Most people, attorneys and non-attorneys alike, have heard of consumer protection agencies like the Federal Trade Commission, or FTC. Likely fewer, however, have heard of the National Advertising Division, or NAD. In short, the NAD operates as the advertising industry’s internal regulatory agency. The NAD monitors truthfulness and accuracy in advertising, and even foresees a voluntary dispute resolution process between advertisers.

Recently, two high profile entities brought their dispute in front of the NAD. The maker of Gatorade, Stokely-Van Camp, Inc., challenged statements in advertising made by the maker of BodyArmor SuperDrink and BodyArmor Lyte sports drinks, BodyArmor Nutrition, LLC. In Particular, Gatorade challenged the truthfulness of BodyArmor’s advertising statements that it is “The Only Sports Drink.” Additionally, Gatorade challenged two videos BodyArmor posted on social media and certain press kits created by BodyArmor that compared certain of its products to Gatorarde’s.

As to the phrase “The Only Sports Drink,” the NAD determined that, although in different contexts such a statement may be considered puffery (i.e. “sales talk”), the way in which the phrase was placed—preceding descriptions of the drinks as containing no artificial sweeteners or being low calorie—implied that no other sports drink was low in calories or contained no artificial sweeteners. As a result, the NAD recommended that BodyArmor discontinue using the advertising term in such a way.

As to the comparison posts and press kits, however, the NAD determined that such comparisons constituted fair advertising. Of particular concern with the comparisons, which compared only select drinks, was whether a consumer would see those comparisons and broadly extrapolate them to all Gatorade products. The NAD determined that a consumer viewing these advertisements would likely not view them in a broad context, but would limit the comparison to the products put forth in the advertisements.

To read more about the National Advertising Division and the tasks it undertakes, visit https://bbbprograms.org/programs/all-programs/national-advertising-division.

Last month, the U.S. Patent and Trademark Office (PTO) issued a guidance document describing how they plan on following the Supreme Court’s recent decision in U.S. Patent and Trademark Office v. Booking.com. You can read our previous blog post about this decision here. This document serves as a roadmap for how the PTO will address “generic.com” trademarks in the future. In Booking.com, the Court rejected a per se rule allowing such trademarks as automatically non-generic. Thus, the agency notes that if examining attorneys want to establish that a generic.com term is generic, they must show “that the relevant consumers would understand the primary significance of the term, as a whole, to be the name of the class or category of the goods and/or services identified in the application.” The PTO goes on to note that even in the absence of evidence showing generic use of a generic.com term, a mark may still be refused if evidence of the record establishes that the proposed mark “yields no additional meaning to consumers capable of distinguishing the goods or services.”

Consumer perception can be shown in a number of ways, one being consumer surveys. When rejecting a “generic.com” mark, the examining attorney will need to explain how the evidence supports the genericness of the term and that the mark does not create new or “additional significance among consumers capable of indicating source.”

Taking into consideration the holding of Booking.com, the PTO acknowledges that generic.com term applicants will have to overcome a significant evidentiary burden if they want to establish that the proposed mark has acquired distinctiveness under Trademark Act Section 2(f). Once again, consumer surveys can be submitted as evidence in support of a Section 2(f) claim. Surveys can be great evidence to support a Section 2(f) claim, however the Supreme Court cautioned that these surveys need to be designed in a way that ensures they’re an accurate and reliable representation of consumer perception of the proposed mark. In addition to the survey submission, applicants will also need to include specifics about the survey including a report detailed information about how it was conducted.

If you are planning to submit an application for a generic.com mark, be sure to check out to the PTO’s guidance to ensure that you’ve provided enough evidence to overcome the evidentiary burden.

 

To apply for a federally-registered trademark with the United States Patent and Trademark Office (USPTO), an applicant is required under 15 U.S.C. § 1051 to, among other things, submit specimens of the mark and verify that it is being used in commerce (or in the event of a future intent to use, verification as such and future submission of specimens).

