D.C. Circuit holds that 1998 law bars renewal of Cuba-owned trademarks

Yesterday the D.C. Circuit, in a 2-1 decision, ruled that the Cuban government-owned company Cubaexport could not renew its HAVANA CLUB trademark for rum. In Empresa Cubano Exportadora de Alimentos y Productos Varios v. United States Dep't of Treasury, No. 09-5196 (D.C. Cir. Mar. 29, 2011), the majority held that a provision in a 1998 appropriations act which prohibited transactions or payments to the PTO under 31 CFR § 515.527 (which at the time referred to registrations and renewals as “transactions”), was not impermissibly retroactive as to Cubaexport. Noting that a “vested right” was required to invoke the presumption against retroactivity, the majority held that Cubaexport did not have a “vested right” in renewal because the Cuban trademark regulations at issue also contained an express reservation allowing them to be amended or modified at any time. The dissent argued that the Supreme Court’s retroactivity jurisprudence makes clear that a statute that impairs an existing “substantive right” is impermissibly retroactive, and that the majority was reading “vested right” to mean something more than substantive rights, thus “driv[ing] a large hole in the presumption against retroactivity.” The dissenting judge noted that Cubaexport had a substantive, existing right to renew its registration, notwithstanding the theoretical possibility that hypothetical future regulations could have eliminated that right.

Federal Circuit: "Capital City Bank" marks not confusingly similar to CITIBANK

The Federal Circuit today handed Citigroup a loss in its opposition proceeding pitting its CITIBANK marks against several marks containing the words “CAPITAL CITY BANK.” Although the decision in Citigroup Inc. v. Capital City Bank Group, Inc., No. 2010-1369 (Fed. Cir. Mar. 28, 2011) was fairly fact-specific, a couple of legal points stood out. First, the Federal Circuit rejected the TTAB’s practice of considering only “reasonable” manners of depicting word (standard character) marks. The court stopped short of re-defining exactly what range of depictions should be considered, however, leaving ambiguity as to exactly what the precise broadening effect of this holding will be. Second, the court noted that “pervasive” use of the phrase “City Bank” in other financial service marks (both registered marks and those found used on various bank websites) “limits the protection afforded to the CITIBANK mark." Interestingly, on appeal, Citigroup waived its arguments as to dilution.

8th Circuit "Church Fight" Trademark Decision

In Community of Christ Copyright Corp. v. Devon Park Restoration Branch of Jesus Christ’s Church, No. 10-1707 (8th Cir. Mar. 21, 2011), the Eighth Circuit addressed several issues:

● whether the mark REORGANIZED CHURCH OF JESUS CHRIST OF LATTER DAY SAINTS is generic (no, in part because of lack of proof of what the public thought and in part based on precedent that church names generally are considered descriptive, not generic);

● whether the use of a church’s trademark by an unauthorized congregation can constitute trademark infringement (yes, it can, and, in this case, did);

● whether the plaintiff was entitled to a permanent injunction (yes, because it prevailed on the merits and irreparable harm is presumed in trademark cases – no mention of the possible impact of eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006)); and

● whether it was an abuse of discretion to whack a small independent congregation with a $348,000 attorneys fees award (no, because there was “willful infringement” in that the defendant ignored the plaintiff’s cease-and-desist letter – which seems like a pretty flimsy reason given the defenses in this unique case resulted in a published opinion).

9th Cir.: Purchase of Competitors' Trademark for Google AdWords Listing is "Use in Commerce"; Court Clarifies Confusion Analysis in Internet Setting

Yesterday the 9th Circuit decided that a company’s purchase of a Google AdWords listing using a competitor’s trademark is a “use in commerce” potentially subjecting the purchaser to liability for trademark infringement under the Lanham Act. In NetWork Automation, Inc. v. Advanced Sys. Corp., No. 10-55840 (Mar. 8, 2011), the 9th Circuit also tried to clarify how to use its version of the well-known multi-factor likelihood of confusion test in this specific Internet setting. The court then vacated the district court’s preliminary injunction. It isn't clear to me whether the 9th Circuit wanted, or even was permitting, the district court to re-assess whether a preliminary injunction was warranted under the newly-clarified confusion analysis.

