No silver bullet for innovator in bullion market

Provident Precious Metals, LLC v. Northwest Territorial
Mint, LLC, 2015 WL 4522923, No. 3:13–CV–02942 (N.D. Tex. July 27, 2015)
 
Interesting TM/copyright case that straddles the boundaries
of so-called aesthetic and “utilitarian” functionality: is the accuracy of a
replica product a matter of utilitarian or aesthetic functionality?  Does it make any difference?
 
Provident sued NWTM seeking a declaratory judgment of invalidity
and non-infringement of NWTM’s alleged copyrights, trademarks, and trade dress
rights; NWTM made the counterclaims you’d expect. Provident and NWTM make
precious metals in the shape of famous types of ammunition (“replica bullets”).
[Slackjawed wonder/gender analysis of this market omitted]
 
NWTM first conceived of the idea of using silver bullion to
copy famous ammunition into sizes that would easily convert to weights in even
troy ounces in 2008.  NWTM therefore measured
sample ammunition with a digital caliper and micrometer, viewed pictures of
sample bullets on the Internet, and consulted published industry standards for
ammunition dimensions. NWTM also bought hundreds of different ammunition
rounds, focusing on popular shapes and sizes, and sought to recreate bullets at
volumes that approximated even weights. NWTM altered the dimensions of the
original .45 round it chose to match the desired bullion weight, but still
sought to appeal to a “gun person, or anyone buying bullion.” NWTM ultimately
resorted to CAD software to make the code used by its manufacturing machines.
 
According to the designer, once the bullet was “machined,”
it would be weighed, and if it “weigh[ed] right they wouldn’t adjust it to meet
[the particular dimension].”  The weight
dictated the form.  NWTM stamped the base
of each bullet with a “head stamp” containing certain information, including
the product’s metal designation (silver, or “Ag”), source (NWTM), weight, and
purity. “The format of the head stamp intentionally resembled the format of
head stamps on actual ammunition, and was intended to convey that the replica
bullet ‘has intrinsical [sic] value,’ similar to money.”  NWTM sells its replica bullets in boxes or
bags designed to “evoke the feeling of military surplus ammunition,” and to
“best present the product to a military customer, to evoke the military
design.”  It advertised its replica
bullets, which went on sale in January 2013, as “virtually identical to their
ammunition counterparts,” claiming for example that one bullet “faithfully
duplicates the famed .50 BM so well-known to military personnel and weapon
enthusiasts,” that its silver 7.62 NATO (.308) is a “near exact, non-firing
replica,” and so on.
 

Provident claimed to have come up with the replica bullet
idea independently of NWTM, but whatever. 
It too used CAD and minor adjustments to achieve the desired
weight.  Provident instructed its
manufacturer to make the head stamp look as similar to live ammunition as
possible, and to include the weight, purity, composition, and “PM,” Provident’s
“mint mark.” Both parties used Tahoma font, with Provident contending that this
was the font that looked closest to real ammunition.  Provident designed its packaging to “look
like an ammo box,” and began selling copper replicas in 2013, with silver
arriving in November.
 

NWTM filed three related trademark applications. In January
2013, it filed an ITU application for “SILVER BULLET BULLION,” for use in
association with “[p]recious metals, namely, gold and silver bullion,” “BULLION”
disclaimed.  This was published for
opposition in June 2013, and Provident duly opposed; PTO proceedings have been
suspended pending the outcome of this suit. 
(B&B and ITUs really don’t
fit together, do they?)
 
In August 2013, NWTM filed another ITU application for
“BULLET BULLION,” for use in association with “[p]recious metals, namely gold
and silver bullion.”  The PTO issued an
office action refusing to register the mark as merely descriptive; the
application has been suspended pending final disposition of a prior application
filed by a third party, but the examiner rejected NWTM’s argument that the term
wasn’t descriptive.
 
In March 2014, NWTM filed another “COPPER BULLET BULLION,” which
Provident opposed after it was published for opposition.
 
In June 2014, NWTM filed five copyright applications for its
five types of silver replica bullets, listing them as “sculptures.”  The Copyright Office denied registration because
the new material did “not contain a sufficient amount of original authorship.”  
 
The court turned first to trademark.  Under governing precedent, “the concept of
descriptiveness must be construed rather broadly.”  If imagination is required to connect the term
to the product, it’s suggestive; if the term conveys information about the
product, it’s descriptive. 
Alternatively, courts ask “whether others in the same business would
generally need the word to adequately describe their product or service.”
 
All three claimed word marks, SILVER BULLET BULLION (SBB),
COPPER BULLET BULLION (CBB), and BULLET BULLION (BB), weredescriptive, because
they immediately conveyed the “characteristics, qualities, and ingredients of
NWTM’s replica bullets without requiring the consumer to make any mental leap.”  Bullion is a generic term for precious metals
in mass/in bars or ingots.  Though copper
isn’t conventionally understood as bullion, the price increases of the last few
years, it was reasonable to define “bullion” broadly enough to include copper;
Merriam-Webster defined “bullion” as “metal in the mass.”
 
