Property, intangible

a blog about ownership of intellectual property rights and its licensing

  • Mattel Moves for Everything

    A little behind in my reporting on the Bratz case.  New reports are that Mattel filed a motion for a permanent injunction to enjoin MGA from making and selling Bratz dolls and from using the Bratz name and trademarks.

    There are a slew of motions.  First for declaratory judgment:

    [T]he Court should now issue a declaratory judgment pursuant to Mattel’s thirteenth claim for relief that Mattel owns all right, title and interest in and to the Bratz-related works, ideas and concepts the jury found Bryant had conceived or created while employed by Mattel, including the Bratz drawings, Bratz sculpts, the ideas for the Bratz characters and the name “Bratz.” Furthermore, the Court should declare that MGA does not have any rights in or to such works, ideas or concepts and that Bryant’s purported transfer of the rights to such matters to MGA was invalid and void ab initio. Finally, the Court should declare that all Bratz-related works Bryant created or conceived while employed at Mattel, and MGA’s copyright registrations of the Bratz works, are subject to a constructive trust in favor of Mattel. In the alternative, the Court should declare that those copyright registrations are invalid because MGA is not — and never was – the true owner of those works.

    Brief here.  It refers only to the works the doll designer created while at Mattel, i.e., the “gen one” dolls, but there are also “gen two” dolls.  A motion for permanent injunction enjoining the manufacture of all dolls, gen one and gen two, was also filed: 

    The only issue even arguably open to debate is the scope of the injunction. MGA all but concedes that the four Bratz dolls released in June 2001 are substantially similar to Mattel’s copyrighted works, but contends that no later Bratz dolls infringe. No such line can be drawn among the Bratz dolls. The original four dolls and all later dolls are based on the same sculpt – the sculpt that was developed from Mattel’s designs, and infringes Mattel’s copyrights in those designs. The infringing sculpt, which gives every core Bratz doll its unique look and feel, is still used for all Bratz dolls today. Accordingly, every one of those dolls necessarily bears substantial similarities to the elements of Mattel’s copyrighted works which this Court ruled are protectable.
    MGA has made clear that it intends to continue to produce and sell infringing dolls in the future. . . . A permanent injunction against further infringement is required. 
    Brief here.  A constructive trust for the trademarks under California law is another separate motion:
    This Court should impose a constructive trust for Mattel’s benefit on the Bratz and Jade marks, order that the rights in the marks be transferred to Mattel and enjoin MGA from further use of the Bratz and Jade names and marks.
    Brief here.  Finally, there was also an ex parte motion by Mattel (opposed by MGA) to expedite the hearing, currently scheduled for November 10.  Here’s the reason:
    Mattel makes this Application on the grounds that the sale of infringing Bratz products during the holiday season poses an enormous, but largely unquantifiable, threat to Mattel’s holiday sales. The months of September, October, November, and December are the most important months of the year for Mattel. Mattel ships thousands upon thousands of toys to retailers during these four months, garnering the majority of its annual revenues in the process. The continued presence of infringing Bratz products on the market poses a significant threat of irreparable harm to Mattel’s sales during this crucial time of year.
    Brief here.  MGA, outraged, says

    [O]n the day when its papers were due, and the clock began ticking for MGA’s response, Mattel filed an ex parte application seeking to alter the schedule by slashing the time for MGA’s opposition to 11 days, enlarging the time for Mattel’s reply by three days, and cutting by two weeks the Court’s time to consider the papers on what could be the most important motion in this case. Mattel’s request, outrageous on its face, should be summarily rejected.

    Opposition brief here. Somehow I expect we’ll still see Bratz dolls on the shelf at Christmas time.
    © 2008 Pamela Chestek
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  • Patents in the Ether, Admission to the Rescue

    THERASENSE, INC., Plaintiff, v. BECTON, DICKINSON AND COMPANY, Defendant.
    No. C 04-02123 WHA
    Consolidated with No. C 04-03327 WHA, No. C 04-03732 WHA,No. C 05-03117 WHA
    UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF CALIFORNIA
    2008 U.S. Dist. LEXIS 76716

    July 14, 2008, Decided
    July 14, 2008, Filed 

    OPINION 
    ORDER DENYING DEFENDANT’S MOTION TO DISMISS

    Abbott Laboratories filed this action alleging infringement of U.S. Patent No. 5,628,890 in March 2005. Over three years have since passed. Now, one week before the trial on the ‘890 is set to begin, BD/Nova moves to dismiss Abbott’s infringement claim on the newly discovered allegation that Abbott is not the owner of the ‘890 patent and therefore has no standing to sue for infringement. Despite being in litigation for three years, BD/Nova contends that it only discovered the ground for its motion within the past month. For the reasons set forth below, BD/Nova’s motion is DENIED.

    The ‘890 patent was assigned to Medisense, Inc., in 1996. Abbott was Medisense’s sole owner and shareholder. Medisense dissolved on December 31, 1998. BD/Nova’s motion is entirely premised on the fact that there is no written document evidencing a transfer of ownership rights in the ‘890 patent from Medisense to Abbott. But BD/Nova has previously stipulated that Abbott is the owner of the ‘890 patent. Specifically, in the joint pretrial order BD/Nova stipulated that “Abbott Laboratories owns the ‘890 Patent” (Parties’ Joint Proposed Pretrial Order at 16). A joint pretrial order lays out those issues that are disputed for trial and stipulations therein are binding at trial. See Malhiot v. S. Cal. Retial Clerks Union, 735 F.2d 1133, 1137 (9th Cir. 1984). In addition, while a party may not stipulate to federal subject matter jurisdiction, it can stipulate to facts from which jurisdiction can be inferred. See United States v. Mathews, 833 F.2d 161, 164 (9th Cir. 1987).

