Abusive Trademark Applications Muddy the USPTO Database

"United States Patent and Trademark Office where trademark applications are filed"

Andrei lancu – the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office – recently testified before a Congressional oversight committee that he could use help tackling the problem of abusive trademark applications. From 2013 to 2018, the USPTO reported an 1100% increase in trademark applications from China. The problem, however, with foreign applications is not just with China.

The problem with foreign applications stems from the fact that trademark applications in a foreign applicant’s native country are filed differently than in the U.S. Most countries do not require proof of use before issuing a registration, and some countries will let the applicant apply for every good or service in a particular International Class even if the applied-for mark will not be used with the vast majority of those goods or services.

Given the foreign applicant’s experience in their native country, the problem in the U.S. becomes obvious. Foreign applicant’s file U.S. trademark applications like they file trademark applications in their native country. The USPTO does not currently require a U.S. licensed attorney to file the applications for the foreign applicant. Accordingly, U.S. trademark applications filed by foreign applicants contain broad descriptions of goods that will never be used with the mark.

These foreign applications can cause all sorts of havoc for trademark searchers because of the Trademark Office’s presumptions. When goods or services descriptions are unrestricted the Trademark Office assumes the description covers all goods of a similar nature, travel in all channels of trade, and appeal to all classes of consumers. When a trademark searcher encounters a broad description with a similar mark, you have to assume it could be cited against the registration of your proposed mark. Then you are left with deciding how to respond to the issue. In the case of a foreign applicant, the likely response is a petition to cancel either on the ground of fraud or void ab initio.

Trademark owners should not have to incur this expense. Foreign applicant’s should ensure their applications comply with U.S. filing requirements. Director lancu testified that the agency has ramped up training for trademark examiners to them help spot troublesome applications, escalated a process to cancel fraudulent marks, and started piloting software that can help detect images in applications that have been tampered with on Photoshop. The agency is also considering requiring all foreign applicants to be represented by a licensed U.S. attorney.

The Board Throws Another Curveball on the Strength Factor

"baseball pitcher throwing a curveball like the Board recently did"

The strength factor in the likelihood of confusion analysis is very important, and it’s not easy to establish either way. The strength analysis becomes even more difficult when the Trademark Trial and Appeal Board throws curveballs.

Friedman and Wieder Enterprises Inc. applied to register the mark HULA DELIGHTS (in standard characters) for “gift baskets featuring processed nuts.” The Trademark Office refused registration of the HULA DELIGHTS mark based on a prior registered mark HULA PRINCESS for “shelled nuts and roasted nuts.”

Friedman and Wieder Enterprises attempted to make the weakness argument with respect to the term HULA. In support of its weakness argument, Friedman and Wieder Enterprises submitted 26 third-party registrations for marks containing the HULA word and identifying some type of food product. The applicant was on the right track exceeding the minimum number of third-party registrations generally required to make the weakness argument.

However, Friedman and Wieder Enterprises made the mistake of assuming all food is related. Of the 26 third-party registrations offered, none identified nuts or even gift baskets with nuts. And Friedman and Wieder Enterprises did not offer any evidence or legal precedent to demonstrate that any of the food identified by the third-party registrations was related to nuts. Therefore, despite offering 26 third-party registrations, Friedman and Wieder Enterprises effectively had 0 third-party registrations supporting its weakness argument.

Nevertheless, the Board concluded that even though HULA is arbitrary when applied to shelled and roasted nuts, and there is no evidence of third-party use, there is evidence of third-party registrations for similar marks in connection with a variety of food products. Therefore, the HULA PRINCESS mark was entitled to a narrower scope of protection than what inherently distinctive marks normally enjoy.

Huh? The Board just finished concluding that the 26 third-party registrations were given little probative value. The moral of this story is that any similar mark for a good or service in the same broad category is enough to establish the weakness of a term or mark.

To try and make sense of this case you could chalk it up to simply a bad decision. The problem is that the Board does not reverse itself. So this is a decision that future Examining Attorneys will cite when the situation suits them, and attorneys in inter partes proceedings will cite when the situation suits them. What this case highlights is the importance of starting any legal research with the United States Court of Appeals for the Federal Circuit, and then working your way to the TTAB precedent if necessary.