Last month, the USPTO revised its Examination Guide 3-19, titled “Examination of Specimens for Use in Commerce: Digitally Created/Altered or Mockup Specimens.”  The guidance speaks to whether digitally created/altered and mockup specimens submitted to the USPTO can constitute examples of use in commerce either of a mark on goods or of a mark associated with services. The USPTO concludes that such specimens do not evidence actual use in commerce.  Accordingly, the USPTO instructs examining attorneys to issue a refusal of registration and request additional information from the applicant (while also empowering examining attorneys to conduct independent research).  In response, the applicant may defend the original specimen or may choose to amend its filing or submit a verified substitute specimen.

The USPTO’s Examination Guide defines digitally created/altered and mockup specimens as follows:

  • A digitally created specimen comprises a digital drawing of the goods or packaging on which the mark appears.
  • A digitally altered specimen includes a digital alteration of an existing image of goods or packaging for goods, a display associated with goods, or an advertisement or website that purports to show the mark used on the goods or in the sale, performance, or rendering of services.
  • A mockup specimen comprises a digital or non-digital rendering of what a mark would look like on a product, display, or website; these may be created solely for submission with the application.

Therefore, as a reminder, when compiling evidence of use to submit with a trademark registration, always make sure to utilize actual evidence of use, and not any digitally created, digitally altered, or mockup specimens.

For the first time in nearly three years, the USPTO will be adjusting its fees for Trademark Registrations and for filing fees related to proceedings involving the Trademark Trial and Appeal Board (TTAB). Some fee increases are minimal (e.g., only about 10% increase to file an ex parte appeal). However, other fee increases are substantial, at least one fee increasing by 250%. In addition, the USPTO has added a variety of new fees for various actions.

Notable increases or new fees include:

  • The TEAS Standard Filing Option (used to file an initial application for a trademark) will increase from $275 to $350.
  • The filing a section 8 or 71 declaration (post registration) will increase from $125 per class to $225 per class.
  • A new fee for deleting goods, services, and/or classes from a registration will be added and cost $250 per class.
  • Petitions to the Director will increase from $100 to $250.
  • A new fee for letters of protest to the Director will be added and cost $50.
  • Petitions to the TTAB to cancel a mark as well as Notices of Opposition will increase from $400 per class to $600 per class.
  • A new fee to file appeal briefs in an ex parte appeal will be added and now cost $200 per class.
  • A new fee to request an oral hearing with the TTAB will be added and now cost $500 per proceeding.

These fee changes and others become effective January 2, 2021. Thus, to save some on your legal fees it is best to address your trademark issues sooner than later. Remember, Hindsight is 2020.

In a recent precedential decision, the United States Trademark Trial and Appeal Board (“TTAB”) affirmed an examining attorney’s failure-to-function refusal as respecting the standard character mark TEXAS LOVE, rejecting the applicant’s argument that the refusal violated the Equal Protection Clause of the U.S. Constitution by treating Texas citizens differently than citizens of Florida, California, Nevada, Maine, and Hawaii.

Applicant Texas With Love, LLC (“TWL”) sought registration of the standard character mark TEXAS LOVE for use on or in connection with “hats; shirts.” The examining attorney refused TWL’s application finding that TEXAS LOVE fails to function as a mark because it does not indicate the source of TWL’s goods, or identify and distinguish them from others’ goods. Instead, the examining attorney concluded that the evidence showed that TEXAS LOVE conveyed “a well-recognized and widely used concept or sentiment.” [Decision, at pp. 1-2]. In support of the refusal, the examining attorney submitted substantial Internet evidence showing third party clothing using the mark TEXAS LOVE, in various forms.

TWL appealed the refusal decision to the TTAB. Among other things, TWL argued that the refusal decision violated the Equal Protection Clause of the U.S. Constitution because it treated citizens of Texas differently than citizens of other States. In support of this argument, TWL cited other registrations that the USPTO had issued for the following marks in what TWL deemed to be “contextually identical” situations: FLORIDA LOVE, CALIFORNIA LOVE, VERONA LOVE, BURMA LOVE, SOUTHERN LOVE, EAST COAST LOVE, and WAIKIKI LOVE.

