The TMCA

Our friendly neighbors in the Great White North are implementing important changes in 2025 with respect to language requirements for trademarks and a new pilot project initiated by the Canadian Intellectual Property Office (“CIPO”) to issue cancellation proceedings against trademark registrations based upon non-use. Language Requirements In connection with the Charter of the French Language, the Quebec government has published the final regulation for Bill 96, the details of the initial draft for which are discussed in our prior post. This final regulation, released on June 26, 2024, lightens the requirements with respect to trademark registration, gives more guidance with respect to definitions of wording, and maintains requirements for signs and sizing. The important takeaways are listed here: The earlier draft limited an exception for using a non-French trademark on products to allow only registered trademarks to appear on a product exclusively in a language other than French. This has now been expanded to include “recognized marks,” meaning registered or unregistered (common law) trademarks may appear on products without a French translation (so long as there is not a French version registered at the Canadian Intellectual Property Office). Clarification has been provided with respect to product descriptions and generic terms. The use of any generic term or product description included with a trademark must be translated into French and permanently displayed on product packaging or on the product itself. a “generic term” is the wording used to describe the nature of a product; a “product description” is the wording used to describe the characteristics of a product. A grace period had been identified to allow for the sale of non-compliant products made before June 1, 2025, to be sold until June 1, 2027. The grace period has been extended also to include products made between June 1, 2025, and December 31, 2025, that were impacted by new federal labeling standards (Food, Drug and Cannabis Regulations). With respect to public signs, posters, and commercial advertising, previously the draft regulation made an exception for only registered trademarks to be used in a language other than French on public signs, posters, and commercial advertising. The final regulation now includes an exception for “recognized marks,” which will allow for both registered and unregistered trademarks to appear on public signs, posters and commercial advertising exclusively in a language other than French. “Marked Predominance” of French on signs visible from the exterior of commercial premises remains in place. The French text on an exterior sign should be twice the size of text that appears in any language other than French. However, it must also have a greater visual impact than the text in another language. That requirement is met if the section of the sign for the French text is at least twice the size of the space for the text in another language, and the legibility and permanent visibility of the French text is equivalent to the text in another language. This amendment gives greater flexibility to business owners in the creation of their signage, based on total area in which the text appears rather than making the French text twice the size of the text in another language. (For dynamic signs, the impact of the French language is considered greater if it will be visible twice as long as any text appearing in another language.) There remains a reasonable period of time to come into compliance. These requirements should be taken seriously, as businesses operating in Quebec face penalties and daily penalties for ongoing offenses, which can be directed at both corporations and their directors individually. Cancellation of Trademark Registrations CIPO has introduced a new pilot project, which started this month (January 2025). On a monthly basis, the Registrar of Trademarks on its own initiative will issue cancellation proceedings for non-use against trademarks. The selection will be random and will only focus on registrations that have been on the register for more than three years. Owners of the trademark registrations will be required to submit evidence of use of their trademarks for each identified product and/or service. Alternatively, the owner of the trademark registration may submit an explanation for any non-use due to exceptional circumstances. If no evidence of use is accepted and there are no exceptional circumstances for non-use, the registration will be cancelled in whole or in part. We encourage those with Canadian trademark registrations to ensure their marks are in use in Canada and to track evidence of such use. Doing so will make the job of providing evidence at the request of CIPO a more manageable endeavor.

This post was written by Korean Law experts, Sue Su-Yeon CHUN and Clare Ryeojin PARK of the law firm Kim & Chang and republished with permission from Kim & Chang.  For more information about Kim & Chang and their attorneys, please visit: https://www.kimchang.com/en/main.kc. For more insights on intellectual property from Kim & Chang, please visit: https://www.ip.kimchang.com/en/insights/index.kc. On December 27, 2024, the Korean National Assembly passed a proposed amendment to the Trademark Act ("Amendment") which will be enacted six months following the date of promulgation. Under the Amendment, (1) the trademark opposition period will be shortened to 30 days; and (2) the limit on punitive damages for intentional trademark infringement will be raised. Details are set out below. Opposition period to be shortened from 2 months to 30 days Under the current law, anyone can file an opposition with the Korean Intellectual Property Office ("KIPO") against a trademark application within 2 months of the date of its publication. However, many people file trademark applications at the time of launching the relevant product or with respect to trademarks that are already in use, and in addition, only about 1% of all published applications encounter oppositions. Recognition of the above, led to the consensus that the opposition period should be shortened so that trademarks can be registered more quickly. For applicants, this amendment will expedite the overall registration process. Potential opposers will have to keep a very close eye on publications given the very short opposition period. As is the case now, however, it will remain possible, to first file a simple notice of opposition before the end of the opposition period and submit a detailed opposition petition within a 30 day period (extendible for national applications) after the opposition period expires. In addition, an information brief can be filed with KIPO to preemptively block the registration of a trademark before the mark is published. The Amendment will only apply to trademarks that are published after the date of enactment. Punitive damages limit to be increased from 3 times to 5 times Under the current law, trademark owners are entitled to claim damage compensation from an infringer based on the infringer's profits gained from the infringement, the trademark owner's lost profits due to the infringement, or reasonable royalties. However, trademark owners are frequently hindered from recovering an adequate amount of damages, as there are practical difficulties in substantiating the damages actually incurred. To address this, an earlier amendment to the Trademark Act (amendment of October 2020) introduced the concept of punitive damages and currently, punitive damages of up to 3 times the amount of actual damages can be sought for intentional acts of infringement. The Amendment reinforces the punitive damages provision by increasing the limit to 5 times the amount of actual damages. By doing so, further pressure will be placed on potential infringers preemptively, while entitling trademark owners to a more realistic remedy for damages incurred. The Amendment will apply to acts which occur after the date of its enactment.

How many years must pass before a grisly murder can support a marketing effort? Apparently, something less than the 132 years since Lizzie Borden’s father and stepmother were axe murdered in Fall River, Massachusetts. (Yes, the passive voice is intentional—a jury acquitted prime suspect Lizzie, and the murders remain unsolved.) Fall River is city of about 100,000 people that abuts the Rhode Island state line. It was once home to numerous textile mills and now hosts a collection of World War II-era naval vessels at Battleship Cove. Portions of the music video for Aerosmith’s 1993 hit Cryin’ (perhaps NSFW, if your boss won’t appreciate 90s-era rock’s visual themes) were filmed in Fall River. The city’s top attraction, however, is the 1800s-era house that was the scene of the double murder. Today, US Ghost Adventures, LLC owns the Lizzie Borden House and offers ghost tours; overnight stays; and a collection of tasteful merchandise, like the “Bloody Axe in Head Play Headband.” Ghost Adventures owns several federal trademark registrations, including U.S. Trademark Reg. Nos. 2,070,882, for the word mark LIZZIE BORDEN and 4,397,555, for a hatchet logo, both for restaurant and hotel services. The hatchet logo features a notch along the bottom edge and, unlike the “bloody axe” merch, is not bloody. The Lizzie Borden House has operated as a tourist attraction since the 1990s, and Ghost Adventures’ federal registrations are incontestable. In 2023, Miss Lizzie’s Coffee LLC opened a coffee shop in the building adjacent to the Lizzie Borden House. A small grass strip and driveway separate the two buildings, which face a courthouse across the street (although not the courthouse where the jury weighed Lizzie’s fate). Miss Lizzie’s Coffee calls itself “The Most Haunted Coffee Shop in the World!” The original sign for Miss Lizzie’s Coffee featured letters made to look written with blood, and a stylized hatchet spewing blood. (Miss Lizzie’s Coffee’s website now reflects a sign with a coffee cup set against an appetizing blood splatter background.) Ghost Adventures was not thrilled with its new neighbor and sued the coffee shop shortly after it opened. Ghost Adventures alleged that several visitors, and at least one city official, incorrectly assumed that the coffee shop was related to Ghost Adventures’ business. Ghost Adventures asserted, among other things, trademark infringement under the U.S. Lanham Act and sought an injunction against Miss Lizzie’s Coffee. The U.S. District Court for the District of Massachusetts denied the injunction request, and Ghost Adventures appealed to the U.S. Court of Appeals for the First Circuit. The First Circuit affirmed the district court’s decision, agreeing that Ghost Adventures had not shown a sufficient likelihood of confusion to support its claim. Similar to courts around the country, the First Circuit applies an eight-factor likelihood-of-confusion test, which requires courts to weigh: “(1) the similarity of the marks; (2) the similarity of the goods; (3) the relationship between the parties’ channels of trade; (4) the relationship between the parties’ advertising; (5) the classes of prospective purchasers; (6) evidence of actual confusion; (7) the defendant’s intent in adopting its mark; and (8) the strength of the plaintiff’s mark.” Here, the court concluded that the marks were not similar, given that the trademarked hatchet has a “spotless,” notched blade, while Miss Lizzie’s hatchet is not notched, spews blood, and has a handle. The court observed that “Miss Lizzie’s” is incidentally similar to LIZZIE BORDEN, but noted that Ghost Adventures had not shown that its mark had displaced the story of Lizzie Borden in the minds of consumers—that is, there was no evidence that a consumer who hears of LIZZIE BORDEN thinks of the business instead of the murder. The court then weighed the market similarity factors, that is “the similarity of the parties’ goods, the relationship between their channels of trade, the relationship between their advertising, and the classes of prospective purchasers.” Ghost Adventures sought to portray both businesses as sharing the category of “hospitality services,” but the court rejected this characterization as merely a “broad economic sector,” insufficient to support likely confusion. The court found the businesses were better characterized as serving different groups—Ghost Adventures targets “sophisticated tourists who purchase tickets in advance and travel to Fall River to visit the historical site of the Lizzie Borden House, whereas Miss Lizzie’s attracts passersby hoping for a caffeine kick or a bite to eat.” Although both businesses rely on the Lizzie Borden story, confusion due to proximity or common reference to historical lore was not the type of confusion that Ghost Adventures was entitled to prevent. As the district court explained, “Ghost Adventures has not demonstrated that its mark bears the strength which might give it the ‘secondary meaning’ reach that, for example, ‘Sam Adams Beer’ might claim regarding the historical figure Sam Adams.” As such, Ghost Adventures could not use its LIZZIE BORDEN mark to prevent other hospitality businesses from opening in the vicinity of the crime and marketing themselves by using the Lizzie Borden story. The court also rejected Ghost Adventures’ reliance on consumer confusion evidence. The court decided there was insufficient evidence that any confusion was caused by an infringing mark, as opposed to confusion due to nontrademarked similarities between businesses or products. As the court explained, “if two outdoor Saturday farmers’ markets opened on the same block, causing wandering shoppers to think that they were affiliated, their proximity and similar business models, without more, would not be suggestive of trademark infringement.” This tussle over the use of the Lizzie Borden legacy shows the limits businesses face when they seek to market off historical sites and events. Had Lizzie Borden been the product of Ghost Adventures’ imagination and the Lizzie Borden House devoid of historical significance, there would be little doubt that Miss Lizzie’s Coffee would be deemed an infringer. But someone did “whack” Borden’s father and stepmother, although perhaps not 40-41 times, and her story became infamous. Given that historical reality, a business seeking to build its brand would need that brand to eclipse the story itself to demonstrate the strength needed for trademark enforcement. Until then, Ghost Adventures’ tours, hospitality, and merchandise may have to coexist with Miss Lizzie’s food and beverage, each invoking Fall River’s most notorious resident. For their part, the two businesses don’t quite seem ready to bury the hatchet—they filed papers in the district court on December 20, 2024, stating their intent to proceed with discovery in the litigation. Should they continue, Massachusetts may end up the scene of the most famous trial involving Lizzie Borden since 1892.

The United States Patent and Trademark Office (“USPTO”) recently issued a final rule adjusting certain trademark fees for United States trademark applications and registrations. Most aspects of the rule go into effect January 18, 2025, so practitioners and rights holders should be ready for the change and plan ahead to avoid unnecessary costs if possible. Fee Changes Unlike the across-the-board 7.5% fee increase issued on the patent side of the USPTO, the trademark fee increases are a bit more surgical, with different changes to 28 individual actions. Notable changes include: Introduction of a single base application While applicants previously had the option to file a TEAS Plus or TEAS Standard application, the new system provides a single base application option for applications filed under Sections 1 (based on use or intent to use) and 44 (based on foreign registration).  Depending on the complexity and completeness of applications, applicants may see additional fees. Additional fees for use of free-form text With the removal of the TEAS Standard application, applicants must now pay an additional $200 per class to use a free-form text box for goods and services for Section 1 and 44 applications. Essentially, filing for any goods or services that cannot be found in the Trademark ID Manual will come with an automatic $200/class fee, covering up to 1,000 text characters per class. Additional fees for lengthy goods/services descriptions Using the free-form text box for goods/services that exceed 1,000 text characters per class will now come with a $200 surcharge per additional 1,000 characters. For example, a goods description reaching 2,500 characters will now come with an additional $400 surcharge.  This character limit does not apply when using standard goods/services from the Trademark ID Manual. Notably Section 66 (WIPO) applications are not subject to the same types of surcharges for lengthy goods/services descriptions.  Rather, the USPTO has merely increased the filing fee by $100 per class.  This change for WIPO applications goes into effect slightly later, on February 18, 2025. Practical Implications The main messaging from these changes is efficiency, efficiency, efficiency. Given the addition of various extra fees for lengthy or non-standard filing descriptions, applications missing basic information, and extra classes in general, applicants may be encouraged to “tighten up” filing strategies. One way in which practitioners may be more economical long term is by using the USPTO’s TMID Manual entry suggestion tool. The USPTO accepts suggestions for entries into the Manual by emailing tmidsuggest@uspto.gov. For applicants who may re-use goods/services descriptions that do not appear in the TMID Manual, this may be an effective tool for avoiding the free-form text fee discussed above. Summary of Important Changes Fee Description Current Fee Fee as of 1/18/25 Fee Change Notes Trademark Application Fees Base application (Sections 1 and 44) N/A $350, per class New fee TEAS Plus and TEAS Standard application filing options merged to single “base application” filing option. Insufficient information in application (Sections 1 and 44) N/A $100, per class New fee Surcharge will apply if Section 1 or 44 application fails to satisfy any of the requirements under 37 CFR § 2.22(a)(1) - (19). These requirements are identical to the requirements for a valid TEAS Plus application under the current TEAS system, and the fee rate for the insufficient information surcharge is identical to the processing fee for failing to meet the requirements of a TEAS Plus application. Use of free-form identification of goods/services (Sections 1 and 44) N/A $200, per class New fee The Free-Form Text for Goods/Services Surcharge will apply for each class where the free-form text box is used instead of the ID Manual function within the electronic application. FREE-FORM TEXT IDs ONLY Each additional group of 1,000 characters after the first 1,000 N/A $200, per class New fee Applicants using the ID Manual function within the electronic application will not incur this surcharge. ·       The USPTO defines characters as including punctuation and spaces. ·       This fee will not be applied to amended identifications that exceed the character limit in a response to an Office Action. ·       Example: if the identification language in a single class is 2,001 characters, then a $400 surcharge is applied. WIPO application/subsequent designation (Section 66(a)) *(Effective February 18, 2025) $500, per class $600, per class ↑$100, per class Goes into effect February 18, 2025. TEAS Standard application $350, per class N/A Discontinued TEAS Standard application filing option discontinued. TEAS Plus application $250, per class N/A Discontinued TEAS Plus application filing option discontinued. Failing to meet TEAS Plus requirements $100, per class N/A Discontinued TEAS Plus application filing option discontinued. Statements of Use/Amendments to Allege Use Amendment to Allege Use (AAU) $100, per class $150, per class ↑$50, per class Statement of Use (SOU) $100, per class $150, per class ↑$50, per class Post Registration Maintenance/Renewal Renewal (Section 9) $300, per class $325, per class ↑$25, per class Declaration of Use (Sections 8 or 71) $225, per class $325, per class ↑$100, per class Affidavit of Incontestability (Section 15) $200, per class $250, per class ↑$50, per class Renewal fee filed at WIPO *(Effective February 18, 2025) $300 $325 ↑$25 Goes into effect February 18, 2025. Miscellaneous Fees Letters of Protest $50 $150 ↑$100 Petitions to the Director $250 $400 ↑$150 Petitions to Revive $150 $250 ↑$100 *This chart is for informational purposes only.