At the threshold, the 9th Circuit agreed with the 2d Circuit’s decision in Rescuecom Corp. v. Google Inc., 562 F.3d 123 (2d Cir. 2009) that Google’s sale of a trademark as a trigger for an AdWords listing qualifies as a “use in commerce.”

In probably the most significant aspect of its attempt to clarify how to apply the Sleekcraft confusion factors in this setting, the 9th Circuit indicated that when assessing the “similarity” of the parties’ marks, the courts must pay attention to the “labeling and appearance” of the purchased advertisement, including whether it identifies the alleged infringer’s business. The court also noted that the graphics and text that the Internet service provider (here, Google) uses to distinguish the purchased ads from the search results also plays into the confusion calculus, as does the degree of care exercised by typical searchers.

Very unsettling 9th Circuit "Betty Boop" decision on copyright and trademark in BETTY BOOP character

[WARNING: longer-than-usual discussion because of the scariness of the 9th Circuit’s decision]

The 1930s creator of the cartoon character BETTY BOOP transferred all his copyrights in the character in 1941 to a second company, who later transferred it a third company, etc. The creator’s company folded in the meantime. Eventually, the family of the original creator started a new company to purchase back and exploit the BETTY BOOP character. After purchasing those rights (at least that’s what they thought they got) from several possible sources, the family sued the defendants, who sell handbags and t-shirts featuring the BETTY BOOP character, for copyright and trademark infringement. The district court dismissed both claims, holding that the family failed to prove up at least one of the transfers in each of the alternative chains of title, and that this scotched the copyright claim, and that so many people currently use the character on various goods, the family couldn’t claim ownership of a trademark in it either. In a 2-1 decision, the 9th Circuit affirmed the dismissal. Fleischer Studios, Inc. v. A.V.E.L.A., Inc., No. 09-56317 (9th Cir. Feb. 23, 2011).

The Copyright Claim

On the copyright side, the chain of title argument isn’t so much interesting because of its merits, but because of the appellate procedural issue via which the defendants won. The family’s opening appeal brief challenged only one of the chain of title arguments. In response, the defendants not only raised the argument on which they defeated that chain of title theory at the district court, but also an alternative ground for affirming the district court’s dismissal (one they hadn’t raised at the district court). In their reply, the family argued that even under the defendant’s new ground, the chain of title would have ended up with a company from whom the family had also purchased rights back! Indeed, this was one of the alternative title chains the family argued in the district court. But the panel majority held that by not raising the alternative chain of title argument in their opening brief, the family had waived the argument, even though they addressed it fully in their reply to rebut an argument in the appellee’s brief. Moral of this part of the story? It’s this: You know how appellate judges are always urging appellants not to challenge everything and just focus on the best one or two issues?? Well, forget all that. Raise everything. Or pay the price.

But that’s not even the scariest part of the decision.

The Trademark Claim

This is where the panel majority seems to go completely off the rails, resting their decision on a flawed concept that neither party—neither party!—argued or briefed. Resting its decision on Int’l Order of Job’s Daughters v. Lindeburg & Co., 633 F.2d 912 (9th Cir. 1980), the panel majority held that the BETTY BOOP character on the defendant’s t-shirts and handbags did not serve as a trademark because it was the very thing that made the t-shirts and handbags desirable. The panel explained that this made it “functional.” The panel majority also placed emphasis on the facts that the defendants “never designated the merchandise as ‘official’ [family] merchandise or otherwise affirmatively indicated sponsorship” and, moreover, the family “did not show a single instance in which a customer was misled.” Holy cow. I see several issues here, e.g., how does this square with: (a) the concept that a likelihood of confusion as to whether some form of legal permission was required to use an image is indeed actionable confusion; (b) the concept that actual confusion isn’t required; and (c) prior 9th Circuit (and other circuit) decisions that where the alleged trademark is the very thing consumers desire, appropriating it is infringement and is not insulated by functionality doctrine. See Automotive Gold, Inc. v. Volkswagen of America, Inc., 457 F.3d 1062 (9th Cir. 2006) (citing the Nike Swoosh, the Playboy bunny ears, the Mercedes tri-point star, and the Ferrari stallion). And where does this leave Mr. Clean, Aunt Jemima, the Jolly Green Giant, Tony the Tiger, the Pillsbury Doughboy, the Geico Gecko, and, well, you get the picture.

