Property, intangible

a blog about ownership of intellectual property rights and its licensing

  • Brother versus Sister

    Sometimes things in your life intersect. I recently had the pleasure of attending “The TTAB Comes to Boston,” a day when the Trademark Trial and Appeal Board heads to Boston for the day. It was a fabulous event, a great case and a great panel.

    And then the first case that landed on my desktop after the event was de la Cruz Gonzalez v. The Youssef Mehanna and Susana de la Cruz Joint Venture, which turned out to be a poster child for the topics discussed in Boston. Before the hearing Judge Mermelstein provided some practice tips, including that you need to both plead and prove all the elements of a claim – the Board can’t decide claims not pled and can’t decide claims not argued.

    If I was a betting person, I’d bet that de la Cruz was on Judge Mermelstein’s mind when he prepared his slides. It was a nightmare procedurally – here are some of the Board’s efforts to get it sorted out:

    In addition to likelihood of confusion, the complaint alleges
    misrepresentation of source, deceptiveness and false suggestion of a connection. Because petitioner has only referred to misrepresentation of source and false suggestion of a connection in passing in his brief, we consider these claims to have been waived by petitioner. Also, petitioner has not discussed his claim of deceptiveness at all in his brief; we consider the claim of deceptiveness to also have been waived.

    Petitioner discusses fraud in its brief. Because fraud was not pleaded in the complaint, and fraud was not tried by the consent of the parties, we do not further consider petitioner’s arguments regarding fraud.

    . . . .

    [B]ecause respondent has discussed likelihood of confusion in its brief, we find that the issue of priority based on use of KUZ by petitioner on shampoo, conditioner, finishing gloss and lotion has been tried by the implied consent of the parties. The petition to cancel is deemed amended accordingly.

    . . . .

    Respondent pleaded an affirmative defense of laches but did not discuss the defense in its brief. We therefore consider respondent to have waived its affirmative defense.

    Moving to the merits, it’s a two-fer on the trademark ownership issue – a manufacturer-distributor dispute AND a family tiff.  Brother-petitioner de la Cruz owned a registration in the Dominican Republic and was president of a Dominican manufacturing company, although his sister-respondent was also a shareholder.  The sister owned a U.S. company of similar name and sold goods of her brother’s manufacture in the U.S. There was no written agreement between them. Ultimately the sister defaulted on payments, started sourcing goods elsewhere, and as the coup to grâce managed to have U.S. Customs exclude her brother’s goods from Puerto Rico at the border because she owned the U.S. registration.

    The manufacturer-distributor relationship provided a framework for analyzing the case – although looking at the briefs it wasn’t a theory offered by either party, another lesson from Judge Mermelstein – do some research before filing, or at least before arguing.

    So the Board had to sort it all out for itself.  It started at the beginning, establishing that invoices showed that this was indeed a manufacturer-distributor relationship.

    Following, in manufacturer-distributor disputes the manufacturer is presumed to own the mark unless there is an agreement to the contrary.  There was no agreement, but a distributor can rebut the presumption by providing evidence on

    1. which party invented or created the mark;
    2. which party first affixed the mark to the goods;
    3. which party’s name appeared on packaging and promotional materials in conjunction with the mark;
    4. which party exercised control over the nature and quality of the goods on which the mark appeared;
    5. to which party did customers look as standing behind the goods (e.g., which party received complaints for defects and made appropriate replacement or refund); and,
    6. which party paid for advertising and promotion of the trademark product.

    Ferreting out the facts argued under other legal theories, at the end of the day they pointed in only one direction – the petitioner owned the mark.  As noted, the registration was cancelled.
     
    de la Cruz Gonzalez v. The Youssef Mehanna and Susana de la Cruz Joint Venture, Cancellation No. 92048199 (TTAB April 22, 2011)

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  • A Postscript on Damages

    Photo by Kevin Burkett. Licensed under CC-BY-SA 2.0

    Frank Gaylord was the artist who created the figures that are part of the Korean War Veterans Memorial. A photograph of the figures in the snow was used on a postage stamp.  In 2006 Frank Gaylord sued in the Court of Claims, lost, appealed, and then won in the Court of Appeals for the Federal Circuit.  The case went back to the Court of Claims on damages.