    Ordinarily when a company dissolves, its assets are distributed to its shareholders or to its owner. Here, Abbott was the sole shareholder of Medisense at the time of its dissolution. It appears therefore that Abbott would have become the de facto owner of the ‘890 patent after Medisense’s dissolution. BD/Nova contends otherwise. The contention must be rejected. Under BD/Nova’s logic, nobody owns the ‘890 patent and it is instead simply floating in the ether. Fortunately, we do not have to get into metaphysics for BD/Nova has already stipulated that Abbott is the owner of the ‘890 patent — a stipulation for which BD/Nova has shown no cause to withdraw from. The only argument BD/Nova makes is that its stipulation was written in the present tense — i.e., “Abbott Laboratories owns the ‘890 Patent” — and the relevant inquiry for standing purposes is whether ownership was established at the time the complaint was filed. See Gaia Tech., Inc. v. Reconversion Tech., Inc., 93 F.3d 774, 777 (Fed. Cir. 1996). BD/Nova’s pedantic argument is without merit. BD/Nova has not explained how Abbott could be the owner of the ‘890 patent today and not the owner of the patent in March 2005. They have also not given any significant justification for its failure to raise this issue earlier (even in the joint pretrial order) rather than on the eve of trial. Given the immediacy of the impending trial, the prejudice to Abbott is clear. Prejudice to the Court’s calendar is also manifest. The Court informed the parties two months ago that it would reserve the time to try this case now and that it would otherwise have to wait until sometime in 2009. For these reasons, BD/Nova’s motion must be DENIED. 
          
    IT IS SO ORDERED.
    Dated: July 14, 2008.
    /s/ William Alsup
    WILLIAM ALSUP
    UNITED STATES DISTRICT JUDGE

  • How to Make Money on Dow Futures

    Most trade secret cases, in evaluating whether there is a trade secret or not, are looking at the degree to which secrecy was maintained, or analyzing whether the particular subject matter is of a type that may be protected through trade secret. Fishkin v. Susquehanna Partners G.P. (a declaratory judgment action) is a more unusual case where a claimed trade secret was learned through observation.

     

    An employee of DJ defendant Susquehanna International Group (SIG), Wisniewski, worked in the the Dow pit on the floor of the Chicago Board of Trade. The court described the development of the trade secret this way:

    45. Around September 1999, after he had been trading unsuccessfully in the Dow pit for a month using an arbitrage fair value strategy, Wisniewski began observing what other, successful traders in the pit were doing. He observed other traders looking up at the electronic wall board near the Dow Futures pit and watching the values for the S&P Index. He noticed that when the values for the S&P Futures were going up, these traders were buying, and when the values went down, they sold. He also noticed that when the value of the S&P Future went up a dollar, the value of the Dow Future would go up nine dollars, an amount proportional to the different underlying cash values of the two indexes. He also observed that these traders appeared to be making money.


    46. Based on what he observed these other traders doing, Wisniewski wrote out the formula for Dow Fair Value, set out in Figure 9. He based this formula on what he deduced the traders whom he had been observing were using as the basis for their trades. Wisniewski did not believe his formula was anything novel or unique, and drafting it did not take him much time. He viewed it as a simple algebraic expression of the concept that he observed other traders using. This concept was that, when the S&P Futures were trading over (or under) their banking fair value the Dow Futures should trade over (or under) their banking fair value in the same proportional amount.

    Wisniewski taught the system to Fishkin when they were employed together at SIG. They started out doing the calculations in their heads but ultimately used the system on handheld computers after seeing other traders using handheld computers in the pit. Both Wisniewski and Fishkin contemplated leaving SIG and so sued SIG seeking to invalidate restrictive covenants in their employment contracts; SIG counterclaimed against Fishkin, but not Wisniewski, for misappropriation of trade secret. Wisniewski ultimately stayed at SIG.


    SIG claimed the formula as a trade secret, as well as using an Excel spreadsheet on a handheld computer to execute it. The court didn’t buy either argument, even though SIG had maintained the secrecy by taking such steps as displaying dummy values on the handheld computers in case other traders looked at the screens. The formula wasn’t a trade secret because it was learned through observation and other traders were using it; the use of handheld computers was learned from others also.

     

    So despite the fact that secrecy was maintained, and Fishkin took the information (albeit in his head) with him, no misappropriation of trade secret.

     

    It’s also a good case to read as a road map for the types of claims that can arise in the common situation where an employee who had a nondisclosure/noncompete leaves. Tortious interference, breach of contract, conversion, trade secret, they’re all in there.

     

    Fishkin v. Susquehanna Partners, G.P., 563 F. Supp. 2d 547 (E.D. Pa. 2008).

