Tag Archives: trademarks

The Rise of Counterfeiting Litigation in Federal Courts

Kaseya VSA Supply-Chain Ransomware Attack Update 7-9-21 PIT IP Tech Cast

Here is the latest on the Kaseya VSA supply-chain ransomware attack which is interesting because there is now strong interplay between the United States government and companies like Kaseya given the national security implications of this type of ransomware attack.
  1. Kaseya VSA Supply-Chain Ransomware Attack Update 7-9-21
  2. Kaseya VSA Server Ransomware Attack July 2021 – Lessons and Protocols for Dealing with Data Breach
  3. The Rise of Counterfeiting Litigation in Federal Courts

Not surprisingly, with the massive sale and transport of goods through Amazon and Alibaba, we are seeing and handling in the courtroom litigation world a lot of actions involving alleged counterfeiting and resultant sales of products on these website marketplaces. These claims involve the freezing of the Amazon Sellers’ financial accounts with Amazon through Federal Court Temporary Restraining Orders (TRO’s) and preliminary injunctions and are being brought primarily pursuant to Federal Statutory Law, potentially allowing for recovery of attorneys fees and punitive damages. These cases are being filed as though they were class actions or mass tort cases, and involve sometimes hundreds of defendants. Most defendants suffer judgment against them by default for failure to answer the complaint, even though the courts are waiving normal service of process rules and are allowing service of the complaint on these defendants by email. Many are foreign entities with fictitious names and in many cases they choose simply to forfeit the amount of money that they have in their Amazon account. Their entire Amazon account is frozen even if the allegedly infringing sales are very small and make up only a small portion of their Amazon funds. These suits fall generally into two camps:

Camp one generally consists of allegations of Federal Lanham Act violations like trademark infringement, false advertising, false designation of origin, counterfeiting and “knock-off”. See: https://www.hh-law.com/intellectual-property-audits-application-prosecution-protection-litigation/trademarks/

Camp 2 is the allegation of patent infringement by the alleged knock-off products. See:  https://www.hh-law.com/intellectual-property-audits-application-prosecution-protection-litigation/patent-infringement/

While these two variations sound similar, they each require a solid understanding of either or both, the Lanham Act/Trademark Law or an understanding of patent law on infringement and USPTO proceedings. There are actions filed in the US District Court for the Western District of Pennsylvania and in many other federal jurisdictions. Our Houston Harbaugh law firm intellectual property group which I chair is prepared to prosecute or defend these matters and I can be reached at sneathhm@hh-law.com or 412-288-4013.

#3M® Sues NJ Based #PerformanceSupply, LLC for #N-95 Mask #Trademark Infringement and #Covid Related #PriceGouging

https://www.3m.com/3M/en_US/company-us/search/?Ntt=n95+masks

Plaintiff #3M® Company filed suit in the USDC SDNY on Friday against New Jersey based Performance Supply, LLC alleging Trademark Infringement, Unfair Competition, False Endorsement, False Designation of Origin, False Advertising, Trademark Dilution, NY State Law Deceptive Acts and Practices, and seeking Injunctive Relief and Exemplary Damages. 3M indicates in the suit that any recovery of damages will be donated to Covid-19 related charities. See the Complaint as filed here:

3M claims that Performance Supply falsely tried to obtain a purchase order and sell through a quote to the City of New York, millions of #N-95 Respirator Masks to be used in the battle against #Covid-19. Performance allegedly used the 3M marks (including the TM phrase “3M Science. Applied To Life”®) and 3M references liberally in its proposal and sought to confuse and deceive NY City into believing that Performance Supply and 3M were aligned and working together on the offer to sell masks. Further, the lawsuit alleges that Performance engaged in price gouging in seeking to charge NY prices that were 500-600% above 3M’s list price.

3M alleges that its marks are incontestable, arbitrary and strong and have long been associated with safety masks and equipment. They stress that during this Corona virus crisis, 3M HAS NOT INCREASED ITS PRICES and that this marks a strong comparison to Performance which is accused of price gouging and other business torts under both Federal and NY State Laws. Performance, sought a purchase order from NY through a quote sent to NY’s procurement director. In its formal quote, Performance states that “acceptance of the purchase order is at the full discretion of 3M…” This is alleged by 3M to show a false designation of origin and false endorsement by 3M of the quote. 3M is represented by Mayer Brown LLP.

