Friday, April 13, 2007

Recent Developments in TM Law, ABA IP conference

Commissioner Lynne G. Beresford, USPTO Developments: Filings have been up about 9-10% each of the last two years. 96% are filed electronically. The paper Official Gazette is going to disappear! But the online search engine will improve to compensate.

Judge Sams, TTAB update: 11% more appeals and 40% more oppositions than last year – projections show a continual but slower rise in appeals in oppositions, corresponding with an increase in TM applications. The Board hopes to keep up the increase in precedential opinions.

Recent cases: Fraud on the PTO – whether in declaration of use or renewal application. Standard Knitting v. Toyota (TTABlog): applicant sought TUNDRA for automobiles, while opposer used TUNDRA and TUNDRA SPORT for various clothing items. Applicant petitioned for cancellation for failure to use on certain listed items in the application and statement of use. Fraud occurs when the applicant knowingly makes false material misrepresentations of fact, proven with clear and convincing evidence. Fraud wouldn’t occur if the statement was made with a reasonable and honest belief in its truth. In Tundra, the opposer wasn’t using the mark on most, if not all, of the children’s clothing listed in the application. The opposer claimed the persons signing the statement didn’t understand what “use in commerce” meant, but the court found that this was not a reasonable misunderstanding but a disregard for the law.

Similarly, THE SIGN case (TTABlog) – opposer alleged fraud with respect to the majority of services listed in the application. Applicants claimed misunderstanding of requirements of US trademark law for use in commerce, given that they owned an Australian registration for the same mark and that they were representing themselves before the PTO. Nonetheless, the TTAB granted summary judgment to opposer, finding the facts similar to Medinol, the source of the current muscular fraud doctrine. The timing of the misrepresentation, whether before or after registration, was not important. The applicants, prior to the filing of the notice of opposition, had repeatedly alleged use in commerce of the mark in the US. Their belief about Australian rights was insufficient because there was an obligation to investigate fully the relevant facts before signing an application.

One more new case: ELLE BELLE cancellation for the mark registered for a variety of women’s, men’s, and children’s clothes. The registrant claimed use on all the items, but the petitioner alleged that there was no use on men’s or children’s clothes, and only on half of the listed women’s clothes. The registrant alleged there was a miscommunication between itself and its attorney, aided by the fact that the registrant’s primary language was Punjabi. The board granted relief based on fraud – the claims were clear and unambiguous, and the registrant and its attorney shared a duty to verify the application. This is the board’s most recent run at fraud, but he can guarantee it won’t be the last.

Susan Upton Douglass, Fross Zelnick, Madrid Protocol Filings:

The Protocoal allows for filings for an international registration (IR) based on a home country application or registration. You don’t file directly, but with your PTO, specifiying the countries where you want protection. The home country PTO certifies the application as meeting the minimum requirements, and forwards it to WIPO’s International Bureau (IB) for review. The PTO looks for conformity between the international application and the underlying application/registration. If there are problems, the IB sends a letter of irregulatrity to the applicant and the PTO, which must be answered in 3 months or the application expires. There are various deadlines used to get priority dates.

Each contracting party examines the application per local rules, and issues office actions to the applicant, practices that vary from country to country. Under Madrid, there is a deadline of 12 or 18 months to issue a final refusal to register or a notice of possible opposition; otherwise, the registration is deemed to be granted. The IR lasts 10 years from the date the application is received in the home country, if the home country PTO sends it on within two months, or if later, 10 years from the date of receipt at the IB.

Effective in the US Nov. 2, 2003, but not much used here. As of March 27, 2007, our PTO has received over 35,000 requests for extension of protection, which is when a foreign company or individual files a request with WIPO. But these are classes, and most filings are for more than one class, so it’s really about 27,000 marks.

9,054 international applications have been received by the USPTO for certification to WIPO’s International Board (IB). 494 international applications have been rejected for certification.

72 countries are current members of the Madrid Protocol. For 2006, the US ranked third in filings in the Madrid system, with 3,148 filings (applications, not classes, 8.6% of total filings), yet this is a tiny percentage of US filings abroad.