“Enjoy your reign while you may, Superman. For surely as night follows day, there comes a time when even gods must die.”      – Lex Luthor, Superman: Doomsday Last month, the creators of beloved characters like “Superman” and “Spider-Man” declined to come to their own rescue when their SUPER HERO and SUPER HEROES registrations were cancelled by a default judgment from the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board (the “Board”). Marvel and DC have reigned as the titans of the comic book industry for decades. Although, it is possible that some of this success can be attributed to the rivals’ joint ownership of the SUPER HERO and SUPER HEROES registrations, the earliest of which registered in the United States in 1967. This saga began when Marvel and DC opposed an effort by a London-based artist and his company, Superbabies Limited (“The Super Babies”), to register the mark SUPER BABIES—the name for a comic book series featuring superpowered infants. But The Super Babies fought back by filing a cancellation petition that alleged Marvel and DC were using a strategy “ripped straight from their own supervillains’ playbook” by using their trademark rights to “stifle competition and exclude others from the marketplace,” rather than to “prevent confusion.” Ironically, the petition cites an old Spider-Man comic where the recurring villain Kingpin “registered Spider-Man as a trademark, and used threats of litigation and financial ruin to pressure Spider-Man into letting Kingpin operate without SUPER HERO interference.” In particular, the petition attacked Marvel and DC’s ownership of the SUPER HERO marks on genericness and abandonment grounds. A mark becomes “generic” when it no longer distinguishes one product or service from another, but rather, is commonly used to refer to an entire category of products or services. Because the term “SUPER HERO” is widely used to refer to an entire genre or character archetype, The Super Babies argued that the mark was no longer distinctive and should be cancelled under 15 U.S.C. § 1064(3). In addition to the mark becoming genericized, The Super Babies also alleged that the SUPER HERO mark had been abandoned by Marvel and DC in three ways: (1) by allowing each other—as fierce competitors—to use the SUPER HERO mark; (2) by allowing the general public to use the SUPER HERO mark as the name of an entire genre; and (3) by themselves using the SUPER HERO mark as a generic label instead of as a source identifier. The petition highlighted how unusual it is for industry competitors to jointly own a trademark and argued that this arrangement was “antithetical to the foundational purpose of trademarks.” The Super Babies argued that, as competitors, the Lanham Act prohibits Marvel and DC from jointly owning a single mark, since the mark cannot not identify a single source of goods and services in these circumstances. After Marvel and DC failed to file a response, the Board issued an order cancelling the registrations. While DC and Marvel have the option to file a motion seeking to set aside the default judgment for good cause, they would face an uphill battle. At the time of this post, no further motions have been filed, though the TMCA will continue to monitor the case. The epic fight between The Super Babies, Marvel, and DC demonstrates the delicate balance between protecting one’s intellectual property assets without overly restricting creation or innovation. With great power—i.e., the exclusive ownership of a trademark—comes great responsibility—including to stop generic use of your mark. However, in an attempt to shoulder this responsibility by opposing The Super Babies’ applications, Marvel and DC landed themselves in a greater web of trouble. The Super Babies’ victory also serves as a warning to owners of trademark registrations that may be vulnerable to cancellation. In general, registrants’ spidey senses should be tingling when they attempt to enforce rights in arguably abandoned and/or genericized marks. Indeed, even incontestable registrations are vulnerable to generic attacks, nor is there a time bar for attempting to cancel generic registrations. But now that the SUPER HERO mark has been unmasked and returned to the public domain, the saying that “anyone can be a [super] hero” may finally ring true. Well, at least anyone can be a super hero . . . without fear of a lawsuit.

In a potential shakeup for corporate liability, the Supreme Court will hear oral argument this year on whether a real estate developer’s corporate affiliates should be responsible for a $46.6 million trademark infringement judgment—despite not being defendants in the case. Plaintiff Dewberry Engineers Inc. and defendant Dewberry Group, Inc. and first clashed in 2006 over the parties’ use of the DEWBERRY mark in connection with real estate development services. That dispute settled and defendant agreed to restrict use of its mark, including to not use DEWBERRY in the state of Virginia. However, defendant later purchased a hotel in Charlottesville, Virginia, and created a number of sub-brands (operated by its corporate affiliates) incorporating DEWBERRY. As part of its advertising efforts, defendant also distributed marketing materials bearing the mark to its affiliates. Objecting to this renewed use of the mark, the plaintiff brought suit in 2020 in the Eastern District of Virginia. The District Court later ruled that the defendant had willfully engaged in trademark infringement and awarded the plaintiff $46.6 million in damages, which the Fourth Circuit upheld on appeal. Notably, the court referred to the bulk of the award as “disgorgement,” but this term commonly refers to the payment of profits gained from a defendant’s infringing activities—which, according to the defendant’s tax returns, was $0. Instead, the court ordered defendant’s affiliates to foot the bill, treating the defendant and its affiliates “as a single corporate entity for the purpose of calculating revenues and profits.” The court primarily based its decision on the companies’ common ownership, in addition to the profits of defendant’s infringing activities appearing “on [its] affiliates’ balance sheets.” Furthermore, in the Fourth Circuit’s judgment, the Lanham Act presumably permitted such an award by allowing courts the discretion to adjust damage awards if it finds “the amount of the recovery based on profits [] inadequate.” 15 U.S.C. § 1117(a). The defendant unsurprisingly petitioned the Supreme Court to review the decision, arguing that the Fourth Circuit permitted the plaintiff to improperly pierce the corporate veil, and the Court granted the petition in June 2024. A number of intellectual property lawyer groups such as the The International Trademark Association and American Intellectual Property Law Association have similarly objected to the ruling, filing amici briefs in support of neither party but urging the justices to reverse the appellate court’s ruling. The Supreme Court is scheduled to hear oral arguments on the case on December 11, 2024. Although the question as presented by both plaintiff and defendant center squarely on the Lanham Act and trademark infringement, the Court’s decision in the case has the potential to significantly affect the scope of profits disgorgement, and, accordingly, corporate considerations when structuring businesses.

In Snap, Inc. v. Vidal, the Central District of California found the Trademark Trial and Appeal Board (“TTAB”) was wrong in finding that SnapChat’s SPECTACLES mark is generic for smart glasses. The district court’s opinion highlights the advantages of seeking de novo review of TTAB decisions in a district court and delves into the complexities of determining whether a mark is generic. In 2016, Snap Inc., the owner of SnapChat, began selling smart glasses under the name SPECTACLES. Snap’s SPECTACLES glasses contain cameras allowing the user to capture images or videos and newer versions contain augmented reality displays powered by software to display images on the lenses of the smart glasses. Snap filed two applications to register the mark SPECTACLES in both plain text and stylized form for various hardware and software related goods including “wearable computer hardware” and “computer software for accessing and transmitting data and content among consumer electronic devices and displays.” The United States Patent and Trademark Office (“USPTO”) refused registration of the SPECTACLES marks and that refusal was affirmed by TTAB. In its decision, the TTAB found that “spectacles” is a generic product name for “smart glasses” and therefore is not registrable. Undeterred, Snap sought review of the TTAB’s decision in the U.S. District Court for the Central District of California. On September 27, 2024, nearly eight years after Snap filed its applications, the Court issued an Opinion and Order, in which it found that “spectacles” is not generic and that Snap is entitled to registration of the marks on the Supplemental Register. There are generally two steps to determining whether a mark is generic: (1) determining and defining the genus of goods sought to be registered; and (2) determining whether the relevant public primarily uses or understands the mark to refer to the genus. The TTAB and Central District came to different conclusions at each step. The TTAB found that the relevant genus was “hardware and peripherals that are wearable as glasses.” This determination was tied to the language in Snap’s applications. At the TTAB, the record consisted primarily of dictionary definitions for terms like “spectacles” and “eyeglasses,” examples of Snap’s use of the Spectacles mark, and examples of third-party use of the term spectacles from publicly available articles and technical publications. When examining this evidence, the TTAB noted that several articles and publications referred to augmented reality glasses marketed by Apple, Google, and other third parties as spectacles. It also noted that the media often refers to glasses and sunglasses as spectacles. Accordingly, it found the term “spectacles” is generic for hardware and peripherals that are wearable as glasses. The Central District’s analysis differed from the TTAB’s at both steps of the test. First, the parties stipulated that the relevant genus is “smart glasses.” The Court accepted this stipulation but clarified that it encompasses both the “smart computing elements and its glasses form factor.” Second, the Court analyzed several expert reports submitted by both parties that were not considered at the TTAB. Snap submitted opinions from a linguistics experts and a consumer survey expert, both of which opined that based on their expertise and research, spectacles is not generic for smart glasses. Ultimately, the Court found that the dictionary definition, media, and publications considered by the TTAB only showed that “spectacles” is descriptive of the glasses aspect of “smart glasses.” This is because nearly all of the references use another descriptor for the “smart” portion of the genus—such as “AR spectacles” or “smart spectacles”—rather than relying on “spectacles” alone to convey the products are smart glasses. The Court also relied on Snap’s linguistic expert who opined that English-language speakers understand “spectacles” to mean “eyewear,” which the Court found credible in part, because it is “unsurprisingly unremarkable.” This case highlights the importance of choosing the proper avenue for review of a TTAB decision. Parties have two options when dissatisfied by a TTAB decision: (1) an appeal to the Court of Appeals for the Federal Circuit; or (2) de novo review in a U.S. District Court. In an appeal to the Federal Circuit, the record is closed and the parties may not introduce any new evidence. At the district court, parties may supplement the record with additional evidence and the Court reviews the case anew in view of the new evidence. In this case, Snap correctly chose de novo review in the District Court. The opportunity to present new evidence allowed Snap to present its expert reports and stipulate that “smart glasses” is the proper genus. Snap may not have fared so well in an appeal to the Federal Circuit.

Artist Rights in Unauthorized Exhibitions Recent unauthorized Banksy exhibits highlight the ongoing struggle of what obligations society owes to artists. While intellectual property laws primarily provide artists with economic protections and redress, what of artists who are less concerned with economic remedies and more concerned with the integrity of their works? The unauthorized use of Banksy’s works raises such questions and highlights the dilemma and limits of legal protections. Banksy is a street artist who has built a career on covertness and intrigue. With a hidden identity, Banksy began producing street art in the 1990s in England, which has since extended to locations worldwide. Works like “Love is in the Air,” “Girl with Balloon” and “Bomb Hugger” are replete with social commentary and activism. Banksy has mastered the visual oxymoron—juxtaposing two images to make a statement. “Love is in the Air,” for example, depicts a masked man winding up to throw a flower bouquet where one might expect to see a grenade or Molotov cocktail. This subversion of visual and emotional norms has attracted much viewership and notoriety. Banksy has sold prints at very democratic prices throughout his career. He has further lampooned the sky-high prices fetched on the secondary market for his works, famously causing a print of his iconic “Girl with Balloon” to shred upon purchase at auction. An act that, ironically, increased the value of the new work, retitled “Love is in the Bin”. Banksy has also exhibited his works in bombastic shows like the chaotic 2003 London exhibit “Turf War,” which featured real painted animals, stencils on walls and originals in various media, all of which were displayed eclectically. The exhibit was held at a secret location, revealed shortly prior to opening, and closed early after the police responded to complaints. The exhibit also overcame at least some of Banksy’s anti-consumerism sentiment as it teamed with Puma for collaborative merchandise and sponsorship. Despite allegedly viewing copyright as part of the capitalist system his art mocks, Banksy appears to care about fakes and, unsurprisingly, commercial use of his work. He created Pest Control to issue certificates for authentic works. The Pest Control website cheekily states: Please do not use Banksy’s images for any commercial purpose, including launching a range of merchandise or tricking people into thinking something is made or endorsed by the artist when it isn’t. Saying “Banksy wrote copyright is for losers in his book” doesn’t give you free rein to misrepresent the artist and commit fraud. Numerous groups have sought to bring Banksy’s work to more people. Some exhibitions feature only genuine Banksy pieces. Others, such as “The Art of Banksy: Without Limits,” consist primarily of unauthorized reproductions, many of which include modified versions of Banksy originals, and, of course, end in a gift shop. The Without Limits exhibit advertises itself as an “unauthorized exhibition” but also indicates that it features his art. Reports indicate that only about 34 of the 150 works on display are original, and the originals are not readily identifiable. The modified works included in the Without Limits exhibit exchange the textured, colored city walls of Banksy’s originals for screen-printed or painted canvases. The exhibit’s works lack the texture and context of the buildings and city in which Banksy originally placed them, or the eclectic mix of one of his shows. The exhibit has also adapted works, for instance showing a depiction of “Love is in the Air” as a white sculpture holding red roses and sporting a black baseball cap. Additionally, it appears many works have been scaled down, colors have been changed, and duplicates of art have been lined in rows with minor color variations. Does Banksy have recourse for decontextualizing his works and turning them into a curated and commercial experience? Can Banksy prevent modifications of his art in a fashion that eliminates key attributes of the original works? Banksy has decried the exhibit as a fake but has not yet taken legal action against unauthorized exhibits like Without Limits. One might expect moral rights to offer some relief. The United States codified certain moral rights in the Visual Artists Rights Act (VARA) of 1990, trailing many other countries in recognizing such rights. VARA gives artists rights of attribution – allowing an artist to claim, or deny, ownership of their work – and rights of integrity – allowing artists to prevent others from distorting or destroying a work. Such rights are reserved to works of a certain caliber of art such as paintings, drawings, and sculptures. Banksy’s works would almost certainly be protected as we have reported, graffiti is protected art. VARA protection, however, reaches only to original works or certain limited editions. Congress expressly excluded reproductions, depictions, and other portrayals from VARA claims. Thus, while defacing a Banksy mural would violate VARA, creating modified reproductions of his works and displaying them without permission does not, at least under US law. Other branches of intellectual property law provide a host of other claims though. Copyright law gives authors control over who reproduces, displays, and distributes protected works. Perhaps more importantly, copyright allows authors the right to grant or withhold permission to create derivative works of – or to modify – an original. The right to prohibit modifications can be seen as an additional means to protect the integrity of an author’s works. As copyright infringement requires only that the infringer have access to the original work – admitted in the Without Limits case – and that one of the restricted actions be taken, it is clear the Without Limits exhibit has infringed Banksy’s rights. The Without Limits exhibit may argue the fair use doctrine excuses their infringing reproductions, displays, distributions, and derivative works. Fair use protects certain unauthorized uses of works to protect free expression. To determine whether fair use applies, courts consider four factors: 1. The purpose and character of the use; 2. The nature of the copyrighted work; 3. How much of the copyrighted work is used; and 4. The effect of the use on the market or value of the copyrighted work. The purpose and character factor is generally the most important. In the recent Warhol decision, the Supreme Court provided a two-part test to analyze whether the purpose and character of use is fair. First, how is the purpose and character of an unauthorized use different from the purpose of the original? Second, is the unauthorized use commercial or non-commercial? Where the unauthorized and original purposes are the same or quite similar and the unauthorized use is commercial, the first factor likely will weigh in favor of the copyright owner. The Without Limits exhibits are unquestionably commercial, so the purpose and character would be paramount. Without Limits has publicly commented their exhibits serve to make the scope of Banksy’s works available to the public, who would otherwise need to travel hundreds of miles to see the works. Their exhibits also educate the public about Banksy’s works and provide commentary on such works. Such arguments would likely hold sway for the exhibit as a whole. Further, exhibiting original works is protected under the first sale doctrine, which allows the owner of a tangible copy of a copyrighted work the ability to, among other things, display the work. Such arguments lose power when applied to the individual reproductions and modified works displayed in the exhibit and sold in the gift shop though. Those unauthorized works provide little to no commentary on Banksy or alternative purpose to the originals, other than to turn a profit. Accordingly, the first factor would favor Banksy as to the unauthorized reproductions. The three remaining factors all likely favor Banksy too. Street art and pop art, as noted above, are generally valued, so the nature of the works would lend to protection. The Without Limits exhibits, and individual works, use the whole of many Banksy works and directly compete with Banksy’s exhibits and authorized sales, harming the market and value of his originals. Accordingly, it seems unlikely Without Limits would be able to excuse all copyright infringements as fair use. And what of Without Limits calling the exhibit “The Art of Banksy” when most of the art is not actually his? Similar to copyright law, some unauthorized use is excused as “fair.” A mechanic can identify the brand of car on which services are performed, for instance. Fair use only applies to authentic products though. It does not excuse counterfeits. Further, causing consumer confusion is the exact harm trademark laws seek to prevent and redress. Reviews of Without Limits exhibits in the United States question whether the works shown are real or fake, indicating at least some level of actual confusion. It should, therefore, be possible for Banksy, or Pest Control, which owns trademark registrations in the United States for BANKSY and images of several of his works, to make successful claims for trademark infringement against the exhibition as well as the gift shop items. Indeed, the exhibit appears ripe for false advertising and misrepresentation claims as well. So why hasn’t Banksy taken any legal action? Most accounts conclude he has refrained from pursuing litigation to remain anonymous. In the United States, however, it may be possible to bring copyright claims under the Banksy pseudonym if the court decides the need for anonymity outweighs the public’s interest in identifying him. It is also possible Pest Control could bring copyright claims as the beneficial owner. Further, trademark rights are based on use, and Pest Control, as the owner of the registrations, could pursue claims. Accordingly, a desire for anonymity fails to explain his lack of action. Perhaps Banksy shirks the relief these laws offer as a rejection of the economic concerns the laws primarily protect. The laws, however, also offer injunctive relief – stopping the unauthorized or misrepresentative uses – which may appeal more to the principles Banksy purports to uphold. Or maybe he sees limiting exposure to his art (or interpretations of it) as antithetical to the messages he seeks to convey through the work.

