The United States Patent and Trademark Office (“USPTO”) approved Campbell Soup Company’s (“Campbell’s”) application to trademark the word “chunky.”  Campbell’s filed an application with the USPTO back in May 2018.  In its application, Campbell’s cited to “massive unsolicited media coverage of chunky,” according to the Philadelphia Business Journal.  The word “chunky” has been parodied by pop culture on various outlets, including programs like Saturday Night Live, The Simpsons, Family Guy, and The Daily Show.  Campbell’s has also maintained a twenty-year partnership with the NFL.

According to the Philadelphia Business Journal, Campbell’s said the “chunky” trademark will be limited to connection with soups.  Using “chunky” in connection with other types of food will not be an issue.  “’Non-prominent, descriptive’ uses of the word — like ‘chunky-style’ — that aren’t a trademark or brand name also pose no issues.”  Campbell’s first used the word “chunky” back in 1969.  Since that time, Campbell’s said it has spent more than $1 billion in advertising soup products under the word “chunky.”  About 75 percent of consumers associate “chunky” with Campbell’s.

We live in an era where news, information, and trends move very quickly. Words, phrases, or ideas that were obscure or non-existent yesterday can be the top trending story tomorrow. These overnight trends are now routinely used by opportunists in trademark applications. But trademarks are meant to be used to identify the source of and to distinguish the goods and services of one seller or provider from those of another. Indeed, as the USPTO recently reiterated, “[t]he Trademark Act is not an act to register mere words, but rather to register trademarks…. The more commonly a phrase is used, the less likely that the public will use it to identify only one source and the less likely that it will be recognized by purchasers as a trademark.” For example, when the President tweeted out the word “covfefe” on May 31, 2017, the internet’s use of the word in social media, public discourse, and merchandise exploded. The word was not only used in memes, but was displayed on hats, t-shirts, jewelry, bodysuits, and mugs. See id. Accordingly, when an opportunist attempted to trademark the term, the USPTO rejected it: “the market is awash in products that display the term [covfefe]…” And as such, “the public will not understand ‘#covfefe’ to identify one, and only one, source of clothing and to recognize [the] applicant as that source when it appears on [the] applicant’s goods.”

If you want to get rich covfefe using the trending word or phrase of the moment, you might be able to sell some swag but you probably will not be able to trademark the trend.

Of late, multiple authors of this blog have followed the legal landscape around “scandalous” trademarks. In particular, this post follows up on the USPTO’s petition to the Supreme Court, which we previously covered.

A “scandalous” or “immoral” trademark is one which a member of the public would likely find “shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable,” and generally offensive to one’s conscience or morality. Until recently, trademarks that were “scandalous” or “immoral” were prohibited. However, in December of 2017, the Federal Circuit, in In re: Erik Brunetti, found that the portion of the Lanham Act prohibiting scandalous trademarks unconstitutionally restricted free speech.

On January 4 of this year, the Supreme Court of the United States agreed to hear the appeal of In re: Erik Brunetti to conclusively determine whether the “immoral” or “scandalous” portion of the Lanham Act is in fact invalid under the First Amendment’s Free Speech Clause. In Iancu v. Brunetti, the Court is set to hear argument in April of 2019, with its final decision to come shortly thereafter. If the Supreme Court upholds the lower court’s decision, new and previously “scandalous” trademarks will likely be in front of the Trademark Office. Only time will tell what new and interesting trademarks consumers may start seeing if scandalous trademarks are no longer widely prohibited.

Chances are you have seen rumblings of creative, even (dare I say) funny cease-and-desist letters, particularly those aimed towards trademark or copyright infringement, popping up in the news. You know the ones: an actor playing a town crier pops in on a local brewery to read a cease-and-desist letter in ‘ye olde English; or a popular fast food joint sends a pun-filled letter to a local brewery demanding they cease from using the restaurant’s trademarked image. These kinds of cease-and-desist letters, especially in the copyright and trademark context, are becoming all the more prevalent.

But is this the best way to demand an entity stop infringing on your trademark? As anything goes, such a strategy can have very real pros, and very real cons.

First, a little background into what exactly cease-and-desist letters are, and the purposes they serve. Generally, a cease-and-desist letter is a notice to the entity receiving it that the activity they are participating in may be illegal, or more particularly in the case of copyright and trademark infringement, that their activity infringes. Although a cease-and-desist letter has no immediate legal effect, the entity receiving the letter may not use the excuse that it did not know the sending party believed its behavior was illegal, as the letter put it on notice of its potentially illegal activity. Notably for the sake of copyright and trademark infringement, if the entity persists in its illegal behavior after receiving the letter, such notice may aid in proving intent, willfulness, and bad faith.