But wait, there’s more! The panel majority then decided that, since it had gone this far astray, it might as well throw in a little overbroad dictum to boot. So it went on to opine that the family’s claim was also precluded by the Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003)—another decision that neither party had cited or discussed. (So much for the time-worn truism that the whole point of the adversarial process is to sharpen the issues for decision.) The panel stated that Dastar precluded the assertion of any trademark rights in the BETTY BOOP character because the family couldn’t prove ownership of the copyright in the character. What? The panel majority reasoned that Dastar stands for the proposition that “a party may not assert a trademark infringement action against an alleged infringer if that action is essentially a substitute for a copyright infringement action.” Yikes! That is quite an overstatement of Dastar, in my view. In other words, if you think you own a design mark that consists of copyrightable expression, you’d better be able to prove you own the copyright too. Or to say it a different way, if you decide to adopt a public domain graphic as a trademark, you’re out of luck. Of course, Dastar said no such thing, as it concerned a section 43(a) action for failure to provide correct attribution concerning who compiled and edited a video consisting of a compilation of war footage (a/k/a “implied reverse passing off”), not a traditional claim for trademark infringement. The whole point of Dastar was that failure to correctly attribute who contributed to the creation of a product was not a representation of “source” actionable under the Lanham Act. But, of course, in contrast, a classic trademark infringement action is precisely that: an action to stop confusion as to source. And this case was not about which Asian or Central American sweatshop actually produced the t-shirts or handbags (with or without child labor and 18 hour-days), but whether they were sponsored by the owners of the BETTY BOOP mark.

Now, I’m not definitively saying that the trademark aspect of this decision is wrong—I want to think about it some more—but, sheesh, there’s a lot of “stuff” to chew on here.

If this decision isn’t reversed on en banc rehearing, it will surely spawn a whole raft of law review case notes and other articles.

UPDATE: Having thought a little more about it, the "Job's Daughters" part of the trademark holding has potentially grave implications for professional and college logo licensing. People generally buy these sports/college logo clothing not for the "assurance of quality through source identifying" connotation of the team's or college's logo, but because they desire to wear clothing with the logo for associational or other reasons, such as liking the way it looks. Just like wearing a character such as, say, Betty Boop. Indeed, the Job's Daughters case specifically rejected the 5th Circuit's seminal Boston Bruins licensing decision (510 F.2d 1004 (5th Cir. 1975)), which paved the way for this sort of official licensing.

9th Circuit: Links to competing services turn cybersquatting into infringement

The 9th Circuit today ruled that an “Internet entrepreneur” (possibly a euphemism for “cybersquatter”) who ran a website at the address not only was guilty of cybersquatting, but also infringed VeriCheck’s VERICHECK mark. What is interesting about the case is that the infringing website was not for a competing service, but was one of those typical “cybersquatter” sites that simply lists lots of seemingly random links to several third party sites. These listings, however, included links to sites of competitors of VeriCheck. Although the Court did not say who was responsible for the appearance of those links (e.g., the cybersquatter or his ISP), the mere existence of links to competing services turned cybersquatting into cybersquatting + infringement (with a dollop of attorneys’ fees).

The case is Lahoti v. VeriCheck, Inc., No. 10-35388 (9th Cir. Feb. 16, 2011) (previous appeal discussed here).

