Creativity and the Law: DuetsBlog

Remember what you were doing back in September 2006? 

Keyword ad trademark infringement lawsuits were being filed left and right (that hasn't changed much). The hot issue at the time: Does the sale (by a search engine) or purchase (by the competitor of a brand owner) of another's trademark -- as a search engine keyword -- constitute "use in commerce," a necessary element of a successful trademark infringement lawsuit?

Search engines and other defendants were hoping that the technical "no use" defense would permit a short-circuiting of these growing number of lawsuits. In fact, this hope was fueled on September 28, 2006 when Google had just prevailed in dismissing such a lawsuit brought by Rescuecom.

A federal district court in New York had dismissed the Rescuecom suit, saying that the sale of Rescuecom's trademark as part of Google's AdWords program did not constitute a "use in commerce," so there was no need to even consider the question of likely consumer confusion. For the next few years, other courts followed suit (mostly in NY) and similarly short-circuited and dismissed such claims.

As of last Friday, two and a half years after Google's initial win, and a full year after oral arguments were made to the Second Circuit Court of Appeals, Rescuecom may be singing, "We're back!"

In reversing the September 2006 dismissal, the Second Circuit Court of Appeals found sufficient trademark "use" for the case to proceed, relying on Rescuecom's allegation that "Google displays, offers, and sells Rescuecom's mark to Google's advertising customers when selling its advertising services. In addition, Google encourages the purchase of Rescuecom's mark through its Keyword Suggestion Tool." As such, the Rescuecom case will proceed and is sent back to the federal district court in New York to determine "whether Google's actual practice is in fact benign or confusing."

The Trademark Blog provides a helpful link through Scribd to obtain a copy of the court's 15-page decision (including the 19-page Appendix) here.

Professor Eric Goldman's detailed analysis can be found at his Technology & Marketing Blog by clicking here. 

You might remember my keyword advertising post on DuetsBlog from a couple of weeks ago here.

Bottom line: It appears that this latest ruling will pave the way for decisions that actually rule on the critical likelihood of confusion question.

• Email This
• Print
• Comments
• Trackbacks

"Buy low, sell high. Fear? That's the other guy's problem."

Can you name the origin of that quote?

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks

Minneapolis is the chosen venue for a brand new legal food fight, one involving potato chips.

Putting aside for the moment that the proper test of trademark infringement is not based on a side by side comparison of products (unless, of course, they are encountered that way in the real world, as opposed to the court room) because consumers are believed to have imperfect recollections of the details of brands and marks, what do you think about the allegation of likely confusion between the two packages shown below?

 

Ding, ding, ding. Ladies and gentlemen, in the white bag, standing in the right corner, sporting the Old Vienna® brand, and the federally-registered Red Hot Riplets® mark (disclaiming only the term “Hot”), is the fighter claiming infringement. In the red-brick bag, standing in the left corner, sporting the Engine Co. 51 brand, and the words Red Hot Ripple, is the “fire” fighter claiming it has done nothing wrong, and feels so strongly, it wants to prove so in court.

To read the spicy cease and desist letters from Old Vienna® that triggered the lawsuit, see here.

To read a copy of the federal complaint filed in court by Barrel O’Fun Snack Foods, see here.

To see how this fight progresses, stay tuned here on DuetsBlog.

• Email This
• Print
• Comments (2)
• Trackbacks

They got it right in 1918. The Supreme Court pronounced that although facts themselves cannot be copyrighted, a company can sue when a competitor copies time-sensitive information or breaking news. Déjà vu in 2009—the Associated Press (AP) was again allowed to pursue its claim. Although this time it is in a new venue: the Internet. A federal judge in New York allowed the AP to sue two companies who took AP articles with "hot news" and deviously removed the reference to AP and sold them to its own customers. Unfortunately, AP's trademark claim did not fare so well. The court dismissed that claim because a mere reference or description of the AP brand name did not cause confusion that the AP was affiliated with the defendant companies' "hot news." You win some, you lose some.