The TTAB began its analysis by noting that “[n]ot every word, name, phrase, symbol or design, or combination thereof which appears on a product functions as a trademark” and “[m]ere intent that a phrase function as a trademark is not enough in and of itself to make it a trademark.” [Decision, at p. 11 (quoting In re Pro-Line Corp., 28 USPQ2d 141, 1142 (TTAB 1993)]. In this particular case, the TTAB found that third party evidence showed that the relevant consuming public would not perceive TEXAS LOVE as a source identifier, but “as a well-recognized and commonly expressed concept or sentiment”—namely, love for or from Texas. [Id., at p. 12]. Further, the TTAB noted that the examining attorney had identified numerous examples of third party uses of TEXAS LOVE (in various forms) on goods identical to or similar to the goods for which TWL sought registration of TEXAS LOVE. In view of such evidence, the TTAB concluded that TWL’s TEXAS LOVE mark does not refer to the sources of the products offered, but, rather, conveys “support for, or affiliation or affinity with the State of Texas.” [Id., at pp. 17-18].

The TTAB also concluded that TEXAS LOVE, in various forms, is widely used by TWL’s competitors in the clothing field, contributing to the determination that the mark fails to function as a source identifier.

Finally, the TTAB rejected TWL’s equal protection argument for two reasons: (1) it lacked factual support; and (2) the Federal Circuit had foreclosed the very argument TWL made.

As to the first argument, the TTAB noted that TWL provided no evidence, other than the existence of third party registrations themselves, to show that the USPTO treats Texas citizens differently than citizens of other States. More specifically, the TTAB stated that TWL failed to introduce any evidence regarding how the third parties used the other marks in connection with their goods and/or services, how extensively the third parties used their marks, whether the third party marks convey particular meanings or commercial impressions, and, if so, what those meanings or impressions are. [Id., at p. 23]. Without such information, the TTAB ruled that it could not make any determination regarding whether the refusal of TWL’s application was made in a situation “contextually identical” to the circumstances that gave rise to allowances of the other registrations. [Id., at pp. 23-24].

As to the second argument, the TTAB pointed to In re Shinnecock Smoke Shop, wherein the Federal Circuit rejected an applicant’s equal protection argument, stating:

[A]llegations of disparate treatment, even if accurate, do not diminish the Board’s and Examining Attorney’s legitimate, nondiscriminatory reasons for denying registration. Even if his allegations were accurate, the most Applicant could establish is that the USPTO should have rejected the other marks. It does not follow that the proper remedy for such mischief is to grant Applicant’s marks in contravention of section 1052(a).

[Decision, at pp. 24-25 (quoting In re Shinnecock Smoke Shop, 571 F.3d 1171, 91 USPQ2d 1218, 1221 (Fed. Cir. 2009))]. In sum, the TTAB relied on the well-settled principle that “[e]ach application for trademark registration must be considered on its own merits.” [Id., at p. 25 (quoting Int’l Flavors & Fragrances Inc., 183 F.3d 1361, 51 USPQ2d 1513, 1519 (Fed. Cir. 1999))].

The decision is In re Texas With Love, LLC, Serial No. 87793802 (TTAB Oct. 29, 2020) (precedential).

Since the COVID-19 pandemic began, the Federal Trade Commission (FTC) has cracked down on companies purporting to sell products that can alleviate or prevent symptoms of COVID-19.  Recently, the FTC announced its approval of a final administrative consent order that settled charges against a marketer of a supplement called “Thrive,” which was advertised as being able to treat, prevent, or reduce the risk of COVID-19.

As discussed in the FTC’s post, Thrive, which consists mainly of Vitamin C and herbal extracts, was advertised and sold online by California-based marketer, Marc Ching doing business as Whole Leaf Organics.  The FTC’s April 2020 administrative complaint states that Ching was advertising and selling Thrive since at least December 2018 but, around the beginning of the COVID-19 pandemic, began marketing Thrive as an “anti viral wellness booster” that can treat, prevent, or reduce the risk of COVID-19. He also deceptively advertised and sold three CBD-containing products.

