RHODE ISLAND. BEER. TRADEMARKS.

Last week’s grand opening of the Tilted Barn Brewery in Exeter got me to thinking.  The craft beer industry is exploding in Rhode Island.  Branding and identification are very important to these companies.  They spend a lot of time coming up with catchy and clever names for their companies and their brews.  But are these companies doing enough to protect their brands?  Probably not.

Trademarks are the most common form of intellectual property we encounter in our everyday lives.  Everywhere we look, on our toothpaste and breakfast cereal in the morning, on the store signs and sides of buildings as we drive to work or school, on television and the Internet, and in the beer and wine and soda we drink, we see hundreds of trademarks a day.  Trademarks influence consumers, help products or services stand out, and create a brand identity for a business

At last count, there are at least 14 breweries and brew-restaurants in operation in Rhode Island, with others rumored to be in the planning stages. Most of these breweries have multiple offerings available to the public.  Yet, according to the records of the U.S. Patent and Trademark Office, there are only 22 registered trademarks or pending applications for beer owned by 10 companies in Rhode Island.  Eleven (11) of these are owned by either Narragansett or Foolproof.  This leaves 11 registrations owned by 8 other businesses.  Let’s take a quick look.

NARRAGANSETT

Narragansett’s repurchase by local investors in the 1990’s heralded a new era of brewing in Rhode Island.   Narragansett has registered 6 of its marks, some of which have been in use since the original Narragansett Brewery days, and has one pending application:

• MADE ON HONOR, SOLD ON MERIT
• OFFICIAL BEER OF THE CLAM
• LOVECRAFT
• HI-NEIGHBOR!
• ‘GANSETT
• 

FOOLPROOF

Foolproof seems to be taking some active steps to protect itself.  Foolproof has 4 registrations or pending applications.  The company has registered FOOLPROOF, the name of the company, and its jester crown logo.  

They have followed up with registrations for the mainstay product “RAINCLOUD” and for a newer product “LA FERME URBAINE (LFU).”  But the company let pending applications for its BACKYAHD and BARSTOOL brands lapse.  What’s up with that?

OTHERS

Other RI brewers who have been using the registration system to protect their trademark rights include:

Farmer Willie
	GINGER WITH SOUL
Proclamation Ale	PROCLAMATION ALE
Providence Brewing Company	PROVIDENCE BREWING COMPANY
	THE GREAT PROVIDENCE BREWING COMPANY
Brutopia Brewery	BRUTOPIA BREWERY
Grey Sail Brewing Company	GREY SAIL
Trinity Beer Company
Newport Harbor Corp.	CASTLE HILL WINDWARD WEISS
J.H. Restaurants

Clearly, the breweries are not taking advantage of the opportunities the legal system provides to protect the marks and company names against others who adopt confusingly similar names or brands.

One reason may be the cost.  A federal application can cost $500- 1000 or more if the application encounters problems.  Many of these businesses are bootstrapping their way off the ground with sales of product and merchandise items funding the next batches.  There is no spare cash for trademark registrations.  But what the businesses are not taking into account is that the cost of trademark registration is modest when compared to the costs of advertising promotion and marketing over the years.  

Aside from the cost, there are sometimes other reasons why companies do not apply to register their trademarks:

• The product or brand is seasonal, and does not have a long enough shelf life to be worth protecting.
• The mark is too descriptive, or refers to a geographic place (OCEAN STATE or PROVIDENCE) that is difficult to protect.  But note that these marks can be registered in many cases.
• The mark is similar to another mark that is already registered, and the company does not want to call attention to itself by filing an application

It is important to register trademarks as soon as possible.  Later users may be able to register the mark, and keep the registration.  The modest cost of obtaining a U.S. registration is far, far less than the amounts a business would spend litigating over the rights later.

RI TrademarkTracker™ --- 2013 RI Trademark Filings Down 14% Over 2012 Filings

Applicants with Rhode Island addresses filed 172 applications to register trademarks with the U.S. Patent and Trademark Office (PTO) during the fourth quarter of 2013. This represents a 17% decrease over the 208 trademark applications filed by Rhode Island owners during the fourth quarter of 2012, and a 27% decrease over the 235 trademark applications filed for the fourth quarter of 2011.

For the year, Rhode Island applicants filed 908 applications with the PTO. This represents a 14% decrease over the 1053 Rhode Island trademark applications filed in 2012, and a 19% decrease over the 1127 trademark applications filed by Rhode Islanders in 2011.

