Yesterday the Trademark Trial and Appeal Board (“TTAB”) affirmed the refusal by the United States Patent and Trademark Office (“USPTO”) to allow a Florida company to register trademarks containing the word “Keto.” In its ruling, the TTAB explained that the term “keto” is descriptive for ketogenic dietary products, even when combined with the other words making up the company’s trademark registrations. With the popularity in ketogenic dieting and products, this may serve as an informative ruling going forward.
Update: Brand Enforcement Challenges
The General Data Protection Regulation, or GDPR, took effect May 25, 2018. As predicted, the GDPR has complicated access to WHOIS information (commonly used to look up the contact information for website domains for, among other things, stopping others from infringing IP rights) and given ICANN (the corporation that manages WHOIS data) a headache.
ICANN (Internet Corporation for Assigned Names and Numbers) continues to struggle to identify a proposal that bridges the gap between the requirements of the GDPR and access to WHOIS information. On the day the GDPR took effect, ICANN passed a Temporary Specification, which attempted to facilitate GDPR compliance while also preserving parts of the WHOIS system of domain name registration data. This temporary guideline states the registrar and registry operator must provide reasonable access to personal registration data to third parties for: (1) legitimate interests, except where those interests are overridden by the interests or fundamental rights and freedoms of the registrants or (2) when the specified request is deemed lawful by the European Data Protection Board (EDPB), a court having jurisdiction, or applicable legislation or regulation.
First, these temporary specifications have not prevented the brand enforcement problems I previously discussed. For example, some European domain name service registrars have decided to no longer collect WHOIS information. Furthermore, Brian Winterfeldt has reported that a California-based registrar has declined a data access request related to a specific enforcement effort of intellectual property rights and that other registrars are responding to such requests on a “case-by-case basis with no transparent or predictable criteria.” More alarming is the report that at least one global company has estimated its ability to enforce trademark rights against infringing domains may drop 24%.
Second, the EDPB still has problems with ICANN’s proposal. On July 5, 2018, the EDPB urged ICANN to develop new legal justifications for why it asks for the data that makes up the WHOIS database and provided further guidance in developing a GDPR-compliant WHOIS model. ICANN appears to be taking the EDPB’s guidance to heart and is hopeful they can create a GDPR-compliant-model that satisfies their purpose of providing WHOIS data to those who need it.
Unfortunately, only time will tell if a GDPR-compliant WHOIS database will emerge. In the meantime, it has become more difficult to determine who is in charge of websites infringing on intellectual property rights making brand enforcement more challenging.
How Bankruptcy Effects Rights Under Trademark Licenses
When a trademark owner/licensor files for bankruptcy, there is an open question as to whether 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. When it comes to the licensing of patents and copyrights, the question is already closed: Congress created an exception in U.S. bankruptcy law that allows licensees of such intellectual property to retain their rights even after a licensing agreement has been rejected by the intellectual property owner who has filed for bankruptcy. However, whether purposely or not, Congress did not mention trademarks in the exception, thereby leading to the current question.
The U.S. Supreme Court is currently considering whether to grant certiorari in a case that would answer this question and resolve a circuit-split on the issue. That case is Mission Products Holdings, Inc. v. Tempnology, LLC N/K/A Old Cold LLC, which was decided by the First Circuit early this year in favor of the trademark licensor, Tempnology. The First Circuit held that Tempnology’s rejection of its licensing agreement with Mission Products Holdings caused the latter to lose its trademark rights under the parties’ agreement in light of Tempnology’s bankruptcy. Now Mission Products Holdings, Inc., the trademark licensee, has filed a petition seeking review by the Supreme Court and a ruling that a trademark licensee’s rights to use a trademark cannot be revoked upon the trademark owner/licensor filing for bankruptcy.
The International Trademark Association (INTA) has already filed an amicus brief asking that the Supreme Court take the case and resolve the dispute in favor of trademark licensees, who make significant investments in their businesses using the licensed marks. According to INTA’s brief, trademarks “are the most widely used form of registered intellectual property” and a ruling in favor of trademark licensees “enhances the value of trademark licenses and promotes the stability of the trademark system.” Tempnology’s response to Mission Product Holdings’ petition is due in early September, and the case is set for conference in late September, after which the justices may decide to hear the case (or not).
Send a C&D, or Just Sue?
When evaluating how to address what you believe constitutes infringement, false advertising, or unfair competition, the decision to send a cease and desist letter or to file a lawsuit becomes an important one. Is there a right approach in each instance? No. There are pros and cons to each and, in a typical lawyer answer, the best approach “depends.”
