IPSC First Breakout Session, Trademark Registration

Barton Beebe & Jeanne Fromer, New York University School
of Law Is the Frontier Closing?: Registration Rates of Frequently Used Words on
the PTO’s Trademark Register 
 
Much of TM literature claims that the range of marks is
infinite; Qualitex discusses color
depletion but treats it as an exception. Is this right?  Some press questioning: marketers have
difficulty finding new names for craft beer, band names.  Another piece of conventional wisdom: marks
are an easy shorthand, and thus should be short and easy to remember/not
complicated b/c you want to use it to refer to a complicated set of attributes
that’s hard to articulate: shared by Landes & Posner and Branding for Dummies.
 
USPTO TM case files dataset: 1870-2014 with 7.4 million
applications, 1.8 million live registrations that include one or more letters
at end of 2013, out of 1.9 million live registrations. 820,000 live single word
registrations in 2013.  45 total
classes.  Compare to Corpus of
Contemporary American English, BYU; 450 million word corpus with lots of
sources.
 
What proportion of words in English are subject to TM
registration?  Across how many classes of
goods/services?  Are there changes in the
proportion of fanciful, image, and phrase marks over time?  We suspect that marks are becoming more
complicated over time, more image marks. 
Finally, what are the distances among marks along various dimensions,
such as sound, sight, and meaning.
 
Start with identical matches: word is registered on its own.
1000 most frequently used words: 718 or 71.8% are registered
as single word TMs.
5000 most: 2928 = 58.6%
10,000 most: 5236 = 52.4%
 
Not registered: disease, die, lose, violence, despite,
problems, difficult, daughter, nearly—makes sense they wouldn’t be registered.
 
Whole-word matches: of 1000, 997 or 99.7% are registered
somewhere in principal register, except although, showed, and seemed.
 
What about identical matches in classes: in class 41
(entertainment), 291 of the most popular 1000 are registered.
Whole word, the percentage in each class gets much much
higher. 946 in class 41.
 
Levenshtein matching: edit distance—how close is it to
another word? Dramatic results: most words are registered in most classes. 
 
The frontier is closing. 
Declining proportion of TM applications by year consists of single
words.  Less than 1/10 are standard English
words in 2000; decline is quite steady with internet-era dip.  Steady increase in applied-for marks’ length
as well.  Eclipse – single most
applied-for single word marks.  535
single word applications 1983-2013. 
Publication rates for single-word applications: if you are basing your
application on a registration you already own, you do well; otherwise success
rates are declining. Likewise for Elite, Titan, etc.  We think this is evidence of congestion.  200 most frequently applied for words:
declining publication rate over time (except for incumbents).  People are still trying, but they can’t get
registrations.
 
Surnames: 1000 most common surnames are 41% of population;
982 appear as a term within a registered TM. 
82% are registered as single words in some category.  In class 42, 668 are registered
(computers/tech related)—33% of population has their surname registered in
computers.  Might help explain declining
publication rates for single-word applications for surnames (except for
incumbents—95% success rate for them).  When
there are 100s of registrations of the surname already, even incumbents’
success rate is declining some; nonincumbents’ success rate is going down
further.
 
What remains: phrase marks in more detail; misspellings and
concatenations (which would make our results even more impressive; PTO has
instructions for how to search misspellings which we will use); acronyms;
non-English words; how many n-character words are possible in English given
phonetic constraints; means of measuring phonetic, visual, and conceptual
similarity; syntactic structure; measures of distance other than Levenshtein;
number of descriptive marks per class.
 
Policy implications: tighten protectability/registration
standards?  Instruct examiners
differently in different classes?  Requiring fanciful marks seems extreme (why?);
increased consumer search costs as complexity and congestion increase; effects
on competition—transaction costs, additional barrier for new entrants.
 