Nationally, the slight upward trend in filings continues. A total of 73,998 trademark applications were filed with the PTO in the fourth quarter of 2013, representing a 0.6 % increase over the 73,540 trademark applications filed in the fourth quarter of 2012. A total of 319,002 applications were filed with the PTO in 2013, representing a 1.2 % increase over the 315,375 applications filed during 2012.

The most likely explanation for the downward trend in filings in Rhode Island remains the sluggish economy in Rhode Island.  Companies are watching budgets carefully and only filing where necessary to protect their major brands. Nationally, the economy is picking up, but the trend has not really been felt here yet.

The top five Rhode Island filers during October, November and December of 2013 are 3 consumer product companies, one financial services company and one educational institution.  RBS Citizens Financial Group  filed the largest number of applications among Rhode Island applicants with 27 filings.  Providence College was next with 15 applications. CVS Pharmacy, Inc. was third with 10 applications, followed by Hasbro (8 filings) and Alex and Ani  (7 filings).

For the year, the top Rhode Island filer was Hasbro with 61 applications.  RBS Citizens Financial Group was next with 39 applications.  CVS Pharmacy was third with 28 applications.  Alex & Ani, The Big East Conference (now known as The American Athletic Conference), and Wizards of the Coast (a Hasbro subsidiary) each filed 27 applications.

Data supplied by PTO.

Related Posts:

RI Trademark Filings Down 12.9% Through 3rd Quarter 2013 (October 18, 2013)

RI Trademark Filings Decrease 9% in First Half of 2013 (August 15, 2013)

Is it Software? Is it a Service? It Matters for Purposes of Trademark Registration.

NetJets Inc. v. IntelliJet Group, LLC, No. 2:12-CV-0059 (S.D. Ohio Dec. 19, 2013)

This recent decision highlights the importance of spending some time thinking about whether a mark used in connection with software is being used on a product (software), is being used for “software as a service,” or is merely incidental to the underlying service.

In NetJets, the federal district court cancelled an incontestable, 18 year old registration for INTELLIJET for “computer software for managing aircraft leasing and sales” as void ab initio and as abandoned, even though:

·                 NetJets had used the mark as the name of its internal software since 1995;

·                 NetJets had spent over $20 million to upgrade its software;

·                 NetJets launched a “portal” in 2013 where clients could log in and see the INTELLIJET name displayed on the screen, but the mark was not displayed to non-customers who access the NetJets website;

·                 NetJets included discussion of the IntelliJet’s software functionality in newsletters to owners and in literature provided to passengers on its planes;

·                 NetJets brochures have mentioned the IntelliJets software;

·                 Several magazine articles about NetJets have mentioned the IntelliJets software;

·                 NetJets demonstrates the software for customers and potential customers.

The court determined that NetJets did not have enforceable rights in the INTELLIJET mark because it did not use the mark in commerce as the term “use in commerce” is defined in the federal Lanham Act.  Section 45 of the federal Lanham Act, 15 U.S.C. § 1127, defines “use in commerce,” in relevant part: 

The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.  For purposes of this Act, a mark shall be deemed to be in use in commerce – (1) on goods when – (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto; or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale; and (B) the goods are sold or transported in commerce ...

Key factors in the court’s determination that the use of the INTELLIJET mark on NetJets’ software was not a “use in commerce” were:

·                 NetJets is not in the business of selling software;

·                 The IntelliJet software is simply the conduit through which NetJets provides a high level of service to its customers;

·                 NetJets does not promote the software as a separate product, but only as part and parcel of the services NetJets provides;

·                 NetJets does not sell the IntelliJet software separately from the services that NetJets provides.

As a result, the court concluded that NetJets’ use of the INTELLIJET mark is not a “use in commerce” on the software, and cancelled the registration.

As a result of the NetJets decision, and similar decisions in other courts, a trademark owner that uses software in its business should take care in determining whether to file a trademark application at all to cover the software, and what goods or services are covered in any trademark application that is filed.  To be safe, especially in close situations, the trademark owner may want to consider filing separate applications to register the mark for the software and for the underlying services.  This strategy would still provide for registration and protection of the mark for the services in the event that the registration of the mark for software is challenged or cancelled.