• Email This
• Print
• Comments
• Trackbacks

Ok, ok, I get it. My last blog post, The Paradox of Brand Protection, was way too long. Just so you know, I do recognize that we live in a sound bite world, but sometimes the educator and storyteller tangled in my DNA get the worst of me, at least when it comes to brevity.

Brevity is a gift. The federal Court of Appeals judge I worked for in Washington, D.C., years ago, had this gift, among many others. He used to describe those who “go on and on” as having no “terminal facilities.” Those of us who worked for him eagerly awaited the meaningful pearls of wisdom he gifted from time to time.

Brevity is memorable. Out of all the words strangers have uttered to me during my life, I have never lost one brief line from a man (a man I couldn’t pick out of a line-up today, by the way) at the public swimming pool some thirty-five years ago: “You’re going to have in-grown toe nails some day.” He was right, and I have never forgotten those exact words.

Brevity is effective. The GOOGLE® home page is a model of brevity. The ALTAVISTA® landing page has migrated in this direction too. Author and master-blogger Seth Godin makes “every word count” a new art form. His blog posts are models of brevity.

Brevity is hard work. It takes significant time, effort, and knowledge to properly distill complex thoughts and ideas into brief, digestible, and meaningful points. This hard work, however, pays dividends in giving the lasting and important gifts of being memorable and effective.

Brevity can have issues. Sometimes it misleads people into believing things are simple, when it is far from the truth. Other times it creates arguments much later about lacking notices or informed consent. So, while brevity is valuable in engaging attention, any further necessary information should be filled in later, as appropriate.

In the trademark world, brevity has issues too. Perhaps most importantly, brevity is more difficult to own, making it much more valuable when you can. Many different companies might vie to boil down their names to the very same acronym. The same is true for top level domains with a limited number of characters. If you haven’t heard before, there is extraordinary value associated with two character top level domains. Quite simply, the shorter the designation, the more interest and competition there is to use and own it.  

For all of these reasons, and probably more, it seems everyone these days wants to truncate their brand. American Express® is AMEX® (never mind that it isn’t the only one), Federal Express® is FEDEX®. Gatorade® is truncating to G (more about that controversial move later). Even law firms, frequently strangers to brevity, are on the bandwagon too. In case you hadn’t noticed, there is currently no shortage of law firms attempting to truncate their multiple alphabet soup names to a single surname. As you might imagine, this can and does lead to trademark fights, even between law firms.

Food for Thought: Will McDonald's® ever attempt to truncate its famous 71 letter mark? Click here to see their trademark registration.  Repeating it in this post clearly would violate my new quest for brevity.

• Email This
• Print
• Comments (1)
• Trackbacks

I often remind branding professionals that trademark law rewards their creativity. Some seem to perk up with this subtle encouragement. After all, everyone likes to be rewarded, right? Well, one of the unobvious rewards for creativity comes in the prompt timing of when trademark ownership begins. Being able to own and enjoy exclusive rights on "day one"—meaning, either the first day of use, or even before first use, upon the filing of a federal intent-to-use trademark application—is a big deal in the world of trademark and brand protection. In fact, timing can be everything. Even a single day can be the difference between having the right to exclusivity and owning nothing at all (except perhaps, the losing end of a lawsuit and a pile of product and packaging ordered to be destroyed). On the other hand, when rights are not available on day one, you may have an uncontrollable situation; one where competitors and others have an opening to copy or mimic before enforceable rights attach, and in some cases, these actions can make it difficult, if not impossible to obtain exclusive trademark rights at all. So, the timing of when trademark rights are acquired is quite important, and those in the business of creating brands play an important role in when those rights may come to be.