NWTM argued that the terms were meaningless prior to the
existence of its replica bullets, and consumers might have thought of images of
bars or coins with bullet-related art on them. 
Plus, the SBB and CBB marks had been published for opposition.  But publication for opposition entitles NWTM
to no presumption (only actual registration does).  Second, the descriptiveness test isn’t
applied in the abstract: it’s applied to these products, which are replica
bullets.  The metal words describe the
material of the replica, and “bullet” describes the shape.  In the alternative, competitors would “almost
certainly” need to use the words in the marks to describe their products.  (I understand why the court didn’t go this
far, but silver, copper, and bullet at least are generic.)  “There are simply a limited variety of
descriptors that can be used to describe products of this sort, and granting
NWTM the trademarks it seeks would effectively preclude potential competitors
from marketing goods with the terms ‘bullet’ or ‘bullion.’ NWTM has simply not
addressed how its competitors could describe their products without using the
terms employed in NWTM’s SBB, CBB, and BB marks.”
 
NWTM couldn’t show secondary meaning. “The burden to
establish secondary meaning is substantial and requires a high degree of proof.”  NWTM didn’t produce any evidence of secondary
meaning, and, “in a borderline case where it is not at all obvious that a
designation has been used as a mark, survey evidence may be necessary to prove
trademark perception.”  NWTM argued that
it lacked survey evidence “because NWTM’s customers tend to buy bullion as a
hedge against what they see as the U.S. government’s failing monetary policy,
and those same customers would be skeptical of a phone call inquiring about the
manufacturer of the bullion products they own.” 
Nonetheless, the burden of proof was still on NWTM.
 
NWTM also sought to protect its alleged trade dress,
described as a bullion piece of silver or copper that:
(1) has a head stamp with a central
circular groove (which suggests the primer cap for a real bullet), surrounded
by the following information in a circular pattern towards the outer edge of
the base of the bullion piece:
(a) metal designation such as “Ag”
or “Cu”;
(b) indication of purity;
(c) a weight; and
(d) abbreviation for the company
name;
(2) is sold in packaging that
evokes a military or gun enthusiast feel by including:
(a) a caliber designation that is
suggested by the general shape of the bullion piece (i.e., .45 ACP, 7.62 NATO
(or .308), .50 BMG, or 20 MM, or 12 gauge for shotgun shell);
(b) a designation of “grains”
associated with gun powder of the bullet, giving an indication of the power of
the associated real bullet type; and
(c) is sold in boxes in rows that
evoke the feeling of a real box of ammunition, or in a plastic bag container
with the same information in (a) and (b); and
(3) while not being an exact copy
or “replica” of a real bullet, has the shape of the bullion piece that evokes
the feeling of such a bullet. [NB: if you have to describe your trade dress as
evoking a feeling, you are probably in trouble.]
 
The head stamp was functional.  It identified the weight, composition,
purity, and source of the bullion used to make the replica bullet, as is
apparently standard practice for bullion products. NWTM argued that the
information could be located anywhere on the bullion piece, and that the
combination of elements—head stamp, shape, and packaging—had a consistent look
that was inherently distinctive.  Nope. 
 
[T]he features that comprise the
head stamp, and the head stamp considered as a whole, were designed to emulate
the head stamp on actual ammunition, and therefore, are “essential to the use
or purpose” and “affect the cost or quality” of the head stamp. NWTM sought to
establish a link with military service members, veterans, and gun enthusiasts.
Thus, the head stamp is functional because it emulates actual ammunition, which
would give NWTM a non-reputation-related advantage over its competitors,
particularly in appealing to military service members and gun enthusiasts, who
would very likely perceive head stamps that did not resemble actual ammunition
as being of lesser quality.
 
The head stamp was also not inherently distinctive.  (Although the court didn’t mention this, it
can’t possibly be under Wal-Mart:
it’s product design, not product packaging.)  Each of its features emulated the head stamp
on actual ammunition—it used a standard font, and the circular groove on the
base simulated the primer of actual ammunition. If it created a distinctive,
consistent look, “that look is that of actual ammunition.” Putting the
information elsewhere on the bullet “would undermine the theme and purpose of
NWTM’s replica bullets—emulating actual ammunition.”  None of the elements were suggestive,
arbitrary, or fanciful, either individually or taken together.
 

Packaging: NWTM’s packaging referenced the caliber of
ammunition and the grain count, which made the packaging resemble, and “evoke[d]
the feel of,” real ammunition boxes. This too was functional, because it served
to remind consumers of an actual ammunition box, “and allowing it to do so with
trade dress protection would put NWTM’s competitors at a significant
non-reputation-related disadvantage.”  Even if the packaging were distinctive and
nonfunctional, there would be no confusion, as a matter of law. Provident
prominently featured its name on the outside of its boxes, and the text on its
packaging was inscribed directly on the top of the boxes. NWTM’s boxes had text
inscribed on a label on the outside cover that included many of the descriptive
features included on the head stamp, with NWTM inconspicuously included on the
bottom left corner of the label. There was no “meaningful” evidence supporting a
likelihood of confusion other than the general similarity of shape.
 