     

    © 2008 Pamela Chestek

  • Positively Perfect in Every Way

    Positive Technologies whiffed the first patent infringement complaint by filing in the name of the wrong entity, Positive-California, when it should have been filed in the name of Positive-Nevada.  Positive calls a mulligan and refiles in the correct entity’s name, then the two companies merge into Positive Technologies, Inc.
    The standing problems aren’t over yet though.  It turns out that the inventor had assigned a 25% ownership interest to a former attorney as part of a fee agreement long before the present suit.  After the present suit was filed and this wild ownership interest uncovered during discovery, the lawyer assigned his ownership interest to Positive, effective on the date of the original assignment to him (N.B., the court refers to the lawyer’s assignment to Positive as the “reassignment,” although it also says the first assignment was from the inventor, not Positive, to the lawyer.  I’ll stick with using the court’s denomination of it as a “reassignment.”).  The reassignment did not provide for an assignment of the right to sue for past infringement and the attorney also retained the right to enforce his original fee agreement.
    A patent infringement suit must be brought by all the owners of a patent, so the defendants raised four arguments for lack of prudential standing:
    First, the defendants argued that the lack of standing at the time suit was filed cannot be cured by a nunc pro tunc assignment.  Wrong; other cases where standing was denied were where plaintiffs had no ownership interest at all at the time of suit, i.e., they lacked constitutional standing.  Here, Positive had 75% ownership at the time of suit and lacked only prudential standing, so the standing problem could be cured post-filing. 
    Second, the defendants argued that the reassignment didn’t grant the right to sue for past damages, which just happened to be when the infringement occurred.  Nunc pro tunc to the rescue again; there was no need to grant the right to sue for past damages since there was no gap in time between the assignment and reassignment.
    Third, the reassignment was only to “Positive,” not specifying whether it was Positive-Nevada or Positive-California, so it was ambiguous.  No matter; while the grant was effective on a date when both entities existed, it was executed on a date when there was only one “Positive,” so no ambiguity as to the assignee.  
    Finally, the assignment was illusory because the lawyer did not give up his right to attorney’s fees pursuant to the fee agreement, and the fee agreement included the original assignment.  Wrong for the last time; the lawyer did not retain any legal rights to the patents after the reassignment, but only at most an equitable interest.  The equitable interest does not divest Positive of the legal title needed for standing.
    I have a hard time swallowing all of this; it seems to be a have-your-cake-and-eat-it-too situation.  The plaintiff succeeded in cutting out links in a chain of title that should be relevant.  The “reassignment” wasn’t an assignment-back, it was an assignment to an entirely different party.  Doesn’t that affect the past damages question – why does the court talk about a “gap” when it’s just two separate transactions between three parties that happened to be effective on the same day?  Why should we assume that the lawyer assigned all that he possessed when he didn’t say so, particularly when he clearly was trying to retain some kind of interest in the whole matter?  But if the nunc pro tunc reassignment was to be construed as effectively a nullity (the “no gap” theory), then shouldn’t it matter that there were two potential assignees on the effective date?
    This “reassignment” was created during the litigation, and, given the plaintiff’s success, it was masterfully done.   I like to think about why certain decisions were made and whether there’s a reason they made sense, even though in a decision they may just come out looking like sloppy work.  Plus here you have the wild card lawyer who has something good that he knows you need.
    You can just imagine that it would be tricky negotiating against a non-patent lawyer who still wants his fees and plans on using his claim to past patent infringement damages somehow to collect them, so you just don’t mention them in the agreement and hope for the best (how often have you negotiated an agreement where you just leave it unstated in the belief, or hope, that your position is the better interpretation?).  Is there a side agreement with the lawyer?  And stating that the assignee was just “Positive,” rather than exactly who, so you could play it any way you needed to, turned out to be a great call.
    Nunc pro tunc was the key, suit proceeds.  Eastern District of Texas, you know.
    Positive Technologies v. LG Display Co., No. 2:07 CV 67, 2008 U.S. Dist. LEXIS 73087 (E.D. Tex. Sep. 24, 2008).

    © 2008 Pamela Chestek

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  • No Trademark Law at All

    I think one of the reasons I like trademarks so much is their split personality. On one hand, they are the most ephemeral of intangible property, only a symbol representing a collective ethos. On the other hand, they can be the subject of the most ordinary transactions, buying and selling, securing a loan. A non-precedential decision from the 6th Circuit, Guaranty Residental Lending, Inc. v. Homestead Mortgage Co. on appeal from a Michigan federal court, demonstrates how a trademark-as-asset can be used to defeat trademark-as-symbol.  Indeed, the case begins, “This appeal of a dismissed trademark suit involves no trademark law.”

    As typical in these cases, the facts are complicated. Below is a roadmap:

    The players:
    Plaintiff is Guaranty Residential Lending (GRL) 
    Defendant and Counterplaintiff is Homestead Mortgage Co. (HMC)
    Non-party former owner of the federally registered trademark HOMESTEAD MORTGAGE is Bob Fitzner, Inc. (BFI)
    Counterplaintiff is Bob Fitzner (Fitzner).