Brand Name for Hemp Products May Be Protected

"product packaging of Hemp brand name supplement"

The United States Patent and Trademark Office recently announced that it will accept trademark applications for hemp-based products. This is a departure from last year when we discussed strategies for brand name owners to secure some trademark protection for any cannabis-based product. Last year, all products containing any part of the cannabis plant were illegal under federal because marijuana was on the federal list of controlled substances.

The 2018 Farm Bill changed the definition of marijuana to exclude hemp. Many people may not know that hemp and marijuana are different. While both plants contain cannabinoids, hemp contains a very low concentration of THC (0.3% or less) whereas marijuana contains concentrations of THC ranging from 15% – 40%. THC is the cannabinoid that induces psychoactive effects and gives the sensation of the user getting “high.”

But before every hemp producer gets too excited about this recent development and rushes to the Trademark Office to register all their brand names, a word to the wise. Make sure you can substantiate that your product satisfies the definition of hemp. In other words, your products contain no more than 0.3% of THC.

With marijuana still on the federal list of controlled substances, it is highly likely that that the Trademark Office will want to ensure that the marks being registered are used with hemp, not marijuana-based products. The Trademark Office will pursue this inquiry by issuing a Request for Information.

The examining attorney may ask questions designed to obtain specific information that is factual in nature from the applicant. The examining attorney may also request literature, exhibits, affidavits or declarations, and general information concerning circumstances surrounding the mark, as well as, if applicable, its use or intended use.  Requests for information that is not public knowledge, but is within the knowledge of the applicant or available to the applicant, are particularly appropriate.  

A trademark applicant has a duty to participate in the examination process by responding directly and completely to each request for information. Failing to respond or to properly respond can result in the abandonment of the application to register the brand name.

PopSockets Tries to Convert Bona Fide Sellers Into Counterfeiters

"two women taking a selfie while under an umbrella with a popsocket on the back of the iphone that likely was not sold by counterfeiters"

In an interview for Vox, David Barnett – the founder of PopSockets – said that he saw the first counterfeit product in about 2016. In 2017 and 2018 he claims to have been Amazon’s best takedown customer because his company was taking down 1,000 – 2,000 listings every day from marketplaces around the world. PopSockets claims to have 40 lawyers around the world and has spent over $7 million in 2018 fighting alleged counterfeits.

We say “alleged” counterfeits because not all PopSocket targets are counterfeiters selling or offering for sale a counterfeit PopSocket. Some of the listings on Amazon and other marketplaces are selling authentic PopSockets. However, PopSocket attempts to transform these bona fide sales into counterfeits through the quality control program it established.

Under the first sale doctrine, also known as the exhaustion doctrine, a branded product may be bought and resold without change, assuming that there is no deception present in the resale process. Therefore, once the trademark owner authorizes the initial sale of the product under the trademark, the trademark owner cannot ordinarily prevent or control subsequent sales of goods bearing the mark. For example, down-the-line retailers can display and advertise the branded goods, and secondhand dealers can advertise the branded merchandise for resale in competition with the sales of the trademark owner, provided they do not misrepresent themselves as authorized agents.

However, the first sale doctrine does not apply if the goods differ materially from the authorized goods. One way a brand owner can differentiate authorized goods from unauthorized goods is to adopt a quality control procedure because this program gives consumers ongoing benefits after the point of sale that is not available from the unauthorized product. However, superficial differences between the quality controls of the authorized product and the unauthorized product do not allow the trademark owner of defeat the first sale defense.

The PopSocket is not a complicated product. It is a circular disk that attaches to the back of a cell phone and extends when pulled making it easier for the cell phone user to hold the phone in certain situations. To suggest that a rigorous quality control program conveys a meaningful benefit to consumers beyond the point of sale is a stretch especially when the PopSockets being resold were from authorized retailers, to begin with.

