Saturday, December 16, 2006

false trademark registration claim fails Lanham Act standards

GoNannies, Inc. v., Inc., --- F.Supp.2d ----, 2006 WL 3590942 (N.D. Tex.)

Plaintiff’s trademark claim against its competitor, which did business under the name goNANI, failed because of defendant’s substantial evidence of use in commerce (on the internet, no less, potentially conferring at least national rights) of the term since at least 2000. By contrast, plaintiff first used GoNannies in commerce in July 2003, and applied for registration at that time. Plaintiff’s registration for GO NANNIES was issued in August 2005, but that of course does nothing to bar senior unregistered uses. Plaintiff’s failure to seek injunctive relief for more than six months after discovering defendant’s use, and more than five months after filing suit, also doomed its request.

Plaintiff also sued defendant for false advertising because it used its goNANI mark with an ®, falsely indicating that it held a federally registered trademark.

False registration claims hurt competitors (and possibly noncompetitor businesses), not consumers, both by falsely asserting federal rights in terms that may in fact be available to others and, potentially, by making a competitor seem like an infringer – a concern not unlike that courts have expressed in reverse confusion cases. These harms are like those caused by false patent markings. Unfortunately for the plaintiff in this case, there is no analogue in the Lanham Act to the part of the patent statute that specifically makes false patent marking illegal. As defendant was quick to point out, plaintiff could not explain how defendant’s use of ® caused plaintiff any harm, much less irreparable harm. Even though the ® was false and misleading, it’s not clear that there’s anyone with standing to challenge it – a consumer suit would presumably fail on the ground that it’s not a material misrepresentation as to consumers.

Similar but more pervasive problems in copyright have led some scholars to suggest that copyright law should give a more robust remedy for false copyright claims, beyond the limited penalties that exist for falsely claiming copyright in US government works. False trademark claims have caused less trouble so far (if you don’t count things like trademark owners’ lawsuits over uses of their marks in expressive works like NBC’s Heroes, which perhaps should count). I have yet to see a thorough analysis of false IP claims generally, but it would definitely be interesting to compare the various possible regulatory regimes.

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