    The timeline:
    1987: GRL first used the marks Homestead USA and Homestead Mortgage in Michigan
    1993: BFI filed a federal application for the mark “Homestead Mortgage”
    1996: BFI registration issues
    May, 1998: A predecessor to GRL (confusingly named “The Homestead Mortgage Company”) files an ITU application for the mark Homestead USA, which was refused in 2001 after ex parte appeal on the basis of likelihood of confusion with the BFI mark
    March, 2001: Texas forfeited BFI’s corporate privileges for failure to pay franchise fee so BFI cannot sue or defend in Texas state or federal courts. Under Texas law, the beneficial ownership of assets passes to the shareholders (here, Fitzner) who can sue or defend in Texas courts on behalf of the company to protect the shareholder’s interest
    August, 2001: Fitzner files for Chapter 7 bankruptcy personally but did not list the beneficial ownership of trademark as an asset
    January, 2002: Fitzner bankruptcy closes (beneficial ownership of trademark remains with the estate because it was unscheduled)
    March, 2002: Texas forfeit’s BFI’s company charter
    February, 2003:  Fitzner bankruptcy reopens
    Before August or September, 2004: HMC begins using “Homestead Mortgage” in MI
    December, 2004: GRL sued HMC for trademark infringement
    January 17, 2005: BFI assigns the Homestead Mortgage mark to Fitzner for $1.00, effective March, 2002
    January 26, 2005: Fitzner licenses the mark to HMC for $10,000
    July, 2005: HMC answers the complaint and Fitzner and HMC file a counterclaim for likelihood of confusion
    January, 2006:  Fitzner bankruptcy closes for the second time

    GRL claimed that Fitzner lacked the capacity to sue on the trademark counterclaim, since he was not the owner of the Homestead Mortgage mark. The issue in the case was whether, under Texas state corporate and tax law and federal bankruptcy law, the assignment of the mark to Fitzner in 2005 was valid. To summarize a lengthy decision as succinctly as possible, yes.

    The court of appeals held that when the corporate charter was forfeited, the beneficial and legal ownerships of the trademark were rejoined. The forfeiture of BFI’s charter began a wind-down for a period of three years during which time the corporation has the right to sue or defend in any court and Fitzner no longer had any interest in the mark. Thus, while Fitzner held beneficial title to the mark as of March, 2001, before he filed for bankruptcy, the interest was extinguished when BFI dissolved in March, 2002. At that point in time, BFI held full title to the mark and Fitzner, as the only officer of BFI, had the authority to liquidate and thus assign the mark to himself personally. Any objections to the assignment would have to have been raised by a creditor, not GRL.

    The court gave two other reasons why the unscheduled asset was not problematic: first, the forfeiture of corporate privileges affected on the right to sue in Texas courts, not Michigan, so BFI always retained those rights. Second, the court raised an argument sua sponte in dicta, that the bankruptcy code exempts from estate property any power that the debtor may exercise solely for the benefit of an entity other than the debtor. Since under Texas law the beneficial ownership to sue and defend is exercised on behalf of the corporation, not the shareholder personally, Fitzner was not required to schedule it.

    Even though Fitzner was (again) in bankruptcy at the time BFI assigned the mark to him, it was an after-acquired asset and not subject to the bankruptcy. Any objections to the assignment would have to be raised in the bankruptcy case (not this trademark case) by a creditor or trustee; further, the time for any objection had past.

    So, well-played by HMC, by successfully engineering a counterattack against plaintiff GRL through licensing of a mark. But is HMC really licensing BFI’s “mark”?  There is no suggestion that HMC had any relationship with BFI before taking a retroactive license; in other words, BFI and HMC were just two unrelated companies that happened to use the same words, but the words had entirely different sets of meaning (i.e., goodwill) for their respective customers. And speaking of “naked licensing,” how could BFI exercise control over HMC’s use of the “mark” when there was no relationship whatsoever between the two companies before January 26, 2006? Can one exercise control retroactively?

    This is a case where the realities were defeated by the formalities, at least so far.  It will be interesting to watch.

    Documents from the district court proceedings here, here and here, in and of themselves an interesting read.

    Guaranty Residential Lending, Inc. v. Homestead Mortgage Co., Nos. 07-1773/07-1815, 2008 U.S. App. LEXIS 19025 (6th Cir. Sep. 4, 2008).

    © 2008 Pamela Chestek

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  • I Vote for “Belief”

    It’s off topic, but I am from Massachusetts, it is the Red Sox, and it’s almost the playoffs.  The TTABlog reports that a mark was refused registration on the basis that, inter alia, it disparaged the Red Sox.  If disparagement must be of “persons, living or dead, institutions, beliefs, or national symbols,” which is the Red Sox?
    © 2008 Pamela Chestek

  • Licensing, Naked or Clothed

    In the Moose Tracks ice cream post, I mentioned that it didn’t look like a naked license situation because Denali was doing everything necessary to defeat a claim of naked licensing. Nevertheless, there was some suggestion in the survey that consumers didn’t associate the “Moose Tracks” flavor with any particular source, i.e., that they thought “Moose Tracks” is a common flavor name, not a trademark.
    The problem is that the doctrine of “naked licensing” has taken on a life of its own. Federal law is a creature of statute, yet some cases don’t even bother reciting the statutory basis for the naked licensing doctrine. For example, one textbook case explains it this way: “it is well established that where a trademark owner engages in naked licensing, without any control over the quality of goods produced by the licensee, such a practice is inherently deceptive and constitutes abandonment of any rights to the trademark by the licensor.” Barcamerica Intern. USA Trust v. Tyfield Importers, Inc., 289 F.3d 589, 598 (9th Cir. 2002). And this, “A trademark owner, for example, can abandon all trademark rights through uncontrolled or ‘naked’ licensing. ‘If a trademark owner allows licensees to depart from its quality standards, the public will be misled, and the trademark will cease to have utility as an informational device.’” TMT North America, Inc. v. Magic Touch GmbH, 124 F.3d 876, 885 (7th Cir. 1997).
    But it shouldn’t be a question of whether there is a naked license per se; “naked” or “license” do not appear anywhere in the Lanham Act. Rather, it should be a question of statutory abandonment, i.e., whether “any course of conduct of the owner, including acts of omission as well as commission, causes the mark to become the generic name for the goods or services on or in connection with which it is used or otherwise to lose its significance as a mark.” Lanham Act § 45, 15 U.S.C. § 1127. 
    The problem with identifying “naked licensing” as the issue is that we then look only at the formality of the licensing arrangement, rather than the reality of consumer recognition. And the naked licensing doctrine is a very poor proxy for what consumers may or may not be thinking.
    In the Moose Tracks situation, the court said “Denali licenses its registered trademarks and provides the formulas, or recipes, to the licensees. Denali has control over which companies receive licenses . . . . Under its licensing agreements, Denali has control over the quality of the product by requiring the licensees to buy ingredients from authorized vendors. Denali has control over the way its ‘Moose Tracks’ trademark is presented, by requiring that licensees obtain its approval for advertising and carton design.” Thus, apparently no naked licensing. Denali therefore may well be successful in defending itself against a charge of abandonment through naked licensing, but nevertheless the trademark could be sliding into genericism because whether a license is “naked” really isn’t the point.

