Many trademark attorneys believe that the goal of a TTAB discovery conference is to zealously prepare for litigation.  A better approach is to view it through the lens of a favorable settlement outcome.  Since over 90% of trademark oppositions settle prior to trial, it makes sense to do so.

According to U.S. Trademark Trial and Appeal Board rules, the parties are required to engage in a mandatory discovery conference.   This conference usually must take place within thirty days after the Answer has been filed.  As part of the conference, the parties will be required to discuss (1) the nature of and basis for their respective claims and defenses, (2) the possibility of settling the case or at least narrowing the scope of claims or defenses, and (3) arrangements relating to disclosures, discovery and introduction of evidence at trial.

Here are a few recommendations for making the most of a TTAB discovery conference:

  1.   Encourage open communications.    Far too often, attorneys are quite terse during the discovery conference.  Engaging in a five minute discovery conference does not serve the client’s interests.  Instead, discuss the merits of the case openly and candidly with opposing counsel.  It is  not a sign of weakness.
  2.   Be respectful.    Have the other party articulate its interests in defending or opposing a trademark application.  This will provide a useful foundation for further discussions.  It will also set the tone for mutual cooperation that is mandated, but not always followed, by trademark practitioners before the Board.
  3.   Prepare for settlement.   Discuss with your client all settlement options available to it prior to the conference.   These may include that the applicant withdraw its application, narrow its identification of goods, or assign the mark to your client with a license back for limited purposes.

The number one goal of a TTAB discovery conference should be to position your client for a successful case outcome.  This should be done without needlessly escalating risk and costs.  Practitioners should do their best to keep tensions low and cooperation high to better serve their clients.

Food for thought.  A trademark cancellation may result from abandonment of a trademark.

In Local Foods LLC v. Foodsmith Bowen Osborn, the Petitioner sought cancellation of Registrant’s FOODSMITH and Design trademark for “health food, namely freshly prepared meals consisting primarily of local and organic meat, fish poultry, vegetables, properly proportioned, for delivery and pickup” in International Class 29 .  For purposes of trademark abandonment, a trademark registration is subject to cancellation if it has not been used for at least three consecutive years.  The objective evidence must also infer that the Registrant had no intention to resume use of the mark.

Rather than waiting for a trial on the merits, the Petitioner elected to file a motion for summary judgment seeking a ruling that Registrant had abandoned its Foodsmith mark.  Summary judgment is an acceptable method to dispose of a case where there are no genuine issues of material fact.  To prevail, the moving party has to show that a particular fact is not in dispute.  This may be established by citing to specific materials that have been made of record, including discovery responses and affidavits.  Once the moving party submits sufficient evidence to meet its proof, then the burden shifts to the non-moving party to demonstrate the existence of material facts for trial.

Here, Petitioner was able to show, via requests for admission, that the Registrant had not used its Foodsmith mark for at least three consecutive years.   The registrant failed to submit any evidence that the mark was still in use by a former partnership via implied license or that he intended to resume use of the mark.  He also admitted in answers to interrogatories that he had not yet used the mark himself.  Based on the cumulative evidence, the Trademark Board granted Petitioner’s motion and the FOODSMITH Mark was cancelled.

Practitioner’s Note:  In seeking a trademark cancellation, the moving party should be sure to plead the proper statutory grounds.  A petition for cancellation on grounds of abandonment is fairly straightforward.  Either there are facts to establish that the registrant has failed to use its mark for three consecutive years or not.   If you are in the position of a defendant/registrant, it is best to speak with a qualified trademark cancellation attorney.

Trademark opposition costs in the United States are some of the highest in the world.   Estimates for a full trial on the merits before the U.S. Trademark Trial and Appeal Board can exceed $100,000 or more compared to half the cost in other countries.  It’s no wonder why inhouse trademark counsel are increasingly seeking ways to more effectively manage their budgets.

