Property, intangible

a blog about ownership of intellectual property rights and its licensing

  • The Melody Can Barely be Heard

    Class 46 brings our attention to the auction of a Spanish brand for a department store chain “Galerías Preciados.” Fogasa, an agency of the Spanish Ministry of Labor and Education, acquired the family of marks as the result of a bankruptcy. Fogasa has tried to auction the brand three times; in 1997 the value was in excess of 19 billion Euros but it can be acquired now for merely 300,500 Euros.

    A machine translation from the newspaper Cinco Días article says

    “Not being able to associate a business now, the valuation of the mark Galleries Preciados is more complicated,” says [valuation expert] Fernandez-Vega. “This has meant that the valuation of the business name was made guided by criteria ‘subjective’.”

    A demonstration of the concept of dissipation of goodwill over time in quantified terms, but also a demonstration of how long the melody can linger on.

    Original article here; Google translation of the article here.

    © 2008 Pamela Chestek

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  • What’s on Your Pocket?

    Not surprisingly, Levi Strauss & Co. v. Abercrombie & Fitch Trading Co. is a case about enforcing the “arcuate” pocket stitching design on Levi’s jeans. Levi’s is not one to be meek in enforcing its registered trademark, shown below:
    But it’s butting up against a litigious player in its own right, Abercrombie & Fitch (various dockets here, commentary here, here and here), a company that has itself sued on its own jeans pocket design (here).

    Abercrombie filed an intent to use trademark application, and started using, this mark for an exclusive line of clothing sold under the “Ruehl” brand:



    On a motion for summary judgment Abercrombie attacked the validity of the Levi’s trademark, claiming both that the mark is weak and raising a formal abandonment defense. Abercromie doesn’t shirk on the evidence, but bases no small part of its defense on evidence arising from Levi’s previous lawsuits and other enforcement efforts. Most of it fails on evidentiary grounds.

    Abercrombie tried to use Levi’s past settlement agreements as proof that pocket designs are in a crowded field and thus the Levi’s mark is not strong, or even weakened to the point of abandonment. But the settlement agreements were not admissible under Fed. R. Evid. 408, which excludes evidence offered to prove liability for, invalidity of, or the amount of a claim that is disputed.

    This is an interesting tactical point, though. Levi used evidence of its enforcement efforts to support its argument that the mark is not weak, stating “LS&CO. spends enormous resources to preserve its mark and maintain a zone of protection against similar uses that would erode its distinctiveness. The Supplemental Declaration of Thomas Onda, submitted with this opposition, shows a few examples among hundreds of enforcement actions taken in furtherance of this effort.” So Levi may use the evidence to prove its own case, but Abercrombie is barred by Rule 408 from using similar evidence to disprove the same point.

    Abercrombie also refigures survey evidence from old cases to try to demonstrate that the Levi mark is losing strength over time, but does it through attorney argument rather than expert testimony. These surveys also therefore inadmissible.

    Although the evidence is excluded, the court makes it clear that the evidence wouldn’t have helped Abercrombie on its abandonment defense:

    To support its claim for abandonment, Abercrombie primarily relies upon the third party settlements and the surveys from other litigation, which the Court has excluded. However, even if the Court were to consider this evidence, it would not alter the Court’s conclusion. It is possible that the presence of other jeans manufacturers using designs purportedly similar to the Arcuate mark has impacted the commercial strength of that mark. See, e.g., Adidas-America, Inc. v. Payless Shoe Source, Inc., 546 F. Supp. 2d 1029, 1078 (D. Or. 2008) (noting that “third party uses of [allegedly similar] designs is relevant to the strength of the mark, not abandonment”). However, only when all rights of protection have been lost can a party be found to have abandoned its trademark.

    Dr. Sood’s survey, however, establishes that notwithstanding the presence of third parties using purportedly similar designs, the public still recognizes the Arcuate mark as a source indicator for Levi’s brand jeans. Abercrombie has not put forth admissible evidence that rebuts Dr. Sood’s conclusions. Accordingly, the Court concludes that Abercrombie has failed meet its strict burden of proof and has failed to put forth facts from which a reasonable jury could conclude that the Arcuate mark has lost all significance as a mark. LS&CO is entitled to judgment in its favor on this aspect of Abercrombie’s counterclaim. For these same reasons, LS&CO is entitled to judgment on Abercrombie’s affirmative defense of abandonment.