RI TrademarkTracker™ --- RI Trademark Filings Down 12.9% Through 3rd Quarter 2013

Applicants with Rhode Island addresses filed 230 applications to register trademarks with the U.S. Patent and Trademark Office (PTO) during the third quarter of 2013.  This represents a 21% decrease over the 291 trademark applications filed by Rhode Island owners during the third quarter of 2012, and exactly the same number as the 230 trademark applications filed for the third quarter of 2011.

Through September 30, Rhode Island applicants have filed 737 applications with the PTO in 2013.  This represents a 12.9% decrease over the 846 Rhode Island trademark applications filed for the first 9 months of 2012, and a 17.3 % decrease over the 891 trademark applications filed by Rhode Islanders for the first nine months of 2011.

Nationally, there is a slight upward trend in filings.  A total of 78,945 trademark applications were filed with the PTO in the third quarter of 2013, representing a 1% increase over the 78,176 trademark applications filed in the third quarter of 2012.  A total of 242,085 applications have been filed with the PTO in 2013 through September 30, representing a .2 % increase over the 241,628 applications filed during the first 9 months of 2012. 

The most likely explanation for the downward trend in filings remains the sluggish economy in Rhode Island.  During economic downturns, there are fewer new start up companies to file new applications, and mature companies are watching budgets carefully and only filing where necessary to protect their major brands.  Nationally, the economy is picking up, but the trend has not really been felt here yet.

The top five RI filers during July, August and September of 2013 are 4 consumer product companies and one financial services company.  Hasbro filed the largest number of applications among Rhode Island applicants with 20 filings.  Alex and Ani was next with 17 applications.  Hasbro subsidiary Wizards of the Coast was third with 9 filings, followed by RBS Citizens Financial Group (8 filings) and CVS Pharmacy, Inc. (8 filings).

Data supplied by PTO.

Related Posts:

RI Trademark Filings Decrease 9% in First Half of 2013 (8/15/2013)

Register Your Trademarks Early ... Or Else!

Dorpan, S.L. v. Hotel Melia, Inc., No. 12-1679 (1st Cir., Aug. 28, 2013)

A recent case from the First Circuit Court of Appeals, the federal court whose rulings  cover Maine, New Hampshire, Massachusetts, Rhode Island and Puerto Rico, demonstrates how important it is for business owners to register their trademarks as early as possible, and the consequences of not doing so.

The case involves a dispute between two hotels over the right to use the mark “Meliá” in Puerto Rico.   Hotel Meliá, Inc. (HMI) has operated the Hotel Meliá in Ponce, Puerto Rico, at the same location without interruption since 1895.  The hotel has achieved some reknown, and has attracted many famous guests over the years, including President Theodore Roosevelt.  Although HMI claims that the Hotel Meliá is the oldest continuously operating hotel in Puerto Rico, HMI never registered its name as a trademark with either the Puerto Rico Department of State, or the U.S. Patent and Trademark Office.

Sol Meliá, a public Spanish company, owns and operates the largest hotel chain in Spain and the third largest in Europe, as well as several hotels in North America using variations of the Meliá mark.  Since the late 1990’s, Sol Meliá and its affiliated company Dorpan, S.L. (collectively, Dorpan), have registered 11 variations of trademarks containing Meliá with the U.S. Patent and Trademark Office for their hotel and resort services.  In 2007, Sol Meliá renovated and reopened a luxury beach resort in Coco Beach, Puerto Rico, called “Gran Meliá,” about 80 mles from Ponce.  HMI predictably objected, negotiations between the two companies broke down, and the dispute moved to court in 2008.  The district court granted summary judgment for Dorpan, finding that “these two marks can co-exist within Puerto Rico without causing substantial confusion to the reasonable consumer.”  HMI appealed.

On appeal, the First Circuit noted that, in the United States, trademark rights derive from use of the mark, not from registration, and analyzed the contours of Dorpan’s trademark rights under federal law and HMI’s trademark rights under common law.  Dorpan’s trademark registrations had become “incontestable” under Section 15 of the Lanham Act, which creates a presumption that the holder of the mark is entitled to exclusive use of the mark throughout the United States if certain conditions are met.  In this case, however, HMI raised a so-called “Section 15 defense.”  Section 15 explicitly limits the incontestable right of a federal trademark holder to the extent, if any, to which use of a mark infringes a valid common law or state trademark right acquired by continuous use of a mark from a date prior to the date of Dorpan’s registration.  As a result, Dorpan’s rights under federal law are limited to the extent of any rights HMI acquired under Puerto Rico common law before Dorpan’s federal registration issued.

