LIKELIHOOD OF CONFUSION®

First, December’s 15, 2009′s story:

Remember the Bratz dolls case, and the phenomenal legal fees application that followed?

It’s back!   The Ninth Circuit Court of Appeals stayed the trial judge’s order basically liquidating the Bratz.  Here’s what the WSJ Law Blog reported last week:

The Ninth Circuit on Wednesday ruled that Bratz maker MGA Entertainment can continue selling its dolls, despite the stinging defeat it suffered last year a jury when a Riverside, Calif., jury awarded Mattel, Inc. $100 million in damages in a closely followed copyright-infringement lawsuit. . . .

The judges on the appellate panel, Alex Kozinski, Kim Wardlaw and Stephen Trott, questioned whether the trial judge went too far by awarding MGA’s Bratz doll franchise to Mattel and wondered why he didn’t instead award Mattel a royalty or ownership stake in the company.

I never played with dolls due to a household manliness mandate, and I’m already uncomfortable blogging about this for the fourth time, so let’s just note it and go back to what I was doing with this here mitre box and also I’m going to do some re-grouting on some tiles somewhere before bed.  Which I sleep in wearing a rustic burnoose emblazoned with my varsity letter. With the windows open.

Bratz-tip to Jaded Topaz!

UPDATE:  In response to certain inquiries, a clarification:  No, I did not actually earn a varsity letter in high school or otherwise.   But the one on my night-burnoose is “mine.”  It’s a kind of … trophy I took from the still-quivering hulk of the middle-linebacker I brutally beat up and left for dead in a Chicago alley, okay?

Now, today’s update:

No surprise here in light of the earlier ruling, but stunning nonetheless:  The Ninth Circuit kayos the award!  Choice quote — Kozinski, of course — via Bloomberg:

Even assuming that MGA took some ideas wrongfully, it added tremendous value by turning the ideas into products and, eventually, a popular and highly profitable brand.  It is not equitable to transfer this billion-dollar brand, the value of which is overwhelmingly the result of MGA’s legitimate efforts, because it may have started with two misappropriated names.

That’s going to ruin a lot of Big IP summers on Cape Cod this weekend.

The opinion’s here.

Originally posted 2005-06-27 14:12:03. Republished by Blog Post Promoter

As predicted in this space, the Supreme Court has ruled against Grokster, according to the AP. Says Justice Souter, “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

UPDATE: SCOTUS Blog puts it very nicely:

Given some ingenuity, both in software design and in marketing tactics, it is conceivable that digital file-sharing technology — available free — may yet be quite legal. …

The technology alone, Souter made clear, does not by itself run afoul of the copyright laws. …

What counts most of all, it is apparent, is that a software developer promote the use of the product explicitly to stimulate computer users to use the product solely or at least primarily as a copyright- infringing mechanism. The Court, while not finally deciding that there was contributory infringement by the software developers in this case, found what it called “unmistakable” proof that an “unlawful objective” did exist.

(Scott Ott also hit on the irony of today’s decisions in light of last week’s Baathist takings decision.)

UPDATE: Information Wants to Be Stupid Dept.: This item on Boing Boing says the Supreme Court has invented a “new thought crime” by focusing on intent in deciding if a legal wrong has taken place — a concept that is actually several millenia old. This is the kind of silliness that gives skulls full of mush a bad name.

UPDATE: Oh, the wailing! Oh, the gnashing of teef! You know the great irony here? In reasoned discussions of this case as it percolated below last year, many peer-to-peer advocates acknowledged that the lower-court opinions in Grokster were written too broadly, were problematic. To read the reaction on the Net today, however, you’d think the Supreme Court had overturned Brown v. Board of Education — which is a huge mistake for advocates of P2P. If the usual suspects would consider the political – judicial lesson of the Roe v. Wade subculture and temper their panic, acknowledge that the Grokster decision (like Roe) opinion was flawed, but fight for a fair rule that supports the view of the world they favor … well, they just might find that moderation has its virtues.

Originally posted 2009-11-12 13:32:16. Republished by Blog Post Promoter

Some fakes are worse than others

Counterfeit Chic happens upon a new defense to trademark counterfeiting:  ”Counterfeiting?  You call this counterfeiting?!”

We’ve all seen imitation goods so poorly rendered that they wouldnt fool a myopic Martian on a dark night.  And there must be a market out there beyond mere video fiction, or LV look-alikes wouldnt keep showing up on shady street corners and in dark corners of the internet, next to the “Prado” and “Channel” bags.  But why would any self-respecting counterfeiter turn out such bad fakes?

It turns out there’s method to the madness.  In theory, these inept imitations could allow a manufacturer/importer/seller to avoid liability under the rationale that there’s no likelihood of consumer confusion.  In practice, however, courts dont like apparent bad actors.

Or have all that much interest in things like likelihood of consumer confusion, actually.  In practice.