Posted by Henry M. Sneath, Esquire Co-Chair Litigation Practice Group and Chair of the IP Practice Group: Houston Harbaugh, P.C.  401 Liberty Avenue, Pittsburgh, Pa. 15222. Sneath is also an Adjunct Professor of  Law teaching two courses; Trade Secret Law and the Law of Trademarks and Unfair Competition at Duquesne University School of Law. Please contact Mr. Sneath at 412-288-4013 or sneathhm@hh-law.com

Western District Analyzes Trademark Issues: Use in Commerce; Abandonment; and Doctrine of Foreign Equivalents

By: Joe Carnicella, an intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

On September 13, 2013, Judge Cercone of the Western District of Pennsylvania issued an opinion in Taza Systems, LLC v. Taza 21 Co., LLC, et al., No. 2:11-cv-073, 2013 U.S. Dist. LEXIS 130974 (W.D. Pa. September 13, 2013), covering various fundamental trademark topics.

Relevant Facts

Taza Systems is the owner of three service mark registrations on the Principal Register of the USPTO: (1) the word mark TAZA; (2) the word mark TAZA A LEBANESE GRILL; and (3) the design mark TAZA A LEBANESE GRILL.  These marks cover restaurant and bar services in International Class 43.  Taza Systems operates two restaurants in Woodmere, Ohio and Cleveland, Ohio.  In July 2008, Taza 21 opened a restaurant in Pittsburgh, Pennsylvania, under the names TAZA21, TAZA21 FRESH, and TAZA21 FRESH SHAWARMA CAFE.

Use in Commerce

Taza 21 asserted that Taza Systems’ registered marks were invalid and subject to cancellation because Taza Systems did not provide services in interstate commerce as required to justify registration under the Lanham Act.

According to the Lanham Act, 15 U.S.C. § 1051 et seq., a mark is used “in commerce” on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce.  Commerce is defined to mean “all commerce which may lawfully be regulated by Congress.”  Because Congress’ authority under the Commerce Clause extends even to purely intrastate activity if that activity substantially affects interstate commerce, the Lanham Act’s authority includes the same.  The court discussed the term “in commerce” as it applies to restaurants located in a single state.  Some factors that have been deemed to satisfy the interstate commerce requirement include location near interstate highways, servicing customers from other states, advertisements in out-of-state publications and purchasing ingredients from out-of-state vendors.

The court determined that Taza 21 would have the burden of proving at trial that Taza Systems did not use the registered service marks “in commerce”, and in doing so, Taza 21 would have to produce evidence to contradict and overcome the rebuttable presumption of validity and ownership of the marks afforded to Taza Systems because it holds registration certificates for all three service marks.  The court concluded that Taza 21 failed to adduce sufficient evidence that could establish at trial that the service marks are not used in commerce.

Abandonment

Taza 21 asserted that Taza Systems’ marks were invalid and subject to cancellation because Taza Systems failed to police third-party uses of confusingly similar marks.

Under 15 U.S.C. § 1127, if a trademark or service mark becomes generic, or otherwise loses its significance as an indicator of source due to the conduct of the owner, it can be deemed legally abandoned.  A mark can also be deemed legally abandoned if the owner discontinues use, with an intent not to resume it.  However, a party arguing for abandonment has a high burden of proof because abandonment, being in the nature of a forfeiture, must be strictly proved.  A “failure to police” a mark is one type of owner conduct that is commonly assumed to result in abandonment.  However, in order to prove this type of abandonment, the challenger must establish that the presence of third-party users in the marketplace resulted in what is described as a “loss of trade significance,” which is another way of saying that a mark is no longer distinctive because it fails to identify and distinguish the services of one person from the services of others and to indicate the source of the services.  As a reminder, the distinctiveness of a mark is evaluated by four categories: (1) arbitrary or fanciful; (2) suggestive; (3) descriptive; and (4) generic.  The first two categories are inherently distinctive and are afforded protection under the Lanham Act automatically; the third type of mark must acquire distinctiveness as an identifier of the source of goods or services before it can be eligible for protection; the fourth category of marks is never protected as a mark.