The FTC’s order bars Ching for making these claims and requires him to send written notices to those who purchased Thrive explaining that it does not have the COVID-19 benefits that he previously advertised and notifying them of his settlement with the FTC. Additionally, he must inform purchasers of the three CBD-containing products that they do not treat cancer.

If a consumer would like to file a report regarding a COVID-19 related scam, they can do so here.

As a reminder, under the FTC Act, the Lanham Act, and state advertising laws, companies should be sure to only advertise information that they have confirmed to be true, accurate, and substantiated – whether related to COVID-19 or any other health benefit.

The Federal Trade Commission (FTC) has reported a three-fold increase in consumer reports about scams arising on social media since last year as well as a spike around the time the COVID-19 pandemic began.  This includes reports about buying products that never arrived and about scams involving romance, economic relief, or income opportunities, which became particularly problematic as the COVID-19 pandemic caused loss of income and jobs.  Although scammers are typically looking for money, sometimes they seek intellectual property.

The FBI reports that intellectual property theft costs US businesses billions of dollars a year and is a growing threat given the rise of digital technology and online file sharing.  The FBI collaborates with brand owners and copyright and trademark holders and, under a new strategy, is working with online marketplaces, payment service providers, and advertisers to help uncover and prevent fraudulent tactics.  The FBI’s tip sheet on safeguarding trade secrets, propriety information, and research is available here.

Companies that operate exclusively online may be a particular target for such scammers.  I recently witnessed a play on a Nigerian scam that targeted an online retail company owned by a family member. (A Nigerian scam is defined as a scheme, typically via email, where the scammer offers a commission to someone who helps transfer a sum of money.)  In this particular scheme, the owner of an online art gallery received a communication from someone purporting to want to buy an expensive painting as a surprise for her husband.  The scammer sent a cashier’s check for well over the painting’s value, surely with the intent to ask that the check be deposited, that a portion be wired back, and that a commission on top of the painting’s price be retained for the inconvenience.  Those who know this scam can predict what happens next — the wire leaves the target’s bank account, the check never clears, and the target has lost the money that was wired.  In this particular scam, it’s possible the scammer could also have ended up with the painting, potentially a valuable piece of intellectual property, without having paid for it.

Luckily the target was too savvy to fall for the scam.  But we did submit a consumer complaint to the FTC in an attempt to protect others who may not be.  Since then, the FTC has announced a new fraud reporting platform for consumers.  The new website, available at reportfraud.ftc.gov, is meant to be a user-friendly way for consumers to report scams, frauds, and bad business practices and now includes a feature for the FTC to provide next steps on what to do.  The FTC will continue to share reports with local agencies, making it a convenient place to file a single report.

Protect your company, your brand, and your intellectual property.  Beware of scammers and fraudsters.  And report their unlawful behavior.

 

On October 27, 2020, the Federal Circuit affirmed a U.S. Trademark Trial and Appeal Board (“TTAB”) decision canceling Corcamore, LLC’s registration for the mark SPROUT. More specifically, the Federal Circuit concluded that the TTAB correctly found that the challenger to Corcamore’s registration had standing, even though the TTAB applied the incorrect legal standard, and that the TTAB did not abuse its discretion in imposing a default judgment against Corcamore as a sanction for Corcamore’s numerous discovery abuses.

In 2014, SFM, LLC filed a petition seeking to cancel Corcamore’s SPROUT registration for vending machine services based on SFM’s own federal trademark registration for the mark SPROUTS for retail grocery store services. SFM asserted that SFM had superior rights in its SPROUTS mark because SFM first used the SPROUTS mark at least as early as 2002—more than 6 years before Corcamore’s claimed first use date for Corcamore’s SPROUT mark. SFM further asserted that continued registration of Corcamore’s mark would damage SFM because the relevant consuming publicly would be likely to confuse the two brands.

