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Trademark Strategies for 2012: "Is There an App for That?"

2011 Cyberspace Law Institute

© 2011 Erik M. Pelton & Associates, PLLC. All Rights Reserved.

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What does the future oftrademark law look like?

Not terribly different from the present, but with:

– More social media

– More apps and technology platforms

– More brands• More entrepreneurs in this economy• More expansion of existing brands

Reg. No. 2651340The mark consists of a

depiction of the Driskill Hotel as it appeared in 1886.

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The Future of Brands and Trademarks

• Fundamentals of trademark law unlikely to change significantly or rapidly

• The ways brands relate to and interact with consumers are changing– Increased interaction– Increased exposure– Increased knowledge– Increased passion

• GAP® logo debacle• YouTube parodies (Old Spice®)

• Strategies for protecting brands

must adapt to and exploit the changes

Reg. No. 1580670

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The Future: More of everything

• Growing trademark portfolios

• More landscapes for disputes

• More options for pursuing infringers

• More options for defendantsCYBERSPACE®

Reg. No. 1975275for “telephone

communications service”

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APPLE® IPHONE®

Portfolio Highlights

• Apple® Computer– IPHONE®– APPLE®– THERE’S AN APP FOR THAT®– APPLE STORE®– APP STORETM

– FACETIMETM

Serial No. 85036990 Retail store services featuring computers, … (pending application)

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• NEW YORK YANKEES®• YANKEES®• NY®• THE HOUSE THAT RUTH BUILT®• YANKEES UNIVERSE®• BRONX BOMBERS• YANKEE HANKEE® • YANKEEOGRAPHY®

NEW YORK YANKEES®

Portfolio Highlights

Reg. No. 2029421 The drawing is a two-dimensional representation of the mark, which consists of the design elements and color combinations appearing on a three-dimensional baseball uniform… The uniform is white with navy blue pinstripes…

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• Large portfolios for all types of businesses

• BUILD-A-BEAR® has more than 250

U.S. trademark registrations– BUILD-A-HERO®– BEAR BOOTIQUE®– BUILDABEAR.COM

BUILD-A-BEAR® Portfolio Highlights

Reg. No. 3133356...The outline of a teddy bear is used to signify

the placement of a hear[t] shaped object inside a stuffed or plush toy animal.

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More landscapes for disputes

• Mobile application stores• Several disputes and removals from Apple’s store• Include in clearance searches• Monitor the names and logos of apps from others available for download • File early (‘intent to use’) with USPTO before launch of application• Example: iTexas app re-named after objections from UT

• Domain Names• New gTLDs eventually

• .delta• .windows

• Social Media• Usernames• Misuse of trademarks Reg. No. 3858099

for “computer application software for mobile

phones”

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More Options Against Infringers

Personal jurisdiction based on online sales• Seller operating online store may be subject to personal jurisdiction

in every state in which it has made sales• Chloe v. Queen Bee of Beverly Hills, LLC, No. 09-3361-cv, ___ F.3d

___ (2nd Cir August 5, 2010)– Sale of 1 counterfeit bag to Plaintiff’s attorney in NY, plus at least 52

other sales of designer handbags in general to NY, was sufficient– shipment of counterfeit bag was not a "one-off transaction," but rather a

part of a larger business plan purposefully directed at NY consumers.• Illinois v Hemi Group, LLC, No., 622 F.3d 754 (7th Cir. 2010)

– The only specific sales to Illinois resident identified in complaint were instigated by a special agent of the Department of Revenue

– But where website expressly stated company would sell to consumers in any state except NY, personal jurisdiction in Ill. found. Court noted refusal to sell in NY indicated Defendant knew sales could subject it to personal jurisdiction

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More Options Against Infringers

• Personal jurisdiction in the trademark holder’s state

– Using Calder test [Calder v. Jones, 465 US 783, 789 (1984)], the 7th and 11th Circuits found personal jurisdiction in infringed trademark owner’s state because the activity expressly aimed at forum where trademark owner located

