The TMCA

Two exciting new programs launched by the U.S. Patent and Trademark Office (USPTO) are poised to accelerate IP protection for COVID-19 related products. Due to medical device shortages and the constant question of when (and if) a vaccine will make it to market, the pace of innovation has been on the forefront of people’s minds throughout this global pandemic. In late March 2020, some even theorized that suspending patents altogether was a radical but necessary step to accelerate innovation and save lives. Supporters of this extraordinary move argued that temporarily allowing companies willing to step up and produce products when the patent-holders could not meet the unprecedented demand for their vitally important products, such as valves for ventilators, would not cause patent-holders to lose money since they clearly were unable to meet demand on their own. The USPTO has not gone quite that far, but it has made two important steps to accelerate the process of granting protective rights for products or processes that could aid in the fight against the novel coronavirus. First, the USPTO announced in May that it would be fast-tracking patent examinations for COVID-19 related applications from small and micro entities. This Prioritized Examination Pilot Program will take up to 500 qualifying applications for products or processes that are subject to an FDA approval for COVID-19 use. Second, on June 15th the USPTO announced that it would also offer a prioritized examination program for trademark and service mark applications for certain COVID-19 medical products and services, defined as pharmaceutical products or medical devices used to prevent, diagnose, treat, or cure COVID-19, if they are subject to FDA approval, and medical services or medical research services that are aimed at fighting COVID-19. Given the well-documented shortages in Personal Protective Equipment (PPEs) and other necessary medical supplies, along with the global race to produce a vaccine, these priority track processes could prove critical in getting new, potentially life-saving products onto the market quickly. Standard prioritized examination fees will not be charged under either program, and the USPTO has announced a goal of making final dispositions of these applications within less than a year. Both programs began accepting applications as of June 16, 2020, meaning applicants can immediately take advantage of these unique procedures to try to get their products onto the market in time to assist in the world’s fight against COVID-19.

The Supreme Court handed down its decision today, affirming that BOOKING.COM is a protectable and registrable trademark for “hotel reservation services,” and rejecting the premise that a generic.com term is ineligible for trademark protection. The Court held that the USPTO’s attempted advancement of a per se rule that a “generic.com” results only in a generic combination “is not borne out by the PTO’s own past practice and lacks support in trademark law or policy.” Such a rule would be “an unyielding legal rule that entirely disregards consumer perception [and] is incompatible with a bedrock principle of the Lanham Act: The generic (or nongeneric) character of a particular term depends on its meaning to consumers, i.e., do consumers in fact perceive the term as the name of a class or, instead, as a term capable of distinguishing among members of the class.” In short, the Court found that “[b]ecause ‘Booking.com’ is not a generic name to consumers, it is not generic.” We at the TMCA.com have blogged about this case for many years as it weaved its way from the Trademark Office up to the Trademark Trial and Appeal Board, to the Eastern District of Virginia, through the Fourth Circuit and finally to the Supreme Court. And with the Court’s decision today, the story will come to an end with a registration certificate.

When family feuds become federal trademark cases, this blog takes notice. In this edition, the U.S. Court of Appeals for the Eighth Circuit wades into a dispute between divorced lawn care proprietors. Their divorce “Mutual Separation Agreement” split their business in half but, for a time, permitted both businesses to use the same name. Central to the dispute—how would consumers know whether they would receive the same quality from the spouses’ separate businesses as they did when the spouses worked together? Trademarks identify a product’s source. Consumers know products with the same mark share a common source and expect consistent quality. Licensing creates a potential problem—when a trademark holder licenses its mark, what if the licensee’s product quality is not consistent with the licensor’s quality expectations? The public would be deceived if products with the same mark had varying levels of quality. To weed out this problem, courts prohibit “naked licensing”—a trademark becomes unenforceable if the mark’s owner licenses it without attempting to ensure the licensee’s quality will be consistent with that of the owner. (Consistent quality does not necessarily mean high, medium, or low quality—the doctrine merely ensures consumers receive from a licensee whatever quality they have come to expect from the licensor.) Spouses Randy and Linda operated Lawn Managers, Inc. together around St. Louis, Missouri, for twenty years. Lawn Managers offers lawn fertilizer, weed killer treatments, and related services. Perhaps seeking greener pastures, the two divorced in 2012. Their divorce settlement sought to divide their business. They agreed Linda would open a new business and could use the “Lawn Managers” trademark for two years before adopting a new name—Progressive Lawn Managers. The two businesses split customers, equipment, and employees. Acrimony grew quickly after the divorce agreement. Randy and Linda were not on speaking terms. As the two years ended, the parties disagreed about whether Linda’s new marketing materials were confusingly similar to the “Lawn Managers” name. Among other things, Randy argued the word “Progressive” was not prominent enough in Linda’s new logo. Randy’s business then registered the “Lawn Managers” mark with the U.S. Patent and Trademark Office and sued Linda’s business for infringement. The trial court found in Randy’s favor. On appeal, Linda’s business did not contest the district court’s finding of infringement but instead pressed its defense that the parties’ divorce settlement was a naked license that invalidated the “Lawn Managers” trademark. She asserted the agreement did not give Randy’s business any control over the quality of her business’s lawn care. The majority—Chief Judge Lavenski R. Smith and Circuit Judge Jane Kelly—disagreed. As they explained, to determine whether a licensor has exercised sufficient quality control, a court should evaluate three factors: whether the licensor retained contractual rights to control quality; actually controlled the quality of a trademark’s use; or reasonably relied on the licensee to maintain quality. The divorce settlement didn’t say anything about quality control, and the parties agreed there was no evidence that Randy’s business exercised actual quality control over Linda’s business. Thus, the case turned on the third means of control—reasonable reliance on the licensee. Past cases found reasonable reliance when the licensor and licensee had a long-term professional association, often called a “special relationship.” Courts occasionally find this “special relationship” permits a licensor to exercise sufficient control without a formal agreement or actual quality control efforts. Hindsight matters—courts emphasize a lack of evidence of deviating quality in the licensee’s products when they find reliance was reasonable. Here, the majority found the parties’ 17-year marriage, the absence of any complaints about the quality of Linda’s new business, and the structure of the parties’ divorce agreement supported the trial court’s finding that Randy’s business could reasonably rely on Linda’s business to maintain quality. The majority highlighted that the divorce agreement meant the parties were effectively operating the same business for two years, that Linda’s business sought to emulate Randy’s business, and that Randy’s employees were in a position to observe whether Linda’s employees were delivering services of equal quality. The majority emphasized that the naked license doctrine requires a high degree of proof—clear and convincing evidence—because a naked license invalidates a trademark. The majority concluded there was sufficient evidence to support the trial court’s finding that Linda’s business failed to reach that high level of proof. Dissenting, Circuit Judge Jonathan A. Kobes initially observed that “No one thinks the Marital Separation Agreement (MSA) is a model trademark transaction.” He then posited that a close working relationship between licensor and licensee might provide enough quality control to protect a mark, but a past relationship between now-divorced spouses doesn’t cut it. He agreed with the majority that a prior relationship could provide the basis for reasonable reliance but he argued some evidence of ongoing control was required. Judge Kobes cited Randy’s testimony that there was “no way possible” for him to control the quality of Linda’s business. Judge Kobes also cited evidence that consumers were confused about the absence of a relationship between the two businesses, highlighting the need for quality control to protect the public. As the majority emphasized, naked licensing is a hard defense to prove. But trademark holders who license their marks – whether in a marital divorce, a business divorce or in the ordinary course of business – should be careful to maintain some control over the quality of the products to which the licensee applies the mark. Contractual provisions are ideal, but even if there is nothing in writing, exercising control or oversight in fact can help establish that the requisite quality control was in fact taking place. That quality can be high, medium, or low so long as consumers get the quality they expect from products bearing the trademark.

Just two months ago, we published a post about an Eastern District of Pennsylvania decision in the Pellegrino v. Epic Games case regarding Epic’s online battle royale video game, Fortnite. In that case, saxophonist Leo Pellegrino alleged that a Fortnite “emote” (i.e., a feature sold by Epic to players to allow their avatars to perform a particular gesture, dance, etc.) titled “Phone It In” impermissibly copied his signature dance move. The court dismissed all of Pellegrino’s claims except for false endorsement, but he voluntarily dismissed the rest of his case on April 29, 2020. On May 29, 2020, a federal district court in Maryland granted Epic another victory by dismissing with prejudice all claims against it for its use and sale of a different emote, “Running Man.” Plaintiffs Jaylen Brantley and Jared Nickens alleged in their complaint that in 2016 they created, named, and popularized a dance called the “Running Man” and incorporated it into breaks during basketball games at the University of Maryland. The dance went viral on social media, and Brantley and Nickens encouraged others to post videos on social media of themselves performing Running Man. Running Man became even more popular after Brantley and Nickens were invited to bust their move on The Ellen Show. Despite the allegations in the their current complaint, Brantley and Nickens told noted dance aficionado Ellen DeGeneres that they copied the dance after New Jersey high school students Kevin Vincent and Jeremiah Hall, who also appeared on the show, created it, and posted it on Instagram. Regardless, Brantley and Nickens now allege that “[t]he Running Man has become synonymous with Plaintiffs [Brantley and Nickens], who are credited with creating the dance and video that became ‘viral.’” They further allege that Fortnite’s Running Man emote is an unauthorized copy of their Running Man dance. Therefore, they asserted claims for invasion of the right of privacy/publicity (Count I), Lanham Act and common law unfair competition (Counts II and III), unjust enrichment (Count IV), Lanham Act and common law trademark infringement (Counts V and VI), Lanham Act trademark dilution (Count VII), and Lanham Act false designation of origin (Count VIII) against Epic. Repeatedly citing Pellegrino, United States District Judge Paul W. Grimm dismissed all of Brantley and Nickens’s claims with prejudice. First, he held that Counts I, III, IV, and VIII are preempted by the Copyright Act. The two-prong test for copyright preemption requires finding (1) that the work is within the scope of subject matter specified in 17 U.S.C. §§ 102-103 and (2) that the rights granted under state law are equivalent to the exclusive rights with the scope of federal copyright under 17 U.S.C. § 106. “Choreographic works” are specifically recognized as a copyrightable work under 17 U.S.C. § 102(a) of the Copyright Act when they are fixed in a tangible medium, but copyright protection does not extend to ideas embodied in those works. Moreover, there is an important distinction between a choreographic work—i.e., “a related series of dance movements and patterns organized into a coherent whole”—and a mere dance—i.e., “social dance steps or simple routines” like “the basic waltz step, the hustle step, the grapevine, or the second position in classical ballet”—because only the former can be protected by copyright. Although Judge Grimm concluded that Running Man falls somewhere on the spectrum between a choreographic work and a dance, he explained that this distinction ultimately did not matter since “the scope of copyright preemption is greater than the scope of copyright protection,” and Running Man is within the “general subject matter” of copyright under a choreographic work. Accordingly, Running Man meets the first prong of the copyright preemption test. Regarding the second prong, Judge Grimm determined that the plaintiffs’ claims for invasion of right of publicity/privacy, common law unfair competition, unjust enrichment, and false endorsement were equivalent to the exclusive reproduction, performance, distribution, and display rights that are exclusive to the Copyright Act. Therefore, these claims are preempted by federal copyright. For similar reasons, Judge Grimm dismissed plaintiffs’ Lanham Act unfair completion and false designation of origin claims for being properly the subject of the Copyright Act, not the Lanham Act since they pertained to the copying of ideas or concepts and failed to allege facts indicating confusion in the market place. Finally, Judge Grimm concluded that Brantley and Nickens failed to plausibly allege a valid trademark as required by their trademark infringement and dilution claims. Plaintiffs failed to allege that Running Man is a valid trademark that identifies a good or service as required by 15 U.S.C. § 1127. Although plaintiffs alleged that Running Man is distinctive and immediately recognizable based on their likenesses, the court pointed out that, “as a general rule images and likenesses do not function as trademarks.” In addition, Brantley and Nickens failed to adequately allege that Running Man identifies a unique good or service, essentially arguing that Running Man is a trademark for the plaintiffs performing Running Man. This argument fails, however, because trademarks are not goods or services and cannot be used to identify themselves. Thus, all claims were dismissed with prejudice. Brantley once again confirms that content creators, such as Epic and other video game companies, are generally allowed to put dance moves into their own work without violating publicity, privacy, trademark, or copyright laws, provided that the only thing being copied are the movements of the dance. There are limits, however. Copying the dancer’s likeness could still be a violation of the dancer’s privacy and publicity rights. In addition, context matters. Had Epic used the dance in a college basketball video game instead of a battle royale video game, this case might have been a closer call. Moreover, if a dance actually were somehow used to identify a unique good or service, then copying that dance could run afoul of the trademark laws. However, as long as content creators are only copying the latest popular dance steps and not the dancers, they should be pleased with this decision.

