Damn Bad Business Decision

A Fort Collins taco shop has made a wicked bad decision.

According to the AP, Dam Good Tacos [DGT] opened sometime in 2006. About the same time, Torchy’s Tacos [TT], a taco franchise in Austin, began using DAMN GOOD TACOS as part of its branding.

TT has three relevant trademark registrations.* TT wrote to DGT asking them to stop using DAM GOOD TACOS. TT offered to help DGT pay for the rebranding. DGT refused. TT is suing.

First, let’s be really clear that trademark law sees no difference between DAM and DAMN. Say them out loud. They sound exactly the same. End of discussion.

So whose rights will prevail?

DGT may have limited common law rights to DAM GOOD TACOS in Fort Collins that will allow it to go on using the name for its existing restaurant. If the court allows that, does it mean that DGT has won?

No. They still lose:

  • DGT will be out tens of thousands of dollars in legal fees. Imagine how else they could have used that money to promote and grow their business.
  • This proud independent taco shop will not be happy when it’s confused with TT some day. And that will happen.
  • DGT won’t be allowed to open a second restaurant using the same name outside its current area.
  • Potential buyers of the restaurant won’t pay as much for the goodwill because of the limitation and the confusion.

It sounds unfair. It may even sound mean. But DGT needs to make a business decision, not an emotional one. Rebrand.

 

*Here are TT’s relevant registrations:

Filed Use started Registered Disclaims
TORCHY’S DAMN GOOD TACOS July 2008 Nov 2006 March 2009 TACOS
DAMN GOOD TACOS Feb 2015 2006 Oct 2015 GOOD TACOS
DAMN GOOD Feb 2015 2006 Oct 2015

 

Photo of tacos by James Willamor used under Creative Commons Attribution-ShareAlike 2.0 Generic license.

 

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The Wasp Still Stings

A little earlier this year, a court in Turin, Italy ruled in favor of Piaggio & C.  S.P.A., the company that makes the iconic Vespa® scooter. A company in China had copied the design for the scooter and was selling its product in Italy.

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The ruling was based on both Piaggio’s copyright and five “3-D” trademark registrations in Italy for their scooter design. It’s a big deal that the trademarks were part of the ruling because the copyright will expire but the trademark registrations, as we’ve learned, can live forever.

Piaggio presented evidence of how well-recognized the Vespa is. They conducted a survey and were able to show that 85% of the people in the survey could recognize the contours and design of a Vespa. The percent grew to 95% when the pool was limited to people who regularly ride scooters.

In other words, just by looking at a drawing of a scooter, 85% of Italians could tell which scooters were made by Piaggio. That’s one hell of a strong brand.

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So, does that mean no one else can make scooters? You already know the answer to that question is no.

But it does mean you can’t make a scooter that incorporates the iconic elements of the Vespa design.

What’s the lesson here: Figure out why customers want your stuff and then make sure you protect the hell out of whatever it is that distinguishes you from your competition.

 

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Protecting a Perfume

The intellectual property of a perfume is hard to protect: The composition is usually a trade secret, but it isn’t that hard for a competitor to compose a compound that’s very close to an existing scent.

So, as with so many other goods and services, protection of the market for the product comes largely by protection of the trademark. That includes a registration of the trademark for the house (Chanel®) and the scent (No. 5®).

The power of a perfume trademark was recently expanded by a court in the Netherlands.

Here’s what happened: Bargello® created smell-alike scents for popular perfumes and gave each of their smell-alike scents a number. So far, Bargello was not infringing anyone’s rights.

Then Bargello create a list, like this, that allowed customers to find the smell-alike for their favorite perfumes:

  • 404    Little Black Dress by Avon
  • 114    London by Burberry
  • 280    Omnia by Bulgari
  • 705    Euphoria by Calvin Klein
  • 674    Chic by Carolina Herrera
  • 135    No. 5 by Chanel

That’s where the District Court of The Hague drew the line. The court held that this wasn’t permissible “comparative advertising.” Rather, this was using a protected trademark owned by a competitor to promote Bargello’s smell-alike products.

