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.
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.
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.
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.
In direct response to the U.S. Supreme Court’s decision striking down the constitutionality of section 2(a) of the Lanham Act, which as enacted barred the registration of disparaging trademarks, there is reason to believe that offensive trademark registration applications are on the rise.
According to Reuters, there were at least nine new applications filed with the U.S. Patent and Trademark Office (“PTO”) between the June 19, 2017 Supreme Court ruling and the end of July 2017. Such marks include versions of the N-word, a swastika symbol, and other offensive terms/phrases. For example, Snowflake Enterprises LLC has filed multiple trademark applications for offensive marks, examples of which can be found on the PTO’s website (a version of the N-word can be seen here and a swastika symbol can be seen here). Prior to the Supreme Court’s ruling, it’s likely that the PTO would have outright rejected such filings as they had with similar filings in the past. But the PTO is now under new guidance—that trademark applicants are protected by the free speech rights guaranteed under the First Amendment to the United States Constitution. According to Reuters, the PTO told its staff a few days after the June 19 Supreme Court ruling that they could no longer use section 2(a) of the Lanham Act to reject a trademark application for a disparaging trademark.
The full effect of the June 19, 2017 Supreme Court ruling remains to be seen, but the evidence to date suggests that applications for offensive trademarks will increase and that the PTO will be forced to approve them if the marks otherwise qualify for trademark registration. However, if the applicant does not establish actual use of the offensive mark or does not use the offensive mark as a source identifier, the PTO can still reject the application. Thus, with the exception of the once-applied disparaging trademark ban, the PTO will continue to apply the same standards to trademark applications as it has in the past.
Rashanda Bruce writes:
In a growing world of technology, companies are employing social media platforms to attract new customers and grow their online presence. #Hashtags and @Handles – made popular by Twitter – have proven to be effective sources for growing business. Hashtags label words, making it easier for customers to find themed information or specific content. Handles create unique identifiers, making it easier for companies to create and market their brand.
Celebrities also rely on hashtags and handles to market their brands. With followers ranging in the thousands to the millions, celebrities use these social media tools to maintain and boost engagement with fans. Additionally, celebrities rely on social media when they enter into partnerships with companies. The partnerships typically require celebrities to reference companies on social media platforms. These references increase a company’s awareness and provide brand validation for celebrity followers. Recognizing this trend, some companies have started to reference celebrities via hashtags and handles – even where the celebrity and company do not have a partnership. Although a profitable marketing strategy, companies should understand how this strategy could lead to a celebrity claiming a right of publicity violation.
The right of publicity prevents the unauthorized commercial use of an individual’s name, likeness, or other recognizable aspects of one’s persona. Although not governed by a federal statute, the right of publicity is actionable and protected by state common or statutory law. The right of publicity is a property right, thereby prohibiting others from using an individual’s identity for a commercial gain. Companies who use social media for marketing purposes should take precautionary steps to avoid possible violations.
For example, companies desiring to use a celebrity’s name for marketing purposes should consult with the celebrity. Best practice is to obtain consent from the celebrity in writing with clearly defined language and detailed rights regarding name use on social media platforms. Where a celebrity is unavailable or unresponsive, companies should think about whether it is better to simply refrain from using the celebrity’s name. Companies should also develop policies for employees who use social media on behalf of the company. Establishing protocol will help alleviate concerns and risk.
Social media marketing using celebrity names can be profitable for companies when appropriately used. However, this same marketing tool can also prove to be burdensome and costly if celebrities feel their publicity rights have been violated. In a growing world of technology, companies need to exercise caution and good judgment when making these marketing decisions.
Rashanda Bruce is a summer associate, based in the firm’s Minneapolis office.
Nike continues to flex its ever-growing muscles in protecting its lucrative Jumpman brand, blocking the NFL’s Rob Gronkowski’s registration of a silhouette of his signature touchdown spike earlier this week. In a Notice of Opposition before the Trademark Trial and Appeal Board of the United States Patent and Trademark Office (“USPTO”), Nike argues that Gronkowski’s mark is too similar to the Jumpman logo (a silhouette of Michael Jordan dunking a basketball), one of the most recognizable trademarks in sports.
Gronkowski’s company, Gronk Nation, L.L.C. is applying for registration of the mark shown above and to the left in connection with “Clothing, namely, hats, caps, shirts, T-shirts, jerseys, sweatshirts, pants, jackets, [and] rain jackets”. In a formal opposition, Nike alleges that Gronkowski’s goods, in combination with his mark, are too similar to the Jumpman logos used in connection with “Footwear and clothing, namely pants, shorts, shirts, t-shirts, sweatshirts, tank tops, warm-up suits, jackets, hats, caps, and socks”, as well as “Footwear, t-shirts, shorts, pullovers, pants, warm-up suits and tank tops”. Nike believes that registration of Gronkowski’s mark will lead to consumer confusion as people could theoretically purchase Gronkowski-branded goods thinking that they are actually getting a pair of Air Jordan 4’s.