NBA superstar and reigning NBA MVP Giannis Antetokounmpo recently filed a series of trademark infringement lawsuits in the Southern District of New York against online retailers and their operators. In the lawsuits, Antetokounmpo claims that the retailers were selling merchandise bearing his nickname—the Greek Freak—along with his likeness. Over the past several years, as Antetokounmpo rose to NBA stardom, he began building a brand, with himself as the centerpiece. Antetokounmpo, who was born in Greece, filed for, and obtained, a trademark for GREEK FREAK, and began selling merchandise bearing that mark and his likeness. In the recent complaints he filed, he claims to have sold “tens of thousands of dollars” of product bearing the GREEK FREAK mark and has licensed his “name/nickname and/or likeness to various brands and campaigns.” He has also sought to register a variation of the mark, GREEK FR34K, which replaces the “ea” in Freak with 34, his jersey number for the Milwaukee Bucks. That mark has been approved for registration and, with no oppositions having been filed, will likely be registered soon. The current S.D.N.Y. lawsuits—Antetokounmpo v. Hill et al., (No. 1:20-cv-3530); Antetokounmpo v. Dickson, (No. 1:20-cv-3572); Antetokounmpo v. Dimoulis, (No. 1:20-cv-3575); Antetokounmpo v. SportsMarketUSA Corp. et al., (No. 1:20-cv-3615); Antetokounmpo v. Jones et al., (No. 1:20-cv-3669); Antetokounmpo v. Settleman et al., (No.1:20-cv-3670); and Giannis Antetokounmpo v. Steve Jones; Katherine B Jones (No. 1:20 cv 4010); and Giannis Antetokounmpo v. Bryant Yarborough dba Bonafide Icon (No. 1:20 cv 4060)—all make the same fundamental allegations: the defendants were selling merchandise online bearing Antetokounmpo’s name, nickname and/or likeness and they refused to cooperate after receiving cease and desist letters from Antetokounmpo. In addition to bringing infringement and related claims under the Lanham Act, Antetokounmpo alleged several state law claims (in total, each complaint contains 13 causes of action) and seeks both injunctive relief and monetary damages. None of the defendants has answered yet, and it will be interesting to see how they attempt to justify their conduct and otherwise respond to the allegations. The recent lawsuits are not the first lawsuits Antetokounmpo has filed to protect his rights. Last year, he filed a similar trademark infringement lawsuit against an artist (Antetokounmpo v. Bhogal, No. 19-cv-6304) who was selling clothing bearing the GREEK FREAK mark and using GREAK FREAK as the name of a clothing collection. That case settled late last year, about a month after it was filed, and before the defendant answered. Similarly, earlier this year, Antetokounmpo filed another trademark infringement case, this time against a company selling mobile phone cases containing his GREEK FREAK mark (Antetokounmpo v. Sportz Cases, LLC, 20-cv-1392). That case appears to have settled, as well, as it was voluntarily dismissed earlier this month. One takeaway from all the lawsuits that he has filed is that Antetokounmpo defends his trademark rights as aggressively as he defends his opponents on the basketball court. We will continue to monitor the cases and report back with updates if any move past the pleading stage. In the meantime, to learn more about NBA players enforcing their personal brands through litigation, check out the TMCA’s coverage of Kawhi Leonard and Michael Jordan.

Lucky Brand has emerged victorious in the latest skirmish of its nearly 20-year trademark litigation battle with Marcel Fashions, a competitor in the apparel business. In Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., its second trademark decision of this term, the Supreme Court unanimously reversed the U.S. Court of Appeals for the Second Circuit, holding that Lucky Brand is not precluded from raising a defense that it could have raised in a previous lawsuit between the same parties. The Lucky Brand opinion, however, rested on narrow grounds and left for another day the questions of whether there is such a thing as “defense preclusion” and, if so, when it is appropriate. The first round of this war began in 2001, when Marcel sued Lucky Brand, alleging that Lucky Brand’s use of the phrase “Get Lucky” infringed Marcel’s registered trademark for GET LUCKY. That case ended in a settlement, whereby Lucky Brand agreed to cease using the phrase “Get Lucky,” and Marcel released certain claims regarding Lucky Brand’s use of its own trademarks (which included various marks containing the word “Lucky”). In the second round (commenced in 2005), Lucky Brand sued Marcel for violating certain of its trademark rights, and Marcel in turn filed several counterclaims based on Lucky Brand’s alleged continued use of the phrase “Get Lucky.” While Lucky Brand initially argued that the counterclaims were barred by the prior settlement agreement, it did not pursue that defense and the court in the 2005 Action permanently enjoined Lucky Brand from copying or imitating Marcel’s “Get Lucky” mark. In 2011, Marcel again sued Lucky Brand for continuing to infringe the “Get Lucky” mark, though the allegations involved different marks used by Lucky Brand claimed to be infringing and different conduct than in the 2005 Action. After extended litigation, Lucky Brand moved to dismiss, arguing—for the first time since early in the 2005 Action—that Marcel had released its claims in the 2001 Action settlement agreement. Marcel countered that Lucky Brand could not invoke the release defense because it could have pursued that defense in the 2005 Action, but did not. The U.S. Court of Appeals for the Second Circuit agreed with Marcel, holding that the doctrine of “defense preclusion” prohibited Lucky Brand from raising the release defense in the 2011 Action when it had failed to do so in the 2005 Action. In a decision authored by Justice Sotomayor (who practiced in the field of trademarks and intellectual property law prior to ascending to the bench), the Supreme Court reversed and remanded the case to the Second Circuit. The Supreme Court framed the key issue as whether “defense preclusion” is a valid application of res judicata, a term that encompasses both issue preclusion (also known as collateral estoppel) and claim preclusion. Issue preclusion, which precludes a party from re-litigating an issue actually decided in a prior case and necessary to the judgment, did not apply here because the scope of the settlement release was never actually litigated in the 2005 Action. The related doctrine of claim preclusion prevents parties from raising issues that could have been raised and decided in a prior action—even if they were not actually litigated. The question at issue here was whether claim preclusion barred Lucky Brands from asserting its settlement defense in the 2011 Action. The Supreme Court noted at the outset that “[t]here may be good reasons to question any application of claim preclusion to defenses.” It did not need to resolve this more general question, however, because for claim preclusion to bar a defense in a later action, the two suits must arise from the same transaction or involve a “common nucleus of operative facts.” In Lucky Brand, the Supreme Court held that the two suits “were grounded on different conduct, involving different marks, occurring at different times” and “[t]hey thus did not share a ‘common nucleus of operative facts.’” Specifically, in the 2005 Action, Marcel’s claims were based on a combination of Lucky Brand trademarks and the use of the phrase “Get Lucky,” while the 2011 Action did not involve any use of the “Get Lucky” phrase. Moreover, the 2011 Action concerned conduct that occurred after the conclusion of the 2005 Action. The Supreme Court noted that this principle is particularly salient in the trademark context, “where the enforceability of a mark and likelihood of confusion between marks often turns on extrinsic facts that change over time” and “liability for trademark infringement turns on marketplace realities that can change dramatically from year to year.” The Lucky Brand decision underscores what all legal practitioners take for granted: the facts matter. Here, because the two actions involved different facts and claims, the Supreme Court found that Lucky Brand’s failure to invoke its release defense in the 2005 Action did not bar it from raising that defense in the 2011 Action. As noted, however, the Supreme Court left undecided the larger issue of whether it is ever appropriate to apply claim preclusion to bar defenses, and there are compelling policy considerations for either position. On the one hand, one of the goals of claim preclusion is to resolve issues at the earliest opportunity – and this principle would seem equally applicable to defenses. On the other hand, requiring defendants to litigate every possible defense at every stage in litigation might have the deleterious effect of increasing litigation time and costs – which preclusion doctrines seek to minimize. It will be interesting to see how this issue plays out and whether the Supreme Court eventually resolves it definitively. In the meantime, litigators (particularly in the trademark field) would be well-advised to carefully analyze the relevant facts in order to determine whether a defense is required – or could potentially be barred – by the doctrine of “defense preclusion” since that doctrine appears to have survived for possible future application under the proper factual circumstances.

The TMCA has been covering two pending trademark infringement cases brought by JaM Cellars against The Wine Group’s “Flavor First” line extension of its Franzia brand, and since our last post, there have been two developments of note. In the first case, involving JaM’s claim that the Franzia RICH & BUTTERY Chardonnay infringed JaM’s registered BUTTER mark, Judge Gilliam of the federal district court for the Northern District of California issued an order on April 17, 2020 denying The Wine Group’s motion for summary judgment. After noting that there was “no evidence of actual confusion by consumers,” and perhaps previewing the key issues to be litigated at trial, the Court identified several issues of material fact bearing on the issue of likely confusion that required a jury determination. First, what is the strength of the BUTTER mark, an issue that turns not only on the commercial success of the brand in the marketplace, but also on whether the word “butter” is descriptive or suggestive. Second, whether the parties’ respective wine products should be considered closely related goods or, as The Wine Group contends, materially different because they are sold at different retail price points in different packaging. And third, whether RICH & BUTTERY is being used in a trademark sense as a brand identifier for the wine, as JaM argues or, as The Wine Group contends, as a product descriptor. In a further analysis of The Wine Group’s fair use defense, the Court also found that issues of fact precluded summary judgment. Interestingly though, the Court commented that it “finds some persuasive force in Defendant’s argument that the use of “buttery” instead of “butter” (an adjective instead of a noun) leans in favor of a description….” A further notable comment from Judge Gilliam closed his ruling on the summary judgment motion: “While the Court has some reason to be concerned based on this and other lawsuits that Plaintiff may be effectively attempting to monopolize use of the term ‘buttery’ to describe Chardonnay, summary judgment is not warranted. It remains to be seen whether judgment as a matter of law may be appropriate at or after trial.” Thus, while The Wine Group lost its dispositive motion, it might take some comfort in the Court’s concern about whether JaM is attempting to preclude a competitor from using a descriptive term. In a second development on May 11, 2020, Judge Gilliam entered an order consolidating the RICH & BUTTERY case with the subsequent separate litigation brought by JaM against The Wine Group. The later-field case, which was the subject of our earlier post, involves claims by JaM Cellars that Franzia’s BOLD & JAMMY cabernet sauvignon and packaging infringes JaM Cellars’ rights in its JAM mark. A jury trial that had been scheduled for July has now been pushed back for the consolidated proceedings until December. Stay tuned!