Here are a few strategies to do so:

  1.   Begin with case outcome mapping.  The first pre-filing step in a trademark opposition should be to fully list all potential outcomes to the case – favorable or unfavorable.  Anything from a negotiated settlement, license, amendment of goods, to a judgment on the merits should be listed.  At this early stage of litigation budgeting, it is important for inhouse trademark counsel to understand options available to any litigant in a TTAB proceeding.  With this knowledge, a case-specific review can take place with greater accuracy.
  2.   Engage in Early-Case Assessment.   Discovery is often the most expensive stage of an opposition proceeding.  Unofficial estimates are that it accounts for at least 50% of total attorney’s fees.   Therefore, an assessment of potential strengths and weaknesses of a case should coincide with case outcome mapping.  Too often, Opposer’s find themselves going down the slippery slope of a full-blown litigation.  This can lead to a higher risk profile that was neither intended nor expected.
  3.   Consider trademark mediation.   Reaching out to opposing trademark counsel to explore the option of mediation is not a sign of weakness.   Since over 90% of cases settle before a full trial on the merits, it makes good economic sense to do so.   INTA’s Trademark Mediators Network consists of over 2oo trademark mediators qualified to assist litigants.   The parties can agree for the mediation to be non-binding, leading to no commitments other than to sit down and talk [disclosure: the author of this blog is an INTA approved mediator].
  4.   Partner with the right outside counsel.   The ability to achieve a favorable resolution can rest on the quality of outside trademark counsel.  Being highly skilled in U.S. Trademark Trial and Appeal Board practice is expected.  Great trademark counsel, however, are the ones that can establish a respectful working relationship with opposing counsel.  It is a known fact that hyper-aggressive attorneys often needlessly increase the cost of trademark litigation. 

Inhouse trademark counsel should always be thinking of objective and measurable means to mitigate the risks of an opposition proceeding.   By doing so, their internal stakeholders and brand protection goals will continue to be served well.

While the term trademark infringement is less than 140 characters, its implications could be costly to a ubiquitous online communications giant.

Twitter, the online news and social networking service, has been accused of trademark infringement and breach of contract by TWiT LLC.   The suit, TWiT LLC v. Twitter, Inc., (N.D. Cal. January 2018) alleges that Twitter has intentionally infringed on the Plaintiff’s TWiT trademark.  Since 2005, TWiT has been in the business of distributing video and audio content over the internet.   TWiT’s programming is available to the public by downloading or streaming from the internet, otherwise known as netcasts.  TWiT is also the owner of U.S. Trademark Registration No. 3,217,759 of TWiT which was registered in March 2007.   The parties are familiar to one another; in fact, one of Twitter’s founders, Evan Williams, appeared on TWiT’s netcast show the same month and year that TWiT received its trademark registration.

So why is the plaintiff chirping so loudly?   TwiT alleges that the parties had a coexistence agreement that Twitter would limit its activities under the TWITTER mark to a text-based blogging service.  Sometime in 2009, the Plaintiff had read that Twitter had plans to expand beyond microblogging and into video and audio streaming.  When TWiT voiced its concern, Twitter gave assurances that such reports of business expansion were inaccurate.  The twelve-count complaint goes on to allege that in or about May 2017, the Plaintiff became aware of Twitter’s intention to indeed offer video and audio streaming services, thereby creating the current controversy.  Twitter has yet to file an answer or otherwise respond to the allegations.

This case raises an interesting lesson on the interplay between trademark infringement and trademark coexistence agreements.   Quite often, competitors are quick to enter into such agreements.  This permits them to proceed with their business activities without interference from the other side, if and only if, the parties adhere to the contract terms.  Quite often, months or years can go by and the coexistence agreement is quickly forgotten.  It is only when one of the parties commits an alleged breach of the contract that the Agreement once again is revisited.  Since most coexistence agreements have penalty clauses, the impact on the breaching party could be severe.