In analyzing HMI’s rights under common law, the First Circuit correctly noted that HMI, as the senior user, does not automatically acquire exclusive right to use the mark throughout Puerto Rico.  Rather, HMI is entitled to exclusive use of the mark in the area where it “currently do[es] business” using the mark.  The First Circuit equated this area to the “one in which the use of a similar mark would create a likelihood of confusion.”  As a result, the First Circuit treated the inquiry into the scope of HMI’s pre-existing common law trademark rights and the likelihood of confusion analysis between HMI’s and Dorpan’s marks as one and the same.

The First Circuit next undertook a traditional multi-factor likelihood of confusion analysis, and, with one exception, reached the same conclusion as the district court on the factors.  The only factor where the First Circuit and the district court reached a different conclusion was on the strength of the marks.  Here, the First Circuit found errors in the district court’s analysis.  The court felt there were genuine issues of material fact on the relative strength of the two competing marks.  The court noted that a reasonable jury could find that Dorpan would be able to use its greater financial strength to flood the market with advertising, thereby causing HMI to lose control over its brand and reputation.  The court also noted that, on the other hand, a reasonable jury could conclude that “Hotel Meliá” was so strongly associated with historic downtown Ponce that consumers are unlikely to associate it with a hotel in Coco Beach.  As a result, the court vacated the summary judgment ruling, and remanded the case for further factual determinations on the issue of likelihood of confusion.

The case is instructive for several reasons:

·         It serves as a reminder that trademark owners should file trademark applications as early as possible.  If HMI had filed its applications prior to the time Dorpan filed its U.S. applications in the 1990’s, Dorpan probably would not have been able to obtain U.S. registrations, and the position of the litigation would have been much different.  The modest cost of obtaining a U.S. registration is far, far less than the amounts HMI must have spent litigating this issue in the federal courts.

·         By not registering its trademarks before Dorpan, and by not petitioning to cancel Dorpan’s registrations before they became “incontestable,” HMI’s use of its MELIÁ  mark is limited to use where it “did business” prior to the date of Dorpan’s Certificate of Registration.   The First Circuit noted that, for a hotel, this area is much larger than the city in which it operates.  Unlike other service providers, hotels seek to attract customers physically distant from the point of service, so HMI’s rights even may extend outside of Puerto Rico.  But for most service providers, the area in which it “does business” is going to be limited. 

·         The decision also reminds us that the first user of a trademark can never be stopped from using its mark, even by a junior user who obtains an incontestable U.S. registration, at least to the extent the mark was in use on the date that the junior user obtains its U.S. Certificate of Registration.

·         The scope of the senior user’s common law rights are more or less co-extensive with the area in which there is likelihood of confusion. In other words, if there is likelihood of confusion in an area, then the senior user has trademark rights there.  In an actual dispute, survey evidence would probably be required to demonstrate likelihood of confusion.

 

RI Trademark Filings Decrease 9% in First Half of 2013

Applicants with Rhode Island addresses filed 505 applications to register trademarks with the U.S. Patent and Trademark Office (PTO) during the first half of 2013.  This represents a 9% decrease over the 553 trademark applications filed during the first 6 months of 2012.

The top five RI filers during the first half of 2013 are all consumer product or entertainment organizations, which is not surprising.  Hasbro led the way with 33 filings.  The Big East Conference was next with 27 filings, in support of its search for a new name and identity for the members who did not split off and retain the Big East name.  Hasbro subsidiary Wizards of the Coast was third with 18 filings, followed by CVS Pharmacy, Inc. (10 filings) and DécorCraft, Inc., the Providence-based consumer product design and distribution company (8 filings).

Data supplied by the PTO.

Trademarks Are Everywhere in Dallas!

As in every city, trademarks are everywhere in Dallas.  Because I am here attending the Annual Meeting of the International Trademark Association,  it is only fitting that I show a few that I spotted on a brief walk in the sunshine:

"Intellectual Property Protection for Small Businesses" Presentation

On Tuesday, I had the pleasure of co-presenting a workshop at the "Beacon for Small Business Expo," sponsored by Beacon Mutual for its policyholders and the general public.  My presentation was titled "Intellectual Property Protection for Small Businesses."  Here is a copy of the slide deck.