It’ll be interesting to see whether similar lawsuits are brought in other jurisdictions and how those courts decide.

What do you think? Should a company be allowed to use a competitor’s trademark like this? How do we balance the interest of consumers in knowing how goods compare to the interests of companies in maintaining the value of an asset they created?

 

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Rock on or Not So Much?

Gene Simmons of the rock band Kiss® has applied to register a hand gesture as a trademark for entertainment services. His application says he’s been using the hand gesture since 1974. November 14, 1974, to be exact. Here’s the drawing of the gesture.

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There are plenty of registrations for stylized versions of hand gestures, like these:

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But this is different. This is a hand gesture itself. Is that ok?

There’s nothing wrong with having a hand gesture as a trademark. Anything can function as a trademark if it identifies a particular source of goods or services. Carol Burnett is extremely well-known for pulling her earlobe at the end of a performance. I would definitely describe her iconic ear-pull as a trademark.

But what about Simmon’s hand gesture?

Imagine a picture of a rock singer, with all identifying features scrubbed out, but the hand gesture clearly visible. If I show that to people who listen to rock music, how many of them would say: “Oh, yeah, that’s Gene Simmons” and how many would say: “Not sure who that is, but he seems cool.”?

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In other words, is this something that Simmons does, or is it something rock stars do? The answer to that question is at the core of whether the hand gesture is a trademark.

If this hasn’t been trippy enough for you, what counts as infringement for hand gestures? Lots of rock stars use the devil’s horn gesture. Is that infringement? Can Gene Simmons make them stop?

Trademark law is soooooooo cool.

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Google Genericide

In 2012, Chris Gillespie registered 763 domain names that included the word “google.”[1]

A few months later, Google took ownership of all of them using a special rule called “UDRP,” which is available only to registered trademark owners.[2]

Gillespie then tried to deregister two Google trademark registrations, claiming that GOOGLE had become generic.[3]

As we’ve already seen, if your product name becomes the generic word for the product you’re selling, you can lose your rights and your registration: linoleum, yoyo, cellophane.

Gillespie submitted the results of a Thermos survey[4] to show that “a majority of the relevant public uses the word ‘google’ as a verb – i.e. by saying ‘I googled it.’”[5]

The Ninth Circuit looked at the evidence Gillespie provided and asked whether the GOOGLE trademarks had “taken the ‘fateful step’ along the path to genericness.” Was the “primary significance” of Google “the name for a particular type of good or service irrespective of its source.”[6]

The court made it clear that just because someone uses a trademark as a verb, she isn’t necessarily using it a generic word: We have to explore what’s her mind. What does she mean when she says: “I googled adorable cat pictures”?

  • I used Google to search for adorable cat pictures.[7]
  • I used a search engine to search for adorable cat pictures.[8]

If she means the first sentence, she’s not using GOOGLE in a generic way.

The court said that Gillespie’s suit “cannot survive . . . based on ‘sheer quantity’ of irrelevant evidence”[9] showing that people “verb” Google. The surveys needed to be worded in a way that reveals what’s in the speaker’s mind.

So, go ahead and Beeline that trademark. Just be sure and do it at beelinelegal.com.

 

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[1] For example: googledisney.com; googlebarackobama.net; googlenewtvs.com.

[2] The Uniform Domain Name Dispute Resolution Policy or URDP. You have to own a trademark registration that predates the offending domain name registration in order to use UDRP.

[3] Mr. Gillespie actually joined an existing lawsuit that had already been filed by David Elliot. Both the UDRP proceeding and the lawsuit involved registrations 2884502 and 2806075. Elliot v. Google, Opinion issued May 16, 2017, page 4.