    And won a grand total of $5,000.  That’s what six years of litigation, including an appeal, got him.

    Gaylord argued he was entitled to $3 million on the theory that he should get a 10% royalty on the revenue the Postal Service received from stamp and non-stamp sales.  The theory didn’t fly with the court though; a royalty-based award is unique to patent infringement cases.  Instead, he was entitled to just compensation, based on “what the owner has lost, not what the taker has gained.”  The Postal Service is forbidden by policy from paying royalties and the most it had every paid to use a pre-existing work was $5,000.  So $5,000 it was for Mr. Gaylord.

    Gaylord v U.S., No. 06-539C (Ct. Cl. April 22, 2011).

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  • Factions Having a Common History

    The caption tells it all: 100 Blacks in Law Enforcement Who Care, Inc. v. 100 Blacks in Law Enforcement Who Care. As explained by the TTAB:

    Opposers’ pleadings herein contain three grounds for refusing applicant registration: (1) priority and likelihood of confusion; (2) likelihood of dilution; and (3) that applicant is not the rightful owner of the mark.

    . . . .

    We are faced with the identical mark used in connection with identical services over a relatively long period of shared history. Hence, we find that traditional concepts of priority, likelihood of confusion, first use dates, dilution, etc., are of little help in resolving this dispute. Therefore, we focus our decision on the issue of ownership.
    Music to my ears.

    It’s really a simple fact pattern. The 100 Blacks in Law Enforcement Who Care organization first started in 1993 and operated for more than fifteen years as an unincorporated organization, but by late 2008 there was a schism. In November, 2008, one member, Mr. Noel Leader, registered the 100 BLACKS IN LAW ENFOREMENT WHO CARE mark with the state of New York in his own name. A few weeks later Mr. Marquez Claxton filed the involved application. Mr. Leader then incorporated the opposer in February, 2009 and sent a cease-and-desist letter to Mr. Claxton.

    So how do we decide who owns the mark? For the TTAB, it comes down to the founding of the organization. The TTAB describes the two camps, one led by Mr. Leader and one led by Mr. Claxton. Mr. Leader was involved at the inception of the organization but Mr. Claxton joined two years later:

    Mr. Leader was the force behind the incorporation of 100 Blacks in Law Enforcement Who Care, Inc., as a for-profit corporation in New York State committed to civil rights advocacy. . . . Weighing the evidence as a whole, we find that opposers have established by a preponderance of the evidence that they have a clear historical lineage to the earliest days of the informal association known as 100 Blacks in Law Enforcement Who Care.

    . . . .

    Inexplicably, [Mr. Claxton’s] alleged period of use beginning in 1993 includes a two-year period when an informal, unincorporated entity was allegedly operating prior to 1995, the year in which Mr. Claxton alleges he was first invited to join the organization. He is also tacking onto more than a dozen years of shared history (1995 – 2008) with an organization allegedly founded by Messrs. Adams, Wells and Leader.

    Without any other evidence corroborating Mr. Claxton’s claims to first use as of 1993, applicant’s involved application entitles it to claim December 4, 2008, as its priority date. Of course, this is more than a dozen years after the phrase 100 Blacks in Law Enforcement Who Care was adopted and first used. However, this shared history should not in any way create for applicant its own mark with its own first use date, i.e., ownership of this identical source indicator.

    Accordingly, we find on the totality of this record, as a matter of trademark law, that opposer, 100 Blacks in Law Enforcement Who Care, Inc., is the owner of the mark 100 Blacks in Law Enforcement Who Care. In view thereof, opposers have proven their claim that applicant is not the rightful owner of the mark.