My co-presenter was Ted Howell,  of Partridge, Snow & Hahn.  Ted spoke about strategies for protecting corporate assets in the broader sense, including confidential business information and relationships with customers and vendors.

Saving Costs in the U.S. Trademark Registration Process

Because of the complexities of the U.S. trademark registration system, many trademark owners from other countries, and their counsel, are reluctant to file national or international applications in the United States. One of the reasons often given is the higher cost of obtaining trademark protection in the United States due to the statutory requirements and the formalities that must be observed. It is frequently overlooked, however, that a U.S. trademark registration covers a largely monolingual (English), highly sophisticated market of over 310 million people.

There are opportunities for international applicants and their counsel to save money and time in the United States registration process. Here is a link to an article I have written, that was recently published by the World Patent and Trademark News, and distributed to over 9500 attendees at the International Trademark Association annual meeting in Washington, D.C.  Comments, especially from outside the United States, are especially welcome, as I am thinking into turning this into a longer, more detailed work.

New Trademark Case Filed in D RI --- Can Erwin Pearl Stop JC Penney's Internet Keyword Purchases?

Erwin Pearl, Inc. v. J.C. Penney Corp., No. 12-207-S (D.R.I. filed March 20, 2012)

From the complaint, this case appears to be one where Erwin Pearl is complaining about J.C. Penney’s purchase from Google of “Erwin Pearl” as a keyword for a “sponsored link,” when J.C. Penney did not sell that brand of jewelry  This practice caused J.C. Penney’s advertisements to appear at the beginning of the search results page whenever a computer user entered “Erwin Pearl” as a search term.

Even though the courts continue to struggle with how to characterize “keyword” cases, it may be difficult for Erwin Pearl to prevail unless it shows that JC Penney used its trademarks in the text of the ads, or stated that it sold Erwin Pearl branded jewelry when it did not.

According to the Complaint, in 2011 Google “suspended” J.C. Penney’s ability to appear prominently in search results for a period of 90 days.  J.C. Penney allegedly used methods of improving its rankings in search results that Google felt were unfair.  As a result, J.C. Penney turned to purchasing keywords to promote “Sponsored Links.”  The Complaint alleges that in October, November, and December 2011 (Erwin Pearl’s most important selling season), whenever a computer user entered a search term of “Erwin Pearl” or “Erwin Pearl Jewelry”: into Google’s search engine, J.C. Penney’s advertisement showed up in the number one spot on the search results page as a “Sponsored Link.”  The Complaint further alleges that the advertisement referred to prices of “40-60% off” select Erwin Pearl jewelry, and misleadingly suggested that Erwin Pearl’s jewelry was available for purchase at J.C. Penney at prices far less than at the retails stores of Erwin Pearl or its distributors. Unfortunately, a copy of the advertisement was not attached to the Complaint.

Erwin Pearl’s complaint contains claims that J.C. Penney’s actions constitute federal and common law trademark infringement, federal and common law unfair competition, federal and state trademark dilution, and unjust enrichment..  The Complaint seeks an accounting, monetary relief and attorneys’ fees.

The case has been assigned to Judge Smith.

Analysis

The courts have struggled over the years with keyword cases since Google first introduced the practice.  Initially, some courts held that the purchase of a competitor’s trademarks as a keyword was not actionable under trademark law  because the purchase and use of the keyword was not a “use in commerce.”  Since the Second Circuit’s Rescuecom decision, however, [link] most defendants  concede that the use is a use in commerce.  For example, in Hearts on Fire Co., LLC v. Blue Nile, Inc., 603 F. Supp. 2d 274 (D. Mass. 2009), the Court found that “there is little question that the purchase of a trademarked keyword to trigger sponsored links constitutes a “use” within the meaning of the Lanham Act.” 

More recently, courts and defendants have turned to arguments that the purchase of the keyword and its use as a “trigger” for sponsored ads is not an infringement because it creates no likelihood of confusion.  In the Hearts on Fire decision, Judge Gertner examined the traditional likelihood of confusion factors, but found that “likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.”  She identified the following non-exhaustive list of “relevant elements” to showing a likelihood of confusion in the Internet context:  (1) the overall mechanics of web-browsing and Internet navigation, in which a consumer can easily reverse course; (2) the mechanics of the specific consumer search at issue; (3) the content of the search results webpage that was displayed, including the content of the sponsored link itself; (4) downstream content on the defendant’s linked website likely to compound any confusion; (5) the web-savvy and sophistication of the Plaintiff’s potential customers; (6) the specific context of a consumer who has deliberately searched for trademarks [products] only to find a sponsored link to a retailer of that product, and, in light of the foregoing factors, (7) the duration of any resulting confusion. 

