After five years of continuous, post-registration use, a trademark registration can become “incontestable” under 15 U.S.C. § 1065. An “incontestable” trademark registration is immune from challenge on certain grounds, such as that the mark is merely “descriptive” and lacks secondary meaning. Although the validity of the registration may not be challenged on a “descriptiveness” basis, the mark’s strength (which affects the scope of protection) can be attacked when considering the “likelihood of confusion” prong of a trademark infringement analysis.
Earlier this week, the Tenth Circuit examined this very issue when it unanimously affirmed a lower court’s summary judgment of non-infringement. In Water Pick, Inc. v. Med-Systems, Inc., the Court analyzed the use of similar marks used by competitors in the nasal irrigation market. The senior user, Med-Systems, owned several incontestable federal registrations for SINUCLEANSE. After negotiations broke down to buy Med-Systems, Water Pik developed its own nasal-irrigation line under the name SINUSENSE.
The Tenth Circuit provided a nice analysis of the problems associated with Med-Systems’ expert’s survey. However, the more interesting issue (which should serve as a reminder to all litigators) was how the Court analyzed the conceptual strength of the senior SINUCLEANSE mark as part of its evaluation of a “likelihood of confusion.” A particularly strong mark can give rise to a “likelihood of confusion” while a weak or “descriptive” mark suggests that use of a similar, junior mark even on similar goods is unlikely to cause confusion.
Determining whether a mark is descriptive and hence, weak, can be difficult. The Tenth Circuit set forth it’s test as “’[d]escriptive terms are those which directly convey to the buyer the ingredients, qualities, or characteristics of the product.’” In the end, the Tenth Circuit found the mark to be “descriptive” of the product’s characteristics or qualities as “Sinu” is a widely used prefix by third parties, including several sinus-irrigation products, and “cleanse” communicates the “nature and purpose of Med-Systems’ products….”
The lesson to be learned is that even if a trademark registration is “incontestable,” in certain Circuits (like the Tenth), it may be possible to defend against a charge of infringement by arguing that the senior mark is “descriptive” as part of the “likelihood of confusion” analysis. Often, this is an overlooked, possible defense.
Law firms beware. I previously posted about the Vermont Attorney General’s Office taking action against a patent troll based on its enforcement efforts against Vermont-based businesses. Now, an Attorney General’s Office has set its sights on a law firm that allegedly represents patent trolls. Last month, the Nebraska Attorney General’s Office reported in a press release that it is investigating a Texas law firm for possible violations of Nebraska’s Consumer Protection Act and the Uniform Deceptive Trade Practices Act based on the firm’s past enforcement efforts on behalf of various non-practicing entity clients. According to the Chief Deputy AG, his office is investigating infringement assertions by the firm that it claims were unsubstantiated and false, misleading or deceptive.
In his cease and desist letter, the Chief Deputy AG noted that this was not first time that the Nebraska AG’s Office had investigated the firm or one of its clients. It’s unclear as to the nature of the prior inquiry.
Of interest, the Nebraska AG’s Office has demanded that the firm identify, among other things, all patents that it has asserted on behalf of its clients against Nebraska consumers since January 1, 2010. It has also asked for all communications related thereto. In addition, the AG’s Office has demanded that the firm cease and desist from any new patent enforcement actions within the State of Nebraska pending the investigation.
Between the uptick of pending legislation and the recent Attorney Generals’ enforcement efforts, there appears to be a groundswell of interest in curbing patent troll activity. The blanket approach to sending out cease and desist letters on behalf of trolls may not bode well if it involves a substantial number of businesses operating in one state.
On June 28th, the U.S. Copyright Office amended its regulations on an interim basis to provide for a new registration option for applicants called the “single application.” The streamlined registration is aimed toward simplifying the process for individual authors of single works. It cannot be used for works for hire or collective works, websites or databases. As such, it will be interesting to see whether the public takes advantage of it. The Copyright Office has invited public comment until August 28, 2013.