On the one hand, sending a cease and desist letter has the potential of resolving the issue outside of court, with fewer legal fees and on a quicker timeline. It also has the effect of placing the other party on notice of your claim and allowing you to make an argument for willfulness down the road (if the party continues the conduct despite the allegations).
On the other hand, filing a lawsuit shows the seriousness of the allegations and preserves your choice of venue—i.e. which court you want to be in. Sending a cease and desist letter first would let the other party know that there is a potential of a lawsuit, which would allow that party to file a declaratory judgment action in its own choice of venue before you have the chance to do so. As a reminder, under the Declaratory Judgment Act, a party who has been accused of illegal conduct like infringement, false advertising, or unfair competition can affirmatively file suit and ask that a court declare its conduct lawful.
Deciding which approach to take will depend on the situation and any prior history with the alleged infringer or advertiser. Make sure to weigh all of your options and discuss with your legal counsel if necessary.
Loss of the Swing Vote
Justice Anthony Kennedy of the United States Supreme Court announced his retirement yesterday, after having served three decades on the bench. Justice Kennedy is known for casting the swing vote in a number of major cases and has drafted opinions on a myriad of hotly-contested issues, including LGBT rights and the First Amendment. His retirement places President Trump in a position to select a conservative justice that will shift the ideological balance of the Court for years to come.
How this will impact future rulings in advertising, trademark, and other intellectual property cases remains to be seen, but we can certainly expect a more conservative slant from the bench going forward.
The Looming (Brand Enforcement) Blackout
There are over 330 million domain names supporting over 1.8 billion websites having a unique hostname on the internet right now. But who owns each of these? There are many reasons one may want to identify the owner or operator of a particular domain or website. In addition to law enforcement and cyber security, owners of IP need to be able to enforce their rights against illegal use of their IP or bad faith domain name registration and use. For example, if your trademark is being infringed by its use on a particular website, you would want to be able to identify the owner, send a cease and desist, and/or sue. Somewhat similar to registering a home or motor vehicle, domains or websites are typically registered and information useful to identifying the individual responsible for the domain or website has, historically, been publically available.
WHOIS is a system established in the 1980s, as the modern internet was emerging. It is used to look up domain registrations in databases that store the registered users or assignees of, e.g., a domain name or IP address. Currently, the name, mailing address, phone number, and administrative and technical contacts of those owning or administering a domain name must be made publicly available through WHOIS, pursuant to the Internet Corporation for Assigned Names and Numbers, or ICANN. WHOIS is not an independent database, but rather relies on third-party accredited entities to manage data and registration. According to ICANN, it is “committed to implementing measures to maintain timely, unrestricted and public access to accurate and complete WHOIS information, subject to applicable laws.” Id.
Enter the General Data Protection Regulation, or GDPR, which is a European Union data protection regulation that will apply to any company that transacts with EU citizens, regardless of the location of the business. The GDPR requires any business that collects any personal data to request explicit permission from the subject before using that data. Personal data is defined as any information that can be used to directly or indirectly identify that person, e.g., a name, photo, email, computer IP address, etc. Under the GDPR, enterprises must limit access to personal data to only authorized individuals that specifically require access to that data. The penalties for violations are significant – up to 20 million Euros or more – and there are no exceptions for enterprise size or scope. Id. The GDPR goes into effect May 25, 2018.
ICANN has been struggling to identify a proposal that bridges the gap between the requirements of the GDPR and the access to WHOIS information. The proposals, thus far, do not do enough to assuage the fears of the third party entities that manage WHOIS data that their actions of publishing information to WHOIS are sufficient and justifiable. On the other hand, brand owners and other WHOIS users are concerned that the proposal takes an unjustifiably conservative approach. Thus, ICANN expects a WHOIS blackout period starting May 25, 2018. Going forward, there may be significantly less publicly available information to conduct enforcement investigations, send cease and desist letters, or prepare and file suit.
Online brand enforcement is about to become much more difficult if not, in some cases, nearly impossible.
TMs: Never Too Late to the Party
March Madness always brings about trademark enforcement-related news. What we generally don’t see is news about a participating school submitting trademark applications while the basketball tournament takes place. But according to numerous articles last week, including this one in the Baltimore Sun, the University of Maryland Baltimore County hadn’t sought trademark registrations prior to securing the first upset of a #16 seed over a #1 seed two weeks ago. After that historic victory, however, the University asked attorneys to file trademark applications for the phrases “16 over 1,” “UMBC Retrievers,” and “Retriever Nation”—which the Baltimore Sun poignantly characterized as capitalizing on the University’s “skyrocketing commercial cachet.” Given the immediate increase in university bookstore apparel sales, the University’s quick response to that newfound cachet is more than timely.