    As a theoretical matter I think that who started an organization doesn’t necessarily tell the whole story. I can imagine a situation where a latecomer to an organization becomes so instrumental that he or she actually is responsible for the direction – the quality of the goods or services, if you will – offered under the mark. There was some slight evidence along that line in this case – Mr. Claxton was a public spokesperon and Mr. Leader a “key executive officer” during the same time period – but not enough to really know what the full picture looked like. Interestingly, both parties submitted the same web page as evidence of use:

    So I think it’s a bit pat to say categorically that a dozen years of shared history is irrelevant. But without more substantial information about the current operations of the organization, I have no quibble with a decision that a founder (or the legal entity he forms) still heavily involved with an organization owns the trademark. I also don’t propose that it should be easy to snatch a trademark away from a founder. But a trademark is also about public perception, which should factor in.

    I’m also a little confused procedurally.  Note that the conclusion is that “100 Blacks in Law Enforcement Who Care, Inc., is the owner of the mark 100 BLACKS IN LAW ENFORCEMENT WHO CARE.  In view thereof, opposers have proven their claim that applicant is not the rightful owner of the mark.”  So is registration refused on the basis that the applicant is not the owner of the mark (a failure to comply with Section 1 of the Lanham Act) or because of likelihood of confusion (Section 2(d))?  Both were alleged in the Complaint.  If it was only the former, then awarding Mr. Claxton a priority date of 2008 is an irrelevant move.  I always believe that it’s improper to have two different first use dates when there is a legal conclusion there is only one mark, because it’s nonsensical.  But if the decision is also under Section 2(d), then priority is a predicate fact, so it makes sense.

    Current web site here, if you’re interested in sports.

    HT to John Welch for the case.

    100 Blacks in Law Enforcement Who Care, Inc. v. 100 Blacks in Law Enforcement Who Care, Opp. No. 91190175 (T.T.A.B. April 12, 2011)

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  • Yankees Sued Over Ownership of Logo

    There’s an interesting, albeit quixotic, complaint against the Yankees over the ownership of its “top hat” logo:

    Plaintiff Tanit Buday claims that her uncle, Kenneth Timur, designed the logo for the Yankees in 1936 but was not compensated for the design.  In 1947 he modified the logo design in preparation for the 50-year anniversary of the Yankees occurring in 1952, but was again not compensated.  Fast forward to 2011 and Timur’s niece files a complaint for copyright infringement.  The complaint claims Timur had an unpublished, common law copyright in the design that was  assigned to the plaintiff.

    Interestingly, while there is an expert report claiming to compare the Timur design to the current logo, the comparison is to a photograph of the logo from a 1952 uniform, not any design drawings (presumably because they don’t exist).  Proof of Timur’s authorship is based on the fact that he traditionally signed his work with a “P,” and the 1952 uniform uses a “P” instead of a “9” to indicate the Yankee’s first year, i.e., “1P03-1952” in a ring around the logo.

    Which doesn’t really say anything about the ownership of the top hat design, only his modification of it in 1947.

    Nevertheless, the claim of authorship as told in the complaint is convincing and the complaint itself is well-written by someone who knows what he’s doing.  But it’s still a law professor’s dream exam for exploring all the ways that the copyright claim could fail.  Publication without notice, non-renewal, work for hire, license, laches, and on and on.

    Additional counts are for unjust enrichment, conversion, breach of contract, quantum meruit, breach of fiduciary duty and for an accounting.

    Buday v. New York Yankees Partnership, No. 1:11-cv-02628-DAB (S.D.N.Y. April 18, 2011).
    More reporting here and here.

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  • MGA Entertainment Wins Bratz! (For Now)

    Image from Counterfeit Chic

    “Staggering blow.”
    “Major reversal.”
    “Plastic cat fight of epic proportions.”
    “Astonishing loss.”
     
    It just doesn’t get more dramatic than this.  In the everlasting dispute over ownership of the Bratz doll franchise, Mattel’s original $100 million verdict in the first trial is gone. Now Mattel gets a paltry $10,000 on an intentional interference claim and MGA Entertainment gets a whopping $88 million – still subject to trebling! – on a misappropriation of trade secret claim.  I think there is some old saw about stones and glass houses . . . .