Often the most important asset of a consulting company is its intellectual property. As such, don’t overlook the potential to protect unique flow diagrams and/or charts that you’ve developed when developing your IP portfolio. In late May of this year, the Tenth Circuit in Enterprise Management Ltd. V. Warrick found that an organizational management diagram was indeed eligible for copyright protection. The diagram-at-issue depicted a listing of variables and possible outcomes. The alleged infringer incorporated a similar diagram into his course materials and consulting business. After later discovering that the diagram had been created by the Plaintiff, he gave her credit for the work at the bottom of his diagram. However, he argued that the Plaintiff’s diagram was not eligible for copyright protection because it consisted only of unprotected ideas and expressions so intertwined with those ideas that they could not be protected under the “merger doctrine.” Although the District Court was persuaded by this argument, the Tenth Circuit disagreed. The Tenth Circuit focused on the expressive choices that the Plaintiff had made to convey her concepts and offered that such information could have been arranged in a myriad of ways. Her selection of symbols and word choices were persuasive factors.
In the end, what appeared to be a fairly mundane flow diagram was found to be eligible for copyright protection. The lesson here is if you incorporate material that you did not create into your business, make sure that you have the legal right to do so. Copyright cases are fact intensive and are not always straight forward.
Technology is becoming more and more integrated into our daily lives and undoubtedly companies are seeking related IP protection. It was recently reported that Coupons.com has released its KitchMe app, which works in conjunction with Google Glass. Now, cooks can be sent shopping lists and recipes with step-by-step instructions by merely looking at available ingredients in their kitchens. Technology is certainly converging with our everyday lives.
Here’s another head spinner. Yesterday, it was reported that during a press conference, David Marcus, President of PayPal, discussed the issues associated with trying to pay for things in space. As companies like Virgin and SpaceX are forging ahead to make space tourism a reality, companies are apparently thinking about how to pay for services rendered in space. Indeed, PayPal is allegedly developing “PayPal Galactic” as a vehicle to buy things while in outer space. It will be interesting to see how it tries to implement and protect this technology as there are no IP addresses in space. These advancements are truly amazing.
You’ve always heard about the carbs in alcoholic drinks, but now, you might just learn more than you want to know. At the end of May, the Department of the Treasury’s Alcohol and Tobacco Tax and Trade Bureau approved beer, wine and spirits companies’ use of nutrition labels on their products, which can list, among other things, calories, carbohydrates, protein and fat per serving. Since the labeling is voluntary, it will be at the beverage companies’ discretion as to whether to use them.
The labeling regulation is only temporary while the Treasury Department considers final rules on alcohol labels. It has been suggested that the recent labeling regulation is the result of lobbying by hard liquor companies that historically sell products with lower calories and carbohydrates than their beer competitors.
As this is a competitive industry, we will probably start to see entire ad campaigns develop around specific amounts of calories and carbohydrates in various beverages. If there is an edge to be had, companies will be sure to highlight it for consumers. So, an after dinner beer or scotch? We may soon learn which one helps us out more with our diets.
On Wednesday, the Vermont Attorney General’s Office brought suit against an alleged patent troll, MPHJ Technology Investments, LLC, for violation of Vermont’s Consumer Protection Act. The Vermont AG claims that the troll engaged in “unfair and deceptive acts” by sending numerous, threatening letters via a host of shell companies to small businesses and not-for-profit organizations in Vermont. The Defendant claims to have a patent on the process of scanning documents and attaching them to email via a network.
At first glance, the suit complains of, among other things, tactics that are fairly commonplace in this arena:
- threatening litigation when the Defendant was neither prepared or likely to bring a litigation;
- targeting small businesses that were unlikely to have the resources to fight patent-litigation; and
- sending letters threatening infringement without independent evidence of infringement.
However, this is probably not what caught the attention of the Vermont AG’s Office. Rather, the numerous complaints by small, Vermont-based businesses and the pursuit of not-for-profit organizations, such as one providing home care to developmentally disabled Vermonters, probably provided the impetus for the State to take action.
