INTA: outer limits and dilution

INTA: Exploring the Outer Limits of Trademark Law

Moderator: Megan M. Carpenter, Texas Wesleyan School of Law (United States)

Christine Haight Farley, American University, Washington College of Law (United States)

Are there any outer limits?  Not going to focus on scope of rights, but on subject matter. Content marks and concept marks: to what extent can TM protect content valuable to consumers, or concept in terms of product/new business model?

Examples: Keep Calm and Carry On: bookstore found original poster from UK during the war; hung it in the bookshop and customers wanted to buy it.  Reproductions had great commercial success. Another party found all different kinds of ways to merchandise the phrase and TMed it, asserting exclusive rights to merchandising.  Occupy, Occupy Wall Street, 99%, 1%: 47 TM applications for Occupy [X] in the past year, 11 for 99%/1%.  Bags, t-shirts, etc. are targets.   Older examples: Let’s roll, shock and awe (37 applications in short period after the invasion), etc.  Are these TMs?  Calls them content TMs because they don’t function as traditional TMs do; don’t indicate source/origin of goods, tell consumers quality of shirts, etc.  Instead, people want to have a shirt that says Shock and Awe.  Other examples of rush to merchandise and to TM office: Linsanity, “Winning,” Who Dat?  Slightly different because the phrases have a referent (I must say I think the other examples also have referents, including both specific people and groups; Who Dat? in particular shows the gradient since it was converted from more general use to Saints-associated by the public).  False association/preclusion of potential registrant who is the referent?  The phrase isn’t operating in the traditional TM sense to refer to Charlie Sheen as source, but as content.

TM doctrine does have the doctrine of ornamentality. 

But we’re already in merchandising-world: Nationals, AU, Capitals T-shirts—these shirts are bought by people who are fans of the teams/schools; they aren’t interested in quality.  Nonetheless, the underlying entities are acting more like traditional TM owners, even as these particular products are presented as content rather than as indications of source.  Seems like unjust enrichment for others to exploit these marks; someone created the demand, and maybe that person should have exclusive rights.  So the law has found ownership of a valid TM under a theory of confusion about affiliation.

Does the logic “if there’s value, someone should own it” apply equally to these newer examples?  Maybe Charlie Sheen should “own” WINNING.  What about Who Dat?, which was popular before the Saints became associated with it?  What about OCCUPY?  What about Keep Calm and Carry On?  TM doctrine has been answering subject matter questions through secondary meaning (if it’s popular, it must be protectable), but that may be a mistake.

Smack Apparel: merchandiser didn’t use registered marks or explicit names for teams, but instead used other references to the team.  TMs on content also include claim by Rock & Roll Hall of Fame against photographer who made his photo of the building into a poster. 

Other content marks: Louboutin’s red sole, Betty Boop in the 9^th Circuit.

Should Corona own the concept of putting a lime wedge in a beer?  Is that ownable?  Pending litigation involving bead bracelets (e.g. Pandora): the concept is of getting a bead for significant life events/preferences and putting it on the string.  You design your own individualized bracelet.  Many competitors: don’t copy the name or the individual beads, but copy the concept: can that really be owned?  SillyBandz: another kind of bracelet at a different price point.  Many companies copied the idea: not the same colors or shapes, but can one company monopolize the idea?  Connections back to Best Cellars case: Taco Cabana says TM can cover design and layout of a restaurant.  Design of wine store, based on research on a new way to sell wine in a simple manner.

Robert Burrell, TC Beirne School of Law, University of Queensland (Australia)

Relationship between TM use and nontraditional subject matter. In some jurisdictions infringement requires defendant be using the sign as a TM.  A lot of uncertainty as to how this might apply to nontraditional subject matter such as 3D shapes and single colors.  He has a growing doubt that the energy spent policing what goes on the register is productive. In registration systems (outside the US), a great deal of attention gets focused on whether this is protectable subject matter.  What’s the difference between an idea/concept (not allowed as a TM) and a TM on a single color?

Registration systems also expend a lot of energy on the graphic representation requirement: how are nontraditional TMs to be depicted on the register?

Why?  One explanation: if we allow a lot of marks on the register, we have a chilling effect even if there are limiting doctrines on the infringement end. That’s why in many jurisdictions there are threats actions to control/mitigate chilling effects of allowing registration.  Another: protectability focus flows from nature of rights afforded by registration systems, e.g. the double identity rule, and the absence of clear well-established defenses. Another: channeling effect.  We want to channel TM owners towards some types of marks and away from others.