Sheff: incumbency effects could be related to inexperience
w/TM office [though to me that wouldn’t change the policy implications]
 
Rebecca Tushnet, Georgetown Law, Registering Discontent 
 
Carol Rose, Crystals
and Mud
in Property Law: Legislatures make hard-edged rules and courts tend
to soften them for equitable reasons. 
They go back and forth in her accounts, but in TM they haven’t gone back
and forth, just an initial rule that seems to have gotten muddier and muddier.
 
The forehand: Registration is substantive: Incontestability
for descriptive terms; nationwide scope for local registered marks.  But the backhand: registration is procedural:
the same infringement standard is applied to registered and unregistered marks;
incontestable marks can be limited to essentially zero rights; Dawn Donut takes back almost all of what
nationwide scope gave.  B&B v. Hargis
is consistent w/ the procedural approach: b/c registration and infringement are
judged by the same standards, preclusion can apply.  Substantive: majority comments and Ginsburg’s
concurrence emphasizes that this will rarely happen. 
 
Substantive: Pro-Football court says cancellation doesn’t
preclude protection.  Procedural: Judge
Moore’s additional views in In re Tam say it does.
 
Substantive: registration of standard character mark gives
broader rights than a word in a particular font/design in PTO proceedings.  But procedural: court say that it doesn’t in
infringement proceedings, if you actually use the mark in a particular
font/design; courts also tend to ignore the registration as design/font and
evaluate words more heavily; they don’t notice that there’s a difference
between a picture and a 3D version of the depicted thing, as in the Mardi Gras
Bead Dog case.  Similar issues arise with
dilution, Exxon v. Fox for Fox’s FX logo.
 
(1)  
Should we choose? [My bias is yes.]
(2)  
If so, which? [I am leaning to arguing
substantive]
 
Lunney: small business often misunderstands importance of
registration—they think state registration/state corporate name register means
something, and it doesn’t.  Is
registration meant to be what you can use
or just an initial cut/fence?  Even if it
doesn’t mean much to courts most disputes never get to courts/never even become
disputes.
 
RT: I think that’s a reason to go substantive—it turns out
big entities aren’t deterred in the same way if they really really want to use
the term. [iPhone, etc.]  Equity suggests
that they should be treated the same way.
 
Q: likewise, cautious companies won’t file even if there’s
just substantial common law usage. That may help account for Beebe/Fromer
findings.
 
Q: What implications on First Amendment/treatment of
commercial speech?
 
RT: Trying to avoid that here, but I have no problem making
wholesale rules about preventing misleading speech.
 
Beebe: disclaimers: how they interact w/registration. Courts
ignore them/compare marks as a whole.
 
RT: substantive approach would provide a basis for changing
that.  Disclaimer = confusing similarity
can’t result from the disclaimed term, just like functional feature.
 
Q: other countries have more substantive approach: what
would that look like?  What about
approach of int’l companies?
 
RT: Int’l companies planning for substantive approach is
another reason that US should consider it if their behavior won’t change.  Other countries have double identity, which
could be good if accompanied by a lot of retrenchment in non-double identity
cases; other countries have robust TM use; many of our differences are not
internal to TM but come from broader traditions around advertising and the
First Amendment.
 
Dinwoodie: if you want substantive approach, should rights
contract over time if use is limited in a particular way?  Also must deal with overlap w/43/44—people will
just plead in the alternative if there’s not a clear doctrine.
 
Melissa Wasserman, University of Illinois College of Law
What Administrative Law Can Teach the Trademark System 
 
Intersection of administrative law & TM—proper standards
of review for TTAB determinations. 
Growing issue.  Guideposts in SCt
cases about deference due to informal-type review.  Fed. Cir. caselaw: decides that the review
should be de novo.  Chevron came out
after that; Fed. Cir. never revisited the issue.  In 1993, Fed. Cir. inexplicably applied
Chevron to TTAB’s legal constructions of an ambiguous statutory provision—no Chevron
step zero analysis at all (were they granted such authority); then proceeded to
ignore that in the future.  What about
Skidmore deference?  If you appeal to the
Fed. Cir. you can’t put new evidence in, so at a minimum there should be
Skidmore deference.  Likewise w/factual
Qs the Fed. Cir. isn’t giving enough deference.
 