The AG claims that various deceptive statements were made in what appears to have been an aggressive letter writing campaign, including:
- Defendant’s licensing program had received a positive response from the business community;
- Many or most businesses were interested in promptly purchasing a license from Defendant;
- The fair price of a license was $900-$1200 per employee (when the average license fee was under $900 in total);
- The shell companies had exclusive enforcement rights; and
- Defendant would sue the target business if it did not respond within two weeks (when Defendant and/or its shell companies had never sued anyone anywhere in the U.S., much less in Vermont).
Ordinarily, you don’t see a state becoming involved in private patent infringement disputes. However, one can understand Vermont’s involvement because of the numerous complaints by those without adequate resources to respond, especially the local, not-for-profit agencies servicing disabled Vermonters.
In spite of the foregoing, it’s not likely that we’ll see other states take action against patent trolls engaging in aggressive patent infringement campaigns against mainstream companies. The states don’t have the resources or the stake in the fight to get involved. Nonetheless, if one of your clients is a small business that receives a baseless infringement letter, it might be worthwhile to check in with your state’s AG’s Office. If enough companies have received similar threatening suits in your state, the AG’s Office may follow Vermont’s lead and consider taking action.
Not long ago, the only smart phone that people knew about was the BlackBerry. Now, it’s been recently reported that BlackBerry has fallen to #4, behind Windows, Android and Apple. What happened? Decentralization and resulting dilution.
BlackBerry was experiencing tremendous growth in the marketplace. However, rather than delivering a consistent message that leveraged off its tremendous name recognition, BlackBerry decentralized its product line, offering a host of models that appear to have cannibalized BlackBerry’s market share. To this day, it’s hard to know the differences between the Curve, Bold, Torch, Tour and Storm models.
Apple and Samsung, on the other hand, went on a marketing frenzy, bombarding consumers with more centralized messages around their iPhone and Galaxy products and reportedly spending ten times that of BlackBerry. Armed with a new CMO, BlackBerry appears to be on the mend, focusing on regaining brand recognition. As the weeks unfold, we will see more about the BlackBerry Q5 and BlackBerry Z10. The company is returning to the brand that put it on the map. The question is whether it can regain its lost ground.
What can be learned? If you have a strong brand, leverage it. Focus on what works and resist the temptation to diversify to the point of cannibalizing your own market share. We’ll see if BlackBerry can regain its position as #1.
My children often use my iPhone to ask Siri the most bizarre questions. No matter what the question, however, Siri always seems to have an immediate answer. Had I thought about it in any detail, I probably would have figured out that there was some form of back end data gathering/analysis being performed in order for this to have happened. Yet, I must confess that I had no idea that my Siri voice requests were being gathered, analyzed and more importantly, stored for any length of time.
Late last week, it was reported that Apple disclosed just how long it keeps this data- 2 years. Apple allegedly anonymizes the data by assigning random numbers to represent the user and associates the voice request files with that number. After 6 months, Apple allegedly disassociates the number from the voice file. The disassociated files are allegedly kept for up to another 18 months for “testing and product improvement purposes.” If Siri is turned off, the associated data is allegedly deleted.
I was so spellbound by the technology that I forgot to inquire about the related privacy issues. The ACLU is pushing for greater disclosure of Apple’s privacy practices on its Siri FAQ page. Meanwhile, hopefully Siri can keep a secret.
What happened at the Boston Marathon last week was horrific. And even though unfathomable, there are some people that will try to profit from this tragedy. As the FTC warns, refrain from giving cash donations to unknown sources and consider these simple rules provided by the FTC when solicited in person, online or on the phone:
- Ask for the name of the charity if contacted by phone and the telemarketer does not provide it promptly;
- Ask what percentage of your donation will support the cause described in the solicitation;
- Verify that the charity has authorized the solicitation;
- Do not provide any credit card or bank information until you have reviewed all information from the charity and made the decision to donate; and
- Ask for a receipt showing the amount of the contribution and stating that it is tax deductible.
Giving to those in need should be encouraged. Give from the heart, but be smart.