9th Circuit: Amended Federal Dilution Law Does Not Require Defendant’s Mark to be “Identical or Nearly Identical” to Plaintiff’s

The 9th Circuit today revived a federal trademark dilution claim because the district court used the “identical or nearly identical” standard in its analysis of the claim. In Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., No. 09-16322 (Feb. 8, 2011), Levi Strauss claimed that the stitching pattern on the back pockets of certain A&F jeans diluted Levi’s famous “arcuate” stitch design. The district court instructed the advisory jury to determine whether the patterns were identical or nearly so. Based in part on their advisory finding that the marks did not meet this standard, the district court found no dilution.

The 9th Circuit reversed and remanded. It found this standard to have its genesis in cases under state dilution laws and under the original version of the federal dilution act. Although more recent 9th Circuit decisions had repeated this standard in cases involving the 2006 amended version of the dilution statute, the Levi panel did not believe these decisions had squarely addressed the issue. Performing its own analysis, the panel held that the 2006 amendments provided no textual support for the “identical or nearly identical” standard. It specifically noted that the amended act targets dilution caused by “the similarity” between marks, and requires assessment of the “degree of similarity.” The panel believed that the lack of any reference to identicality or substantial similarity in the amended statute was a significant omission that precluded any more stringent requirement.

9th Cir. addresses procedural effect of presumption of validity under § 410(c) of the Copyright Act

The 9th Circuit today highlighted the procedural ramifications of the presumption of validity afforded by § 410(c) of the Copyright Act.

In United Fabrics Int’l, Inc. v. C&J Wear, Inc., No. 09-65499 (9th Cir. Jan. 26, 2010), the district court (sua sponte) dismissed plaintiff’s copyright claims, saying that: (1) the plaintiff hadn’t produced sufficient evidence of the “chain of title” in the underlying design (which it got from an Italian firm); and (2) the plaintiff hadn’t produced evidence that the designs, which were registered as a published collection, were actually published as a collection, as required under 37 CFR 202.3(4)(b).

The 9th Circuit reversed, holding that the district court ignored the statutory presumption of validity when it required the copyright owner to prove these things without first identifying evidence to the contrary. The appeals court noted that it was the defendants’ burden to first explode the presumption by coming up with some proof to the contrary on these issues.

3d Cir.: later-created "memorandum of transfer" of copyright not enough; historical evidence of transfer also required

Section 204(a) of the Copyright Act requires that, to be valid, a transfer of copyright ownership must be in writing, such as a “memorandum of the transfer.” The Third Circuit recently rejected the Ninth Circuit’s requirement that the memorandum of the transfer be “more or less contemporaneous” with the transfer, and held that a memorandum of transfer executed almost 9 years after the alleged transfer was fine (at least where the transferor and the transferee both signed it). But the court further held that there must also be historical evidence – beyond the later-created memorandum -- that the transfer actually occurred. The accused infringer in the case (who was not the transferor) had successfully moved for summary judgment challenging that the transfer ever occurred, and the Third Circuit affirmed that the transferee failed to raise a genuine issue of material fact on that point.

The case is Barefoot Architect, Inc. v. Bunge, No. 09-4495 (3d Cir. Jan. 14, 2011).

8th Cir.: disgorgement of profits under Lanham Act does not, in all cases, require proof of actual confusion

The Eighth Circuit today clarified that its precedents do not necessarily require proof of actual confusion to qualify for an award of disgorgement of the infringer’s profits in all cases. It held that where a licensee willfully uses the mark for services beyond those authorized in the license, the licensor may seek disgorgement.

While the court did not expressly limit its ruling to this factual setting, it was careful to avoid broad dictum implying that disgorgement is available in all trademark infringement settings, irrespective of proof of actual confusion.

The case is Masters v. UHS of Del., Inc., No. 09-3543 (8th Cir. Jan. 6, 2011).

