IP Law Bulletin

Building upon our recent note concerning general international intellectual property protection considerations, this article describes how foreign IP expansion efforts might play out in a case study format. The company, a hair restoration lotion manufacturer named WonderFlo Tonight, is fictional, but the fact pattern is derived from real world situations encountered by businesses as they seek to establish and protect their intellectual property in foreign markets.

There are occasions where displaying another company’s trademark is desirable. Whether that type of trademark use is lawful generally is a subjective, fact-specific determination under both United States and European Union law. A recent United Kingdom appeals court decision is instructive.

U.K. Court Ruling

The decision stemmed from a trademark infringement lawsuit brought by BMW against a London auto repair shop. The U.K. appeals court, applying E.U. law, handed BMW a victory. The appeals court, overruling a High Court of Justice decision, held that the shop’s use of the phrase “Technosport - BMW” infringed BMW’s European word mark “BMW.”[1] Not at issue on appeal was the lower court’s finding that Technosport’s use of BMW’s famous “Roundel” logo “would lead the average consumer to believe that [Technosport] was an authorized dealer.” The appeal instead focused on Technosport’s use of the BMW acronym in plain text immediately after its trade name, in particular on the top portion of the back of its service trucks, as shown in the image below.

Technosport had successfully argued before the lower court that its use of “BMW” was merely descriptive of the fact that it had experience servicing BMW cars, and thus non-infringing. 

The appeals court, however, found that “putting BMW immediately after the shop’s name isn’t merely a description of the business’s services.” The appeals court expounded on the distinction between permissible descriptive use and impermissible infringing use under E.U. law through examples: Suggesting or implying “my business provides a service which repairs BMWs” is permissible. In contrast, suggesting or implying “my repairing service is commercially connected with BMW” is not. Once a use crosses the line to suggest a connection with the trademark holder, the use is no longer a non-infringing descriptive use.

The U.K. appeals court ultimately found that Technosport’s use of BMW infringed because it would likely lead the average consumer to believe that the shop has a commercial connection with BMW, despite no evidence of actual consumer confusion. Technosport’s use was therefore not merely “informative.” Indeed, one of the reasons the appeals court overturned the lower court’s finding of non-infringement was the lower court’s undue focus in its decision on the lack of actual evidence of consumer confusion.

How Can One Use Another’s TM in the U.S. without “Crossing the Line?”

While the case above was decided in the United Kingdom under E.U. law, the principle applied is similar to that applied in determining the “fairness” of use of another’s mark in the United States. The concept, labeled “informative use” under E.U. law, is known as “referential use” or “nominative fair use” under U.S. law.

A leading case under U.S. law for determining whether a given use of another’s trademark merely refers to another’s mark in a “fair” way or, instead, crosses the line and suggests affiliation or sponsorship is New Kids on the Block.[2] That decision established a three pronged test for determining if a use is fair, namely:

Nominative fair use is available as a defense to trademark infringement where the defendant uses a trademark to describe the trademark holder’s product or service and (1) the product or service in question is not readily identifiable without use of the trademark, (2) only so much of the mark or marks may be used as is reasonably necessary to identify the product or service, and (3) the defendant does nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.[3]  

Introducing the three prong test, the 9^th Circuit in New Kids affirmed a lower court’s finding that a publisher’s use of the NEW KIDS ON THE BLOCK band trademark was a non-infringing, fair use. The publisher had displayed the mark in conjunction with a phone-in poll (callers were charged a fee to participate) asking readers to chime in with opinions about the group. 

It is important to note that use of another’s logo, as opposed to a plain text mark, is more likely to be deemed to suggest sponsorship or affiliation with the trademark holder under the test.

 *  *  *  *  *

It can be entirely lawful to use another’s mark within marketing materials, for example, in the comparative advertising context, etc. At the end of the day, however, the three prong legal inquiry into whether a use qualifies as fair requires a subjective determination that is best assessed from the perspective of an experienced trademark attorney.

[1] See Bayerische Motoren Weke AG v. Technosport London Ltd. [2017] EWCA Civ 779, No. A3 2016 1801.

[2] New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302 (9th Cir. 1992).

[3] Id. at 308.

