TRADEMARKS 2002-03 Lingerie to Lawn Care

1. TRADEMARKS 2002-03Lingerie to Lawn Care Austin Intellectual Property Law Association May 14, 2003 Steve Meleen Fulbright & Jaworski

2. 2002 Trademark CasesAn Overview Another Busy Year • Over 40 Cases Discussed in TIPLJ Article • Special thanks to Susan Hightower and Martin Hernandez • Supreme Court Continues to Show Interest in Trademark Cases • Victoria’s Secret decision (March 4, 2003) • Dastar oral arguments held April 2, 2003 • Lots of Dilution and Trade Dress Cases • Internet Cases Down Overall, But Still Some Important Developments

3. The Cases … Why Should You Care About This Particular Case? • Well-known, or Someone Might Ask You About It • Helpful Analysis or Part of a Trend • Interesting Facts • Most Importantly, What Can You Cite It For?

4. Moseley v. V Secret Catalogue, Inc.537 U.S. (2003) • This Just In: FTDA Requires Actual Dilution • VICTORIA’S SECRET vs. “Victor’s Little Secret” for a store selling adult products • District court found tarnishment and Sixth Circuit affirmed, without requiring a showing that dilution had occurred • Circuit Split: • Actual Dilution - 4th, 5th • Likelihood of Dilution - 2nd, 6th, others

5. Moseley v. V Secret Catalogue, Inc.537 U.S. (2003) • Without much discussion, the Court determines that the FTDA requires “actual dilution” • FTDA provides relief against a use that “causes dilution of the distinctive quality” of the famous mark (emphasis by the Court) • Contrasts with state dilution statutes, which “repeatedly refer to a ‘likelihood’ of harm, rather than to a completed harm.” • “This text unambiguously requires a showing of actual dilution, rather than a likelihood of dilution.”

6. Moseley v. V Secret Catalogue, Inc.537 U.S. (2003) • Court explicitly stops short of the 4th Circuit Ringling Bros. standard • “Of course, that does not mean that the consequences of dilution, such as an actual loss of sales or profits, must also be proved.” • Also makes clear that “mental association” is not sufficient to establish actionable dilution (“at least where the marks are not identical”) • “such mental association will not necessarily reduce the capacity of the famous mark to identify the goods of its owner”

7. Moseley v. V Secret Catalogue, Inc.537 U.S. (2003) • Reversed and remanded • “There is a complete lack of evidence of any lessening of the capacity of the VICTORIA’S SECRET mark to identify goods or services” • Court is unsympathetic to the difficulty of obtaining evidence of actual dilution • “Whatever difficulties of proof may be entailed, they are not an acceptable reason for dispensing with proof of an essential element of a statutory violation.” • But, “direct evidence of dilution such as consumer surveys” may not be necessary if “actual dilution can be reliably proven through circumstantial evidence--the obvious case is one where the junior and senior marks are identical.”

8. Moseley v. V Secret Catalogue, Inc.537 U.S. (2003) • Intriguing dicta - language arguably supporting contentions that: 1) FTDA protection is confined to identical uses of famous marks; and 2) The FTDA only covers blurring, not tarnishment (because it refers only to “dilution of the distinctive quality of a trade name or trademark” and omits “injury to business reputation”) 3) The dilution doctrine should only protect arbitrary, coined, or fanciful marks (based on Schecter article) • Note to Congress: When you fix “causes dilution,” take a look at these issues also.

9. Moseley v. V Secret Catalogue, Inc.537 U.S. (2003) • Why You Care: • Another Supreme Court trademark decision (remember when that used to be a big deal?) • 39,000 copies of Victoria’s Secret catalog distributed each year in Elizabethtown, Kentucky (population 22,000) • Just My Opinion: • A temporary setback for trademark protection, a victory for statutory interpretation, and probably good for everyone in the long run

10. Dastar Corp. v. Twentieth Century Fox Film Corp.No. 02-428 (S.Ct.) • From an unpublished Ninth Circuit opinion in a reverse passing off case • 20th Century Fox owns rights to “Crusades In Europe” TV series, based on Dwight Eisenhower’s book • Dastar essentially repackaged (with minor additions) the series and sold it as “Campaigns in Europe” • Ninth Circuit: • This was a “bodily appropriation,” without proper attribution, so no need to show likelihood of confusion • The Lanham Act permits doubling the profit award “to deter future infringing conduct”

11. Dastar Corp. v. Twentieth Century Fox Film Corp.No. 02-428 (S.Ct.) • Questions Presented (abridged): 1. Does Section 43(a) of the Lanham Act require an independent showing that consumers will likely be confused by a defendant’s false designation of origin? 2. Does Section 35(a) authorize enhancement of a monetary award solely for deterrent purposes?