9th Cir. decision on re-sale of "promotional only" copies of music CDs

Promotional music CDs that were sent, unsolicited, from a record company to music critics and radio stations, were subject to “first sale doctrine” and could be freely re-sold—notwithstanding a disclaimer stating that the discs were licensed only and could not be re-sold or transferred.

In UMG Recordings, Inc. v. Augusto, No. 08-55998 (9th Cir. Jan. 4, 2011), Mr. Augusto somehow obtained a bunch of these promotional CDs and re-sold them on eBay. UMG sued him for copyright infringement, arguing that the disclaimer stamped on the discs precluded his “first sale defense”:

"This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws."


The court rejected UMG’s argument that the disclaimer created a license primarily because the UMG sent the CDs out unsolicited. The court also noted that no recipients responded back to UMG, and that UMG did not even try to figure out the status of the copies it sent to the initial recipients.

The court also held that the “Unordered Merchandise Statute,” 39 U.S.C. § 3009—the Unordered Merchandise Statute???; that's some good lawyering!—explicitly permits the recipients of any unsolicited merchandise sent through the mail or similar means to dispose of the merchandise any way they want. The court held that UMG’s unilateral attempt to create a license was inconsistent with this law.

7th Cir. decision on likelihood of confusion and 11th amendment immunity where state appeals TTAB cancellation order to district court

The Seventh Circuit recently issued an interesting decision in the appeal of a district court decision that reversed a TTAB-ordered cancellation. While long (85 pages, including a dissent), the opinion in Board of Regents of Univ. of Wisc. Sys. v. Phoenix Int’l Software, Inc., No. 08-4164 (7th Cir. Dec. 28, 2010), addressed two core issues:

(1) is actual use (rather than the description of goods and services in the registration) relevant to likelihood of confusion in the context of a district court proceeding challenging a TTAB-ordered cancellation? (yes); and

(2) by going the district court route rather than appealing the TTAB decision cancelling its registration directly to the Federal Circuit, did Wisconsin waive its sovereign immunity for 11th amendment purposes, thereby rendering itself vulnerable to Phoenix’s infringement counterclaims? (no).

The TTAB had granted Phoenix Int’l's petition to cancel Wisconsin’s registration. Rather than appeal to the Federal Circuit, Wisconsin challenged the decision in a district court. Phoenix counterclaimed for trademark infringement and sought damages. The district court gave Wisconsin a win/win: it granted summary judgment reversing the TTAB and reinstating Wisconsin’s registration, and held that the 11th amendment barred Phoenix’s counterclaims. The Seventh Circuit reversed and remanded for a likelihood of confusion trial, but affirmed Wisconsin’s immunity to the infringement counterclaims under the 11th amendment.

On the actual use vs. description-of-goods-and-services-in-the-registration issue, the Seventh Circuit noted first that this sub-issue, in the context of a likelihood of confusion analysis, is not a rote comparison of the parties’ goods, but whether the parties’ products are the kind that consumers would believe to come from the same source. The court further noted that the actual goods the parties’ marks are used on may inform the meaning of the terms used in the registration.

As to the 11th amendment issue, the majority held that the mere fact that Wisconsin chose to challenge the TTAB’s cancellation via a district court proceeding in which it could submit new evidence was not enough to constitute a waiver of 11th amendment immunity. The majority felt that, at bottom, for purposes of 11th amendment immunity, such a challenge is simply a continuation of the TTAB proceeding in which Wisconsin was effectively a defendant. The dissent believed that, for 11th amendment purposes, there was a material difference between a straight appeal to the Federal Circuit and the institution of a de novo proceeding at the district court, primarily because, by choosing to file a proceeding in the district court, the challenger could present new evidence.

Happy New Year!

9th Circuit Digital Millennium Copyright Act decision creates split with Federal Circuit on circumventing access controls

In a long, comprehensive opinion, the Ninth Circuit (among other rulings) created a circuit split by disagreeing with the Federal Circuit about the elements of violations of the Digital Millennium Copyright Act, 17 U.S.C. §§ 1201(a) & (b).