Bullet shape: this was unprotectable as lacking
distinctiveness.  Any differences between
NWTM’s products and actual ammunition were imperceptible to actual consumers,
and were also functional. Changes in dimension and weight were designed to make
products that weighed in even troy ounces, in part in order to give them
intrinsic value as a financial investment—“the weight dictated the form,”
according to NWTM’s designer. 
 
NWTM argued that the combination of these functional,
nondistinctive features were distinctive in their “total impression.”  The court wasn’t persuaded.  “[T]he overall impression of the elements,
each of which has only trivial differences with the features of actual
ammunition, serves to identify NWTM’s product as a bullet.”
 
Even if the trade dress were nonfunctional, NWTM failed to
show secondary meaning. NWTM argued that it heavily promoted the new product;
that it sold over 191,000 pieces of SBB and CBB through June 2014; that it had
100% of the market share for silver bullet bullion from January to October
2013; that Provident copied NWTM; that, according to NWTM’s CEO, at least four
customers contacted him to ask whether Provident’s products were in fact
manufactured by NWTM, and a customer expressed confusion on Provident’s
Facebook page; and a video on the “Salivate Metal” YouTube channel featured a
reviewer pondering whether the real manufacturer of Provident’s product was
actually NWTM.
 
Even if all of this unambiguously weighed in NWTM’s favor,
there was still no empirical evidence of secondary meaning.  There was no admissible consumer testimony or
survey evidence; its customers’ posited unwillingness to be surveyed again
didn’t relieve it from its burden, “particularly given that its customers
constitute a unique demographic.”  (That’s
one way to put it.)  The time of use
weighed against NWTM—other cases have found 3½ years of exclusivity to be
“relatively brief,” while NWTM had 10 months. 
While the substantial amount of NWTM’s sales would weigh in its favor,
that wasn’t enough.  NWTM claimed that
its marketing was successful but provided no evidence on the amount it spent
marketing the trade dress.
 
Turning to copyright:  “A mere reproduction of a work in a different
medium does not constitute a sufficient variation to meet the originality
threshold for copyright protection.” See L. Batlin & Son, Inc. v. Snyder,
536 F.2d 486, 491 (2d Cir.1976).  NWTM
argued that its replica bullets were original because they didn’t correspond to
actual ammunition, sometimes varying in dimension by a quarter of an inch or
more. NWTM argued that it was an innovator and that there was significant
creative effort that went into making the product, including testing, trial and
error, and the creation of numerous prototypes between 2008 and 2012.
 
No again.  Any
differences between the replica bullets and actual ammunition were trivial or
functional: (1) the composition, i.e., silver or copper (functional); (2) the
dimensions (imperceptible and functional in order to make a bullet in even troy
ounces); (3) the shape (functional); and (4) the weight (functional).  Even were that not so, merger would still
apply: the expression of a bullet in bullion couldn’t be separated from the
idea. “[T]he only way NWTM can express a .45 ACP design is to replicate it, and
if NWTM were to make significant variations in its replica, the product would
no longer be identifiable as a .45 ACP design.”
 
NWTM argued that Provident engaged in false
advertising/unfair competition by claiming to have its own mint, allowing it to
minimize manufacturing costs and pass on savings to consumers. But NWTM failed
to timely identify false advertising as the foundation for its unfair
competition claim, which it earlier said was based on trademark
infringement.  Also, without copyright
and trademark claims, there were no actionable unjust enrichment claims.

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Amicus supporting rehearing in MTM v. Amazon

IP Professors, with excellent assistance from Cathy Gellis.

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Limiting remedies when a descriptive fair use defense fails

Anhing Corp. v. Thuan Phong Co., No. CV 13-05167, 2015 WL
4517846  (C.D. Cal. Jul. 24, 2015) 
 
This post-trial ruling covers a lot of detailed ground on
descriptive fair use, unclean hands, and remedies.  Anhing successfully sued Thuan Phong for
trademark infringement; the court denied Thuan Phong’s motions and granted a
permanent injunction. [NB: the Westlaw version gets rid of most of the
non-English orthography; I tried to fix that but my apologies for missing instances.] 
 
Anhing imports food and related products, and has a private
label brand, “MỸ THO,” which has existed for thirty-five years. Here are two of
its rice products:   Anhing registered
MY-THO (no tilde) for rice sticks and rice vermicelli in 1986.  According to the registration, “MY–THO” has a
dual meaning in Vietnamese of “beauty and longevity” and “pretty autumn.” At
some point, Plaintiff also began selling rice noodles in packaging with the
words “MỸ THO” accompanied by ®. 
 