In addition, Nike seeks denial of Gronkowski’s registration based on fame. Nike alleges that it has continuously used the famous Jumpman logo in commerce for more than 25 years; Nike’s earliest registration for the Jumpman logo was over 20 years ago; and its Jumpman logo became famous well before Gronkowski’s use of his mark. As a result, Nike believes that registration of Gronkowski’s mark will lead to dilution of the distinctive quality of the Jumpman logo.
Nike’s opposition prevents Gronkowski’s application from proceeding to registration. Gronkowski has until August 5 to respond to the Notice of Opposition or the USPTO can abandon his application. Spokespersons for Nike and Gronkowski have said they wish to resolve the matter without a legal battle.
A potential legal battle would be an awkward clash between Nike – a behemoth in the sports apparel industry – and Gronkowski, who, ironically, has an endorsement deal with the very company that is opposing his registration. If it comes to that, Gronkowski would need to overcome Nike’s arguments and evidence of consumer confusion. Even if Nike loses on its likelihood of confusion claim, it would almost assuredly prevail on its dilution claim, as proving fame does not require any evidence of consumer confusion. Moreover, Nike would likely have no issues proving the fame of its Jumpman logo.
Nike took advantage of USPTO filing procedures in receiving the maximum 180-day filing extension for its Notice of Opposition. Gronkowski’s application would have likely proceeded to registration if no other parties had opposed the application as long as Gronkowski assured the USPTO that it was using his mark on the goods listed on his application.
Amid the hullabaloo over the U.S. Supreme Court’s decision this week in Matal v. Tam, a much broader and potentially more significant development might be overlooked. It shouldn’t be.
The case involved Simon Tam’s band “The Slants,” and as our Elizabeth Patton wrote earlier this week, it invalidated the Lanham Act’s prohibition on the registration of disparaging marks. The crucial development that might be missed, however, is separate from the fascination over whether this decision spells the end of efforts to invalidate the trademark registrations held by the NFL for its football team in Washington, D.C. – it does. Rather, the Slants’ case should be seen for what is lurking in the opinions of the concurring justices. That is, the Tam decision marks a potent evisceration of the First Amendment’s commercial speech doctrine, ensuring heightened constitutional protection for commercial speakers.
The commercial speech doctrine has long been invoked to allow broader, more intrusive regulation by government of speech that can be characterized as “commercial.” This is the doctrine that justifies not only the Trademark Office’s regulation of trademarks, but also the Federal Trade Commission’s regulation of social media, and a local municipality’s regulation of highway billboards. The commercial speech doctrine holds that because commercial speech is more robust – that is, because it is financially better equipped to defend itself – the government may have a freer hand in regulating such speech. Under this doctrine, a government regulation of commercial speech has heretofore been subject to a lesser degree of constitutional review – the so-called “intermediate” scrutiny of the Supreme Court’s Central Hudson test.
The Tam case dramatically undermines those prior principles.
Indeed, the various opinions in the Tam case buttress a development in the law that has been building in recent years, where the Supreme Court has been much more skeptical of government attempts to regulate the speech of businesses and other commercial actors. This latest case now solidifies a five-justice majority, and potentially a larger one, that will require rigorous, full-bore, core-speech “strict scrutiny” for government regulations of commercial speech when the regulations attempt to restrict or punish non-misleading commercial speech on the basis of the “viewpoint” expressed in the speech.
In other words, there are at least five justices, and likely more, who no longer focus on whether the speech being regulated is “commercial.” Instead, these justices are willing to apply strict scrutiny – and even a presumption of unconstitutionality – to a regulation that can be characterized as “viewpoint” based.
The nose-counting for this principle looks like this:
In his separate concurrence in Tam, Justice Thomas reiterated his long-held view, one that he persistently expressed along with the late Justice Scalia, that all government regulation of commercial speech should be subjected to strict scrutiny if the speech to be regulated is not misleading. Thus, as First Amendment scholars have long recognized, Justice Thomas already stands in the camp that rejects the rationale of the commercial speech doctrine, that commercial speech is entitled to less protection under the First Amendment.
In addition to Justice Thomas, a four-justice wing led by Justice Kennedy concurred with the outcome in Tam. Kennedy, along with Justices Ginsburg, Sotomayor, and Kagan (that is, the so-called “liberal” wing of the Court) sounded a clarion call for the highest level of constitutional scrutiny on regulations that attack a person’s speech based on the speaker’s viewpoint, regardless of whether the speaker is engaged in commercial speech. Justice Kennedy wrote that “it is a fundamental principle of the First Amendment that the government may not punish or suppress speech based on disapproval of the ideas or perspectives the speech conveys.” He then said that regardless of whether the speech in question is commercial – that is, regardless of the nuances of the commercial speech doctrine – “[a] law found to discriminate based on viewpoint is an egregious form of content discrimination which is presumptively unconstitutional.” (emphasis added)
Thus, there is a five-justice majority, between Kennedy, Thomas, Ginsburg, Sotomayor, and Kagan, that will apply full First Amendment protection against a government regulation that discriminates on the basis of a speaker’s viewpoint, regardless of whether the speaker is commercial or not.