As the opening paragraph suggests, trademarks are not all created equal. Inherently distinctive trademarks are the obvious target, the gold standard, for brand names because they are always recognized and rewarded with immediate legal rights. Courts view these marks as sufficiently creative and unique to presume they function as trademarks, believing without proof they automatically identify, distinguish, and indicate source. Inherently distinctive word mark examples include KODAK for film (coined trademark), APPLE for computer (arbitrary mark), and COPPERTONE for suntan oil (suggestive mark). Descriptive marks, on the other hand, while capable of being owned and acquiring distinctiveness, are not inherently distinctive. In fact, they are inherently lacking in creativity, so those who pick (not create) these designations must live with the uncertainty of when, if ever, exclusive rights attach. Owning them takes longer, is more expensive, and is more difficult. This is because the law refuses to presume a trademark function with the use of descriptive terms. Nor does the law reward those who choose to "hit the consumer over the head" with such a blunt device (would-be trademark); one that immediately and overtly describes something about the product. As a consequence, picking (not creating) a descriptive mark, brings a state of limbo for an unspecified period of time, where there can be little or no control of destiny. These folks typically have to hope others voluntarily steer clear until after acquired distinctiveness is achieved. For example, the CALIFORNIA PIZZA KITCHEN mark was used for six years before those words were owned as a federally registered mark. A lot can happen in six years to get in the way of obtaining exclusivity. Generic terms, even worse than descriptive ones, apparently "hit the consumer over the head" so badly with the obvious connection to the goods that they are incapable of being trademarks—they cannot be owned, they are simply part of the public domain, free for all to use. Examples include LITE for beer and BRICK OVEN for pizza—both name entire product categories, they don't identify, distinguish, or indicate source. There is simply nothing creative about them.

So, if "hitting the consumer over the head" is not a rewarded activity for branding professionals, where is the other half of the lesson, the promised paradox piece? Actually, there is a time and place for everything and being blunt, direct, and overt is not always a mistake for marketers. At times, bluntness and overtness is not only rewarded, but an important component for legal success. The key is knowing and understanding those circumstances where "hitting the consumer over the head" is appropriate, beyond repeated purse-snatching or shoplifting episodes, of course. This is where the paradox comes into play.

As you may recall, we previously blogged about some types of non-traditional trademarks here. Non-traditional trademark formats extend far beyond words and logos, encompassing any other subject matter that may be perceived by one or more of the five senses, provided they still identify, distinguish, and indicate source. Color, product configuration, product packaging, uniforms, restaurant interiors, building exteriors, sound, touch, scent, and taste, all have potential. What we haven't explained before about many types of non-traditional marks is that the law can be quite skeptical of them, and as a consequence, proof that they actually function as trademarks can be helpful in easing the skepticism. When such proof is required, the target, or the gold standard, is being able to point to "look for advertising"—consumer communications where one directly informs of an intention to treat non-traditional subject matter as a trademark. So, "hitting the consumer over the head" with this blunt and overt "look for" advertising can be necessary and important, if not critical. Because the Trademark Office or a court might be highly skeptical of a claimed trademark in the polka dot background of a product label, it may want to see evidence that the claimed trademark owner was blunt in stating its intentions on packaging and in advertising, "Look for the Polka Dot Label, as a sign of high quality milk from XYZ Company." Perhaps the mark is the container itself, so "Look for the unusual shape of our milk container to be sure you are getting high quality milk from XYZ Company" is needed. These very overt kinds of marketing statements are a common element of many successful efforts to protect various non-traditional, yet visual trademarks. Most such statements are boring, pedestrian, and not very creative. They seem to distract from other important messages to convey. One good exception is the "What Can Brown Do For You?" tagline, used by UPS, to reinforce a more creative form of "look for" advertising to acquire exclusive rights in the color brown for the various services it provides.