    While the damages were awarded for misappropriation of trade secret, I’m mostly interested in the dispute over the ownership of the copyright in the Bratz doll and trademarks in the Bratz names.  Where we last stood, the court of appeals held that designer Carter Bryant’s invention assignment agreement was ambiguous and the jury should decide whether he designed the Bratz dolls in the course of his employment with Mattel.  The answer was “no,” according to the verdict form, which means that trademarks weren’t “inventions” and that Carter Bryant didn’t design the dolls “at any time during my employment” – but we don’t know whether it was because they were designed during his non-duty hours or because it was during a period when he was not employed by Mattel.

    Good advice from Steptoe & Johnson:  “The lesson? Employment agreements assigning rights to intellectual property must be absolutely clear in scope – including the use of terms of art such as ‘copyright,’ ‘inventions,’ ‘ideas’ and ‘scope of employment.’ Without such clarity, courts will leave the interpretation of such provisions to the jury – where the results, as the Bratz case demonstrates, are a roll of the dice.”

    And don’t forget how much this case has cost Mattel.  “It means they wasted $400 million or so of shareholder money to get zero return,” reports MSN Money.  Yowza.

    Expect to see some post-trial motions, followed on by appeals.  This dispute is far from over.


    Mattel Inc. v. MGA Entertainment, Inc., No. CV 04-09049-DOC (RNBx) (C.D. Calif.).

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  • Guess Confusion Isn’t Such a Big Deal

    Gosh, such a juicy fact pattern; I read it with baited breath waiting to find out who owns the trademark. You can’t help but love a story that has stuff like this in it: “You have just 48 [hours] to decide…. After this deadline, Chen, Shenda, and I will have only one goal in our lives, kill your company by fair competition and replace you in the United States market.”

    How did such a battle come about? In 1983, two cousins, Paul Allen and Huang HongSheng, incorporated defendant JoLida, Inc. to sell China-manufactured vacuum tubes. It adopted its “X marks the spot” design used with the JoLida name below:

    The business expanded into designing tube amplifiers. It outsourced the manufacture to China but the amplifiers were of questionable quality, so JoLida contracted with plaintiff Chattery International to do repairs. JoLida and Chattery also formed a company, Shenda Sound Electronic Co., Ltd., to manufacture amplifiers in China. Shenda was a subsidiary of JoLida but was managed by Jing Guo Chen, the CEO of Chattery. The parties entered into an agreement (the 1997 Agreement) which said:

    [Chattery] authorizes [JoLida] to be the sole distributor for the U[nited] S[tates] and Europe for the audio product series manufactured by Shenda. Shenda shall distribute its products by itself in China and Asia.

    The trademarks used by the audio products manufactured by Shenda belong to Shenda, and shall be registered in China by Shenda. Should JoLida wish to register the [subject] trademark for the audio products in the US and other countries and areas, [JoLida] must obtain authorization from Shenda.

    Sometime after the agreement was signed, Shenda became a wholly-owned subsidiary of Chattery. Shenda registered the JoLida word and “X marks the spot” design in China. It worked at a loss for several years while Chen funded the loss, but it improved the product and ultimately began working at a profit.

    At the same time, Shenda’s factory manager Qin Zhong (“Loyal Qin”) was, according to Shenda, “secretly conspiring with JoLida to build a competing factory.” He signed some documents on behalf of Shenda. The first said:

    The second said:

    JoLida then opened its own factory in China, took over the manufacturing of the amplifiers, and not-so-Loyal Qin jumped ship to got to JoLida.

    JoLida filed an application to register the JOLIDA trademark in the U.S. in 2005 without Shenda’s permission and the mark ultimately registered. In 2007 JoLida also obtained an International Registration for the mark, designating some European countries.

    In 2008 Shenda sued JoLida in China and both claimed victory over use of the JoLida mark. In late 2009 and January, 2010, Shenda’s marketing and overseas manager launched the websites www.jolida.fr and www.jolida.net. The French site was for French sales, but people in the U.S. and Canada could buy from the dot-net site.