In an oral ruling last month, Oregon District Court Judge Michael W. Mosman granted Nike’s motion dismissing NBA star Kawhi Leonard’s claims that he rightfully owned “The Claw” logo. The Claw is a logo depicting Leonard’s initials “KL” and jersey number “2” in the palm of an outstretched hand. Although no written order has been issued yet, the ruling reveals potential pitfalls facing athletes or celebrities attempting to build out brands with personalized logos or trademarks. Leonard, who led the Toronto Raptors to its first NBA title last year, is nicknamed “The Claw” (or “The KLaw” - using Leonard’s initials) because of his enormous hands. Those powerful paws, reportedly as big as Wilt Chamberlain’s and measuring over 11 inches long, are credited as one of the reasons behind Leonard’s success as a basketball player. Nike, which signed Leonard to an endorsement deal in 2011, set out to immortalize Leonard’s iconic hands in a logo, just as it had done with Michael Jordan’s iconic free throw line dunk in the Jumpman logo. (Incidentally, Judge Mosman is the same judge who dismissed claims challenging Nike’s copyright ownership of the Jumpman logo in Rentmeester v. Nike, Inc., No. 3:15-cv-00113-MO, 2015 U.S. Dist. LEXIS 77468 (D. Or. June 15, 2015)). The eventual “Claw Design” was created by Nike artists during the course of Leonard’s endorsement deal, but it shared similarities with a prior drawing Leonard created and provided to Nike. Both drawings include the letters “K” and “L” as well as the number 2 (Leonard’s jersey number) on an outstretched hand. Nike copyrighted The Claw design and listed itself as the author as an employer for hire, indicating that its employees—rather than Leonard—created the work. In late 2018, Nike’s endorsement contract with Leonard expired. Instead of re-signing with Nike, Leonard and his giant hands inked a new deal with New Balance. Intent on continuing to use The Claw as part of his personal brand with his new partner New Balance, Leonard sued Nike in 2019 seeking a declaration that he authored and owns the The Claw, and that Nike was neither the creator nor owner of the logo. Leonard’s claims were originally brought in the S.D. of California, but Nike was successful in transferring the case to its backyard: the District of Oregon. After the case was transferred to the District of Oregon, Nike answered, asserted counterclaims, and moved under Federal Rule of Civil Procedure 12(c) for judgment on the pleadings. The focus of Nike’s motion was dismissal of Leonard’s copyright claims, and recognition that Nike owned the copyright to The Claw. In his complaint, and in response to Nike’s motion, Leonard alleged that because he drew a previous draft logo and shared it with Nike, he was the actual owner of the subsequent Claw Design. Nike’s motion argued that its design was “obviously distinct” from Leonard’s, and that Nike never claimed ownership of Leonard’s own drawing. Nike’s Rule 12(c) motion further relied on a provision in its endorsement contract that stated “Nike shall exclusively own all rights, title and interest in and to any logos, trademarks, service marks, characters, personas, copyrights, shoe or other product designs, patents, trade secrets or other forms of intellectual property created by Nike (and/or its agents), consultant or athlete in connection with this contract.” Leonard claimed that his drawing, which was made before the endorsement deal was signed, was not made “in connection with” the endorsement contract. Although Leonard did not dispute that The Claw was made in connection with the contract, he claimed it was derivative of his drawing and ineligible for copyright protection. Ultimately, the court ruled in favor of Nike on its claim that it owned The Claw copyright. The minute entry from the hearing noted the court’s position: “As stated on the record, I grant the motion with respect to defendant Nike's ownership of the Claw design….” Although it isn’t clear from the minute order whether the court found The Claw to be independently copyrightable by Nike, or a derivate work of Leonard’s that Nike owned by contract, Oregon Live reports that the Judge stated, “It’s not merely a derivative work of the sketch itself…I do find it to be new and significantly different from the design.” In other words, Nike’s logo was sufficiently original to merit independent copyright protection, regardless of any inspiration from Leonard’s sketch. This case is a reminder of the potential importance of securing copyrights over trademarks. For instance, if The Claw was merely trademarked, Nike could lose its trademark protection by ceasing to use The Claw on advertising or merchandise for a period of time (generally three years), which would be expected after the endorsement deal expired. But because Nike copyrighted The Claw, there is no requirement that Nike actually use the copyright in commerce to retain sole ownership. In addition, this case is a warning to athletes, celebrities, or other public persons that they should take care to clearly define in endorsement contracts the ownership of personalized copyrights or trademarks that might become part of their personal brand.

Even devoted comic book fans and other true believers might not know that the term “Comic-Con” is meant to refer to the king of comic conventions—the San Diego Comic Convention (“SDCC”)—not all comic conventions in general. Until now! In the recent San Diego Comic Convention v. Dan Farr Prods., No. 18-56221 (9th Cir. April 20, 2020) decision, the Ninth Circuit established that the last two syllables of “convention” are crucial for organizers who want to avoid being illustrated as the bad guy in a trademark dispute, even if those syllables make a convention’s title slightly longer and less snappy. The Court affirmed a district court’s holding that the defendant, Dan Farr Productions, failed to prove that “Comic-Con” is generic, and it also affirmed that SDCC did not exercise unclean hands in registering “Comic-Con” as a trademark. In addition, the Ninth Circuit affirmed the district court’s award of attorney fees against Dan Farr Productions for its infringing use of the term for the Salt Lake Comic Con. The Ninth circuit ruled that the district court properly granted summary judgment when it concluded that Dan Farr Productions’ evidence was insufficient to support its claim that the term “Comic-Con” was generic prior to SDCC’s first use. The district court denied Dan Farr Productions’ motion for summary judgment on its “generic ab initio” defense. Dan Farr Productions argued that “Comic-Con” was generic before SDCC used the wording as a trademark to the products at issue. The court denied this argument, and granted SDCC’s motion for summary judgment. The district court stated in its opinion that the Ninth Circuit has never recognized a “genericness ab initio” theory of defense, finding the argument irrelevant. Moreover, the court concluded that even if such a theory were available, Dan Farr Productions’ evidence was insufficient to support the argument that the term “Comic-Con” was generic prior to SDCC’s first use. As the record before the district court failed to demonstrate any genuine issue of material fact, the Ninth Circuit affirmed the district court’s grant of summary judgment in favor of SDCC. Fortunately for SDCC, the Ninth Circuit also found that district court did not abuse its discretion in denying Dan Farr Productions’ motion for judgment on the unclean hands defense. To show that SDCC had “unclean hands,” Dan Farr Productions was required to demonstrate SDCC’s super villain-like behavior, specifically, wrongfulness, willfulness, bad faith, or gross negligence. Such behavior must be proven by a standard of clear and convincing evidence. Dan Farr Productions claimed that SDCC had unclean hands by registering its various Comic-Con trademarks. The Ninth Circuit affirmed the district court’s denial of Dan Farr Productions’ motion for judgment on the unclean hands defense. According to the Ninth Circuit, Dan Farr Productions failed to prove on appeal that the district court abused its discretion by finding no evidence of unclean hands in SDCC’s registration of the contested marks. The Ninth Circuit affirmed the district court’s award of reasonable attorney fees to SDCC but vacated its award of non-taxable costs for expert witnesses. The Ninth Circuit explained that the Lanham Act authorizes district courts to award “reasonable attorney fees” for “exceptional cases” based on examining the “totality of the circumstances” and using a preponderance of the evidence standard. In doing so, district courts may consider a variety of nonexclusive factors, including objective unreasonableness, compensation, and deterrence, which were the factors on which the district court focused. According to the district court, Dan Farr Productions litigated its case in an “unreasonable manner.” This included such Joker-like behavior as their “failure to comply with court rules, persistent desire to re-litigate issues already decided, advocacy that veered into ‘gamesmanship,’ and unreasonable responses to the litigation.” In other words, Dan Farr Productions’ conduct had crossed the line from common villainy to super villainy. To compensate SDCC and deter future infringers, the district court decided that it was therefore necessary to deem the case “exceptional” and award reasonable attorney fees. The Ninth Circuit concluded that this was not an abuse of discretion. However, since the district court’s award of non-taxable costs for expert witnesses was not expressly authorized by the Lanham Act, the Ninth Circuit vacated that part of the award. Unless comic book fans care about Ninth Circuit trademark law as much as they care about collecting the latest issues of The Super Friends, The Unbeatable Squirrel Girl, and Betty and Veronica, there is a good chance that fans will still refer to all conventions as “Comic-Cons.” However, organizers who want to avoid a lawsuit should be mindful about how they name their conventions. Even so, like many current comics, the lessons provided by this decision are not simply black and white. There is also a lot of gray. In the end, Dan Farr Productions wasn’t SDCC’s nemesis because they failed to sufficiently prove that “Comic-Con” is generic, but that doesn’t mean it can’t be done. A different defendant with different counsel litigating their case in a more reasonable manner might become SDCC’s kryptonite if they can provide sufficient evidence to meet their burden. ‘Nuff said.

On March 26, 2020, the Chinese Supreme People’s Court (the “SPC”), the highest court in China and thus China’s equivalent to the United States Supreme Court, issued its re-trial decision, giving Michael Jordan an assist against Registration No. 6020578 for the mark “Qiaodan in Chinese characters & Design” in Class 25 owned by Qiaodan Sports Co., Ltd (“Qiaodan Sports”), a Chinese sportswear company based in Fujian Province of China. “Qiaodan” in Chinese characters is a commonly recognized phonetic translation for the name “Jordan” and the design in the mark is that of a basketball player in midair attempting a layup. China’s top court ruled in favor of Michael Jordan in the re-trial decision by recognizing the former National Basketball Association superstar’s prior rights in the name “Qiaodan in Chinese characters”, in which an established link to Michael Jordan was found by the SPC based on the evidence in the trial. Specifically, Qiaodan Sports had argued in the previous proceedings as well as in the re-trial that there was a lack of an exclusive link between Michael Jordan and “Qiaodan in Chinese characters” because (1) “Qiaodan in Chinese characters” has its own meaning -- “grass and trees of the south” in Chinese and (2) even if “Qiaodan in Chinese characters” can be regarded as the corresponding Chinese translation for the name “Jordan”, “Jordan” itself is merely an ordinary surname in English and an exclusive link to Michael Jordan had not been established based on the evidence in the trial. These arguments were not entertained by the SPC. In its re-trial decision, the SPC went through the evidence on the use and reputation of Michael Jordan in detail and took the view that the evidence established a link between “Qiaodan in Chinese characters” and Michael Jordan, which gave rise to the necessary name rights protection to Michael Jordan. Therefore, the SPC quashed the decisions of the lower courts and ordered the invalidation case to be returned to the China National Intellectual Property Administration for re-review (the CNIPA” has merged the previous PRC Trademark Review and Adjudication Board (“TRAB”)) . As such, it is almost a foregone conclusion that the CNIPA’s re-review decision will result in a victory for Michael Jordan. This case is the last of a series of high profile trademark invalidation actions that Michael Jordan had commenced in 2012 with the TRAB against Qiaodan Sports’ 78 objectionable trademark registrations for marks that the former NBA basketball player believed infringed his name rights, among other legal violations. These actions failed in the TRAB as well as in the subsequent appeal to the Beijing First Intermediate People’s Court and the further appeal to the Beijing High People’s Court in 2014 to 2015. In rejecting Michael Jordan’s claim for protection of his name rights, the Beijing High People’s Court held that there was insufficient evidence to establish an exclusive link between the mark “Qiaodan in Chinese characters” and Michael Jordan. Michael Jordan sought the SPC’s leave for a re-trial of the 78 cases. The SPC granted leave for re-trial in 10 cases and eventually ruled in favor of Michael Jordan in four of the re-trial decisions, including the present one. This means that Michael Jordan wins 4 of the 78 cases against Qiaodan Sports. It is reported that the main reason for the low success rate of Michael Jordan’s actions is the undue delay in the commencement of those actions because Chinese Trademark Law provides a five-year time bar on the invalidation of a trademark registration in China. Most of the 78 trademark registrations of Qiaodan Sports had been registered for more than five (5) years in 2012 when the actions were commenced. It can be seen from the re-trial decision that the SPC has shifted from the ”exclusive link” approach adopted by the Chinese courts in the past (such as by the Beijing High People’s Court in the further appeal of the present case) to a more relaxed “established link” approach. This is like an alley-oop to rights owners, as it sends out a message to the public that China will be less likely to tolerate the free-riding activities of trademark squatters who register famous names as trademarks. On April 8, 2020, Qiaodan Sports posted an announcement via its official Weibo account to its business partners that based on the company’s win in 74 of the 78 cases, including those relating to the company’s core registrations for the mark “Qiaodan in Chinese characters”, “Design” and “QIAODAN”, the present re-trial decision will not affect the company’s use of its existing trademarks and will not affect the company’s normal business operations. Qiaodan Sports’ announcement might not quite reflect the real situation. Here’s an instant replay: around the same time of the commencement of the 78 trademark invalidation actions in 2012, Michael Jordan also filed a civil lawsuit against Qiaodan Sports for infringement of his name rights and portrait rights with the Shanghai Second Intermediate People’s Court. This last minute civil action frustrated Qiaodan Sports’ first IPO in China, which had been scheduled for listing in March 2012. The civil action with the Shanghai Court is still pending. Qiaodan Sports came back with its second attempt of an IPO in April 2019 in China. Its IPO application has passed the preliminary review and is pending the second review at the China Securities Regulatory Committee. The SPC re-trial decision issued at this critical period has overshadowed Qiaodan Sports’ second IPO application and has brought uncertainty to its outcome. The decision will also provide great support to Michael Jordan’s civil action in Shanghai. We will likely see an increasingly stronger defensive strategy in the form of IP protection in China going forward. The best way forward for Qiaodan Sports is perhaps to pivot and re-brand away from the current infringing name. From a U.S. standpoint, this case demonstrates the importance of worldwide protection of trademarks and protection of the right of publicity, where applicable. As celebrities’ stars shine brighter, it is important to also think about the value and monetization of a personal brand, and to protect that brand by registering it with trademark offices in key jurisdictions where there are lots of fans and where goods and services are sold, licensed, and/or manufactured. In addition to the right of publicity protection that is available to celebrities in most U.S. states, federal trademark registration is possible in the U.S. for names and symbols used by celebrities to offer goods and services. It follows that international registration is also available for celebrities who sell and license products and services to consumers in other countries using their names and symbols. We at the TMCA have published numerous blog articles about celebrities protecting and enforcing their personal brands in the U.S. (some more successful than others), including Beyoncé, Lindsay Lohan, and even newborn Psalm West. Celebrities with international appeal should take heed of the Qiaodan Sports litigation saga as a case in point where acting early to protect global rights would have saved Michael Jordan from eight years of litigation and a Chinese doppelgänger brand clouding his image. Beyond the U.S. and a few other common law countries that allow for protection of unregistered names and symbols, it can be difficult to enforce trademark rights against an unauthorized user of a mark if they were first to file a trademark. Such “first to file” countries do have laws against bad faith squatters as well as special laws protecting famous marks. However, the evidentiary standards can create hurdles, especially in cases like the Qiaodan Sports case in China, where the mark might be subject to various translations and it may be difficult to show an “established link” let alone an “exclusive link” between the infringing mark and the celebrity based on the available evidence. This case is helpful for rights holders going forward in China, though filing early and often remains the best strategy for global branding. For previous articles written by Dorsey on this topic, please see: Protecting famous names and It’s all in the name: protect your own in China.