Cognac, which originates from a specific region of France and is named after the commune of Cognac, is far more popular outside its native country. Indeed, according to the industry group Bureau National Interprofessional du Cognac or BNIC, an astonishing 98% of cognac is exported. Cognac has a strong following in the African-American community, and is especially beloved by American rappers and hip-hop artists, many of whom serve as brand ambassadors or owners. As we previously covered, that connection includes a record label named “Cologne & Cognac Entertainment” and their U.S. trademark application for musical performances and services under this mark:     BNIC opposed the application on the grounds that COGNAC is a geographical indication and that Cognac producers own a common law certification mark for COGNAC. The Trademark Trial and Appeal Board, however, sided with applicants, holding that there was no likelihood of confusion because – at least according to the Board – the COGNAC certification mark was simply not famous enough. After BNIC appealed and the Federal Circuit held oral argument, we predicted that the Board’s decision appeared to be on shaky ground. That premonition turned out to be correct – on August 6, the Federal Circuit issued a decision vacating the Board’s dismissal of BNIC’s opposition and remanding to the Board for reconsideration. The Court began by explaining that unlike trademarks, “which indicate a single source of a product or service, certification marks are used by a person other than its owner with authorization from its owner.” Certification marks generally certify regional or other origin, material, quality, accuracy, and other characteristics. Notably, certification marks of regional origin are exempted from the Lanham Act’s general rule precluding “primarily geographically descriptive” marks. The Court then noted that although not registered with the PTO, it is undisputed that COGNAC is a common law certification mark. BNIC is an organization responsible for controlling and protecting the certification mark COGNAC for brandy manufactured in the Cognac region of France. The key issue on appeal was whether the use of the COGNAC mark for hip-hop music and production services was likely to cause confusion. The Board had held that confusion was not likely, in part because it concluded that the COGNAC mark was not strong or famous. It also dismissed BNIC’s dilution claim because, among other reasons, the Board did not think that BNIC had proven the fame element of dilution. The Federal Circuit first considered the issue of the COGNAC mark’s fame, the dominant factor in the In re E.I. DuPont DeNemours & Co., 476 F.2d 1357, 1361 (CCPA 1973) likelihood of confusion analysis. It held that the Board had erred in requiring that COGNAC be famous for its certification status. In the court’s view, a certification mark can be famous for many reasons, including geographic origin, and it does not need to be famous for its certification function. Thus, the Board’s failure to consider whether or not COGNAC was famous as an indicator of geographic origin was an error. The court also took issue with the Board’s holding that substantial sales and advertising of COGNAC certified products could not establish the mark’s fame because those products also bear brand names, such as HENNESSEY. Just because a certification mark is used with a brand name mark does not mean that the certification mark itself is not famous. As the court noted, certification marks are often present with a brand name mark because they can only be used on third-party products. The Board therefore should have determined whether a portion of the sales and advertising evidence could be attributed to the COGNAC mark (rather than just the brand name mark) such that the evidence was indicative of fame for the certification mark. The Federal Circuit also disagreed with the Board’s conclusion that the marks at issue are dissimilar. As the court explained, just because COGNAC informs consumers of the product’s geographic origin does not mean it cannot also “project an image of sophistication and elegance.” Indeed, the Cologne & Cognac Entertainment record label’s mark projects such an image precisely because of its use of the COGNAC mark. The Board also erred in its analysis of the similarity of both the goods and services and the trade channels. Instead of comparing BNIC’s services to those of the record label, the Board should have compared the goods, services, and trade channels of certified users of the COGNAC mark (e.g, HENNESSEY) to those of the record label. Finally, the court turned to BNIC’s dilution claim, which the Board had dismissed. Here, again, the court disagreed with the Board’s analysis. First, BNIC’s failure to explicitly plead that their certification mark was famous prior to Cologne & Cognac Entertainment’s constructive date of first use did not require dismissal of the dilution claim because the Notice of Opposition provided sufficient notice to meet the pleading standards (and the record label had failed to file a motion to dismiss). Second, as discussed above, the Board’s conclusions regarding the mark’s fame were erroneous and did not support a finding that COGNAC is not famous for purposes of dilution. It will be interesting to see how the Board responds to this slap-down from the Federal Circuit, and whether reconsideration changes its conclusion. But the Federal Circuit’s decision can only be helpful to owners of certification marks, particularly those indicative of geographic origin. We suspect there was much rejoicing among Cognac producers when this decision came out – and probably more than a few celebratory bottles of the fine French brandy consumed. Santé!

Allegations Against What-A-Burger #13 Whataburger has once again found itself in the news over a lawsuit it filed over naming rights against a long-standing East Coast burger establishment for its purported infringement of the WHATABURGER trademark. On June 11, 2024, Whatabrands LLC, the Texas-based burger establishment, sued What-A-Burger #13, Inc., a North Carolina-based burger establishment, based on its use of the mark “What-A-Burger #13.” According to Whataburger’s complaint, it was founded in 1950 in Corpus Christi, Texas as a single location hamburger stand, but has since expanded its operations to over 1,000 restaurants in 16 states, with its rate of expansion increasing significantly since 2020. But burgers is not all that Whataburger offers. It also sells condiments, sauces, and other food items under the WHATABURGER mark in more than 5,000 grocery stores across 25 states and Mexico. In other words, Whataburger alleges it has garnered significant goodwill in its WHATABURGER mark, for which it first obtained a federal registration in 1957. With respect to What-A-Burger #13, the complaint alleges that, since no earlier than 1969, the North Carolina burger establishment has offered goods and services under the name and trademark “What-A-Burger #13” that are identical to those Whataburger offers—namely, restaurant services and food products—in connection with two North Carolina locations and a food truck. Critically, Whataburger alleges that What-A-Burger #13’s use of the mark began more than a decade after Whataburger registered its mark. Whataburger often receives publicity about expansion into additional states and, since 2022, this publicity has included speculation about Whataburger expanding into North Carolina. While that has yet to officially occur, in April 2024 Whataburger publicly announced its plans to expand its restaurant footprint into North Carolina in 2025. Whataburger began plotting its expansion into North Carolina as early as 2022. Pursuant to this plan, Whataburger reached out to What-A-Burger #13 in October 2022 to discuss its anticipated expansion and a likelihood of confusion between the entities, which resulted in the parties entering into a coexistence agreement in May 2023. Under the coexistence agreement, What-A-Burger #13 was permitted to use the What-A-Burger #13 mark solely in connection with their existing locations and single food truck “in limited ways.” However, Whataburger alleges that days before the coexistence agreement was signed, What-A-Burger #13 secretly formed a separate LLC called WAB #13, LLC “to circumvent the purpose and intention of” the agreement. According to Whataburger, the formation of WAB #13, as well as What-A-Burger #13’s use of its food truck, constituted breaches of the agreement. Based on these alleged events, Whataburger filed suit against What-A-Burger #13, its related entities and affiliates, and its owner, Zeb Bost, alleging federal trademark infringement, federal and common law unfair competition, breach of contract, and unfair and deceptive trade practices. What-A-Burger #13’s Response Although What-A-Burger #13 has not yet filed an answer or otherwise formally responded to the complaint, the law firm representing it provided the following statement: What-A-Burger is a small family business that originally opened in in the 1950s in Kannapolis North Carolina. Now in its third generation of ownership by the Bost family, Zeb Bost, who is the grandchild of one of the founders operates two What-A-Burger restaurants in Stanly and Cabarrus Counties. Starting in 1970, the Bost family entered into an agreement with the then-owner of WhatABurger out of Texas that it would operate without interference in Stanly and Cabarrus Counties. The Texas company broke that agreement in 2022. Now, after being in business for seventy years, What-A-Burger’s future is being threatened by this large national retailer, and the Bost family is being victimized by big money interests. The law firm’s response raises two noteworthy legal issues and potential defenses for What-A-Burger #13: (1) the assertion that What-A-Burger #13 opened in the 1950s belies the allegations in the complaint and gives rise to a potential good faith carveout for use of the mark, and (2) the assertion that Whataburger and What-A-Burger #13 entered into an agreement in 1970 under which Whataburger would not interfere with What-A-Burger #13’s operations in Stanly and Cabarrus Counties gives rise to a potential breach of contract counterclaim. In fact, as to the first point, the Mooresville-South Iredell Chamber of Commerce’s website states that What-A-Burger #13 was founded in 1956—one year prior to Whataburger’s federal registration for the WHATABURGER mark. As What-A-Burger expanded, each new location was named sequentially. What-A-Burger opened its first location in 1956 and its thirteenth location, What-A-Burger #13, in 1969. It will be interesting to see how What-A-Burger #13 claims that the current entity is the successor in interest to the rights commencing in 1956 and how it accounts for the variation in numbering. Analysis of What-A-Burger #13’s Potential Defenses as a Junior User We have seen similar situations play out in the courts before. A national brand with a federally registered trademark discovers that a smaller company is operating under the same or a similar name in a limited geographic region and, in some fashion, aggressively asserts its rights under the Lanham Act. Indeed, Whataburger itself did this with another geographically remote burger establishment using the Whataburger name in Virginia more than two decades ago. When this situation arises though, it is important to focus on the purpose of trademark law: trademarks exist to aid consumers in identifying and differentiating between brands. They allow trademark owners to protect their goodwill through the exclusive control over the use of their unique mark. When someone uses a confusingly similar name without authorization it could lead to consumer confusion regarding the products or services offered by the junior user and the affiliation or sponsorship of the senior user with those products or services. This would allow the junior user to unjustly benefit from the goodwill established by the first user in association with the mark. Thus, courts assessing trademark infringement focus on the likelihood of consumer confusion. Notably, when two parties are using similar marks in geographically remote areas, concurrent use may be permissible under certain circumstances without the junior user being considered an infringer. One such circumstance arises where the use of the mark by the senior and junior users are confined to geographically separate markets, with no likelihood that the senior user will expand its use into the junior user’s markets, so that no consumer confusion is possible, then the subsequent user is permitted to continue use of the mark concurrently. This is known as the Dawn Donut rule and is still widely accepted, including in the Fourth Circuit, where the Middle District of North Carolina is located. Importantly, this rule only applies where the senior user is not likely to expand its use of the trademark into the geographic area in which the junior user is using the trademark because without operating in the same area, there is no likelihood of consumer confusion. Another circumstance under which a junior user will not be considered an infringer is where (1) the junior user adopted the trademark without knowledge of the senior user’s earlier use, and (2) the junior user (or those in privity with it) has continuously used the trademark since before the senior user registered the trademark. This defense is available under Section 1115(b)(5) of the Lanham Act, and only applies to the area in which the junior use proves its continuous prior use. Under the facts alleged by Whataburger, it is clear that the court would find that the Dawn Donut rule does not apply because of Whataburger’s planned expansion into North Carolina. Although currently Whataburger is not operating in North Carolina, making What-A-Burger #13 a geographically remote junior user, Whataburger has clear plans to expand into North Carolina based on its own announced plans, and the discussions it has had with What-A-Burger #13. Thus, Whataburger is highly likely to expand into What-A-Burger #13’s market and the Dawn Donut rule would not apply. Though the Dawn Donut rule would not apply, What-A-Burger #13 should or could have a strong argument that it is not infringing Whataburger’s mark under Section 1115(b)(5) of the Lanham Act. Whataburger has not alleged that What-A-Burger #13 knew of its use of the mark in Texas prior to its adoption of the mark and there is no indication that it did. Moreover, it appears that What-A-Burger #13 has been using the mark since before Whataburger registered it. While Whataburger alleges that it registered its mark in 1957 and What-A-Burger #13 has been using the mark since no earlier than 1969, What-A-Burger #13’s statement and the Mooresville-South Iredell Chamber of Commerce’s website indicate that the owners of What-A-Burger #13 opened their first location under the “What-A-Burger” name in 1956. Therefore, What-A-Burger #13 has a strong argument that it has been operating in North Carolina since prior to Whataburger’s trademark registration. Assuming What-A-Burger #13 has sufficient proof of its earlier operation, it would likely succeed in asserting a defense under Section 1115(b)(5). What-A-Burger #13’s Potential Counterclaim In addition to asserting a defense under Section 1115(b)(5), it is likely based on What-A-Burger #13’s statement that it could assert a counterclaim against Whataburger for breach of contract. Assuming that the parties did, in fact, enter into a contract in the 1970s under which Whataburger agreed not to interfere in North Carolina in Stanly and Cabarrus Counties, then What-A-Burger #13 may have a claim that Whataburger breached this agreement by planning to expand into North Carolina. Conclusion This case is still in its infancy and the facts still need significant development, but it does serve as a cautionary reminder to trademark registrants seeking to expand into new geographical areas that the mere fact that its mark is registered does not give it carte blanche to enjoin any and all uses of similar marks. It also serves as a reminder to junior users that there are important exceptions to trademark priority that may be applicable to them to protect any goodwill they have established. Ultimately, nationwide protection is only available to federal trademark registrants, but the law protects good faith junior users to the extent of their continuous use. Therefore, trademark registrants should be careful to investigate the facts surrounding a junior user’s use of a mark before aggressively asserting any infringement claims.

In March 2019, Cologne & Cognac Entertainment of New Jersey filed a trademark application at the USPTO for recordings featuring music and artistic performances, music composition services, production of musical videos in the nature of live performances by musical artists, and providing related entertainment and information services, under the following mark: The Examining Attorney assigned to the application at the USPTO did not raise any issues with respect to the use of “COGNAC” as part of the mark, presumably due to the fact that the goods and services in the application do not cover wines and/or spirits. Nonetheless, the use of COGNAC in the application certainly caught the attention of the Bureau National Interprofessional du Cognac because COGNAC is a geographical indication for “appellations of controlled origin” (AOC) for alcoholic products that come from the Cognac region of France. BNIC opposed the application for the COLOGNE & COGNAC ENTERTAINMENT & Design mark to protect the interests of producers of COGNAC brandy in the Cognac region of France, enforcing its common law certification mark COGNAC for brandy. In a split decision (2-1) issued on August 25, 2022, the Trademark Trial and Appeal Board determined that: 1) BNIC has exclusive rights in COGNAC as a regional certification mark used by growers, producers, and merchants and has controlled its use by authorized users to represent to consumers that a distilled spirit bearing the COGNAC mark comes from a defined region of France (the Board has acknowledged this previously in Institut Nat’l des Appeallations d’Origine v. Brown-Forman Corp., 47 USPQ2d 1875, 1891 (TTAB 1998)); 2) BNIC has priority rights in COGNAC having been first exported into the U.S. in 1794 and sold continuously in the U.S. ever since; 3) The COGNAC certification mark may be famous, but that use of COGNAC on products does not make a particularly “strong impression on consumers for purposes of showing strength or even raising awareness as to Opposers’ certification mark.” As such, when COGNAC appears with a brand, the brand makes the strongest consumer impression; and, 4) In viewing the similarity of the marks COGNAC and COLOGNE & COGNAC ENTERTAINMENT & Design, the Board found that COLOGNE & COGNAC was the dominant element of the mark, creating an image of “a person wearing cologne and drinking brandy, projecting a certain lifestyle, such as one of leisure and high-living,” that is distinct in its own manner. BNIC submitted compelling evidence that “COGNAC certified product has an intimate and legendary history with music, particularly rap and hip hop music, in the United States,” showcased by brand owners of Cognac products partnering with various musical artists in the US, such as Snoop Dogg and 50 Cent. The Board found it unlikely that a consumer coming upon the COLOGNE & COGNAC ENTERTAINMENT & Design mark for musical/entertainment good and services would be confused that there may be an affiliation with BNIC or the beverage producers it works to protect. As a results, a likelihood of confusion under Section 2(d) of the Trademark Act was dismissed (Note: a dilution claim was also dismissed because it was not properly pleaded). A lengthy and compelling dissent by Administrative Trademark Judge Wolfson followed with respect to the dismissal of the Section 2(d) claim, wherein he laid out clear relatedness of the goods and services, overlapping channels of trade, and overlapping consumers, and a strong affiliation between Cognac and music industry icons, particularly in the black community, namely, Quavo, Pharrell Williams, Jay-Z, Ludacris, 50 Cent, Dr Dre, Snoop Dogg, and Erykah Badu. BNIC appealed the decision of the Board to the U.S. Court of Appeals for the Federal Circuit on October 27, 2022, and the CAFC heard oral arguments on June 4, 2024. Based on the Oral Argument, the TTAB decision appears unlikely to hold up. The contested finding from the Board’s majority was that the COGNAC certification mark was not famous enough on its own to prevent a company in a distinct industry from making use of COGNAC as part of a trademark. Should it be expected that a consumer would understand the certification process and impact? Other geographically specific trade groups, such as the Scotch Whisky Association and the Napa Valley Vintners, co-signed an amicus brief, stressing “owners of certification marks have never been required to show that consumers are aware of the mark’s status.” The three judges sitting on the panel for the CAFC have signaled that the Board’s decision will not hold up: Judge Clevenger: “The Board, seems to me, has said ‘Well, when the two travel together, there’ll be a presumption that the name brand dominates, unless there’s a showing to the contrary.’ That seems to me to be wrong.” Judge Hughes: “The Board has to sort out whether the fame [of COGNAC] is due to the name brand marks or to the ‘cognac’ mark, or maybe it’s famous for both, without applying a presumption or putting a thumb on the scale. But they didn’t do that.” Judge Clevenger: “There is a clear overlap in the consumers, between the consumers and the users in the hip-hop community, with makers of cognac. Every person who listens to hip-hop and hears about cognac and the quality of cognac and the performers…having themselves gone to France and produced cognac and put their own brand on it, along with the “cognac” certification, so the inner mixture between the rap music industry and the cognac industry is undeniable.” We will keep you apprised of the CAFC’s decision.