    Summary judgment on the abandonment defense granted in favor of Levi. But, the court acknowledged that there was nevertheless a question about the strength of Levi’s mark because of the co-existence:

    [M]any of the articles that LS&CO submits to show third party recognition of the Arcuate mark are dated. Indeed, of the nine articles submitted, only one appears to have been published in this decade. Abercrombie also introduces evidence that there are numerous third parties using designs that are purportedly similar to the Arcuate mark. Finally, although the Court has concluded that Abercrombie has not established a genuine issue of material fact to show the Arcuate mark has lost all significance as a mark, the Court concludes that Dr. Ford’s criticisms of Dr. Sood’s consumer recognition survey may bear on the issue of whether LS&CO can show the mark is “famous” for purposes of its dilution claim.

    The TTAB has stated that it was “reluctant” to find the Arcuate mark famous on a record that appears similar to this case. See Levi Strauss & Co. v. Vivat Holdings PLC, 2000 TTAB LEXIS 817 (Dec. 19, 2000). In light of third party usage of purportedly similar marks, the lack of specific figures for advertisements bearing only the Arcuate mark, the age of the materials regarding third party recognition, and the survey evidence, the Court concludes that there are facts from which a reasonable juror could reach a determination in either party’s favor on the question of fame.

    Abercrombie’s motion for summary judgment on the absence of dilution and noninfringement denied since questions of fact remained.

    Levi Strauss & Co. v. Abercrombie & Fitch Trading Co., No. C. 07-03752, 2008 U.S. Dist. LEXIS 87625 (N.D. Cal. Oct. 16, 2008).

    © 2008 Pamela Chestek

  • Application as Registration

    William Patry is vocal in his disagreement with Nimmer about whether § 411(a) of the Copyright Act requires the issuance of a Certificate of Registration before suit can be filed. Patry says “yes,” Nimmer says “no.” 2 Nimmer on Copyright § 7.16[B][1].

    CHM Industries v. Structural & Steel Products, Inc. demonstrates the mischief that can happen when a statute is stretched beyond its plain meaning. As Patry notes, the 5th Circuit has adopted the Nimmer position, i.e., one only has to file an application for registration, not actually receive the registration, before filing a lawsuit. 
    In CHM Industries, the plaintiff and defendant were competitors in the manufacture of large outdoor lighting fixtures. A number of employees left plaintiff to work for defendant, including a draftsman. The defendant then began making lighting fixtures that were similar to the CHM Industries fixtures. CHM Industries sued for copyright infringement of the technical drawings for the lights, misappropriation, conversion and other causes of action.
    The court said that the drawings were “registered” with the Copyright Office one day before the complaint was filed – the use of the word “registered” in this case means that the application was filed one day before and, in the Fifth Circuit, this is good enough to be “registered” by operation of § 410(d) (which states that the effective date of a copyright registration is the day on which a complete application has been received in the Copyright Office, assuming that the Copyright Office decides the work is entitled to registration). From the remainder of the discussion in the case, it’s clear that the plaintiff had not received its certificates of registration.
    The mischief results when CHM Industries tries to claim that the registration is prima facie evidence of its ownership of the copyright in the drawings. Under § 410(c), “In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate.” CHM Industries’ theory goes that if, under § 411(a) as interpreted by the Fifth Circuit it has “registered” its work upon receipt by the Copyright Office of the application, fee and deposit, then it should also be entitled to the presumption of ownership at the same time. This is a theory that worked in In re Napster, Inc. Copyright Litig., 191 F. Supp. 2d 1087, 1101 (N.D. Cal. 2002).

    The theory, of course, doesn’t make sense. The Copyright Office hasn’t passed on the copyrightability of the work by its mere receipt of the application, so logically no presumption should arise; indeed the Copyright Office might reject the application. Even Nimmer disagrees with the plaintiff’s theory. 2 Nimmer on Copyright § 7.16[B][1] (“To the contrary, however, one court concluded that an application alone suffices for a prima facie presumption to arise. [citing Napster] It is submitted that its summary determination was incorrect.”).
    The CHM Industries court disagreed with Napster; the certificate is required before the presumption inheres. CHM Industries therefore had to prove ownership without relying on the prima facie proof of a certificate of registration. 
    The defendants cast doubt on CHM Industries’ ownership claim by questioning whether the drawings were derivative works not claimed as such in the applications, so that the registrations might be fraudulent (N.B. that this wouldn’t have stopped the certificates from issuing, since the Copyright Office doesn’t investigate the truth of the statements in the registration), defeated a claim of ownership by assignment because it was raised only in the reply brief, and raised doubt about the originality of the works.  CHM Industries’ motion for preliminary injunction denied.
    CHM Industries, Inc. v. Structural & Steel Prods., Inc., Civ. No. 4:08-CV-454-Y, 2008 U.S. Dist. LEXIS 86131 (N.D. Tex. Oct. 24, 2008).