Yesterday the U.S. Supreme Court overturned the Second Circuit, and ruled that infringer’s profits can be awarded even without a showing of willful infringement. A jury had ruled that Fossil acted in “callous disregard” of Romag’s trademark rights when Fossil’s Chinese manufacturers used counterfeit Romag fasteners. To recap the case posture, described in a prior blog post, Romag v. Fossil: Is Willfulness the “principle of equity” or the “big kahuna,” or is this all “much ado about nothing” , the question was whether statutory language allowing recovery of infringer’s profits consistent with “principles of equity” means that infringement must be willful. As will come as no surprise to those who track the judicial philosophy of Supreme Court justices, Justice Gorsuch took a textualist approach. No, “principles of equity” does not equal a requirement of “willfulness,” particularly when the drafters of the statute used the term “willful” repeatedly in other portions of this section. The short but vigorous opinion took several opportunities to slam Fossil’s position. As the opinion muses: “So how exactly does Fossil seek to conjure a willfulness requirement out of §1117(a)?” Fossil argued that “principles of equity,” in the context of trademark infringement at the time of the statute’s passage, required willfulness and Congress implicitly adopted that standard into the new law. Justice Gorsuch was not impressed, calling it a “curious suggestion.” In addition to attacking its merit from a textualist approach, Justice Gorsuch took issue with the underlying point – that an award of the infringer’s profits required willfulness – and cited to several cases identified by Romag as showing the opposite. So, then, willfulness is not the “principle of equity.” Fossil’s fallback argument fared little better. Fossil had argued that, even if not required, willfulness was key, calling it the “big kahuna.” The majority opinion expressed no emphasis on willfulness, leaving equity up to the district court’s discretion, although Justice Gorsuch observed that a defendant’s mental state would be “an important consideration” in deciding whether an accounting of profits is an appropriate remedy. In a concurring opinion, Justice Sotomayor (who practiced in the field of intellectual property law when she was in private practice prior to ascending to the bench), expressed her view that although willfulness was not a necessity, some wrongful state of mind – for example, recklessness – should exist before infringer’s profits are awarded. Following Romag v. Fossil, trademark plaintiffs have a greater opportunity to recover infringer’s profits, making some trademark suits by small players against big defendants more economically palatable.

On April 8, 2020, the Court of Appeals for the Federal Circuit issued a decision on an appeal from the refusal of registration of a color trademark by the Trademark Trial and Appeal Board. In this case, the applicant, Forney Industries, Inc., a maker of welding and machining tools and accessories, filed a trademark application in the U.S. Patent and Trademark Office based on use in commerce of the color mark shown above, which Forney features on its product packaging. The Examining Attorney rejected the application on the ground that the mark was not inherently distinctive – and so not immediately eligible for registration - and only registrable on the Supplemental Register (the secondary register of the USPTO for marks potentially capable of acquiring distinctiveness), or on the Principal Register with adequate evidence of acquired distinctiveness. On appeal of the Examiner’s decision by Forney, the TTAB affirmed the refusal of registration, rejecting Forney’s argument that its proposed mark was inherently distinctive product packaging trade dress that was registrable without further proof. Forney subsequently appealed the Board’s decision to the CAFC. The CAFC vacated the TTAB’s determination that the color trademark as applied for was not inherently distinctive, and remanded the case to the TTAB for further consideration. The question the TTAB must now answer is whether, as used on product packaging, a mark consisting of a combination of colors, and the design those colors create, is sufficiently indicative of the source of the goods contained in that packaging, and thus inherently distinctive. The CAFC looked to three Supreme Court decisions that are seminal to the analysis of trademark protection for trade dress, color trademarks, product design, and product packaging, and reflect the long and complicated history in this area of U.S. trademark law: Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992) -- Holding that product packaging, i.e., trade dress, is inherently distinctive under the Lanham Act, although the case is silent on how to assess whether such inherent distinctiveness exists. Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159 (1995) -- Holding that color trademarks used as part of product design can meet the legal requirements for trademark registration provided that the color marks have acquired secondary meaning in the minds of consumers. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000) -- Holding that product design can never be inherently distinctive because consumers do not typically associate a product design with its source, and confirming its prior ruling in Qualitex that a color trademark, whether applied to a product or its packaging, cannot be inherently distinctive. The CAFC concluded that the TTAB had erred in two ways: 1) by concluding that color-based product packaging marks (as opposed to color-based product design marks) can never be inherently distinctive marks; and 2) by suggesting that a multi-color mark must be associated with a well-defined peripheral shape or color in order to be inherently distinctive. Using these cases as guideposts, the CAFC found that the Supreme Court had not gone so far as the TTAB had with respect to the treatment of a color mark on product packaging (as distinct from use on product design). Rather, the CAFC held that color marks (and particularly multi-color product packaging marks) can in fact be inherently distinctive when used on product packaging, depending upon the character of the color design. To support its holding, the CAFC pointed to a 2016 decision of the 10th Circuit, which also involved Forney, for its finding that “the use of color in product packaging can be inherently distinctive in appropriate circumstances.” The TTAB’s job now is to assess whether Forney’s product packaging can be viewed as inherently distinctive, and thus source identifying, applying certain factors laid out in a 1977 federal case holding, Seabrook Foods, Inc. v. Bar-Well Foods Ltd., 568 F.2d 1342 (C.C.P.A. 1977). These factors are: 1) whether the trade dress is a “common” basic shape or design; 2) whether it is unique or unusual in the particular field; 3) whether it is a mere refinement of a commonly-adopted and well-known form of ornamentation for a particular class of goods viewed by the public as a dress or ornamentation for the goods; and, 4) whether it is capable of creating a commercial impression distinct from the accompanying words (note: this factor is not applicable in this case). Other cases also support the proposition that the overall combination of elements will determine whether product packaging identifies the products as originating with a known source, and that a color combination used in conjunction with a particular geometric pattern can be a valid trademark. Will Forney’s color trademark on it product packaging ultimately be found to be inherently distinctive? We will keep you informed of the TTAB’s final holding.

On April 1, 2020, JaM Cellars filed a trademark infringement lawsuit against The Wine Group, makers of the popular Franzia brand boxed wine. Plaintiff JaM Cellars is the owner of trademarks relating to the word JAM used in wine products (U.S. Trademark Registration Nos. 3,787,229 and 3,855,785). According to the complaint, since being introduced in 2009, wine using the JAM marks has received several awards, and JaM Cellars has expended millions of dollars in advertising the wine using the JAM marks. JaM Cellars filed the complaint in the U.S. Federal Court in the Northern District of California. In addition to allegations of trademark infringement, the complaint also includes unfair competition claims under federal and state law. The dispute between the parties arose out of the sale and advertising of Franzia’s “Bold and Jammy” brand of Cabernet Sauvignon. According to the suit, Franzia has undertaken the “first major marketing campaign in thirty-five years for [the] Franzia brand, which includes a full packaging revamp, as well as new products and line extensions.” One of the results of the marketing campaign has been the BOLD & JAMMY wine, sold in packaging JaM Cellars alleges is distinctive from Franzia’s usual design for other wines in the Franzia line. The complaint alleges that Franzia’s use of BOLD & JAMMY infringes the JAM marks and that Franzia’s packaging has imitated certain unregistered trade dress elements of JaM Cellar’s packaging. The parties have a contentious history, and this suit is the latest salvo in a series of disputes between the parties dating back to 2017. JaM Cellars is also the owner of marks relating to the use of the word BUTTER in Chardonnay wines and had previously settled a lawsuit with The Wine Group for its use of the word BUTTERKISSED in wines. In April of 2019, JaM Cellars filed another lawsuit over The Wine Group’s use of the phrase RICH & BUTTERY on the packaging of Franzia’s Chardonnay wines, which is still pending. It will be interesting to see how this dispute plays out if it isn’t resolved through a private settlement. JaM Cellars will likely focus on any evidence of improper motivation and inspiration behind the rebranding redesign as well as why Franzia departed from other packaging presentations in its line of wines. Franzia, for its part, can rely on the distinguishing role of its well-known FRANZIA trademark in making confusion unlikely to occur. It could also attempt to show that certain colors, font styles and graphic designs are common packaging elements in the field of alcoholic beverages and that JaM Cellars does not own any registered trade dress rights. From a consumer perspective, the question of whether word JAM has any specific meaning or common use in the wine industry will also come under scrutiny. Evidence of actual confusion in the marketplace (or lack thereof) or in the form of survey evidence could also play a role. The TMCA will monitor further developments and provide updates once the case is resolved. If there is a private settlement, it can also be possible to discern the likely terms of resolution if a re-designed Franzia packaging surfaces in the marketplace (or not).