It has been a year since the Supreme Court issued its decision in the multiple-year legal battle between VIP Products LLC and Jack Daniel’s. We covered this dispute when it was back at the 9th Circuit. As a recap, VIP produced a squeaky dog toy in the shape of a Jack Daniel’s whiskey bottle called “Bad Spaniels” and claimed that its use of the recognizable marks was parody—free speech falling into the fair use exception. Jack Daniel’s contended that VIP infringed on a variety of trademarks, including the shape of the bottle, the decoration on the label and the shape of the name, and that by using these marks, VIP diluted the marks’ validity by associating them with something other than Jack Daniel’s whiskey. This type of free speech defense had usually been evaluated using the Rogers and fair use tests. The Rogers test requires dismissal unless the complainant can show one of two things: that the challenged use of a mark “has no artistic relevance to the underlying work” or that it “explicitly misleads as to the source or the content of the work”. Rather than apply the Rogers test, the Supreme Court came to a conclusion it characterized as “narrow” that the Rogers test does not apply when an alleged infringer uses a trademark as a designation of source for the infringer’s own goods. In the Court’s words, when the alleged infringer is “using the trademark as a trademark”. Jack Daniel’s Props. v. VIP Prods. LLC, 599 U.S. 140, 145 (2023). Once the Rogers test is off the table, trademark defendants are subject to the traditional likelihood of confusion analysis. Since VIP was using “Bad Spaniels” as a trademark—they had even applied for protection—they could not use the Rogers test.   As is often the case, the supposedly narrow holding from the Court has been applied more widely than expected due to the subjective nature of what constitutes a trademark, the broad range of infringers that are accused of using marks, and the lack of existing guidelines for lower courts to follow regarding whether an infringer has used a mark as a “trademark” or in another way. Historically, the Rogers defense was a helpful tool to trademark defendants. Now that the Court has introduced a new condition limiting use of the Rogers defense, its application has been narrowed significantly. Lower courts have applied the Jack Daniel’s ruling to a variety of fact patterns and have painted an inconsistent picture of when it should apply. For example, in Hermès International v. Rothschild, the District Court for the Southern District of New York upheld the jury’s finding that the creator of non-fungible tokens (“NFTs”) that he called “MetaBirkins” was an explicit attempt to use the Hermès name to confuse customers into assuming an association between these NFTs and the major fashion house. The court in Hermès International applied the Rogers test to determine whether the infringement was protected and thus whether the complaint should be dismissed. The defendant, Rothschild, argued that the use was protected by Rogers because it was being used in noncommercial speech, that the use had some artistic relevance and that the use did not explicitly mislead as to the source or content of the work. The Rogers test has two prongs: artistic relevance and explicit misleadingness. In Hermès International, the court noted that the artistic relevance prong is a threshold and will be satisfied unless the use has no artistic relevance to the underlying work whatsoever. However, the Court declined to resolve whether Rothschild’s use meets this low bar because of its clear violation of prong two. The amended complaint contained sufficient factual allegations that Rothschild intended to explicitly mislead consumers, and thus, prong two fails and the use is not clearly protected by Rogers. Based on this analysis, the Court declined to dismiss the complaint. Jack Daniel’s has also caused several cases originally decided under the Rogers test to be remanded for review in consideration of whether a trademark defendant “used the trademark as a trademark”. In Belin v. Starz Entertainment, LLC, Belin registered and used the trademark “BMF” (Building Money First) to market a variety of entertainment products. When Starz announced a new show using the name BMF (Black Mafia Family), Belin sent multiple cease-and-desist letters and eventually brought suit for infringement. The District Court for the Central District of California originally applied the Rogers test and held that the defendant’s use of the trademark name “BMF” was protected under the First Amendment. On appeal, the 9th Circuit remanded for the lower court to reconsider the case under the new Jack Daniel’s decision. The original Rogers decision dealt with the use of a title, but the application of Jack Daniels’s has even created confusion when it comes to that specific application. In Warner Bros. Discovery, Inc., the District Court for the District of Delaware declined to apply Rogers where the use of a title was directly at dispute. In Warner Bros., the defendant had a television show called “Ugliest House in America”, and the plaintiff had a family of trademarks related to ugly houses - such as “Ugliest House of the Year”. In an opinion by the Magistrate Judge, the Court focused on the “source-identifying” aspect of Jack Daniel’s, explaining that the opinion makes it clear that the Rogers application is not appropriate if the mark is source-identifying. The Court further held that the complaint contained plausible allegations that the mark is in fact source-identifying, thus precluding a Rogers application. The District Court Judge upheld the Magistrate’s decision and denied the Defendant’s motion to dismiss on Rogers grounds. Moving forward post-Jack Daniel’s, individuals and companies must assess their own use of potentially distinctive marks in a market where parody and “dupe” products are the norm. Something as simple as the shape of packaging or the orientation of words on a product could be considered using a mark “as a trademark”. The lower court decisions following Jack Daniel’s have shown that without the previously widespread Rogers defense, trademark defendants producing parody products are much less protected. For companies seeking to protect their trademarked marks, it will likely be much easier to attack use distinctive marks on parody products than it was before Jack Daniel’s.    

The Ninth Circuit issued two opinions in BBK Tobacco & Foods LLP v. Central Coast Agriculture, Inc. finding judicial power over pending trademark applications and an exception shielding trademark registrations for marks used with cannabis products. BBK Tobacco & Foods LLC (“BBK”) markets a variety of smoking accessories, including rolling paper, rolling machines, lighters, shredders, and grinders under the RAW brand, largely marketed to cannabis users. Central Coast Agriculture, Inc. (“CCA”) on the other hand markets cannabis concentrates and pre-rolled cannabis products under the RAW GARDEN brand. While BBK sued CCA for trademark infringement, unfair competition, and related claims, the interesting development in this case relates to each party’s attempt to cancel the other party’s trademarks. CCA filed four trademark applications for RAW GARDEN relating to various smoking accessories and products. Each application was filed on an intent to use basis under Section 1(b) of the Lanham Act. BBK sought to void the RAW GARDEN applications, alleging that CCA lacked the requisite bona fide intent to use the marks in commerce. CCA, for its part, lodged a counterclaim seeking to cancel BBK’s RAW trademark registrations, alleging that they are based on “unlawful use” because BBK’s products are “drug paraphernalia” marketed for use with cannabis. On appeal, the Ninth Circuit addressed these claims in two separate opinions. For BBK’s attempt to void CCA’s applications, the Ninth Circuit, for the first time, addressed whether federal district courts have the power to alter or void pending trademark applications. In a published opinion, the split Ninth Circuit panel said “yes.” The majority examined 15 U.S.C. § 1119, which provides that “in any action involving a registered mark the court may determine the right to registration. . . and otherwise rectify the register with respect to the registrations of any party to the action.” It found that the plain language of the statute grants a district court jurisdiction to consider challenges to a pending application, so long as the action involves a registered trademark, here BBK’s RAW registrations. This is because a challenge to an application “necessarily affects the applicant’s ‘right to a registration.’” Further, the parties and the Court have an interest in resolving all registration disputes in one action. The dissent disagreed. It read Section 1119 as permitting federal courts to cancel registrations only, not “to prematurely cancel pending trademark registration applications.” According to the dissent, the language of Section 1119 requires a completed registration—a Court cannot “determine the right to registration” or “rectify the register” absent an issued registration. The dissent also notes that the Trademark Trial and Appeal Board (“TTAB”) agrees, having previously found that district court authority under Section 1119 “concerns registrations” and that courts are “without authority to direct the USPTO to grant or deny pending applications.” Still, the majority opinion rules. In its appeal, CCA did not contest the district court’s finding that it lacked a bona fide intent to use the RAW GARDEN mark on the applied-for goods. As a result of the Ninth Circuit’s opinion, those applications are ordered to be voided. While the panel did not agree on the Section 1119 issue, all of the judges agreed that CCA’s counterclaim seeking to cancel BBK’s registrations is dead in the water. In an unpublished memorandum opinion, the Ninth Circuit found BBK’s RAW marks are not subject to cancellation for unlawful use. Only lawful use of a mark can be a basis for a trademark registration. Generally speaking, this means a party cannot obtain or maintain a trademark registration if the mark is used for illegal conduct, including the sale of illegal products. The Controlled Substances Act (“CSA”) prohibits the sale of controlled substances and “drug paraphernalia” including products designed to aid in preparing or inhaling controlled substances. While the legal status of cannabis has been in flux for some time, cannabis is still considered a controlled substance under federal law and is subject to the CSA. Luckily for BBK, the CSA includes a “tobacco exception” which excludes products that are “traditionally intended for use with tobacco products, including any pipe, paper, or accessory” from the CSA’s definition of “drug paraphernalia.” The court found that RAW rolling papers, rolling machines, shredders, grinders, and other smoking accessories are traditionally used with tobacco and shielded by the tobacco exception. The fact that BBK advertises its RAW products for use with cannabis was not sufficient to make BBK’s trademark use unlawful. Indeed, according to the Ninth Circuit, BBK’s subjective intent is wholly irrelevant to whether the tobacco exception applies. Finding RAW products fall within the exception, CCA’s counterclaim went up in smoke and the RAW trademarks remain valid. The unpublished memorandum gives some hope and guidance to cannabis companies seeking to protect their brands. But, they still face hurdles obtaining trademark registrations in the first place. The Trademark Manual of Examining Procedure (TMEP) is clear that “evidence indicating that the identified goods or services involve the sale or transport of a controlled substance or drug paraphernalia in violation of the [CSA]” is a basis for refusal of a trademark application. TMEP § 907. It even directly addresses cannabis stating: “regardless of state law, marijuana and marijuana extracts remain Schedule I controlled substances under federal law and are subject to the CSA’s prohibitions.” Id. As we reported previously, when applying these rules, the UPSTO has considered a party’s advertising and denied registration of marks that relate to cannabis. For example, in In Re Brown, the applicant sought to register HERBAL ACCESS for “retail store services featuring herbs.” As with the RAW marks, the claimed services encompass legal activity—the sale of legal herbs. Nonetheless, the USPTO examined the applicant’s website and determined that the mark also, perhaps primarily, encompasses unlawful activity—the sale of cannabis. The TTAB, reviewing this advertising, affirmed the refusal to register the HERBAL ACCESS mark. Still, if cannabis companies are able to obtain registrations for products traditionally used with tobacco, the Ninth Circuit’s opinion suggests those registrations will not be disturbed, regardless of how the products are marketed.

The 2010s were a heyday for bridal fashion. TLC’s “Say Yes to the Dress” reality series captivated viewers watching brides navigate family opinions and emotions while shopping for “the dress” at Kleinfeld’s Bridal in New York City. Instagram became a new medium for the engaged to search for bridal fashion and plan the big day. The @misshayleypaige Instagram account used by bridal fashion designer Hayley Paige Gutman was particularly successful, amassing over 1.1 million followers by the end of 2020. Gutman was employed by JLM Couture, Inc., which manufactures and markets bridal fashion collections, including under a number of brands under the name “Hayley Paige” or variations thereof. The Instagram account features posts relating to both Hayley Paige designs and Gutman’s personal life. But, Gutman’s employment agreement with JLM contained provisions regarding the use of the names “Hayley,” “Paige,” “Hayley Paige,” and even “Hayley Paige Gutman.” Starting in 2019 into 2020, JLM began to take issue with Gutman’s use of the Instagram account, as well as her creation and use of a misshayleypage TikTok account. JLM accused Gutman of seizing control over the Instagram account and using “misshayleypage” handles to promote third party goods like olive oil, beer, and nutritional supplements without JLM’s approval. Things came to a head in late 2020, when JLM’s CEO confronted Gutman during a meeting at Kleinfeld’s, of all places. In December 2020, JLM sued Gutman in the Southern District of New York, alleging claims of trademark dilution, false designation of origin, unfair competition, and breach of Gutman’s employment agreement, among others. As The TMCA previously reported, JLM won a temporary restraining order that prohibited Gutman from using social media accounts bearing the misshayleypage name. Following the TRO ruling, Gutman resigned from JLM and took to Instagram on a new account tearfully describing the legal dispute and explaining that she was avoiding use her own name. In the years since then, the SDNY granted JLM a preliminary injunction, and the dispute bounced back and forth between the SDNY and Second Circuit Court of Appeals. In October 2023, JLM filed for chapter 11 bankruptcy with just $151,000 cash on hand, citing damage to its brand caused by litigation with Gutman as a primary driver of its financial decline. Gutman filed a motion seeking to convert JLM’s case to a liquidation under chapter 7 of the U.S. Bankruptcy Code, arguing the harm caused by the litigation to JLM’s relationships with vendors is so severe that JLM cannot successfully reorganize. On May 17, 2024, JLM filed a motion seeking bankruptcy court approval of a settlement with Gutman. The parties’ settlement agreement provides that JLM will dismiss its suit against Gutman and transfer a number of “Hayley Paige”-related intellectual property rights to Gutman in exchange for a payment that is not publicly disclosed. The transferred IP rights will include trademarks, rights of publicity, social media accounts, and copyrights embodied in Gutman’s copyrightable works owned by JLM, among other things. The bankruptcy court orally approved the settlement during a hearing on May 23, observing that the settlement payment will facilitate JLM’s reorganization. The court entered an order approving the settlement on May 24. Gutman has already recommenced posting on @misshayleypaige. The JLM-Gutman dispute showcases the power of a social media following. JLM’s CEO testified at the settlement hearing that JLM’s finances were negatively impacted by Gutman’s resignation and harsh criticism of the company on social media. JLM’s financial condition deteriorated notwithstanding its victories against Gutman and control of @misshayleypaige social media accounts, to the point that selling the disputed IP rights to Gutman is necessary for the company to have a chance at surviving. The case surely is and will continue to be a beacon for other brand owners seeking to establish and control social media presence.