Thuan Phong is a company that began and continues to operate
in the city of Mỹ Tho, Vietnam.  It makes
rice paper, sold under the TUFOCO logo. The package features BÁNH TRÁNG MỸ THO
in red lettering across the top and three green bamboo trees.  In 2008, it registered the mark and design “BÁNH
TRÁNG MỸ THO TUFOCO DAC BIET DE LAM GOI CUON VA CHA GIO VIET NAM BAMBOO TREE
HIEU BA CAY TRE VIETNAMESE RICE PAPER” for rice paper.  In 2010, Thuan Phong introduced a rice noodle
product with similar packaging.   
 

The parties began doing business together in 2004, when
Thuan Phong agreed to make rice paper for Anhing’s White Elephant Brand private
label.  In 2010, Anhing discovered Thuan
Phong’s US sales of rice paper with BÁNH TRÁNG MỸ THO on the label, which
Anhing considered confusingly similar to its BÁNH TRÁNG MỸ-THO rice paper, and
Anhing had the same objections to Thuan Phong’s “BÁNH PHỞ MỸ THO” rice noodles,
given Anhing’s “BÁNH PHỞ MỸ-THO” rice noodles. 
In response to Anhing’s requests, Thuan Phong maintained that the terms
weren’t used as marks, but rather as information about the geographic source of
the products.  However, Thuan Phong
agreed to discontinue these particular phrases and to sell under “BÁNH PHỞ SẢN
XUẤT TẠI THᾺNH PHỞ MỸ THO” and “HỬ TIỀU SẢN XUẤT TẠI THᾺNH PHỞ MỸ THO.”  These phrases state more clearly in
Vietnamese that their rice noodles are produced in the city of Mỹ Tho.  Anhing wasn’t satisfied, because the geographic
designations would still appear at the top of Defendant’s packaging, with the
words “MỸ THO” in bold red lettering and in the same font size as the rest of
the words on the packaging. Thuan Phong refused to move the words “MỸ THO” to
the bottom of its packaging, and it didn’t change its rice paper packaging or
add similar prepositional phrases.     
 

Anhing sued for infringement of its registered “MY-THO” mark
as well as for infringement of its unregistered MỸ-THO mark and for its
unregistered trade dress.  A jury found
willful infringement of the registered mark and lack of fair use.  However, the jury found that Anhing didn’t
prove ownership of a valid mark in “MỸ-THO” (with tilde) or likely confusion
with respect to its trade dress.  The
equitable issues remaining for the court were Thuan Phong’s affirmative
defenses of laches and unclean hands, a counterclaim under the UCL, and Anhing’s
request for a permanent injunction. Thuan Phong also sought judgment as a
matter of law.   
 
The court rejected Thuan Phong’s laches defense based on
Anhing’s delay in filing suit. Thuan Phong argued that Anhing knew about the
infringement as early as 2004, when one of its representatives visited Thuan
Phong’s factory, but failed to file suit until July 2013.  Laches doesn’t bar a suit against a deliberate
infringer, where the public’s right not to be confused is paramount and where
the infringer’s hands are unclean. Given the jury findings and instructions,
its finding of “willful use” amounted to a finding of willful
infringement.  The jury was instructed
that it should award profits if it found willful infringement and skip an
accounting otherwise, and it stated $8690.52 as Thuan Phong’s profits attributable
to infringement.  Separately, Thuan Phong
failed to show prejudice either in its ability to bring evidence forward or in
its reliance on Anhing’s inaction to grow its business, given its position that
it wasn’t using MỸ THO as a mark but as a statement of information—any delay
couldn’t therefore have injured its brand or reputation.
 
The court further rejected Thuan Phong’s unclean hands
defense based on (1) Anhing’s use of ® on rice products not disclosed in its
registration for the “MY THO” trademark and next to the unregistered “MỸ-THO”
mark; (2) geographic misleadingness; and (3) inequitable conduct in securing
its registration. Inequitable conduct must relate to the use or acquisition of
the plaintiff’s claimed rights to justify the defense, but need not be illegal
or criminal.
 
The wrongful use of ® disturbed the court; some evidence
suggested that the misuse was not inadvertent. 
But it still was not sufficiently related to the subject matter of
Anhing’s claims based on “MY–THO,” especially given the Ninth Circuit’s focus
on balancing the parties’ willfulness and harms to each other.  (Given that the marks are so similar, it
seems likely that they’d qualify for tacking if Anhing went ahead and tried to register
MỸ-THO.)