    Thereafter, Shenda filed a lawsuit in Maryland state court that was ultimately removed to federal court. JoLida counterclaimed and moved for a preliminary injunction, which is the subject of the decision. The parties continued to bicker over the mark, including the “kill your company” comment.

    The court focused on the 1997 Agreement. JoLida claimed that the document was faked – it had no record of the document, the JoLida stockholders had never considered transferring JoLida’s ownership of the trademark; the signatory was never authorized to make such a transfer; JoLida has never had equipment capable of printing Chinese characters; and JoLida’s letterhead has not included a telex number since 1995. JoLida’s expert also opined that the document “appeared to be fabricated from other documents” but he would need to see the original to know for sure. Shenda retorted that the document is authentic, although never produced the original. The parties also argued over whether there was consideration for the agreement, the intent of the agreement, whether the Loyal Qin documents confirmed JoLida’s ownership of the trademark, and whether JoLida’s failure to register the trademark for many years was proof that Shenda owned the mark.

    But after all the excitement, a bit of a fizzle. To my disappointment, on a a motion for preliminary injunction where a court is allowed to weigh facts, and there were great facts on either side to be weighed, the court punted on the whole thing:

    Although JoLida asserts that the Shenda Parties have offered no evidence of the Joint Venture Agreement, JoLida has not denied the existence of the agreement. The remaining issues–whether Hong-Sheng, who has died, was authorized to enter into the alleged 1997 Agreement with Chen; what they intended; what typewriter and letterhead HongSheng may have had access to; and whether Loyal Qin was authorized to sign legal documents on behalf of Shenda–are significant factual questions that are unable to be resolved on this incomplete record.

    In light of the alleged 1997 Agreement assigning ownership of the JoLida Trademark to Shenda, JoLida’s apparent compliance with the agreement for eight years, and the remaining factual questions, JoLida has not clearly shown that it is likely to succeed on its trademark infringement claim. Accordingly, JoLida cannot obtain preliminary relief on its trademark infringement claim.

    The court could get away with a non-decision because, despite Shenda’s counterclaim, it never moved for its own preliminary injunction. As a result, the two companies can continue to sell identical goods with the identical mark. I’m not sure why Shenda didn’t; perhaps Shenda didn’t really have sales in the U.S. despite the dot-net web site, or perhaps it doesn’t have very good penetration into the U.S. market and is perfectly happy to have JoLida continue to keep the market alive. But apparently confusion is not a problem.

    Chattery International, Inc. v. JoLida Inc., No. WDQ-10-2236 (D. Md. March 28, 2011)

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  • Missing the Question

    Sometimes decisions seem expedient instead of right, albeit perhaps no harm, no foul. VocalSpace, LLC v. Lorenso is one of those decisions.

    Defendant Daniel Lorenso is a software developer and former employee of plaintiff VocalSpace, a company that designs web-based internet marketing and streaming media systems. VocalSpace claimed that Lorenso “stole” VocalSpace’s source code and is selling a competing product that infringes the code.  Lorenso counterclaimed on a number of theories, including VocalSpace’s infringement of the same code.

    The decision was in the context of a challenge to VocalSpace’s copyright registration, that is, a claim that VocalSpace was not the owner of the code for which it registered the copyright. (Kill the registration and you kill subject matter jurisdiction.) There were two different pieces of code that were in dispute, which is how the kind of squirrelly analysis arises. First, Lorenso had written “Pre-2003 Code” that he incorporated into the work he did for VocalSpace. The second piece of code was written while Lorenso was employed by VocalSpace, but Lorenso nevertheless claimed that he was the copyright owner.

    Taking the 2006 code first, an employer will own the copyright in a work created by an employee in the scope of his or her employment. 17 U.S.C. § 201 and 17 U.S.C. § 101. Lorenso had two theories for why he nevertheless owned the copyright – the work wasn’t created within the scope of his employment and, even if it was, he had a signed writing saying that he was the owner as permitted by § 201.