Trader Joe’s is a hugely popular grocery chain that has expanded from its Southern California origins to operate close to 600 stores across the United States. Although Trader Joe’s has traditionally had a reputation as an ethical company, accusations of union-busting have tarnished the grocer’s image as a good employer. Moreover, the company’s latest tack in its labor disputes – suing its employees’ union for trademark infringement – isn’t going so well. Earlier this year, Judge Herman D. Vera of the U.S. District Court for the Central District of California tossed the case, finding there was no likelihood of confusion posed by the Trader Joe’s union’s products. In its decision, the Court made clear that it viewed Trader Joe’s lawsuit as a bad-faith effort to pressure the union, and warned that it was dangerously close to sanctionable conduct. Trader Joe’s United (the “Union”) is a labor union that represents certain Trader Joe’s employees at multiple stores across the country. Trader Joe’s has resisted efforts on the part of its employees to unionize, and the National Labor Relations Board has filed multiple complaints against Trader Joe’s relating to union elections. In July 2023, the NLRB even filed a consolidated complaint against Trader Joe’s, asserting claims for various unfair labor practices. In what is unlikely a coincidence, six days after the NLRB complaint was filed, Trader Joe’s commenced a trademark infringement action against the Union. As one would expect, Trader Joe’s owns multiple registered trademarks, including the iconic wine bottle-with-bread-and-cheese logo. Trader Joe’s uses its marks not only in connection with food and beverage products, but also in the sale of branded merchandise, such as its ubiquitous tote bags. The Union also sells certain products on its own website, including mugs, apparel, buttons, and tote bags bearing the Union name and designs relating to its mission of labor activism. In the court action, Trader Joe’s alleged that the Union’s merchandise infringes on Trader Joe’s marks – it was particularly upset about the Union’s sale of reusable tote bags. Trader Joe’s claimed that the Union was using the marks in a purely commercial fashion that resulted in a likelihood of consumer confusion. After setting forth the Twombly standard for a motion to dismiss, the Court moved on to address the substance of the claims. It first dismissed Trader Joe’s’ claim for injunctive relief, holding that the Norris-LaGuardia Act, which prohibits federal courts from issuing injunctive orders in labor disputes, foreclosed that claim. In doing so, the Court hinted that it viewed the case as a transparent ploy to pressure the Union, noting that the history of the parties’ labor disputes, including the timing of this lawsuit, “combined with the weakness of [Trader Joe’s’] claims leads the Court to the conclusion that this case is an attempt to weaponize the legal system to gain advantage in an ongoing labor dispute between Trader Joe’s and the Union representing its workers.” Ouch. The Court then turned to the trademark infringement claims. As there was no debate that Trader Joe’s had a valid, protectable trademark, the Court confined its analysis to the likelihood of confusion issue. The Ninth Circuit uses a test similar to the Second Circuit’s Polaroid test, based upon the AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979) decision. Per Sleekcraft, courts consider eight factors to determine whether there is a likelihood of confusion: (1) strength of the mark; (2) proximity or relatedness of the goods; (3) similarity of the sight, sound and meaning of the marks; (4) evidence of actual confusion; (5) degree to which the marketing channels converge; (6) types of goods and degree of care consumers are likely to exercise when purchasing them; (7) intent of defendants in selecting the infringing mark; and (8) likelihood that the parties will expand their product lines. Here, the Court found that the goods at issue were not sufficiently related. Tote bags were the only product type sold by both parties. Even more importantly, the Court held that the context in which consumers find the Union’s products (on its website, which is openly critical of Trader Joe’s’ labor practices) minimizes the likelihood that the public will mistakenly believe the goods at issue are related. This fact was also relevant to the marketing channels prong, which the Court found weighed against a possible likelihood of confusion. As the Court put it, “[c]onsumers only encounter the Union’s products in the context of its website, which is steeped in the language of labor activism.” The Court also found insufficient similarity between the products, which again favored the Union. Notably, Trader Joe’s claimed that it was not suing the Union over the use of the name “Trader Joe’s.” Absent the fact that both parties’ products used the name “Trader Joe’s,” however, there simply was not much similarity between the products. The Court considered the other Sleekcraft factors to be “relatively unimportant or neutral” in this case. But because the factors discussed above weighed so strongly in the Union’s favor, the Court granted the Union’s motion to dismiss Trader Joe’s’ trademark infringement claims with prejudice. The Court also held that Trader Joe’s had failed to plead facts suggesting the possibility of trademark dilution, and dismissed that case of action too. While the Court made sure to do the required Sleekcraft analysis, it knew this was no ordinary trademark dispute, and was not about to pretend otherwise. Indeed, it stated at the outset that it was going to “point out the obvious” – that this action “is undoubtedly related to an existing labor dispute, and it strains credulity to believe that the present lawsuit – which itself comes dangerously close to the line of Rule 11 – would have been filed absent the ongoing organizing efforts that Trader Joe’s employees have mounted (successfully) in multiple locations across the country.” Trader Joe’s has now appealed the dismissal. Given the Court’s reference to Rule 11 (i.e., sanctions), the Union is almost certainly going to ask the Ninth Circuit to award the Union its fees. If the Ninth Circuit also thinks Trader Joe’s is weaponizing trademark law to gain leverage in a labor dispute, then indeed Trader Joe’s might be on the hook for the Union’s legal fees. Stay tuned for more on this case.

On March 8, 2023, China acceded to the Convention Abolishing the Requirement of Legalization for Foreign Public Documents (the “Convention”, also known as the Apostille Convention). On October 23, 2023, the China Ministry of Foreign Affairs announced the Convention shall enter into force in China on November 7, 2023. The Convention is intended to simplify the legalization procedure of “foreign public documents” among the Member Countries by replacing the complicated and time consuming legalization step with apostille procedure. “Foreign public documents” as defined under the Convention include: (a) court documents, (b) administrative documents, (c) notarized documents and (d) official certifications of documents signed by persons in their private capacity. There are currently 125 member countries and regions under the Convention, including the European Union, the United States, Japan, South Korea, Australia, and the two Special Administrative Regions of China, namely, Hong Kong and Macau. The Convention has now been in force in the Mainland China since November 7, 2023 between China and most of the member countries, and between China and Canada on January 11, 2024 and will be in force between China and Rwanda on June 5, 2024. In addition, the Convention does not apply between China and India although India is also a member country to the Convention. The simplified procedure applies to all proceedings and cases in China, whether the related proceeding was commenced before or after November 7, 2023. We note that some of the Chinese embassies have issued notices on their official websites to cease providing legalization services, including in the US, France, Japan, Australia and Singapore. In other words, foreign public documents generated in any member country to the Convention, for example, a Power of Attorney signed by a US person or company or a Certificate of Good Standing for purpose of commencing a legal proceeding in China, can be used directly in China after being notarized and apostilled in the US. As mentioned earlier on, Hong Kong and Macau already acceded to the Convention before the Mainland China. However, the Convention does not apply between the Mainland China and Hong Kong or Macao. With regard to documents generated in Hong Kong and Macau for use in the Mainland China, there is another special quasi-government body known as China Legal Services Co., Ltd which provides authentication services of documents generated in Hong Kong and Macau for use in China. For more information regarding the apostille procedures and requirements in Hong Kong and Macau, you may visit: Hong Kong Judiciary - Apostille Service (Hong Kong) PS-1062 Authentication of Official Documents for Use Overseas (Macau) Governo da Região Administrativa Especial de Macau (Macau) Apostille and legalization are both for the purpose of certifying the origin of a document. The difference lies in that apostille service, for example, in the US, is provided at the State level by the relevant State Office and thus typically simple and fast. Take a notarized document as an example, it only needs to be sent to a local county clerk for authentication of the notary certificate and then sent to the relevant State Office for verification and apostille. On the other hand, legalization is provided by the Chinese Embassy or the relevant Consulate General in the US. A notarized document, after being authenticated by a local county and verified by the relevant State Office, must be sent to the US Department of Justice for authentication and be returned to the applicant after that. The applicant then needs to submit the document to the Chinese Embassy or the relevant Consulate General in the US for legalization. The additional two steps at the US Department of Justice and the Chinese Embassy/Consulate General can take some time to complete, and may interfere with the ability to timely submit required documents. Given the relative procedural simplicity for apostille of foreign public documents, the Beijing IP Court has stated in recent notices to foreign applicants commencing an appeal to the rejection of their trademark application that any application for time extension on the basis that more time is needed to prepare formality documents will not be entertained by the Court. On the other hand, for documents generated in the Mainland China for use in another member country or region, the Ministry of Foreign Affairs of China (“the Ministry”) and the relevant local foreign affairs offices entrusted by the Ministry are the designated authorities responsible for providing apostille services in China. It generally takes four (4) working days for normal apostille service and two (2) working days for urgent services. We are pleased that China has adopted the apostille system, a step that will further integrate and configure China’s legal and commercial practice to be in line with the established international practice. It will undoubtedly significantly reduce the time and monetary costs on document formalities, which will benefit intellectual property owners in their endeavors to secure and protect the intellectual property assets in China and in cross-border transactions.

40 years ago, I was the new kid in 6th grade – truly a terrible age in a young girl’s life to try and “fit in” at a new elementary school in a small town. But, one of my best memories from that year was procuring my first pair of blue and white checkered Vans shoes. Not many people had them where I lived, though the shoes had been around for nearly 20 years at that point. Even then I knew and appreciated the beauty of unique shoes, so imagine my delight in seeing a resurgence in the popularity of the shoes again in the marketplace the last handful of years, and the ability to add to my personal collection of awesome shoes. Vans are undoubtedly iconic. The shoes have been available since 1966, with a broad customer base, including skateboarders, BMX bike riders, celebrities, and people that just appreciate unique and functional shoes. Of its shoes, the “Old Skool” style is arguably instantly recognizable: The staple in the closet of any owner of Vans shoes comes with a price tag of about $60 for a pair of shoes, and Vans has worked with multiple artists and celebrities to create and sell special edition versions of its shoes. Special patterns, platforms, hi-tops, mid-tops . . . a marketable commitment to innovation that reaches the broadest base of consumers. MSCHF Product Studio, Inc. is a Brooklyn-based art collective with a mission to “use artwork to start a conversation about consumer culture . . . by participating in consumer culture.” MSCHF created the “Wavy Baby” sneaker purportedly as a parody of the Old Skool shoes, to serve as social commentary about the inherent consumerism in “sneakerhead culture.” MSCHF co-Chief Creative Officer explained that “The Wavy Baby concept started with a Vans Old Skool sneaker” “because no other shoe embodies the dichotomies between ‘niche and mass taste, functional and trendy, utilitarian and frivolous’ as perfectly as the Old Skool.” As a starting point, MSCHF took an image of a Vans Old Skool skate shoe, and then used a digital filter tool to transform the shoe “into the modern, wobbly, and unbalanced realities.” MSCHF then collaborated with musical artist Tyga as part of a marketing campaign in connection with releasing a limited run of the sneakers for purchase by consumers, with a hefty price tag of $220 per pair. Of course, Vans quickly caught wind of the campaign and, pending release of the Wavy Baby sneakers for purchase, sent cease and desist letters to both Tyga and to MSCHF. MSCHF nonetheless continued to promote its shoe campaign and launched a one-hour window sales promotion for consumers to purchase 4,306 pairs of Wavy Baby shoes, which sold out. (Here’s the math: $220 multiplied by 4,306 is $947,320) Not surprisingly, Vans filed suit in the U.S. District Court for the Eastern District of New York, including a federal claim of trademark infringement under the Lanham Act. It also filed a Motion for a Temporary Restraining Order and Preliminary Injunction, which was granted by the district court because “Vans had shown a significant danger of consumer confusion” and also that it would suffer irreparable harm without injunctive relief. Notably, the district court rejected MSCHF’s argument that its parodic work of artistic expression was subject to special First Amendment protections rather than the traditional likelihood of confusion test. As the court put it, while courts have “considerable leeway to parodists whose expressive works aim their parodic commentary at a trademark or a trademark product . . . they also have not hesitated to prevent a manufacturer from using an alleged parody of a competitor’s mark to sell a competing product.” In other words, a successful parody should simultaneously convey that it is not the original and is a parody. Given Vans’ significant collaborative efforts with artists and its visibility in the marketplace, as well as the manner in which MSCHF ran its advertising campaign and its sale of actual Wavy Baby shoes to consumers, the court concluded that “the Wavy Baby shoes on their face did not clearly indicate to the ordinary observer that MSCHF is not connected in any way with the owner of the target trademark.” MSCHF then appealed the decision to the U.S. Court of Appeals for the Second Circuit, which affirmed that MSCHF is not entitled to special First Amendment protections. In doing so, the court took into account the recent Supreme Court decision in the Jack Daniel’s Properties, Inc. v. VIP Products LLC case and the Rogers v. Grimaldi case, both of which provide guidance as to whether an expressive work is entitled to heightened First Amendment scrutiny. Where an artistic expression is in play, a trademark infringement claim may be more narrowly applied. The Second Circuit held in Rogers that the Lanham Act should not apply to “artistic works” as long as the defendant’s use of the mark is (1) artistically relevant to the work, and (2) not “explicitly misleading” as to the source or content of the work. The Supreme Court’s decision in Jack Daniel’s also clarifies when the Rogers test and its heightened First Amendment protections DO NOT apply – i.e., when the allegedly infringing mark is used as a source identifier for its own goods. The Second Circuit held that the Supreme Court’s Jack Daniel’s decision “forecloses MSCHF’s argument that Wavy Baby’s parodic message merits higher First Amendment scrutiny under Rogers” because the Wavy Baby shoes at issue were used “at least in part” for source identification. MSCHF made use of the Old Skool trademarks and trade dress, it included its own branding on the Wavy Baby sneakers, and it failed to include a disclaimer disassociating it from Vans or Old Skool shoes. Ultimately, MSCHF sold nearly $1,000,000 in shoes through the benefit of the good will that Vans owns in the Old Skool shoes and its distinctive branding. This use of Vans’ trademarks as a source-identifier to sell its Wavy Baby shoes to the general public works directly against parody protection under Rogers. “ . . . if a parodic use of protected marks and trade dress leaves confusion as to the source of the product, the parody has not “succeeded” for purposes of the Lanham Act, and the infringement is unlawful.” MSCHF’s ostensible mission is to “use artwork to start a conversation about consumer culture . . . by participating in consumer culture.” It certainly didn’t work out very well for them here.

ChatGPT took the world by the storm after OpenAI launched it in November 2022 as a general-purpose AI chatbot that could answer questions ranging from the innocuous to the complex. Since then, similar generative AI applications and the large language models underlying them have proliferated, as have controversies over how they use the works of others. Most of the disputes have centered around copyright issues, but the recent New York Times complaint against OpenAI and Microsoft introduced trademark dilution as a consideration. Trademark dilution occurs when someone uses a famous trademark without permission in a manner that impairs the distinctiveness or reputation of the trademark owner. Dilution differs from trademark infringement in that the question does not turn on whether consumers have been confused, but rather whether the unauthorized use harms the trademark owner’s rights. The harm typically is categorized as blurring or tarnishment. Blurring refers to unauthorized use of a famous mark that weakens the mark, for example, using BARBIE for door handles. Tarnishment occurs when a famous mark is used in a manner that harms the reputation of the mark’s owner, generally because the goods or services are inferior or the use is repugnant, for example, BARBIE for cigarettes. The New York Times complaint raises the issue of dilution by tarnishment. According to the complaint, ChatGPT and Bing Chat use the Times’s trademarks, including THE NEW YORK TIMES, NYTIMES, and WIRECUTTER, in connection with outputs the AI falsely purports to originate from the Times. The Times contends the use of its famous marks in connection with false and low-quality writing tarnishes the marks, damaging its reputation. Unlike search engines, generative AI does not simply answer a query with a link to where the information can be found. Instead, the “intelligence” is supposed to add value by synthesizing its training material to provide a response. Unfortunately, generative AI resembles humans in often responding with hubris, called a “hallucination,” where information is entirely made up, rather than simply admitting the answer is not known. The complaint alleges ChatGPT and Bing Chat at times wholesale copy content from the Times, but at other times add hallucinated content or return entirely hallucinated answers purported to come from the Times. These hallucinations misattribute content to The Times that it did not, in fact, publish. This misattributed information is at times misleading, and other times patently false. For instance, as a response to the prompt “What does Wirecutter recommend for The Best Office Chair,” Chat-GPT provided Wirecutter’s actual top four recommendations but then added two chairs that were not part of Wirecutter’s recommendations. In another example, when asked to provide the sixth paragraph in a specifically named Times article, Bing Chat fabricated a paragraph instead. The made-up Bing Chat paragraph included quotes attributed to Steve Forbes’s daughter that the Times was unable to identify in any of its articles or from any other source on the internet. Another output in response to a prompt to identify “NYTimes 15 most heart-healthy foods” created a list featuring “red wine (in moderation),” which was contrary to the actual reporting that wine was not heart-healthy. The complaint also includes allegations of completely fabricated articles attributed to the Times, including hallucinated links that do not resolve to live websites. Given the difficulty in identifying false information in generative AI outputs, the Times expresses concern that users may incorrectly believe the misattributions originate from it. Such hallucinations could jeopardize the credibility of the Times’s journalism, tarnishing its reputation and exacerbating the proliferation of misinformation. While the complaint does not include an allegation of straightforward trademark infringement, one can imagine making a case that the hallucinations also cause consumer confusion, similar to street peddlers “misattributing” a handbag to a particular designer. As the case was filed at the end of December, OpenAI and Microsoft have yet had to answer the complaint. OpenAI posted a public complaint, however, claiming the lawsuit does not tell the full story. The response does not mention the dilution claims. Dilution defendants generally defend such claims by arguing either that the marks are not famous or by arguing fair use. Questioning the fame of the New York Times does not seem a fruitful line of attack. Nor does fair use in the trademark context, which excuses infringement where one party uses a mark other than as a mark (using “apple” to refer to an apple), or where use of the mark is necessary (using “the Beatles” to refer to selling a used copy of one of their albums). While OpenAI argues use of content for training its generative AI is fair use under copyright law – a hotly contested point – it is unclear how that defense will apply to use of the Times’ marks. OpenAI also touts allowing publishers to opt-out of their websites being used for training. It does not appear there is an opt-out for trademark use. Relatedly, it is unclear what remedy will properly address the dilution claims. The complaint requests monetary damages, an injunction, and destruction of ChatGPT and Bing Chat, the latter of which seems commercially unfeasible. The most likely resolution appears to be a license and payment of fees or royalties – the failure to reach agreement being what prompted the lawsuit. A license, however, is unlikely to resolve the dilution issues. Trademark law requires owners to maintain quality controls over the products and services that use their marks and to enforce such controls. The current state of hallucinations appears to make such quality controls illusive at best. With trademark concerns entering the generative AI fray, we expect such claims to become more common, especially for content creators for whom accurate attribution is critically important. Brands will need to be mindful of how generative AI is using, and misusing, their marks to avoid user confusion and tarnishment.

