Continuing my ongoing coverage of the Lanham Act’s disparaging trademark ban, the Federal Circuit ruled today that the U.S. Supreme Court’s June 2017 ruling striking down the ban on disparaging trademarks also applies to the ban on “immoral” and “scandalous” trademarks set forth in section 2(a) of the Lanham Act. Applying First Amendment free speech rights, the Federal Circuit overturned the U.S. Patent and Trademark Office’s refusal to allow a trademark applicant to register the term “Fuct” for his apparel brand. Despite the Supreme Court’s ruling regarding disparaging trademarks, the USPTO had apparently continued to take the position that it would not register immoral or scandalous trademarks. The Federal Circuit has now rejected that position, finding that the ban on immoral and scandalous trademarks is unconstitutional just like the ban on disparaging trademarks.
Following up on my blog post last month related to the Coachella/Filmchella trademark infringement case pending in the Central District of California, the court held this week that the organizer of the Filmchella music festival cannot use the name Filmchilla now either. The court had previously issued a preliminary injunction in favor of the organizers of the Coachella music festival enjoining the defendant’s use of Filmchella, but following the parties’ flurry of motions, the court extended its ruling to enjoin the use of Filmchilla as well. The court was apparently persuaded that Filmchella and Filmchilla sound very similar to each other and are both similar enough to Coachella to warrant injunctive relief.
Following upon on my earlier blog post about the Food & Drug Administration’s (“FDA”) menu labeling rule, which implements the nutrition labeling provisions of the Patient Protection and Affordable Care Act of 2010, the FDA recently released new supplemental guidance in advance of the current compliance deadline in May 2018. This new guidance is meant to address concerns regarding implementation of the menu labeling rule and is open for public comment until early January 2018. The FDA cautions that its guidance is not binding and is merely meant to represent the FDA’s current thinking on the issue. For a more detailed discussion of the menu labeling rule and its impact, take a look at my colleague Alexander S. Radus’ recent post on the firm’s Franchise Law Update blog.
The Coachella/Filmchella trademark infringement case continues to heat up. Last month, my colleague Megan Center wrote a blog post about the preliminary injunction granted by the Central District of California to the organizers of the Coachella music festival related to another party’s use of Filmchella to refer to a film festival. Interestingly, the plaintiff attempted to seek expedited proceedings but the Filmchella festival had already occurred by the time of the court’s order.
Subsequently, the parties have filed a flurry of motions. The plaintiffs first filed an ex parte motion asking the court to hold the defendant in contempt for violating the preliminary injunction order, but the court found no basis for emergency relief and instead required the parties to argue their positions by regular motion. The plaintiffs then filed a new motion for an order to show cause as to why the defendant should not be held in contempt, and both parties moved for reconsideration and clarification of the court’s preliminary injunction order.
The plaintiffs contend that the defendant has continued to use terms prohibited by the order, that there is new evidence supporting the issuance of the injunction, and that the court should clarify the scope of the injunction, including deeming it both retrospective and prospective. The defendant argues that the court’s order is unclear and insufficiently detailed, that the court should clarify the time to comply and the acts to be restrained (including whether use of a related term, Filmchilla, is prohibited), and that there is new evidence disproving damage to the plaintiffs. These motions will be heard by the court in the next few weeks, but for now, it’s safe to say that there is no end in sight for this ongoing trademark battle.
Pet products are subject to advertising, labeling, and safety-related laws and regulations just like any human product. For an update on the Food & Drug Administration’s guidance on the compounding of animal drugs from bulk drug substances and the labeling of pet medications, see Nancy Halpern’s recent blog post on Fox Rothschild’s Animal Law blog. For more information on the FDA’s regulation of pet and veterinary products, see the FDA’s website.
Last month, a journalism collective called the Fourth Estate Public Benefit Corp. (“Fourth Estate”) petitioned the United States Supreme Court to review a decision issued by the Eleventh Circuit involving the question of when a copyright holder can properly file a copyright infringement lawsuit. At issue is 17 U.S.C. § 411(a), which states that “no civil action for infringement of the copyright in any United States work shall be instituted until preregistration or registration of the copyright claim has been made in accordance with this title.” Although copyright holders obtain copyright protection immediately upon the creation of a copyrightable work, copyright holders cannot initiate a lawsuit without satisfying the “registration” requirement set forth in 17 U.S.C. § 411(a). According to a Copyright Office circular, this means that “registration (or refusal) is necessary to enforce the exclusive right of copyright through litigation.”