    © 2008 Pamela Chestek

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  • Barking up the Wrong Tree

    I wrote an article proposing an analytical framework for resolution of disputes where two parties claim to own the same trademark, using settled law on the manufacturer-distributor relationship as a starting point.  The situation comes up fairly often and in this case the tip off is early – “This dispute stems from the shifting business relationship” between the parties. The court didn’t have much trouble deciding who owned the mark, though; no strenuous legal analysis required.
    Multi-Vet is the plaintiff, Premier the defendant, and the goods are anti-bark spray collars for dogs.  In 2001 Premier entered into a license agreement with Multi-Vet to become the exclusive distributor of its patented anti-bark spray collars in the United States under the trademark “Gentle Spray.”  Multi-Vet registered the mark. The 2001 Agreement provided that if the agreement was terminated, Premier could buy the trademark for $1.00.
    The parties next entered into a “First Amended and Restated Licensing Agreement” in 2003, which only affected financial terms of the 2001 agreement.  Then the two companies renegotiated their relationship in 2004 and entered into an “Exclusive Distribution Agreement.”  The 2004 agreement said that all “intellectual property” used by Multi-Vet in association with its products was the exclusive property of Multi-Vet, with no mention of the potential assignment described in the 2001 agreement. The agreement also had an integration clause stating that it merged, superseded and cancelled the 2003 agreement.
    The 2004 agreement was terminated in 2005 and the parties entered into a non-exclusive distribution agreement, including a license to the Gentle Spray trademark.  The distribution agreement was terminated in 2006 but Multi-Vet continued to provide the collars to Premier until 2007.  After that, Premier began manufacturing its own collars.
    Multi-Vet brought a trademark infringement claim against Premier in April, 2008 for Premier’s use of “Gentle Spray Bark Citronella Anti-Bark Collar” and “Gentle Leader Spray Sense Anti-Bark Collar” (complaint here).
    The conflict addressed in the opinion, however, is on a motion for preliminary injunction by Premier on an infringement counterclaim.  Premier counterclaimed against Multi-Vet’s own use of the Gentle Spray mark and trade dress; you can see the two bear a strong similarity:
    Premier argued that it owned the Gentle Spray trademark, a predictable loser of an argument.  Premier was largely defeated by the evidentiary presumption that Multi-Vet’s registration provided.  The purchase option for the mark under the 2001 agreement didn’t change anything; it was superseded by the 2004 agreement and later agreements made no mention of a potential transfer.  Letters from Multi-Vet to Premier assuring Premier that it had the exclusive right to use the mark were consistent with the terms of the licenses, not a reflection of the ownership of the mark.
    Premier had also itself registered a “No Shock/No Pain” mark.  Multi-Vet claimed to have developed the No Shock/No Pain mark itself in Canada in the mid-1990’s, and pointed out that the 2004 agreement confirmed Multi-Vet’s ownership of all marks used in association with the product.   This was enough evidence to rebut the presumption of ownership of the “No Shock/No Pain” mark to a degree sufficient to defeat the grant of a preliminary injunction against Multi-Vet.  For good measure, Multi-Vet’s use was not likely to be confused with Premier’s use because it was so small (the small circle on the left of the back of the packaging):
    A packaging trade dress claim failed for procedural reasons; Premier had not pleaded ownership and infringement.
    No likelihood of success on the merits, therefore no need to go on to the “irreparable harm” prong of the test for preliminary injunction.  Preliminary injunction on related state law claims also denied.
    A procedural faux pas (or a deliberate choice) – only Premier filed a motion for preliminary injunction, which was denied.  Multi-Vet had not, so the products are currently coexisting in the marketplace.  Premier’s replacement trademark, Spray Sense, is on the web as “formerly Gentle Spray,” so it looks like Premier is phasing out its use.  Query whether the harm to Multi-Vet is even greater, though, if consumers believe that “Gentle Spray” is being phased out when Multi-Vet itself sells it.

     

    Multi-Vet Ltd. v. Premier Pet Prods., Inc., 08 Civ. 3251 (LMM), 2008 U.S. Dist. LEXIS 67466 (S.D.N.Y. Aug. 22, 2008).

    © 2008 Pamela Chestek

  • And the Survey Says —

    I had a great response to my survey; my thanks to everyone who participated and to those who drove traffic to the survey, particularly Marty at The Trademark Blog and John at The TTABlog. Here’s a link to the original post and here’s a pdf version of the blank survey questions, in case you missed it.


