Trademarks – Attorney Evan Brown

December 22, 2024 Cybersquatting, Trademarks

Cybersquatting claim failed where there was a weak mark and no evidence of bad faith intent

acpa

Aspire Health Partners sued Aspire MGT under the Anticybersquatting Consumer Protection Act, 15 U.S.C. §1125(d) (“ACPA”) over defendant’s registration and use of the domain name <aspirehealthgrp.com>. Plaintiff sought a preliminary injunction to stop defendant from using the disputed domain name, but the court denied the request. The court held that plaintiff failed to show that defendant acted with a bad-faith intent to profit from the use of the domain name, a key element of a cybersquatting claim under the ACPA.

To prevail on a cybersquatting claim under the ACPA, a plaintiff must demonstrate that (1) its trademark in the disputed domain name was distinctive when the domain name was registered, (2) the disputed domain name is identical or confusingly similar to that trademark, and (3) the defendant registered the disputed domain name with a bad-faith intent to profit. In this case, the court found plaintiff would not likely succeed on its cybersquatting claim because of deficiencies under the first and third element.

The court found that plaintiff’s mark was not distinctive but instead was descriptive as a “self-laudatory” type of mark. Citing to the well-known McCarthy treatise on trademark law, the court determined that the word “aspire” when applied to healthcare services was of the same sort of use as the word “best” or “super” that extolls some feature or attribute of services and thereby becomes descriptive in nature and likely too weak to be subject to trademark protection.

As for the lack of bad faith, the court found that plaintiff had only made a conclusory allegation on the topic. Looking at various factors that courts apply to determine bad faith under the ACPA, the court noted in particular, among other things, that defendant had used the domain name in connection with a bona fide offering of its goods and services, and had not been shown to possess any intent to divert customers form plaintiff’s website or any intent to transfer or sell the domain name for financial gain.

Three Reasons Why This Case Matters:

Legitimacy in Business Use: Using a domain name for legitimate business purposes can protect defendants against cybersquatting claims.
Trademark Strength: Descriptive trademarks often face greater challenges in cybersquatting cases without strong evidence of distinctiveness.
Evidence of Intent: Courts require clear proof of bad-faith intent to profit, not just similarity between domain names, to uphold a cybersquatting claim.

Aspire Health Partners, Inc. v. Aspire MGT LLC, 2024 WL 5169936 (M.D. Fla., Dec. 19, 2024)

December 18, 2024 Trademarks, Unfair Competition

When does a neighborhood name become a trademark?

neighborhood trademark
Stephanie Reveron sued multiple companies, including Zumiez, New Balance, Amazon, Etsy, Zazzle, and Redbubble, for trademark infringement. Plaintiff claimed that her trademarks, such as LES NYC and LOWER EAST SIDE were being improperly used on clothing and other products. She argued that defendants’ use of these marks created consumer confusion and amounted to unfair competition.

Defendants moved to dismiss the claims. They argued that their use of the words “Lower East Side,” “LES,” and similar phrases was protected under the “fair use” doctrine of trademark law. Specifically, defendants claimed they were using these terms descriptively to refer to the well-known geographic location in New York City, not as trademarks to identify the source of the goods.

The court dismissed certain claims but let others proceed. For certain defendants, such as New Balance, Etsy (partially), and Zazzle, the court found that the use of “Lower East Side” and similar terms clearly referred to the neighborhood, not to plaintiff’s brand. This use was descriptive, in line with the fair use defense, and did not infringe plaintiff’s rights. For others, such as Amazon and Redbubble, the court found that the use of the phrases—especially when stylized or prominently displayed—could plausibly be interpreted as trademarks, making dismissal inappropriate at this stage.

Why did the court reach this decision?

The court considered the fair use defense, which allows the use of trademark-protected words in a descriptive sense if done in good faith. The court reasoned that the phrases “Lower East Side” and “LES” are commonly understood as referring to the geographic location—a neighborhood in New York City. For most defendants, this descriptive use was clear, especially when the words appeared alongside other terms or images referencing the neighborhood. The court also noted that fair use often turns on context: when words appear on a product without clear descriptive meaning, the line between fair use and trademark infringement becomes less certain.

For defendants such as Amazon and Redbubble, the court found that more analysis was needed. In some cases, the terms “LES” or “Lower East Side” were stylized or prominently displayed in a way that might suggest they were being used as a brand identifier rather than in a purely descriptive sense. As a result, the court allowed those claims to move forward.