Key features: dependence on the basic mark. For a period of 5 yeaars from the date of the IR, the IR is dependent on the application/registration that formed the basis of the IR. “Central attack” feature causes all registration s granted on the IR to fail if the basic mark is cancelled, successfully opposed, or lapses in the 5 year term – the PTO is supposed to notify the IB about this. If you negotiate a settlement with another party and drop a class, that’s forwarded to other countries too.

However, the holder has 3 months from date of cancellation of the IR to file directly with the contracting parties to transform the registrations into national registrations, which allows you to keep your priority date but pay all the fees and start over, including finding a local agent.

Advantages: cost savings on filing fees, unless there are major problems or a central attack. Large savings on assignments and other title changes and renewals. Time savings due to deadlines in contracting parties, though there’s no deadline for the IB to issue the IR.

Disadvantages: central attack/dependency; she doesn’t recommend filing based on an application, because too many bad things could happen. If you have an existing, longstanding registration and you want a new color scheme or class of goods, this would be a good use of Madrid. Other problems: Assignment of IR may be made only to nationals of Protocol Countries, which excludes Canada and Latin America. Also, for US filers, IRs and REPs are narrower in protection than would be allowed under national rules – “books in the field of travel” rather than “books.” In the CTM, you can get “books.” Clients would often rather have broader protection. Also, no amendment of the mark is permitted. If you change the order of your mark – word mark before logo when application was logo before word mark – the USPTO will accept that, but Madrid won’t.

More disadvantages: Incoming REPs risk attack on the ground of fraud on the PTO due to overclaiming of goods/services or use of class headings per local country rules. An application that lists a large number of products generally includes a lot of “garbage” from the US perspective – is it fraudulent ab initio? Douglass would like to say no, but can’t be sure.

Separately, IB correspondence is not specifically addressed to any person in the company, doesn’t contain deadlines on the cover sheet, sometimes refers only to the IR number without the mark or the holder’s name, and file cannot be reconstructed if IB correspondence is lost in the mail! Also, there are docketing issues for Sec. 8/71 filings – the timing is different, and there is no IR grace period whereas the US has one.

New provision in US law: if there’s a split of mark ownership, a registration can be divided into separate registrations, each with a new registration number but original registration and priority dates. This creates special IR problems.

Siegrun Kane, Morgan & Finnegan, Back to the Future with the 2006 Trademark Dilution Revision Act: The TDRA puts us back where we thought we were with the 1995 Act, protecting the value of the uniqueness of plaintiff’s mark without showing likely confusion. Except that niche market fame is gone.

If you are a famous fish in a small pond, look to a state likely dilution statute. If you are not quite famous, look to a state statute that doesn’t require fame – some require “extremely strong” or “truly distinctive,” though one case held that sTRANGEmUSIC for concert recordings wasn’t distinctive enough for dilution protection – there were plenty of “strange music” sites on the internet. Practice point: check the internet, Lexis and Westlaw.

Kane predicts increased importance of intent, now listed as a specific blurring factor. When a mark is arbitrary, there’s often no good reason to copy it – e.g., Viagra copied by Triagra. By contrast, Century 21 lost a case against Century for insurance, when the parent company had used Century for a long time; this case was reconsidered under the TDRA and the defendant still prevailed.

Kane cited Lardashe and Spa’am as tarnishing uses (though noted that the Second Circuit disagreed about Spa’am). She identified the “Be Prepared” Girl Scouts case as the earliest use of the First Amendment to fend off a tarnishment claim,
and then pointed out that “we’ve come a long way,” such that Barbie is now the poster girl for the First Amendment defense, because of the Barbie Girl case. (All this really brings up the IP/Gender connection.) If you are a cultural icon, you may be skewered by the First Amendment – as Food Chain Barbie was.

Exclusions: the exclusions include any noncommercial use, which is the same thing as anything protected by the First Amendment. (Comment: !! Further proof that trademark lawyers live – with the long-time assistance of courts, I should say – in a different world than the rest of us concerned with regulations of commercial speech.) Also nominative and descriptive fair use.

Chewy Vuitton case: the issue on appeal is whether the exclusions apply, because the defendant is using “Chewy Vuitton” as its mark.

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