Geographic deceptiveness: If the jury found that MỸ THO is confusingly similar
to MỸ-THO, Thuan Phong argued, Anhing shouldn’t be allowed to use the mark,
because Mỹ Tho is a city.  But the jury
didn’t find confusing similarity in the abstract; it found that Thuan Phong’s
use of MỸ THO as a trademark was confusingly similar to Anhing’s mark, which
didn’t mean that MỸ-THO was misleading or deceptive as to geographic source.  Also, this too was unrelated to Anhing’s
acquisition or use of the right it claimed.  (Hmm. 
Neither of these reasons seems right to me.  Geographic terms can be used as marks, so
there’s no incompatibility between geographic indication and source indication;
indeed that’s why we have a descriptive fair use doctrine—to preserve others’
rights when a descriptive term has successfully been used as a mark.  And if the term is geographically deceptive, then Anhing’s claim against a producer
who is in fact from the location is fundamentally related to its deceptive
appropriation of a geographic term (or a confusingly similar version of the
term, since I can’t see why the confusion wouldn’t go both ways).)  The court says that the right at issue is “MY–THO,”
and so whether MỸ-THO is understood as a geographical reference is irrelevant,
and that the connection between the terms is too tenuous to support an unclean
hands defense.  But the connection was
strong enough to make the terms confusing!
 
The court further found insufficient evidence of geographic
deceptiveness. Though all of Anhing’s products were made in Thailand, there was
conflicting evidence over whether the phrases displayed on its packaging was a
geographic reference or pure trademark use. 
Thuan Phong didn’t offer persuasive evidence to show that the mark’s
“primary significance” was to refer to the city of Mỹ Tho, or any evidence of
actual consumer confusion.   The products were all labeled as having been produced
in Thailand.   
 
Unsurprisingly, Anhing’s failure to disclose the existence
of the city when it registered its mark also failed to constitute sufficient
inequitable conduct to justify an unclean hands defense. There was no evidence
of Anhing’s knowledge of the city, understanding that it should disclose the
city’s existence, or intent to deceive the PTO.
 
There was also no basis for Thuan Phong’s UCL counterclaim
based on the misuse of ® because there was no evidence that such use caused Thuan
Phong to suffer any damages. Nor did a claim based on alleged misrepresentation
of source succeed—the jury could reasonably have concluded that MY-THO didn’t
stand for a geographic location in most consumers’ minds.
 
The court also rejected Thuan Phong’s motion for judgment as
a matter of law, focused mostly on its descriptive fair use defense.  Though the jury’s finding of likely confusion
didn’t preclude the fair use defense under KP
Permanent
, the evidence supported a finding of use as a mark.  Even after Thuan Phong’s changes, the words
still appeared prominently at the top and in bold red lettering, albeit in the
same font and color as other words indicating the type of product (rice
noodles) and the prepositions indicating geographic source.  “The jury could have found Defendant’s refusal
to move the reference to ‘MỸ THO’ to the bottom or back of its packaging, or to
reduce the size of the lettering, as evidence Defendant did not take sufficient
precautionary measures despite its knowledge of potential infringement,” and
likewise the jury could have found that its failure to change the wording on
its rice paper packaging indicted an intent to attract public attention. The
jury could have found that Thuan Phong displayed MỸ THO more prominently than
other design features, such as its blue “TUFOCO” logo and the three green
bamboo trees. 
 
Likewise, the jury could have found a lack of good faith,
given Thuan Phong’s conduct after Anhing sent its C&D.  Thuan Phong expressly acknowledged a
likelihood of confusion and agreed to modify the wording on its packaging to
more clearly state its products were produced in Mỹ Tho, but refused to move
this “information statement” to a less prominent place on its packaging. That
refusal, combined with the lack of evidence that Thuan Phong consulted legal
counsel, was sufficient to support a finding of lack of good faith.  (Wow!) 
Finally, the jury was entitled to find that the use was not purely
descriptive, because of testimony that Mỹ Tho isn’t a famous city and consumers
don’t associate the words with a geographic place. “[T]he evidence is
consistent with a finding that consumers do not interpret the words to refer to
Mỹ Tho city, and that Defendant did not use the words in a trademark sense.”

As to willfulness, though there was evidence that Thuan Phong independently
designed its rice paper packaging before the parties began doing business
together, and chose to use “MỸ THO” not to refer to competing products but to
inform consumers where its products were produced, that didn’t negate willful
infringement given its continued use of the term after it became aware of the
MY-THO mark. Nor did Thuan Phong’s own registration, from 2008, preclude a
finding of willfulness. Though the registration was evidence of lack of
willfulness, it couldn’t be viewed in isolation, and was undermined by Thuan
Phong’s own statements in response to the C&D:
 
The words “BÁNH PHỞ MỸ THO” on the
packing of Anhing Corporation and on the packing of Thuan Phong Company are
likely to cause confusion in the marketplace. Thuan Phong [C]ompany does not
want to use alike name of Anhing’s rice noodle (sic ). We will correct the name
of our product on packing clearly in order that it will be quite different to
the name of product of Anhing Corporation (sic).
 
“Use of an infringing mark, in the face of warnings about
potential infringement, is strong evidence of willful infringement.” Likewise,
failure to consult trademark counsel where such consultation would be
reasonable supported a finding of willfulness.
 
Similarly, the evidence supported a finding of likely
confusion, despite what the defendant characterized as minimal evidence of
actual confusion.
 