The Erwin Pearl Complaint does not attach a copy of the advertisements in question, so it is difficult to undertake an analysis of the strength of Erwin Pearl’s claims.  Plaintiffs have not had much luck in many recent cases, however, as the courts have continued to find that there has been no likelihood of confusion when a potential customer has been momentarily diverted to a competitor’s website but the competitor has not actually used the plaintiff’s trademark publicly, other than to trigger the sponsored advertisement.   Erwin Pearl may have a stronger case if JC Penney used Erwin Pearl's trademarks in the text of the ad, or stated that they sold Erwin Pearl branded jewelry when they did not.

If the case results in a substantive decision, it may be the first in Rhode Island dealing with whether the purchase of keywords by competitor constitutes trademark infringement.

Great White Band Fights Over Name

Russell v. Kendall, No. CV12-02477 (C.D. Cal. complaint filed March 22, 2012).

The Great White band has had its share of notoriety and legal problems over the past decade, largely due to poor decision-making.  According to the Courtroom News Service it looks like another bad decision has led to another legal problem.  This time, the band is fighting over whether its name is owned by the founder and lead singer Jack Russell, or by the members who continued the band when Russell had to leave for a while due to medical issues.

It seems the trouble started in August 2010, when Russell was hospitalized and underwent surgery for a perforated bowel.  While he recuperated, other singers filled in for him during the band's live performances.  Russell claims everyone knew his absence was temporary, and that he would resume singing with the band when he had recovered.  But when he announced he was ready to return in December 2011, the band imposed a series of "unfair requirements" for his return (including abstaining from taking medications), and gave interviews claiming that Russell was also engaging in substance abuse, and that his addiction troubles were the reason for their not letting him return.  The band filed to register the trademark Great White with the Patent and Trademark Office.  After Russell formed a new band called "Jack Russell's Great White," Russell's' complaint claims that the band threatened litigation against any location that booked Russell's band.  The band is also planning to release a new Great White album later this year.

The Complaint alleges federal law claims for  trademark infringement, trademark dilution and unfair competition and state law claims for trademark infringement, unfair competition, injury to business reputation, and interference with prospective economic advantage.  Russell seeks injunctive relief and damages in excess of $500,000.  The defendants have not filed answers or responsive motions yet.

In similar situations we counsel clients to decide up front who is going to own the name, and what happens in various scenarios when band members leave, the band dissolves, etc.  Whether the entity is going to own the name or one of its members, the decision needs to be made and documented.  Then there aren't any disputes in the future over ownership of the name.  Apparently this advice wasn't given to or followed by Great White.  And now it is going to cost a lot in legal fees to sort the matter out.

New Trademark Infringement Case Filed in DRI --- Selling Good Stuff Cheap Can Get You in Trouble

Swarovski Aktiengesellschaft v. Building #19, Inc., No. 11-627 ML (D.R.I. filed Dec.14. 2011)

A new trademark infringement case was filed in the District of Rhode Island in December.  The case involves the sale of genuine Swarovski crystal products by Building #19, Inc., which obtained the products from a salvage company after the warehouse in which the products had been stored was damaged in a tornado.  For those of our readers outside New England, Building #19 is an iconic chain of discount stores known for selling items it obtains at fire sales, liquidations, bankruptcies and other unfortunate events.  The chain’s motto is “GOOD STUFF CHEAP,” which is all you really need to know. 

According to Swarovski’s Complaint, Building #19 acquired over $1.5 million of Swarovski crystal products from an insurance salvage company.  At least some of the crystal products came from a warehouse that had been damaged in a tornado, but Swarovski claims it was not a Swarovski warehouse.  As can be expected in a disaster like this, the packaging for some of the products was damaged.

In  December, Building #19 advertised a “One Day Event” for “SWAROVSKI CRYSTAL” in the Providence Journal and on its website, and allegedly used the Swarovski name liberally in website ads and in in-store materials promoting the sale.  The next weekend, Building #19 advertised a similar sale at its Weymouth, Massachusetts store.  Swarovski took offense to the use of its name and trademark on the web ads, on Building #19’s Facebook page and on the in-store promotional materials.  Apparently, Swarovski feels that the ads made it look like Swarovski sponsored or otherwise approved of the sales.