[4] Gillespie’s Thermos survey asked 251 respondents: “’If you were going to ask a friend to search for something on the Internet, what word or phrase would you use to tell him/her what you want him/her to do?’ Over half of the 251 respondents answered this question by using the word ‘google’ as a verb.” Elliot v. Google, Opinion issued May 16, 2017, page 15.

Google used a Teflon survey: “A Teflon survey begins with a brief lesson explaining the difference between brand names and common names. It then asks respondents to classify a series of words, including the trademark at issue, as either brand names or common names. In response to Google’s Teflon survey, a little over 93% of respondents classified ‘Google’ as a brand name. Most respondents also classified ‘Coke,’ ‘Jello,’ ‘Amazon,’ and ‘Yahoo!’ as brand names, and classified ‘Refrigerator,’ ‘Margarine,’ ‘Browser,’ and ‘Website’ as common names. Unlike [the] Thermos survey, Google’s Teflon survey offers comparative evidence as to how consumers primarily understand the word ‘google’ irrespective of its grammatical function.” Elliot v. Google, Opinion issued May 16, 2017, page 16. Internal citations omitted.

[5] Elliot v. Google, Opinion issued May 16, 2017, page 5.

[6] Elliot v. Google, Opinion issued May 16, 2017, page 7. Emphasis added.

[7] This is called a “discriminate verb.”

[8] You guessed it: This is called an “indiscriminate verb.”

[9] Elliot v. Google, Opinion issued May 16, 2017, page 20.

“Happy Talk” Law is Dead!

Today Simon Tam of The Slants won a tremendous victory for free speech.

If you’re feeling despondent about the state of the world, if you’re in need of a booster shot for enlightenment thinking, if you long to have the government bitch-slapped for stepping on civil rights, if you want to laugh out loud, read on.

The U.S. Supreme Court vehemently rejected all of the government’s arguments for preserving the “disparagement clause” that allows the Trademark Office to refuse to register trademarks that may disparage or bring into contempt or disrepute any persons, living or dead.[1]

Although the justices[2] supported different reasons for their judgment, all of them agreed that the provision is total BS, constitutionality-wise.

Government Speech Schmovernment Speech

The court starting by rejecting the government’s argument that trademark registration is “government speech,” a category of speech not subject to First Amendment protection.[3] Here’s the court explaining why government speech is not protected:

“During the Second World War, the Federal Government produced and distributed millions of posters to promote the war effort. There were posters urging enlistment, the purchase of war bonds, and the conservation of scarce resources. These posters expressed a viewpoint, but the First Amendment did not demand that the Government balance the message of these posters by producing and distributing posters encouraging Americans to refrain from engaging in these activities.”[4]

The Court then hits the government upside the head with a baseball bat for its attempt to expand what’s included in “government speech.”

“But while the government-speech doctrine is important—indeed, essential—it is a doctrine that is susceptible to dangerous misuse. If private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints. For this reason, we must exercise great caution before extending our government-speech precedents.”[5]

Then, just in case the government didn’t feel the baseball-bat love tap, the Court took out the big ammo and blasted away.

“If the federal registration of a trademark makes the mark government speech, the Federal Government is babbling prodigiously and incoherently. It is saying many unseemly things. It is expressing contradictory views. It is unashamedly endorsing a vast array of commercial products and services. And it is providing Delphic advice to the consuming public.

“For example, if trademarks represent government speech, what does the Government have in mind when it advises Americans to ‘make.believe’ (Sony), ‘Think different’ (Apple), ‘Just do it’ (Nike), or ‘Have it your way’ (Burger King)? Was the Government warning about a coming disaster when it registered the mark ‘EndTime Ministries’?”[6]

Not Even if It’s Commercial Speech

 The Court next considered whether trademark registration is merely “commercial speech,” which is subject to a lesser level of First Amendment protection than non-commercial speech. The Court chose “not to resolve” the debate about whether or not it’s commercial speech “because the disparagement clause cannot withstand even the lower level of review for commercial speech.”[7]