In short:

The court dismissed claims against most defendants because their use of the words “Lower East Side” and “LES” was descriptive and protected under the fair use defense. However, for some defendants, such as Amazon and Redbubble, the court allowed the claims to proceed because the use of the phrases could plausibly be seen as a trademark rather than a description of a location.

Three reasons why this case matters:

Clarifies Fair Use: The case highlights how courts apply the fair use defense when trademarks overlap with descriptive geographic terms.
E-Commerce Accountability: It raises questions about the role of online platforms, such as Amazon and Etsy, when third-party sellers offer potentially infringing products.
Balancing Trademark Rights: The case underscores the challenge of balancing trademark protections with the public’s right to use common words, such as neighborhood names, in a descriptive way

Reveron v. Zumiez, Inc. et al., 2024 WL 5131627 (S.D.N.Y. Dec. 17, 2024)

November 24, 2024 Litigation, Social Media, Trademarks

People tagging the wrong place on Instagram did not help prove trademark infringement

The City and County of San Francisco sued the Port of Oakland and the City of Oakland alleging trademark infringement and unfair competition. The dispute began when Oakland renamed its airport “San Francisco Bay Oakland International Airport,” which San Francisco claimed created confusion and harmed the brand of its own airport, San Francisco International Airport (SFO). San Francisco asked the court for a preliminary injunction to stop Oakland from using the new name while the case proceeded.

The court granted the motion in part, finding that the new name improperly implied an affiliation between the airports. However, it rejected claims that Oakland’s actions caused confusion during online ticket searches or at the point of sale. Social media evidence featured prominently in the case but ultimately did not sway the court’s decision.

San Francisco argued that social media posts demonstrated actual consumer confusion. For example, some users on platforms such as Instagram tagged images of SFO with Oakland’s new name, while others expressed uncertainty about which airport they were referencing. Despite these examples, the court found the evidence weak and unconvincing. It noted that most of the posts lacked context, such as whether the users were actual travelers or how their confusion affected any purchasing decisions. Additionally, the court questioned the sincerity of some posts, particularly where users repeated the same confusion across multiple platforms or appeared to joke about the issue.

While the court acknowledged that social media evidence could have value, it stressed the need for reliability. Without clear patterns or evidence of widespread confusion, the posts provided little support for San Francisco’s broader claims.

Three reasons why this case matters:

The Limits of Social Media Evidence: This case demonstrates that courts demand robust, contextualized proof when social media posts are used to argue consumer confusion.
Trademark Law in the Digital Age: The case highlights the challenges of protecting trademarks in a world where branding and consumer perception are shaped online.
Impacts on Regional Branding: The ruling underscores the importance of clear naming practices for public infrastructure, especially in areas with competing interests.

City and County of San Francisco v. City of Oakland, 2024 WL 5563429 (N.D. Cal., November 12, 2024)

September 29, 2024 Contracts, Cybersquatting, Licensing, Trademarks

Counterfeit lubricant case gets preliminary injunction based on defendant’s slick conduct

A German-based lubricant manufacturer sued a U.S.-based distributor, alleging that the distributor produced and sold counterfeit versions of its products with branding that closely resembled plaintiff’s trademarks. Plaintiff brought claims for trademark infringement, cybersquatting, unfair competition, and other related violations, moving for a preliminary injunction against defendant, which the court granted.

The parties initiated a business relationship in 2019, but they never formalized a distribution agreement. Although plaintiff sent a draft agreement outlining trademark rights and restrictions, it was never executed. Plaintiff asserted that the relationship involved a limited license for defendant to distribute plaintiff’s authentic products, but defendant registered a “GP” mark in the U.S. without plaintiff’s consent. According to plaintiff, this was an unauthorized move, and defendant falsely represented itself as the mark’s legitimate owner.

Plaintiff further alleged that defendant continued to produce and sell lubricants with packaging mimicking plaintiff’s design, misleading consumers into believing they were purchasing legitimate products. Defendant also registered several domain names closely resembling plaintiff’s, which were used to display content imitating plaintiff’s branding and operations.

The court found plaintiff’s evidence of irreparable harm and likelihood of success on the merits compelling, issuing an injunction to stop defendant’s operations and prevent further distribution of the alleged counterfeit goods.

General Petroleum GmbH v. Stanley Oil & Lubricants, Inc., 2024 WL 4143535 (E.D.N.Y., September 11, 2024).

