Trademark law is generally considered to be functioning well, and therefore not to be in need of the kind of regulatory overhaul pondered with respect to patent law. Rather, trademark law tends to evolve more steadily though new case law. Last year brought a number of interesting and timely cases.
Surname Rarity Rises to the Forefront
A debate has emerged among the judges of the TTAB as to the proper test for whether a mark is primarily merely a surname and must be refused registration. This issue first emerged in In re Joint Stock Company “Baik”, 84 USPQ2d 1921 (TTAB 2007), a case in which I wrote the winning brief that resulted in the reversal of the Trademark Examiner’s refusal to register the mark BAIK as primarily merely a surname.
In its decision, the Board relied on the rarity of the surname (several hundred listings nationally) and the fact that other similar surnames were also very rare. In a concurrence, one Judge argued against the use of similarity of the mark in sound and appearance to other surnames as a basis to refuse registration.
The purpose of refusing to register surnames is not to avoid exposing consumers to surnames, but only to ensure that other business owners with that surname can use their own surname in their business. From that perspective, it should make little difference whether a given surname has the look or feel of another common surname. Rather, the focus of the analysis should be on rarity, which determines the likelihood that a person with that surname will want to use it in business and be unable to.
Since then, the issue has arisen in other cases, but other judges have been unwilling to alter the surname test in light of this argument. The question that no one is bringing up is what exactly the threshold level is for rarity. How rare does a name have to be before it is registrable? This seems to be a question the Board does not want to answer. This issue is one to look out for in 2009.
The Doctrine of Fraud in Trademark Law – Strict liability, Danger for Foreign Mark Owners
Trademark practitioners and applicants are held to a strict standard with respect to statements made to the Trademark Office. Several 2008 cases reaffirmed the TTAB’s strict stance with regard to fraud, namely that “fraud occurs when an applicant or registrant makes a false material representation that the applicant or registrant knew or should have known was false.” General Car and Truck Leasing Systems, Inc. v. General Rent-A-Car Inc., 17 USPQ2d 1398, 1401 (S.D. Fla. 1990) (emphasis added).
This issue often arises when a statement of use is filed listing goods or services on which the mark was not actually used. In in Herbaceuticals, Inc. v. Xel Herbaceuticals, Inc., 86 USPQ2d 1572 (TTAB 2008), the TTAB confirmed that such a misrepresentation is considered fraud and will invalidate the trademark for an entire class of goods and services, and not only those goods incorrectly included in the statement of use.
As the Board stated in that case, “Statements under oath are made with a degree of solemnity requiring thorough investigation prior to signature and submission to the USPTO.” Therefore, a lack of investigation will not excuse a false statement, nor will lack of legal advice, language difficulties, or inadvertent mistake. Actual fraudulent intent is not material.
The Board even held in Bose Corp. v. Hexawave, Inc., Opposition No. 91157315 (November 6, 2007) that a novel and untested legal argument that a trademark was used for a certain good is not enough to avoid a finding of fraud. Bose argued that the repair and transport of certain goods constituted use of the mark for those goods, but the Board found that argument, unsupported by case law, did not give Bose a reasonable belief that their statement of use was accurate. The mark was invalidated for fraud.
Correction of False Statements
In University Games Corp. v. 20Q.net Inc., 87 USPQ2d 1465 (TTAB 2008), the board held that correction of a false statement before publication of a mark gives rise to a rebuttable presumption that the applicant did not have the requisite willful intent to deceive the PTO. Someone seeking to invalidate the mark on fraud grounds would therefore have to produce sufficient evidence to overcome this presumption, a difficult task in most cases.
However, in Grand Canyon West Ranch, LLC v. Hualapai Tribe, 88 USPQ2d 1501 (TTAB 2008), the Board held that correction of a false statement after publication, but before any allegation of fraud, was not sufficient to avoid a finding of fraud.
A Trap for the Unwary Foreign Owner
Foreign owners are held to this strict standard as well. In most countries, unlike the United States, registration of a mark does not require use. As a result, many foreign registrations contain very broad listings of goods and services, not all of which the mark is necessarily used with. Foreign mark owners can rely on their foreign registration under Section 44 as the basis for a U.S. application and register their mark in the U.S. without claiming actual use and without verifying use of their mark on all listed goods and services prior to registration.
However, Section 8 of the Trademark Act requires a Declaration of Use between five and six years after registration of a mark in the U.S. In this declaration, the mark owner must certify that the mark is currently in use in the U.S. for all listed goods and services. If the mark is not being used on one or more of the listed goods and services, they must be canceled at this time to avoid a charge of fraud.
