One-minute read

Today’s session on recent US trademark cases will focus on the most significant issues to make it to the TTAB and the courts since last year’s Annual Meeting. The past year has seen the courts address a range of topics such as what constitutes use in commerce; the parody defense to dilution claims; the registration of marks incorporating generic terms; and fraud at the TTAB. Today’s speakers tell the INTA Daily News why the selected cases are important, what lessons can be learned and why—in some cases—they believe the courts have it wrong.

In today’s session CW02 on US case law, Ted Davis of Kilpatrick Stockton and Jordan Weinstein of Oblon Spivak McClelland, Maier & Neustadt, editors of the INTA publication The Trademark Reporter, will review some of the most noteworthy cases of 2006 and 2007 and explain their implications.

Fame and foreign marks

In one recent case that could have far-reaching effects on the doctrine of famous marks, the US Court of Appeals for the Second Circuit upheld summary judgment for the defendant on the basis of an Indian restaurant owner’s non-use of its mark for restaurant services in the US.

The case, ITC Limited v. Punchgini, stems from a dispute between Indian conglomerate ITC and owner of New York’s Bukhara Grill restaurants, Punchgini. ITC accused Punchgini of unfairly adopting the name of its own well-known restaurant, Bukhara, in New Delhi, and in 2003, sued Punchgini for trademark infringement and unfair competition under New York state law, alleging that the New York Bukhara Grill owners—some of whom were former employees of the New Delhi Bukhara—had deliberately copied the name and trade dress of its Indian restaurants.

A district court granted and the Second Circuit affirmed the defendant’s request for summary judgment on the basis of ITC’s non-use of the BUKHARA mark for restaurant services in the US. The Court also rejected ITC’s claim of unfair competition because it relied on the “famous marks” doctrine, which has not yet been adopted into US federal law.

Although the Court said that ITC’s federal claim of unfair competition was unsupported, it asked the New York Court of Appeals to answer two questions in order to determine whether New York common law might support an unfair competition claim. First, the court asked whether New York common law permits the owner of a federal mark or trade dress to assert property rights by virtue of the owner’s prior use of the mark or dress in a foreign country. Second, it asked how famous a foreign mark must be to permit the owner of a foreign mark to bring a claim for unfair competition.

Although the New York court answered the first question affirmatively, it went on to say that “it did not recognize the famous marks doctrine as an independent theory of liability under state law” and concluded that “if a foreign plaintiff has no goodwill in this state to appropriate, there can be no viable claim for unfair competition under a theory of misappropriation.”

Both the district court and the Second Circuit found that ITC had presented sufficient evidence of deliberate copying, but neither court found any evidence that ITC’s mark had acquired secondary meaning in New York.

In its decision, the Second Circuit said: “More than copying is necessary for a famous foreign mark holder to pursue a state law claim for unfair competition. That foreign holder must further offer evidence that the defendant’s potential customers ‘primarily associate’ the mark with the foreign holder.”

In 2007, the US Supreme Court denied ITC’s request that it hear an appeal from the Second Circuit’s decision, and Ted Davis says that the case isn’t likely to make it to the highest court anytime soon: “The only thing the New York Court of Appeals did was to articulate state law, and the Supreme Court won’t opine on a question of state law,” says Davis. “I do believe there’s a legitimate split between the Second and Ninth circuits on the issue of famous marks though, so a future litigant might be able to appeal to the Supreme Court.”

Dog toys and dilution

The issue of dilution made headlines last year as well, when the Court of Appeals for the Fourth Circuit ruled that a line of dog toys called Chewy Vuiton did not dilute LVMH’s famous LOUIS VUITTON mark. In that case, the court upheld a district court decision by rejecting claims from LVMH that the toys infringed its rights and diluted its trademark under the Trademark Dilution Revision Act of 2006 (TDRA). Instead, the Court agreed with the lower court that Haute Diggity Dog’s dog toys were successful parodies of LVMH’s handbags and trademarks.

“In short, the dog toy is a small, plush imitation of an LVM handbag carried by women, which invokes the marks and design of the handbag, albeit irreverently and incompletely. No one can doubt that LVM handbags are the target of the imitation by Haute Diggity Dog’s ‘Chewy Vuiton’ dog toys,” wrote Judge Niemeyer in the ruling.

The US federal dilution statute suggests that if you are a claimed parodist, you may be immune from liability, unless you’re using what is being challenged as a trademark. But Davis says that the parody rule should not have been applied in this case. “Chewy Vuiton was using the line as a trademark,” says Davis. “They even tried to register it—[Chewy] shouldn’t have been let off the hook.” He adds that the court agreed with this sentiment in a sense, but chose to consider the parody defense nonetheless in determining whether or not dilution had occurred. “The upshot is that the Fourth Circuit really gutted the section of the Lanham Act dealing with this issue to excuse parody in a way that Congress did not intend,” says Davis, who nominates Louis Vuitton Malletier v. Haute Diggity Dog as “worst decision of the year.” N

Trends at the TTAB

At the TTAB, issues such as generic marks and fraud cases topped the list of hot topics this past year. In one case, In re Pennington Seed, Inc., a supplier of grass seed sought to register the name REBEL—which is also the name for a variety of plant—as a trademark, but was denied by both the Board and the Federal Circuit on the ground of genericness, since those in the trade “need to call [a plant] by the name that it is known or otherwise consumers will not know what they are buying.” Such decisions suggest a trend at both the TTAB and in the courts to find claimed marks generic. Other terms rejected on this ground over the last year include “brick oven” for pizza, the url “lawyers.com” and “nutritional bulletin” for a website that provides health and diet information.

Finally, TTAB cases involving fraud claims continue to signal the need for both foreign and US applicants to increase the scrutiny of information provided in submissions to the USPTO. In Hurley Int’l LLC v. Volta, for instance, the Board granted summary judgment on the ground of fraud, despite the foreign applicants’ claims that they misunderstood the requirements of Section 1(a), did not understand the legal meaning of “use in commerce,” and “honestly believed that their ownership of the same mark in Australia and their use in commerce of such mark in Australia justified their Section 1(a) filing in the U.S.” Such decisions have caused Ted Davis to characterize the Board’s recent approach to fraud claims as “increasingly draconian.”