As non-traditional trademarks proliferate, the brand new challenge of creativity will be in developing the legal equivalents of "look for" advertising when marks touching the other non-visual senses are involved. Using the admittedly clunky "look for" phrase won't even work when something other than a consumers eyes need to experience the claimed mark. The challenge there will be in coming up with creative and engaging ways to be overt about the intention of having consumers experience the subject matter in question as a trademark.

So, when creating and building new brands, consider whether being blunt and overt or subtle and suggestive, is the right course of action, to achieve your desired result.

• Email This
• Print
• Comments
• Trackbacks

Andy Rooney from CBS’ Sixty Minutes made famous, “Have you ever wondered?” The more basic threshold questions should have been, “Did you even notice?” and “Does anyone even care?” Mr. Rooney had a knack for making us take notice, perhaps after the fact, because we never cared to wonder, at least, before he asked in the first place. In the raging world of keyword advertising, all three burning questions are itching for answers, so here goes, in reverse order.

First, almost everyone cares about online keyword advertising today. In fact, the GEICO® caveman may be the only one that doesn’t, but GEICO corporate certainly does, given the large keyword trademark infringement lawsuit it had against Google®, discussed here. Keyword advertising is big business ($21.1 billion in 2007, click here for FTC report) for the search engines that sell the advertising (i.e., Google®, Yahoo!®, MSN®, ASK®, AOL®, Lycos®, and AltaVista®, among others). Given this, the FTC certainly cares and has even issued alerts on the subject. Domainers also care a great deal, as do others with more traditional business models that pay for preferred listing of their keyword ads. For proof that Utah seems to care the most about keyword ad regulation, click here. Last, but certainly not least, trademark owners care a lot about keyword advertising, especially when competitors purchase keywords that match or mimic their valuable trademarks. (For a detailed catalog and analysis of trademark litigation showing how much litigants and the courts care about keyword advertising, check out the Search Engines links on The Trademark Blog and Professor Eric Goldman’s Technology & Marketing Blog.) 

Second, as to the “did you even notice” question, it is a frightening statistic, but even as late as 2002, the FTC was warning search engines a “Consumers Union national survey found that 60% of Internet users had no idea that certain search engines were paid fees to list some sites more prominently than others in their search results.” This caused the FTC to recommend that search engines “clearly and conspicuously” disclose when paid-for placements appear among unbiased search results to avoid the potential for “consumer deception.” Even now, there still must be an appreciable number of reasonable consumers who have never noticed the subtle search engine phrases like “Sponsored Links,” and don’t know what they are, much less appreciate that certain search results obtain priority and top-line status because an advertiser has paid for it. What consumers actually notice and understand about the appearance of a search engine’s results-page will be critical in deciding “likelihood of confusion” in future keyword trademark cases. 

Finally, taking the first question last, “have you ever wondered” why your favorite search engine uses a phrase like “Sponsored Links” or a similar one, instead of more certain phrases like “Paid Advertisements” or “Paid Advertising Results”? If not, I’m predicting much attention will be given by litigants and the courts to search engine use of these discrete “sponsor”-type “notice” phrases. After all, if lawyers must prominently display the blunt “Advertising Material” phrase when soliciting certain people (“Sponsored Reading Material” simply won’t cut it), why is it that search engines are able to freely use seemingly ambiguous phrases like, “Sponsored Links” (Google® and AOL®), “Sponsored Sites” (MSN®), “Sponsor Results” (Yahoo!®), “Sponsored Results” (Ask® and Lycos®), and “Sponsored Matches” (AltaVista®)? They are ambiguous because they beg the question of “sponsored” by whom? Equally confusing is the fact that the federal trademark statute protects not only against “likelihood of confusion” as to source, but sponsorship too. As such, it is worth examining whether these curious “sponsor”-type “notice” phrases actually reduce confusion or magnify likely confusion as to sponsorship, at least. No doubt, a great deal of time and effort will be devoted to surveying how consumers understand these phrases, if it already hasn’t been done yet behind closed doors. 

• Email This
• Print
• Comments (1)
• Trackbacks