Although cease-and-desist letters are often thought of as sternly worded letters from stuffy attorneys, creative and humorous cease-and-desist letters can have real benefits for a company. As alluded to above, creative cease-and-desist letters have received especially beneficial PR as of late. As companies become more and more of an open book in this age of social media and online news, crafting creative ways to assert a company’s legal rights helps show that the company is amiable, fair, and all in all fun. Not to mention, such exposure can turn in to free and hopefully beneficial press.

However, creative cease-and-desist letters must be drafted the right way, as they also carry credible risk. For one, if the creativeness is taken over the top, the recipient of the letter may not take it seriously. Ultimately, cease-and-desist letters are meant to be taken seriously and cause the recipient to stop its infringing action—if the recipient thinks the letter is simply a joke, it may continue on engaging in its infringing behavior. In that same vein, if the humor placed in the letter misses the mark, or muddles the issue, the recipient may have an argument that it was in fact not on notice of its allegedly infringing behavior. Finally, straightforward cease-and-desist letters are often quiet and discrete. By issuing a humorous letter, a company is taking a risk and opening itself up to potential public scrutiny. However, if a company is able to strike that perfect balance between informative and humorous, it is potentially a worthwhile risk to take.

All in all, creative and humorous cease-and-desist letters, if done right, are largely beneficial in the copyright and trademark infringement context. If you decide to send such a letter, make sure to do it right, and of course try to have the wittiest attorney you know write the letter for you (although some say witty attorneys are few and far between).

Earlier this month, the Canadian Intellectual Property Office (“CIPO”) published a new set of Trademark Regulations and announced that amendments to Canada’s trademark laws will go into effect on June 17, 2019.  The CIPO’s website describes the regulatory initiative as “accession to trademark treaties and modernization of Canada’s trademark regime.”  As summarized by the Canadian Trademark Blog, the amendments include:

  • Canada’s accession to the Madrid Protocol;
  • eliminating filing bases and use of a mark as a prerequisite;
  • introducing a requirement of grouping goods and services into Nice classes;
  • introducing a shortened 10 year term for registration and renewal; and
  • introducing new distinctiveness requirements for registration.

The Canadian Trade-marks Act is available here.  The new Trademark Regulations are available here.

The National Labor Relations Board (“NLRB”) is seeking comment through mid-December on its proposed rule establishing a joint employer standard, as set forth in 83 FR 46681.  One of our Fox Rothschild partners, Tami McKnew, submitted the following comment to the NLRB, which speaks to the implications of the joint employer rule on trademark licensors/licensees:

“The proposed rule specifically acknowledges the effects of the 2015 shift in joint employer analysis evident in the Board’s decision in Browning-Ferris Industries, 362 NLRB No. 186 (“Browning-Ferris”). Following the Browning-Ferris decision, franchisors, temporary employment firms, contract employers and others whose businesses necessitate some degree of interaction with and arguable control over non-employed workers found themselves as joint employers, despite decades of precedent otherwise. The effect on such businesses was immediate and profound.

With this proposed rulemaking the NLRB more clearly defines the conditions under which joint employment may be evident, and largely restores the pre-Browning-Ferris analytical framework. This is entirely appropriate, given the decades of business relationships and industries whose very structure incorporated and depended upon the prior established analytical framework. As recognized in the Notice, the proposed rule also reflects the pre-Browning-Ferris well-established and long-standing joint employment analytical framework.

However, that the Notice fails to adequately address, by specific acknowledgement or by example, the concerns of licensors and licensees of intellectual property, in particular patent, trademark or service mark licensors. Owners of such intellectual property rights must police and protect those rights; failure to do so may render such rights unenforceable. In legal jurisprudence, a patent owner’s policing obligations have been whittled down, especially given the elimination of a laches defense in infringement actions, SGA Hygiene Products Aktiebolag v. First Quality Baby Products, 137 S.Ct. 954 (2017), but affirmative action must be undertaken by the licensor to protect against infringement. The policing obligation remains for trademark owners, however. 15 U.S.C. §1064(5)(A).

Patent and trademark owners may license rights to practice patented technology or use trademarks or service marks. Such licenses require the licensee to abide by standards and/or to adhere to particular practices. Certain types of patents, for instance, process or method patents, may dictate an entire process and all the operations required to perform the method or process; the licensee has little or no choice as to the operations governed by the patent license.

Similarly, trademark or service mark licenses may dictate extensive quality control standards, processes and procedures. The most obvious example is the central role that trademark and service mark licensing have in a franchise system. But such licenses are not limited to the franchise industry. A dealer or distributor may sell products bearing the trademarks of one or more licensors; it may service products pursuant to licenses from different licensors; and it may lease products under license from yet a third licensor. The scenario is not unlikely. A tire dealer may be licensed to sell multiple brands; it may be licensed to provide recapping services, as directed in the license, by a different licensor; it may lease products under the service marks of yet a third licensor. Each of the licenses will include mandated procedures and operations over which the dealer has no control.