However, the Circuit Courts are split as to whether “registration” as used in 17 U.S.C. § 411(a) includes the mere filing of a registration application or whether it requires that the Copyright Office have actually approved or denied the registration application. Earlier this year, the Eleventh Circuit held in Fourth Estate Public Benefit Corp. v. Wall-Street.com that “registration” requires the latter. Because Fourth Estate had applied for copyrights that had not yet been decided upon by the Copyright Office, the Eleventh Circuit held that Fourth Estate could not properly bring its copyright infringement lawsuit against Wall-Street.com, a news website that Fourth Estate claims kept its news stories live after Fourth Estate’s membership was cancelled. Therefore, the Eleventh Circuit affirmed the lower court’s dismissal of Fourth Estate’s complaint.
Now, Fourth Estate asks the Supreme Court to weigh in, reverse the Eleventh Circuit’s decision, and resolve the dispute amongst the Circuit Courts. In the event the Supreme Court hears the case, copyright holders will finally obtain clarity as to whether they may file suit merely after filing an application for a copyright registration. On the other hand, if the Supreme Court declines to hear the case, copyright holders will be forced to continue to evaluate which courts are, or may be, favorable on the issue. If copyright holders are stuck with filing in an unfavorable court, they must evaluate the risks of waiting to file a lawsuit (and potentially paying for an expedited registration) or of jeopardizing dismissal of their complaint.
On November 1, 2017, the Supreme Court distributed the case for conference on November 21, 2017. After that conference, we should know whether the Supreme Court has granted certiorari, and will thus hear the case, or whether the Circuit Court split will remain for the foreseeable future.
Earlier this week, Under Armour filed a declaratory judgment action in Maryland federal court against Battle Fashions Inc. and Kelsey Battle seeking an order that Under Armour is not infringing any of Battle Fashion’s trademark rights. In its complaint, Under Armour describes multiple communications the defendants sent to Under Armour demanding that it cease and desist all uses of the phrases “I Can Do All Things” and “I Can. I Will.” as infringing upon the defendants’ “ICAN” trademark, or otherwise be subject to legal action and an injunction. In addition, Under Armour alleges that the defendants sent communications to its advertising agency, NBA player Steph Curry, and his agent asserting that Under Armour is infringing the defendants’ “ICAN” trademark. That trademark was obtained by Kelsey Battle doing business as Battle Fashions in 2006.
According to its complaint, Under Armour uses the phrase “I Can Do All Things” on a line of apparel associated with Steph Curry as a reference to his favorite bible verse: “I can do all things through Christ who strengthens me.” Likewise, Under Armour uses the phrase “I Can. I Will” on various of its apparel products. Under Armour asserts that, prior to initiating this action, it told the defendants that it “was using ‘I Can’ as part of formative and descriptive phrases, such as ‘I Can Do All Things,’ that the use was a fair use, that numerous third parties use similar descriptive phrases that begin with ‘I Can,’ and that confusion was unlikely.” But Under Armour asserts that it did not receive any concession from the defendants and thus it decided to initiate a declaratory judgment action.
Under the Declaratory Judgment Act, 28 U.S.C. § 2201-2202, a party may affirmatory file a lawsuit seeking a declaration or order regarding its legal rights. In this context, as a result of Battle Fashion’s demands, Under Armour seeks an order that it is not infringing, has not infringed, and is not liable for any infringement of the defendants’ trademark rights under either the federal Lanham Act or any state trademark or unfair competition laws. In its complaint, Under Armour explains that, without an order from the court, it believes it cannot know with certainty whether it is exposing itself to liability through its uses of the phrases “I Can Do All Things” and “I Can. I Will.” on its products. The defendants have not yet answered the complaint.
Last month, the Food & Drug Administration (“FDA”) sent a lengthy warning letter to Nashoba Brook Bakery, a bakery based in Massachusetts, identifying a number of alleged violations of food regulations and labeling regulations. One such allegation was that the bakery’s Nashoba Granola product improperly listed “love” as an ingredient on its label. Specifically, the FDA alleged, “Your Nashoba Granola label lists ingredient ‘Love’. Ingredients required to be declared on the label or labeling of food must be listed by their common or usual name [21 CFR 101.4(a)(1). ‘Love’ is not a common or usual name of an ingredient, and is considered to be intervening material because it is not part of the common or usual name of the ingredient.”
The FDA’s love-related allegation has garnered some press both locally and nationally and is a good reminder regarding labeling regulations and the FDA’s enforcement authority. Other FDA warning letters can be found here.
The attendance of a multi-day concert/festival in the desert seems to be a right of passage for millennials with events popping up all over the country. However, are you permitted to utilize the goodwill associated with those events to create your own event? The U.S. District Court for the Central District of California (Court) held that a company could not do so in granting a preliminary injunction in Coachella Music Festival, LLC and Goldenvoice, LLC v. Robert Trevor Simms.