The author would like to thank legal intern Liza Hadley for her assistance with this blog entry.

Recently the Ninth Circuit ruled that Google’s trademark for search engines has not become generic and is still enforceable as to search engines. As Bayer learned with its previously-existing trademark aspirin, when a court determines a trademark to be generic, the mark is no longer protectable. In effect, a generic (no longer a) trademark is re-appropriated by the public such that the mark is no longer a source-identifier for the related goods and services. A generic (no longer a) trademark tells the public what the good and services are rather than who makes and/or sells the goods or services. Additional examples of trademarks that courts held to be generic include cellophane, thermos, and trampoline[1].

Imagine you’re a fashion designer with a unique clothing design. As with any other business, you wish to protect your intellectual property through the standard combination of patents, trademarks, and copyrights. Sounds simple, right?

Wrong! There is no one-stop shop for protecting your intellectual property and, until recently, the law was not completely on your side. Though a single garment may be the result of a single creative process by a designer, multiple mechanisms may be needed to protect the design of that garment. One of those mechanisms—copyright law—historically has presented a significant hurdle to protecting fashion designs. The Supreme Court, however, recently clarified and expanded how copyright law can be leveraged to protect designs, often quickly and relatively inexpensively.

Below is a high-level overview of the various legal forms of protection for the fashion industry and what those legal mechanisms cover.

We have written previously about Scholz v. Goudreau, No. 13-CV-10951 (D. Mass.); the case recently went to trial on the parties’ surviving claims, and they are now immersed in post-trial briefing.

Tom Scholz and Barry Goudreau were once bandmates in BOSTON, and since Goudreau left the group in 1981, the two have occasionally litigated the trademark ramifications of his post-BOSTON career. The present dispute mostly arose from promotions tied to other musical acts and events that Goudreau was associated with.

The public comments have been considered and the Trademark Trial and Appeal Board rule changes proposed in April 2016 and summarized in this blog post have been confirmed with only minor exceptions. The new rules will be effective on January 14, 2017, and will apply to all opposition and cancellation proceedings active on that date or subsequently filed.

Cue, Inc. sells high-end home audio equipment (e.g., table radios and speakers). In 2007, it applied to register the trademark CUE ACOUSTICS, and in late 2009 the USPTO allowed its application. Cue’s CUE ACOUSTICS mark was registered in August 2012, and later that year, its application for a separate mark—CUE—was allowed. Cue filed a Statement of Use for the CUE mark in November 2015.

In the summer of 2012, Jeremy Southgate applied with the United States Patent and Trademark Office to register a design mark for “Sound Spark Studios.” A little over a year-and-a-half later, Southgate formed Sound Spark Studios, LLC, and he registered it in Delaware. He characterized the entity as a “music and entertainment company.” The Sound Spark Studios design mark was registered on September 16, 2014.

On April 4, 2016 the United States Patent and Trademark Office (USPTO) published a Notice of Proposed Rulemaking that details proposed changes to the USPTO’s rules of practice for trademark application opposition and registration cancellation proceedings. Public comments are due by June 3, 2016. While it is possible that the rules will be modified further before being finalized based upon public comment, it is likely that the rules ultimately will take effect substantially in the form published.

In a decision dismissing plaintiffs’ claims of service mark infringement, the District of Massachusetts held that the plaintiffs’ transfer of “goodwill” in an asset purchase agreement also transferred plaintiffs’ rights to their service marks. In Pereyra and City Fitness Group, LLC v. Sedky, et al. (No. 15-cv-12854, 2015 WL 7854061, December 3, 2015) plaintiffs City Fitness and its sole owner, Roberto Pereyra, alleged that defendants unlawfully used City Fitness’s service marks after the parties executed an Asset Purchase Agreement (APA) that did not explicitly transfer the service marks to the defendants. Pereyra and City Fitness negotiated the APA with the defendants for the sale of City Fitness’s three Eastern Massachusetts health clubs, as well as the company’s assets. City Fitness operated its health clubs under the trade name “Leap Fitness” and registered two service marks under that name. The Leap Fitness marks appeared on the company’s signage, letterhead, business cards, t-shirts and its website. Defendants continued to use the marks for identification, marketing and promotional purposes after the deal with City Fitness.