But PopSockets is not distinguishing these legitimate resellers from the true counterfeiters. This is the case in a recent lawsuit filed by PopSockets against Lora Suzanne Wilcox. PopSockets were purchased from authorized retailers and then resold on Amazon. This act is squarely within the defendant’s rights, yet PopSockets’ is attempting to argue that its rights were not exhausted when it sold a PopSocket to the first authorized reseller because of its quality control program.

PopSockets will likely lose this case because it is likely the case that no quality issues exist with the PopSockets being resold on Amazon by Ms. Wilcox. She is not one of the counterfeiters PopSockets should pursue. What PopSockets should be more concerned about is potentially losing its trademark rights altogether.

Trademarks should never be used as nouns. They should always be used adjectives. If consumers start using a trademark as a noun, congratulations you have just lost your trademark rights because the trademark is now a generic term. PopSockets appears to be heading in this direction.

At the beginning of the Vox article, the journalist states “[e]very time some asks me, ‘What’s that?” there’s about a 70 percent chance I know exactly what they are referring to. It’s my PopSocket.” Throughout the article PopSockets is used as a noun:

  • I love PopSockets
  • Without a PopSocket
  • PopSockets were originally invented . . .
  • PopSockets sell really well

With the Federal Circuit’s decision in Coke Zero finding that a generic term can exist for sub-categories of the generic term like “no sugar soda pop,” PopSocket should be concerned that it may meet the same fate.

Counterfeiting is bad and counterfeiters should be aggressively pursued by brand owners. But any enforcement campaign must be thoughtfully designed to pursue the actual wrongdoers. Not individuals that are legally reselling branded goods. Otherwise, the label of a trademark bully is fitting.

Trademark Strength is the Most Misapplied Factor

"man shooting arrow at blurry target metaphor for misapplying strength factor"

The two most talked about likelihood of confusion factors are the: (1) similarity of the marks; and (2) relatedness of the goods or services. While these factors possess their own intricacies, trademark applicants seem to misapply the trademark strength factor the most. The misapplication of this factor then leads trademark applicants to make poor filing and prosecution decisions.

Two recent Trademark Trial and Appeal Board decisions demonstrate the problem when misapplying the trademark strength factor. Ming’s Mark Inc. applied to register the mark POWER TECHON for, among other goods, “electrical power extension cords.” Gehr Industries, Inc. opposed the registration of Ming’s Mark on the ground that it was likely to cause confusion with its prior registration for POWER TECH in connection with “electric extension cords for use with portable electric hand tools . . . .”

Ming’s Mark argued that Gehr Industries’ POWER TECH mark was weak and attempted to prove it the following ways:

  1. Offering the dictionary definitions of POWER and TECH. Unfortunately, Gehr Industries’ POWER TECH mark was registered on the Principal Register so under Section 7(b) of the Trademark Act the mark was presumed valid. And since the registration was not based on Section 2(f) of the Trademark Act (i.e., acquired distinctiveness), the mark was at least suggestive.
  2. Offering TESS listing of 100 third-party pending applications and registered marks for or including the POWER term in International Classes 9 and 2. Offering the same TESS listing for the TECH term. First, listing from the Trademark Office database is not evidence. A trademark applicant must submit title and status copies of each registration. Second, don’t waste your time with applications, the Board will not consider them. Third, make sure the third party registrations correspond to the mark you are claiming is weak. In this case, third-party registrations for POWER TECH needed to be offered. Fourth, don’t focus on the class numbers. the focus of the third-party registrations needs to be on identical or related goods.
  3. Offering the fact that other Examining Attorneys registered marks for or containing POWER TECH without issue. Prior decisions by Examining Attorneys do not bind subsequent Examining Attorneys. Each trademark application must be decided on its own merits and you will be reminded of this time and time again if you try to make this argument.

None of Ming’s Mark’s strength arguments persuaded the Board; therefore, the opposition was sustained.

Here for the Girls, Inc. sought to register the mark HERE FOR THE GIRLS for providing emotional support services for young women affected by breast cancer. The Trademark Office refused registration of this mark on the ground that is was likely to cause confusion with the prior registered mark FOR THE GIRLS in connection with promoting public awareness of breast cancer.

