Wednesday, June 04, 2014

unregistrable means unprotectable by sec. 43 as well

Renna v. County of Union, N.J., 2014 WL 2435775, No. 2:11–3328 (D.N.J. May 29, 2014)
This is a well-written opinion whose legal conclusions are in part obvious but nice to have down in print and in part quite striking: I think for the first time, a court clearly rules that a mark specifically excluded from federal registration on policy grounds may not take advantage of §43(a) either.  If I were the attorney for Washington’s slur-named football team, I would be paying attention.
Renna, an outspoken critic of the County Board, produced a public access television show, the “Union County Citizen’s Forum.” The show displayed a graphic illustration depicting the Seal of the County of Union with a spotlight shining on it, symbolizing “the self-proclaimed mission of the show to shine a critical light on the workings of the Union County Board of Chosen Freeholders…. It would appear in the background as Renna read Board resolutions or interviewed guests on the air.” 
Screenshot of spotlight logo
A tidbit from the opinion:
This Seal, by the way, may be the only official County seal to depict a murder. The central illustration is an artist’s re-creation of the fatal shooting of Hannah Caldwell during the Revolutionary War. Hannah resided with her husband, “rebel pastor” James Caldwell, in the Connecticut Farms area of what today is Union Township. Her death in 1780, allegedly at the hands of a British soldier, was used to further galvanize public sentiment against England and its royalist sympathizers.
The County Attorney sent a C&D to the television station, warning it to stop displaying the seal and claiming trademark infringement.  “Whether the County has tried to bully a constituent is for the public to decide.” What it didn’t do was assert any legitimate rights. Declining to reach the First Amendment issues, the court found that Union County had no trademark rights in its seal, and Renna’s display in connection with her TV show did not infringe.  (If I were the County, I’d get out my checkbook for fees.  The Rutherford Institute represented Renna.)
The County’s C&D to the Township of Cranford, which operated the public access channel, said:
Re: Unauthorized usage of the seal of the County of Union Union County Citizens Forum
To Whom It May Concern:
It has come to the attention of the County of Union that your entity is using the Seal of the County of Union without proper authorization. The County of Union demands that your entity cease and desist use of the Seal of the County of Union in any way including, but not limited to, displaying it in the background of all television shows with exception of the prerecorded unedited meetings of the Board of Chosen Freeholders. Please be advised that the County Seal is also a pending trademark, therefore you are committing trademark infringement.
Renna discussed the letter with the TV station manager, who asked her not to use the Seal graphic.  Meanwhile, the USPTO refused the County’s pending trademark registration application, “because the applied-for mark consists of an insignia of a U.S. municipality.” 15 U.S.C. § 1052(b).
When Renna resumed taping (after an unrelated delay), she replaced the old logo with a new one, a spotlight shining on a photograph of the Union County Manager.   