April 10, 2024 Artificial Intelligence, Trademarks

Key Takeaways From the USPTO’s Guidance on AI Use

uspto ai

On April 10, 2024, the United States Patent and Trademark Office (“USPTO”) issued guidance to attorneys about using AI in matters before the USPTO. While there are no new rules implemented to address the use of AI, the guidance seeks to remind practitioners of the existing rules, inform of risks, and provide suggestions for mitigating those risks. The notice acknowledges that it is an effort to address AI considerations at the intersection of innovation, creativity and intellectual property, consistent with the President’s recent executive order that calls upon the federal government to enact and enforce protections against AI-related harms.

The guidance tends to address patent prosecution and examination more than trademark practice and prosecution, but there are still critically important ideas relevant to the practice of trademark law.

The USPTO takes a generally positive approach toward the use of AI, recognizing that tools using large language models can lower the barriers and costs for practicing before the USPTO and help practitioners serve clients better and more efficiently. But it recognizes potential downsides from misuse – some of which is not exclusive to intellectual property practice, e.g., using AI generated non-existent case citations in briefs filed before the USPTO and inadvertently disclosing confidential information via a prompt.

Key Reminders in the Guidance

The USPTO’s guidance reminds practitioners of some specific ways that they must adhere to USPTO rules and policies when using AI assistance in submissions – particularly because of the need for full, fair, and accurate disclosure and the protection of clients’ interests.

Candor and Good Faith: Practitioners involved in USPTO proceedings (including prosecution and matters such as oppositions and cancellation proceedings before the Trademark Trial and Appeal Board (TTAB)) are reminded of the duties of candor and good faith. This entails the disclosure of all material information known to be relevant to a matter. Though the guidance is patent-heavy in its examples (e.g., discussing communications with patent examiners), it is not limited to patent prosecution but applies to trademark prosecution as well. The guidance details the broader duty of candor and good faith, which prohibits fraudulent conduct and emphasizes the integrity of USPTO proceedings and the reliability of registration certificates issued.

Signature Requirements: The guidance outlines the signature requirement for correspondence with the USPTO, ensuring that documents drafted with AI assistance are reviewed and believed to be true by the signer.

Confidentiality: The confidentiality of client information is of key importance, with practitioners being required to prevent unauthorized disclosure, which could be exacerbated by the use of AI in drafting applications or conducting clearance searches.

International Practice: Foreign filing and compliance with export regulations are also highlighted, especially in the context of using AI for drafting applications or doing clearance searches. Again, while the posture in the guidance tends to be patent heavy, the guidance is relevant to trademark practitioners working with foreign associates and otherwise seeking protection of marks in other countries. Practitioners are reminded of their responsibilities to prevent improper data export.

USPTO Electronic Systems: The guidance further addresses the use of USPTO electronic systems, emphasizing that access is governed by terms and conditions to prevent unauthorized actions.

Staying Up-to-date: The guidance reiterates the duties owed to clients, including competent and diligent representation, stressing the need for practitioners to stay informed about the technologies they use in representing clients, including AI tools.

More Practical Guidance for Use of Tools

The guidance next moves to a discussion of particular use of AI tools in light of the nature of the practice and the rules of which readers have been reminded. Key takeaways in this second half of the guidance include the following:

Text creation:

Word processing tools have evolved to incorporate generative AI capabilities, enabling the automation of complex tasks such as responding to office actions. While the use of such AI-enhanced tools in preparing documents for submission to the USPTO is not prohibited or subject to mandatory disclosure, users are reminded to adhere to USPTO policies and their duties of candor and good faith towards the USPTO and their clients when employing these technologies.

Likely motivated by court cases that have gotten a lot of attention because lawyers used ChatGPT to generate fake case cites, the USPTO addressed the importance of human-review of AI generated content. All USPTO submissions, regardless of AI involvement in their drafting, must be signed by the presenting party, who attests to the truthfulness of the content and the adequacy of their inquiry into its accuracy. Human review is crucial to uphold the duty of candor and good faith, requiring the correction of any errors or omissions before submission. While there is no general duty to disclose AI’s use in drafting unless specifically asked, practitioners must ensure their submissions are legally sound and factually accurate and consult with their clients about the representation methods used.

More specifically, submissions to the TTAB and trademark applications that utilize AI tools require meticulous review to ensure accuracy and compliance with the applicable rules. This is vital for all documents, including evidence for trademark applications, responses to office actions, and legal briefs, to ensure they reflect genuine marketplace usage and are supported by factual evidence. Special attention must be given to avoid the inclusion of AI-generated specimens or evidence that misrepresents actual use or existence in commerce. Materials produced by AI that distort facts, include irrelevant content, or are unduly repetitive risk being deemed as submitted with improper intent, potentially leading to unnecessary delays or increased costs in the proceedings.