12. Dastar Corp. v. Twentieth Century Fox Film Corp.No. 02-428 (S.Ct.) • AIPLA and INTA amicus briefs agreed: (1) likelihood of confusion is required • Likelihood of confusion is an explicit requirement of Section 43(a)(1)(a). That requirement also prevents the constitutional problem that could arise from a potentially perpetual copyright (2) a profits award cannot be enhanced for solely deterrent purposes • A sum awarded under Section 35(a) “shall constitute compensation and not a penalty.” Thus, while an award may have a deterrent effect, it must have some compensatory purpose as well.

13. Toro Co. v. ToroHead, Inc.61 USPQ2d 1164 (TTAB 2001) First Substantive TTAB Decision on Dilution • Sets high standard for showing fame “In effect, an owner of a famous mark is attempting to demonstrate that the English language has changed.” • Also looks at uniqueness The term must be “now primarily associated with the owner of the mark even . . . outside the context of the owners goods or services. • TORO not a famous mark Despite $1.3 billion annual sales and much advertising

14. Toro Co. v. ToroHead, Inc.61 USPQ2d 1164 (TTAB 2001) • Why You Care: • TTAB’s first substantive dilution case • Citable for: Defending a dilution claim, where the fame or uniqueness of plaintiff’s mark is questionable

15. Bose Corp. v. QSC Audio Products293 F.3d 1367, 63 U.S.P.Q.2d 1303 (Fed. Cir. 2002) • Federal Circuit reverses TTAB finding of no likelihood of confusion • Unlike TTAB in Toro, relies on evidence of sales volume, advertising, and critical acclaim as evidence of strength and fame of Bose’s WAVE marks • Why You Care: Citable for proving fame through indirect evidence

16. Te-Ta-Ma Truth Foundation - Family of Uri, Inc. v. World Church of the Creator297 F.3d 662 (7th Cir. 2002) • CHURCH OF THE CREATOR is descriptive (with secondary meaning), not generic • Why You Care: • This is the trademark case where the defendant was arrested for trying to have the judge killed.

17. Karl Storz Endoscopy-America v. Surgical Technologies Inc.285 F.3d 848, 62 U.S.P.Q. 2d 1273 (9th Cir. 2002) • Repaired/rebuilt surgical endoscopes • If rebuilding is so significant that it’s really a new product, it is an infringing use of the product’s original mark • Includes a four-part test to determine whether a different product results • Why You Care: • Really only if you have a case involving remanufactured goods • Also citable for post-sale confusion

18. Herbko Int’l, Inc. v. Kappa Books, Inc.38 F.3d 1156, 64 USPQ 1375 (Fed. Cir. 2002) • “Analogous Use” may support a priority date, but a book title is still not a mark • Single use may create priority, if (1) designed to create an association with goods or services and (2) timely followed by trademark use • Here, no priority because the first use was for a book title • Reiterates Federal Circuit law that the title of a single book is never source-identifying • Why You Care: • Good discussion of analogous use doctrine

19. Promatek Indus. v. Equitrac Corp.300 F.3d 808 (7th Cir. 2002) • Servicer of COPITRAK equipment used that mark in metatags on its website • 7th Cir. Affirms preliminary injunction requiring disclaimer and hyperlink to plaintiff’s website • Why You Care: • Citable for a plaintiff alleging initial-interest confusion (with good quotes) • Injunction requires hyperlink to plaintiff’s site (somewhat unusual)

20. Mattel Inc. v. MCA Records Inc.296 F.3d 894, 63 U.S.P.Q. 2d 1715 (9th Cir. 2002) • “Barbie Girl” song parodying the doll was not actionable • Barbie doll was the target of the parody, unlike Dr. Suess • 9th Cir. found use was not “commercial” • Analysis under First Amendment doctrine, even though “Barbie” was used to sell copies of the song • “inextricably intertwined with expressive elements” • Why You Care: • Citable for a significant expansion of “noncommercial use” exemption to FTDA • Free lyrics sheet included!