    Neither theory worked though. The 2006 code was indeed written in the scope of Lorenso’s employment. His work for VocalSpace included writing code. Although Lorenso sent an email saying that that he intended to “develop[] projects outside [his] employment,” specifically blogging software (which was a functionality VocalSpace did not have at the time), Lorenso also said that the code would be similar “in nature (and code) to those I have already developed for VocalSpace projects” and that there “may be overlapping needs between the 2 projects which could benefit from collaboration.” His boss responded with “[i]f I ask you to write a blog system, you can use the one you’re writing, or rewrite it from scratch, but you need to guarantee me the code is unencumbered” and that “I need to own the code you write for me, 100%.” The court concluded the 2006 software was written in the scope of Lorenso’s employment.

    Lorenso didn’t fare any better with the signed writing argument. His fundamental problem was that,  for an employee to retain ownership, the writing has to be signed by both parties. There was no such writing here; Lorenso’s email was only an offer that was not accepted by VocalSpace. Putting VocalSpace on notice that he was writing software on the side wasn’t enough:

    Further, Defendants cite the Court to no authority, and the Court is aware of none, stating that an employee can avoid the written instrument requirement under the Copyright Code simply by stating that the work is intended for both his use and the use of his employer. Therefore, the Court concludes that no material questions of fact exist with regard to the non-existence of a signed agreement.

    Where it gets squirrelly though is with the Pre-2003 Code. There didn’t seem to be any question that Lorenso was the owner of the copyright in the code, but that didn’t seem to matter to the court. Rather, all the court cared about was that Lorenso added it to the VocalSpace body of code:

    Defendants present no evidence showing Lorenso was not a VocalSpace employee when he placed the Pre-2003 Code into the VocalSpace code base. Therefore, the Court concludes Lorenso was acting within the scope of his employment when he inserted the 2006 Lorenso Code and the Pre-2003 Code into the VocalSpace code.

    I don’t think the matters that Lorenso was “acting within the scope of his employment” when he inserted the code. The legal question posed was whether the registration was invalid for claiming ownership of code not authored by VocalSpace, so saying that Lorenso put the code in there doesn’t really answer the question.

    At the end of the day it didn’t matter though; there was also third-party code that the court found was correctly identified in the application by stating that “material excluded” included “computer program.” No more detailed information than that is required on the application, so the description would have covered the Pre-2003 Code too.

    Whether VocalSpace could still use the Pre-2003 Code is a different question that would require examination under the law of licensing, like this situation. But we’ll never know; the case has settled.

    VocalSpace, LLC v Lorenso, No. 4:09-cv-350 (E.D. Tex. March 7, 2011).

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  • Bringing a Copyright Suit Is Not as Easy as It Looks

    Here’s an exercise in frustration that killed a copyright infringement lawsuit twice:

    1993, 1995, 1996, 1997, and 1998 – Plaintiff Kunkel creates copyrightable works.
    November 2001 – Kunkel files bankruptcy.  Does not list copyrights as part of estate.
    February, 2003 – Kunkel files copyright applications for works created pre-bankruptcy in his own name.
    March, 2006 – Bankruptcy proceeding closed.
    March 28, 2007 – Kunkel sues Jasin for copyright infringement.
    May, 2007, September, 2007, and October 2007 – Kunkel files additional copyright applications for works created pre-bankruptcy in his own name.

    What happens? Lawsuit killed. The court rules that, since Kunkel didn’t schedule the copyrights in the bankruptcy, they were still the property of the bankruptcy estate. Therefore the trustee was the real party in interest, Kunkel did not have standing, and the case was dismissed.

    Kunkel then reopened the bankruptcy estate and scheduled the copyrights. The bankruptcy court abandoned the copyrights back to Kunkel on January 24, 2008.  Kunkel sued Jasin for copyright infringement again.