“A simple answer to this argument is that the disparagement clause is not ‘narrowly drawn’ to drive out trademarks that support invidious discrimination. The clause reaches any trademark that disparages any person, group, or institution. It applies to trademarks like the following: ‘Down with racists,’ ‘Down with sexists,’ ‘Down with homophobes.’ It is not an anti-discrimination clause; it is a happy-talk clause. In this way, it goes much further than is necessary to serve the interest asserted.”[8]

In his opinion, Justice Kennedy sums it all up beautifully:

“A law that can be directed against speech found offensive to some portion of the public can be turned against minority and dissenting views to the detriment of all. The First Amendment does not entrust that power to the government’s benevolence. Instead, our reliance must be on the substantial safeguards of free and open discussion in a democratic society. ”[9]

Rock on, SLANTS. Rock on SCOTUS. Rock on RIGHTS.

 

 

[1] 15 U. S. C. §1052(a)

[2] C.J. Roberts, J. Alito, J. Thomas, J. Breyer, J. Kennedy, J Ginsburg, J. Sotomayor, and J. Kagan. J. Gorsuch took no part in the consideration or decision of the case.

[3] The Court also rejected various related arguments about lesser levels of government involvement in speech. Read the full opinion for details.

[4] Slip Opinion at p 13.

[5] Slip Opinion at p 13-14. Emphasis added.

[6] Slip Opinion at pp 14-15. Emphasis added. Citations omitted.

[7] Slip Opinion at p 24.

[8] Slip Opinion at p. 25. Emphasis added.

[9] Opinion of J. Kennedy’s at p 8. Emphasis added.

Prada Place

Do you think I should be allowed to create a housing development with street names based on luxury brands?

  • Maserati Drive
  • Prada Place
  • Armani Avenue
  • Tiffany Circle
  • Rolex Road

Here’s what the law says: “Any person who . . . [uses] any word . . . which is likely to cause confusion . . . as to the affiliation or association of such person with another person “[1] is infringing.

It sounds like I could use those street names because no one buying a lot from me would be confused into thinking that my development is affiliated with those famous luxury brands, but . . .

If you still think this is somehow wrong, you’re absolutely right. I shouldn’t be allowed to get the benefit of the luxurious feeling these brands convey in order to sell dirt in my housing development.

In fact, there’s a separate section of the law that allows the owner of a famous trademark to get an injunction against someone like me who uses their trademark in a way that “is likely to cause dilution[2] . . . of the famous mark, regardless of the presence or absence of actual or likely confusion . . ..”[3]

Famous trademarks have special rights that other trademarks don’t have and this story explains why. Even though everyone knows that Prada isn’t associated with my housing development, people would rather buy (and would probably be willing to pay more for) a lot on Prada Place rather than Peppermint Place. I would be taking unfair advantage of someone else’s valuable asset and that’s not OK.

 

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[1] 15 US Code Section 1125(a)(1)

[2] There are two kinds of “dilution”. “Dilution by blurring” happens pretty much whenever someone uses of a famous brand to promote or sell something without permission from the owner. “Dilution by tarnishment” happens when they use the famous brand to sell something that is kind of crappy. For example, if the housing development were a mobile home park.

[3] 15 US Code Section 1125(c)

Trademark Super Powers

Futbol Club Barcelona, known to its fans as Barça, is a worldwide powerhouse of professional soccer. It holds the record for the most FIFA wins.large

In May 2015 Barça filed an application to register a trademark made up of alternating blue and red vertical stripes. The application covered a bunch of stuff including shirts, jerseys, soccer shorts, footwear, and hats.

adidas, The Brand With Three Stripes®, was having none of that.

Do you think Barça’s red/blue striped logo is “confusingly similar” to the adidas logo? In other words, if you saw a running shoe with the blue/red stripe design would you think they were made by adidas?

Do any of these facts change your mind?