21. Playboy Enters., Inc. v. Welles279 F.3d 796 (9th Cir. 2002) • “Nominative fair use” • Terri Welles really was “Playmate of the Year” in 1981 • Did not imply any current sponsorship • Had to remove stylized “PMOY ‘81” wallpaper from site • Why You Care: • Playboy, a relatively new trademark doctrine, … people are going to talk

22. Cohn v. Petsmart Inc.281 F.3d 837 (9th Cir. 2002) • Same mark + same services = summary judgment for Defendant • Local veterinarian: “Where Pets are Family” • Petsmart: “Where Pets are Family” (national pet supply store with an in-store animal clinic) • 9th Circuit affirms summary judgment • Similarity of the marks favors defendant, because both parties use with their house mark • Pet owners are selective in choosing vet • Six years without actual confusion* • Why You Care: • So you can explain to me how this can be right (looks like classic reverse confusion to me)

23. Could it be another . . . ? ? ? Or just another 9th Circuit Trademark Case?

24. New York Stock Exchange Inc. v. New York, New York Hotel LLC293 F.3d 550,62 U.S.P.Q.2d 1260 (2d Cir. 2002)

25. Deere & Co. v. MTD Products, Inc. 2002 WL 1837402 (S.D.N.Y. 2002) • “The Second Circuit Two-Step” • Equal parts Wal-Mart (color mark is never inherently distinctive) and TCPIP (in 2nd Cir., mark must be inherently distinctive for FTDA) • Thus, Deere’s green and yellow color mark is not eligible for dilution protection • But thanks for playing - lovely parting gifts • Why You Care: • You probably don’t want to bring a color-based dilution case in the Second Circuit

26. Eppendorf-Netheler-Hinz HMBH v. Ritter HMBH289 F.3d 351, 62 U.S.P.Q.2d 1534 (5th Cir. 2002) • Fifth Circuit applies TrafFix • Alleged trade dress of plaintiff’s pipette tips was functional • Reverses $1.75 million award • Availability of alternative designs is irrelevant after TrafFix • Why You Care: • It’s the Fifth Circuit - you need to know this stuff

27. Abercrombie & Fitch Stores Inc. v. American Eagle Outfitters Inc.280 F.3d 619, 61 U.S.P.Q.2d 1769 (6th Cir. 2002) • Abercrombie’s alleged store trade dress is functional • included the A&F clothing designs, advertising displays, and the use of college students as sales associates • Why You Care: • So you don’t argue that using college students as sales associates is part of protectible trade dress

28. Porsche Cars North America, Inc. v. Porsche.net302 F.3d 248, 64 U.S.P.Q. 2d 1248 (4th Cir. 2002) • Ongoing saga of Porsche domain names • After ACPA enacted, Porsche re-filed in rem action against 128 domain names • British citizen who owned two names consented, on eve of trial, to jurisdiction in CA • District Court said this destroyed in rem juisdiction • Fourth Circuit: in rem jurisdiction determined at time of filing • Also, challenge to in rem jurisdiction waived

29. Harrods Ltd. v. Sixty Internet Domain Names302 F.3d 214, 64 U.S.P.Q. 2d 1225 (4th Cir. 2002) • ACPA in rem jurisdiction is available not only for ACPA claims, but any Lanham Act violation • ACPA: may file in rem action if domain name violates “any right” of the owner of a mark registered or protected under 43(a) or (c). • Why You Care: • very helpful if you need to rely on in rem jurisdiction, but are concerned about ability of prove “bad faith” element of ACPA

30. Nissan Motor Co., Ltd. v. Nissan Computer 231 F. Supp.2d 977 (C.D. Cal. 2002) • Another ongoing saga • Uzi Nissan registered nissan.com for his computer company in 1994. In prior decision, court found for Nissan Motor on dilution claim. • No transfer of domain names - noncommercial speech on site does not violate FTDA • But, no “disparaging remarks or negative commentary” about Nissan Motor -- that use is “sufficiently commercial” to invoke FTDA • So, Uzi keeps his sites but must be nice • Why You Care: • Citable for (controversial) proposition that criticism may be commercial speech

31. Barcarmerica International USA Trust v. Tyfield Importers Inc.289 F.3d 589, 62 U.S.P.Q. 2d 1673 (9th Cir. 2002) • LEONARDO DA VINCI wine • Plaintiff licensed mark to a third party • no quality control provision in license, and plaintiff not familiar with quality control efforts • Summary judgment of abandonment affirmed • whether licensee’s wine was objectively “good” is irrelevant - Barcamerica had no role • Why You Care: • Good reminder of the dangers of licensing with no quality control