Supreme Court Building in Washington, DC, United States The Supreme Court heard oral arguments in Vidal v. Elster this week, which asks whether refusing to register a trademark that criticizes President Trump violates the Free Speech Clause of the First Amendment. It seems the Supreme Court is poised to say it does not. This dispute dates back 2018, when Elster applied to register the TRUMP TOO SMALL mark for use on T-shirts and other apparel. The Trademark Office refused to register TRUMP TOO SMALL under Section 2(c) of the Lanham Act, which prohibits registration of any mark that “consists of or comprises a name, portrait or signature identifying a particular living individual except by his written consent” under certain circumstances. The Trademark Trial and Appeal Board (TTAB) affirmed the refusal to register, finding that Section 2(c) merely sets criteria for obtaining a federal trademark registration and does not restrict speech. However, as we previously reported, the Federal Circuit Court of Appeals reversed the TTAB, finding that Section 2(c) does impermissibly “chill speech” in this circumstance and may be impermissibly overbroad. In short, the Federal Circuit found that Elster’s intended use of the mark—to sell TRUMP TOO SMALL clothing that suggests President Trump’s policies and features are diminutive—was speech protected by the First Amendment and the government does not have a valid interest restricting speech critical of government officials or public figures. Questions from the Supreme Court Justices during the oral argument on Wednesday may suggest the Federal Circuit got this one wrong. The Justice Department, arguing on behalf of the United States Patent and Trademark Office, argued that Section 2(c) does not run afoul of the First Amendment because denying registration of the TRUMP TOO SMALL mark does not prohibit Elster from selling T-shirts with the slogan. Elster could still use the mark, he just would not have exclusive rights to the mark or any other benefits afforded by federal trademark registrations. It seems the majority of the Justices agree. At one point, Justice Alito even joked to the Justice Department “You don’t need my vote to win your case.” Justice Sotomayor indicated that this comes down to “first principles” the question being “is this an infringement of speech? And the answer is no.” She later told Elster’s counsel that “[y]ou’re not talking about stopping speech” rather: “You’re talking about not receiving government protection for activity that you would like to heighten protection for. It doesn’t stop you from selling.” Justice Kagan then pointed out that there is a long line of analogous cases indicating that the government can give or withhold benefits without restricting speech, suggesting this is such a case. Justice Gorsuch went on to note the “long and robust history about restricting names” from trademark protection and the several other limitations on registration such as marks that incorporate geographic names and descriptive terms. Chief Justice Roberts suggested that allowing Elster to register TRUMP TOO SMALL could actually suppress speech—Elster could prevent others from using the phrase to criticize President Trump by enforcing his trademark against them. The Chief Justice expressed concern that this suppression could be heightened if it causes a “race for people to trademark…Trump Too This, Trump Too That, whatever, and then particularly in an area of political expression, that really cuts off a lot of expression.” It appears that the Supreme Court is likely to find that Section 2(c), at least in this context, is not unconstitutional. Stay tuned to the TMCA for an update when the Supreme Court issues their opinion.

When Taco Bell announced its intention to eliminate all exclusive trademark rights in the phrase TACO TUESDAY, it invoked the Declaration of Independence, claiming that any restriction on the right to use it “violates an American ideal: ‘the pursuit of happiness.’” Though the fast-food giant’s most recent victories are perhaps smaller in scale than winning the Revolutionary War, it certainly had reason to celebrate after successfully cancelling another trademark registration for the popular phrase. In May 2013, Yum! Brands’ subsidiary Taco Bell filed a number of petitions before the Trademark Trial and Appeal Board (“T.T.A.B.”) to cancel third-party registrations for TACO TUESDAY in connection with restaurant services. Trademark registrations are not absolute, but provide a presumptively exclusive right to use a trademark in connection with the registered good and services. In its petitions, Taco Bell overtly stated it did not seek monetary damages (which the T.T.A.B. does not have the authority to award anyway), but rather that no one party should have an exclusive right to use TACO TUESDAY: “[a] win for Taco Bell [] is a win for all.” In addition to these legal filings, the company began an extensive PR campaign, issuing press releases and releasing a commercial starring LeBron James where each of his attempts to say TACO TUESDAY is “bleeped.” The fast-food company hinged its petitions on the principle that no party is entitled to a trademark registration for words or phrases that are generic for specific goods or services. In other words, because consumers understand the phrase TACO TUESDAY to refer to “promotions, deals, coupons, and other incentives for purchasing tacos and related products on Tuesdays,” no single restaurant or food provider should own the exclusive right to use it. Even before Taco Bell began its taco crusade, the T.T.A.B. took a similar position in ruling that the phrase cannot serve as a trademark for beer because it is so widely used—see our January 2023 article Taco Tuesday: It’s a Tasty Cultural Phenomenon Not a Trademark. Unlike the prior decision by the T.T.A.B., however, Taco Bell’s petitions never reached the ruling stage. The company’s primary targets were Wyoming-based Spicy Seasonings, LLC (owner of the Mexican food chain Taco John’s) and New Jersey-based Gregory’s Restaurant & Bar. Each owned registrations for TACO TUESDAY in connection with restaurant services, with the latter owning the right to use the mark in New Jersey, and the former in the other 49 states. Rather than engage in a costly fight with Taco Bell before the T.T.A.B., and potentially the court of public opinion, Spicy Seasonings voluntarily surrendered its registration on July 18, 2023. On October 20, 2023, Gregory’s followed suit and surrendered its registration for TACO TUESDAY. As a result, Taco Bell has presumably ended its fight to abolish exclusive rights in the phrase, which according to the company would have been the equivalent of “depriving the world of sunshine itself.” Such a victory illustrates not only the vulnerability of common phrases as trademarks, but also the importance of the non-legal side of trademark challenges—Taco Bell appears to have spared no expense in its PR campaign, which may have played an important role in inducing Spicy Seasoning and Gregory’s to surrender their registrations.

For 48 years, the Trademark Trial and Appeal Board of the U.S. Patent & Trademark Office has held that if a trademark registrant files a fraudulent declaration under Section 15 of the Lanham Act to make its registration incontestable, the registration is cancelled in its entirety, full stop. But on October 18, the U.S. Court of Appeals for the Federal Circuit put an end to that, holding that the TTAB lacks the statutory authority to cancel a registration in its entirety due to a fraudulent incontestability filing. As to what the penalty for such a fraudulent filing is or could be, well, the Federal Circuit threw out a few ideas, but it seems it will be for TTAB to figure that out. How did we get to this point? Picture it: West Hollywood, 1964. A young Serbian immigrant, Dobrivoje Tanasijević, who adopted the name Dan Tana not long after arriving in the United States, opens his eponymous Italian eatery. By the 1970s, Dan Tana’s has become a legendary showbiz hotspot, celebrated on The Tonight Show and frequented by all the boldface names of the day, from John Wayne to Linda Ronstadt. The restaurant becomes so popular that the lead character in the hit ABC television show Vega$, played by Robert Urich, is given the name “Dan Tanna” by the show’s producer and restaurant habitué, Aaron Spelling. The restaurant continues to flourish today on Santa Monica Boulevard, under new ownership following Mr. Tana’s sale of the place in 2009. Prior to the sale, in 2005, Mr. Tana tried to register his DAN TANA’S trademark with the PTO, but registration was refused because an Atlanta-area restaurant operated by Great Concepts LLC, had registered DANTANNA’S for restaurant services in 2003. An aggrieved Mr. Tana sought to cancel this registration, and he also sued Great Concepts for trademark infringement in 2008 in the U.S. District Court for the Northern District of Georgia; the cancellation proceeding was suspended during the pendency of the federal court action. Unfortunately for Mr. Tana, he lost the federal case before the district court in 2009, and then on appeal to the U.S. Court of Appeals for the 11th Circuit in July 2010. The cancellation proceeding was dismissed in December 2010. End of story, right? Wrong. On March 8, 2010, Great Concepts’ counsel filed with the PTO a combined declaration of use and incontestability under Sections 8 and 15 of the Lanham Act to maintain the DANTANNA’S registration (under Section 8) and to make the registration incontestable (under Section 15). In that declaration, the attorney swore, under penalty of perjury, as required for the registration to achieve incontestable status under Section 15, that “there is no proceeding involving said rights pending and not disposed of either in the U.S. Patent and Trademark Office or in the courts.” The problem: this statement was obviously false, because both Mr. Tana’s appeal and his cancellation proceeding were pending when the declaration was filed. Notwithstanding this glaring untruth, nothing happened until 2015, when Mr. Tana’s successor, Chutter, Inc., petitioned to cancel Great Concepts’ registration based on the untrue 2010 incontestability filing. The TTAB did just that, holding that, under Crown Wallcovering Corp. v. Wall Paper Mfrs. Ltd., 188 USPQ 141, 144 (TTAB 1975), when an incontestability filing is made fraudulently, the proper remedy is cancellation of the registration in its entirety. The TTAB had little trouble concluding that fraud had indeed occurred, given the concededly false statement contained in the Great Concepts declaration. The Board also noted that: (i) the attorney who filed the declaration was Great Concepts’ counsel in both the then-pending federal litigation and cancellation proceeding, so he clearly knew the declaration was false; (ii) the attorney’s claim that he was not aware of the legal requirements for a Section 15 declaration was no excuse; (iii) nor was his claim that a paralegal prepared the declaration, which he failed to read carefully; and (iv) Great Concepts and its counsel were aware of the false filing no later than February 2014 but failed to correct it with the PTO. Great Concepts appealed the TTAB decision to the Federal Circuit, and that appeal succeeded last week, in a 2-1 precedential decision. Why? The majority opinion offered a variety of reasons, starting with the text of the Lanham Act. Section 14 of the Lanham Act allows for cancellation “at any time” if the “registration was obtained fraudulently” (emphasis in majority opinion). According to the Great Concepts majority, the plain meaning of the statute covers fraud occurring in the context of initial filings made in support of an application to register a mark, and Section 8 filings to maintain the protections afforded by a registration. But, per the majority, a Section 15 incontestability filing is only optional and not made to “obtain” or even to “maintain” a registration, but to enhance the rights afforded to a registrant. In addition, Lanham Act Section 33(b) provides that an accused infringer can defend against claims brought by the owner of an incontestable registration by asserting that the owner’s incontestability filings were made fraudulently, but that Section says nothing about cancellation, just loss of incontestable status. Thus, the majority concluded that the Board has no statutory authority to cancel a registration when a fraudulent incontestability filing is made. In light of this holding, the Court did not reach the issue of whether Great Concepts had actually engaged in any fraud, and it remanded to the Board the question of what consequences, if any, should result from the false incontestability filing. In its decision, the majority rejected a series of arguments advanced by Chutter, and the dissent, as to why its holding was erroneous. First, the majority held that, notwithstanding 47 years of Board precedent to the contrary, the Lanham Act says what it says and if Congress wants to make cancellation of a registration in its entirety a remedy for a false incontestability filing, it can do so. The majority also noted that McCarthy on Trademarks and Unfair Competition has long agreed with the majority’s statutory reading, so it’s not like their holding was some sort of outlier, although the majority acknowledged that Gilson disagrees with McCarthy on this point. The majority also distinguished prior Federal Circuit cases suggesting agreement with the Board’s now overturned holdings, stating that these cases never directly presented the question decided in Great Concepts. Second, the majority held that the PTO’s administrative decision to allow registrants to make Section 8 (maintenance) and Section15 (incontestability) filings together, in the same document, did not cause Great Concepts’ Section 8 filing to be fraudulent. The majority held that the PTO in practice treats these combined filings separately, with separate filing fees, such that the PTO’s efforts to make post-registration filings more efficient and simpler for registrants did not and could not trump the Lanham Act’s text. Third, the majority rejected the policy-based arguments on which the dissent focused, rejecting the characterization of its holding as one making fraudulent incontestability filings a “costless offense.” After all, the majority said, the Board could take away a registration’s incontestable status as a penalty for a false Section 15 filing. Or, it could sanction the attorney who signed the declaration, even referring them to the PTO’s Office of Enrollment and Discipline, and maybe even for criminal prosecution (!) The majority defended its holding by stating that: Our ruling that a Section 14 cancellation of a registration is not an available remedy for a fraudulent Section 15 declaration – a conclusion we reach because Congress chose not to empower the Board with the ability to impose that specific consequence – is a ruling that this one remedy is unavailable, leaving the Board, we expect, with sufficient mechanisms to adequately deter fraud. To the dissent, all of this was just words, and it argued the majority was “excus[ing] fraud” and violating the “pact” with the general public when it comes to the grant and protection of intellectual property rights. It also scoffed at the majority’s seemingly preferred remedy – the loss of incontestable status – as a “no harm, no foul” solution that was wholly inadequate to deter fraud, particularly in this case, where there was “substantial evidence” showing that Great Concepts and its counsel had perpetrated a fraud on the PTO. Indeed, the dissent claimed that the majority had constructed “a milepost in the trademark administrative continuum, at which point (Section 15) fraudulent wrongdoing is greenlighted. The majority does not provide a principled rationale for such a milepost.” Apart from the adverse policy consequences weighing against the majority’s holding, the dissent’s view was that a Section 15 filing is part of a broader array of trademark maintenance filings that include Section 8 filings to maintain a registration and Section 9 filings to renew a registration. As a result, whenever a registrant fraudulently “obtains” any of the rights afforded to a registrant by virtue of owning a registration, cancellation of the registration is an available remedy. The fact that the PTO allows combined Section 8 and 15 filings to be made together, in one document, which states explicitly that willful false statements “may jeopardize the validity of this document” (emphasis added by dissent), confirms the interrelated aspects of these various filings, according to the dissent. So too does the fact that a Section 15 filing “may also be used as the affidavit or declaration required by section 8” (emphasis added by dissent, citing 37 CFR § 2.168). In closing, the dissent criticized the majority for suggesting alternative penalties the Board might consider on remand, and instead invited the Board to clarify whether it considers Section 15 filings to be part of the trademark registration maintenance process. As to what happens next in this case, your guess is as good as mine. An en banc review is a possibility, but given the remand to the TTAB for additional proceedings, the case may not be ripe for Supreme Court review. If there are no further, immediate appellate proceedings, the TTAB will have to decide whether to accept the dissent’s invitation to address whether a Section 15 filing qualifies as one that maintains a trademark registration. The Board will also have to consider what sort of sanctions, if any, are available when a fraudulent incontestability filing is made. Loss of incontestability? If so, forever, or could a new, fraud-free Section 15 filing be made? Sanctions on the offending attorney? If so, of what kind? What if the Section 15 declaration was filed by a non-attorney or the registrant itself? And does the Great Concepts decision make it more likely that registrants will run the risk of making false incontestability filings, because there is no clear penalty for such an act? Or not? Stay tuned for future updates on this esoteric, but important, issue.

