Top Ten Most Important Trademark Cases

June 26, 2014 | Patents

By Stephen B. Schott

Patent attorneys appreciate patent law’s rigidity. Unlike many areas of the law, there are hard rules and unextendable deadlines. In some ways, this inflexibility reflects the personality of the scientists and engineers who benefit from it. But if patent law is predictable and rigid, trademark law is its antithesis: unpredictable and changeable. Its practitioners dabble in a dark art that patent practitioners cannot sometimes appreciate. As a mentor of mine used to say, “The beauty of trademark law is that you can argue any point and support it with 10 cases.”

Some of the reason trademark law can support many positions is that where patent law is largely regionally consistent, trademark law may not be. Further, trademark law is often subjective so what trademarks are confusing to one jury may not be to another. Thus, while it was not challenging to come up with a Top Ten Patent Cases article and presentation, the same is not true for trademarks. But given the challenge, here’s my shot at a top ten—that turned out to be eight—trademark cases.

There may be limits on an individual’s rights to use his own name. Taylor Wine Co., Inc. v. Bully Hill Vineyards, Inc. (2d Cir. 1978). This case is famous for its story. Taylor Wine was and is a winery in the Finger Lakes region of New York. Walter Taylor, grandson of Taylor Wine’s founder, began selling wine under his name: Walter Taylor. In a series of colorful cases, the courts denied Walter Taylor the right to sell wines under his own name and went so far as to conclude in one case, “[Walter Taylor], in short, [can] not pretend that his grandfather or his father passed anything on to him as a vintner.” Ouch. The reasoning was based on Taylor’s lack of relation to the wine business before his purchase of a winery and many years after the establishment of the Taylor Wine brand. (The top of Walter Taylor’s Bully Hill Love My Goat wine label reads “They may have my name but they didn’t get my goat.”)

Use of a mark establishes use in commerce, which is a trademark requirement. Zazu Designs v. L’Oreal, S.A. (7th Cir. 1992). In this case, L’Oreal knew that Zazu intended to use the mark ZAZU in hair products but L’Oreal began a wide distribution using the ZAZU mark before Zazu began its own widespread sales. In finding Zazu’s trademark rights not valid, the court stated that “Only active use allows consumers to associate a mark with particular goods and notifies other firms that the mark is so associated.… But use sufficient to register a mark that soon is widely distributed is not necessarily enough to acquire rights in the absence of registration.The Lanham Act allows only trademarks ‘used in commerce’ to be registered.”

Factors to consider when determining whether there is a likelihood of confusion between two marks. Polaroid Corp. v. Polarad Elecs. Corp. (2d Cir. 1961). AMF Incorporated v. Sleekcraft Boats (9th Cir. 1979). When determining whether one mark infringes another, the test is whether there is a likelihood of confusion between the marks. In making this determination, a court considers the following factors:

strength of the senior user’s mark. The stronger or more distinctive the senior user’s mark, the more likely the confusion.
similarity of the marks. The more similarity between the two marks, the more likely the confusion.
similarity of the products or services. The more that the goods or services are related, the more likely the confusion.
likelihood that the senior user will bridge the gap. If it is probable that the senior user will expand into the junior user’s product area, the more likely there will be confusion.
the junior user’s intent in adopting the mark. If the junior user adopted the mark in bad faith, confusion is more likely.
evidence of actual confusion. If the trademark owner can show that the average reasonably prudent consumer is confused, it is evidence of infringement.
sophistication of the buyers. The less sophisticated the purchaser, the more likely the confusion.
quality of the junior user’s products or services. The lesser the quality of the junior user’s goods, the more harm is likely from consumer confusion.
related products and services. The more related the products and services, the more likely the confusion.

A mark must be deceptively misdescriptive to be invalid. In re Nantucket (CCPA 1982). In this case, a North Carolina company called Nantucket, Inc. applied to register NANTUCKET for sales of t-shirts. The USTPO and the Appeals Board rejected the application as ”primarily geographically deceptively misdescriptive” since the company had nothing to do with the Nantucket area. The court found that the USPTO did not give enough weight to the word “deceptive” in the law and even discussed the US House of Representative’s debate during the statute’s enactment. “Debate in the House concerning the word “deceptively” indicates that it is not mere surplusage, that its addition was intentional, not accidental, and that it has meaning.” The court found that people do not associate Nantucket with t-shirts and therefore the use of NANTUCKET with t-shirts is not deceptive. (In contrast, selling MAINE branded lobsters would be improper if the lobsters were actually from Rhode Island.)

Proof of secondary meaning is an issue only with respect to descriptive marks: Suggestive and arbitrary or fanciful marks are automatically protected upon registration, and generic terms are unprotectable even if they have acquired secondary meaning. Zatarain’s, Inc. v. Oak Grove Smokehouse, Inc. (5th Cir. 1983). Zatarain’s owned the marks FISH-FRI, which had been in use for a long time and CHICK-FRI, which had been in use for less time. Trademarks can be classified as generic, descriptive, suggestive, or arbitrary/fanciful, and descriptive and Oak Grove challenged the Zatarain’s marks as merely descriptive. The court found that both marks were indeed merely descriptive and thus would only be registerable if they had developed secondary meaning. “Factors such as amount and manner of advertising, volume of sales, and length and manner of use may serve as circumstantial evidence relevant to the issue of secondary meaning.” For FISH-FRI, the court found that Zaitarain was using FISH-FRI to successfully indicate to the public that it was the producer of the product rather than just the product itself. Given CHICK-FRI’s shorter time in use, however, the court found that it had not acquired secondary meaning and canceled the mark.

Even a limited background use of a mark can be enough to create a likelihood of confusion. Playboy Enterprises, Inc. v. Netscape Communications Corp. (9th Cir. 2004). When searching for Playboy Enterprise, Inc.’s mark PLAYBOY, Netscape’s search engine Excite brought up certain “click here” labeled advertisements that were linked to a non-Playboy website. The court held that even though consumers could not see that there was an association of the “click here” ad and the search term Playboy, there was confusion, and this confusion was not nominal because the “click here” advertisements could have been identified in other ways to make it clear they were not associated with Playboy Enterprise, Inc.

False advertising requires that a plaintiff must show either that the advertisement 1) is literally false or 2) is literally true yet likely to mislead or confuse consumers. Johnson & Johnson Merck Pharmaceuticals, Co. v. Smithkline Beecham Corp. (2nd Cir. 1992). Smithkline ran an advertisement calling attention to the fact that J&J’s MYLANTA contained aluminum and its own TUMS product did not. J&J claimed that Smithkline did this because there were media reports about a link between aluminum and Alzheimers, and that J&J’s conduct amounted to false advertising. In denying J&J’s claim, the court found that false advertising requires that a plaintiff must show either that the advertisement 1) is literally false or 2) is literally true yet likely to mislead or confuse consumers.

If you have a suggestion for trademark cases to round out my top ten, please contact me.
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