32. Tamko Roofing Products, Inc. v. Ideal Roofing Co., Ltd.282 F.3d 23 (1st Cir. 2002) • First Circuit affirms award of over $700,000 in profits and attorney fees • Willful infringement is sufficient, rejecting defendant’s argument that fraud or bad faith is required for a case to be “exceptional” • “willfulness short of bad faith or fraud will suffice when equitable considerations justify an award and the district court supportably finds the case exceptional” • Why You Care: • Damages and attorney fees awarded

33. Quick Technologies, Inc. v. The Sage Group PLC313 F.3d 338 (5th Cir. 2002) • Willful infringement is not a prerequisite to an award of profits • Contrary jury instruction was erroneous • But, harmless error because equity did not weigh in favor of award • Why You Care: • Citable to show that you can get monetary relief without willful infringement • But … cite it somewhere outside the 5th Circuit because you’re not likely to get any $$ here

34. R.C. Bigelow, Inc. v. Liberty Mutual Insurance Co.287 F.3d 242, 62 U.S.P.Q.2d 1529 (2d Cir. 2002) • Second Circuit: Trade dress infringement claim covered under “advertising injury” policy provision • Based on specific policy definition: “copying” advertising ideas or advertising style • Also based on Connecticut duty-to-defend law • Your mileage may vary (based on State and policy provisions) • Why You Care: • Coverage cases have gone both ways - chalk this one up for the insured

35. Waco International Inc. v. KHK Scaffolding Houston Inc. 278 F.3d 523, 61 U.S.P.Q.2d 1460 (5th Cir. 2002) • Be careful what you seize • Fifth Circuit affirms award of over $1 million for wrongful seizure under § 34(d)(11) • Products themselves bore no mark (infringement claim based on invoices and promotional material) • KHK’s reference to Waco in claiming compatibility is a fair use • Why You Care: • If you plan to seize counterfeit goods, be sure you’re right

36. Barcelona.com, Inc. v. Excelentisimo Ayuntamiento De Barcelona189 F. Supp. 2d 367, 63 U.S.P.Q. 2d 1189 (E.D. Va. 2002) • ACPA protection extended to foreign marks • City Council of Barcelona awarded “barcelona.com” under ACPA, based on Spanish trademarks incorporating “Barcelona” • “It is untenable to suppose that Congress, aware of the fact that the internet is so international in nature, only intended for U.S. trademarks to be protected.” • Why You Care: • Also received a lot of publicity • Interesting twist on extraterritorial application of the Lanham Act

37. Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc.314 F.3d 48 (2d Cir. 2002) • Second Circuit adopts test for what constitutes “commercial advertising or promotion” • must be (1) commercial speech; (2) for the purpose of influencing consumers to buy defendant’s goods or services; and (3) although representations less formal than those made as part of a classic advertising campaign may suffice, they must be disseminated sufficiently to the relevant public.

38. Fashion Boutique of Short Hills, Inc. v. Fendi USA, Inc.314 F.3d 48 (2d Cir. 2002) • One store’s employees bad-mouthing another’s (up to 27 incidents) is not “advertising” • Why You Care: • Issue of first impression for 2nd Circuit

39. Scotts Co. v. United Industries Corp.315 F.3d 264 (4th Cir. 2002) • Fourth Circuit vacates preliminary injunction based on false advertising • File under “Helpful life information I learned from trademark cases”: chemical crabgrass killers only work before crabgrass sprouts, or within four weeks after, not on mature plants • Defendant’s package had a picture of mature crabgrass and claimed it “prevents” crabgrass • Scotts said that conveyed false messages

40. Scotts Co. v. United Industries Corp.315 F.3d 264 (4th Cir. 2002) • Fourth Circuit disagreed: it does “prevent” mature crabgrass, it just doesn’t kill it. • Scotts’ survey evidence (two focus groups plus survey of 40 customers) were “utterly unreliable” on the relevant question • Emphasizes importance of balancing harms; not discounting defendant’s harm as “self-inflicted” • Why you care: • Good for defendant resisting preliminary injunction • If you want to prevent crabgrass, try again next year

41. TRADEMARKS 2002-03Lingerie to Lawn Care Austin Intellectual Property Law Association May 14, 2003 Steve Meleen Fulbright & Jaworski