    © 2008 Pamela Chestek

  • Bad News Two Days In a Row

    Adding insult to injury after yesterday’s post, in which the Court of Appeals for the Federal Circuit affirmed a decision that Oren Tavory wasn’t a co-owner of the NTP patents, in a separate decision the Federal Circuit affirmed that he also owed NTP the attorneys’ fees it incurred defending against his copyright suit. Mr. Tavory claimed infringement of source code used in the patent application, but his copyright application was defective because the deposit copy wasn’t a bona fide copy of the original software.

    Tavory claimed that NTP wasn’t the prevailing party because the copyright claim was dismissed for lack of subject matter jurisdiction. Wrong; $37,000 in attorneys’ fees on the copyright portion of the suit affirmed.
    Tavory v. NTP, Inc.

    © 2008 Pamela Chestek

  • Invention and Assignment of Patents

    A couple of ownership cases of interest. First, Oren Tavory failed in his effort to join in the NTP jackpot also known as the RIM settlement – he’s not a co-inventor because he didn’t have evidence that his contribution to the invention was more than simply the exercise of ordinary skill in the art.  Tavory v. NTP, Patent Hawk here, Patently-O here.

    And from Thorn Security Ltd v Siemens Schweiz AG [2008] EWCA Civ 1161, the IPKat brings a tail of registration of a patent after merger.  The Court of Appeal (England and Wales) held that the registration of the “assignment” of a patent as described in Patents Act 1977 section 33(3), a necessary step before one could collect damages for patent infringement by operation of section 68 (now amended to cover only costs), includes acquisition of ownership by any means, including merger.

    © 2008 Pamela Chestek
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  • Trade Dress and Copyright

    This is the final post in the series on Tacori Enterprises v. Rego Manufacturing. As well as claiming copyright in the ring design, Tacori also claimed that the ring design was Tacori’s protected trade dress and sued for trademark infringement. Tacori has filed a trademark application for registration of the trade dress in the ring design:


    The trade dress is described as “the appearance of portions of two essentially concentric rings, with one of the rings having a larger diameter than the other. Embedded between the rings are repeating semi-circles or arcs which appear contiguous to each other. A space is created between the contiguous semi- circles or arcs. The dotted lines show the placement of the mark on the goods.”

    At the time of the decision, Tacori had received a Notice of Publication for the design but the design had not registered (ed. note: registration has been opposed by a company called EMMI, Inc. and the opposition is stayed pending resolution of a pending federal case between EMMI, Inc. and Tacori in the Central District of California, Civ. No. 08-00552. The court in this case also mentions two more pending consolidated cases in the Central District of California, between Tacori and Beverlly Jewellery Co., Civ. No. 06-5170, and Pink Diamond, Civ. No. 07-3939).

    Tacori submitted evidence through an affidavit from Tacorian that the mark had acquired distinctiveness, including exclusive use since 1999, emails and letters from consumers recognizing the design as a source indicator, $6 million spent in advertising, $30 million in sales, unsolicited media coverage, use by others of the term “Tacori inspired” to describe similar designs of jewelry, and over 125 cease and desist actions. (The evidence of secondary meaning submitted in the registration process can be found here in the December 18, 2006 Response to Office Action).

    Rego Manufacturing asked for summary judgment on the trade dress claim on two theories: first, that the Tacori couldn’t assert a trade dress infringement claim without a registration; and second, that the trade dress is not distinctive. It failed on both theories. Tacori’s infringement claim was under § 43(a) for infringement of an unregistered trademark, not under § 32 for infringement of a registered trademark, so it stands. Tacori had also offered enough evidence to make acquired distinctiveness a question of material fact sufficient to defeat summary judgment.

    Tacori Enter. v. Rego Mfg., Civ. No. 1:05cv2241, 2008 U.S. Dist. LEXIS 73686 (D. Ohio Sept. 25, 2008)

    © 2008 Pamela Chestek

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  • Mongols Trademark Seizure

    There have been a lot of posts about the government’s seizure of the MONGOLS trademark, used by a biker gang. You can find blogging about it here, here and here, and commentary here and here on what it means under trademark law principles.