– Indianapolis Colts, Inc. v. Metro. Baltimore Football Club ltd. P’ship, 34 F.3d 410, 411-12 (7th Cir 1994)

– Licciardo v. Lovelady, 544 F.3d 1280, 1288 (11th Cir. 2008)

AUSTIN – LIVE MUSIC CAPITAL OF THE WORLD®

Reg. No. 2392553 for “Promoting of conventions and tourism in Austin, Texas; retail store services, featuring clothing, …”

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More Options Against Infringers

Potential contributory infringement liability of companies processing payments for the infringing party• In 2007, the Ninth Circuit found Visa and Mastercard not liable for

copyright infringement even though their credit card services were used to sell infringing photographs.– Perfect 10 v. Visa Int'l Service Ass'n., 494 F.3d 788 (9th Cir. 2007)

• But in a 2010 trademark case, S.D.N.Y. found otherwise– Gucci went after three companies that set up and serviced the

counterfeiter’s merchant credit card accounts; each had some knowledge of the nature of the counterfeiter’s business.

– Court found each could be held liable for contributory infringement, because they “knowingly provide[d] a financial bridge between buyers and sellers of [counterfeit products]…. making a profit on every sale.”

– Gucci America, Inc. v. Frontline Processing Corp., Case No. 09 Civ. 6925 (S.D.N.Y. June 23, 2010)

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More Options for Defendants

Declaratory Judgments

• Supreme Court creates new test for patent cases in 2007– Rejected previous “reasonable-apprehension-of-suit” standard– New test: whether facts alleged, under all the circumstances, show a

substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment

– MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 126-27 (2007):

• TTAB Oppositions sufficient for subject matter jurisdiction– 6 yrs. had passed since last Defendant’s litigation threat, but had filed 5

T.T.A.B. Oppositions in the interim– Surefoot LC v. Sure Foot Corp., 531 F.3d 1236 (10th Cir. 2008).

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More Options for Defendants

Declaratory Judgments

• Requesting abandonment of USPTO application sufficient– INTEL requested abandonment of INTELLACT USPTO application;

stated that use would infringe (was not aware of use at the time)– Express Scripts, Inc. v. Intel Corp., Case no. 4:09CV00796 (E.D. Mo.

Mar. 3, 2010)

• Notice to 3rd Party (eBay) of © infringement and email threat of Federal lawsuit was sufficient basis for brining declaratory judgment action in the accused’s state– Sending a Notice of Claimed Infringement (NOCI) to eBay’s VeRO

program subjects sender to personal jurisdiction in the seller’s state in the seller’s suit for declaratory judgment of non-infringement

– Dudnikov v. Chalk & Vermillion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008)

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More Options for Defendants

Publicity attacks• Increasingly popular tool available for Defendants to fight back. • Use social media and other tools to put pressure back on complaining (larger) party• The North Face Apparel Corp. vs. The South Butt LLC (E.D. of Mo., filed Dec.

10, 2009) (settled).– The South Butt accused of infringing North Face® trademarks. North Face® suit

resulted in media attention, and support South Butt. Case was settled and South Butt still in business.

• Monster Energy & Hansen Beverage Company– Owners of Monster Energy® beverage threatened infringement suit over microbrew

called The Vermonster®. Facebook fan page grew to 10,000+ fans in less than 2 weeks. Hansen soon backed down.

– Led to Congress in 2010 directing USPTO to study “aggressive

trademark litigation tactics”• Federal Bureau of Investigation & Wikimedia Foundation

– FBI sought to have its seal removed from from Wikpedia page, claiming it was a violation of the law. Wikipedia fought back publicly, posting the FBI’s demand letter and their response, and FBI apparently backed down from its request.

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• Trademarks are increasing in number, in scope and in the level of interaction with the consumer

• Forward thinking brand owners will continue to expand portfolios creatively

• Plaintiffs have more tools

• Defendants have more tools

• Trademark lawyers will be busy!

© 2011 Erik M. Pelton & Associates, PLLC. All Rights Reserved.

Conclusion:MORE, MORE, MORE!

Reg. No. 3504172