In a recent decision, Judge John R. Padova of the federal court for the Eastern District of Pennsylvania dismissed seven out of eight of the claims brought by musician Leo Pellegrino alleging that Epic Games unlawfully copied his “Signature Move” in its massively popular online video game, “Fortnite.” Although Pellegrino’s false endorsement claims survives, this was a significant victory for Epic, since the remainder of Pellegrino’s right of publicity, privacy, unfair competition, unjust enrichment, and trademark claims were dismissed with prejudice. Like several other recent decisions, this decision provides guidance to video game companies seeking to incorporate elements of reality into their games. Leo Pellegrino is a professional saxophone player and member of the “brass house” band, “Too Many Zooz.” According to Pellegrino’s complaint, “[u]sing [Pellegrino’s] unique anatomy—specifically his externally rotatable feet—Pellegrino was able to create the Signature Move, a series of movements that express his own unique dancing style” while playing a saxophone. The complaint further alleges that “[b]y executing the Signature Move in concert and festival performances in front of hundreds of thousands of people and in online videos with millions of views, his Signature Move has grown in popularity and has become inextricably linked to his identity.” For those of you who, like me, aren’t particularly hip to the brass house music scene, Pellegrino’s Signature Move looks like this. It’s kind of like a hyperactive version of the dance professional wrestler Junkyard Dog used to do with kids after wrestling matches, but with more foot twisting and a saxophone. Although the Court’s reference to Pellegrino’s “unique anatomy” suggests that a particular anatomy is required to do the dance, having externally rotated feet appears to be somewhat common. Epic’s Fortnite is a multiplayer online battle royale game in which players work competitively and collaboratively with others to be the last person or team standing, after dispatching all other players with weapons and other violence. Fortnite is free to download and play, but Epic generates revenue by selling things to players in the game, such as “emotes.” An emote allows a player to perform particular dance moves with their character, or avatar. Here is a side-by-side video comparing Pellegrino executing his Signature Move and a Fortnite avatar performing the emote at issue, which is called “Phone It In.” Assuming that this is not the only way to dance while holding a saxophone, Phone It In’s resemblance to the Signature Move seems more than coincidental, but Pellegrino and the Fortnite avatar look completely different. Pellegrino’s Counts I-III were right of publicity and privacy claims. Epic moved to dismiss them on First Amendment grounds since video games are protected by the First Amendment as an expressive work. In the Third Circuit, courts balance First Amendment protections and publicity and privacy rights using the Transformative Use Test. As the Court explained, under the Transformative Use Test, First Amendment protections outweigh a celebrity’s interest in their “likeness if the likeness is so transformed that it has become primarily the defendant’s own expression rather than the celebrity’s likeness.” The Court noted that in a previous video game case, Hart v. Elec. Arts, Inc., 717 F.3d 141 (3d Cir. 2013), which involved the use of college football player Ryan Hart’s likeness in a NCAA Football series of games, the Third Circuit applied the Transformative Use Test by first considering whether Hart’s “identity,” defined as including both his appearance and biographical information, was sufficiently transformed. Second, the Third Circuit considered “the manner in which Hart’s identity was ‘incorporated into and transformed by’ the expressive work” by looking at the context of the digital avatar and querying whether that avatar “did in the game what Hart did in real life.” Applying these considerations, Judge Padova concluded that Phone It In passed the Transformative Use Test because the complaint demonstrated that Fortnite’s heavily customizable avatars do not share Pellegrino’s appearance or biographical information, and the avatars execute the Signature Move only in the context of a battle royale competition, not in the context of a musical performance, like Pellegrino would do. Accordingly, the Court dismissed Pellegrino’s publicity and privacy claims. The Court also dismissed Pellegrino’s unjust enrichment claims because the complaint did not allege a contractual or quasi-contractual relationship in which Pellegrino conferred benefits on Epic. In addition, the Court dismissed Pellegrino’s unfair competition claim because it did not accept Pellegrino’s contention that he, a musician, and Epic, a video game company, are competitors “in the field of selling dance performances.” Under Count VI, Pellegrino asserted both false designation of origin and false endorsement claims. The Court dismissed Count VI with respect to the false designation of origin because it was barred by Dastar Corp. v. 20th Century Fox Film Corp., 539 U.S. 23 (2003). In Dastar, the U.S. Supreme Court held that false endorsement claims cover the origin of the good itself (e.g., the Fortnite video game) not the “idea, concept, or communication embodied in those goods” (e.g., Pellegrino’s Signature Move), which would fall under copyright law. However, the Court denied Epic’s motion to dismiss with respect to Pellegrino’s false endorsement claim. The Court based its decision on the complaint’s allegations that Pellegrino created the Signature Move, was identified with it due to his performances and online videos, Fortnite players’ immediate recognition that Phone It In embodied Pellegrino’s signature move, and Epic intentionally mimicking the Signature Move and naming it Phone It In to allude to a 2017 Google Pixel 2 phone commercial featuring Pellegrino. According to the Court, these allegations were sufficient to plausibly claim that Epic had created the false impression that Pellegrino had endorsed Fortnite. Pellegrino also asserted state trademark infringement and federal trademark dilution claims. The Court held that the state trademark claim was directed to the Signature Move, which is a dance, and choreographic works are specifically covered by 17 U.S.C. § 102(a)(4) of the Copyright Act. Since Pellegrino’s state trademark claim was equivalent to a copyright claim, the Court dismissed it as being preempted by the Copyright Act. The Court also dismissed Pellegrino’s trademark dilution claim because the complaint did not allege that Epic’s use of the Signature Move was intended to be a trademark for Fortnite, as required by the dilution provisions of the Lanham Act. In other words, Epic might use the Signature Move in its game, but the key missing allegation is that Epic uses the Signature Move as a trademark to identify Fortnite. Usually, when a court dismisses a plaintiff’s claims for the first time, it will allow the plaintiff leave to amend the complaint unless there is, or would be, undue delay, bad faith, dilatory motive, prejudice, or futility. Here, the Court found that amending the dismissed claims would be futile, and it therefore denied Pellegrino’s motion for leave to amend his complaint and dismissed those claims with prejudice. Under the rationale of this case, video game companies can copy a celebrity’s dance move, and perhaps other actions, without running afoul of publicity and privacy rights as long as the copying is done in a transformative way. Putting a celebrity musician’s likeness and signature dance in a game about musical performances probably won’t fly, but giving the same sweet moves to a character that looks nothing like the celebrity and putting them in a completely different context, as was done here, would be less risky. Even so, if a signature move is strongly identified with a celebrity, or the game company names it in a way that alludes to the celebrity, the game company might have to litigate a false endorsement claim beyond the pleading stage. How the parties and Court ultimately resolve the false endorsement claim could provide some more interesting case law about the limits of incorporating dance moves into a video game. This decision also indicates that future plaintiffs should consider adding copyright claims to their complaints if copyrightable content has been copied, since some of Pellegrino’s trademark claims were dismissed for being preempted by copyright law. We will see if Pellegrino tries to add copyright infringement claims to his current complaint or files a new complaint for copyright infringement.

Even though professional sports are on an indefinite and unprecedented hiatus due to the global outbreak of coronavirus, professional athletes are still making moves behind the scenes. In particular, NFL quarterback and six-time Super Bowl champion, Tom Brady (often referred to as “TB”), will be relocating from Boston to Tampa Bay for the upcoming NFL season. Brady began his NFL career with the New England Patriots and spent 20 seasons with the Patriots under the leadership of Coach Bill Belichick. Together, the two built a dynasty that spawned an impressive list of accomplishments, including the only undefeated 16-game regular season in NFL history, appearances in eight straight AFC Championship games (2011-2018), and six Super Bowl victories in nine appearances. At the age of 42, and after his longstanding history and unparalleled success with the Patriots, sports fan began to wonder what was next for TB. Will he retire? Or will Brady try his hand for the first time in a non-Patriots uniform? On March 20, 2020, these questions were answered. Brady ended his tenure with the Patriots and signed a two-year, $50 million contract with the Tampa Bay Buccaneers. Brady’s NFL contract wasn’t the only thing he signed that day. With “TB” now headed to “TB,” Brady seized the opportunity to capitalize on the play on words and filed a US trademark application for the mark TB X TB in connection with various clothing items in Class 25 (App. No. 88/841,801). Tampa Bay also took advantage of the TB connection and included “TB X TB” in a video announcing Brady’s arrival to the Bucs. Presumably, the parties have an agreement in place regarding shared use of the phrase, but the application was filed by Brady’s team. It seems Brady and the Bucs are not the only ones trying to score rights in “TB Squared.” On March 23, 2020, three days after Brady signed with the Bucs, an individual, Connor Patrick Hegarty, filed a US trademark application for a stylized version of TB2 (“TB Squared”) in connection with various clothing items in Class 25 (App. No. 88/844,457). The description of the mark indicates that it is “[i]ntended to be read as ‘TB Squared’,” and that the stylized letters and number signify the union between “Tom Brady” and “Tampa Bay.” The application does not contain a statement from Tom Brady providing his consent to register. There is nothing preventing Hegarty from using “TB” as an abbreviation for “Tampa Bay,” as this is a generic reference to a specific geographic place. However, Hegarty’s use of “TB” as an abbreviation for Tom Brady is more problematic. Although celebrities do not automatically enjoy trademark rights in their names, if the name (or nickname) achieves secondary meaning and is recognized as a source for particular goods or services, then the name can be a protectable trademark. Brady owns a number of pending trademark applications and existing registrations for the mark TB12 (both word marks and stylized marks) in connection with an array of goods and services, including clothing. Each registration includes the following statement: “The name, portrait, and/or signature shown in the mark identifies Tom Brady, whose consent to register is made of record.” The TB12 mark has been used in connection with clothing goods since at least as early as 2008, including the type of clothing items claimed in Hegarty’s application. Therefore, Brady’s initials, TB, have come to develop secondary meaning as an indicator of source, separate from reference to Tom Brady as an individual. Here, Hegarty specifically included “TB” in his TB2 trademark as a direct reference to Tom Brady. Such use of TB in connection with goods that Brady offers under the TB mark is likely to mislead consumers into believing that Hegarty’s goods are related to, sponsored by, or somehow affiliated with Brady. Moreover, not only does the inclusion of TB imply a (presumably) false association with Brady, the mark itself, TB2, is arguably similar to the TB12 and TB X TB marks, making confusion between the sources even more likely. Although it is too early to tell what the fate of Hegarty’s application will be in the eyes of the United States Patent and Trademark Office (“USPTO”), it would be surprising if Brady’s team didn’t “throw the flag” and challenge Hegarty’s application and any corresponding use of the mark. Incidentally, this is not the first time Brady has made headlines for his trademark filings. As previously reported in the TMCA Blog, the USPTO preliminarily refused Brady’s applications for TOM TERRIFIC after receiving a letter of protest claiming that “Tom Terrific” is actually the nickname for Tom Seaver, an MLB Hall of Fame Pitcher who played for the New York Mets. Brady had until February 22, 2020, to respond to the refusals but failed to do so. As such, the TOM TERRIFIC applications, as well as TB’s hopes for a nickname with perfect alliteration, are now dead.

A bong distributor with a reputation as a serial trademark plaintiff managed to persuade a Florida federal court that it should not be on the hook for the prevailing party’s attorney’s fees. In Sream Inc. et al. v. CIJ Enterprises Inc., Plaintiffs Roor, a German “water pipe” maker and its U.S. licensee, Sream, alleged that defendant CIJ infringed Plaintiffs’ trademark by selling a bong at its convenience store that bore the Roor mark. After CIJ prevailed at trial, it moved for attorney’s fees. On March 3, however, Judge Reinhart of the Southern District of Florida issued an order denying the motion on the grounds that CIJ had failed to establish that the case was exceptional under the Lanham Act. Judge Reinhart began with a brief overview of the applicable law regarding what constitutes an exceptional case. As another Southern District of Florida court noted, courts may consider whether there was purposeful, intentional or willful conduct that went beyond "mere negligence” in assessing whether a case is exceptional. An attorney’s fees award may also be justified when a plaintiff has brought an "obviously weak" Lanham Act claim and the evidence shows that the plaintiff acted in bad faith and with an "improper motive.” The policy reason for this doctrine is clear:  to, ahem, weed out frivolous claims. As this case demonstrates, however, it is no easy feat to recoup attorney's fees under the exceptional case doctrine. In this case, CIJ made three principal arguments in support of its position that this was an exceptional case justifying an award of attorney’s fees. CIJ first argued that Plaintiffs were on notice of the weakness of their case, as a judgment had been entered against them in a similar case, Sream, Inc. v. Smokers Edge, LLC, just nine months earlier. Notably, in Smokers Edge, the court had ruled it was an exceptional case meriting an award of attorney’s fees. Next, CIJ claimed that Plaintiffs’ “apparent business model” is to file trademark infringement lawsuits against “smaller, stand-alone, independent stores” and obtain settlements before trial an (oh no, not again) chronic litigant, if you will. According to CIJ, Plaintiffs likely earn more revenue from these settlements than from sales of their water pipes. Finally, CIJ contended that Plaintiffs’ attempt to obtain damages for allegedly infringing the mark of what it deemed an unlawful product made this an exceptional case. CIJ noted that Plaintiffs’ bongs had competed in the Cannabis Cup (the horror!) and that it had asserted the affirmative defense of illegality. Apparently, CIJ failed to see the irony in raising this argument given that its own presence in the bong market is what led to the suit to begin with. Judge Reinhart found CIJ’s Smokers Edge argument to be its strongest. In that case, the same plaintiffs had raised identical claims against a smoke shop that sold a counterfeit Roor water pipe. Nevertheless, Judge Reinhart found several reasons to distinguish the two cases. First, while the Smokers Edge court found that the bongs at issue were not “remotely similar in design, construction or quality,” the CIJ court found that a consumer seeing the two bongs next to each other could reasonably conclude that both came from the same source. Second, the defendant in Smokers Edge had twice made settlement offers that the plaintiffs rejected; in this case, however, there was no evidence that CIJ had offered to settle and been rebuffed (perhaps CIJ should have—please make it stop—tried to hash it out with Plaintiffs before trial?). Third, in Smokers Edge, despite the fact that the plaintiffs knew the identity of the distributor who sold the counterfeit bong to the defendant, they had never investigated the distributor nor sought to add them as a party, suggesting that the infringement was not actually causing Plaintiffs the harm they claimed. By contrast, in CIJ, there was nothing in the record regarding the distributor’s identity. Fourth, Judge Reinhart was also unpersuaded by CIJ’s argument that Plaintiffs did not actually care about the alleged infringement and only brought these actions to achieve settlement payments. As the court noted, there was no evidence Plaintiffs’ settlement proceeds exceeded their sales revenues (as CIJ had speculated), and Plaintiffs had a reasonable basis for bringing an infringement action, despite the fact they ultimately failed to prevail. Finally, the court rejected CIJ’s claim that the case was exceptional due to the alleged illegality of the water pipes. CIJ’s affirmative defenses did not include a claim that Plaintiffs had fraudulently procured their trademark by misrepresenting the nature of their water pipes. And, at least according to testimony from Plaintiffs’ corporate representative, Plaintiffs “advertise and market their water pipes only for tobacco use.” One suspects, of course, that most consumers of Roor bongs employ them for marijuana use. Absent evidence of misrepresentations to the USPTO, however, the fact that most consumers likely use Plaintiffs’ bongs to smoke an unlawful product does not make this case exceptional. It’s not at all surprising that winning trademark defendants are anxious to have their attorney’s fees paid—particularly when it appears to them that the plaintiff is in the trademark infringement litigation business. Judge Reinhart’s opinion reminds us once again that, absent truly exceptional cases, the expectation of an attorney’s fees award under the Lanham Act is generally nothing but … a pipe dream.