Not convinced that those reasons make sense of protectability/registrability focus.  Think of legal regimes available in Commonwealth countries, we have passing off as well as TM claims.  Passing off has no absolute exclusions.  No absolute rules against protection of functional design. But in practice we see it’s difficult if not impossible to protect a functional design—by and large courts do a pretty good job of constraining its limits.

Existence of passing off raises questions about chilling effects of registration, since it’s always available. Are we really saying that chilling effect concerns collapse into concerns of strength of rights in the first place?  Also raises questions of how effective a channeling effect is.  Passing off de-channels owners from particular types of marks.

Also, some nontraditional signs are inevitably going to make it onto the register.  Then we still need to talk about infringement standards.

If we allow marks to be protected through registration, makes it easier to deal with certain types of predatory conduct, if there are carefully crafted limiting doctrines.  Finally, focus on scope of rights instead of subject matter may allow us to reinvigorate limiting doctrines.

Historically, Commonwealth infringement required use as a TM. Consumers have to respond to the defendant’s sign as a badge of origin.  Uncertainty about this in a number of other jurisdictions, including South Africa. How should the infringement test be influenced by questions about how consumers are reacting to the sign?  To be judged objectively: do consumers respond to this use?  Has been used in cases of what the US would call both nominative and descriptive use.

How to apply TM use to nontraditional subject matter?  Sometimes courts are extremely reluctant to accept that defendant’s use is use as a mark: Koninklijke Philips Electronics v. Remington, dispute over Remington’s copying of triangular shaving head leading to multijurisdiction litigation.  Australia federal court held: no use as TM.  Purely decorative/intended to take advantage of benefits of the shape.  It’s difficult to regard the approach taken as anything other than bare assertion.  Mayne v. Advanced Engineering Group: claim based on the shape of a chair.  Must distinguish use of the “bare shape” and the shape with “additional features.”  Seems to mean the shape per se v. components of a shape with TM significance, but no indication of how you make that kind of assessment.  Nation Fittings v. Oystertec (Singapore): shape of pipe fittings, again a bare statement that d’s use wasn’t use as a mark.  Other cases finding use as a mark: Coca-Cola v. All-Fect, producer of candies in the shape of a Coke bottle.  Held: was use as a TM.  Because the defendant had tried to make its product more attractive and arresting in appearance; sounds like mere assertion to him.  Global Brand v. YD (Australia): pattern on bottom of shoe was used as TM because consumers would inevitably find attention drawn to sole because info on price and size is found there.  Just assertion again!

More principled approach: Coca-Cola v. Pepsico, over Pepsi’s decision to sell cola in a bottle reminiscent of Coke’s contour bottle.  Is that use as a TM?  Need to recognize that nontraditional signs tend to operate as sub-brands.  How a consumer would respond: no one will say that the people who sell Coke in that contour bottle have decided to rebrand themselves as Pepsi.  Prominence of brand pushes out source identification function the shape might otherwise have.  But where there might be a complementary relationship—premixed vodka and cola—consumers might have real doubt about the relationship between Coke and the producer of the premixed drink, even if prominently labeled Smirnoff.  Recognize that nontraditional signs work differently in the ordinary case.

Rebecca L. Tushnet, Georgetown University Law Center (United States)

One thing I learned from the previous 2: grass is always greener!

A few suggestions about why the boundary problem is difficult and where we might turn for answers.  Bill McGeveran: We have multiple overlapping limiting doctrines that can trip courts up as they go through each one and lose the forest for the trees.

My candidate for a good boundary definition is materiality: used to be an inherent part of the test for trademark infringement, because infringement required harm, and harm was lost sales—it would have to be something that made a difference to consumers in a purchasing decision

False advertising law has kept that requirement, but TM jettisoned it, creating a problem of “confusion in the air”—confusion that consumers don’t care about became actionable.  One consequence of that is that confusion became inherently easier to find, because the doctrine already told us that when consumers pay less attention, confusion is more likely—and consumers don’t pay much attention to things they don’t care about.

The demise of an explicit materiality requirement has contributed to TM’s expansion, and should be a part of attempts to find limiting principles.  Functionality, for example, can be understood as a kind of materiality requirement: what does or should a reasonable consumer base a purchasing decision on?  Does the consumer want the thing or the source?  And when most consumers want the thing, courts are likely to declare a product functional even if the design has de facto secondary meaning.

Compare YSL’s all-red shoes to this manufacturer’s gold socks: regardless of what you think of YSL’s case, it’s hard to imagine that the makers of Gold Toe socks have any claim against this producer.  One way to explain why is that the reasonable consumer here doesn’t want the gold toes, he or she wants the gold socks.