The court analyzed Taza 21’s evidence, which consisted of only a list compiled by counsel of 51 businesses that included TAZA in their name and an excerpt from a Thomson CompuMark Trademark Research Report issued to Taza Systems’ attorney seven years prior, and determined that such evidence did nothing to establish that Taza Systems’ marks lost their significance as an indicator of the source of its restaurant and bar services.  According to the court, the evidence did nothing more than establish that, at one point in time, various businesses across the United States may have used the word TAZA in their names and that those businesses ranged from coffee shops and restaurants to blown glass manufacturers and residential building contractors.  Moreover, the court applied the Dawn Donut Rule (see Dawn Donut Comp. v. Hart’s Food Stores, Inc., 267 F.2d 358 (2d Cir. 1959)) and concluded that, because these third parties use their marks in geographically “separate trading areas” and there was no evidence that Taza Systems had imminent plans to expand into the third-party user’s territory, no public confusion was likely.  The court ruled that Taza 21 failed to submit evidence sufficient to establish that the moniker TAZA had become generically descriptive of restaurant services as a result of Taza Systems’ failure to police the market.

Descriptiveness – Doctrine of Foreign Equivalents

Taza 21 asserted that Taza Systems’ marks were invalid and subject to cancellation because the marks were merely descriptive upon application of the doctrine of foreign equivalents.

Registration of a mark on the Principal Register constitutes prima facie evidence of the validity of a trademark and of the owner’s exclusive right to use it in commerce.  However, if a challenger comes forward with evidence to establish that the mark was erroneously registered, the registration can be cancelled or otherwise invalidated.  Under the doctrine of foreign equivalents, foreign words from common languages are translated into English to determine whether they are generic or descriptive.  However, this doctrine applies only if the ordinary American purchaser would stop and translate the mark into English.  When it it unlikely that an American buyer would translate the foreign mark, either because of unfamiliarity with the foreign word or association of the word with its foreign language through decor, the doctrine does not apply.

During prosecution of its marks, Taza Systems disclosed that the word “taza” translates from the Lebanese dialect of Arabic to English as “fresh,” and each of the registration certificates explicitly reflects this translation.  Taza 21 submitted as evidence printouts from various on-line dictionaries reflecting that “taza” translated from Hindi to English as “fresh” and “green,” that “taze” translated from Turkish to English as “fresh” and “youthful,” and “taza” translated from Persian to English as “fresh, young, new.”

The court analyzed this limited evidence and determined that Taza 21 failed to adduce any evidence that would allow a reasonable juror to overcome the presumption of validity afforded to Taza Systems by its federal registrations and to conclude that the ordinary American purchaser would deem the mark TAZA to be descriptive of “restaurant and bar services.”  The court opined that, because the mark TAZA appeared in the context of a restaurant that serves Lebanese food, plays Lebanese music and is decorated with Lebanese decor, a reasonable juror could find that the ordinary American purchaser would not be prompted to translate the mark TAZA, thereby making the doctrine of foreign equivalents inapplicable.  Moreover, even assuming that the doctrine of foreign equivalents might apply, the court determined that Taza 21 failed to produce evidence that the doctrine would invalidate the marks.  In making this decision, the court considered certain statistics, which demonstrated that only a very low percentage of the U.S. population speaks Arabic, and concluded that the ordinary American purchaser would not stop and translate the term TAZA into English.  The court also considered the pages from the various dictionaries submitted by Taza 21 and determined that such evidence would not invoke the doctrine because there are multiple translations and varying foreign spellings and pronunciations.  Finally, assuming arguendo that Taza 21 could establish that the ordinary American purchase would stop and translate “taza,” the court held that no reasonable juror could conclude that “fresh” is a word used to describe restaurant and bar services.  Although “fresh” could be suggestive of the type of products or ingredients used at a particular restaurant, as opposed to another, suggestive marks are inherently distinctive and entitled to trademark protection.  The court held that the Taza Systems’ registrations for “fresh” do not remove an inevitably descriptive or generic word for restaurant or bar services in a foreign language from public use in the United States.

Under Armour Seeking to “Protect Its House”

By: Joseph R. Carnicella, intellectual property attorney with Picadio Sneath Miller & Norton, P.C.

Under Armour has filed suit against Nike alleging that Nike has infringed certain Under Armour trademarks as a result of Nike’s use of the phrase “I Will” in advertisements.  Under Armour alleges that Nike’s use of “I Will” infringes its trademark rights, dilutes a famous mark, e.g. the slogan “I will protect this house,” and constitutes unfair competition.  Under Armour alleges that Nike launched an advertising campaign on its Facebook page and YouTube video page that repeatedly use the “I Will” trademark/tagline, and as a result, consumers have already associated Nike’s use of “I Will” with Under Armour.

Under Armour filed the lawsuit on February 21, 2013, in the United States District Court for the District of Maryland, Baltimore Division (1:13-cv-00571).  Nike has not yet filed a response to the complaint.  We will continue to monitor this action.

