• Why You Always Bring a Claim Under § 43(a)

    by  • September 5, 2009 • trademark

    For starters, so you have standing. Particularly if your assignment record is a hot mess.

    There are two statutory bases for trademark infringement, § 32 (15 U.S.C. § 1114) for infringement of registered marks and § 43(a) (15 U.S.C. § 1125(a)), a broader provision that can also encompass trademark infringement. Section 32 provides a cause of action for the “registrant” of the trademark, but § 43(a) allows for an action by “any person who believes that he or she is likely to be damaged by such [infringing] act.” So if you’re not a registrant you can’t bring a claim under § 32, but you may be able to under § 43(a). Typically, a licensee, or an owner of an unregistered mark, will bring suit under § 43(a). But all registrants should, to add suspenders to the belted pants.

    There were three registrations asserted in Invisible Fence, Inc. v. Fido’s Fences, Inc., INVISIBLE (assignment record here), INVISIBLE FENCE (assignment record here), and INVISIBLE FENCING (assignment record here). The actual chain of title looks fine, which should be all that matters. (“The recording of a document pursuant to § 3.11 is not a determination by the Office of the validity of the document or the effect that document has on the title to an application, a patent, or a registration.” 37 CFR § 3.34). Unfortunately, the recording was so bungled that the court finally concluded that
    it is clear that Invisible Fence has “some cognizable interest” in the mark and therefore has standing to sue under 15 U.S.C. § 1125 . . . . Whether plaintiff is the current registrant of the marks, however, such that it has standing to sue under 15 U.S.C. §1114, is not clear. As documented above, there is a question as to whether Innotek, Invisible Fence or Fifth Third Bank currently is the registrant of the marks. . . . The court will reserve a ruling on whether plaintiff has standing to sue under 15 U.S.C. § 1114 upon further evidence at the bench trial of this matter.

    Part of the court’s confusion may stem from the PTO’s practice of referring in the electronic database to everyone as “assignor” or “assignee.” The recordation cover sheet doesn’t; all versions refer to “conveying party” and “receiving party.” No bank took an assignment of any of the trademarks; instead, the banks had only various forms of security interests correctly characterized on the cover sheet. So there’s no reason the court should have thought the marks had been assigned to a bank unless it was misled by the use of improper terminology by the PTO.
    But the court had little help from the data supplied on the cover sheets. Here’s a comparison of what each of the recorded documents say with what the cover sheets say. For reference, Innotek (a non-party) is the parent of plaintiff Invisible Fencing, Inc.