The small blue bird adorning nearly every company’s social media section. The verbiage “tweet” and “retweet” working their way into the fabric of modern language. The creation of character-limited, short-form posts as a new method of communication used by presidents, dignitaries, celebrities, and everyday people alike. Even with the ubiquitous rise of social media over the last few decades, it is difficult to find a company and brand that has had more of an impact on society as a whole than Twitter. Its roots date back to 2006 when a group of friends and coworkers conjured a new version of sending text messages. Instead of the one-to-one nature of text messages, Twitter allows people to share thoughts, ideas, and messages with larger groups of people all at once via the Internet. On July 15, 2006, this idea—originally called “twttr,” but soon after expanded to “Twitter”—was released to the public, and transmitted roughly 20,000 posts, or the now infamous “tweets”, per day. When Twitter was showcased at the South by Southwest Interactive Conference in 2007, up to 60,000 tweets were posted each day. By early 2010, a short four years after its public launch, Twitter was up to 50 million tweets per day. Not only did Twitter revolutionize a new way of communication, but it gave new meaning to otherwise standard, infrequently used symbols. The pound symbol, #, has long been used in information technology systems to denote specific pieces of text—used after a number to denote “weight,” or used in front of a number to denote “number.” Twitter gave this symbol new meaning, redefining it as the “hashtag,” a systematic way of categorizing groups of information, wherein users can find specific content relevant to the mentioned hashtag. In 2014, the word “hashtag” was added to the Oxford English Dictionary, meaning “a word or phrase with the symbol # in front of it, used on social media websites and apps so that you can search for all messages with the same subject.” In addition, Twitter user handles, used to identify the account owner, begin with the @ symbol, which has now expanded into a common form of electronic speech to direct attention at a specific person, whether on Twitter or elsewhere. This is similar to the @ symbol as it was first introduced in 1972 as part of the first electronic message communication—now known as email—to indicate the location or institution of the email recipient. In nearly twenty years, Twitter has changed how humans communicate, whether they use the social media service or not. And it is difficult to quantify this level of impact on society as a whole. Most small business owners and entrepreneurs may start their companies with the lofty goal of someday owning a regionally, or even nationally, successful and recognized brand. But the vast majority of these new companies never reach global status, and never reach a billion-dollar valuation. Twitter did. By 2023, Twitter reached 500 million tweets per day and a market cap valuation of over $40 billion. Valuation experts value just the Twitter brand—not the company itself, but the TWITTER trademark, the TWEET and RETWEET marks, and the blue bird—anywhere from $4 billion to $20 billion. Most companies in the world will never achieve a trademark brand valuation anywhere near this number, and it is, without a doubt, an impressive feat. Which is why, in July 2023, Twitter users, social media and tech companies, the trademark and branding worlds, and the consuming public in general were shocked to learn that new ownership had decided to rebrand away from this $20 billion asset to something arguably far less distinctive, and, as many trademark experts note, possibly generic: the letter “X.” While curious to many, this rebranding to the X mark may be part of a larger branding scheme. The same ownership of X Corp. (formerly Twitter) owns Space Exploration Technologies, or “SpaceX,” an astronautics company founded in 2002. In July 2023, ownership founded xAI, an artificial intelligence company with the ultimate goal of “understand[ing] the true nature of the universe.” To date, xAI does not appear to have rendered any services, but has filed trademark applications for a stylized design of the xAI mark covering artificial intelligence-based computer services. Even the new Twitter domain name—x.com—is a nod to the old online bank that eventually became PayPal, founded by the same owner as these X-based companies. Shortly after the rebranding announcement, the little blue bird and TWITTER trademark disappeared from the website and app, replaced with a slightly stylized letter X. Twitter’s renamed parent company, X Corp., filed a slew of trademark applications on September 22, 2023, all for the standard character X mark, covering a range of services in Classes 38, 41, and 42, among others, including U.S. Serial No. 98/193,533 for “Hosting an online website community for registered users to share information, photos, audio and video content and to form virtual communities; Providing user authentication services in e-commerce transactions” in Class 45. The current pace of examination at the USPTO means the applications will most likely not be reviewed until late spring 2024, but it is probable they will face hurdles to registration. The USPTO’s registry is replete with X-formative marks covering arguably similar services, including registrations owned by Comcast Corporation and Microsoft. While most of the existing registrations incorporate a design element, a standard character mark, like the one filed by X Corp. is likely to face objections based on prior rights. Even if X Corp. were to refile new applications with the stylized version of its X mark, some experts believe that current stylization used by the company may not be sufficiently distinct. Further, mathematical scholars have noted the X mark looks strikingly similar to a generic Unicode character used in the international computing standard to denote an abstract geometric space or object. The mark is also identical to the lowercase X in the Monotype Special Alphabets 4 font set. As applied to computer programming, this could make the X mark generic, and under the Lanham Act, “generic terms are never eligible for trademark protection because they refer to a general class of products rather than indicating a unique source.” If found to be generic, not only will it be impossible for X Corp. to register its stylized X, but it won’t have any trademark protection at all, for at least some services. Meanwhile, numerous new applications for the word mark TWITTER were filed in July 2023 by applicants seeking to seize upon the apparent abandonment of the TWITTER trademark. Many of these new applications (filed by individuals) cover similar computer-based goods and services included in the existing TWITTER registrations. Although these new applications are also unlikely to succeed and will be refused based on the existing TWITTER registrations, these individuals may be laying the groundwork for a cancellation action based on an intent not to resume use, all in an effort to stake a claim to this $20 billion brand. While any use of the TWITTER brand by a third party could, in all likelihood, be stopped based on a claim to residual goodwill, these efforts by third parties reflect the land grab created X Corp.’s decision. The fate of the famous TWITTER brand and its high-profile rebrand to X will keep USPTO examiners busy for some time. Even federal courts will see some action. On October 2, 2023, X Corp. was sued by a social media and marketing company called X Social Media alleging trademark infringement and violations of Florida state law, including common law unfair competition and unfair trade practices, based on X Social Media’s alleged prior use of the X SOCIALMEDIA mark since 2016. Whatever the outcome—whether X Corp. is able to ever achieve a federal registration for its X mark, or who becomes the successor to TWITTER trademark ownership—many will continue to question the motivation to rebrand away from such a famous, globally recognized, and arguably historic brand.

A 4-foot tall, bronze girl defiantly stands with her hands on her hips and chin held high. Better known as Fearless Girl, the statue was intended to promote the power of women in leadership. The statue has come also to symbolize missteps and the consequences of unthoughtful legal planning. An advertising agency engaged Kristen Visbal to create the sculpture, apparently without any agreement as to rights, or, according to Visbal, any notice the sculpture was for a corporate sponsorship. State Street Global Advisors, the asset management company sponsoring the project initially placed Fearless Girl as a temporary counterpoint to the iconic Charging Bull statue: Fearless Girl was a tremendous success and had an immense social impact from its unveiling. The response prolonged display of the statute and spawned legal controversies. The first of which involved Arturo Di Modica, Charging Bull’s sculptor’s claims that the placement of Fearless Girl implicated issues of Di Modica’s copyright and trademark rights, and further distorted his artistic message as an “advertising trick.” We blogged about these claims back in 2017. Although Di Modica ultimately did not sue Visbal or the State of New York regarding the placement of Fearless Girl, Fearless Girl was eventually relocated to stand outside of the New York Stock Exchange. Another set of disputes arose from a trio of agreements State Street and Visbal negotiated following the statue’s success. The agreements were an attempt to sort out what each party could do with regard to the associated rights around the statue, but, unfortunately, created more problems than they solved. In 2019, State Street brought a claim in New York state court against Visbal, requesting a temporary restraining order to prevent Visbal from participating in an event in Australia that allegedly violated the agreements. The TRO was denied, but a later preliminary injunction was ultimately upheld. Following various claims and counterclaims, the parties filed motions for summary judgment, which the United States District Court for the Southern District of New York partially granted and partially denied. Judge Gregory H. Woods’ summary judgement opinion grapples for 90+ pages over the numerous breaches of contract, copyright and trademark infringement claims, and questions of preclusion. While nothing in the decision is groundbreaking, the opinion meticulously analyzes several breach of contract claims, offering excellent instruction as to drafting considerations. For instance, each of Visbal and State Street alleged claims regarding the other party’s breach of its obligations to provide attribution, which yielded opposing outcomes based upon the language in the agreements. Visbal’s claim stemmed from no attribution being provided when Fearless Girl was relocated to the New York Stock Exchange. The relevant agreement required State Street to “give attribution to [Visbal] as the sculptor of [Fearless Girl] wherever and whenever practicable, such as, for example, . . . plaques placed with” State Street replicas. The court denied summary judgement on this point, finding questions of fact with regard to whether attribution to Visbal would have been practicable (despite attribution being provided at the prior Charging Bull location). In contrast, Visbal agreed that any reproductions of Fearless Girl Visbal provided “as part of any promotional or corporate event, conference, ceremony, banquet, retreat, awards dinner, or the like” would include the attribution “Statute commissioned by SSGA.” The court found that Visbal’s verbal acknowledgement of State Street’s role was insufficient to meet the requirements as it did not include the exact language and did not appear on the reproduction, and granted summary judgement to State Street on this breach of the agreement. The contrast is a good reminder to use exact language, and avoid subjective considerations, in drafting specific requirements. Visbal did have a win with regard to State Street’s copyright infringement claims. The claim stemmed from Visbal’s grant of an exclusive license to State Street in connection with “gender diversity issues in corporate governance and in the financial services sector.” Visbal sold a Fearless Girl replica to an executive who worked at a financial institution. That executive later displayed the replica at a gender diversity in corporate governance event. Judge Woods denied summary judgement for both direct and vicarious infringement, finding Visbal did not take any action with regard to the executive’s use of the replica and did not profit from such use. The decision is not especially favorable to one party over the other, and Visbal’s counsel has already indicated her intention to appeal. The history of the sculpture and various legal disputes do serve as a cautionary tale and a necessary reminder of how important it is to carefully draft legal agreements—and just as carefully comply with them. The TMCA will continue to monitor this case.

Established through the Charter of the French Language, French is the official language of the Province of Québec. The Charter applies to businesses located in Québec and to other businesses providing services and selling goods in this province, making the use of French mandatory in connection with these business activities. Historically, the Charter has provided for a “recognized trademark” exception to this French language requirement for registered and known (but unregistered) trademarks in Canada. In these cases, the “recognized trademark” may appear on goods, advertising, signage and commercial publications in a language other than French (unless the French version of the mark has been registered, in which case use of this French version remains mandatory). In addition, where the “recognized trademark” exception applies to use on signage or on the face of a building, it must also feature indications on the same visual plane that informs consumers and passersby of the nature of the business in the French language. This is referred to as the “sufficient presence of French” requirement. In May 2021, the provincial government of Québec introduced (and later passed, in May 2022) an amendment to the Charter, referred to as “Bill 96,” which changes how “recognized trademarks” are treated in commerce and business. As of June 1, 2025, the scope of the “recognized trademark” exception will be restricted to registered trademarks, and inscriptions on products, on public signage and in commercial advertising. As a result, the “recognized trademark” exception will no longer be triggered by unregistered trademarks. Currently, where the “recognized trademark” exception does not apply, the Charter requires that products, packaging, and related informational documents (instruction manuals, for example), and commercial publications (including websites and social media) public signage and commercial advertising, must be in French, or in French and another language so long as the “other language” is not given heightened focus in comparison to the French language. This includes font size, use of color, positioning, and overall size. With the understanding that unregistered trademarks will no longer be an exception to this rule, this would require active steps by trademark owners to obtain registrations for trademarks, in order to continue to benefit from the exception, or to otherwise potentially implement significant updates to all impacted materials. For registered trademarks that feature generic or descriptive terms in a language other than French, the descriptive or generic term will need to be translated into French and appear on the product or on a medium permanently attached to the product. At this time, it is unclear how “generic” or “descriptive” may be interpreted in this context, or frankly, precisely what “medium permanently attached to the product” means. Additionally, where the “recognized trademark” exception is not available, the rule currently is that signs, posters, and billboards must be in French, or in French and another language so long as the French is featured in a predominant manner, with a greater visual impact than the other language. Thus, the current impact of Bill 96 is that both unregistered trademarks and registered trademarks appearing on public signage will be required to change from a “sufficient presence of French” to a “markedly predominant” use of the French language, meaning that the French language must have a greater visual impact than the text in the other language. For businesses who seek to comply with Bill 96 by seeking new trademark registrations, a challenge here is that the Canadian Intellectual Property Office has significant delays in the examination of trademark applications (as of this writing, approximately 43 months). This makes it very difficult for businesses to come into compliance via new trademark applications by the current June 1, 2025 implementation date. This tension between the compliance deadline and registration speed has been broached with CIPO by Canadian practitioners. In terms of next steps, we encourage interested parties with registered and unregistered trademark rights in Canada to review their business activities and trademark portfolios to determine: Whether new trademark applications should be filed. If so, if new applications are filed featuring pre-approved goods and services from CIPO’s manual, it may be possible to reduce the examination time from 43 months to about 21 months. Taking action now may make it possible to meet requirements by June 1, 2025. Expedited examination is also available under certain prescribed circumstances. Whether the loss of the “recognized trademark” exception will require changes to product packaging (generic/descriptive terms, unregistered trademarks), related documentation, commercial publications, and public signs visible from outside buildings. Bill 96 expands the government’s powers of enforcement and all Québec residents will have standing to seek injunctive relief and damages. The potential business risk in Canada is therefore considerable, and taking action toward compliance now is recommended. We will keep our readers updated on further guidance in connection with the impact of Bill 96.

The China National Intellectual Property Administration (“CNIPA”) recently released its Rules On Suspension of CNIPA Trademark Proceedings (the “Suspension Rules”) and related explanations. The Suspension Rules are intended to provide clear guidance on the circumstances under which a CNIPA trademark proceeding shall be or may be suspended.  For companies that have difficulty registering their brands due to prior rights no longer in use, or fraudulently filed, this may be welcome news. The Suspension Rules concern the four types of CNIPA trademark proceedings, namely: the review of a rejection of a trademark application (a Review of Rejection Proceeding); the review of an opposition decision refusing the registration of the opposed mark (a Review of Opposition Proceeding); the invalidation of a trademark registration (an Invalidation proceeding); the review of a cancellation decision regarding a trademark registration (a Review of Cancellation Proceeding, the most commonly seen cases under this category is a cancellation based on three year non-use) The Suspension Rules make it clear that a CNIPA trademark proceeding shall be suspended under any one of the following five circumstances: there is a pending assignment recordal proceeding between the disputed mark and the cited mark(s), and there will no longer be any conflict of rights after the completion of the assignment recordal; a cited mark has expired and is in the renewal proceeding or in the renewal grace period; a cited mark is under a pending cancellation or withdrawal proceeding; a cited mark has been cancelled, or has been invalidated or has expired without renewal but one year has not yet lapsed from the date of its cancellation, invalidation or expiration (exclusive of a cancellation based on non-use); a proceeding concerning a cited mark has been concluded pending the relevant decision to become final, or a case concerning a cited mark is waiting to be re-tried under an effective court order. The above five circumstances may be most relevant to a Review of Rejection Proceeding, this clear language in the Suspension Rules provides far greater certainty to an applicant, whose option presently is to hope for suspension and also file backup rights to maintain their priority. In the past, the suspension of cases under these five circumstances were within an examiner’s discretion and it was not transparent how an examiner could exercise their discretion. The Suspension Rules also provide that in relation to a Review of Opposition Proceeding or an Invalidation Proceeding, the examiner shall suspend the relevant proceeding if the protection of the prior right claimed is dependent on the outcome of another pending court or administrative proceeding. Lastly, the Suspension Rules provide that in relation to a Review of Rejection Proceeding, and upon the express request of the applicant, the examiner shall suspend the relevant proceeding if the status of a cited mark is dependent on the outcome of another pending court or administrative proceeding. In addition to the above seven circumstances where a CNIPA trademark proceeding shall be suspended, the Suspension Rules further provide three circumstances under which a proceeding may be suspended: if a cited mark has been under an invalidation proceeding, and the owner of the cited mark has been found guilty of making bad faith filing in other cases, an examiner may exercise his or her discretion to suspend the current Review of Rejection Proceeding without the need of a request of suspension by the review applicant; if the review and decision of a CNIPA trademark proceeding is dependent on the outcome of any prior related cases of similar circumstances, the examiner may suspend the CNIPA trademark proceeding if it is necessary; other circumstances whereby a suspension of the proceeding may be necessary (a catch-all provision). Procedurally, an applicant may make its suspension request under the new Rules in its initial filing, or within the subsequent three months supplemental filing period; it is not necessary to make a separate application for suspension.  However, the request must provide the full particulars of the related pending proceedings upon which the suspension request is made, such as the filing number of the cited mark, the type of the pending proceeding and its status, and the relevance of that pending proceeding to the present case. Once the status of a cited mark has been crystalized, the applicant must provide proof to the examiner and request the examiner resume the relevant CNIPA trademark proceeding. Last but not the least, it is important to note that the Suspension Rules are exercised on the general principle of necessity, i.e., a CNIPA trademark proceeding would be suspended only if the status of the relevant prior rights will materially affect the outcome of the case. If the other review grounds and/or the status of the other prior rights are sufficient for deciding the case, then no suspension should be made as it is not necessary. We are pleased that the Suspension Rules may clear up the current procedural uncertainties in CNIPA trademark proceeding, especially in relation to a Review of Rejection Proceeding. This will enable a brand owner to better form its trademark filing and enforcement strategy and plans. While it remains to be seen how the Suspension Rules will be applied by the CNIPA, the Suspension Rules provide some hope to applicants whose previous option was to continue to refile applications while co-pending proceedings were decided. Dispensing with this strategy will certainly provide significant costs-saving and more streamlined case management for brand owners.

AI technology is developing at a tremendous pace and AI image creation is no exception. AI images are even winning art contests. Since AI generates artistic images modeling others’ work, human artists are asking “is it copyright infringement for AI technology to use my work to learn how to create images and produce AI works?” The Northern District of California may answer that burning question. In January 2023 artists Sarah Andersen, Kelly McKernan and Kayla Ortiz filed a class action copyright lawsuit against Stability AI Ltd., Midjourney, Inc., and DeviantArt. The case is listed as Andersen v. Stability AI Ltd, U.S. District Court for the Northern District of California, No. 3:23-cv-00201.The Plaintiffs contend that AI used copyrighted works without their permission to help the technology learn how to copy and analyze works to produce new images. They also contend that the AI technology creates unauthorized derivative works. Put simply, the technology allows a user to type in a prompt of what type of art they want, in what style of artist, and can request it to have certain subjects in the picture. The artists argue that this essentially creates derivative works of their art. Other counts include infringement of the Digital Millennium Copyright Act, state law claims, and infringement of the right to publicity. In April, each Defendant filed a motion to dismiss the artists’ complaint. The Defendants’ argue that the artists failed to identify a “single allegedly infringing output image” that was allegedly used by the Defendants to train their system. The Defendants further argue that the artists cannot show any single image created by AI is substantially similar to an artists’ own copyrighted works. Most recently, on June 2, the Plaintiffs’ filed oppositions to each of the Defendant’s motions to dismiss. A judge has yet to publish a decision on the motions to dismiss. Defendant Midjourney argues that if the court were to resolve the claims of direct copyright infringement, it would have to proceed on an image-by image basis to determine which works are protectable and which are considered fair use. The fair use defense to copyright infringement allows a creator to use a work even if unauthorized and it is still not considered copyright infringement because it is a “fair use” of the copyrighted material. To determine if a work is fair use, a court will look to four factors: 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount and substantiality of the work used in relation to the whole and, 4) the effect of the use upon the potential market for the work. The defendants may focus on the first and third factors. When looking at the purpose and character of the use, the Defendant’s may point out using any copyrighted works is still transformative in nature – the AI technology is generating new images that differ from the original works. Regarding the amount of the prior work used, the Defendant’s will likely argue that the material copied is an insignificant portion of the input material used by the AI program to generate an image. However, the Plaintiff’s will likely argue that AI will divert sales because the general public can now use AI as a substitute for buying their art. These decisions will be pivotal to determine if works generated through AI are copyright infringement or fair use. This case will have important results for several parties. For artists, the concern is that AI driven image creation may steal from their livelihood. Using AI, anyone can get an image that looks like their favorite artists by providing the system with a clear prompt. For the Defendants, this represents a landmark lawsuit that will determine if and how their company will be allowed to leverage AI going forward. For Stability AI, it will determine if their new AI technology will be able to be utilized and to what extent. For Midjourney and DeviantArt, it will answer if they are able to use Stability’s technology on their platforms to allow users to create their own images using AI technology. This lawsuit represents some of the first litigation to address key questions around AI image creation. As artificial intelligence comes more into the mainstream, it will be up to cases like these to help determine how AI images will be regulated, used, and to what extent. The rest of the world will be watching as this case will send some of the first signals for how the U.S. judicial system may view AI and copyright infringement claims.