Corcamore moved to dismiss SFM’s cancellation petition for lack of standing based on the U.S. Supreme Court’s decision in Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014) (“Lexmark”). Lexmark, which the Supreme Court decided in the context of a civil claim for false designation of origin under 15 U.S.C. § 1125(a), holds that a party has standing to bring a claim if (1) the party’s interests fall within the protection of the Lanham Act and (2) the party’s injuries are “proximately caused” by violations of the Lanham Act.

The TTAB denied Corcamore’s motion to dismiss, concluding that Lexmark did not extend to cancellation of registered marks under 15 U.S.C. § 1064. Instead, the Board concluded that SFM had standing under the Federal Circuit’s decision in Empresa Cubana del Tabaco v. Gen. Cigar Co., 753 F.3d 1270 (Fed. Circ. 2014) (“Empresa”), finding that SFM had sufficiently alleged a real interest in the cancellation proceeding and a reasonable belief of damage, as required under 15 U.S.C. § 1064.

After the TTAB denied Corcamore’s motion to dismiss, Corcamore sent a letter to SFM’s counsel, indicating that Corcamore would bring “procedural maneuvers” against SFM and delay discovery. “Corcamore then embarked on a path of conduct that resulted in two separate sanctions and entry of default judgment in favor of SFM.”  [Federal Circuit Op., at p. 5].

On appeal, Corcamore argued that SFM lacked standing to bring a petition for cancellation of a registered trademark under Lexmark. Corcamore further argued that the Board abused its discretion in granting SFM default judgment as a sanction against Corcamore.

A three-judge panel of the Federal Circuit affirmed the TTAB’s ultimate ruling, but held that the TTAB applied the incorrect legal standard in determining that SFM had legal standing to bring the cancellation proceeding.

Although the Supreme Court decided Lexmark in the context of a false advertising claim under 15 U.S.C. § 1125(a), the Federal Circuit held that Lexmark established the two requirements necessary to find that a party is entitled to bring or maintain a statutory cause of action. First, the party must demonstrate an interest falling within the zone of interest protected by the statue. Second, the party must demonstrate proximate causation.

The Federal Circuit noted that a cancellation proceeding brought under 15 U.S.C. § 1064 is a statutory cause of action provided by the Lanham Act. Accordingly, the Federal Circuit ruled that the Lexmark analytical framework applies to both § 1064 and § 1125(a).

The Federal Circuit, however, concluded that, although the TTAB applied the incorrect legal standard, it still reached the correct result. In reaching that decision, the Federal Circuit stated that a party that demonstrates a real interest in cancelling a trademark under § 1064 has demonstrated an interest falling within the zone of interests protected by § 1064. Moreover, a party that demonstrates a reasonable belief of damage by the registration of a trademark demonstrates proximate causation within the context of § 1064. The Federal Circuit found that SFM had alleged facts sufficient to satisfy both of these requirements and, therefore, had standing under Lexmark to bring the cancellation.

Finally, in light of the facts of record, the Federal Circuit ruled that the TTAB did not abuse its discretion in entering default judgment against Corcamore as a sanction for Corcamore’s repeated discovery abuses.

The decision is Corcamore, LLC v. SFM, LLC, Case No. 2019-1526 (Fed. Cir. Oct. 27, 2020).

As the Senate hearings for Judge Amy Coney Barrett conclude, and as her confirmation looms nearly certain, I’ve been wondering where she falls on Intellectual Property (IP) issues. Turns out so have others.

An article posted on Bloomberg Law titled “Where Does Judge Barrett Fall on IP Issues” noted that Judge Barrett has only decided a small number of IP-related cases during her three years at the Seventh Circuit but has applied a textualist approach each time.  In reviewing her trademark and trade secret decisions where there was a clear result, the authors found that Judge Barrett has neither clearly favored intellectual property owners (siding with them three times) nor accused infringers (siding with them two times).  The takeaway from the authors is on textualism: “The U.S. Supreme Court has increasingly taken a textualist approach to intellectual property issues in recent years, and President Donald Trump’s nomination of Judge Amy Coney Barrett to the high court promises to continue that trend, if she is confirmed.”