On the other hand, as much as I rail against that judicial trend around here, when it comes to trademark counterfeiting I don’t have a big problem with it; it’s nearly a per se, strict liability tort, and that’s what it is.  I certainly wouldn’t want to live in a world where sloppy work is anything other than its own reward, after all.

Originally posted 2005-01-24 13:10:00. Republished by Blog Post Promoter

Speaking of my post from yesterday, below — wow. Survey: Users Confuse Search Results, Ads. Hard to see how this doesn’t have some effect on any settlement discussions in the Google / Geico case.

Of course, this survey has not met, and presumably would not meet. the Daubert standard for admissibility in federal court. But it does require me to change my post below to read, “whether a search engine is or is not causing likelihood of confusion under the Lanham Act by delivering results utilizing key word searches that happen to be someone’s trademark is essentially a metaphysical one — which is to say that judges are making policy decisions, which Congress is supposed to do.”

Yes. And the reason I believe it remains a question, or should be, is because I am dubious in the extreme — as everyone who has ever met me knows — about the cooked-up concept of “initial interest confusion.” (I wrote about my discontent here.) This doctrine, never contemplated by Congress, is what is driving all these cases. If somebody doesn’t address this full-on (and the Seventh Circuit has already someone let me down — see the article), it won’t be the end of the world. But it will be world we never voted to create.

UPDATE: Via Marty Schwimmer, here’s a transcript of the proceedings in the Geico case in which the court and counsel address the topic of designing the appropriate survey.

UPDATE: Crack IP attorney David Nieporent from my office took a close look and confirms that far from meeting the Daubert standard, this survey wouldn’t even meet the Dilbert standard. Not only was it a phone survey, but it essentially consisted of asking the subjects whether they knew what “sponsored results” and other terms meant — terms that most people who are not involved in Internet marketing or IP wouldn’t know. That’s a long way, however, from saying they would be confused if actually presented with these different results on the screen.

Originally posted 2008-03-11 11:34:33. Republished by Blog Post Promoter

If it’s a “meatball sundae,” perhaps very little you’d want to eat.

How much, really, does a name matter in business success?  As I have mentioned before, clients have come to me with checkbooks in hand, eager to register trademarks for products or services as yet unproduced and unserved, with no business plan besides what they think is a spiffy name for a business.

That is not a plan, unless you include “a plan to waste a lot of money” as a “plan.”

Glenn Reynolds links to a an article in Wired about a newspaper “chain”‘s — actually, lawyer Steve Gibson’s — “new business model”:  Suing bloggers who post newspaper articles, evidently more or less intact ones, on their sites.  Glenn says suing bloggers “seems like a poor business plan” — mainly, of course, because most bloggers are broke, or pretty close to it.

The article also explains why these one-off claims by outfits such as the Las Vegas Review-Journal are unlikely, in the long run, to pay off.  One reason is that at least the music industry, through the Recording Industry Association of America, is theoretically going for some degree of bulk in its litigation trawling against unlawful file sharing.  And we did say “theoretically”:  Remember, in 2008 the RIAA managed to spend about $16 million on legal fees to reel in a whopping $391,000.  As the article says, “You’d have to go after a lot of people for a relatively small amount of money,” says Jonathan Band, a Washington, D.C. copyright lawyer. “That is a riskier proposition.”

So, yes, it is hard to comprehend the return on investment here.

There are other reasons this doesn’t seem to make sense.  ”Defendants might be less willing to settle a lawsuit stemming from their posting of a single news article, despite the Copyright Act’s whopping damages,” says the article.  But no, not quite on the “whopping damages” stuff.  Contrary to myth — and to the threats routinely uttered by copyright plaintiff attorneys — statutory damages are not meant to be a windfall, as I explain at some length here.  Now it is true that some juries think intellectual property infringement damages are a jackpot unrelated to actual harm — usually because judges don’t instruct them properly.  But other judges in high profile cases are refusing to be part of the copyright shakedown.  Thus in the recent Tannenbaum copyright case, the District Judge reduced the jury’s damages award of $675,000 for infringement of 30 songs to $67,500, ruling that the amount awarded was unconstitutional under the Due Process clause.

Still, $67,500 is a lot of money, a lot, and still pretty darned distant from any plausible quantum of loss to the copyright owner.   Read More »

Michael Young:

It is not often a case hits upon two of our favorite topics: Trade secrets and pie. But when it does, mmmmmmmm, it’s good to be an attorney.

And for this reason, we are grateful to Justice Rushing who provided us with a little of both in his recent opinion in Silvaco Data Systems v. Intel Corp. (Calif 6th App. Dist., April 29, 2010), Case No. H032895.