In MDY Industries, LLC v. Blizzard Entertainment, Inc., No. 09-15932 (9th Cir. Dec. 14, 2010), the Ninth Circuit addressed a dispute between the creator of the popular on-line game “World of Warcraft” and a manufacturer of a software program that automatically plays the game for users to help them progress through the game’s levels. In a nutshell, the Ninth Circuit held that §§ 1201(a)(1) & (2) created a brand new “copyright”—the right to prevent circumvention of measures designed to prevent or control access to a copyrighted work. The court held that § 1201(b), in contrast, prohibited trafficking in devices that circumvent measures that prevent traditional types of copyright infringement, such as copying, displaying, or performing a work.

The Ninth Circuit’s reading of § 1201(a) creates a circuit split with the Federal Circuit. The Federal Circuit had previously required § 1201(a) claimants to prove an additional element: that the circumventing technology infringes or facilitates the infringement of a copyright (i.e., an “infringement nexus requirement”). See Chamberlain Group, Inc. v. Skylink Techs., Inc., 381 F.3d 1178, 1203 (Fed. Cir. 2004). The Ninth Circuit believed that there was no textual support for requiring an “infringement nexus” and that the legislative history confirmed that no such nexus was required.

The circuit split may induce the Supreme Court to grant cert. if the decision is challenged.

Fed. Cir. orders transfer of multi-defendant patent case to N.D. Cal.

Did you think that having several defendants in multiple other districts insulated an E.D. Tex. patent plaintiff from a § 1404(a) transfer? If so, you may want to qualify that thought a bit.

The Federal Circuit today issued a writ of mandamus ordering the transfer of a multi-defendant patent case to the N.D. Cal. The key facts were these:

• The plaintiff was from the N.D. Cal.
  
• 11 of the 12 defendants were headquartered in California, with 6 of those actually headquartered in the N.D. Cal.
  
• Only one defendant (Dell) was headquartered in Texas (but not in the E.D. Tex.).

So the lesson seems to be this: the “multi-defendant defeats § 1404(a) transfer” strategy doesn't necessarily work where the majority of the defendants are from one particular area outside the forum (even if they’re all not from the same federal district).

In re Acer Amer. Corp., Misc. No. 942 (Fed. Cir. Dec. 3, 2010)

9th Circuit decides that "naked licensing" led to abandonment of mark

The 9th Circuit recently decided that "“The Freecycle Network"—a non-profit organization facilitating the free re-use of unwanted items by others—abandoned the mark FREECYCLE because it failed to exert adequate quality control over its loose network of local affiliates.

The court based its conclusion on the facts that: (1) there was no express licensing agreement between the main organization and its affiliates; (2) a directive to affiliates not to use the mark "for commercial purposes" didn’t constitute an implied license; (3) a one sentence ethics standard and voluntary "etiquette guidelines" did not constitute actual control over the affiliates; and (4) the main organization could not have reasonably relied on the affiliate’s own quality control standards (if any) because there was no evidence of a "close working relationship" between the two.

The case is Freecycle Sunnyvale v. The Freecycle Network, No. 08-16382 (9th Cir. Nov. 24, 2010).

7th Circuit (Posner, J.) decision on proper standards for finding case "exceptional" under Lanham Act

The 7th Circuit today published an interesting decision, written by Judge Posner, on the proper standards for determining whether a case is “exceptional” under the Lanham Act, 15 U.S.C. § 1117(a). The opinion reviews the standards in the other circuits, notes that they seem to differ, and then goes back to “first principles” to try to see if it’s possible both to articulate the proper standard and to reconcile the various circuits’ seemingly different tests.

To cut to the chase, the court held:

We conclude that a case under the Lanham Act is “exceptional,” in the sense of warranting an award of reasonable attorneys’ fees to the winning party, if the losing party was the plaintiff and was guilty of abuse of process in suing, or if the losing party was the defendant and had no defense yet persisted in the trademark infringement or false advertising for which he was being sued, in order to impose costs on his opponent.

