoughts.
1. What forms of IP can build assets?
Trade Secrets
… and more

Three simple questions that a practitioner can ask an inventor to find out what the invention is all about.
What is the problem you’re solving?
How are others solving it?
How are you solving it?

The 3.5 year first installment is due after the 3.5 years for cases that are before the examiner for longer than 3.5 years.

2. How do you document your idea?
A. Notebooks. This section of the talk was interesting because the company I am currently working for is really big into notebooks. Dierdre used her litigation experience to discuss how notebooks can be more credible if they are initialed by someone else. But an interesting question raised was if this really adds to the credibility of the notebook because this witness, who is supposedly removed somewhat from the inventor, may not really understand and appreciate all the notes the researcher is including in his notebook. This is especially the case if there are lots of lab notes and lots of notebooks.
B. Internal invention disclosure form – One question that you may have with regards to these disclosure forms is, “How far upstream do they encourage invention disclosure forms be filled out?” The answer is at conception.

3. How do you determine ownership?
This topic was interesting to me. Some questions the speaker posed was, Who owns patent rights at the time of bankruptcy? What about when the company goes through a merger or acquisition and the inventor says that he didn’t assign the patent to the company? These questions made me think of the upcoming Stanford v. Roche case.
Another question talked about in the assignment portion of this bullet was, What is the value of recording the assignment at the PTO? An assignment doesn’t have to be recorded at the PTO to be a legitimate assignment. But there are benefits. The recordation tells bona fide purchasers that they should be on notice that you have the rights to it.

4. How do you know when to file?
The United States has a one-year period to file your patent. Australia and Canada also have 1 year. Certain European countries have an absolute bar of novelty, meaning that you have to file it before it becomes public. Certain Asian countries are 6 months.
“Disclosure” may be different from one country to another so even if a form of publication has issued, this may not automatically bar you from filing a patent in another country, depending on how they interpret disclosure.

5. How do you assess where to file?
This involves analysis of multiple factors including:
License agreements that may require certain filings
Potential investors
Potential licensees

6. How do you claim the invention?
Sometimes it is best to split up a patent into two to license the technologies to two separate entities: methods on one patent, compositions on the other. But these are business decisions as well, as they may add on additional maintenance fees.

7. How do you describe the invention?
US requirements include enablement, written description, and best mode. Other countries may be different.
Sometimes your parent application can obviate a continuation-in-part. If the parent mentions, but does not enable, blood, for instance, then the continuation in part will be obvious in light of the parent application, but it would not be enabled so you’re “screwed both ways.”

8. How do you navigate the process?
Remarks made on the record can estopp you. You can live with your description for the rest of your patent. If you make assertions to the foreign office too. But it was pointed out that recently the CAFC said that prosecution in other countries is not relevant for estoppel purposes in this country. I don’t know which case the audience member was referring to, but litigators will argue that this should be narrowly construed. Even if you can mention it at all will cause serious problems.
The way that Dierdre described Markman hearings really got me excited to see one in action. I believe Markman hearings are open to the public to sit in on, but I was not sure. I’ll have to look into this because I got excited about seeing one.
Then they talked about duty to disclose. For instance, who is under the duty? CFR 1.56. The lesson learned from McKesson is that you have to cite to the examiner the same case that they have allowed previous. You can’t assume that they know anything. But you always are assumed to know about previous references being the reasonable practitioner.
Try to disclose everything

9. How do you keep your options open?
You can file one patent that is very big or multiple patents with multiple maintenance fees

10. How do you use an issued patent?

Overall, it was a very interesting event. Tom Field was in the back asking questions and laughing as I remember him best. There was also this pretty sharp audience member who had a Russian accent and who every once in a while corrected the speaker.

 Posted by at 10:59 am
Aug 052009

The trend of capitalizing on merchandising trademarks started in the 1970s.[1] Professional sports teams first recognized and discovered the untapped goodwill springing from their trademarks; collegiate institutions followed suit thereafter.[2] With so much money at stake in the trademark merchandising business, it is no wonder why professional sports teams and collegiate institutions have recently aggressively protected their trademarks.[3] Recently, the Fifth Circuit’s decision in Board of Supervisors for Louisiana State University v. Smack Apparel Co. barring a t-shirt manufacturer from using Universities’ school colors further extended the realm of merchandising trademark protection.[4] However, the Court’s reasoning seems insufficient to affirm a summary judgment holding in favor of the Universities.