Normatively: deference would be desirable.  Comparative institutional analysis: expertise
and capture.  Changes to PTO would be
helpful to improve it.  Not many
structures set up on TM side to bias it to granting TMs.  TM fees are set much more to cover costs; 11%
is from actual registrations.  In
comparison to patent side, TM office understudied for particular
incentives.  It’s all comparative—Fed.
Cir. is pro-IP as well.
 
PTO just makes registration determinations, not validity
determinations. If we give more deference to TTAB on validity, think about how
that would affect TM infringement.
 
Lunney: allowing bottle shape to be registered—PTO acted and
CCPA ultimately accepted.  Single color
registration: Fed. Cir. reversed denial and then Qualitex relied on “PTO accepts them!” even though that was only
because they’d been forced to. 
 
TTAB lacks consumer understanding.
 
A: would like to improve their capacity through creation of
guidelines. 
 
Jeremy Sheff: nervous about institutional analysis in the
abstract. Interactions b/t PTO & Congress, PTO is now lobbying to take away
de novo review before district courts & make exclusive avenue of review of
inter partes review at the Fed. Cir. Which is weird if you think of them as
different bodies w/different institutional interests.  PTO is generally P first and T second; patent
office tends to drive policy on these issues. 
If the prerogatives of a TM administrative agency were exercised by a
patent administrative agency, results might differ.
 
RT: I worry about capture—PTO is trying to get © too (look
at recent best practices in DMCA takedowns run by the PTO) and that would make
a huge difference in amount of industry capture; with the recent project on
whether renewals were actually of TMs in use, no one even considered a stronger
use requirement, which is evidence of being only devoted to people who have
lots of registrations.
 
Charles Colman: TTAB doesn’t worry about long term implications
of granting registrations, especially w/district courts—thinks it’s just a
presumption of validity and won’t be incontestable for 5 years.  TTAB also doesn’t know what to do w/parody.
 
A: she proposes a policy group; not just TTAB judges v.
federal district court judges.
 
Megan Carpenter, Texas A&M University School of Law
NSFW: An Empirical Study of Scandalous Trademarks
 
What’s really happening in practice?  26.72% of office actions discussed context;
remainder did not.  TTAB has held that
dictionaries alone can establish scandalousness.  TM examiners have high quarterly quotas and
they have limited time.  To be
outstanding, need 515-575 “balanced disposals” per quota; goals are that complete
examination should occur from search to notice of allowance/office action w/in
7 calendar days of receipt. EAs are under serious pressure to process
applications quickly; dictionaries are easier than assessing meaning in social
context of the day.
 
Dictionaries were primary source of support for rejection
91% of the time, 70% of the time as the only evidence.  17% used media evidence.  Same pattern in niche (adult) markets.  Also cite applicant’s ads.  Almost always used in refusing
registration.  If it’s an adult market,
then it’s evidence that the scandalous meaning is intended/understood.  If it’s a general market, more likely to be
scandalous.  Catch-22.  FAT COCK beer, even with an image of a plump
rooster, was rejected b/c available to general audience.  Same result w/goods or services: if goods are
scandalous then that’s evidence the mark will be scandalous: MR. HORSE COCK for
adult movies.  Deodorant: MY SHIT DON’T
STINK—because it was on nonscandalous goods, it would be available to everyone.
Examiners often recognize the relevance of context de jure, but abandon that de
facto.
 
In our data, success rate was less than 5%, compared to 44%
for small businesses generally—small businesses were over 97% of applications
in her data.  Low probability of response
= related to lack of representation by attorney.  Applicants don’t respond to office actions
very much—about 20% of the time.  80% =
abandonment.  Applicants who do respond
argue contextual factors.  Top arguments:
alternate meanings of words; marketplace context; actual goods.  Only 2 of 232 were successfully passed to
registration.
 
Where you see both approved and rejected: general trends
exist.  Bitch has a larger number than
whore, slut, and pothead. Examiners say that other registrations don’t matter,
but examiners do consider them informally.

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