Robert Trevor Simms (Simms) purported to create a film festival known as FILMCHELLA. Prior to filing for the injunction, Coachella Music Festival, LLC and Goldenvoice, LLC (collectively, Coachella) sent numerous cease and desist letters to Simms demanding that Simms change its name with no success. As such, Coachella was forced to file for a preliminary injunction to prevent Simms from using the terms, “Filmchella”, “Coachella for Movies” and “Coachella Film Festival” due to alleged trademark infringement. Coachella argued that Simms’ use of these terms will cause consumer confusion, dilution of its marks and other irreparable harm.
Generally, a claimant must fulfill the four-pronged test to allow a court to grant a preliminary injunction in its favor. Specifically, the moving party must establish that: (1) it has a likelihood of success on the merits of the underlying case, (2) it is likely to suffer irreparable harm if no action is taken, (3) the balance of inequities shifts in the favor of the moving party, and (4) an injunction is in the public interest. Here, the Court took a slightly different approach and used a sliding scale approach.
In granting the preliminary injunction, the Court noted that even if a moving party cannot fulfill the first prong of the test, a Court may decide that the moving party has sustained its burden if the moving party can show the balance of hardships shifts sharply in its favor of the moving party and the remaining two prongs of the test also weigh in its favor.
In examining whether Coachella had sustained its burden to obtain a preliminary injunction, the Court first examined the merits of the trademark infringement claim. Here, the Court determined that a protectable interest existed through Coachella’s trademark registrations for COACHELLA and CHELLA. Second, the Court held that the likelihood of confusion inquiry weighed in Coachella’s favor because both events are designed to be artistic, multi-day festivals; Coachella’s marks are widely known and strong; and using the suffix CHELLA is likely to confuse consumers as to the affiliation with Coachella. However, Coachella failed to demonstrate that it is likely to succeed on the merits of the underlying claim because the two events are focused on different mediums of entertainment; the marks look and sound different; no actual confusion has been demonstrated; Coachella failed to submit concrete evidence that the two events compete with one another; and Simms’ lacked the intent to confuse consumers. As such, Coachella is required to demonstrate that it fulfills the “shifts sharply” rule in its favor.
In this case, the Court held that Coachella sustained its burden. First, Simms’ event occurred prior to the issuance of this order so the potential injury to Simms is greatly decreased. Further, the issuance of this order does not prohibit Simms’ from conducting other film festivals under a different name. Additionally, Simms’ continued use of the potentially infringing mark is likely to cause serious, irreparable harm to Coachella with respect to potential damage to its reputation and dilution of its trademarks. Lastly, it is in the public interest to grant this injunction to prevent potential customer confusion. As such, the Court held that Coachella sustained its burden and granted the preliminary injunction.
What this decision demonstrates is a court’s willingness to grant a preliminary injunction despite a moving party failing to show a likelihood of success on the merits of the underlying claim. This is a big win for large companies seeking to protect their brands. It’s a hit to the little guys trying to make a name for themselves. Time will tell how far future courts will take this ruling, and what facts will support a determination that the balance of hardships “shifts sharply” in favor of the moving party.
The Federal Trade Commission (“FTC”) operates a single National Do Not Call Registry at donotcall.gov for both personal land lines and cell phones. Although the FTC notes that the Federal Communications Commission (“FCC”) regulations prohibit telemarketers from utilizing automated dialers to call cell phone numbers without a consumer’s prior consent, the FTC allows consumers to “register” cell phone numbers (in addition to land line numbers) on the Registry in order to notify telemarketers that they don’t want to receive unsolicited telemarketing calls. Once a consumer registers a particular number, it will stay on the Registry until the consumer cancels the registration or discontinues service for that number.
If a consumer receives an unwanted sales call after more than 31 days have passed since placing a number on the Registry, the FTC encourages reporting that call. However, the FTC notes that the Registry only prohibit sales calls, meaning that companies may still make certain calls like political calls, charitable calls, debt collection calls, informational calls, and telephone survey calls. In addition, companies may make a sales call to a consumer if they have recently done business with the consumer or received written permission from the consumer.
In light of developing technology, the FTC has seen an increase in the last several years of illegal sales calls, particularly calls with pre-recorded messages and fake caller ID information known as “robocalls.” The FTC prohibits robocalls that promote the sale of any good or service. However, the FTC notes that certain pre-recorded messages are permitted — e.g. purely informational calls, political calls, calls from certain health care providers, calls related to collecting a debt, and calls made by banks, telephone carriers, and charities.
To combat illegal sales calls and robocalls, the FTC reports that it has sued hundreds of companies/individuals and obtained over a billion dollars, is coordinating with law enforcement and industry groups, and is pursuing the development of technology-based solutions. According to the FTC, companies that violate the Registry or conduct an illegal robocall may be fined up to $40,654 per call. Thus, companies should always make sure to follow proper procedures when making sales calls, particularly pre-recorded sales calls, to consumers.