    Reel/Frame What the Documents Say What the Cover Sheet Says What the PTO Database Says Comment
    1937/0916 Amendment to Certificate of Incorporation, changing the name of Invisible Fence Company, Inc. (DE) to IFCO Enterprises, Inc. (DE) (dated Nov. 11, 1997) Certificate of Amendment; conveying party Invisible Fence Company, Inc. (DE) to receiving party IFCO Enterprises, Inc. (DE) Conveyance type: Certificate of Amendment So far, so good, although it would probably have been clearer to check “Change of Name” on the cover sheet rather than “Other” and adding “Certificate of Amendment”
    1958/0625 Confirmatory Assignment, assigning marks from IFCO Enterprises, Inc. (DE) to IFCO Enterprises, Inc. (PA) (dated March 27, 1999) Assignment; conveying party IFCO Enterprises, Inc. (DE) to IFCO Enterprises, Inc. (PA) Conveyance type: Assigns the Entire Interest Hmmm, looks okay – but who’s IFCO Enterprises, Inc. (PA)?
    2074/0001 1. Application to amend certificate of authority for foreign business doing business in PA to change the name of the company with authority from Invisible Fence Company, Inc. to IFCO Enterprises, Inc. (dated Nov. 18, 1997)
    2. Certificate of Dissolution of IFCO Enterprises, Inc. (DE) (dated March 27, 1999)
    3. Articles of Domestication of Foreign Corporation in PA of IFCO Enterprises, Inc. (dated March 27, 1999)
    Change of name; conveying party Invisible Fence Company, Inc. (DE) to receiving party IFCO Enterprises, Inc. (PA) Conveyance type: Letters of Administration Ah, that’s who IFCO Enterprises, Inc. (PA) is. And not really a change of name at all.
    2383/0194 Assignment from IFCO Enterprises, Inc. (PA) to Canine Acquisition Company, Inc. (dated Jan. 24, 2001) No type of transaction given; conveying party Canine Acquisition Company, Inc. to receiving party Innotek Pet Products, Inc. Conveyance type: Assigns the Entire Interest What? Grabbed the wrong cover sheet on that one. What it does suggest, though, is that Canine “Acquisition” Co. might be some kind of transactional vehicle, and that a further transaction assigning the marks to the parent was at least contemplated. But the document itself is clear that Canine Acquisition Company, Inc. is the owner of the marks.
    2475/0651 Same document as above Corrected assignment; conveying party IFCO Enterprises, Inc. (PA) to receiving party Canine Acquisition Company, Inc. Conveyance type: Corrective Assignment to Correct the Name of the Assignor and Assignee Previously Recorded at Reel 002383 Frame 0194 Okay, it’s all fixed.
    2475/0858 Amendment to Certificate of Incorporation, changing the name of Canine Acquisition Company, Inc. to Invisible Fence, Inc. (dated Jan. 25, 2001) Change of name; conveying party Canine Acquisition Company, Inc. to receiving party Invisible Fence, Inc. Conveyance type: Change of Name Phew, this one looks alright. Looks like they decided to keep the marks in the sub instead of assigning up to the parent.
    3164/0588 Contingent Patent, Trademark and License Assignment, where Canine Acquisition Company, Inc. grants a “lien and security interest” in the trademarks to National City Bank to secure credit on its own and Innotek, Inc.’s behalf (dated Jan. 25, 2001) Security interest; conveying party Innotek, Inc. to receiving party National City Bank Conveyance type: Security Interest Whoa, that was a mistake on the cover sheet. It’s clear in the document that the conveying party is Canine Acquisition Company, Inc., not Innotek
    3396/0316 Trademark Collateral Agreement, where Invisible Fence, Inc. pledges the trademarks as collateral to Fifth Third Bank as administrative agent for creditors (dated Sep. 15, 2006) Security agreement; conveying party Invisible Fence, Inc. to receiving party Fifth Third Bank, as Administrative Agent Conveyance type: Security Agreement Looks okay.
    3397/0226 Release of Contingent Patent, Trademark and License Assignments, releasing Invisible Fence, Inc. (f/k/a Canine Acquisitions Corp.) and Innotek, Inc. (dated Sep. 15, 2006) Release of Security Interest Recorded on September 23, 2005 at Reel/Frame No. 3164/0588; conveying party National City Bank to receiving party Innotek, Inc. Conveyance type: Release of Security Interest Recorded on September 23, 2005 at Reel/Frame No. 3164/0588 The cover sheet perpetuates the error made in the original grant of the contingent assignment, which listed the wrong conveying party. Do you go with the flow and list the wrong party so the chain looks correct in the database? But the document itself is clear.
    3398/0025 Same document as above Release of Assignment; conveying party National Banking Association to receiving party Innotek, Inc. Conveyance type: Release of Assignment The same document was filed by two different attorneys. And who’s “National Banking Association”? That name isn’t one listed as a party. So this recordation has BOTH parties wrong.
    So, all in all, apparently it IS rocket science. If you look at what the documents say, it’s a clean chain of title – Invisible Fence Company, Inc. changed its name to IFCO Enterprises, Inc. (DE), which assigned the marks to IFCO Enterprises, Inc. (PA), which assigned them to Canine Acquisition Company, Inc., which changed its name to Invisible Fence, Inc., the plaintiff. The security interests were all properly done. At the moment, it looks like the marks are pledged as collateral to Fifth Third Bank, but there was no assignment of them. But the recordation of the documents is nothing but a series of mistakes and compounding errors, suggesting that Innotek, if not a bank, might own the marks, and ultimately leading the court to toss up its hands and put the whole problem off until another day. If the recordation record was cleaner, would the defendant have bothered challenging standing?
    And another reason to always file under § 43(a)? If your registration is deemed invalid for some reason.

    Invisible Fence, Inc. v. Fido’s Fences, Inc., No. 3:09-cv-25, 2009 WL 2601857 (E.D. Tenn. Aug. 20, 2009). Assignment documents available on Scribd. The filing with the court was a hot mess too: “In its memorandum, plaintiff referred to each of these documents by the reel and frame number . . . . As the exhibit was submitted in seventeen different documents, however, without any master index for the reel and frame numbers, this citation method was actually very inconvenient for the court.” Here, here.

    © 2009 Pamela Chestek