I. Background

A couple cases made the holding in Smack possible by expanding the scope of trademark rights.[5] The Fifth Circuit’s decision in Boston Professional Hockey Ass’n v. Dallas Cap & Emblem Manufacturing “broke new theoretical ground” by holding that a manufacturer could not use NHL teams’ trademarks on clothing.[6] In Boston Hockey, the NHL and member teams sued to stop an emblem manufacturer from reproducing their registered trademarked logos.[7] Because each team’s trademark represented the team, the consumer could confuse the mark as originating from the mark’s team, rather than from the Dallas Cap and the teams had a right to exclude such use under the Lanham Act.[8] The Court changed from a proof of confusion standard to a much broader “mental-association-based approach of functionality” standard. [9] This new standard presumed confusion if the trademark comprised “the triggering mechanism” in the sale.[10] In so doing, the Court “effectively wrote the confusion requirement out of the Lanham Act.”[11]

The Eleventh Circuit expanded trademark infringement into the collegiate setting.[12] In University of Georgia Athletic Ass’n v. Laite, the defendant used the University of Georgia’s school colors, mascot image, and mascot name on its “Battlin’ Bulldog Beer.”[13] The Court reasoned that the similarity between the beer manufacturer’s logo created a likelihood of confusion as to the source of the beer and held such use trademark infringement under the Lanham Act.[14]

II. Instant Case

In the instant case, Smack, an apparel company in Tampa, Florida, manufactured designed t-shirts targeted specifically to college sports fans.[15] Smack sold some t-shirts online, but sold the majority to retailers and t-shirt vendors.[16] In stores, Smack t-shirts were frequently sold alongside officially licensed t-shirts.[17] Six of Smack’s designs under review included school colors and school-associated text of four Universities: Oklahoma University (“OU”), Louisiana State University (“LSU”), Ohio State University (“OSU”), and the University of South California (“USC”).[18] The first four designs made references to OU and LSU winning the Sugar Bowl; the remaining two designs referred to OSU and USC winning seven and eight national championships respectively.[19] Except for the shirt allegedly infringing OU, which had the letters “o” and “u” in different type face in the words “your” and “bourbon,” the text described the Universities without using the name of the school or logo.[20] Smack included its own logo and the text “Talkin’ the Talk” in a 2.5 inches wide area on each shirt.[21]

The Fifth Circuit affirmed the district court’s summary judgment for trademark infringement, holding that the Universities had established ownership in a legally protectable mark.[22] A color scheme, even though not registered as a trademark, can be protected as a trademark when it has acquired secondary meaning and is non-functional.[23] The schools’ color schemes had acquired secondary meaning under the category of a descriptive mark and were non-functional because the colors were not essential to the purpose of a t-shirt.[24] The Court held that Smack’s Apparel contributed to a sufficient likelihood of confusion using a list of eight factors, particularly stressing Smack’s admission that it intended to refer the consumers’ mind to the Universities.[25]

III. Analysis

The Court in Smack could have ruled in favor of Smack based on the facts of the case and current trademark law.[26] Critical points on which the Court relied to reach its conclusion are very debatable. It is difficult to see how the Court found a likelihood of confusion in Smack’s mark and held that the color scheme was non-functional. More than anything, it seems to show the Fifth Circuit Court strongly dislikes free riding on well-established trademarks.

  1. Likelihood of Confusion

The opinion was not convincing in holding that Smack’s t-shirts led to a sufficient likelihood of confusion. The digits of confusion the Court applied do not compel a decision in favor of the Universities using the high standard for summary judgment. Indeed Smack offers compelling arguments against each digit in question. It is likely the Court could have gone the other way had it kept in mind the value of competition in trademark.[27]

Smack’s argument against the first digit, type of mark, is that many other businesses are using the color scheme.[28] The Court counters that extensive third-party use does not necessarily make the mark weak, but rather the key inquiry is if the association between the original owner and mark is diminished.[29] However, the Court then proceeds to shift the burden onto Smack by holding that because Smack has not shown that other businesses’ use had diminished the association between the Universities and their mark, the marks are by default strong.[30] It is unclear how the Court so confidently held that there was no evidence that other businesses’ use decreased the strength of the mark while at the same time determining that Smack’s use did infringe on the trademark. The Court’s conclusion here seems to contradict the reason for conducting the digits of confusion inquiry. If other businesses are using the color schemes without confusion as to approval or sponsorship, the public is not per se confused over the source of the t-shirts.[31] The Court should have demanded actual evidence that supports the notion of public confusion.[32]

The second and third digits are similarity of the marks and similarity of the products or services. Here, the Court explains that the content of Smack’s shirts are very similar to the Universities’ designs. However, this analysis does not resemble a trademark infringement claim.[33] The only mark that has acquired secondary is the schools’ color scheme. If the Universities desire to sue Smack for copying their designs, this fits more appropriately under a copyright infringement claim.[34]