    But still no luck.  This time the district court ruled that the copyright registrations are invalid because the copyrights were registered in Kunkel’s name when the owner at the time of application was the bankruptcy estate.  The Court of Appeals for the Third Circuit affirmed: “as a general matter, upon the filing of a petition for bankruptcy, all legal or equitable interests of the debtor in property become the property of the bankruptcy estate and will be distributed to the debtor’s creditors.”  Kunkel’s argument that he could claim continuous ownership under the theory of “relation back” also failed:

    Kunkel also relies on the theory that, upon abandonment of an asset that was part of a bankruptcy estate, the property revests in the debtor, who is treated as having possessed the property continuously. Thus, according to Kunkel, because his “interest in the copyrights and architectural plans revert[ed] back to [him] as if the bankruptcy had never been filed and [he] is to be treated as if they had remained with him at all times,” the “copyright registrations are and have been in full force and effect since the time they were obtained . . . .” We agree with the District Court‟s refusal to apply the doctrine of “relation back” here, however. Kunkel failed to include the copyrights on the appropriate bankruptcy schedule, certified to the Copyright Office that he owned the copyrights when in fact they belonged to the bankruptcy estate, and belatedly regained possession of the copyrights only by seeking reopening of his bankruptcy case. Under these circumstances, we believe that the District Court properly granted summary judgment in favor of SVCH.
    The first suit failed because Kunkel was not the copyright owner and did not have standing, the second suit failed because the copyrights were not registered by the then-owner. Third time a charm?

    Kunkel v. Jasin, No. 10-4268 (3d Cir. Mar. 29, 2011) (unpublished).

    Kunkel v. Jasin, No. 5:09-cv-00371-WD (E.D. Pa. Sept. 7, 2010).

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  • A Good Tacking Decision

    Boathouse Group, Inc. v. TigerLogic Corp. is a priority dispute between two trademarks for software used to enhance the functionality of social media sites. The plaintiff’s mark was POSTPOST, located at postpo.st, and the defendant’s was POSTPOST, located at postpost.com.  Given the identicality of the marks, the only question was whether the services were similar enough that there would be likelihood of confusion – they were.

    The part of the case that drew my attention was defendant TigerLogic‘s defensive acquisition of a trademark that predated plaintiff Boathouse Group‘s first use date. TigerLogic had the trademark assigned to it by a company called DK New Media and then licensed it back to DK New Media.

    The concept here is “tacking.”  One can claim the first use date of the earlier use as one’s own if there is sufficient continuity:

    A valid assignment requires that the products or services be sufficiently similar to prevent consumers of the products or services offered under the mark from being misled from established associations with the mark. Minor or expected variations or alterations in the quality or characteristics of the product will not invalidate the assignment. 

    By contrast, an assignment is ineffective to transfer the assignor’s priority if the assignee uses the mark on substantially different goods or services. Use of the mark by the assignee in connection with a different goodwill and different product would result in a fraud on the purchasing public who reasonably assume that the mark signifies the same thing, whether used by one person or another.

     Boathouse Group’s first use date was August, 2010 and TigerLogic’s own first use date, without the benefit of tacking, was December, 2010 (in a December 7 press release, according to the Complaint). The acquired trademark’s first use date was February 2007.* So if TigerLogic could tack to the DK New Media’s first use it was the senior user, but if it couldn’t it was a junior user. 

    The acquired trademark was for a WordPress plug-in called POSTPOST. Since you’re here reading a blog, you probably know that WordPress is a blogging platform. The POSTPOST add-in was used to append a preface or footnote to a blog entry so text would appear in a certain location on the screen.  The TigerLogic software compiles links, pictures and videos posted on Facebook and presents them to users in a newspaper format. These two uses weren’t close enough for TigerLogic to claim the earlier first use date, according to the court:

    Here, although DKNM’s plugin and TigerLogic’s application share some general and broadly-construed similarities (e.g. both are used on the internet), they seem otherwise unrelated with different purposes, thus making the assignment ineffective for the purpose of transferring priority. DKNM’s plugin is an optional feature designed to work with specific software. It has limited functionality, requires the user to input content and lacks a search feature. Furthermore, it does not rely on or require access to a user’s social network to function, unlike the applications of TigerLogic and Boathouse.