Filling out Forms:

AI tools can enhance the efficiency of filing documents with the USPTO by automating tasks such as form completion and document uploads. But users must ensure their use aligns with USPTO rules, particularly regarding signatures, which must be made by a person and not delegated to AI. Users are reminded that USPTO.gov accounts are limited to use by natural persons. AI systems cannot hold such accounts, emphasizing the importance of human oversight in submissions to ensure adherence to USPTO regulations and policies.

Automated Access to USPTO IT Systems:

The guidance notes that when utilizing AI tools to interact with USPTO IT systems, it is crucial to adhere to legal and regulatory requirements, ensuring authorized use only. Users must have proper authorization, such as being an applicant, registrant, or practitioner, to file documents or access information. AI systems cannot be considered “users” and thus are ineligible for USPTO.gov accounts. Individuals employing AI assistance must ensure the tool does not overstep access permissions, risking potential revocation of the applicable USPTO.gov account or face other legal risk for unauthorized access. Additionally, the USPTO advises against excessive data mining from USPTO databases with AI tools. The USPTO reminds readers that it provides bulk data products that could assist in these efforts.

April 8, 2024 Cybersquatting, Trademarks

Sprint puts an end to entrepreneurs’ efforts to revive NEXTEL brand

abandonment — This house is abandoned but the NEXTEL mark is not.

Plaintiff Sprint (owner of the NEXTEL brand) sued defendant business owners, asserting claims for trademark infringement, cybersquatting and counterfeiting. Beginning in 2016, defendants – apparently believing that Sprint had abandoned the NEXTEL mark – began selling cheap cell phones branded as Nextel devices, and operating websites lauding the brand’s “revival”.

The question of defendants’ liability for infringement of the NEXTEL word mark went to a jury, which found in favor of plaintiff. The jury rejected defendants’ argument that Sprint had abandoned the NEXTEL mark.

Defendants sought review of the jury’s finding of no abandonment with the Eleventh Circuit Court of Appeals. On appeal, the court affirmed the lower court’s judgment.

The court examined how abandonment is a defense in trademark infringement cases, requiring discontinuation of a mark’s use with no intent to resume. Trademarks must be used genuinely, and the Lanham Act provides that three years of nonuse is prima facie evidence of abandonment.

The court concluded that the evidence showed Sprint’s continuous use of the NEXTEL word mark. For the three year period that defendants claimed Sprint had not used the mark, Sprint had provided evidence that the mark was used on at least two products. This continuous use also undermined defendants’ arguments against the cybersquatting claim.

Sprint Communications, Inc. v. Calabrese, 2024 WL 1463416 (11th Cir., April 4, 2024)

April 2, 2024 Cybersquatting, Trademarks, Unfair Competition

Redirecting URL was unlawful but did not cause damages

url redirect trademark

In the months leading up to the FDA shutting down plaintiff’s business, one of the co-owners of the business left and set up a competing enterprise. For a few weeks, the former co-owner set plaintiff’s domain name to forward to the new company’s website.

Plaintiff sued and the court held that redirecting the URL was a violation of the Lanham Act (the federal law relating to trademarks and unfair competition). But plaintiff was not entitled to any damages because it failed to show that the redirection caused any lost sales. During that time, 133 users who tried to access plaintiff’s website were redirected to the new company’s website, and of those 133 visitors, only two submitted inquiries and neither customer who submitted an inquiry placed an order.

ABH Nature’s Products, Inc. v. Supplement Manufacturing Partner, Inc., 2024 WL 13452228 (E.D.N.Y., March 29, 2024)

Can the owner of a company be personally liable for what the company does?

personally liable

One of the major benefits of forming a corporation or limited liability company is the shield from personal liability the business entity provides to its owners. But that shield does not protect against all of the company’s officers’ conduct.

In a recent trademark infringement case in federal court in California, a court evaluated whether a company’s officer could face liability for trademark infringement and cybersquatting. Plaintiff sued the company and the owner individually, asserting that that the owner should be personally liable because he controlled and was involved in all significant corporate decisions regarding the alleged infringement.

Citing to Facebook, Inc. v. Power Ventures, Inc., 844 F.3d 1058 (9th Cir. 2016), the court observed that a corporate officer can be personally liable when he or she is the “guiding spirit” behind the wrongful conduct, or the “central figure” in the challenged corporate activity.