Swarovski’s complaint alleges that Building #19’s advertising constitutes federal and common law trademark infringement, trademark dilution, federal and state unfair competition, deceptive trade practices under R.I.G.L. Section 6.13.1-2, and injury to business reputation under R.I.G.L. section 6-2-12.  The complaint seeks injunctive relief, damages, treble damages for willful infringement, punitive damages, and an order requiring Building #19 to produce corrective advertising.

The case has been assigned to Judge Lisi.

New Trademark Infringement Case Filed in DRI --- FM Global Seeks to Protect its FM and Diamond Certification Mark

FM Approvals, LLC v. Fullco Industries, Inc., No. 11-cv-00327-L (D.R.I. filed July 28, 2011).

A new trademark complaint was filed in the District of Rhode Island on July 28th. In its Complaint, FM Approvals LLC, a subsidiary of FM Global, claims federal and state trademark rights in a four-sided diamond containing the letters "FM." for its third party testing and product certification services.  FM's mark is a certification mark, like the Good Housekeeping Seal of Approval, and is registered with the U.S. Patent and Trademark Office.  FM Approvals tests and certifies numerous products, including roofing and building material products, classroom materials, and electrical and fire protection equipment.    According to the Complaint, FM Approvals's certification process assures customers that a product has been tested by an objective third party and conforms to rigorous standards. 

FM Approvals claims that Fullco is selling industrial products such as bushings and bearings, fasteners and screws that are of the type used in building assemblies certified by FM Approvals, and has been casting a design consisting of an "F" inside a four sided diamond onto its products. Fullco's mark also has been registered with the U.S. Patent and Trademark Office. 

FM Approvals seeks damages on counts of federal trademark infringement and federal and state law unfair competition, and seeks cancellation of Fullco's federal trademark registration for its "F" and four sided diamond mark.. The case has been assigned to Judge Lisi.

Angry Birds Take On Counterfeit Pigs

Rovio Mobile Oy v. Ideal Toys Direct Inc., No. 11-CIV-4773 (Complaint Filed July 11, 2011).

We often discuss with clients the importance of multiple layers of intellectual property protection.  Take, for example, a video game.  The title can be protected under trademark law, and the trademark can be registered with the U.S. Patent and Trademark Office and its counterparts throughout the word.  If there are characters that are important, the names and images can be similarly protected under trademark law, and the visual appearances of the characters are protected under copyright law.  U.S. copyright law also provides additional benefits in litigation if the copyright is registered before any infringement or unlawful copying takes place.  Original music and videos can also be protected under copyright law. 

Multiple layers of protection provide advantages and options when it comes to enforcing the trademark rights.  For example, if a character is protected under both trademark and copyright law, a copyright claim might be more successful in litigation.  To prove infringement, one just has to demonstrate that the protected work and the infringing work are "substantially similar."  No intent to copy, or customer confusion need to be shown.  If the copyright is registered before the infringement takes place, one does not even have to demonstrate damages.  The federal Copyright Act permits the court to award "statutory damages" in an amount of $750 to $30,000 per infringed work (or up to $150,000 per work if the court determines the copying is willful).  Unlike the trademark law, which permits the court to award attorneys fees to the prevailing party only in "exceptional" cases, the Copyright Act provides that a court may award attorneys fees to the "prevailing party". So it is often preferable and more efficient to pursue a copyright claim in the right circumstances.

A complaint filed earlier this week by the owners of the intellectual property rights in the "Angry Birds" video game provides a good illustration of this. Rovio Mobile Oy, the developer of the Angry Birds video game, owns a U.S. trademark registration for its ANGRY BIRDS trademark.  Rovio also owns several U.S. copyright registrations covering the pig, bird and eagle characters.  Rovio's complaint claims that Ideal Toys's "Roly-Poly Birds" stuffed toys infringe Rovio's copyrights, and constitutes passing off and unfair competition under Section 43 (a) of the Lanham Act.  In addition to injunctive relief, the complaint seeks statutory damages, destruction of the infringing products, and attorneys' fees under the Copyright Act and an award of the defendants' profits and attorneys' fees under the Lanham Act.

The Complaint appears to have Ideal Toys on the run.  Time will tell whether Ideal Toys has any valid defenses.