Contrast UMBC’s recent trademark enforcement efforts with those of Iowa State University, which we’ve previously covered on this blog. As a reminder, Iowa State University had refused to continue to license university trademarks to two of its students and their chapter of the National Organization for the Reform of Marijuana Laws because the organization was using the university’s mark on pro-marijuana t-shirts. That dispute raised issues of the interplay between trademark licensing principles for public universities and students’ First Amendment rights, the latter of which the federal court found was trump. Last week, in addition to the $150,000 emotional distress damages and $193,000 in legal bills already awarded, the judge approved another $598,208 in attorneys’ fees and costs, bringing the total cost to state taxpayers to almost $1 million.
These quite varying anecdotes serve as a reminder that it isn’t just public and private companies that think and care about trademark enforcement—universities do too, even if they’re late to the party.
Creating Buzz Through Creative Brand Management
Today is International Women’s Day. As a way to celebrate, McDonald’s has flipped their iconic golden arches upside-down. The arches, one of the most recognizable logos, have been physically flipped in one California location but can be seen on McDonald’s social media channels. Putting aside the effort to flip the California sign, by simply rotating its logo on social media McDonald’s was able, whether intended or not, to accomplish several marketing and advertising objectives. First, the move helped bring further awareness to an inspiring campaign; a great way to enhance brand identity and perception. Second, it created plenty of buzz and free publicity with news outlets in the U.S. and around the world picking up the story. Third, while the change was significant enough for people to take notice, it was not significant enough to cause any brand confusion. That is, consumers could still quickly identify the source.
This move serves as a great reminder that companies can use their brand identity, including their logos and other trademarks, in creative new ways to accomplish a variety of goals. Today, McDonald’s has helped to make sure that International Women’s Day and its objectives are a part of our global conversation. I’m loving it and I’m sure McDonald’s is too.
Fourth Circuit Finally Rules on Washington Redskins Trademark Case
In what may be the final installment of a series of blog posts related to the Lanham Act’s disparaging trademark ban and its effect on the Washington Redskins’ trademarks, the Fourth Circuit finally issued a decision in the Redskins’ case. When the United States Supreme Court ruled last June in a case involving the Slants rock band that section 2(a) of the Lanham Act was unconstitutional, the fate of the Washington Redskins’ trademarks became clear. But it took until yesterday for the Fourth Circuit to officially weigh in.
In yesterday’s simple one-page decision, the Fourth Circuit vacated the lower court’s ruling (which affirmed the U.S. Patent and Trademark Office’s earlier order) that six of the team’s trademarks violated section 2(a) of the Lanham Act. In other words, as expected, the Fourth Circuit issued an order in line with the Supreme Court’s decision that the disparaging trademark ban is unconstitutional and cannot bar the registration of an allegedly disparaging trademark. As part of its ruling, the Fourth Circuit dispensed with oral argument and remanded the case to the lower court for further proceedings consistent with the Supreme Court’s decision. Given that the remand is merely a formality at this point, the Washington Redskins may now finally feel closure on the issue (though in true procedural fashion, the Fourth Circuit’s Notice of Judgment does confirm that there is 90 days to file a petition for certiorari to the Supreme Court).
To trace this blog’s history of this interesting trademark issue, check out blog posts here, here, here, here, here, here, here, here.
Student Organization Trademark Licensing Dispute Results in Emotional Distress Damages
At most public universities, student organizations are permitted to license various university trademarks to designate the organization’s involvement with the university and the organization’s status as a registered student organization. My colleague Chris Beall previously wrote blog posts here and here about a dispute stemming from this practice that involved the First Amendment, Iowa State University, two of its students, and their chapter of the National Organization for the Reform of Marijuana Laws (“NORML”). As a reminder, the case involved Iowa State University’s refusal to continue to license university trademarks to NORML because the organization was using the university’s mark on pro-marijuana t-shirts. The federal district court, and later the Eighth Circuit (twice), ruled in favor of the students, finding that the First Amendment trumps normal trademark licensing principles for public universities and that Iowa State University violated the students’ First Amendment rights.
According to the Des Moines Register last week, the State of Iowa agreed to pay $150,000 to the two students as emotional distress damages and $193,000 in legal bills to their two law firms. But apparently this agreement only resolves attorneys’ fees related to the Eighth Circuit aspect of the parties’ dispute, not the district court work for which the students plan to request an additional amount in attorneys’ fees from the court.
As my colleague previously wrote, this case stands as an important reminder that trademark licensing principles are different for governmental organizations because of the overarching constraints of the First Amendment.