    By contrast, TigerLogic’s application is premised on access to information generated by a user’s social network and has the ability to aggregate that information or allow the user to search, edit and delete content. While DKNM’s plugin is a feature of the WordPress platform, TigerLogic’s product is an application itself. DKNM’s plugin and TigerLogic’s product are substantially different such that TigerLogic’s use of DKNM’s mark in connection with TigerLogic’s application (instead of DKNM’s plugin) may result in fraud on the public and consumer confusion.

    The court also questioned whether the assignment and license-back was valid at all. (Practice tip – date the license-back AFTER the assignment, not the day before.) TigerLogic acquired the trademark in December 28, 2010, after the lawsuit was filed on December 9, 2010. The court recognized the arrangement for what it was – a ploy:

    [I]t constitutes an obvious attempt by defendant not only to evade liability for conduct that likely constituted infringement at the time this suit was filed, but also to transform the suit into one focused on plaintiff’s purported infringement of defendant’s mark which only materialized, if at all, after the assignment.

    This thrills me.  I find assignment/license-back arrangements to be entirely suspect, especially in the context of an ongoing litigation. There may be valid reasons for it – such as where the original trademark owner has manufacturing capability that the assignee does not, like in Syntex Labs., Inc. v. Norwich Pharmacal Co., 315 F. Supp. 45 (D.N.Y. 1970) – but that’s the rare case where there actually is identicality of goods.  Nice to see it didn’t work here.

    And what does this do to DK New Media’s license? I haven’t thought about it before, but it is a cautionary tale for the assignor/licensee. DK New Media now finds its own use constrained by the preliminary injunction, since “The defendant TigerLogic Corporation shall not expand the plugin it acquired by assignment from DK New Media for use beyond WordPress.”  It doesn’t look like the WordPress POSTPOST plug-in is available at all right now:

    (click for larger view)
    DK New Media got a whopping $5 grand for the trademark assignment. Hope it was worth it.

    Pending posting of bond, TigerLogic is enjoined from using the mark POSTPOST “in association or connection with its so-called ‘social newspaper’ application” and has to include a disclaimer on its site:

    Boathouse Group didn’t get off quite scot-free; it was also enjoined from expanding its business into Facebook while the case is pending.

    Technology & Marketing Law Blog post on the case here.

    *I note that the blog post purporting to be from February, 2007 has this at the bottom – “Looking for the other PostPost? Our friends at TigerLogic also have a product called PostPost in the social media space that aggregates your Facebook content intelligently into a virtual newspaper. Very cool!”  Given that defendant TigerLogic’s POSTPOST didn’t exist until three years after the post was supposedly published, this clearly was added later. I think it’s bad practice to change pages substantially without noting they’ve been updated.  Particularly if it was done after a lawsuit about the mark was filed.

    Boathouse Group, Inc. v. TigerLogic Corp., No. 10-12125-NMG (D. Mass. March 3, 2011).

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  • The TTAB Comes to Boston

    John Welch has done his usual stellar job of convincing the Trademark Trial and Appeal Board to come to Boston to conduct a hearing.  Sponsored by the Trademark Committee of the Boston Patent Law Association, the Board will sit at the Northeastern University School of Law on April 29th in the afternoon.  The case is an appeal on the genericism of PAVEWAY for laser guided bombs, Lockheed Martin Corp. v. Raytheon Co., Opposition No. 91167189. More information on the event is here and registration is here.

    And I am thrilled to be asked to speak on trademark ownership issues.  Thrilled and a little nervous.  I plan on surveying how the TTAB has dealt with competing claims of ownership to the same mark, with perhaps a few district court cases thrown in.  I’m a little nervous because sometimes I haven’t been so charitable in my comments on the decisionmaking.  Sure, it’s easy to sit on your couch with just your computer to judge you and loftily pontificate on how it should have gone, but now I have to look the judges in the eye and talk about it.  (I should have taken more lessons from John on that discretion/valor thing.)

    So I’ll start right now.  Mea culpa.  Come on April 29th and you’ll probably hear some more.  Hope to see you there.

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