The jury also awarded $10,000 in actual damages, which was supported
by reasonable inferences given Anhing’s evidence that experienced a decline in
sales after Thuan Phong entered the domestic marketplace, selling apparently
identical/confusing staple products at a cheaper price; Anhing’s other brands
didn’t suffer a decrease in sales at the same time.  The amount awarded was about 10% of Anhing’s
claimed losses, making it a reasonable inference from the evidence.
 
Anhing also secured a permanent injunction. “Evidence of
intangible injury, such as a loss of customers or damage to a party’s goodwill,
can constitute irreparable harm. Evidence of a loss of control over one’s
business reputation may also suffice.” 
The trial evidence showed the necessary loss of control/harm,
particularly because of testimony that Thuan Phong’s products were of inferior
quality.  “That the jury found a
likelihood of confusion substantiates this conclusion and further supports a
finding of irreparable injury.”  (In
other words: likely confusion is irreparable injury, so eBay doesn’t matter.) 
 
Irreparable injury meant legal remedies were
inadequate.  “The evidentiary burden
Plaintiff faced in establishing its actual damages at trial also favors injunctive
relief [even though Anhing submitted evidence on actual damages and the jury
made a finding]. Perhaps most important, however, is the risk that Defendant
will continue to engage in infringing conduct.”
 
The balance of hardships favored Anhing; Thuan Phong argued
that it would be harmed by being unable to adequately convey the geographic
source of its products, but the fair use finding made this argument fail,
though it affected the appropriate scope of an injunction. The public interest
likewise favored a tailored injunction preventing confusion while allowing fair
use.
 
Anhing argued that Thuan Phong should be limited to using
the phrase “Mỹ Tho Industrial Zone” on the back of its packaging, in black ink
and no more than 4 centimeters in length and 0.2 centimeters in height. There
was no evidentiary basis for requiring Mỹ Tho “Industrial Zone”; the parties
didn’t show that consumers would more readily recognize “Mỹ Tho Industrial
Zone” as an indication of geographic source than simply “Mỹ Tho.” Nor was there
an evidentiary basis for the requirement the source statement be in black ink. Thuan
Phong’s packages use red, blue, green, and white ink; black ink is only used on
the back, to convey information not included in its trade dress, such as
nutrition facts, ingredients, and directions for use. Because the jury found no
likely trade dress confusion, requiring black ink would be an unfair limitation
on Thuan Phong’s trade dress rights. A ban on putting a source statement on the
front of the products was also overly burdensome; some of Anhing’s own products
included a statement of geographic source on the front. The jury’s confusion
finding didn’t mean that any and all uses of Mỹ Tho on the front of packaging
would necessarily infringe.  The same
reasoning led the court to reject an absolute size constraint. “Certainly, the
jury’s finding of willful infringement requires a change to Defendant’s current
use of ‘MỸ THO.’ But it does not require the wholesale relegation of any and
all reference to the words to an entirely inconspicuous location.”  The court allowed a six-month sell-off period,
given that Anhing hadn’t shown that six more months of use would cause a
significantly increased risk of harm.
 
Thus, Thuan Phong was enjoined from using “Mỹ Tho” in a manner
likely to cause confusion; use in the same/similar manner as existing packages
would be likely to cause confusion.  It
had to immediately cease importing infringing products to the US.  It would be permitted to use Mỹ Tho as a
location designator: “The text of the location designation shall state, in
Vietnamese, ‘Product made in Mỹ Tho, Vietnam’ or ‘Produced in Mỹ Tho,Vietnam,’”
and it couldn’t be bigger than the letters TUFOCO in Thuan Phong’s logo.  If on the front of the package, it couldn’t
be at the top, above the “TUFOCO” logo and three bamboo trees. Thuan Phong was
also ordered to immediately notify its distributors and customers in writing
that it wasn’t associated with, affiliated with, sponsored by, or otherwise
related to Anhing, including a copy of the final permanent injunction, and it
had to immediately notify its wholesalers in writing that they were required to
discontinue sales of the infringing products.     

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Transformative use of the day, Lululemon edition

I can’t wait to carry this bag around and watch the double-takes.  (Would also fit well on Welcome to Night Vale.)

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Somehow the Coke bottle survived this dilutive free riding

1962 Doyle Dane Bernbach ad for the VW Beetle:

Headline: 2 shapes known the world over.

Text: Nobody really notices Coke bottles or Volkswagens any more. They’re so well known, they blend in with the scenery…. (The only reason you can’t buy a VW at the North Pole is that the Volkswagen people won’t sell you one. There’s no VW service around the corner.) We hear that it’s possible to buy yourself a Coke at the North Pole, though. Which makes us suspect there’s only one thing that can get through ahead of a Volkswagen. A Coke truck.

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4th Circuit denies rehearing in In re GNC

:(

If this ruling sticks and is actually applied in Lanham Act cases (something of which I am uncertain), then the resulting circuit split would probably justify Supreme Court review, given the Court’s newfound interest in 43(a)(1)(B).