    The mark being tested was MOOSE TRACKS. 210 people answered the survey questions, 7 from outside the U.S. Here are the results for the U.S. in a snapshot:
    Term
    Percentage responding “brand”

    1.
    Cherry Garcia
    (brand)
    96.0%

    2.
    Blue Moon
    (generic)
    80.0%

    3.
    Founder’s Favorite
    (brand)
    70.0%

    4.
    Moose Tracks
    (test)
    64.2%

    5.
    Death by Chocolate
    (generic)
    61.5%

    6.
    Jamoca
    (brand)
    57.3%

    7.
    Rocky Road
    (generic)
    20.5%

    8.
    Cake Batter
    (brand)
    15.5%

    9.
    Vanilla
    (generic)
    1.5%

    10.
    Coffee
    (generic)
    1.0%


    The Story


    Sometimes you read a case thinking it’s a slam dunk and it comes out just the opposite of what you expected. I recently read Blue Bell Creameries, L.P. v. Denali Co., LLC, about the ice cream flavor “Moose Tracks.” My immediate reaction was “but that’s a generic flavor!” and I was surprised that genericism wasn’t raised as a defense. Moose Tracks ice cream is, to me, vanilla ice cream with a chocolate ribbon and peanut butter-flavored inclusions; the name comes from what a moose track looks like (you might not want to go there). This photo from my camera phone is what I think of (“Moose Tracks” immediately below “Lobster Tracks”):


    The decision was only a standard run through the likelihood of confusion factors and the four part test for preliminary injunction, ending with an injunction against DJ plaintiff Blue Bell’s use of MOOO TRACKS. Not only was there no mention of genericism, but the court said “there is no meaningful dispute that Denali’s registered trademark ‘Moose Tracks’ is a strong mark.”

    So I asked my hairdresser:

    (Me): Have you ever had moose tracks ice cream?
    (Him): Look at me, what do you think?
    (Me): What’s in it?
    (Him): Oh, chocolate chips, lots of stuff, depends on which one. Have you ever had Snickers?
    (Me): No.
    (Him): It’s good.
    (Me): Who makes moose tracks?
    (Him): Lots of companies, you know, it’s like all those kinds of ice cream.

    I live in New England, where moose are a common theme in advertising and naming, so maybe my reaction was a regional thing. I did some more research. I found many web sites for ice cream shops that list Moose Tracks as an available ice cream flavor with no suggestion it might be anything other than a flavor; I found Moose Tracks ice cream made with “famous Moose Tracks fudge.” I found many ice cream shop web sites that use the ® symbol with no suggestion that anyone but the store owned the trademark, but I also found a fair number that mentioned Denali.


    Denali owns a number of trademark registrations for variations of MOOSE TRACKS for ice cream and fudge, which it licenses to a number of ice cream manufacturers. From Denali’s web site, by my count “Moose Tracks” ice cream is sold under at least 60 different brand names. Here are some licensees:






    You can see the Denali moose logo on each container (superimposed over the photo of the ice cream), although there is nothing similar about the font for the words “Moose Tracks” or the trade dress of the cartons. Nevertheless by all indications this was not a “naked license” situation; the decision said “Denali licenses its registered trademarks and provides the formulas, or recipes, to the licensees. Denali has control over which companies receive licenses . . . . Under its licensing agreements, Denali has control over the quality of the product by requiring the licensees to buy ingredients from authorized vendors. Denali has control over the way its ‘Moose Tracks’ trademark is presented, by requiring that licensees obtain its approval for advertising and carton design.”


    I had some reason to have assumed that Moose Tracks was just a flavor and not a brand, but was I the only one? So, with a HT to my trademark professor, I decided to do a Teflon survey.


    First the disclaimer – it’s not a particularly reliable survey. For starters, the surveyed population is made up largely of trademark professionals, hardly a representative population for a genericism survey (albeit a population with a good appetite for ice cream). I asked questions that may not be kosher for an evidentiary survey, but that I hoped might provide some insight into people’s responses. I did not qualify respondents and anyone could have stuffed the ballot box. I’m making assumptions based on some fairly low numbers of responses where the margin of error is far larger than the percentage swing. My interest is in the conversation, not finding the “right” answer.


    For my survey I wanted a range of choices in the distinctiveness spectrum, so I looked for ice cream flavors, both trademarks and generic, that had lesser or greater descriptiveness (the references I used in deciding whether a flavor is a trademark or generic are hyperlinked):

    Test word:
    Moose Tracks
    		 Ingredient description only Reference to ingredient with another word No reference to ingredient
    Generic

    Vanilla
    Coffee

    		 Death by Chocolate (Wikipedia,Google)

    Trademark

    (® Cold Stone Creamery)

    (® Ben & Jerry’s)
    (® Baskin Robbins)

    Founder’s Favorite (® Cold Stone Creamery)



    I would put them in roughly this order along the Abercrombie spectrum, highest to lowest (you may disagree):


    1. Blue Moon
    2. Rocky Road
    3. Moose Tracks
    4. Founder’s Favorite
    5. Cherry Garcia
    6. Jamoca
    7. Death by Chocolate
    8. Cake Batter
    9. Coffee
    10. Vanilla

    Now compare the flavors in order of brand recognition based on the survey results with their spots on the spectrum:
    Term
    Brand name or generic term
    Rank in distinctiveness spectrum
    1.
    Cherry Garcia
    brand
    5
    2.
    Blue Moon
    generic
    1
    3.
    Founder’s Favorite
    brand
    4
    4.
    Moose Tracks
    test
    3
    5.
    Death by Chocolate
    generic
    7
    6.
    Jamoca
    brand
    6
    7.
    Rocky Road
    generic
    2
    8.
    Cake Batter
    brand
    8
    9.
    Vanilla
    generic
    10
    10.
    Coffee
    generic
    9


    You can see that the little-known, regional generic flavor “Blue Moon” rated very high in brand recognition, demonstrating that we do indeed attribute a lot of trademark significance to the arbitrariness of an identifier. But commercial strength pushed Cherry Garcia to the top of the list, even though it has some descriptive character to it.

