Third party lacked standing to challenge allegedly misleading use of abandoned mark

578539 B.C., Ltd. v. Kortz, 2014 WL 12572679, No. CV
14-04375 (C.D. Cal. Oct. 16, 2014)
Westlaw is doing something to surface all sorts of old cases,
but this one covers an issue about abandoned marks that often comes up in my
class on abandonment, so here goes.
Plaintiff, trading as Canadian Maico, filed a trademark
infringement claim against Kortz, d/b/a SoCal Maico.  Maicowerk A.G. was a popular German
motorcycle manufacturer founded in 1926; it went out of business in the
1980’s.  Plaintiff was founded in 1996
with the goal of rebuilding Maicowerk’s business by restoring and selling
genuine Maicowerk motorcycles, as well as parts that could be used by others to
restore and maintain Maicowerk motorcycles. Canadian Maico now serves Maicowerk
motorcycle enthusiasts in the US and Canada, as well as internationally.  It had registrations for the word Maico and a
large “M” superimposed over a shield (the “Maico marks”) for relevant goods.
Plaintiff alleged that Kortz observed its success and
decided to copy it under the name SoCal Maico. In 2014, Kortz sought to register
MAICO in connection with “on-line retail store services featuring new and used
Maico motorcycle parts” and his website Kortz’s logo
allegedly incorporated Maico’s federally registered trademarks; Kortz
petitioned to have the USPTO cancel Maico’s registration.  Kortz also allegedly made false and damaging
statements about Maico and its goods to potential customers.
Kortz alleged, in his counterclaims, that Maico registered
Maicowerk’s abandoned trademarks despite the fact that it had not received an
assignment of any of Maicowerk’s rights, reputation or goodwill, even though
that reputation and goodwill persists. 
He alleged that Maico traded on Maicowerk’s goodwill and caused consumer
confusion as to the source or origin of its goods and services.
The court found that Kortz lacked Article III standing to
bring his counterclaims.  He lacked
allegations of injury to himself that was “concrete and particularized” and
“actual or imminent” in order to satisfy the injury in fact requirement of
Article III standing. Kortz wasn’t Maicowork’s successor in interest:
Because Kortz admittedly has no
protectable legal interest in Maicowerk’s purported goodwill and reputation, he
cannot assert injury based on damage to that goodwill and reputation. Because
he sues as a competitor, and not as a member of the public confused by Maico’s
use of the Maico marks, he cannot assert injury to consumers as a basis for his
H didn’t plead that Maico’s customers would otherwise do
business with him or that its use of the marks otherwise injured him in his
business.  Lexmark analysis would reason likewise.
Later, the court commented that the fact of Maicowerks’
persistent goodwill would not, in itself, make Maico’s adoption of the Maicowerks
marks invalid, quoting McCarthy: “Once abandoned, a mark may be seized
immediately and the person doing so may build up rights against the whole
world.” “After abandonment, those who then adopt the mark must turn to the
basic rules of trademark priority to determine priority of use and ownership.”  True, parties who adopt an abandoned mark “must
take steps to avoid a likelihood of confusion arising from an association with
the former owner,” but that’s the former owner’s business, and even the former
owner won’t win without use that fraudulently trades on its reputation.

from Blogger

Posted in Uncategorized | Tagged | Leave a comment

Press release constituted commercial advertising or promotion

Engineered Arresting Sys. Corp. v. Runway Safe LLC, No.
1:15-CV-546, 2016 WL 6087906 (W.D. Tex. Sept. 19, 2016)
Engineered materials arrestor systems (EMAS) are installed
at the end of airport runways in order to safely stop an aircraft that fails to
stop before the end of the runway by absorbing the energy of the aircraft. For
over 15 years, plaintiff ESCO was the only supplier of EMAS for US airports,
but Runway Safe entered the market in 2014. 
ESCO sued for direct and indirect patent infringement; Runway Safe
brought various counterclaims, including a false advertising counterclaim based
on ESCO’s press release announcing this lawsuit.  (Including: “As a new and untested entrant
into the marketplace, Runway Safe apparently hopes to capitalize on the
goodwill and reputation of [ESCO] by misappropriating [ESCO’s] valuable
intellectual property ….”) 
The court declined to dismiss that counterclaim, adding to
the small but reasonably consistent jurisprudence on press releases: at least
when the target market is small enough that press releases are a good way to
communicate with consumers, they can constitute advertising or promotion. The
press release, which also says that “[c]ustomers desiring the aircraft
arresting system that provides proven safety records with successful
arrestments should ensure that they are purchasing the EMASMAX® manufactured
only by [ESCO],” directly targets EMAS customers and encourages them to buy
from ESCO.  It was published on ESCO’s
website where any potential purchaser of an EMAS would be able to view it.  Thus, Runway Safe properly pled commercial
advertising or promotion.
Likewise, Runway Safe properly alleged that statements such
as that Runway Safe has copied features of ESCO’s EMAS and that Runway Safe is
an “untested entrant into the marketplace,” were false and misleading.

