Trademark

This past offseason, Lebron James began sharing videos on social media of his family’s “Taco Tuesday” dinner gatherings.  The videos went viral, with James inviting other celebrity guests and NBA players for the “Taco Tuesday” dinners, and even making apparel with the quote “Its Taco Tuesday.”  Lebron James’ company, LBJ Trademarks, subsequently filed a trademark application seeking to register the term, with the underlying goods and services involving "advertising and marketing services provided by means of indirect methods of marketing communications, namely, social media, search engine marketing, inquiry marketing, internet marketing, mobile marketing, blogging and other forms of passive, sharable or viral communications channels."

On Wednesday, September 11, 2019, the USPTO refused the trademark application filed by LBJ Trademarks, stating that TACO TUESDAY  "is a commonplace term, message, or expression widely used by a variety of sources that merely conveys an ordinary, familiar, well-recognized concept or sentiment.”  However, the USPTO’s decision was not treated as a loss for the James’ camp.  In fact, a spokesperson claimed that the rejection was the intended result:  “Finding 'Taco Tuesday' as commonplace achieves precisely what the intended outcome was, which was getting the U.S. government to recognize that someone cannot be sued for its use.”  Under that approach

Earlier this year, Anheuser-Busch launched an advertising campaing for its "BUD LIGHT" brand of beer which emphasized that the light beer is not brewed with corn syrup. Competitor Miller-Coors filed a lawsuit alleging that the campaign constitutes false advertising and unfair competition, not because it infers that "MILLER LIGHT" is brewed with corn syrp, which is true, but because consumers may mistakenly believe that the product contains high fructose corn syrup. A federal judge has agreed that Miller-Coors has made a preliminary showing of success, and has ordered that Bud Light must phase out this packaging and advertising campaign until the dispute is resolved. 

The Seventh Circuit Court of Appeals recently held that Gatorade’s use of the phrase, “Gatorade The Sports Fuel Company,” constitutes fair use under the Lanham Act, and therefore did not violate SportFuel, Inc.’s (“SFI”) rights.  Plaintiff SFI is the owner of two registered trademarks for “SPORTFUEL,” and brought an infringement suit in 2016 against Gatorade for its use of the aforementioned slogan.  While Gatorade had also obtained a registration for its trademark, it disclaimed “THE SPORTS FUEL COMPANY,” and defended the lawsuit based on fair use.  The district court entered summary judgment for Gatorade, finding that it did not use “SPORTS FUEL” as a trademark, that Gatorade’s use was descriptive of its sports drinks, and that Gatorade used the mark in good faith.  On appeal, the Seventh Circuit affirmed the lower court’s ruling.  Among other things, the appellate court noted that Gatorade had introduced substantial evidence indicating that “sports fuel” was a marketplace term in describing nutritional sports products, and that Gatorade did in fact hold itself as a manufacturer of sport fuels (which undermined SFI’s alleged “bad faith” argument).

Earlier this month, the United States Patent and Trademark Office (“PTO”) disclosed that a new rule would soon take effect, requiring that all foreign-domiciled parties, registrants, and trademark applicants to Trademark Trial and Appeal Board (“TTAB”) proceedings must be represented by a licensed attorney that is admitted to practice law in the United States.  The new rule takes effect on August 3, 2019, and applies not only to new filings, but current filings as well.  Thus, and in enforcing the rule, the TTAB will suspend any proceedings – and require appointment of a licensed U.S. practitioner – in any action where a foreign-domiciled party is represented by a non-U.S. attorney.  Andrei Iancu, the director of the USPTO, stated that the new rule is intended to combat “fraudulent submissions,” and to “maintain the accuracy and integrity of the register.”

Gibson originally introduced its "Flying V" Guitar shape in 1958, but waitied until 2010 to file an application in the European Union Intellectual Property Office to protect the iconic shape as trade dress. A German guitar manufacturer challenged Gibson's exclusive right to the guitar shape. After nine years and two appeals, a panel of three judges sitting on the the European Union General Court has determined that, while the shape may have been very original when it was originally released, the current presence on the market of a number of similar shapes makes it unlikely that consumers will regard one particular shape as belonging to a specific manufacturer. The General Court made this finding despite Gibson's submission of survey evidence in eight European Union countries. 

Today, the Supreme Court ruled that Section 2(a) of the Lanham Trademark Act is unconstitutional because it violates the First Amendment’s protection of freedom of speech. The Section 2(a) provision bans the issuance of trademark registration to marks that the U.S. Patent and Trademark Office (“PTO”) deems are “immoral” or “scandalous,” based on ordinary and common meanings of the proposed mark. The high court ruled that this immoral or scandalous bar discriminated on the basis of a viewpoint and therefore conflicts with the First Amendment.

The Lanham Act provides for the administration of federal trademark registration. While registration of a mark is not mandatory, and a mark can still be used in commerce and enforce it against infringers, federal trademark registration gives trademark owners valuable benefits. For example, a valid federal trademark registration gives prima facie evidence of the mark’s validity, and serves as constructive notice to others of the registrant’s claim of ownership of that mark.

Here, in the case of Iancu v. Brunetti, Erik Brunetti sought these benefits by applying for federal registration for the trademark “FUCT” for use in connection with his clothing lines, but the PTO refused this application for violation of Section 2(a). The Examining Attorney assessed his proposed mark as a “total vulgar” mark and therefore unregistrable, and the Trademark Trial and Appeal Board agreed, stating that the mark was “highly offensive,” “vulgar,” and that it had “decidedly negative sexual connotations.”