Artistic fights: artist Daniel Moore paints pictures of Alabama sports events.  People buy his paintings instead of photos because they like his artistic talents.  Alabama asserts the right to control his products because he depicts Alabama players in their actual uniforms.  Should he get to paint his chosen subjects without a license from Alabama?  Is this the same question as that in Smack Apparel, and if not why not?  Do we respect painters more than sloganeers?

Can call Moore’s case a First Amendment question, but could also talk about aesthetic functionality (communicative functionality) or even materiality: what does a reasonable consumer want?  And should we look at the product on its face to determine that?  There is a connection here to the doctrine of nominative fair use and to a certain extent descriptive fair use: both attempt to create alternatives to the multifactor confusion test when that test doesn’t do a good job descriptively or normatively in analyzing a particular type of use.  With comparative advertising too, courts rarely use the multifactor confusion test in its usual form because it would obviously distort the results: when Pepsi says “we’re better than Coke” it’s using a strong mark with directly competing products, which sounds really bad on the usual multifactor test but is not confusing.  Connected to this too is a worry that consumer surveys aren’t a great way of figuring out what consumers really think: there is a high risk of a demand effect or of asking consumers to speculate about something they never would have thought of if they weren’t being surveyed about it.  If your own intuitions are an equally bad guide—what Prof. Burrell called bare assertion—then bright line rules might actually be better overall than a case by case inquiry a court is likely to get wrong.

Overall, boundary pushing is making the multifactor test seem insufficient as applied to all the different kinds of TM claims being made today, even if it works as applied to a core of commercial activity.

Another instance: Betty Boop: the product is the content, and it’s not covered by copyright.  Increasing numbers of copyright claims are being framed as TM claims, creating a looming Dastar problem.  John Carter (Disney) v. Warlord of Mars (Dynamite Comics).  Battleship v. American Battleship.  If you can’t win your copyright case, whether because of the idea/expression distinction, fair use, or because a work is in the public domain, you shouldn’t be able to win your TM case based solely on the content of the work and the accurate description thereof.  Can see this as tied to materiality too: again, what is a reasonable consumer interested in buying?  This is inherently a normative question as well as an empirical one, especially since we are also interested in telling prospective TM owners ex ante what kinds of things they should try to create marks in.

Carpenter: TM as shield v. sword: very hard to prevent commercial exploitation of something unless there’s a false association claim—Let’s Roll as an example.  Comes up a lot with names, e.g., Trayvon Martin’s parents trying to register.

Farley: yes, Beyonce’s baby’s name is an example.  There are a number of doctrines that can be used in those cases to deny registration to a third party.  The other ground for refusal is ornamentality: that is fading because of the focus on the third party; maybe also because some party may want to resist commercialization entirely, though there aren’t too many examples. 

Q: trend towards lack of rigor in fair use/confusion?  Is there any reason for INTA’s members to worry about that?

My answer: experience with dilution.  Also anyone involved with media/entertainment, which can include anyone who is doing product placement and places a product in a show that also portrays the Slip ‘n Slide in a negative light.

Burrell: a defendant with deep pockets must be concerned about lack of rigor and being forced to take something all the way to trial.

Farley: copying an unprotected idea or design used to be called competition; now it’s called infringement.  That’s a matter of concern, especially in TM bully. Courts also have that reaction, leading to uncertain results: 9^th Circuit’s first Betty Boop decision—court reacting with condemnation to a trend.  The public has come to think you can TM anything and the key is to be first in line: that’s a dangerous proposition for established owners.

Q: How do you balance First Amendment right to affiliate, e.g., with Occupy?

A: use ornamentality, maybe as an irrebuttable presumption.

Q: marks that function as marks but also ornamentally: how address using materiality there?

A: I would advocate for counterfactual causation, as in negligence: requires judgment calls, but we have a lot of judgment calls already.  Ask whether someone would want a 5-inch polo pony on his chest more than the alternatives if the TM owner didn’t exist.

The Great Dilution Debate: Fifteen Years After Enactment, has the Federal Trademark Dilution Act Lived Up To Expectations?

Moderator: Stephen W. Feingold, Kilpatrick Townsend & Stockton LLP (United States)

Barton Beebe, NYU School of Law (United States)

Studied all reported opinions; entire population gives a different view than most prominent cases.  Oct. 2006 to Oct. 2011, the first five years of the TDRA.  Too soon to say whether there’s a real trend, though data hint at a decline in cases.  One in five applies the old FTDA improperly.  Seven apply both old and new, not apparently realizing that they were quoting both (usually from an appellate opinion).  Judges are largely competent, qualified, and incredibly overworked; don’t have time to check stuff from briefs.  So lawyering may be a big problem.  Still in 2009, E.D. Mich. opinion applies actual dilution.  NJ case from the same year applies both tests for fame.