In this case, the court declined to dismiss the individual defendant from the lawsuit. With respect to the alleged trademark infringement and cybersquatting, the court focused on the fact that the individual defendant:

was the founder and central figure of the company,
personally participated in all major business strategy, branding and marketing decisions and actions,
ran the company from his home,
was the only officer of the company and was simultaneously the CEO, CFO and Secretary,
promoted the company’s brand from his personal social media account, and
directly negotiated with the plaintiff’s founder to see whether the parties could “find a more peaceful resolution.”

Simply stated, the individual defendant was not merely a board member that “final say,” but was substantially involved in every aspect of the conduct of the business giving rise to the alleged intellectual property infringement.

Playground AI LLC v. Mighty Computing, Inc. et al., 2024 WL 1123214 (N.D. Cal., March 14, 2024)

See also:

March 18, 2024 Blockchain, Trademarks

MetaBirkins defendant denied of opportunity to exhibit NFT artwork in Swedish museum

metabirkins museum
In February 2023, Sonny Estival, known by his pseudonym “Mason Rothschild,” was found liable by a jury on a number of claims, including intentional trademark infringement, trademark dilution, and cybersquatting against luxury brand Hermès. The court ordered Estival to pay $133,000 in damages to Hermès and issued a comprehensive permanent injunction against him and his associates. This injunction specifically prohibited the production, distribution, and promotion of “MetaBirkins” non-fungible tokens (NFTs) and related merchandise, aiming to prevent any association or confusion with Hermès’s “Birkin” trademark.

In January 2024, Estival sought clarification from the court regarding the scope of the permanent injunction, particularly whether it would prevent him from allowing a Swedish museum to exhibit his MetaBirkins artworks as part of an exhibition on Andy Warhol and Business Art. Despite his claims that the museum’s display would not imply any association with Hermès and would even include mention of the lawsuit and its outcome, Hermès opposed this motion. The court held an evidentiary hearing, and after considering submissions from both parties and testimony from museum representatives, denied Estival’s motion. The court could not conclude that the proposed exhibition would comply with the injunction’s terms, given the lack of detailed information about the nature of the permission Estival would be granting to the museum, especially concerning the promotion of the exhibit and potential merchandising.

The court’s decision was heavily influenced by the context of Estival’s previous actions and the jury’s findings, which characterized him as intentionally misleading the public to associate his NFTs with Hermès’s Birkin brand. Despite the museum’s assurance that the exhibit would not suggest any affiliation with Hermès, the court remained unconvinced, especially given discrepancies in the museum representatives’ testimonies regarding how the lawsuit and Estival’s infringement would be presented to the public.

Hermès Int’l v. Rothschild, 2024 WL 1089427 (S.D.N.Y. March 13, 2024)

See also:

February 20, 2024 Trademarks

Peloton did not infringe trademark rights of fitness app maker

Plaintiff used the mark BIKE+ in connection with a fitness tracking app and obtained a federal registration for the mark. It sued defendant Peloton for trademark infringement over Peloton’s adoption and use of the mark PELOTON BIKE+. Defendant moved for summary judgment arguing, among other things, that there was no likelihood of confusion. The court granted defendant’s motion for summary judgment.

Sitting in the Ninth Circuit, the court embarked on an analysis under AMF, Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979) to assess the likelihood of consumer confusion. It considered several factors, including the strength of the mark, the similarity of the products, marketing channels used, and the intent behind the choice of mark, among others. The court determined that plaintiff’s BIKE+ mark, being descriptive of the app’s functionality to enhance biking experiences, did not possess the inherent distinctiveness that warrants a broad scope of protection. This was compounded by the existence of similar marks in the app marketplace, further reducing the strength of plaintiff’s mark.

The court then looked to the relatedness of the goods offered by both parties, the similarity of the marks in appearance, sound, and meaning, and the absence of evidence of actual consumer confusion. Despite the complementary nature of the defendant’s physical product and the plaintiff’s app, and some similarities in the marks, the lack of actual confusion evidence, along with divergent marketing channels and the sophistication of the consumers, weighed against the likelihood of confusion. The defendant’s intent in selecting its mark did not suggest a deliberate attempt to create confusion, further diminishing the plaintiff’s stance.

Ultimately, the court concluded that the descriptive nature of the plaintiff’s mark, the lack of significant commercial strength, and the minimal impact of relatively recent development activity made confusion unlikely. Defendant’s commercial prominence and extensive marketing efforts did not overshadow the plaintiff’s app to a degree that would cause confusion among consumers. Given all the circumstances and the specific context of each factor considered, the court found confusion to be possible but not probable, leading to the grant of summary judgment in favor of defendant.

World Champ Tech LLC v. Peloton Interactive, Inc., 2024 WL 665181 (N.D. California, February 16, 2024)