A dainty dish

That’s what Professor Reynolds calls “bloggy goodness” right there.  I’m cutting way back on the sugar, but here, pour a cold glass of whole milk and take a slice of this:

After obtaining [an] injunction [against CSI, an alleged trade-secret thief], Silvaco sued Intel. Why? Because Intel had purchased and was using the software that CSI had created from Silvaco’s source code. The software did not actually contain the source code, but it was using executable, machine-readable code that had been derived (via the compiler) from the source code. Silvaco claimed that by using the software, Intel was “using” its trade secret source code, and hence was in violation of California’s Uniform Trade Secret Act (CUTSA).

Intel begged to differ and filed for summary judgment. Of the many arguments set out in the briefs, one was simply that Intel hadn’t “misappropriated” Silvaco’s trade secret source code. Under CUTSA, to “misappropriate” a trade secret, one must either “acquire,” “disclose,” or “use” the secret.

Silvaco argued that Intel “used” the source code when it ran the software since even though the software was executing the object code, the object code was based on the stolen source code. This is not a wholly frivolous argument.

[I]n granting Intel’s ][summary judgment] motion, the court decided to talk pies and pie recipes. When one bakes a pie from a recipe, he is clearly “using” the recipe, noted the court (to which most bakers would, I presume, agree). But what about the blogger who eats the pie? Is he “using” the recipe? Or just enjoying the fruits (or chocolate creams) of the end product? Mmmmmm.

The court held that the eater of the pie is simply a happy diner…even if he knows the baker stole the pie recipe in the first place. He is not a “user” of the recipe itself:

One who bakes a pie from a recipe certainly engages in the ‘use’ of the latter; but one who eats the pie does not, by virtue of that act alone, make ‘use’ of the recipe in any ordinary sense, and this is true even if the baker is accused of stealing the recipe from a competitor, and the diner knows of that accusation.

Michael pokes a little at the morsel — where, exactly, is the line that defines “use” of a trade secret? — before digging in.  Go on, dig in!  I don’t know about you but I haven’t eaten all day.

UPDATE:  Maybe instead you like cake?

Originally posted 2005-01-04 00:00:00. Republished by Blog Post Promoter

Speaking of Google and trademarks, an interesting article on Google’s own trademarks is this:  Don’t “Hitchhike”A Ride On Google’s Trademarks and URLs by Russell Shaw.

Only thing is that he defines a “word mark” as “similar to a trademark, but more of a logo than a business name,” which it isn’t.

I don’t blame him for being confused. The term is not found in the index of McCarthy’s definitive treatment, nor in the INTA glossary on line. But one thing is for sure: A word mark is a trademark, it’s not “like a trademark.” And describing it as being like a logo is misleading — many logos don’t have any words in ‘em at all. In fact, a word mark is nothing more or less than a trademark consisting of a word or words.  See, e.g., American Home Products Corp. v. Johnson Chemical Co., Inc.,589 F.2d 103, 200 U.S.P.Q. 417 (2nd Cir. 1978). If you must.

Originally posted 2007-04-11 02:33:49. Republished by Blog Post Promoter

Blawg Review #103:  That one is outta here!

Jewish tradition teaches that on Tisha B’Av (the Ninth day of the month of Av) , which begins tonight, five national calamities occurred:

1. During the time of Moses, Jews in the desert accepted the slanderous report of the ten spies, and the decree was issued by God forbidding them from entering the Land of Israel. (1312 BCE — traditional Jewish dating)
2. The First Temple was destroyed by the Babylonians, led by Nebuchadnezzar. 100,000 Jews were slaughtered and millions more exiled. (586 BCE)
3. The Second Temple was destroyed by the Romans, led by Titus. Traditional sourcest teach that two million Jews died, and another one million were exiled. (70 CE)
4. The Bar Kochba revolt was crushed by Roman Emperor Hadrian. The city of Betar — the Jews’ last stand against the Romans — was captured and liquidated. Over 100,000 Jews were slaughtered. (135 CE)
5. The Temple area and its surroundings were plowed under by the Roman general Terentius Rufus. Jerusalem was rebuilt as a pagan city — renamed Aelia Capitolina — and access was forbidden to Jews.

Other grave misfortunes throughout Jewish history occurred on the Ninth of Av, including:

1. The Spanish Inquisition culminated with the expulsion of Jews from Spain on Tisha B’Av in 1492.
2. World War One broke out on the eve of Tisha B’Av in 1914 when Germany declared war on Russia.  German resentment and the upheaval and instability that resulted set the stage for the Holocaust.
3. On the eve of Tisha B’Av 1942, the mass deportation began of Jews from the Warsaw Ghetto, en route to Treblinka.

More on the Ninth of Av, which continues through tomorrow.  Observant Jews will fast (a complete fast — no food, no water) until nightfall Tuesday night. For us, this is the “hardest” day of the year. (Reposted from past years.)