Upon review, the Supreme Court struck down this provision for being unconstitutional. The Court emphasized a core foundation of freedom of speech law: that the government may not discriminate against speech based on the ideas or opinions it conveys. The Court concluded that this provision of the Lanham Act “allows registration of marks when their messages accord with, but not when their messages defy, society’s sense of decency or propriety.”

Writing for the majority, Justice Elena Kagan illustrated this content-based discrimination with four made-up marks: “Love Rules” “Hate Rules” “Always Be Good” and “Always Be Cruel.” The Court contended that the statute would favor marks such as “Love Rules” and “Always Be Good” but disfavor a mark such as “Hate Rules” and “Always Be Cruel.”  This favoring or disfavoring based on content results in viewpoint-discriminatory application. Under this provision, the statute “on its face, distinguishes between two opposed sets of ideas: those aligned with conventional moral standards and those hostile to them; those inducing societal nods of approval and those provoking offense and condemnation.” Therefore, the Supreme Court struck down this ban on federal registration of these “scandalous” or “immoral” marks.

In May 2019, Tom Brady’s company filed two intent-to-use trademark applications, seeking to register the nickname TOM TERRIFIC in connection with apparel, posters, and playing cards.  In those filings were declarations that Brady had a legitimate, good faith intent to use the TOM TERRFIFIC mark in commerce.  However, after receiving some criticism by loyal New York Mets fans – who claim that the nickname “Tom Terrific” has long belonged to famed pitcher Tom Seaver – Brady attempted to ease the pushback from critics, stating to reporters that he “didn’t like the nickname,” and was actually trying to “keep people from using it” in filing the underlying trademark applications.  Further, when asked whether the name would be used for merchandise, Brady answered, “I hope not.”  It will be interesting to see what unfolds relative to the underlying trademark applications in light of these events.

In Mission Product Holdings Inc. v. Tempnology LLC, the Supreme Court addressed a Circuit Split on whether a bankruptcy trustee can terminate a trademark license agreement, thereby allowing a trademark licensee to lose their rights to continue using the trademark under the license contract. The Supreme Court held that the debtor-licensor’s rejection of the contract does not deprive a trademark licensee of its rights to use the trademark thereafter.

Section 365(a) of the Bankruptcy Code allows a bankruptcy trustee to assume or reject a debtor’s pre-bankruptcy executory contracts, depending on whether the benefits of continued performance of the contract outweigh the burdens to the bankruptcy estate. Section 365 of the Bankruptcy Code enables a debtor to “reject any executory contract,” which is a contract that neither party has finished performing.  The section provides that a debtor’s rejection of a contract under that authority “constitutes a breach of such contract.” At issue in this case were the implications of a breach of such contract. While it was acknowledged that the licensee would have the right to a claim for damages for such a breach of contract, which may perhaps be valueless in light of the bankrupt state of the licensor, it was not clear whether the trademark licensee still had the right to use the trademark after such breach.

In interpreting the meaning of a breach of the contract, some lower circuits took the position that a rejection has the same consequence as a contract rescission, which allows a damages claim, but terminates the whole agreement along with all rights it conferred. However, the Supreme Court disagreed with this position, and held that such rejection does not mean that a trademark licensee will lose their rights to use the trademark under the contract. Specifically, Justice Kagan in her majority opinion stated, “A rejection breaches a contract but does not rescind it. And that means all the rights that would ordinarily survive a contract breach, including those conveyed here, remain in place.”

Under certain circumstances, colors can act as indicators for the source of certain goods and services in a similar fashion as their more typical trademark counterparts. One example is Tiffany & Co.'s Registration for a certain color blue as applied to jewelry packaging. The estate of Prince filed an application to register a certain color purple (specifically a shade produced by Pantone after Prince's death) in connection with Prince's entertainment services and musical recordings. The Patent and Trademark Office has initially refused the application, taking the position that Prince had not established the requisite "secondary meaning" between this shade of purple and his music. The estate has responded with an overwhelming 400 pages of evidence showing Prince's use and association with the color purple over his career in an attempt to persuade the Patent and Trademark Office to allow the application. If persuaded, the application will move on to the publication phase, where third parties will have the opportunity to object to the registration. Otherwise, the estate will have additional opportunities to request reconsideration or appeal the refusal. 

Orlando International Airport (“OIA”) officials recently filed suit against Orlando Melbourne International Airport (“OMIA”), which is located approximately 70 miles away from Orlando.  In the complaint filed in the Middle District of Florida, OIA claims that OMIA’s use of the word “Orlando” in its name and related advertisements “convey[s] the false impression that [OMNI] is the Orlando International Airport, or is located in or is closer to Orlando and Orlando area attractions than it actually is.”  In addition to seeking damages, attorneys’ fees, and a permanent injunction prohibiting OMNIA from using the word “Orlando” in its name, promotional materials, and related advertisements, OIA also requests that the Court order OMNIA to display a retraction statement on its website.  OMNIA has refuted OIA’s likelihood of confusion arguments, citing how Manchester-Boston Regional Airport uses the word “Boston,” while serving the same market as Boston Logan International Airport.

The case is Greater Orlando Aviation Authority v. Melbourne Airport Authority, Case No. 19-cv-00540 (M.D. Fla. March 19, 2019).

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