The court believed that this test “captures the concerns that underlie the various tests and offers a pathway through the semantic jungle.” In arriving at its holding, the court was swayed by, among other things, the “practical concern” about the misuse of the Lanham Act “to obtain a competitive advantage independent of the outcome of the case by piling litigation costs on a competitor.”

The case is Nightingale Home Healthcare, Inc. v. Anodyne Therapy, LLC, No. 10-2327 (7th Cir. Nov. 23, 2010).

Fed. Cir.'s decision on district court challenges to BPAI decisions to apply to TTAB decisions too?

In today’s en banc decision in Hyatt v. Kappos, No. 2007-1066 (Fed. Cir. Nov. 8, 2010), the Federal Circuit addressed 35 U.S.C. § 145, which concerns the alternative routes by disappointed patent applicants can contest BPAI rulings rejecting a patent: an “appeal” to the Federal Circuit or a “civil action against the Director in the United States District Court . . . .” Addressing the “civil action” alternative, the court held:

(1) § 145 itself imposes no limit on an applicant’s right to introduce new evidence in the district court, regardless of whether he could have introduced before the BPAI;

(2) such new evidence is subject only to the Federal Rules of Civil Procedure and Evidence;

(3) the district court must make de novo findings on any issues implicated by the new evidence;

(4) in contrast, the district court must apply the deferential APA “substantial evidence” standard of review as to issues for which no new evidence was taken; and

(5) issues (as opposed to evidence) not raised in the Patent Office cannot be raised for the first time in a district court action.

The opinion did not mention the trademark-side counterpart to 35 U.S.C. § 145 (i.e., 15 U.S.C. § 1071(b)). In my view, however, (so take it for whatever it's worth), these standards on the patent side may very well apply to proceedings challenging TTAB trademark decisions too, for the wording of the two provisions is virtually identical, at least in the respects that the en banc court found significant:

35 U.S.C. § 145

"An applicant dissatisfied with the decision of the [BPAI] may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court . . . . The court may adjudge that such applicant is entitled to receive a patent for his invention . . . as the facts in the case may appear . . . ."

15 U.S.C. § 1071(b)

"Whenever a person . . . is dissatisfied with the decision of the [TTAB], said person may, unless appeal has been taken to said United States Court of Appeals for the Federal Circuit, have remedy by a civil action . . . . The court may adjudge that an applicant is entitled to a registration . . . , that a registration involved should be canceled, or such other matter as the issues in the proceeding require, as the facts in the case may appear."

I also commend Judge Newman’s partial dissent. She didn’t like points (4) & (5), above. As usual, her dissent seems to make sense.

2d Circuit decision on "false endorsement" and unusual counterfeit-related unfair competition claims

The 2d Circuit today seemed to take a fairly forgiving view of what types of disputes are covered by the Lanham Act. The case is Famous Horse, Inc. v. 5th Ave. Photo Inc., No. 08-4523-cv (2d Cir. Oct. 21, 2010). Famous Horse is a clothing retailer. 5th Avenue Photo is a clothing wholesaler. Famous Horse bought what it thought were genuine “Rocawear” jeans from 5th Avenue Photo, but stopped buying them after determining they were counterfeit. 5th Avenue Photo, however, continued selling the counterfeit jeans to retailers competing with Famous Horse and also advertising that Famous Horse was a “satisfied customer.”

False Endorsement Claims – the 2d Circuit upheld Famous Horse’s “false endorsement” claims under both sections 32 and 43(a) of the Lanham Act (15 U.S.C. §§ 1114(1)(a) & 1125(a)(1)). It held that neither section’s “use in commerce” requirement requires the defendant to have attached the plaintiff’s mark to the goods themselves when the false endorsement related the defendant’s services.