    But I also asked whether people had encountered the flavors. The ice cream flavors from least to most often encountered were:
    Term
    Percentage responding “never seen”
    1.
    Blue Moon
    85.1%
    2.
    Founder’s Favorite
    85.1%
    3.
    Jamoca
    53.6%
    4.
    Cake Batter
    41.5%
    5.
    Death by Chocolate
    37.8%
    6.
    Moose Tracks
    34.9%
    7.
    Cherry Garcia
    4.6%

    Coffee (tie)
    4.6%
    9.
    Rocky Road
    2.6%
    10.
    Vanilla
    .5%


    I thought that if someone had never actually seen a flavor, his or her response would be more about the inherent distinctiveness of the mark because the person was, after all, just guessing based on the words alone. A comparison of the responses of those who had seen a particular flavor to those that hadn’t might give me a different insight into the genericism of the mark.

    Comparing the difference in people’s responses based on this distinction showed some interesting results. First, the percentage of “don’t know” responses dropped; if people had seen it they had formed an understanding. Taking “Blue Moon” again, if people had actually seen the flavor their understanding that it was a generic flavor name increased fairly dramatically:


    Blue Moon (generic) Brand Common Don’t Know
    All responses 80.0% 9.5% 10.5%
    Had seen it (29 responses)
    69.0%
    (-11.0%)

    31.0%
    (+20.5%)

    		 0.0%


    The same pattern was true in the opposite direction for the brand Founder’s Favorite; for the most part it was the brand recognition that increased for those who had seen it:


    Founder’s Favorite (brand) Brand Common Don’t Know
    All responses 70.0%
    		 13.5%
    		 16.5%
    Had seen it (29 responses)
    79.3%
    (+9.3%)

    13.8%
    (+0.3%)

    		 6.9%


    Cake Batter showed the expected pattern for a brand; brand recognition increased and identification as “common” decreased among those who had seen it (although brand recognition is still very low):

    Cake Batter (brand) Brand Common Don’t Know
    All responses 15.5%
    		 77.0% 7.5%
    Had seen it (113 responses)
    17.7%
    (+2.2%)

    76.1%
    (-0.9%)

    		 6.2%


    Generic Death by Chocolate was as predicted; generally the recognition of it as a generic flavor increased:

    Death by Chocolate (generic) Brand Common Don’t Know
    All responses 61.5%
    		 29.0%
    		 9.5%
    Had seen it (120 responses)
    62.5%
    (+1.0%)

    33.3%
    (+4.3%)

    		 4.2%


    But two flavors didn’t behave as one might expect; first, the brand Jamoca appears to be losing recognition amongst those who had seen it:

    Jamoca (brand) Brand Common Don’t Know
    All responses 57.3%
    		 26.1%
    		 16.6%
    Had seen it (88 responses)
    56.8%
    (-0.5%)

    39.8%
    (+13.7%)

    		 3.4%



    Second, for Moose Tracks both identifications as brand and common increased:


    Moose Tracks (test) Brand Common Don’t Know
    All responses 64.2%
    		 22.9%
    		 12.9%
    Had seen it (127 responses)
    66.9%
    (+2.7%)

    27.6%
    (+4.7%)

    		 5.5%


    The next survey question might provide some clues why. I also asked people to name the company that makes each flavor. It was Denali’s practice of licensing a flavor name to different manufacturers that I found curious. I had no problem with the concept of a flavor as a brand indicator, but only if it was always associated with the same house brand, like Ben & Jerry’s (although of some interest, “Cherry Garcia” is actually a licensed mark, originally owned by Ben & Jerry’s but assigned in 1997 to the estate of Jerry Garcia). Can people recognize that, even though the ice cream itself was made by different companies, the flavor was from a single source?

    According to the Denali web site, using Ohio as an example, these brands of ice cream are sold in a “Moose Tracks” flavor at the listed stores:


    Ruggles, sold at Meijer, Giant Eagle, Discount Drug Mart, and Acme;
    Pierre’s, sold at Giant Eagle, Marc’s, Acme, Tops, Heinan’s, and Dave’s;
    Reiter, sold at Giant Eagle and Discount Drug Mart;
    Giant Eagle Creamery Classic, sold at Giant Eagle;
    Tofts, sold at Discount Drug Mart; and
    Meijer, sold at Meijer.


    So in a Meijer store you can buy two different brands of ice cream in Moose Tracks flavor, in a Giant Eagle store you can buy it in four brands, and so on. What ice cream brands did the survey show people associated with Moose Tracks ice cream?