In the case law, very few cases find dilution without confusion.  Cases that considered both causes: the outcomes strongly correlate; 70% of cases the dilution finding was redundant. Courts don’t really understand what dilution is.  277 opinions: 2 in which the court explicitly found no confusion but went on to find dilution, though one was a dissent (he codes opinions not cases); the other was the Hershey v. Art Van case.  Shows up in casebooks, but it’s not representative. 7 opinions: court didn’t bother to address confusion and just found dilution.  That might be an instance of making a difference.  (Is not addressing the extent to which the cause of action makes C&Ds more powerful/scarier.)  Cases: V’s Secret, eVisa, Nike v. Nikepal, a couple of others. 

For the moment, dilution isn’t making much difference in court.

Clarisa Long found decline in success over time; too soon to tell if that’s also true of TDRA.

58 opinions found dilution; 18 explicitly found blurring, 9 tarnishment, 5 explicitly found both; remaining 26 didn’t specify which kind.  We should ask courts to be specific.  Continued mystery causes confusion in courts/litigants.

Heightened fame requirement: Protection for nonfamous marks gives the cause of action a bad name.  Still some howlers: ARTOFEX in the baking equipment industry, 2009.  Rain Bird = famous in Florida, enough for federal protection (2009).  Jayhawk mascot, the Phog, famous (Kan. 2009).  You see this with bad faith defendants, courts trying to throw the book at them while also finding confusion.  Then we get this caselaw cited by other lawyers as if it were actually the standard of fame. Louisiana Hayride too.

2010: Bradley, Marblelife found widely recognized by general consuming public.  Maker’s Mark: not famous.  Might have been a problem with the record.

Final finding: litigators who understand antidilution law know nationwide fame is an issue, so people are turning to the state law alternative.  Cash Store (N.D. Tex. 2011) found deserving of antidilution protection under state law.  Should there be preemption?

Steven Weinberg, Holmes Weinberg, PC (United States)

Likes dilution law, though there are issues with implementation.  Art Van case: compelling to most judges because they understand a Hershey bar and understand how it’s a problem.  Confusion is uncertain—what association means—but easy to understand the problem.  Nike v. Nikepal: again, the perfect case.  Judges don’t have to understand the law.  Defendant was selling syringes.  Testimony about mark selection was hard to believe.

Problems: we can’t get our stories straight. What are we trying to achieve with dilution? Schecter: descriptive marks weren’t protected, and there was no such thing as related goods confusion, so it made sense to argue that protection should extend further in that situation.  Protecting “in gross,” the power of the brand aside from any TM requirements.  But what now?

Everyone is confused.  Chewy Vuiton: the court was not impressed by the argument that LV would be harmed if a dog choked on the toy.  Courts don’t like the argument that consumers are confused, but if they aren’t then they experience dilution.  When you add the multiple multiple-factor tests, it gets even harder. 

Start with the basics.  Be clear about what we’re trying to achieve.  Arguing that every mark is famous isn’t going to win.  Professional dilemmas: in house branding people who want to show their bosses how great a job they’ve done, telling in house counsel to bring a dilution action.  Then they run out of the budget.  Then there’s judicial hostility, negative commentary from academics/McCarthy, and irreconcilable decisions.  Start with why we have TM protection: brands are a promise. Dilution is about diluting the brand equity in that promise/relationship with customers. Some brands have an iconic place in the market, transcending being brands, and therefore there should be protection for them.  (Um, that does not follow; to the contrary, it suggests that the transcendence has escaped the bounds of TM.)  Fed. Cir.: Play Doh v. Fun Dough: lower court said Play Doh was so famous that no one would be confused.  Shouldn’t punish success.  (How is success being punished if people aren’t confused?)  If consumers identify with the brand, consumers are saying “this is who I am” and so is the brand.

People should not be allowed to reap where they have not sown.  There is still an economic right in these properties that should be subject to protection.  Like a right of publicity for iconic brands.  CAFC 1983 case held that uniquely named institutions may have a right of publicity, though Notre Dame didn’t.  Given Citizens United, why not take that further?  Others suggest it’s a moral right, though the US lacks true moral rights.  Or is it really misappropriation?

EC tries: unfair advantage of, or detriment to, distinctive character.  A little more elegant than ours.

Trying to figure out circumstantially what people are thinking: not very successful. New methods exist to measure thinking that we should start to use.

Fame is changing.  Note that Mattel lost the Barbie Girl case and then licensed the song. Brands are trying to reach out to consumers and fulfill all their needs for information and emotion.  Social media is making that far more effective.   People and brands can become famous very quickly through viral marketing. Today’s kids are plugged in from day one and they are consumers.  Branding 101 is happening before they hit middle school.