Interesting Unfair Competition Claim – Famous Horse also alleged unfair competition under section 43(a) because 5th Avenue Photo sold counterfeit “Rocawear” jeans to Famous Horse’s competitors. Famous Horse alleged not only that it lost sales, but also that customers would view famous Horse as a price-gouger because the competing stores that 5th Avenue Photo sold to could then sell the counterfeit jeans for less than the genuine jeans sold by Famous Horse. 5th Avenue asserted that Famous Horse lacked standing because the parties weren’t competitors (Famous Horse is a retailer and 5th Avenue a wholesaler). The 2d Circuit rejected this argument, holding that there is no hard and fast rule in the 2d Circuit that, to have standing, the plaintiff be a retail competitor of the defendant, so long as the plaintiff demonstrates that it has a “reasonable interest” to be protected and a “reasonable basis” to think that the defendant is damaging that interest. The court held that Famous Horse’s allegations of injury adequately gave it standing to assert unfair competition under section 43(a).

Challenging assignments of incontestable registrations (the "Stoly" decision)

I quickly read the "Stoly" case (Fed. Treasury Enter. Sojuzplodoimport v. Spirits Int'l N.V., No. 06-3532-cv (2d Cir. Oct. 8, 2010)) when it came a little over a week ago but didn't write anything because I figured it was such a unique and complicated set of facts that, who cares?, really. But a colleague spurred me into more closely re-reading it, and I now see two larger legal points here.

First, where an incontestable registration has later been assigned, a challenge to the assignment is not precluded by section 1115(b)'s provision that incontestability is "conclusive evidence of . . . registrant's ownership of the mark" because where there's a dispute as to the validity of an assignment, an assignee is not necessarily the registrant. And where an assignee's rights are at issue, the recordation of the assignment at the PTO is only "prima facie evidence of execution" of the assignment. Thus, to tap into the "conclusive evidence of ownership" provided by incontestability, an assignee whose assignment is challenged must first prove up a valid assignment.

Second, while the "antecedent question" of the validity of the assignment might be a question of state or even foreign law, federal courts have jurisdiction to hear disputes as to the validity of assignment of a federal registration under the Lanham Act if the challenger specifically seeks any of the remedies provided by the Act.

4th Circuit decision on furniture design knockoffs as both copyright infringement and reverse passing off under the Lanham Act

In an interesting case that I missed (because it issued the day after I had shoulder surgery), the 4th Circuit discussed copyright and Lanham Act claims directed at knock-off furniture designs. In Universal Furniture Int’l, Inc. v. Collezione Europa USA, Inc., No. 07-2180 (4th Cir. Aug. 20, 2010), the plaintiff designed two furniture line busily adorned by many types of decorative designs derived from historical public sources.

The Fourth Circuit first held that in selecting, adapting, and arranging historical design elements from the public domain, the creator of the furniture displayed enough expressive originality to obtain copyrights on the designs.

The Court then dealt with the “more vexing” question of whether the decorative designs carved into the furniture were “conceptually separable” from the utilitarian aspects of the furniture design, because without this separability, otherwise copyrightable material incorporated into a useful article are not eligible for copyright protection. After discussing cases holding that mannequins of human torsos are not copyrightable but highly ornamental designs on belt buckles are, the Fourth Circuit decided that the decorative elements of the furniture at issue were more like the belt buckle and thus were copyrightable.

The Court then went on to (mis)construe the Supreme Court’s decision in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), holding that the defendant’s knock offs amounted to “reverse passing off” under the Lanham Act. In a really small nutshell, Dastar held that the word “origin” in the Lanham Act required the limiting of reverse passing off claims to instances where the accused product actually originated with the plaintiff (like taking Coke and putting it in Pepsi bottles). The 4th Circuit construed some language in Dastar about how licensors can also be a source of “origin” too broadly, however, and held that a knockoff product not made by the plaintiff, but by the defendant, “originated” with the plaintiff. To me, this pretty much re-expands the tummy tuck the Supreme Court gave reverse passing off claims in Dastar, but that’s just my opinion. Your mileage may vary.