    Ben & Jerry’s is the epitome of successful marketing and commercial strength. Of the 154 people who both identified Cherry Garcia as a brand and provided an answer on the “what company makes it” question, four people didn’t know, one person said Baskin Robbins, one said “t&j” and 148 said Ben & Jerry’s. In fact, people’s association of Ben & Jerry’s with ice cream names is so strong that for every flavor, vanilla included, someone named Ben & Jerry’s as the manufacturer.


    Contrast the result in Cherry Garcia with the generic but more distinctive Blue Moon. Of the 50 people who both identified Blue Moon as a brand and provided an answer on the “what company makes it” question, 44 couldn’t name a company, one said Hudsonville, one said Maggie Moo, three identified it as a beer (Marc, I think all yours), and one said the ever-present Ben & Jerry’s. So while the responses still tended to “brand” (69%), they actually couldn’t come up with a maker.

    “Moose Tracks” had the second highest number of responses to the “who” question after Cherry Garcia, with 58 answering both “brand” and responding on the “who” question. But unlike the universal association between “Cherry Garcia” and “Ben & Jerry’s,” 37 responses named 21 different companies as the manufacturer of the Moose Tracks flavor. “Moose Tracks” or “Denali” were listed six times, 9 different licensees (Alaskan Classics, Cascade, Gifford’s, Hershey’s, Kemp’s, Meijer, Pierre’s, Spartan, and Velvet) were listed 9 times, and 22 times people listed 11 companies that are not licensees and who do not make a Moose Tracks flavors (Baskin Robbins, Ben & Jerry’s, Blue Bell (oops, the DJ plaintiff), Blue Bunny, Breyer’s, Dryer’s, Eddie’s, Edy’s, Emack & Bolio’s, Friendly’s and Perry’s). Twenty people couldn’t name a brand, and one said “all.”

    One more statistic, I had asked about packaging. My prediction was that people who more often ate ice cream from an ice cream shop (like the top photo) would be less inclined to identify “Moose Tracks” as a brand. The results were the opposite:

    Moose Tracks (test) Brand Common Don’t Know
    Packaged (88 responses)
    		 63.6%
    		 29.6%
    		 6.8%
    Unpackaged (28 responses)
    78.6%

    21.4%

    		 0.0%



    We know that people don’t have to be able to name the company for a mark to have trademark significance, but is it relevant that when they can name names, they name so many different companies, including so many wrong companies? If a flavor has brand significance when I see it in association with one brand of ice cream, what happens when I go to the store down the street, or look in the next case over, and see another brand with the same flavor? With different trade dress? Is this why those who ate packaged ice cream had a lower “brand” response? The licensing relationship between Denali and its licensees seems to be escaping consumers, why? My ice cream shop photo above is of a licensee’s brand, but “Maine Lobster Tracks” is a registered trademark of the licensee Gifford’s, not Denali – how does that affect the brand significance? Should it matter in a trademark lawsuit whether the consumers are identifying a common company as the manufacturer or many different ones, or is it simply enough that consumers think it’s a brand? Is the identification of many manufacturers evidence that the flavor is going down the genericism road but hasn’t reached the legal identity of “generic” yet?


    Even though it was a question specifically about flavor, people overwhelmingly named an ice cream manufacturer in response. Can an ice cream flavor be a trademark and yet associated with many manufacturers? If one is going to use flavors as trademarks, do all flavors associated with the manufacturer have to be distinctive? Are there some kinds of marks, like a flavor, a slogan or distinctive packaging, that can function as a trademark when sold with a primary indicia, i.e., manufacturer brands, but can’t live alone? If so, where does that fit into our standard confusion analysis?

    Epilogue

    Thanks to the seven of you outside of the U.S. who responded. The only flavors the majority of respondents had seen were vanilla, coffee, Death by Chocolate and Cherry Garcia, and the flavors fell pretty much in the order of inherent distinctiveness (Founder’s Favorite at 89.7%, Blue Moon, Jamoca and Cherry Garcia tied at 71.4%, Death by Chocolate and Rocky Road tied at 57.1%, Moose Tracks and Cake Batter tied at 42.9%, and vanilla and coffee tied at 0.0%).

    A few random comments on the survey results. The majority of the responses to “how often do you eat ice cream” was “monthly,” yet about 3/4 of the respondents buy their ice cream in packaging – so hats off to those of you who can manage to buy ice cream at the grocery store and not eat it daily.

    Poor Cake Batter ice cream. A teaching moment – proof that you can’t turn a generic name into a trademark, even if you get it registered. And you gotta love trademark lawyers; I had several people make comment along the lines of “I know Cold Stone makes Cake Batter, but I still think it’s generic” (and they responded “common” on the survey).

    I’d love to hear from the person who commented “A very misleading survey.” How come?

    Thanks to all who helped on this exercise; comments enthusiastically invited. Let it rip.


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  • There’s Only One Mustang Ranch

    The Seattle Trademark Lawyer reports on a 9th Circuit decision affirming ownership of the mark MUSTANG RANCH. It’s a long saga, where the government seized the ranch and all its property then stumbled around for years trying to figure out what to do with it. David and Ingrid Burgess then adopted the mark and later sued the eventual purchaser of the government’s rights, Lance Gilman. Gilman survived challenges of his ownership based on abandonment and assignment in gross.

    Seattle Trademark Lawyer post here. News reporting of trial court decision here. Description of the history of the ranch and the various transfers in Burgess v. Gilman, 78 U.S.P.Q.2d 1773, 2006 WL 449212 (D. Nev. Feb. 23 2006).

    © 2008 Pamela Chestek

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