Runway Safe also alleged that this conduct was likely to
cause “confusion, mistake, or deception as to the origin, sponsorship or
approval of the nature of the services offered by Runway Safe.”  Hello, Dastar.  Here, the court reasoned that §43(a)(1)(A)
required statements about the speaker’s own goods, not statements about someone
else’s goods, which are covered by §43(a)(1)(B).

from Blogger

Posted in Uncategorized | Tagged | Leave a comment

At the USPTO Trademark Expo

Well, here I am at the National Trademark Expo

Here is a giant registration symbol character costume

Musical pairing, which seems really really functional to be at a TM expo, but emphasizes its patents, copyrights, and word marks

Metrorail Map and Logo usage guidelines

USAF: An Emblem of Power & Protection

Did you know that sounds can be trademarks?

DC Rollergirls, for Dave Fagundes

Velcro: There is only one.  I asked the rep, “One what?” and she said “it’s the original hook and loop fastener.”

Velcro mascot with kids throwing balls at its chest

The power of the Navy brand

How to report a Coke bottle lookalike (it’s right side up on my computer, sorry)

NOT AUTHORIZED versions of bottles Coke finds unacceptable

More on the DC Rollergirls, for Dave Fagundes

Did you know that color can be a trademark?

Benefits of federal registration

Here I am. Considering making this my new profile picture.

Swag: UPS plane, Idaho stuffed potato (get it?), Velcro branded Velcro, sunscreen from the Global IP Protection Council (protect yourself)!

I heart IP and IP in heart tattoos–I got a few extra if anyone must have them
Modern Velcro usage guidelines

from Blogger

Posted in Uncategorized | Tagged | Leave a comment

A transformative purpose fair use finding

Wong v. Village Green Owners Association, No. CV 14-03803, 2015
WL 12672092 (C.D. Cal. Mar. 20, 2015)
This transformative fair use case just showed up in my
Westclip search.  Wong, who owned a unit
in Village Green, prepared a National Historic Landmark nomination on behalf of
VGOA, a homeowners association, which subsequently posted the nomination on its
website. Wong sued for copyright infringement, and the court found fair use.
Wong prepared the NHL nomination on her own initiative,
knowing that VGOA wouldn’t pay her, because she believed that, “[f]rom a moral
viewpoint, [she] had no choice.” The nomination consists of a 78-page form and
38 pages of photographs. It contains “purely factual information, such as
information about the property’s location, the structures on the property, the
materials used to build the property, and its architecture, history, and impact
and legacy on the community.” The Village Green became a certified National
Historic Landmark in 2001.
Since 2005, Wong has made the nomination available for free
to the general public through her website. Another copy is also available for
free to the general public through the National Park Service’s website, and Wong
understood that the general public would eventually have access to the document
for free while she was preparing it.
The court found that VGOA’s use of the nomination as an “Important
Document[]” on its website was transformative. Wong’s purpose in making the
work was to obtain a NHL certification on behalf of the Village Green, which
was granted.  VGOA’s purpose in posting
the document was “so the Village Green community and the general public may
have access to the document as an information and educational resource.” This
substantially different purpose weighed heavily in favor of fair use.
VGOA’s use was also entirely noncommercial: VGOA neither
charged for nor received profits from or revenues from the use.  The tax benefits VGOA received from the
certification decision were irrelevant. Anyway, even counting those benefits
wouldn’t render VGOA’s use of the nomination commercial, in the sense of
“unfair[ly] exploit [ing] the monopoly privilege that belongs to the owner of
the copyright.” Village Green, as a National Historic Landmark, was eligible
for a tax break, but Wong, as an individual, was not.
Nature of the work: highly factual, favoring fair use. Amount
used: the whole thing, which was reasonable in relation to the purpose of the
copying, so this factor didn’t weigh in favor of either party.