    Ryan Giles at the Law Vegas Trademark Attorney had the comment that interested me the most, which is the potential for abandonment of the mark. A trademark is abandoned after a period of nonuse with an intent not to resume use – abandonment is presumed after three years of nonuse.
    The government seems to be in a pickle though, to the extent it needs to rely on trademark law to stop people from using the trademark. The significance of the mark is that it stands for a motorcycle gang that the government has characterized as outlaw. I assume the government’s position is that it wants to eradicate use of the mark, or in other words, it will cease use of the mark and has no intent that use be resumed. If so, the mark is abandoned and freely available for others to adopt at the moment that becomes true – waiting three years not required.
    If the government says it has an intent to resume use through the sale of the mark, query whether it can even be sold in a way that’s of value to the purchaser. To claim priority to the Mongols’ use, the new user would have to “tack” to it, but:

    The standard for “tacking,” however, is exceedingly strict: “The marks must create the same, continuing commercial impression, and the later mark should not materially differ from or alter the character of the mark attempted to be tacked.” In other words, “the previously used mark must be the legal equivalent of the mark in question or indistinguishable therefrom, and the consumer should consider both as the same mark.”

    Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1036, 1048 (9th Cir. 1999) (citations omitted). The goods or services offered under the mark post-assignment must essentially remain the same:

    Inherent to the rules involving the assignment of a trademark is the recognition of protection against consumer deception. Basic to this concept is the proposition that any assignment of a trademark and its goodwill (with or without tangibles assigned) requires the mark itself be used by the assignee on a product having substantially the same characteristics.

    PepsiCo, Inc. v. Grapette Co., 416 F.2d 285, 288 (8th Cir.1969). The government may have been willing to sell a trademark for a whorehouse, but that was a legal enterprise. But the government could hardly sell the mark for an outlaw biker gang, the “commercial impression” that the mark currently has. Just fun to think about.
    © 2008 Pamela Chestek
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  • Cherry and Jerry Garcia

    Awhile back I did a survey on ice cream flavors.  One of the flavors in the survey was Cherry Garcia, a Ben & Jerry’s flavor.  According to the PTO records, the trademark was originally registered by Ben & Jerry’s but was later assigned to Jerry Garcia’s estate in 1997.

    The Grateful Dead’s attorney passed away recently and I just ran across a piece about him that mentions the assignment.  The dates don’t jibe with the PTO records, but it’s an interesting tidbit of a story.  I can’t summarize it succinctly, just go read it for yourself.
    © 2008 Pamela Chestek

  • Originality in Copyright

    I blogged here about the defendant’s attack on the validity of an assignment and registration in Tacori Enterprises v. Rego Manufacturing. As a refresher, there were two parties that participated in the design of a ring, Haig Tacorian, acting as the President of Tacori Enterprises, and Garo Karounian, a designer for his sole proprietorship Anais Fine Jewelry Manufacturing.
    In addition to the attacks on the assignment and registration, accused infringer Rego Manufacturing also argued that the work wasn’t copyrightable because it wasn’t original.

    Originality encompasses two concepts: that a work was independently created by the author (i.e., the author didn’t copy) and that the work has a minimal degree of creativity. Rego’s expert opined that the ring design was just a reworking of similar and identical designs that had existed for thousands of years. He identifyed a bracelet design by Saara Hopea-Untracht in particular, saying “Without any stretch of the imagination, it easily appears that her jewelry was the prototype for the design that Tacori submitted to the Copyright Office. One cannot look at this artist’s work and not conclude that the Tacori rings are derivatives of the Untracht design.” In response, Tacori offered detailed evidence on how Karounian and Tacorian developed the design and submitted declarations that they did not base the design on any other works, were not aware of any similar works, and had not seen the jewelry in defendant Rego’s expert report.

    Rego’s argument wasn’t good enough to survive summary judgment. The Tacori design was sufficiently different from the designs in the expert report to have the requisite level of originality; further, the expert’s conclusion that the Tacori work was not independently created wasn’t enough to raise an issue of material fact since Rego had no evidence rebutting Tacorian’s and Karounian’s statements that they had not seen the works in the expert declaration. The ring design was copyrightable.

    Tacori Enter. v. Rego Mfg., Civ. No. 1:05cv2241, 2008 U.S. Dist. LEXIS 73686 (D. Ohio Sept. 25, 2008)

    © 2008 Pamela Chestek

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  • Implied, Irrevocable, Nonexclusive, Royalty-Free License to Retain, Use and Modify

    The IP Law Blog digests an interesting software licensing case. An independent contractor software developer worked for a number of years writing applications for his client. When the relationship ended the copyright (and trade secret) lawsuit ensued. The Ninth Circuit found that the client had not just a license to use the software, but an unlimited, non-exclusive, irrevocable license to retain, use and even modify the software.

    © 2008 Pamela Chestek

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