In Sierra Sunrise Vineyards v. Montelvini S.p.A., Cancellation No. 92048154 (September 10, 2008), a Statement of Use was filed verifying use of a mark on wines, spirits, and liquers, when the mark was not in use on liquers. This was found to be fraud and resulted in cancellation of the trademark registration. The Board held that confusion regarding the listed goods due to legal, language, and cultural differences between countries is not an excuse to fraud. It is the mark owner’s obligation to verify the precise meaning of the Statement of Use before signing it.
Bona Fide Intent to Use Requires Documentation
The Board decided a couple of cases on the grounds of a lack of bona fide intent to use in 2008. The Trademark Office takes an intent-to-use applicant’s required certification of a bona fide intent to use an applied-for mark in commerce at face value. However, that intent can be challenged in an opposition proceeding.
In L.C. Licensing, Inc. v. Berman, 86 USPQ2d 1883 (TTAB 2008) and Boston Red Sox Baseball Club Limited Partnership v. Brad Francis Sherman, Opposition No. 91172268 (September 9, 2008), the Board confirmed its general rule that documents supporting a claimed bona fide intent to use a mark in commerce are required to withstand a challenge on this basis. However, other evidence may be sufficient to explain the lack of documentation and support the existence of a bona fide intent to use.
The Board found in Red Sox v. Sherman that an argument that an online apparel business can be started almost overnight with no forward planning lacked credibility and was insufficient to overcome a lack of documentation. It is unclear what evidence would be sufficient to meet the Board’s test. It may be best for applicants to create supporting documentation in advance of filing an intent-to-use trademark application.
This is another issue that may arise with some frequency for foreign applicants, since bona fide intent to use, but not actual use, is required for Section 44 registrations relying on a foreign registration. Without supporting documentation, these registrations may be vulnerable to a cancellation proceeding (or opposition proceeding prior to registration).
I wish to thank the TTABlog for its insightful coverage of TTAB cases. I rely on the TTABlog throughout the year to keep me updated on the latest trademark cases. Much of the material for this condensed summary was drawn from the much more expansive TTAB year in review.
The digital revolution, and the resulting difficulty of controlling the distribution of copyrighted works, has brought copyright law to the forefront of public perception. Not everyone needs or cares about patents or trademarks, but everyone has read a book, listened to music, or played a video game. The debates in copyright law center on the tactics employed by industry organizations for these various types of media and the support or lack of support for such tactics under the law.
In 2008, the biggest change to copyright law was brought about by enactment of the Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act. The PRO-IP Act makes three major changes to existing copyright law in order to help industry groups attack digital piracy.
IP Enforcement Coordinator
First, the Act creates a new government cabinet position, the Intellectual Property Enforcement Coordinator. The IP Enforcement Coordinator will chair an interagency intellectual property enforcement advisory committee (IIPEAC) also established by the Act and will develop and implement a new Joint Strategic Plan against counterfeiting and piracy. The purpose of this Coordinator is essentially to ramp up enforcement of copyright laws, focusing government resources and coordinating interagency actions in support of this goal.
Second, it increases the penalties for copyright infringement by broadening the definition of a work. Where previously an entire album was considered a single work, each song on the album is now a separate work. That means that illegally downloading an album of ten songs now exposes you to the penalties inherent in illegally copying ten separate works, instead of only one.
Third, the Act expands the ability of the government to seize and destroy property involved in copyright violations. “Any property used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense” is now subject to permanent seizure. In other words, an illegally downloaded song may lead to the seizure and destruction of the computers and related equipment in your home or office.
The bill contains numerous other provisions, most of lesser concern to consumers. The Act increases statutory damages for the use of counterfeit trademarks, increases the resources available to combat copyright infringement and cyber crimes (including the number of FBI agents responsible for investigating these areas), and requires the production of reports on the implementation of the Act.
Also included is a statement of Congressional intent that gives priority to combating organized crime and criminal counterfeiting enterprises, apparently indicating that the Attorney General should not focus on the actions of individual citizens.
Some of the provisions more frequently objected to were removed prior to final passage of the Act. One controversial provision that was removed would have given the Attorney General the power to sue citizens in civil court to enforce copyrights, taking some enforcement burden off of the rights holders. This was widely seen as a handout to industry. Provisions were also inserted to protect the privacy of information obtained by the seizure of property.
For more information, see the full text of the bill at http://thomas.loc.gov/cgi-bin/query/z?c110:S.3325:.