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ISHTIP at Penn, part 9

Session 6 | Josh Sarnoff (DePaul University), Moderator
 
In Search of a Trade Mark: Search practices and Bureaucratic
Poetry
Jose Bellido and Hyo Yoon Kang (University of Kent, UK)
Commentator | Amanda Scardamaglia (Swinburne Law School)
 
Enhanced searching: bureaucratic poetry—early manual
searches. TM office was tasked with organizing words and devices for the first
time: a new commodity of commercial information in signs and words and the
ability to find them on the register. 
Needed a system of classification to register marks; classifications
changed over time to reflect commercial change. 
Patent system classified according to subject matter; a different
endeavor.
 
TM clerk was very different from patent counterparts—technical
expertise v. experts in delicate art of distinguishing and classifying signs
and words.  TM agent emerged, esp. after
1883 amendments opening registration for invented words, leading to significant
increase in number of applications. Agents were skilled in navigating and
searching the register.  Profession
attempted to limit access to registration data, as patent agents had before
them; closing of profession was linked to increasing openness of TM
registers.  Index clerks and TM
abstractors: index w/range of general marks; divisional index of devices
arranged according to things like birds, buildings, and beasts; index arranged
alphabetically by prefixes and terminal endings/suffixes—third index was the
most important. 
 
Significant impact on development of TM law—led to
deconstruction of words and assisted w/creating new marks by creating
comparisons.  Deconstruction of words was
evident in TM infringement cases as well, which focused on comparing sequences
of letters in the same way.  Indexes were
strategic—could find out about what competitors were doing b/c they’d register
preemptively. Initially available only to agents but eventually opened to
public, though agents were still powerful actors who specialized in searching
the register.
 
Index cards and punched cards; final phase of computerized
searching and privatization of search services—entrusted to private services,
with a direct and immediate impact on search. 
Computerization affected registrations: TMs were redesigned for
mechanical purposes; transformed the way search happened—algorithms made it
possible to search across subjects & geography quickly. Removed obstacles
to manual search.  Transformed registry
from visual markers of ownership to a metalevel database.
 
Discussion points: evidence of how the processes impacted
the legislation itself?  Registries
internationally were introduced around the same time.  What indexes if any were used at that time?
Did that impact others’ indexes?  Did
others’ indexes affect Britain’s? What were the tradeoffs in moving from
mechanical to digital?  Paper says
openness increased, but was the info the same?
 
Bellido: we wanted to explore bureaucratic property. Were
surprised that first TM clerks in UK were A.E. Housman, Griffin, and other
poets and antiquaries.  Bureaucratic poetry: indexing techniques have
something to say about how TMs were conceived and developed.
 
Kang: TM is more complicated than patent b/c of two
different forms of numbering—application number, then publication/registration.
Can be complicated to retrieve full info. 
Shows how unstable the nature of property is in legal practice.
 
Bellido: the more open the register was, the more experts
could claim to be able to navigate this massive endeavor.  Legal expertise is founded in the management
of retrieval tools that may look more technical/less interesting to legal
scholars, but it’s everyday routine that constitutes the subjectivity of the TM
expert.
 
Kang: relates to issue of legal agency: what does TM law
actually do?
 
Bellido: registration practice can make the TM a
thing/object of law/property even before there is a product in the market.
 
Kang: complicate picture of TM as consumer-driven. 
 
Bellido: registering invented words: impact on the legal
profession—agents could then sell the possibility of providing new words to
companies. We haven’t touched colonial indexing.   
 
You sometimes see trolling behavior around descriptive
words/changing descriptive words around to try to make them registrable.  Or an agent could identify marks that were
not quite as good but were usable until the register relaxed its standards.
 
The Modern Expansion of Trademark Rights, and How One
Forgotten Treaty Made It Possible
Christine Haight Farley (American University Washington)
Commentator | Dan Hunter (Swinburne Law School)
 
Big claim: a forgotten treaty did a lot more than we thought
it did in creating TM rights.  Hunter is
not sure that this treaty made expansion of rights possible.
 
Paper is a detective story. 
Interamerican Convention on Trademark and Commercial Protection (IACTCP)
(1929).  TM comes from one of two or
maybe three/4 foundations: passing off, concerns over confusion, search costs.  Does this convention give us new insights
into the foundations of TM law?  Offers unfair
competition as a distinct foundation. 
Can we tell that the convention is a contributor to the modern day
understanding?  Even if we could, so
what?  The lawyer’s question: what does
that tell us? 
 
Why was the convention ignored?  The architect of both IACTCP and the modern
Lanham Act (1946) was one man, Edward S. Rogers, founder of first specialized
TM firm and lover of unfair competition. 
 