In each of these cases, control over significant operations in the licensee’s business is dictated by the licensor. Will the efforts of the licensors to police and enforce the licensed rights expose them to the risk of being considered the joint employer of the licensee’s employees whose employment is to perform such operations? And for a licensee who holds licenses from multiple licensors, as in the distribution example above, are multiple licensors potential joint employers? In each situation, the licensor can be said to offer “direct and immediate” control over the licensee’s employees, in that the licensor dictates the operations that form the central part of their employment. The ability of an owner of intellectual property to reap the potential financial benefits of a patent or trademark/service mark is ephemeral at best if enforcing those rights exposes one to the risk of becoming a joint employer of the licensee’s employees. More importantly in the context of the NLRB’s proposed rulemaking, it makes little sense to include such licensors at the bargaining table. Absent specific recognition in the proposed rule of the unique position of intellectual property licensors and licensees, the application of the joint employer analysis is unclear.

I respectfully suggest amending the proposed rule to include language which provides that the status of joint employment is inappropriate based solely on a licensor’s policing or enforcement of its patent, trademark or service mark requirements and standards. Intellectual property owners should not be dissuaded from enforcing their rights to control, police and enforce their patent, trademark or service mark rights.”

Credit: Tami’s comment was originally posted on Fox Rothschild’s Franchise Law Update blog.

 

As I previously blogged about, there is a circuit split as to whether, when a trademark owner/licensor files for bankruptcy, the licensee of the trademark can legally continue use of the mark or whether the trademark owner/licensor can reject its obligations under the licensing agreement and effectively prohibit the licensee’s continued use of the mark.  A case arising from the First Circuit, Mission Product Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC, involves this precise question and has made its way to the United States Supreme Court.

At the end of last week, following the submission of briefs from the parties and others, the Supreme Court decided to grant certiorari in the case.  According to SCOTUS blog, the issue presented is: “Whether, under Section 365 of the Bankruptcy Code, a debtor-licensor’s “rejection” of a license agreement—which “constitutes a breach of such contract,” 11 U.S.C. § 365(g)—terminates rights of the licensee that would survive the licensor’s breach under applicable non-bankruptcy law.”

Not surprisingly, the Supreme Court did not provide any reasoning or insight into its decision to grant cert.  Nor did it directly respond to the parties’ positions regarding a recent order in Tempnology’s underlying bankruptcy case, which Tempnology argued (and Mission Product Holdings disagreed) may have a bearing on the Court’s decision to do so.

 

 

Over the past year, including in my blog post last month, we’ve traced the progression of the Coachella/Filmchella lawsuit, which was scheduled for trial earlier this month.  Approximately a week before trial, the parties settled the case and the Court entered a stipulated order as a result.  The order contains a permanent injunction prohibiting the Filmchella defendants from using the Filmchella marks, the Coachella marks, and any confusingly similar marks and requiring them to transfer certain domain names.  Like many trademark cases, this interesting and contested one did not make it to a jury.

The Coachella/Filmchella trademark infringement case, which we have previously covered herehere, and here, is headed to trial in California this October.  Last week, the federal judge assigned to the case denied Coachella’s partial summary judgment motion and ruled that a jury, not the judge, must ultimately decide whether the Filmchella founder committed trademark infringement by way of his movie festival.  The standard the judge had to apply was whether a reasonable juror could find that the two festivals are not similar enough to cause confusion, which is exactly what the judge determined.

As a result, the case will head to trial and will be decided by jury verdict.  Until then, the court’s preliminary injunction in favor of Coachella, which currently prohibits the use of Filmchella, remains in effect.

 

Just when we thought the unconstitutionality of the ban on disparaging and scandalous trademarks had been resolved, the United States Patent and Trademark Office (“USPTO”) is shaking things up.  As a reminder, and as previously covered on this blog here and here, there were two important rulings in 2017 related to the trademark ban set forth in section 2(a) of the Lanham Act.  First, in June 2017, the United States Supreme Court ruled that the disparaging trademark ban is unconstitutional under the First Amendment’s free speech clause and later, in December 2017, the Federal Circuit found that the Supreme Court’s ruling also applies to the ban on immoral and scandalous trademarks.

Refusing to accept the latter ruling, the USPTO has now petitioned the Supreme Court to review the Federal Circuit’s decision and to essentially reinstate the ban on scandalous trademarks.  Although the unconstitutionality of the disparaging trademark ban is settled law from the Supreme Court, the USPTO views the scandalous trademark ban as different and as not violative of the First Amendment.  Whether the Supreme Court will hear the case and will agree with the USPTO remains to be seen.