The Court focuses intensely on the sixth digit, intent to confuse, explaining that this factor may alone be sufficient to justify a likelihood of confusion.[35] The Court heavily relies on the Eleventh Circuit case Laite, where the Court held that the defendant’s “Battlin’ Bulldog Beer” infringed the University of Georgia’s trademark because the beer used the university’s school colors, mascot image, and mascot name.[36] However, instead of using this case to show intent to confuse, as this digit requires, the Court uses this case to show intent “to capitalize on the popularity of [a college sports team].”[37] Notwithstanding the misleading comparison, the Court could have easily distinguished Laite from the instant case. In Laite, the Court had concrete evidence of actual confusion surrounding the University and the beer.[38] In the instant case, the Court concedes that it found no actual evidence of confusion – a very powerful point when the standard should be viewed in the light most favorable to Smack.[39] Also, unlike Laite, Smack did not make use of any school mascots or names on its t-shirts. It seems like a stretch to rely so heavily on Laite when the only similarity between the two cases is that both defendants used school colors and both had a desire to capitalize on the popularity of the Universities.[40] However, trying to derive benefit from the reputation of a popular mark holder does not conclude intent to confuse.[41] Smack offers a compelling argument that its logo identifies the source of the shirt. At the very least, this argument puts doubt into Smack’s intent to confuse the consumer, but instead the Court laid aside the argument and declared Smack’s intent to confuse as a matter of law.[42] If the Court was not so determined to punish the free rider, it probably would have concluded that Smack’s intent to make money by targeting University crowds does not automatically mean that it intended to confuse the public.[43]

2. Non-functional

The opinion was also not very convincing about holding the color schemes non-functional. The Court uses two tests for functionality: traditional and competitive necessity.[44] The Court compares the case at hand to Boston Hockey, concluding that people buy Smack’s t-shirts only because they have the Universities’ trademarks.[45] In other words, the colors serve no function that is unrelated to trademark. Under the traditional test, Smack offers a very compelling argument that the colors are aesthetically functional.[46] The recent Supreme Court case Dastar shows how the trademark could serve an important communicative function.[47] The colors allow people to bond in groups, show support for a common philosophy or goal, express support to a school, identify the wearer as a fan and indicate which team the fan is supporting.[48] For instance, Smack introduced evidence of many businesses including restaurants, bars, a furniture store and a donut shop, which have primary functions completely unrelated to the Universities’ function, using the color schemes with precisely such a function.[49] The Court cites the recent Supreme Court case TrafFix that “it is proper to inquire into the competitive necessity test in cases of aesthetic functionality….”[50] At this point, the Court could have easily transitioned into an aesthetic functionality analysis, or at least leave the matter up for a jury to debate. Instead, the Court dismisses such strong language as dictum and refuses to recognize aesthetic functionality.[51]

Smack’s argument under the competitive necessity test is also persuasive that if it wants to sell shirts that allow fans to show support for their team, there are very few alternatives for it to do so.[52] The Court while entertaining the competitive necessity test, concludes that just because “a trademark is desirable does not . . . render it unprotectable.”[53] Much of the Court’s analysis focuses on its previous decision in Boston Hockey, where it held that the manufacturer using NHL’s logos and names was infringing on the teams’ trademark. However, unlike Boston Hockey, Smack did not use any of the Universities’ logos or names of the teams. Rather, Smack only used the Universities’ color schemes. The Court refers to Smack’s admission that the colors were designed to call the Universities to the minds of the fans as it was a most detestable act to perform.[54] But riding off of the good will of others is a fact of life in our society.[55] It happens all the time and is indeed vital for healthy competition.[56] However, because Smack was seeking to “take advantage of the Universities’ reputation,” the Court did not deem it legitimate competition. The underlying reason for the Court rejecting Smack’s rights to compete in this market seems to arise from an anti-free riding stance.

The likelihood of confusion and non-functionality arguments likely could have gone either way. The decision, more than anything else, seemed to represent a desire to make sure that well-established trademark holders are protected against the free rider. In 2005, Dogan and Lemley aptly described the Fifth Circuit Court’s approach that the Court, “apparently moved by sympathy for the trademark holder, nominally focus[ed] on a likelihood of confusion but stretch[ed] the facts or adopt[ed] unsupported assumptions to conclude that consumers, presuming an association between the trademark holder and goods bearing its mark, will be confused.”[57]

[1] Stacey L. Dogan & Mark A. Lemley, The Merchandising Right: Fragile Theory or Fait Accompli?, 54 Emory L.J. 461, 465, 472-73 (2005). 