Here for the Girls argued that THE GIRLS was weak by offering Google search results. Google search results are ineffective strength evidence because they provide little context with respect to the use of the mark. To make Internet evidence of record and persuasive on the strength factor, you need to offer pages from the website and some context for how many consumers likely encountered the website. Here for the Girls did none of this; therefore, the Board concluded it had no evidence to support its weakness argument.

Getting the strength analysis right is critical and something that must be assessed during the trademark search process, and certainly when a registration refusal is made or an enforcement proceeding is threatened or commenced.

Video Conferencing is a Related Service to E-mail

"INFOCUS MARKETING e-mail service was a related service to video conferencing"

The Trademark Trial and Appeal Board relied on evidence in the real world marketplace to conclude that video conferencing is a related service to the electronic transition of messages like e-mail. This decision is a good reminder that intuition about whether certain goods or services are related can lead to wrong decisions.

InFocus Corporation filed a service mark application to register the mark INFOCUS (Stylized) for “video conferencing services, namely, providing cloud-based telecommunications connections between video conferencing systems for video calling” in International Class 38. The Trademark Office refused registration of the mark on the ground that it was likely to cause confusion with a prior registered mark for INFOCUS MARKETING (in standard characters with MARKETING disclaimed) for direct mail and e-mail marketing services.

The Trademark Trial and Appeal Board found the marks at issue were similar to both contained the dominant word INFOCUS and the rights in the cited mark extended to all forms of stylization of the word INFOCUS. The similarity of marks factor favored a finding of confusion.

As for the relatedness of the services, the Trademark Office offered 15 third-party websites that promoted video conferencing and some type of electronic messaging such as e-mail, text, or instant messaging. In a majority of these websites, the messaging feature is ancillary to the primary services, which is video conferencing. Nevertheless, because InFocus Corporation made the mistake of not petitioning to partially cancel the INFOCUS MARKETING registration to narrow the identification of services description to e-mail as part of a marketing campaign, the Board considered all forms of electronic messaging whether ancillary to a primary service or not.

When the marks at issue are identical, trademark searchers need to take a closer look at goods or services their intuition is telling them may not be related. We know that when marks are identical, less relatedness between the goods or services at issue is required in order to create a likelihood of confusion. Looking at prior decisions and paying attention to what any competitors are offering should be considered.

No Brand Extension When Giving Branded Clothing to Employees

"brand clothing polo shirt"

Companies give branded clothing items to their employees to wear during the performance of their job. Make the branded clothing stylish enough and the employee may just wear it out socially as well. Brand extensions are helpful to increasing the conceptual strength of the mark, so being able to extend a brand to clothing or anything else can be a positive thing. Unfortunately, giving branded clothing to employees will likely not extend your brand to clothing because it likely does not qualify as transport in actual trade.

Trademark rights are based on use of the mark in commerce, and for use to be sufficient to establish trademark rights it must: (1) be a bona fide use in the ordinary course of trade; and (2) not be merely for the purpose of reserving rights in a mark. The use must a genuine commercial use as opposed to use solely for the purpose of establishing trademark rights. Accordingly, whether use is genuine is based on what is a typical commercial use within the relevant industry.

Commercial use does not mean that a sale must occur. A mark is used in commerce in connection with goods when the goods are sold or transported in commerce. For a sale or transport to qualify as use in commerce it must be: (1) in actual trade; and (2) lawful. And in the case of transport as the basis, the use must also be: (a) of a finished product; and (b) open and public to actual consumers of the goods.

Transport of a good in actual trade means the good must benefit and have independent value to others, and cannot be an item that is transported incidentally in connection with other primary goods and services. Goods that are incidental to other primary goods and services: (1) are useful only in connection with a primary good or service; (2) are inextricably tied to a primary good or service; and (3) lack independent value.