Market effect: there was none because the nomination had no
market value and Wong already made it available for free, as did the NPS.  Although someone had to pay for the work’s
preparation, the fourth fair use factor “has nothing to do with the cost of preparing
the copyrighted work.”

from Blogger

Posted in Uncategorized | Tagged , | Leave a comment

Package size can be false advertising

In Re: Mccormick & Company, Inc., Pepper Products
Marketing & Sales Practices Litigation, 2016 WL 6078250, No. 15-cv-2188 (D.D.C.
Oct. 17, 2016)
Watkins, which produces black pepper, alleges that its
largest competitor, defendant McCormick (which has 70% of domestic black pepper
sales), deceptively “slack-filled” its black pepper containers, confusing
consumers and causing a loss in Watkins’ pepper sales. Consumers can’t see
inside McCormick’s containers before they buy. In early 2015, McCormick allegedly
reduced the amount of actual pepper in each of its pepper tins by 25% but
“misleadingly continued to use the same traditional-sized tins” and reduced the
quantity of peppercorns in its grinders from 1.24 ounces to 1 ounces, again
without changing the size of the containers. McCormick did print the reduced
quantity on the containers. Watkins also alleged that McCormick kept the price
the same, though it didn’t specify wholesale or retail price.  Under 21 C.F.R. § 100.100, “A container that
does not allow the consumer to fully view its contents shall be considered to
be filled as to be misleading if it contains nonfunctional slack-fill.
Slack-fill is the difference between the actual capacity of a container and the
volume of product contained therein.” 
McCormick challenged Watkins’ Article III standing. In a
false advertising suit, a plaintiff can demonstrate injury by showing that “
‘some consumers who bought the defendant’s product under a mistaken belief’
fostered by the defendant ‘would have otherwise bought the plaintiff’s
product.’ ” The court here quoted Judge Bazelon’s statement that “all claims of
competitive injury are to some extent speculative, since they are predicated on
the independent decisions of third parties; i.e., customers. However, … it is
the stuff of the most elementary economic texts that if two firms are offering
a similar product for different prices, the firm offering the lower price will
draw away customers from its competitor.” Given the purpose of the Lanham Act
to protect producers against unfair competition, the court adopted the Ninth
Circuit rule that “[a] plaintiff who can’t produce lost sales data may …
establish an injury by creating a chain of inferences showing how defendant’s
false advertising could harm plaintiff’s business.”  That’s what happened here.  Watkins alleged that consumers bought
containers that looked like they delivered more bang for the buck and wouldn’t
have done so if they’d known the truth; that was an adequate allegation of
injury fairly traceable to McCormick’s conduct.
Statutory standing: Lexmark
allowed Watkins standing. Lexmark
noted that “potential difficulty in ascertaining and apportioning damages is
not … an independent basis for denying standing where it is adequately
alleged that a defendant’s conduct has proximately injured an interest of the
plaintiff’s that the statute protects.”  Sales diversion from a direct competitor was a
“paradigmatic” direct injury for Lanham Act purposes.
On the merits, Watkins also stated a claim.  McCormick argued that slack-fill packaging wasn’t
“commercial advertising or promotion.”  “McCormick’s
insistence that the size of its containers does not constitute advertising or
promotion defies common sense and the law.” 
McCormick argued that the size of its containers didn’t propose a
commercial transaction.  But “advertising
includes statements about the product to be sold, not merely a proposal to
sell.” Moreover, “[t]he size of a package signals to the consumer vital
information about a product and is as influential in affecting a customer’s
choices as an explicit message on its surface.” As Watkins argued, “[t]he size
of McCormick’s containers is exactly what makes them misleading, because consumers
cannot see the amount of their contents.” (We might more properly call
McCormick’s actions communicative conduct, but that hardly helps its argument.  Compare this wrongly decided case about how color and price aren’t falsifiable claims.) 
Watkins properly alleged falsity, given federal law about
nonfunctional slack fill.  “[T]he
slack-fill regulations do not include an exception for containers which
accurately state the product amount.” The court articulated the reason for this
An accurate statement of weight
does not necessarily correct a consumer’s misimpression of product quantity
based on the size of a container, because consumers are accustomed to seeing
how much space a product occupies but may not know how that relates to its
weight. Moreover, as plaintiff has alleged, the history and iconic,
recognizable size of the McCormick containers creates a misleading impression.
McCormick argued that Watkins needed to plead “facts showing
that identifiable consumers were actually confused.”  But Watkins could rely on the allegations in
the parallel consumer class actions against McCormick, and anyway, the
regulations consider nonfunctional slack fill to be deceptive as a matter of
law, “ so there is nothing implausible about allegations of actual, widespread
deception among McCormick’s customers.”

State law claims under various deceptive trade practices
laws also survived.

from Blogger

Posted in Uncategorized | Tagged | Leave a comment

Transformative work of the day, Dilbert edition

Dilbert is mine now: art, appropriation, and politics.

from Blogger

Posted in Uncategorized | Tagged , | Leave a comment

Carl Oppedahl on ITUs and specimens of use

Good practical advice showing the function of an ITU in stabilizing priority.

from Blogger

Posted in Uncategorized | Tagged | Leave a comment