Significance of Inter-American TM Convention (1929)—self-executing,
and yet completely forgotten.  Modest
number of cases in TTAB and courts, startlingly small # of cases.  Yet this is law.  Why forgotten?  Or has it been?  Are Ps all just dumb?  That seems unlikely.  Erie
says there’s no general federal common law. Then there’s the Lanham Act §43(a),
but also and especially 44(h) and (i). 
The Lanham Act is, for all intents and purposes, federal common law, and
the paper suggests that 44(h) and (i) need to be more talked about, b/c §44 is
generally about recognizing TMs from outside the US; in fact Rogers included
them largely to include unfair competition w/in the American system.
 
Questions: is the paper trying to get us to apply the
Convention?  Are you arguing that unfair
competition is foundational to the Lanham Act? Just b/c it’s in the Lanham Act
doesn’t make it foundational.
 
Farley: A treaty still in force about TM—we don’t have many
of those in the US.  Modern parallels
were interesting about how the US makes the law of other countries and then has
a strategy of making US law also through that undemocratic process.  Beyond that, this text is so interesting b/c
of its novelties and timing, as well as the characters involved.  Inordinate influence of a couple of people
has no modern analogue.  We can
inadvertently make a mistake by privileging moments of development of IP; IP
has not always had pride of place in law, society, or commerce.  Especially in TM law: early 20th
c., it was a teeny field. TMs weren’t as valuable as they are; there was no TM
bar, certainly not in Latin America, just a handful of people in US.  These particular people could have outsized
influence.
 
The ground was shifting under their feet b/c the nature of
marketing was changing, markets were changing, global markets were
changing.  Amorphousness of IP and
particularly TM.  Doing this history,
evident how unsettled and indeterminate the foundations of TM are.  The story that we have an ancient idea of
unfair competition, within it a new thing called TM law, isn’t right. These
were simultaneously being developed and playing off one another.  Early development was a mess.  These guys are making up new law in this
treaty.  Provisions don’t appear anywhere
else.  Rights that suited US businesses
at that moment for expansion into Latin America.
 
Then the Lanham Act comes along, and federal common law is
pulled out.  Given the fact of the
treaty, and their overlapping author, and that Rogers argues the first TM
Supreme Court case after Erie, there
was a unique opportunity to write a new chapter in TM as clean, settled,
organized.  And we don’t get that. We get
slivers of clarity, and then this space/haze around the rights. We focus on
§43(a) as a site of expansion and a site for unfair competition, but these
sections in 44 are what the drafters intended.
 
US corporations exercise their rights under the treaty in
Latin America all the time; drafters expected that b/c of US dominance.  Lanham Act makes vague reference to the
treaty (was explicit reference in first draft); Rogers argued that the treaty
was self-executing and the SCt agreed. 
Conclusion: give those rights to go after unfair competition to US
citizens as well.  We didn’t get that.
§43(a) was reaction of patent bar trying to put the brakes on what Rogers was
trying to do in §44.  Rogers deals with
this by taking §43(a), designed as substitute for 44, in the law too. 
 
RT: Another suspect: What is unfair competition that isn’t infringement?  Trade secret misappropriation was a
possibility bruited about in the 1940s; maybe also antitrust violations.  But that kind of understanding seems impossible
to recover now, especially given other laws—no court is going to find that
there’s been a federal trade secret law for 70 years.  Trademark infringement-like activities that
aren’t infringement but are still unfair competition?  US courts have no current understanding of
what that gap might be: collapse b/t protection and registrability, absence of
a passing off category in US law.
 
A: Many law review articles written at the time clearly
stated that many things were under the umbrella of unfair competition but were
nowhere collected; some understanding that it would be collected in Lanham Act:
trade secret, tortious interference w/ business relations, antitrust.  Not so much interested in those things, but
is interested in what the haze might be surrounding the concept.  (What might a clever P’s lawyer argue?)
 
Possible to bring something like a TM case w/o a possibility
of confusion.  Rogers brought a case
where there were nonproximate goods, a different name but phonetically similar,
and no bad faith.  That was meant to be
one of the §44 cases—not really a theory of confusing the public, but
unfettered right to expand business.  Haze
of rights as buffer around TM rights. 
Rogers won, but we only talk about Frank Schecter, who lost; Rogers won
by making subtle moves.
 
Q: compare to avoision in tax law: indeterminancy of whether
someone is engaging in avoidance (ok) and evasion (not ok).  Infinite ingenuity of malefactors to get
around intent of law w/o letter of law.
 
Madison: concepts in the law having agency v. the agency of
individual humans like Rogers. Rhetorical constructs enabled by disciplinary
angles. 
 
Q: role of timing?
 
A: may have been related to the Depression; also to Erie and resulting uncertainty for TM
lawyers.  Treaty was a bit premature for
the Latin American market.  Responding to
a Europe in which the US lacked a big place, anticipating Americas as a market
to dominate. WWII meant that vision didn’t come about as anticipated.  Not that many businesses were demanding these
kinds of protections; just on the cusp.
 
Sarnoff: if the idea is to remember, do you expand rights in
unpleasant ways?  Is this a comedy and
not a mystery—a tale of laughter and forgetting?

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