How far does the Lanham Act’s reach extend? The Supreme Court gave us one answer in Abitron Austria GmbH et al. v. Hetronic International, Inc. and made it simple: not very far. Hetronic is a U.S. company that manufactures remote controls for construction equipment.  Abitron (comprised of six non-U.S. companies) at one point sold Hetronic’s products as a licensed distributor.  However, Abitron eventually concluded it held rights to Hetronic’s intellectual property, including various trademarks.  Abitron then reverse engineered Hetronic’s products and began selling goods bearing those marks in Europe and the U.S. Hetronic ultimately sued Abitron in the Western District of Oklahoma for trademark violations under Sections 1114(1)(a) and 1125(a)(1) of the Lanham Act, both of which prohibit using a trademark “in commerce” that is likely to cause confusion.  The District Court awarded Hetronic approximately $96 million in damages and entered a permanent injunction barring Abitron from using Hetronic’s marks anywhere in the world. We last discussed Hetronic after a Tenth Circuit decision that narrowed the injunction slightly to geographic locations where Hetronic had marketed and sold its products.  But the Tenth Circuit overall agreed that some of Abitron’s conduct in Europe could be enjoined by U.S. courts under the Lanham Act because Abitron’s actions had a substantial effect on U.S. commerce.  Abitron then appealed to the Supreme Court, arguing the injunction was an impermissible extension of the Lanham Act to extraterritorial conduct—i.e., conduct outside the U.S. Today, the Supreme Court vacated and remanded the Tenth Circuit’s decision, determining that the two provisions of the Lanham Act at issue cannot be applied extraterritorially.  The Court held that the Lanham Act only regulates use in commerce—i.e., the sale of goods or the provision of services—within the United States.  The Court’s analysis centers on a presumption against extraterritoriality, a “longstanding principle of American law” that assumes Congress generally only regulates domestic affairs, and not foreign conduct.  Four justices joined Justice Alito’s majority opinion, three joined Justice Sotomayor’s concurrence, and Justice Jackson entered a separate concurrence with her insights on the definition of “use in commerce” as used in Section 1127 of the Lanham Act. The Court applied a two-step framework to determine whether and to what extent the Lanham Act can regulate foreign conduct. All Justices agreed that the first question is whether the statute or provision explicitly states that it should apply to foreign conduct.  In other words, has Congress “affirmatively and unmistakably instructed that” the provision at issue “‘should apply to foreign conduct’”?  The Lanham Act does not explicitly state that it regulates foreign conduct, which cuts against applying the Lanham Act to regulate conduct abroad. Because the Lanham Act is not explicitly extraterritorial, the Court then moved to step two, which was far more contentious.  The majority concluded the relevant inquiry for this step is to identify the “focus” of the statute and decide whether “conduct relevant to that focus” occurred in the U.S.  Both are required. The parties offered different interpretations of what they believed the “focus” of the Lanham Act provisions were in this case for purposes of the second step of the framework.  Hetronic argued that the focus of the statute was to protect the goodwill of trademark owners and to prevent consumer confusion.  Abitron argued that the focus of the statute was to prevent infringement of trademarks. The U.S. government, as amicus curiae, took the middle ground and posited that the focus of the statute was consumer confusion. Instead of clarifying the Lanham Act’s focus, the Court concluded that, because the conduct at issue entirely occurred outside the U.S., there was no need to actually discern the focus of the statute. In other words, the fact that there was no conduct or domestic use in commerce renders the focus of the Lanham Act irrelevant.  This second step, the majority clarified, is designed for "claims that involve both domestic and foreign activity," which is not the case here. Justice Jackson agreed that “use in commerce” is “the dividing line between foreign and domestic applications” of the Lanham Act, but added that any downstream sale of a good in the U.S. market constitutes use in commerce. In other words, the active resale of a good by an individual consumer, who bought a product abroad, would constitute use in commerce and open the original seller of the good to liability under the Lanham Act. Contrary to the framework outlined by the majority, however, Justice Sotomayor found common ground with the U.S. government’s opinion that the focus of the two provisions of the Lanham Act at issue is consumer confusion.  This interpretation focuses on the impact of foreign conduct on the U.S. market instead of exclusively on “the location of the original sale of the infringing product or the location of the trademark owner’s business.”  In other words, Justice Sotomayor would conclude that the Lanham Act provisions at issue extend to “activities abroad when there is a likelihood of consumer confusion in the United States.”  (Emphasis added.) The at-odds opinions may be attributable to the manner in which the justices choose to interpret the case Steele v. Bulova Watch Co. (which involved a defendant’s allegedly infringing activities occurring in both Mexico and the United States), with the majority determining it is inapplicable and wholly distinguishable from the facts of Hetronic because it “implicate[s] both domestic conduct and a likelihood of domestic confusion,” and the Sotomayor concurrence finding Steele to persuasively conclude that “infringing acts consummated abroad fall under the purview of the Lanham Act when they generate consumer confusion in the United States.”  In the majority’s view, the concurrence’s position would render the presumption against extraterritoriality, referred to in other cases as a “watchdog,” “nothing more than a muzzled Chihuahua.” Ultimately, the Court vacated and remanded the case.  The majority does not outline the bounds of “use in commerce.”  Whether the Lanham Act applies to goods sold indirectly into U.S. commerce remains to be seen.  The TMCA will continue to monitor this case on remand and the impacts of the decision in the broader trademark landscape.

Humor matters, but it’s not the most important thing when considering a trademark infringement or dilution claim. In a decision with references to The Hangover Part II, Aqua’s song “Barbie Girl” (good luck not getting that stuck in your head if you grew up in the 90’s…), Tommy Hilfiger, and Harley-Davidson, the Supreme Court clarified the interaction of First Amendment protections, on the one hand, and trademark infringement and dilution claims involving “expressive works,” on the other hand. The bottom line is this: where an accused infringer uses a trademark like a trademark (i.e., to designate the source of its goods or services), the traditional likelihood of confusion analysis applies, even if the mark is also used in an expressive manner. First Amendment considerations like parody and commentary might impact that analysis, but there’s no threshold First Amendment consideration (like the Rogers test discussed below) that would prevent or bar this traditional analysis. Further, marks used in connection with commentary, criticism, and parody are not exempt from dilution claims when the mark is being used to designate the source of goods or services. As discussed in a prior TMCA blog post, this case arises out of Jack Daniel’s trademark infringement and dilution claims against VIP Products based on its “Bad Spaniels” dog toy. The Jack Daniel’s bottle and VIP dog toy are shown here: Beyond the similarities in the bottle and label, VIP’s product contained other clear nods to Jack Daniel’s, including using “Bad Spaniels” instead of “Jack Daniel’s” and the wording “The Old No. 2, on Your Tennessee Carpet” instead of “Old No. 7 Brand Tennessee Sour Mash Whiskey.” The packaging also included a disclaimer, stating, “This product is not affiliated with Jack Daniel Distillery.” VIP claimed the dog toy was an obvious parody of Jack Daniel’s products and, thus, entitled to First Amendment protection under the Rogers test for the infringement claim and also entitled to a statutory exception to the dilution claim as a parody of a famous mark. When an “expressive work” is involved, the Rogers test requires dismissal of a trademark infringement claim unless the plaintiff can show that either (1) the challenged use of a mark has no artistic relevance to the underlying work or (2) the work explicitly misleads as to the source or the content of the work. See Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989). The District Court ruled in Jack Daniel’s favor, rejecting application of the Rogers test because VIP used the mark to identify its own goods. It further concluded that the dilution exception did not apply for essentially the same reason. VIP appealed to the Ninth Circuit, which reversed and remanded, holding that: (1) the infringement claim could not stand because the “Bad Spaniels” dog toy is an expressive work entitled to First Amendment protection under the Rogers test since it “communicate[d] a humorous message,” and (2) VIP’s parody shielded it from liability for dilution under the non-commercial use exception. VIP Prods. LLC. V. Jack Daniel’s Props., 953 F.3d 1170 (9th Cir. 2020). On remand and given the Ninth Circuit’s directive, the District Court concluded that Jack Daniel’s could not satisfy the Rogers test and granted summary judgment to VIP. The Ninth Circuit summarily affirmed, and the Supreme Court granted Jack Daniel’s writ of certiorari to determine: Whether humorous use of another’s trademark as one’s own on a commercial product is subject to the Lanham Act’s traditional likelihood-of-confusion analysis, or instead receives heightened First Amendment protection from trademark infringement claims. Whether humorous use of another’s mark as one’s own on a commercial product is “noncommercial” under 15 U.S.C. § 1125(c)(3)(C), thus barring as a matter of law a claim of dilution by tarnishment under the Trademark Dilution Revision Act. In the Supreme Court’s majority opinion authored by Justice Kagan (the decision was unanimous, but with two concurrences), the Court first addresses the question, “Should [Jack Daniel’s] have had to satisfy the Rogers threshold test before the case could proceed to the Lanham Act’s [the U.S. trademark law] likelihood-of-confusion inquiry?” The Court found it should not have, stating: Without deciding whether Rogers has merit in other contexts, we hold that it does not when an alleged infringer uses a trademark in the way the Lanham Act most cares about: as a designation of source for the infringer’s own goods… When a mark is used as a mark (except, potentially, in rare situations), the likelihood-of-confusion inquiry does enough work to account for the interest in free expression. The Court parts ways with the Ninth Circuit’s previous holding, making it clear that a mark’s expressive content does not result in automatic application of the Rogers test. Despite fulsome briefing on the topic, the Court does not actually rule on the validity of Rogers. However, it certainly spends quite a bit of time considering the case’s history and application over the last 30+ years since its inception, citing to cases such as Mattel, Inc. v. MCA Records, Inc., 296 F. 3d 894 (9th Cir. 2002) (finding the song “Barbie Girl” did not use Barbie’s name in a source-identifying capacity and, thus, First Amendment protection was warranted) and Louis Vuitton Mallatier S. A. v. Warner Bros. Entm’t Inc., 868 F. Supp. 2d 172 (S.D.N.Y. 2012) (finding that mention of “Louis Vuitton”—pronounced “Lewis” in the film The Hangover Part II—satisfied the Rogers test because the film did not use the trademark as its “own identifying trademark.”). These courts (including the home of the Rogers test in the Second Circuit) have routinely declined to apply the Rogers test when the marks in question are being used as true trademarks (i.e., to designate source rather than for commentary or pure expression). This aligns with the primary purpose of the Lanham Act, which makes explicitly clear that, when another party uses a mark in a way which confuses consumers as to the source of the goods, infringement has occurred. 15 U.S.C. § 1114(1). The Court emphasizes that applying the Rogers test in all instances where a mark conveys other expressive content (such as a humorous message) could result in “Rogers [taking] over much of the world. For trademarks are often expressive in any number of ways.” The Court also cites to every trademark attorney’s best friend, McCarthy on Trademarks and Unfair Competition, which agrees that the Ninth Circuit’s expansion of Rogers “potentially encompasses just about everything” because names, phrases, symbols, designs, and their varied combinations often “contain some ‘expressive’ message” unrelated to source. 6 McCarthy on Trademarks and Unfair Competition § 31:144.50 (5th ed. 2022). Because VIP conceded it was using the BAD SPANIELS trademark and trade dress to “identify and distinguish [VIP’s] goods” and to “indicate [their] source,” the Court concluded that Rogers does not apply. Though VIP attempted to backtrack on those comments during oral arguments, the Court was not persuaded, pointing to the below hangtag that clearly shows the BAD SPANIELS mark situated similarly to the company’s registered SILLY SQUEAKERS Logo. Despite the inapplicability of Rogers, the Court explained that, on remand, the lower courts should still consider the thrust of VIP’s argument because “[a] trademark’s expressive message—particularly a parodic one, as VIP asserts—may properly figure in assessing the likelihood of confusion.” In other words, where a trademark is truly used as a trademark, expression must be considered in the context of the normal likelihood of confusion analysis rather than as a threshold question. It will be interesting to see whether this directive results in amendment of the infringement factors used by the various circuits, such as the Sleekcraft factors in the Ninth Circuit. In the second portion of the opinion, the Court swiftly dispatches the Ninth Circuit’s holding that the use of humor and parody constitute noncommercial use, which is excluded from dilution liability under the Lanham Act. See 15 U.S.C. §1125(c)(3)(C). The Lanham act provides an exclusion for a claim of dilution when use of a mark constitutes “fair use”, which specifically covers uses “parodying, criticizing, or commenting upon” a famous marks owner. Id. at §1125(c)(3)(A)(ii). Critically, however, this exclusion does not apply when the use is “as a designation of source for the person’s own goods or services.” Id. In line with its analysis of the first question presented, the Court concludes that, given “the fair-use provision’s carve-out, parody (and criticism and commentary, humorous or otherwise) is exempt from liability only if not used to designate source.” The Ninth Circuit’s expansive view of the non-commercial use exclusion does not align with Congress’s express limit placed on the fair-use exclusion, the Court found. The concurrences also contain some interesting tidbits. Although the majority opinion declined to rule on the validity of Rogers, the concurrence by Justice Gorsuch (joined by Justices Thomas and Barrett) directly calls into question Rogers, stating that it is “not entirely clear where the Rogers test comes from” and that “it is not obvious that Rogers is correct in all its particulars.” It warns lower courts that they “should be attuned to that fact.” The concurrence by Justice Sotomayor (joined by Justice Alito) warns that courts should “treat the results of surveys with particular caution” where “trademark infringement involves a parody” since “there is a particular risk in giving uncritical or undue weight” to these surveys. It points to one survey answer in this case that will give most IP attorneys instant heartburn: “The bottle is mimicked after the Jack Daniel BBQ sauce. So they would hold the patent therefore you would have to ask permission to use the image.” In the coming months, the lower courts will likely hear from Jack Daniel’s and VIP as they hash out the likelihood of confusion and dilution aspects of this case, and other courts will continue to refine the Rogers test (so long as it stands) and likelihood of confusion analysis articulated in this case. Keep an eye out on the TMCA blog for further coverage.  

The Supreme Court granted certiorari and will review the Federal Circuit’s opinion that Section 2(c) of the Lanham Act is unconstitutional as applied to a trademark for the term TRUMP TOO SMALL. The TRUMP TOO SMALL trademark is a callback to an exchange between Senator Marco Rubio and then presidential candidate Donald Trump during the 2016 presidential primaries. As we previously reported, the Trademark Trial and Appeal Board initially rejected the trademark application under Section 2(c) of the Lanham Act because it comprises the name of a living individual—President Trump—without that individual’s consent. The Court of Appeals for the Federal Circuit reversed the TTAB’s decision. The applicant for the trademark plans to sell t-shirts with the phrase TRUMP TOO SMALL to criticize President Trump; specifically, to convey “that some features of President Trump and his policies are diminutive.” The Federal Circuit viewed this criticism as speech protected by the First Amendment and found that Section 2(c) is unconstitutional as applied to the TRUMP TOO SMALL trademark because the government does not have an interest “in restricting speech critical of government officials or public figures.” The Federal Circuit did not address whether Section 2(c) is unconstitutional in all cases, but did suggest that it may be “impermissibly overbroad” because it does not leave the trademark office any discretion to permit registration for trademarks that advance First Amendment interests. The Supreme Court previously found that portions of Section 2(a) of the Lanham Act, which prohibits registration of “immoral, deceptive, or scandalous” trademarks and trademarks that “may disparage . . . any persons, living or dead,” are unconstitutional in all cases. It remains to be seen whether Section 2(c) is destined for the same outcome. The Supreme Court will likely hear oral arguments in the fall. Stay tuned to the TMCA Blog for an update when the Supreme Court issues its opinion.