Fleet Feet, Inc. is a national running equipment retail store chain and owner of the trademarks CHANGE EVERYTHING and RUNNING CHANGES EVERYTHING for retail sporting goods stores and athletic apparel and related goods and services. According to the company website, the company espouses the core belief that “running changes lives,” and thus transforms everything else. Nike, Inc. adopted “Sport Changes Everything” in its 2019 advertising campaign highlighting youth, athletes with miraculous physical abilities in spite of obstacles, and the difference that sports can make in transforming lives. There was even a “Sport Changes Everything, Chicago-Style” commercial featuring grit, determination and, of course, mustard-only hot dogs. For Nike, it was a tearjerker campaign that resonated with many. Fleet Feet took notice of Nike’s campaign and filed a trademark infringement lawsuit seeking damages and an injunction, based in large part on a theory of reverse likelihood of confusion. Reverse confusion occurs when consumers believe that a prior user of a mark is somehow connected to a later user, even though the later user is the interloper. In contrast, plain vanilla “forward” likelihood of confusion occurs when a later user’s good or services are confused as originating with or somehow connected to the prior user. Reverse confusion can seem especially egregious because it causes a lesser-known prior user to become mixed up with a well-known later user of a mark simply because the later user’s reputation and resources eclipse that of the lesser-known prior user. In this instance, Fleet Feet asserted that even though its marks had been in use exclusively since 2013, Nike’s brand power and 2019 advertising campaign overpowered its use and would make consumers believe that Fleet Feet is somehow affiliated with Nike, when it is not. The U.S. District Court for the Middle District of North Carolina concluded that the marks were quite similar, and in light of Nike’s advertising power, its use could, and indeed already had, eclipsed that of Fleet Feet’s use of its marks such that there was a strong likelihood of reverse confusion and sufficient irreparable harm to warrant an injunction. Nike recently appealed the decision to the Fourth Circuit on the basis that the injunction was a restraint on free speech. Nike asserts that its use of “Sport Changes Everything” was not as a trademark or tagline, but was merely descriptive, and thus a fair use. As contended in Nike’s appeal, fair use of a trademark was established in the First Amendment to the Constitution, which in part prohibits Congress from making any law abridging the freedom of speech. In its fair use defense, Nike must prove that it used the phrase descriptively and in good faith. 15 U.S.C. § 1115(b)(4). Nike also asserted that advertising taglines are frequently short lived and therefore not always intended to become source indicating, though the relevant legal question is whether consumers thought the “Sport Changes Everything” phrase was source indicating—and if they did, were they likely to be confused as between Fleet Feet or Nike as the source of the products and services. We’ll continue to keep you posted, as this appeal could change everything.

A federal district court has eliminated a cannabis company’s affirmative defense to federal trademark infringement claims based on the company’s prior use of a trademark that was legal under state law but not federal law. The Court concluded that, although use of the mark may have been legal under California law, “[c]annabis is illegal under federal law [and] the Lanham Act preempts the state law.” As the TMCA discussed previously, Kiva Health Brands (a national health food and supplements company) and Kiva Brands (a company selling cannabis-infused edibles) are locked in a dispute over the trademark KIVA. The parties cross-filed motions for summary judgment in late 2019 related to Kiva Brands’ various affirmative defenses to Kiva Health Brands’ infringement claim, including defenses based on prior use, laches, acquiescence, waiver, and estoppel. The Northern District Court of California ruled on the motions last Friday, eliminating Kiva Brands’ prior use defense but preserving its other equitable defenses. With respect to the prior use defense, the Court looked to its previous rulings in the case and reiterated that “while [Kiva Brands’] product is legal under California law, its illegality under federal law means that [Kiva Brands] cannot have trademark priority.” The opposite conclusion, it reasoned, would “put the government in the anomalous position of extending the benefits of trademark protection to a seller based upon actions the seller took in violation of that government’s own laws.” The Court rejected Kiva Brands’ argument that Section 1065 of the Lanham Act requires consideration of state trademark rights. This section applies only when a plaintiff has asserted incontestable trademark rights, on which Kiva Health Brands does not rely. The Court went a step further, indicating that even if it were required to consider state trademark rights under the Lanham Act, a federally-illegal use of a trademark simply cannot “support a prior use defense to a federal trademark” and any state law that would allow Kiva Brands to obtain common law (unregistered) trademarks rights would encroach upon and are thus preempted by Kiva Health Brands’ federal trademark rights. Notably, Kiva Brands’ counterclaim based on its common law rights under California law is still pending. However, the preemption aspect of this decision certainly leaves questions about the viability of that counterclaim. The TMCA will continue to monitor the progress of this case, which continues to provide helpful insights into trademark disputes involving cannabis, especially the potential limitations of common law trademark rights for such products.

I used to love pocket watches. My Wyatt Earp Halloween costume was not complete until I had a gold pocket watch hanging from my black vest. It’s no surprise then that reading the court’s decision on a motion for summary judgment in Hamilton Int’l Ltd. v. Vortic LLC piqued my interest. Vortic—a watchmaker that restores antique pocket watches, and converts them into wrist watches—is about to present its defense at trial in the Southern District of New York on claims that one of its converted watches infringes trademarks owned by the venerated Hamilton Watch Company, which produced its first watch in the 1890s and is still in business today. The Vortic watch style at issue is called “The Lancaster.” It uses a restored movement (i.e. the internal mechanism), face and hands from pocket watches produced by Hamilton, but the other parts of the wristwatch are produced by Vortic and the ultimate product is also assembled by Vortic. The Hamilton mark is visible on both the front and back of the watch. In order to produce The Lancaster, Vortic modifies the movement mechanism and, in some cases, must use parts from multiple Hamilton pocket watches. Denying Hamilton’s motion for summary judgment, Judge Alison Nathan held that the case at trial will turn on facts bearing on the issue of likelihood of consumer confusion, including the “crucial supplemental factor” of whether Vortic provided adequate disclosure of the nature of the watch being sold as a “modified genuine product.” While there is no dispute that Vortic uses Hamilton’s marks in commerce without Hamilton’s consent, Judge Nathan’s summary judgment opinion relied on the Supreme Court’s decision in Champion Spark Plug Co. v. Sanders, 331 U.S. 125 (1947) in concluding that a reasonable fact finder could determine the uses were unlikely to cause consumer confusion because Vortic had disclosed on its website and packaging that it had used Hamilton parts in creating the wrist watch. Just as in Champion, where the Court found there was no infringement when a defendant sold repaired and reconditioned spark plugs conspicuously labelled as such, the disclosures on Vortic’s packaging and website disclosed that the various parts of its rebuilt wristwatch “‘started out their life in a … pocket watch made by [Hamilton].’” Because consumers would expect that used or repaired second hand goods would not be in original condition or were otherwise inferior, a conspicuous label on the advertisements or packaging may constitute full disclosure for trademark purposes. Judge Nathan also analyzed the Second Circuit’s Polaroid factors that are applied when determining the likelihood of consumer confusion in trademark cases (not involving reconditioned or modified goods), and concluded that five of the eight factors were not relevant and would not be part of the analysis. On the remaining three factors—actual confusion, defendant’s good faith and sophistication of the buyers—Judge Nathan concluded there was no evidence of actual confusion and there was a genuine dispute of fact regarding Vortic’s good faith. Further, because the watches were expensive, the relevant consumers would likely be more discerning than usual in making a purchasing decision. Accordingly, these factors counseled against granting summary judgment to Hamilton. In its motion for reconsideration, Hamilton complained that Judge Nathan had improperly considered only three of the eight Polaroid factors in denying summary judgment. Judge Nathan denied the motion, holding that while it was incumbent upon the court to engage in a review of each factor, the court need not apply every factor in every trademark infringement case if a factor is deemed inapplicable and the court explains why, as was the case here. Judge Nathan set a bench trial to commence February 19, assuming the case does not settle beforehand. In denying both Hamilton’s motion for summary judgment, and its motion for reconsideration, Judge Nathan previewed her views on many of the issues that she will ultimately decide. Unless Hamilton produces additional evidence of actual confusion at trial, it appears the die is cast against it. Regardless, the case will be interesting to watch.

The Supreme Court oral argument in the trademark case Romag v. Fossil provided an entertaining view of what some may consider a dry topic: legislative intent for damages awards in a trademark infringement case. Not to be lulled into a monotone and perfunctory argument, the parties engaged in spirited debate that quoted sources from Shakespeare to Oliver Wendell Holmes and four times elicited laughter from the audience. But the question remains: must a trademark plaintiff prove the defendant acted with willfulness in order to recover the infringer’s profits? The parties argued two opposite approaches: Romag argued that willfulness is not required, reasoning that if Congress had intended to impose a willfulness requirement, it would have used the word “willful,” as it did in other parts of the statute, instead of saying that profits are allowed when consistent with “principles of equity.” This argument appeared to resonate with Justices Ginsburg and Gorsuch, who questioned “whether principles of equity might be an unusual way of saying willfulness” if Congress had intended to impose a willfulness requirement. Fossil argued that courts have consistently required willfulness and that “principles of equity,” in this context, should be interpreted to require willfulness. According to Fossil, the statutory text should be read in light of what Fossil described as a consistent body of caselaw requiring willfulness. (On the other hand, Romag’s lawyer argued “the law was a mess and it wasn’t that clear.”) According to Fossil, “even though equity is generally flexible, you’ve got to go through the gate” by showing willfulness. Justice Kagan was skeptical of this argument, commenting that “the courts do seem to be thinking of willfulness as a factor, a significant factor, but not a gateway requirement.” Justice Breyer wondered wither this was “much ado about nothing,” because courts have the discretion to adjust damages awards and could increase or reduce an award regardless of which gateway rule is applied. Fossil’s fall-back argument – which may carry the day – is that willfulness is the “big kahuna”: “if we were to lose this case on remand, you should make very clear that willfulness is a key factor, the big kahuna or something like that….” The justices may take him up on that offer: Justice Kagan mused that there may be an “intermediate position” between the two parties’ arguments, “which is that willfulness might not be…an absolute necessity but it certainly should be entitled to very significant weight.” So there you have it. Willfulness just might be the “big kahuna” when deciding whether to award infringer’s profits to a trademark plaintiff. We’ll have that answer sometime between now and next June.

Now that the political rollercoaster of the past 3 years over Brexit has drawn to a close with the UK electorate falling firmly behind Boris Johnson and a Conservative Party determined to leave the European Union (EU) with no further delays, the new withdrawal agreement reached between the UK government and the EU is being signed by the EU and will shortly be ratified by the UK government. The UK will accordingly cease to be a member of the EU from midnight on 31 January 2020. Legislation has been passed by Parliament, known as the European Union (Withdrawal) Act 2018, which will bring to an end, from a domestic UK law perspective, the application and supremacy of EU law in the UK, as of the “exit date”. The legislation will convert EU law, as it exists on the exit date (and which forms a significant part of existing law in the UK) into domestic UK law. This will guarantee continuity of the law as it applies domestically in the UK. In many areas, the exercise of transposing EU law into domestic law will require significant amount of detailed secondary legislation, much of it has already been developed over the past few years. In the context of intellectual property rights, legislation will address important (and potentially complex) issue such as the continued protection of EU trade marks and registered designs in the UK. The process the UK government announced in this respect will involve a requirement for the owners of EU rights to notify the UK intellectual property office of their desire to maintain protection in the UK, but not a requirement to re-file their trade marks and designs in the UK. More complex arrangements will be put in place in relation to pending applications before the EU Intellectual Property Office (EUIPO) and to address issues such as priority rights, non-use challenges and trade marks with a reputation (issues where geographical considerations may apply). But in fact all this will not take place on 31 January 2020. The key element of the Withdrawal Agreement between the EU and the UK is the establishment of the “transition period”. That period, which will continue until 31 December 2020, is designed to give the parties a period of time to negotiate a new trade deal or trading arrangements for the future. From a UK law perspective, the transition period is implemented through another piece of legislation known as the European Union (Withdrawal Agreement) Act 2020. The effect of this legislation (which received royal assent on Friday 24 January) is to suspend the effect of the European Union (Withdrawal) Act 2018 until 31 December 2020. So in actual fact (at least from the domestic law point of view) the UK will remain subject to EU law and to the jurisdiction of the Court of Justice of the EU until the end of the transition period, notwithstanding that it will no longer be an EU member from 31 January. Many consider that an 11 month period is woefully inadequate for negotiating a complex trade agreement and believe that the transition period should be extended from time to time to allow time for the necessary discussions to take place. The UK government however is adamant that the transition period will not be extended. One possible and perhaps not unlikely possibility is that a trade deal of some description might be reached by the end of 2020 but it will probably be partial and may well include transitional arrangements in many different areas to allow the status quo to continue for an additional period whilst further agreements and arrangements are being discussed and put in place.