And finally, there is reason to anticipate sympathy for this view even among the rest of the justices. The portion of Justice Alito’s principal opinion that reflected only a four-justice plurality of himself, and Chief Justice Roberts and Justices Thomas and Breyer, observed that the Supreme Court has said “time and again” that the public expression of ideas “may not be prohibited merely because the ideas are themselves offensive to some of their hearers.”
These pronouncements line up to be an eight-justice majority, and potentially a unanimous Court once Justice Gorsuch’s views become known (he did not participate in the Tam case). The Court has thus made clear that the government is barred from regulating truthful, non-misleading commercial speech where the only justification for the regulation is that the commercial speech offends the sensibilities of the listeners.
This expansion of the strict-scrutiny regime into territory once thought to be an area of more fulsome government regulation puts into play all kinds of statutory regimes. Clearly, in addition to the anti-disparagement provision of the Lanham Act, that statute’s additional prohibitions against the registration of trademarks that are “scandalous” or “immoral” soon will be invalidated. (Indeed, the Trademark Office has already signaled its recognition of the likely invalidity of these provisions in briefing it submitted to the Federal Circuit last year.) As a reuslt, trademark applicants who previously were unable to obtain registrations of marks with profanity in them or marks with sexual innuendoes now likely will be able to obtain such registrations.
Similarly, the FTC’s regulatory guidance that has required media companies to disclose whether content on their websites are “sponsored” is potentially subject to strict scrutiny because these restrictions are a regulation of commercial speech based on the viewpoint of the speaker.
Other statutory regimes are equally at risk under this now more robust protection of commercial speech. Hence, states that have enacted “veggie libel” laws that prohibit advertising that criticizes a state’s agricultural products are now likely to face a presumption of unconstitutionality and a need to justify the laws under a strict scrutiny regime.
In addition, states that have enforced restrictions on companies’ truthful, non-misleading advertising will face more legal challenges. One prime example will be the states where marijuana has been legalized but the states have also restricted how those cannabis businesses may advertise their products. Those regulations discriminate against the cannabis business’ advertising based on their viewpoint. The Tam decision means that those regulations are presumptively unconstitutional.
Similarly, municipalities that have prohibited or restricted the advertising of ride-sharing or room-sharing businesses also will find it much more difficult to defend such commercial speech regulations because they enjoin speech on the basis of the speakers’ viewpoints.
The fundamental sea change that can be seen in the Tam decision is that non-misleading, truthful commercial speech is no longer the benighted stepchild of the First Amendment. Rather, such speech now is entitled to the strongest form of constitutional protection when the government seeks to regulate such speech because of the speaker’s viewpoint – that is, when the speech is targeted “based on the government’s disapproval of the speaker’s choice of message.”
The practical effect of the Tam case, when read together with the earlier line of decisions applying the highest form of First Amendment protection against viewpoint discrimination, is that businesses now have an even stronger First Amendment basis to resist government efforts to control the way they speak to the public and their customers when their speech is not misleading.
This morning, the United States Supreme Court issued its long-anticipated ruling in the Lee v. Tam (now designated Matal v. Tam) trademark dispute involving the rock band, The Slants. As detailed in an earlier blog post, the legal issue faced by the Supreme Court was whether section 2(a) of the Lanham Act, which bars the registration of disparaging trademarks, is constitutional.
Justice Alito wrote the opinion for the Supreme Court, which affirmed 8-0 the Federal Circuit’s prior determination that the disparaging trademark ban is facially unconstitutional under the First Amendment’s free speech clause. In reaching that conclusion, Justice Alito explained that trademarks constitute private speech, not government speech as the government had argued. As Justice Alito pointedly and simply stated, “Speech may not be banned on the ground that it expresses ideas that offend.” Justice Alito’s analysis, other aspects of his opinion joined by a smaller number of justices, and two concurring opinions can be read here.
As noted in an earlier blog post, although the Supreme Court decided to hear the Tam case last year, it decided not to hear the Washington Redskins’ related trademark dispute described in another earlier blog post. It now seems that the Supreme Court’s decision with respect to The Slants will allow the Washington Redskins to keep their federally-registered trademarks in the Redskins name, despite the United States Patent and Trademark Office’s prior cancellation of a number of those trademarks. More broadly, the outcome of the Tam case may entitle any trademark registrant to invoke the First Amendment’s free speech clause to register disparaging or offensive trademarks.