Starbucks® v. Starbarks

by: Kelly A. Williams, a shareholder at Picadio Sneath Miller & Norton, P.C.

Near the top of the list of my favorite things in life (besides my family and working at PSMN of course) are dogs and Starbucks® coffee.  In fact, let me take a brief moment to give a shout out to my black lab, Sadie, who may be reading this blog over her morning crunchies (really—she’s that smart).  Anyway, because of my love of dogs, Starbucks® and intellectual property infringement law, this definitely caught my eye:  “Starbucks Objects to Dog Day Care Starbarks’ Logo,” which I found on the ABCNews website.

So what do you think?  Would people looking for a dog daycare likely be confused by a logo that looks like the Starbucks® logo but says Starbarks Daycare?  Maybe.  Maybe not.  I don’t want to take a position because I like both companies.  I think I’ll just sit back, have a cup of coffee and pet my dog (when I get home from work).  See you in a little bit, Sadie.

Popular Reality Television Show Deals With Trademark “Situation”

By: Robert M. Palumbi, attorney at Picadio Sneath Miller & Norton, P.C.

When we think of the typical reality television show today, we are generally focused more upon the outrageous conduct of the characters rather than the implications of the onerous terms of the contracts between the cast and company. However, intellectual property rights are currently directly in dispute between Michael “The Situation” Sorrentino and MTV owner Viacom over trademarks to the phrases he uses on the show “Jersey Shore.”

A trademark generally refers to a distinctive sign or indicator used by an individual or company in order to identify their products and services to the public, usually through a logo or brand. Using a trademark without the permission of the owner in certain products which may be similar or dissimilar would constitute trademark infringement, allowing the owner of a registered trademark to institute legal proceedings against the infringer.

Sorrentino has claimed in the past that many of the catch-phrases he uses on the show were developed prior to filming, with the intention of using such phrases in the show and later asserting trademark rights. On August 22, 2011, Sorrentino, through his company, MPS Entertainment, filed a registration with the Trademark Board for the term “twinning”, with the intent to use the phrase on t-shirts. On August 15, 2012, MTV owner Viacom filed papers at the Trademark Trial and Appeals Board stating that it owned any and all catch-phrases that Sorrentino develops on the show.

So what is Viacom’s basis for such a position? It can all be traced back to the oppressive Participant Agreement Sorrentino signed with the studio that produced the original “Jersey Shore.” In that Participant Agreement, Sorrentino waived the rights to “all ideas, gags, suggestions, themes, plots, stories, characters, characterizations, dialogue, text, designs, graphics, titles, drawings, artwork, digital works, songs, music, photography, video, film, and other material whether or not fixed or reduced to drawing or writing, at any time heretofore or hereafter created or contributed by me which in any way related to Jersey Shore.”

Nonetheless, this was just the original contract between the parties. After the show became popular, Sorrentino and Viacom signed an amended contract which reasserted the above rights, adding “The above language shall not be construed to grant to Artist or otherwise allow Artist the right to issue t-shirts featuring Artist’s quotes from the series.” Viacom followed this up with an additional provision that states “The above language shall not in any way limit any previous grant of rights to the Producer.”

Based upon this Participation Agreement, Viacom stated in papers filed with the Trademark Trial and Appeals Board that “Under the terms of the Participant Agreement Form, all rights in any intellectual property relating to Jersey Shore belong to 495 Productions Inc., the production company which creates the programs in the Series, which in turn assigned those rights by separate contract to Remote Productions Inc., a wholly owned subsidiary of Viacom. Therefore, Viacom is the rightful owner of all rights in and to the “twinning” mark and slogan.”

These developments highlight the carelessness of individuals who are explicitly willing to sign away their personal rights just for a chance at becoming a celebrity. Production companies are well aware of this phenomenon, and seemingly are in a position of power when proposing terms. However, this doesn’t mean that Sorrentino was permanently placed in such a position; remember, he did sign an amended contract. Perhaps a smarter way to deal with such a situation would be the path Karen J. Connelly took in her 2005 case against ValueVision Media. (Connelly and S.Y.K., LLC v. ValueVision Media, Inc. d/b/a ShopNBC, 393 F. Supp. 2d 767 (D. Minn. 2005).

Connelly worked as a television program host of the corporation, and her initial contract was similarly as oppressive as Sorrentino’s, forcing her to sign away all “inventions, innovations, or improvements in the method of conducting Employer’s business or otherwise related to Employer’s business, including new contributions, improvements, ideas, and discoveries, whether patentable or not or otherwise protectable by copyright, trademark, common law or trade secret law.” However, as Connelly grew in popularity, she also had an opportunity to sign an amended contract, which did in fact in retain some trademark rights. Perhaps if Sorrentino would have taken advantage of his opportunity to sign an amended contract he wouldn’t be in the situation he finds himself in.