Originally posted 2005-03-17 14:08:00. Republished by Blog Post Promoter

“Geographic Indicators,” that is. The USPTO reports today that:

the World Trade Organization (WTO) has released a panel report affirming the United States’ assertion that European Community (EC) regulations discriminate against foreign owners of geographical indications (GIs), and that the EC cannot deny trademark owners their rights. . . .

The United States objected to the EC’s Agriculture regulation, on several grounds, including the following: . . . The EC Regulation creates a system for registering and protecting geographical indications for agricultural goods sold in the EC market. But while the Regulation allows EC rightholders to apply directly to register and protect their GIs for EC products, non-EC nationals must rely on their government to apply for the protection in the EC on their behalf, as well as to object to GI applications in the EC. . . .

Under the EC’s Regulation, foreign governments must adopt a system of GI protection that mirrors the EC’s and that provides reciprocal protection to EC products in order for their foreign rightholders to be considered for benefits of the EC Regulation’s protections.

The WTO Panel found that these aspects of the GI Regulation – the requirement for government-level intervention as well as the requirement of reciprocal protection for EC products and equivalent systems of protection – discriminate in favor of EC products and EC GI rightholders and against the GI rightholders and products of other WTO Members. . . .

On the trademark claim, the United States argued that the EC GI Regulation would not permit certain trademark owners to enforce their trademarks — that is, they would not be able to stop the confusing uses of similar GIs, which is one of their rights under the WTO TRIPS Agreement. The TRIPS Agreement requires that the owner of a registered trademark be able to prevent all others from using identical or similar marks or signs, which includes GIs, when consumers would be confused by the later uses.

The Panel agreed with the United States but clarified that the EC could provide for a very limited exception to trademark rights for certain trademarks with respect to later-registered GIs. The exception is very narrow in that, according to the Panel, GIs that are likely to create confusion with prior trademarks are unlikely to be registered as GIs in the first place. Further, the Panel noted that only a few people are allowed to use the GI that conflicts with the prior trademark, and the exception only applies to certain trademarks that do not have reputation or renown.

But more importantly, the Panel found that the GI Regulation could only protect GI names as registered, and not translations of the GIs where those translations as they appear on labels in Europe cause confusion with European trademarks owned by U.S. companies. The panel agreed with the United States that this would present concerns under the TRIPS Agreement.

I assume we get reparations.

Anyone who is interested in trademark law and is reading this should do what I do:  Read blogs by pure trademark lawyers* such as Marty Schwimmer’s Trademark Blog and John Welch’s TTABlog® (and some law professor blogs, too, but besides Eric Goldman they mainly never link to lawyers and I guess today I’m in the mood to return the favor).  But also they should subscribe to the International Trademark Association “list,” “TMtopics.”

Everyone who’s anyone at least looks at this email list, and many of the everyones who are real trademark law whizzes generously share their expertise, which is sometimes dizzying in its profundity.  It’s okay if you don’t read the INTA list every day, too — it can be a bit much sometimes, especially for civilians — but your trademark learning will grow and grow the more you do.

Here, for example, is a great pickup in connection with an issue that cropped up a years ago when the Second Circuit ruled, in International Star Class Yacht Racing v. Tommy Hilfiger U.S.A., that a defendant that searches federal applications and registrations before choosing a trademark — which is easier than ever these days due to the online TESS system —  and then turns out to have infringed on someone else’s common law mark is not an “innocent infringer.”  To the contrary, ruled the court, such a defendant has acted in bad faith (and had to suffer an enhanced damages award) by failing to search common law uses, which is done by one or two fairly pricey trademark search services.

That made quite an impression on trademark lawyers, if you weren’t around then.

So the question that came up this week on the list was: “Is it malpractice to tell a client it can lawfully use a mark when you only conduct a search via TESS?”  Among the useful comments I most appreciated and learned from this one by crack trademark attorney Dan Ballard (@ballard_ip):

I think it is.

The following link is to a compilation of Second Circuit law on the intersection of trademark searching and bad faith infringement. See http://j.mp/6J6Sq3 .

After Hilfiger, the Second Circuit decided Streetwise Maps, Savin, and Star Industries – all of which walk back the apparent trademark search requirement created by Hilfiger.  These latter cases hold that a trademark owner cannot prove bad faith infringement solely by noting the fact that the infringer did not conduct a trademark search — either properly or at all.  Flipping that rule means that the failure to conduct a search is not, by itself, conclusive evidence of bad faith infringement.

But back to the original question: is it malpractice to tell a client it can lawfully use a mark when you only conduct a search via TESS? I think it is.

I do, too.  Because it is.  And adding a Google search helps — but not much.  Failure to conduct a search (a real search) isn’t conclusive evidence of bad faith, but it’s still evidence.  And it’s still … failure to conduct a search.

Trademark-wise, that’s not where you want to be.

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* Yes, the “pure” modifies “trademark lawyer,” not “lawyer.”