Will the Real DJ Paulie/DJ Pauly D, Please Stand Up, Please Stand Up?

Lis v. Delvecchio, No. 3:11-CV-01057-AWT (D. Conn. filed June 30, 2011).

Mr. Paul Lis, a Connecticut man who claims to have used the name “DJ PAULIE” since 1973 as a disc jockey, has filed a complaint for trademark infringement in federal court in Connecticut against Rhode Island resident Paul DelVecchio Jr, more popularly known as “DJ Pauly D” on the MTV Network show “Jersey Shore.” The complaint also names 495 Productions, the producer of the television show, MTV Networks, the Palms Casino Resort in Las Vegas, Room 960, a nightclub in Hartford, Baskin-Robbins and Hearst Publications, as additional defendants.
The complaint alleges claims for federal trademark infringement, federal trademark dilution, federal unfair competition, state unfair competition, and violation of the Connecticut Unfair Trade Practices Act. No specific dollar amount for damages is specified in the complaint, which also seeks injunctive relief, punitive damages and attorneys fees.

Obviously, more facts will need to be developed before the claims can be properly analyzed. But at the outset, the claims for federal trademark dilution, and for injunctive relief, may be in trouble.

Federal law allows the owner of a "famous mark" to enjoin a person from using "a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark.” To succeed on his federal dilution claim, then, Mr. Lis has the burden of proof to show: (1) that he owns a “famous” mark; (2) that the defendants are making use of the mark in commerce; (3) that Mr. Delvecchio adopted his mark after Mr. Lis’s mark became famous; and (4) that Mr. Delvecchio’s mark is likely to cause dilution by blurring or dilution by tarnishment of Mr. Lis’s famous mark.

Here, Mr. Lis’s complaint alleges dilution by tarnishment by claiming that the “Jersey Shore” television show follows “a group of young adults pursuing a debauched lifestyle suggestive of loose morals, violence, intoxication and liberal profanity – the exact opposite” of the good reputation Mr. Lis purportedly has spent decades building up. The problem is that Mr. Lis is likely to have trouble showing that he owns a “famous” mark. Under federal law, a mark is famous if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner. Can Mr. Lis really prove that his “DJ PAULIE” brand is “widely recognized by the general consuming public in the United States.” If not, then his dilution claim is likely to fail.

Mr. Lis also may face a problem in seeking injunctive relief, at least before a trial. The complaint alleges that Mr. Lis’s attorneys first contacted Viacom about the issue in early 2010. Most courts require a showing of “likelihood of success on the merits” and of “irreparable harm” in order to obtain preliminary injunctive relief before the trial. Leaving aside the case on the merits, it will be difficult for Mr. Lis to argue he has been “irreparably harmed” and requires relief prior to trial where he and his attorneys have waited nearly 18 months to pursue their claims in court.

Most lawsuits of this nature settle at some point, and this one probably will settle, also. If not, look for a trial in a couple of years over who is the “real DJ Paulie (Pauly) D.”

Let the Merchandising Begin!

Minutes after the Boston Bruins won Game 7 of the Stanley Cup Finals Wednesday night, an e-mail arrived in my in-box from Modell's, offering the "official" locker room Championship T-shirts and caps.

Studies have shown that merchandising revenues for professional sports teams are greatly impacted by winning. The Bruins can expect a big jump in merchandise sales over the next year (especially given how their playoff run ended suddenly and unfortunately last year).

I have a pretty good idea what I am getting for Father's Day . . . and Christmas.

New Trademark Infringement Case Filed in DRI --- Can Thrifty Stop the Use of a Blue Shuttlebus by a Competitor?

Thrifty, Inc. v. KDSB Rentals, Inc. d/b/a Payless Car Rental, No. 11-cv-235M (D.R.I. filed June 8, 2011).

A new trademark complaint was filed in the District of Rhode Island last week. In its Complaint, Thrifty Car Rental claims federal and state trademark rights in the color light blue (Pantone No. 300) for vehicle rental services and for its rental buildings. Thrifty claims that Payless is operating a light blue courtesy shuttle bus out of its Warwick rental location. Apparently, Thrifty has been trying since October to get Payless to repaint its shuttle bus, without success. Thrifty seeks injunctive relief and damages on counts of federal trademark infringement, federal dilution and federal and state law unfair competition. The case has been assigned to Judge McConnell.