Revised logo
This resulted in another request from the Cranford Township laywer to stop using that logo. Then the management requested that Renna sign an indemnification agreement, which made her nervous and caused her to seek legal counsel. 
Her counsel then sent a letter to the Union County Counsel who’d sent the C&D, pointing out that the County was wrong in a number of ways, with the consequence of chilling Renna’s First Amendment rights.  Counsel requested that the County withdraw its demands.  Instead, the County doubled down, claiming, “For your information, this Seal is in fact now trademarked.” The County maintained that the seal was “trademarked under Federal law”; that by state statute, the County was required to maintain a seal; that use by others was unauthorized; that State law “prohibits a third party, such as your client, from registering a mark that uses such an insignia”; and that there was “no impairment of your client’s first amendment right.” The County “simply is protecting its official seal, protected by trademark, from direct and unauthorized use.”
Meanwhile, the County failed to respond to the office action denying registration, and the registration was abandoned.  The County tried to revive its application, but of course revival would’ve been futile, and the application was again abandoned.
The court ruled that, given Section 2, 15 U.S.C. § 1052(b), the Seal was not a “valid and legally protectable mark.”  Section 2(b) provides an absolute bar to registration of matter that “[c]onsists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof.”
The County argued that this barred registration only by nongovernmental parties, not by the government body itself.  “The USPTO, however, correctly and authoritatively interpreted Section 1052(b) as an ‘absolute bar,’ one that ‘does not list any exceptions that would allow for countries, states or municipalities to register their own flags or insignia.’”  The Federal Circuit has agreed with the PTO.  In Re City of Houston, 731 F.3d 1326 (Fed. Cir. 2013).  While G-d  and the Supreme Court know that the fact that the Federal Circuit came to a conclusion doesn’t mean it’s right, the reasoning itself is sound. The Lanham Act must be read according to its terms, and not as a mandate to protect the public from “pirates and cheats” of all stripes. “And it would be particularly inappropriate to read a silent exception into section 2(b), because the surrounding provisions demonstrate that Congress knew how to express such an exception when it wanted to.”  
In a footnote, the court noted that it was bound by the statute’s words.  But it also defended the lack of any special exemption for government entities as consistent with the Lanham Act’s purpose.  “The registration bar was not enacted to protect official prerogatives or preserve official symbols from desecration. Rather, the bar represents a more general determination that state insignia are not appropriate subjects of trademark law at all. Trademark law concerns itself with goods and services in commerce.”  McCarthy explains the bar as based on the theory that government insignia shouldn’t be registered as symbols of origin for goods and services because such insignia “ought to be kept solely to signify the government and not to be sullied or debased by use as symbols of business and trade.” The court concluded that it could “easily imagine the absurdities that would arise from the trademark registration of flags and insignia, which are intended to be used by the citizenry.”
In its communications with Renna’s counsel, the County didn’t acknowledge the USPTO’s authoritative rejection, but instead claimed that the seal was “now trademarked under federal law,” which—given the earlier reference to a pending mark, which had to mean registration—“carried the misleading implication that some intervening event had solidified the trademark status of the Seal” when the opposite was true.  To that misleading implication, the county’s lawyer added another, claiming that New Jersey law barred third parties from registering insignia.  But the state statute didn’t say that—it said what the Lanham Act says, imposing a categorical bar.  The letter then added a “non sequitur”: “Indeed, N.J.S.A. 52:2–4 makes unauthorized use of the State seal a crime.”  While this is true, the state seal wasn’t at issue.  “It is hard to discern any purpose, other than general intimidation, for the citation of this criminal statute in an official communication to a citizen, even one represented by counsel.”  The stated basis for the C&D was illusory.
Okay, so what about § 43(a)?  The County argued that its seal was a protectable mark “because its letters and symbols signify only one thing: the County of Union and the services the County provides,” as well as being fanciful/inherently distinctive.  The doctrine says that the Lanham Act “protects unregistered marks to the same extent as registered marks because trademark rights emanate from use and not merely registration.”  Registration is not a prerequisite for protection—but validity is.  The court concluded that there was “a difference between a mark that happens to be unregistered, and one that cannot be registered as a matter of law” (emphasis added).
Section 2 was best interpreted as determining that certain marks “are inappropriate subjects for trademark protection.”  It followed that an unregistrable mark was not actionable under §43.  There are no cases finding unregistrable marks protected under §43, which made sense because of the broader purpose of §2 to distinguish “fit from unfit” subjects of trademark protection. Section 2’s bar is substantive, not a function of the registration process.
Two Pesos supported this result, using §2 standards to determine validity in a §43 case.  Though §43 is broader than §32, that doesn’t mean it applies to “a different kind or class of mark.”  Justice Stevens’ concurrence further elaborated that “§43(a) is properly understood to provide protection in accordance with the standards for registration in §2.”  Wal-Mart likewise applied §2 analysis about distinctiveness to a §43 case.  (Consider whether a deceptive mark could get §43 protection.  The court’s reasoning suggests that there’s a super-unclean hands defense whenever a plaintiff’s mark is itself confusing/deceptive.) 
This all made sense.  Consistency was an “independent virtue”: as McCarthy said, “What the law does not need is a separate set of different substantive trademark rules followed in § 43(a) cases.... A plethora of different rules and standards provides neither predictability nor consistency, both hallmarks of a rational and democratic legal system.”  Plus, the whole point of §43 was to provide unregistered marks with the same protection as registered marks.  “A mark should not earn extra protection because it is not registered. The Congressional scheme would be scrambled if Section 43(a) were used to protect marks that could never have received any protection as registered marks.”
Thus, Renna’s use could not violate any County trademark rights; there were none.
Independently, even assuming that the County had trademark rights, trademark law has a particular purpose, to which it should be confined: the use of a mark in connection with furnishing goods or services.  “Trademark law is not properly employed to stifle discussion. Microsoft Corporation could not use trademark law to enjoin a consumer from saying ‘I prefer Apple® to Microsoft®,’ nor could Apple do the reverse. Such comments simply have nothing to do with protecting a purchaser mistaking the source of goods.”  Use in the course of criticism is not infringement.  Even if the County considers Renna’s statements inaccurate, trademark law “protects only against mistaken purchasing decisions and not against confusion generally,” which must be corrected with counterspeech or, if appropriate, a libel claim.  This rule implements First Amendment values.  And if that’s true of the limits of trademark as applied to a private company, it is much more so with respect to a governmental body. 
But the court didn’t have to decide any First Amendment issue, though Renna’s arguments on this point were persuasive.  Renna’s use was clearly expressive and political, “entitled to the highest degree of constitutional protection.”  If the US couldn’t criminalize the desecration of the US flag, “an artful extension of trademark law” to quash political expression using a county seal would be “both unwarranted and Constitutionally risky.”  Not before the court was whether a state or municipality could enjoin deceptive misuse of official insignia, as opposed to expressive statements.  The county submitted no evidence that any viewer had been or was likely to be deceived by Renna’s logo.
Comment: And now we see the sub rosa encoding of a confusion analysis.  But I’d say this makes more sense than many such moves (*cough*Louboutin*cough*), since the relevant confusion in an official insignia case would be confusion about the source of authority.  The risk of deceptive use of insignia is not that people will buy a T-shirt from the wrong person; the risk is that they will obey or give money to someone believing that someone to be an official/have official sanction.  That’s just not a trademark concern, but it is reasonably addressed by laws against impersonation.

1 comment:

Mitch Stabbe said...

In holding that a mark that cannot be registered under the Lanham Act equates with a mark that is valid and protectable under federal law, the NJ District Court misread the CAFC’s decision. In In re City of Houston, 731 F.3d 1326, 1331 (Fed. Cir. 2013), the Federal Circuit said:

We note that Houston has other means to prevent "pirates and cheats" from using its city seal to deceive the public. Presumably the city of Houston could pass an ordinance prohibiting such activity. Other legal protections under the Lanham Act may exist as well. See 15 U.S.C. § 1125 [emphasis added].

IMHO, the fact that a mark cannot be registered does not mean it is not entitled to common law protection (including under federal common law).

Mitch Stabbe
Edwards Wildman Palmer
Washington, DC