USPTO Update—New TTAB Manual and Trademark Dashboard Released

by: Robert Wagner, intellectual property attorney at Picadio Sneath Miller & Norton, P.C.

Last month, the USPTO issued new rules and provided information that will be useful to trademark practitioners. In May 2011, the USPTO published the third edition of the TTAB Manual of Procedure (TBMP), which is the first update since 2004. The latest edition “incorporates all case law, statutory changes,  and changes to the Trademark Rules of Practice and Federal Rules where applicable as of November 15, 2010.” The complete version can be downloaded here. Trademark practitioners before the Trademark Trial and Appeal Board (TTAB) will need to review the changes and become familiar with these new rules.

In addition, building on its successful patent dashboard, the USPTO launched a trademarks dashboard. This dashboard, in the USPTO’s Data Visualization Center, provides up-to-date information about trademark filings at the USPTO, such as the average time to the first action, average total pendency of an application, number of applications, and other relevant statistics. This information will allow trademark attorneys to better inform their clients of the delays they may face in filing for a trademark. The USPTO now has three dashboards (patent, trademark, and policy and external affairs) that provide current statistics for the public, which builds on Director Kappos’ goal of providing more transparency about USPTO procedures.

Time for a Checkup?—IP Audits

by: Robert Wagner, an intellectual property lawyer at Picadio Sneath Miller & Norton, P.C.

With the dawn of the new year, it is time to consider getting your annual checkups. IP assets often form the core assets of a company—enabling the company to provide its goods and services and to prevent others from encroaching on its valuable property. Regardless of the size of your company, maintaining the health of these assets should be a key priority, so a company’s IP portfolio should undergo a routine review to make sure the assets are in top shape and no issues have arisen.

Among the many things that can be done in an IP checkup (or audit) is to determine which assets are currently being used. Are their underutilized assets that should be utilized? Or, can these assets be sold or licensed to someone else? An IP audit can verify that you have the proper title or license to the IP assets you do use and that all maintenance fees have been paid to maintain the enforceability of these assets. An IP audit can not only assess the assets you have, it can serve as preventative medicine to help ward off lawsuits. With the recent plague of false patent marking cases that have been filed throughout the country, verifying that the goods you provide are properly marked and any expired patent numbers have been removed can help avoid needless and expensive litigation.

An IP audit provides the mechanism to obtain a current snapshot of the status of a company’s IP assets. Like any other kind of checkup, an IP audit can range from a broad, general review and inventory of the assets to a detailed analysis of some or all of the assets. Often, the audit begins with the broad review to identify potential problems and then prioritizes which problems to focus on.

New Trademark Infringement Action Filed in Western District of Pennsylvania

by: Joseph R. Carnicella, an intellectual property associate at Picadio Sneath Miller & Norton, P.C., jcarnicella@psmn.com

Plaintiff Taza Systems, LLC filed suit against Defendants Taza 21 Co., LLC, et al. in the Western District of Pennsylvania on January 19, 2011.  Plaintiff alleges that it owns various federally-registered service marks, all of which include the term “TAZA,” and has used these marks to identify its restaurant and bar services continuously since 2005.  Plaintiff alleges that Defendants have been on notice of these marks, yet have used the name “TAZA” to identify and advertise their restaurant services without permission from Plaintiff.   Plaintiff has asserted claims of trademark infringement, dilution, unfair competition and cyberpiracy.  Defendants have not filed a response to the Complaint.

We will continue to monitor and update the status of this case.

New Trademark Infringement Action Filed in Western District of Pennsylvania

by: Joseph R. Carnicella, an intellectual property associate at Picadio Sneath Miller & Norton, P.C., jcarnicella@psmn.com

On January 5, 2011, Entrepreneurial Ventures Capital Co., LLC filed an action against V.P. Racing Fuels, Inc. for trademark infringement, dilution of trademark rights and unfair competition.  According to the Complaint, Plaintiff alleges that it owns the mark, “WORK THE MACHINE,” and claims that Defendant has been using “FUEL THE MACHINE” in violation of Plaintiff’s rights.  Plaintiff is seeking, inter alia, injunctive relief and damages.  Defendant has not filed a response to the Complaint. 

We will continue to monitor and update the status of this case.