Branded clothing given to employees is connected to the primary purpose of the business. It is incidental to the primary purpose of the business. Generally, the branded clothing is useful only in the performance of the employee’s job. And, generally, it lacks independent value. Branded clothing given to employees functions more like advertising or promotional material, which is insufficient to establish trademark rights for goods.

Brand is Not Just a Marketing Expense, It’s a Company Opportunity

"marketing materials that are part of marketing expense"

Brand is commonly thought of as the marketing department’s responsibility. And if the marketing expense is high, that should translate into a high brand valuation. But brand is not just a marketing responsibility.

Truly Inc. published a podcast with Tracy Chong – co-founder of Strata Insights – about a brand method she helped create called Brand Economics. According to Ms. Chong, Brand Economics differs from Brand Valuation or Brand Evaluation because it considers all aspects of a business (human resources, operations, marketing, finance). These factors are then used to assign a financial qualification to the brand.

Brand drives revenue. In fact, according to a 2017 Strata Insights study, brand contributed to 34%-74% of the S&P 500’s value. Therefore, it is important to understand the brand’s ability to attract customers. According to Strata Insights, brand is not a marketing expense, it is an organizational opportunity.

As an organizational opportunity, a brand economics valuation looks at: the businesses customers, sales channels, distributors, product or service, pricing in each channel, partners, and the market at large. All aspects of the business can and does contribute to the customer’s experience with a brand.

A couple areas may be missing from Strata Insight’s model – although, Ms. Chong may not have disclosed every consideration during the podcast. The first is starting with the right name. If the theory of brand economics is a brand’s ability to attract customers, having the right name is a crucial starting point. Not only does the name have to be appealing, but it also has to standout from the crowd. Another reason why working with a naming professional is important for every business.

The second consideration focuses on the legal department and the enforcement of rights against unauthorized use of confusing similar trademarks. Ms. Chong explained that it is important to consider the entire business because any department can negatively impact the customer experience with a brand. One example she gave was the IT department designing a website to have three separate logins, which frustrates customers and creates a bad experience with the brand.

One reason to enforce trademark rights against confusingly similar marks is to prevent any negative experiences to be misattributed to your brand. This does not mean that a trademark owner needs to take on all comers, although bad trademark attorneys will say that you do. Enforcement needs to be strategic and thoughtful, but it is something that every brand owner should do because it could be the case that the brand economics assessment indicates that your business is doing all the right things to produce a high brand economic value, but the acts of another party is depressing the value of the brand.

Lessons from Trademark Litigation Over PATAGONIA for Beer

"Patagonia beer packaging spurs trademark litigation"

The Patagonia clothing company commenced trademark litigation with AB InBev over what has been characterized as its “launch” of a new beer brand PATAGONIA in Colorado. Although, this characterization is not accurate. Nevertheless, on its face, the Patagonia clothing company should have a real concern with AB InBev’s PATAGONIA beer brand. AB InBev is BIG and could easily saturate the market with advertising bearing the PATAGONIA brand.

Patagonia was founded as a climbing hardware manufacturing company in about 1960. By about 1970, the company expanded into clothing and it was also the time the PATAGONIA mark was adopted. Fast forward to the present, and the Patagonia company had revenue of about $209M in 2017, and has 33 retail locations nationwide.

And Patagonia expanded into beer in 2016, but not under its PATAGONIA mark. Its beer is branded LONG ROOT ALE. Unfortunately, there is a reason for this.

On July 24, 2007, Warsteiner Importers Agency, Inc. filed an intent-to-use application for PATAGONIA (in standard characters) in connection with “beer.” A statement of use was filed on July 17, 2012 with a specimen of use consisting of a beer bottle with a label depicting a mountain range and the word PATAGONIA. The PATAGONIA application for “beer” matured into a registration on October 16, 2012.

About two months later, on December 20, 2012, Anheuser-Busch, LLC acquired the PATAGONIA registration from Warsteiner Importers Agency, Inc. The assignment was officially recorded with the United States Patent and Trademark Office on February 8, 2013. On October 5, 2018, the PATAGONIA registration was maintained by Anheuser-Busch and the Declaration of Incontestability was filed. This declaration can only be filed if the registered mark has been continuously used for the previous 5 years. This declaration must be valid because Patagonia clothing did not petition to cancel the PATAGONIA registration for beer on the ground that it was abandoned.