34126235 - copyrightThe Copyright Alliance’s blog recently asked, “What Would Amy Coney Barrett’s Supreme Court Confirmation Mean for Copyright?”  The blog references two decisions the Supreme Court issued while Judge Barrett was clerking for the late Justice Antonin Scalia and also the judicial panels on which Judge Barrett has served that have decided cases involving copyright law.  The blog concludes that Judge Barrett has been exposed to “complex infringement disputes and important copyright doctrines that will influence her consideration of the critical copyright issues that come before the Supreme Court.”

IP issues do not appear to have been a focus of Judge Barrett’s confirmation hearings, though she did answer a few IP-related questions from Senator Thom Tillis, Chair of the Senate Intellectual Property Subcommittee, according to an IP Watchdog article summary.  When asked about patent eligibility decisions, Judge Barrett responded that “clarity in decision-making is always something that courts should strive for” and that “clarity is certainly a virtue in this context.”  The IP Watchdog, recognizing that patent law issues would not have come before Judge Barrett at the Seventh Circuit, concluded that these remarks “should sound a hopeful note to the ears of innovators.”  Later responding to Senator Tillis’ questions about copyright law and technology, Judge Barrett responded, “Most of the things you are identifying sound to me like matters of policy, so those seem like matters that are best addressed by the Legislature; the democratically elected body, not policy made by courts.” The IP Watchdog, noting that these comments likely do not provide insight into copyright activism from the bench, concluded that Judge Barrett believes “matters of policy are best addressed by Congress, as is intended by the Constitution.”

A change on the Supreme Court always yields questions about what direction the court will take on various issues.  Although not a focus to date, where the next Supreme Court justice lands on IP issues will inevitably matter in the years to come.

In the COVID-19 era, sports leagues have had to come up with creative ways to move forward with their seasons in a safe and stable environment. The solution for multiple leagues has been to create a “bubble,” in which athletes only interact with other athletes and approved team and league personnel. Essentially, how it works is upon entering the bubble—an area equipped to host multiple games and house multiple athletes—each athlete and participating team and league personnel are tested for COVID-19. Any athletes that test negative can enter the bubble, but continue to be tested regularly to be safe. Any athletes that test positive for COVID-19, however, must quarantine for at least two weeks after testing positive, and afterwards must receive two negative tests in a row to enter the bubble. To date, leagues that have taken this approach have experienced a fair amount of success, have avoided any COVID-19 outbreaks, and have been able to continue on with their seasons.

Of course, the introduction of sports bubbles in the COVID-19 era has gone hand in hand with entities and individuals attempting to trademark different terms and phrases that in some way relate to these bubbles. In late July, the Women’s National Basketball Association started its season in a bubble located in Orlando Florida. Quickly, WNBA players began using the term “Wubble” to refer to their league’s bubble. Shortly thereafter, the WNBA filed for a trademark for the term “Wubble.” Similarly, although it is not yet confirmed, the NCAA is considering hosting their yearly March Madness tournament in a bubble. Considering this a likely possibility, the NCAA recently applied to trademark the phrase “Battle in the Bubble.

Seeking trademarks related to COVID-19 isn’t referenced just for leagues, however. Individual athletes as well have sought to trademark terms or phrases related in some way to the events surrounding their league’s bubble. The NBA—which finished out the second half of their season and their playoffs in a bubble—has had multiple players file for bubble related trademarks. For instance, Miami Heat player Jimmy Butler has filed for three trademarks related to a grassroots coffee business he started from his own hotel room. Further, Los Angeles Clippers player Lou Williams filed for the trademark “Lemon Pepper Lou,” after he received criticism and was forced to quarantine after leaving the NBA bubble to purchase chicken wings.

Presumably, no matter what new situations present themselves in the world, there will always be those seeking to capitalize by connecting a trademark to those situations’ most unique aspects.