Jay-Z and Iconix Brand recently settled a two-year old lawsuit centered on a $204 million licensing agreement. The settlement not only ends the federal lawsuit, but also ends an arbitration related to the suit which Jay-Z had petitioned to halt on novel grounds—i.e., lack of racial diversity among potential arbitrators. In its complaint, Iconix accused over a dozen different defendants, including Jay-Z, Roc Nation Apparel Group, Major League Baseball, and New Era of undermining its rights in the Rocawear trademarks that it purchased from Jay-Z in 2007. Specifically, Iconix—which manages apparel brands such as Mossimo, Candies, Bongo, and Joe Boxer—alleged that by selling New Era baseball caps bearing the “Roc Nation” trademark, defendants infringed Iconix’s exclusive right to manufacture and sell certain goods and apparel using the “Roc” family of trademarks. In response, Roc Nation and Jay-Z lodged a counterclaim for breach of implied license, arguing that Iconix’s licensing deal covered only the “Rocawear” brand, not the Roc Nation trademarks. In the recent settlement, the parties agreed to drop all claims and Iconix agreed to sell some of its rights in Rocawear back to Roc Nation in exchange for $15 million. What makes this case unique and interesting, however, is not the trademark aspect, but Jay-Z’s bold invocation of the lack of racial diversity among arbitrators as an obstacle to justice. Years before this lawsuit, Iconix and Jay-Z’s companies had previously resolved a separate licensing dispute that resulted in a settlement agreement that mandated arbitration for disputes related to the licensing agreement. After Iconix filed its federal lawsuit, the parties took their dispute to arbitration before the American Arbitration Association’s (“AAA”). One month after beginning the AAA proceedings, in November 2018, Jay-Z sought a temporary restraining order to stop the AAA proceedings because there were not enough African American candidates in the pool of arbitrators to make up the panel. Jay-Z alleged that the AAA was only able to find three “token” African Americans (one of which was conflicted out of sitting on the panel) out of the more than 200 arbitrators who were qualified to participate on the panel for this dispute. Jay-Z also alleged that the AAA’s lack of black candidates with experience in large and complex cases left him with “no choice at all,” and amounted to discrimination based on race and a violation of New York’s Equal Protection Clause. Jay-Z’s camp went on to state that the “blatant failure of the AAA to ensure a diverse slate of arbitrators is particularly shocking” and he “expect[s] there to be the possibility that the person who stands in the shoes of both judge and jury reflects the diverse population.” These allegations were enough to catch the AAA’s attention. The AAA eventually agreed to allow the case to be heard by a three-arbitrator panel instead of by a single arbitrator, and offered five additional African-American candidates to be considered for the panel. The AAA also agreed to consider a list of eleven African-American candidates to add to its greater pool of arbitrators to handle big arbitrations. On those terms, Jay-Z was “content to proceed with the arbitration,” which eventually led to the settlement of the federal case. Though the case settled before the diversity challenge raised by Jay-Z could be decided on the merits, Jay-Z’s efforts highlighted this issue as a critical deficiency in intellectual property disputes. Jay-Z’s novel and creative argument has brought much needed attention to a widely recognized problem that is far too infrequently addressed in litigation.

A dispute over the trademark KIVA involving use of the mark with health food and cannabis continues to smolder in the Northern District of California. In late 2018, Kiva Health Brands (a national health food and supplements company) sued Kiva Brands (a company selling cannabis-infused edibles in California) under federal and state trademark law. Kiva Brands answered with a number of affirmative defenses (including prior use of the mark and laches) and its own federal and state trademark claims based on alleged prior use of the KIVA mark in California. In late 2019, the Court granted Kiva Health Brands’ motion to dismiss Kiva Brands’ federal trademark counterclaims. It ruled that Kiva Brands cannot assert federal trademark rights (even unregistered rights) because Kiva Brands sells federally illegal products and unlawful use cannot form the basis of a valid federal trademark claim. The parties both moved for summary judgment in late 2019 related to Kiva Brands’ various affirmative defenses and recently filed response briefs on January 3, 2020. Kiva Health Brands argues it should prevail against Kiva Brands’ prior-use affirmative defense given the Court’s prior ruling that Kiva Brands cannot offensively assert any federal trademark rights. Kiva Health Brands claims that, “where a mark is used for cannabis products, the [federal trademark law] does not recognize those ‘rights’ for a federal registration or for any other purpose.” It also contends that any state trademark rights held by Kiva Brands would be preempted by Kiva Health Brands’ federally registered rights - although Kiva Health Brands still has not sought dismissal or summary judgment on Kiva Brands’ state trademark claims. For its part, Kiva Brands requests summary judgment on its laches defense, asserting that Kiva Health Brands unreasonably delayed in filing suit, which resulted in significant prejudice to Kiva Brands. Kiva Brands claims that, under pertinent case law, Kiva Health Brands had only two or three years to bring its claim, while Kiva Health Brands claims it had at least four years and filed within that window. Dorsey will continue to monitor the progress of this case, which has provided helpful insights into trademark disputes involving cannabis, especially the potential limitations of common law trademark rights for such products.

Just in time for the holidays, the U.S. Court of Appeals for the Seventh Circuit resolved a lawsuit rooted in the spirit of the season—family drama.  Fabick, Inc. v. JFTCO, Inc. recounts a dispute that pit brother against brother and offers insight into the doctrine of reverse trademark confusion.  The trademark at issue?  The family’s good name, of course. A Family’s Name, a Trademark, and a Lawsuit This story begins with the patriarch, John Fabick, founder of multiple businesses throughout the Midwest.  In 1982, the John Fabick Tractor Company bought two Caterpillar equipment dealerships serving Wisconsin and the Upper Peninsula of Michigan.  John’s son Joseph Fabick, Sr. then moved to Wisconsin and founded FABCO, a business selling Caterpillar equipment, attachments, and parts.  FABCO launched a subsidiary, Fabick, Inc. in the early 1990s.  Fabick, Inc.’s business focused on spray-on sealants for use in the beds of pickup trucks and similar vehicles.  In 1994, Fabick, Inc. obtained a trademark registration for “FABICK” for “polyurethane-based and polyurea-based sealers and protectants to be applied as a coating to hard or flexible surfaces.” One of Joseph Sr.’s sons, Jeré, worked for FABCO, while another, Jay, worked for Fabick, Inc.  Tensions between the brothers made this unworkable, and by the early 2000s, Jeré had taken over FABCO, while Jay assumed sole ownership of Fabick, Inc.  The two companies coexisted peacefully for a time. In 2015, the John Fabick Tractor Company formed a new subsidiary, JFTCO, which purchased FABCO and took over its operations.  JFTCO began operating as a Caterpillar dealer and launched an extensive effort to rebrand under the trade name “Fabick CAT.”  Fabick, Inc. accused JFTCO of trademark infringement, alleging the rebranding resulted in confusion, evidenced by consumers calling Fabick, Inc. looking for JFTCO and Fabick, Inc. receiving checks intended for JFTCO.  At trial, the jury found JFTCO liable for federal trademark infringement. Both parties appealed.  JFTCO challenged the sufficiency of the evidence to support Fabick, Inc.’s infringement claim as well as the court’s jury instructions.  Fabick, Inc. found the trial court’s remedies inadequate, and it appealed the court’s refusal to award lost profits or grant a broad injunction barring JFTCO from using the “Fabick” name in any context. The Seventh Circuit’s Explanation of Reverse Trademark Confusion The Seventh Circuit explained that Fabick, Inc. had proven a less common, but still actionable, theory of trademark infringement under the Lanham Act—reverse trademark confusion.  In a typical infringement case, a smaller junior user attempts to profit from a larger senior user’s goodwill by imitating its mark.  In a reverse confusion case, a larger junior user saturates the market with a mark confusingly similar to that of a smaller senior user.  The junior user may not be trying to profit from the senior user’s goodwill, but the senior user is harmed anyway, as the public assumes the senior user’s products are really the junior user’s or that the two have somehow become connected.  The senior user loses the value of its corporate and product identities, loses control of its goodwill and reputation, and is limited in its ability to move into new markets. The Seventh Circuit found sufficient evidence to support the jury’s verdict that Fabick, Inc. had proven JFTCO liable for reverse trademark infringement.  It also approved the district court’s modification of a standard jury instruction permitting the jury to find infringement if: “[D]efendant JFTCO used the FABICK mark in a manner that is likely to cause confusion as to the source or origin of plaintiff’s product or that [Fabick, Inc.] has somehow become connected to JFTCO.”  (The language the district court added to the Seventh Circuit Pattern Jury Instruction 13.1.2 is bolded.)  This additional language was appropriate in a reverse confusion case because it was accompanied by other instructions that required the jury to find the confusion about a connection between Fabick, Inc. and JFTCO related to the parties products or services, not just “vague ‘general confusion’ in the ether,” which would not support infringement. For its part, Fabick, Inc. challenged the district court’s refusal to award it lost profits or enjoin JFTCO from using the mark “Fabick” in any business context.  The Seventh Circuit relied on other cases finding “meager justification” for profit awards in reverse confusion cases and affirmed.  As it explained, the junior user in a reverse confusion case is not trying to take away the senior user’s customers through confusion, meaning the junior user’s profits are not a proper basis for damages.  The Seventh Circuit also affirmed the district court’s limited injunction requiring JFTCO to use certain disclaimers and notifications for five years to inform consumers that JFTCO and Fabick, Inc. are not related.  A limited injunction was within the district court’s discretion because the case rested on a reverse confusion theory involving a small number of Fabick, Inc.’s customers, the parties were formerly related entities that did not compete, and they were disputing the use of a shared family name. Tips for Avoiding This Issue Although this case has some interesting points for families operating unrelated businesses under the same name, a broader audience will appreciate its lessons on reverse trademark confusion.  In particular, larger businesses evaluating new marks should consider the risks of liability for reverse confusion when they weigh potential marks in use by smaller senior users.  Those smaller users may have rights, whether against unrelated entities or junior users they know all too well.  Early attention to this issue can avoid fights in court and at the holiday dinner table.