[2] Id.

[3] See id. at 461 (“In 2001, a marketing consultant estimated the global market for marketing and licensing sports merchandise estimated to be $17 billion in 2001. The college-logo retail market was estimated to be $3 billion in 2003.”).

[4] 550 F.3d 465, 471 (5th Cir. 2008).

[5] Dogan & Lemley, supra note 1, at 472-74.

[6] Id. at 474.

[7] Boston Prof’l Hockey Ass’n v. Dallas Cap & Emblem Mfg., 510 F.2d 1004, 1008 (5th Cir. 1975).

[8] Id. at 1012.

[9] Dogan & Lemley, supra note 1, at 474.

[10] Id.

[11] Id.

[12] University of Georgia Athletic Ass’n v. Laite, 756 F.2d 1535, 1537-38 (11th Cir. 1985).

[13] Id.

[14] Id. at 1546-47.

[15] Bd. of Supervisors for La. St. U. v. Smack Apparel Co., 550 F.3d 465, 472 (5th Cir. 2008).

[16] Id.

[17] Id.

[18] Id. at 472.

[19] Id. at 472-73.

[20] Id.

[21] Id. at 473.

[22] Id. at 471, 474.

[23] Id. at 475.

[24] Id. at 475-77.

[25] Id. at 478-85.

[26] See Dogan & Lemley, supra note 1, at 486-87 (noting that “there is no reason to extend the merchandising right [in the sports context] any further, since it is hard to find any theoretical or statutory basis for the property approach to trademarks”).

[27] See id. at 467 (noting that trademark law affirms “the competitive model that drives the U.S. economy” and that competitive markets ensure efficient resource allocation while bringing “consumers the highest quality products at the lowest prices”).

[28] Smack, 550 F.3d at 479.

[29] Id.

[30] Id.

[31] See Dogan & Lemley, supra note 1, at 486-87 (noting there are many marks for which there is no evidence that consumers expect the trademark owner to be the only manufacturer).

[32] Id. at 476-77 (“Of the post-Boston Hockey courts that have found a likelihood of confusion in merchandising cases, most have based their decisions not on a general right to prevent unjust enrichment or control merchandising, but on evidence that the public actually believed the trademark holder licensed the defendants’ products.”);

[33] See id. at 496 (“[T]he Supreme Court has consistently held (and the Lanham Act requires) that trademark status depends on proof that consumers are likely to perceive the mark as a brand. Absent a ‘consumer predisposition to equate the feature with the source,’ the mark is not serving as a trademark and its use by others cannot infringe.”).

[34] See id. at 467-68 (noting that trademark law does not serve the goal of remedying copying of expressive works, rather “both the philosophy and its structure reject the notion that trademark rights should serve as either an inducement or a reward for the creation of product features that have inherent value”).

[35] Smack, 550 F.3d at 481.

[36] Laite, 756 F.2d at 1537, 1543.

[37] Id. at 1545.

[38] Id. at 1546.

[39] Smack, 550 F.3d at 483.

[40] Id. at 474; Laite, 756 F.2d at 1545.

[41] See Dogan & Lemley, supra note 1, at 476-77 (“The point of trademark law has never been to maximize profits for trademark owners at the expense of competitors and consumers.”).

[42] Smack, 550 F.3d at 482-83.

[43] See, e.g., NFL v. Governor of State of Delaware, 435 F.Supp. 1372, 1378 (D. Del. 1977) (explaining that defendant’s seeking to profit from the popularity of the NFL did not constitute wrongful misappropriation).

[44] Smack, 550 F.3d at 485-86.

[45] Id. at 486.

[46] Id.

[47] Dogan & Lemley, supra note 1, at 500-01 (noting that “[W]hen fans buy Harvard shirts, Chicago Cubs hats, Rolling Stones tattoos, or Winnie the Pooh cakes from the local bakery, they are doing so not because they believe that Harvard or the other trademark holders made or sponsored the goods, but because the trademark in this context serves an important communicative function for them”).

[48] Smack, 550 F.3d at 486-87.

[49] Id. at 479.

[50] Id.

[51] Id. at 487-88.

[52] See id. at 502 (noting that exclusive use of a feature puts competitors at a “significant non-reputation-related disadvantage”).

[53] Id. at 488.

[54] Id. at 477.

[55] Dogan & Lemeley, supra note 1, at 480-81.

[56] See id. at 481-82 (explaining that without competition, consumers lose something tangible, whether it be a more expensive or worse quality product).

[57] Id. at 477.

 Posted by at 4:28 pm