For the news outlets to characterize AB InBev as having “launched” the PATAGONIA brand is not accurate. It appears that the PATAGONIA brand for beer has been around for almost 7 years and Anheuser-Busch was in charge of the brand for 99% of that time.

The more pressing problem for Patagonia clothing company is the Colorado Statute of Limitations for Unfair Competition claims. The federal Trademark Act does not contain a statute of limitations like the Copyright Act. Instead, courts look to state unfair competition statutes of limitation to determine whether a trademark infringement claim was not brought in time.

In Colorado, the statute of limitations is 3 years from the time the plaintiff knew or should have known of the infringing act. The Patagonia clothing company has retail stores in Boulder, CO and Denver, CO, and is a large company. Therefore, the key question in the case will be whether Patagonia clothing company knew or should have known of AB InBev’s PATAGONIA beer brand by 2015. If this is the case, then Patagonia clothing company will not succeed in its lawsuit.

The takeaway from this case is the importance as trademark owners to monitor the filings at the Trademark Office, and have a thought out enforcement strategy. Had Patagonia been monitoring the Trademark Office, maybe it would have acquired the PATAGONIA trademark application before Anheuser-Busch. That would have avoided trademark litigation.

Trademark Dispute Driven By Emotions Not Necessarily Fact

"Trademark dispute over Bittman's Medium publication"

About a month ago, Mark Bittman – a cookbook author and former New York Times columnist – announced the launch of his new online food publication called SALTY. His publication would cover the world of food with an eye for politics and inequality, in addition to recipes and personal essays. Unfortunately for Mr. Bittman, another publication was already using the SALTY name and took issue with Mr. Bittman’s choice of name.

The focus of the other SALTY publication was a sex, dating, and relationships newsletter for women, transgender, and non-binary people. The founder said SALTY was chosen because “it’s visceral. Sex is salty, sweat is salty, sweat is salty, tears are salty.” This publication has not been around for a long time having been launched in March 2018.

When the founder learned of Mr. Bittman’s publication she reportedly was “really angry.” This reaction is not uncommon in trademark disputes. Unlike copyrights and patents, trademarks are supposed to embody all the good things about a good or service and help tell the story. That’s why from the beginning founders in particular are closely tied to their trademarks.

When a trademark dispute rears its ugly head, it can be difficult for trademark owners to look past the emotion and make decisions based on the facts of the case. But getting to the facts is key to making smart decisions. With every trademark dispute, the question must be asked “Is this other use harming me” or “could this use realistically harm me in the future”?

The word “salty” has multiple meanings and conveys different impressions depending on the context of the use. This means that – assuming no famous mark for dilution purposes exists – identical marks may be capable of peacefully co-existing in the marketplace. Not all publications are same for likelihood of confusion purposes.

This was the case with the SALTY publications. First, the two marks – while visually and phonetically identical – conveyed very different meanings because they were exploiting different meanings of the “salty” term. Second, their target audiences are very different because the subject matters of the publications are very different.

It is unlikely that any consumer would mistakenly believe that Mr. Bittman’s publication is associated with the first SALTY publication such that Mr. Bittman will unjustly benefit from more visitors, subscribers, or readers. Because the subject matters are so different, there is no way the first SALTY publication will lose readers or visitors because of Mr. Bittman’s publication. Mr. Bittman was a former New York Times columnist, so the likelihood that his publication would be so poor that it would negatively reflect on the first SALTY publication is highly unlikely. Finally, the publications both are new, so there is no potential loss of control of a reputation because Mr. Bittman’s publication is so large.

By getting through the emotion and looking at the facts, this isn’t a case that the first SALTY publication should spend the time pursuing. And hopefully, first SALTY does not pursue it because Mr. Bittman voluntarily rebranded his publication to MEDIUM X BITTMAN. However, the name change wasn’t enough, first SALTY is looking for a payday.