  • adidas has more than two dozen U.S. trademark registrations for their three-stripe logo.
  • adidas has been using its three-stripe logo on shoes since 1952 and on other athletic apparel since the 1960s.
  • adidas “sponsors internationally famous soccer players, including David Beckham, Lionel Messi, Paul Pogba, Mesut Ozil and Gareth Bale.” *
  • adidas uses the three-strip logo on soccer cleats, soccer balls, soccer jerseys, shin guards, and goalie gloves.
  • The Trademark Office examiner didn’t find Barça’s trademark confusingly similar to the ones owned by adidas.

Q:  What do you think happened after adidas opposed the application? Take some time to think about it. I’ll wait.

Lalalalalalalala.

A: Several months after adidas filed the opposition, Barça voluntarily agreed to withdraw its application.

Was that what you thought would happen?

 

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* Notice of Opposition, page 7.

Swastikas and Red Stars

In Hungary, the government is considering a bill to ban trademarks that include symbols of totalitarian regimes, including swastikas and red stars.* This wouldn’t just prevent registration of the trademark like we saw in Mr. Tam’s case. This would make using totalitarian symbols as a trademark a criminal offense. People could actually go to jail.

Pellegrino.png

If passed, the new law would have the biggest impact on Heineken, but it could also affect other companies, like San Pellegrino.

Whatever your political bent, I think you should have a problem with this bill. Both Heineken and San Pellegrino were using a red star before it was co-opted as a symbol of Russian communism. Heineken started using the five-pointed red star in 1916 and San Pellegrino first used it in 1910. It didn’t become a symbol of communism until at least 1917.

Let’s see what you think by looking at two items I found in the U.S. Trademark Office database that contain a swastika.

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This trademark is registered:

 

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This trademark is a portion of a pending application.

 

 

Does it matter to you that in the first case, the swastika is being used as a Buddhist symbol and the second one appears to be used as a neo-nazi symbol? Would you buy products or services offered by either of these companies?

If you think that neither should be allowed, do you think people who use them should go to jail or just be prevented from getting the extra protection of registration?

It’s important to think about free speech, even when talking about trademarks.

 

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*This played out before, in 2013. The Hungarian Constitutional Court threw out an earlier law that criminalized totalitarian symbols. That law was revised to include a requirement that the person using the symbol have the intent to undermine social peace.

Examiners are People, Too

Last weekend, I rode my bike to DUMBO[1] to confirm that I’m nowhere near cool enough to spend time there. My suspicions were borne out before I even entered the local exceptionally cool coffee house (ECCHO), so I left immediately to write a trademark blog instead. When facing your lack of cool, go back to what you do well.

I knew I wasn’t cool enough because outside the ECCHO was this:

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From the relative safety of my LES[2] office I checked to see whether Dog Parker, Inc., the maker of the DOG PARKER, had been able to register their trademark, which seemed to me to be “merely descriptive,” which would prevent its being registered.

I was surprised that they had succeeded in registering DOG PARKER for “Pet boarding services” with only a disclaimer for the word “dog”.[3] The examiner didn’t even question whether DOG PARKER was “merely descriptive” for selling use of this temporary dog house.

So, was I wrong? Was the Trademark Office wrong?

No one was wrong. It’s just that Trademark Office examiners are individuals and trademark law is a bit of an art, rather than a science. A different examiner may have reached a different conclusion and issued an office action refusing to register the trademark.

That said, if I were Dog Parker, Inc., I would definitely come up with a good generic phrase for this sort of thing so that DOG PARKER doesn’t become the generic phrase and they lose their rights.

 

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[1] DUMBO is an acronym for Down Under Manhattan Bridge Overpass. No neighborhood is cool until it has an acronym.

[2] Lower East Side. I’m almost cool enough to have an office on the LES. Close enough to fake it, anyway.

[3] A disclaimer means that the owner of the trademark doesn’t claim any exclusive rights to a particular word, in this case “dog.”