In a dispute between two fruit product manufacturers concerning whether the phrase “Fruit is Our 1st Ingredient” is protectable as a trademark the parties initially litigated the application of the “first-to-file” rule where an anticipatory declaratory judgment suit is filed to achieve a jurisdictional advantage over a later-filed infringement action in another forum. J.M. Smucker Company v. Promotion In Motion, Inc., Case No. 5:19-cv-1116 (N.D. Ohio). The Ohio district court held that the anticipatory suit should not be given priority, declined to enforce the first-to-file rule, and dismissed the case in favor of the second-filed case in another district. To understand why the later-filed case took precedence, some background is required, first. In early April 2019, Promotion in Motion, Inc. (“PIM”), the maker of Welch’s Fruit Snacks, sent a cease and desist letter to J.M. Smucker Company (“Smucker”), who manufactures consumer food products such as jams, jellies and preserves, claiming that Smucker was infringing PIM’s trademark “Fruit is Our 1st Ingredient.” At the time, both parties were using the phrase to describe fruit-based products where fruit was, in fact, the first ingredient in the product. In the cease and desist letter, PIM alleged that the use of the same slogan was likely to deceive consumers into believing that the products were affiliated and that Smucker’s conduct violated PIM’s trademark rights under the Lanham Act. To no surprise, Smucker disagreed, and responded to PIM on April 19, 2019 that the phrase was “merely descriptive and incapable of functioning as a mark,” that no consumers recognized that phrase as a trademark, and that the phrase had no “commercial impression” outside of its ordinary meaning. PIM rejected Smucker’s position in its response letter dated April 30 and warned Smucker that if it continued to use the phrase, PIM would take steps to “protect its rights.” Having received no response for two weeks, PIM followed-up on May 14, asking for a response “by the end of this week.” Smucker responded the following day stating that it needed to speak with its outside counsel, who was out of town, and would provide a response the following week “after the INTA Annual Meeting.” However, that’s not exactly what happened. Although Smucker did provide a response on May 17, Smucker also filed a complaint in the United States District Court for the Northern District of Ohio seeking a declaratory judgment that its use of the phrase was non-infringing. And, Smucker failed to mention that it had filed the lawsuit in its response to PIM, which was sent the same day it filed the lawsuit. While Smucker did not serve the complaint immediately—it waited until May 30—PIM learned of the filing and filed its own complaint for trademark infringement on May 24 in the United States District Court for the District of New Jersey. See Promotion in Motion, Inc. v. The J.M. Smucker Company, Case No. 2:19-cv-12927 (D.N.J.). In the Ohio case, PIM moved to dismiss the complaint on the ground that it constituted an “anticipatory action designed to deprive PIM of its choice of forum.” PIM asked the court to disregard the general first-to-file rule because the first filed lawsuit was motivated by forum shopping and “deceptive gamesmanship”; specifically, that Smucker used the excuse of its counsel being out of town—at INTA—to lull PIM into inaction so Smucker could get its lawsuit, in Ohio, on file before PIM could do so—in New Jersey. The first-to-file rule prevents duplicative litigation in different districts. When a duplicative or overlapping lawsuit is filed, it will be dismissed in favor of the first filed lawsuit provided certain criteria are met. However, even when the criteria are met, courts retain discretion to reject the rule when there are “equitable considerations” present. Those equitable considerations include “inequitable conduct, bad faith, an anticipatory lawsuit or forum shopping” on behalf of the party that filed first. After finding that the first-to-file rule presumptively applied, the Court turned to the equitable considerations. Anticipatory suits are closely scrutinized when they involve declaratory judgments, like Smucker’s, because their utility diminishes when subsequent, “coercive” suits are filed and because of the possibility that it was filed for an improper purpose. In reaching its decision, the court found that Smucker’s lawsuit was filed for the improper purpose of “procedural fencing,” which is essentially forum shopping. The court focused heavily on Smucker’s request for more time to respond to PIM because its outside counsel was attending INTA, only to file a lawsuit a lawsuit several days later without even telling PIM that it was doing so in its letter response sent the same day. Based on that conduct, the court held that “Smucker’s declaratory judgment complaint was motivated by improper forum shopping.” The court accordingly dismissed Smucker’s declaratory judgment action in Ohio, and the parties are currently litigating their dispute in New Jersey. While we don’t yet know whether the phrase is protectable (and if it is, who owns it), we do know that you can’t do what Smucker did. Courts will not look kindly upon manipulative conduct with the aim of winning a race to the courthouse. We’ll follow-up and let you know what happens if and when the New Jersey court decides the merits of the case.

On May 9, 2019, Kim Kardashian West and Kanye West’s fourth child, Psalm West, was born. On May 18, 2019, Kim Kardashian West’s company, fittingly named Kimsaprincess Inc., filed sixteen trademark applications for PSALM WEST for a litany of goods and services. Psalm isn’t the first child whose name Kim and Kanye have sought to trademark. Kimsaprincess Inc. has applications on file in the names of children North, Saint and Chicago. Kanye has already secured trademark registrations for his name, and Kim owns registrations for several variations of her name, as do the rest of the Kardashian/Jenner clan. One word can explain this flurry of filings: branding. Public figures often commercialize their names and personas through cosmetic products, clothing lines, endorsement deals, etc. In other words, they leverage their celebrity to create a brand. Kim Kardashian West, ever the savvy businessperson, clearly understands the power of branding, and knows that an important part of successfully building and exploiting a brand is ensuring that that brand is properly protected. Trademark law is one of the most important tools a celebrity can turn to when looking to protect their personal brand. As a celebrity gains widespread recognition and begins to cultivate their persona, trademark law can help them to prevent others from exploiting that hard earned good will for the others’ commercial gain, giving the celebrity a degree of commercial exclusivity and control over their own name or persona. This helps put the celebrity in a better position to reap the benefits of their valuable brand for themselves. Of course, trademark rights are not without limits, as Beyoncé learned earlier this year. Trademarks cannot be wielded to prevent certain speech that is protected under the First Amendment, such as most uses of a trademarked name in news reporting. Nor can it be used to prevent fair uses of the trademark, such as uses of a trademarked name as part of a parody, which is a type of expression that is specifically protected under the U.S. Trademark Act. Moreover, trademark applications must specify the goods and services that are to be used in connection with the mark, and applicants must be able to demonstrate a bona fide intent to use with respect to any applied-for goods/services that they are not already using at the time of filing. The Kardashian-Wests, along with the rest of the Kardashians/Jenners, are a testament to the power and promise of effective branding. The attention and resources that they’ve each committed to obtaining trademark protection for their names underscores the importance of integrating trademarks into an overall branding strategy. Kim may remember May 9, 2019, as the day her baby, Psalm West, was born, but we should also commemorate May 18, 2019, as the day Psalm West™, the brand, was born.

On November 6, 2019, I discussed a licensing dispute regarding Ms. Pac-Man between Bandai Namco and AtGames Holdings. At that time, Bandai Namco sought a preliminary injunction against AtGames based on AtGames’ alleged unauthorized infringement of Bandai Namco’s IP rights in Ms. Pac-Man. AtGames countered that it had not infringed Bandai Namco’s rights and had no plans to use Ms. Pac-Man without a license. Rather, AtGames had created a prototype of a potential Ms. Pac-Man arcade product, and it had been negotiating with Bandai Namco for over a year to acquire the rights it needs to commercialize the product. Since then, the players parties have progressed to the next level. On November 19, 2019, United States District Court Judge Vince Chhabria of the Northern District of California, denied Bandai Namco’s request for a preliminary injunction in a strongly-worded, one-paragraph order. Judge Chhabria ruled that “Bandai’s likelihood of success on the merits is questionable at best,” and its “allegations of reputational harm fall somewhere between speculative and fanciful.” Discouraging words like these might as well have been accompanied by the sound Ms. Pac-Man makes when she gets clobbered by a ghost: https://www.youtube.com/watch?v=jpkxkKcLsho. On November 14, 2019, a few days before the Court issued its order, AtGames filed its answer to Bandai Namco’s complaint. AtGames also asserted three counterclaims against Bandai Namco for (1) breach of contract, (2) declaratory judgement that Bandai Namco’s termination of certain agreements it had with AtGames is null, void, and without legal effect, and (3) breach of implied covenant of good faith and fair dealing. Thus, the dynamics of the litigation have shifted and not in Bandai Namco’s favor. With a preliminary injunction denied and the stakes raised by AtGames counterclaims, will Bandai Namco and AtGames be able to resolve their differences with a mutually beneficial settlement? Or will they litigate until one of them reaches the legal equivalent of a game over screen? Keep watch on TheTMCA.

    In 2005, Christian Faith Fellowship Church, a Chicago-based church group, filed two trademark applications for the mark ADD A ZERO for use on clothing, including shirts and caps that they later sold to raise money for charity. One application was for a standard character word mark and the other application was a stylized version of the phrase shown below. Both applications reported a first use date in the summer of 2005 and matured to registration in 2006. In 2009, adidas AG filed a trademark application for the mark ADIZERO for use on footwear, shirts, jackets, and other apparel. Adidas uses the ADIZERO mark on a collection of lightweight athletic shoes and related products and reported a first use date in December of 2005. The application was refused due to a likelihood of confusion with the Church’s ADD A ZERO marks. Determined to secure the rights in the mark, Adidas moved to cancel the Church’s registrations on the grounds that (1) the Church failed to show sufficient “use in commerce” required for a use-based application for registration; (2) the Church had abandoned the marks by failing to use them in commerce after obtaining the registrations; and (3) the phrase ADD A ZERO was an informative phrase rather than an indicator of source and therefore fails to function as a trademark. In the first go-round at the TTAB in 2015, the Board agreed with Adidas’ first argument and cancelled both of the Church’s registrations. According to the Board, federal trademark rights stem from Congress’ power to regulate interstate commerce, and the “use in commerce” required to obtain a federal trademark registration must be interstate commerce. The Church primarily used the ADD A ZERO phrase as “a prophetic word spoken to the congregation” to encourage charitable giving. However, t-shirts and other apparel bearing the ADD A ZERO phrase and stylized mark were available for purchase at the Church’s bookstore, and the Church was able to show that one resident of Wisconsin purchased two hats for $38. The TTAB found that this single sale was not sufficient to establish an interstate “use in commerce” and cancelled both of the Church’s applications under Adidas’ first theory. The Church appealed the TTAB’s decision to the Court of Appeals for the Federal Circuit. The Federal Circuit applied Supreme Court precedent, finding that the Church’s single sale of two hats is “quintessentially economic” that if “taken in the aggregate would cause a substantial effect on interstate commerce.” The Federal Circuit went even further, holding that the Church need not show actual proof that its conduct affected interstate commerce, just that the conduct is in a class that affects interstate commerce. The appellate court thus reversed as to Adidas’ first theory and remanded to the TTAB to address the remaining issues of abandonment and failure to function as a trademark. Considering abandonment on remand, the TTAB reasoned that if the single sale transaction of two shirts for $38 is sufficient use in commerce to register a trademark, the same minimal or de minimis sale must be sufficient to overcome an inference of abandonment. The TTAB found no three-year period where the Church made zero sales of products bearing the ADD A ZERO phrase or stylized mark without intent to resume use. There was a four year period where no sales of products bearing the mark were made, but the Church was able to show that the non-use was excusable due to remodeling and that sales had resumed afterwards in the Church’s online store. As such, neither the ADD A ZERO word mark nor the ADD A ZERO stylized mark had been abandoned. The standard articulated in this case appears to set a very low bar of use required to avoid abandonment of a registered trademark rights, so long as the sale of products bearing the mark – however limited – are bona fide economic transactions in commerce. The TTAB’s decision here is non-precedential, but the Federal Circuit’s decision relating to initial registration is binding on the TTAB. It will be interesting to see whether subsequent TTAB decisions apply the same standard articulated in this case. The TTAB then considered each mark independently to adjudicate the failure to function issue. A mark fails to function as a trademark if the public would perceive it as merely conveying information about goods or services rather than as an indication of a single source of goods or services. Adidas presented evidence of several charitable organizations using some version of ADD A ZERO to encourage donors to give more money. As an example, charities often use some form of the sentiment: “determine how much you can afford to donate, and then add a zero to that amount.” The TTAB held that the ADD A ZERO slogan is a general fundraising term used to convey enthusiasm and support for fundraising causes and consumers would not view it as being uniquely associated with the Church. Therefore, the ADD A ZERO word mark does not function as a trademark and the TTAB cancelled the registration. The ADD A ZERO stylized mark, however, was held to be a “specific combination, placement and shading of the wording and design elements” that create a unitary, distinct mark. Despite the informational nature of the slogan, the three-dimensional unitary design creates a distinct commercial impression in the minds of consumers. The TTAB therefore held that it does function as a trademark and denied the claim for cancellation of this registration. Because the parties are in this for the long run, it will be interesting to see if the ADD A ZERO case makes a return trip to the Court of Appeals for the Federal Circuit. The TMCA previously reported on LeBron James’ IT’S TACO TUESDAY application and Cardi B’s OKURR application, both of which were denied for failure to function as a trademark. Like those cases, the ADD A ZERO case demonstrates the obstacles to obtaining trademark registration protection for trademarks that are likely to be perceived as common phrases or informational matter.

Last Friday, the U.S. Supreme Court granted the USPTO’s writ of certiorari to review traveling website company Booking.com’s trademark application for “booking.com”. The TMCA previously covered developments in this case here and here. Back in 2016, the USPTO rejected the company’s trademark application because the proposed mark “Booking.com” was a generic term for the services offered, commenting that “booking” generically refers to “a reservation or arrangement to buy a travel ticket or stay in a hotel”. The company appealed to federal district court in the Eastern District of Virginia, which reversed the USPTO’s rejection. The district court held that although “booking” was a generic term for the services identified, BOOKING.COM as a whole was nevertheless a descriptive mark. Further, the company submitted survey evidence demonstration that 74.8% of consumers recognized BOOKING.COM as a brand rather than a generic service. The USPTO appealed to the 4th Circuit Court of Appeals, which affirmed the district court holding. The appellate court observed that “this case presents one such rare occasion where the record evidence supported a finding that the USPTO failed to meet its burden of proving that the public primarily understood BOOKING.COM to refer to the genus of online hotel reservation services, rather than the company or brand itself.” In other words, even though the terms “booking” and “.com”, were independently generic, the USPTO failed to rebut the evidence from the company showing that the combination had acquired secondary meaning. This USPTO then petitioned for Supreme Court review of the appellate ruling. It is anticipated that by summer of 2020, the Supreme Court will provide the final say on this issue.