It is vitally important for companies to record and track their coexistence agreements and other contracts that could impact their brand protection and marketing activities.  Brand owners should review these agreements on an annual basis and consider using contract management software to ensure compliance with third-party agreements.   These and other trademark best practices are part of an effective brand management strategy.

How prevalent is trademark infringement?  According to a recent Compumark Clarivate Analytics report, global brands fall victim to it at an alarming rate.

The report, The Trademark Ecosystem: Insights from Intellectual Property Professionals around the World, is a compelling read.  It is the result of a survey of more than 300 trademark professionals in the United States, UK, Germany, and France.   While there are many interesting findings on how companies manage and protect their brand portfolios, several are worth emphasizing here:

Trademark infringement is increasing.     Nearly three-quarters of respondents experienced trademark infringement in the past year.  One contributing factor may be the availability of inexpensive marketing tools. Digital marketing plays an important role in helping companies market their products and services to the general public. E-commerce, social media, and pay-per-click just some of the tactics that are available to the brand owners.  Unfortunately, the endless possibilities to harness the goodwill of a brand also makes it possible for infringers to utilize these same digital technologies to their advantage.

Trademark infringement results in real damage.    The respondents listed the impact of trademark infringement on their brands, including consumer confusion, loss of revenue, and reduced customer loyalty.  This is not entirely surprising.  The rise of private label brands is one reason for this phenomenon. Some private label brands seek to mimic the trade dress of many well-known consumer product brands.  This is found particularly in the food and over the counter pharmaceutical categories.

Trademark clearance is often neglected.   Even well-meaning companies with sophisticated brands are not immune to claims of trademark infringement.  In fact, the report revealed a surprisingly high number of instances where the respondents had to change the name of their own brands.  This once again reiterates the importance of conducting a full trademark search.  It is advisable to obtain a trademark clearance opinion letter prior to introducing a new brand into commerce.

Brand enforcement efforts differ by country.   Legal action against infringers took place more in European countries than in the United States.  This reality may be in part due to the fact that U.S. trademark litigation can be very expensive.  As a result, trademark owners are forced, at times, to limit their enforcement efforts.  Therefore, it is advisable that companies protect and enforce their brands based on priority of importance.  Be sure to rate specific marketplace activities that could impact the value of your brand from greatest to least.

U.S. trademark filings are on the rise.   In the United States, trademark applications increased 9.4 percent during the first three quarters of 2017 compared to the same period in 2016.   This trend is continuing as the U.S. economy posts stronger gains and the importance of trademark filing becomes evident.  Small businesses, who still make up the majority of trademark filers, remain a potent contributor to these statistics.

Practice Note for Brand Owners:   The importance of a comprehensive trademark protection and enforcement strategy cannot be overlooked.  While many companies are quick to apply for a trademark, not all conduct a full trademark search to fully assess the risk of adopting a chosen brand name.  While time and budgetary constraints continue to present a challenge to companies, it is still possible to mitigate the risk of trademark infringement and maximize trademark enforcement efforts.   This begins with a proactive brand management and enforcement plan.

When it comes to trademark oppositions, it pays to be Kühl.

In Alfwear Inc. v. Shuff, the U.S. Trademark Trial and Appeal Board was asked to consider whether the Applicant’s KU:L and design trademark for bicycles in International Class 12 created a likelihood of confusion with Opposer’s asserted “family” of KUHL trademarks for inter alia, clothing, bottled water, textile fabrics, lip balm and other items.  Of interesting note is that Opposer’s trademark registrations on which it had relied to constitute a family consisted of multiple variants of the English translation of “cool,” including KUHL, KÜHL, and KUUL.

Family of trademarks.   The Federal Circuit has defined a family of trademarks as a group of marks having a recognizable common characteristic; however, simply using a series of similar marks does not a family make for purposes of protection.  Instead, there must be a recognition among the relevant consuming public that the marks are indicative of a common origin, which is generally established by considering the use, advertising, and distinctiveness of the marks as a whole.  Here, the Opposer introduced evidence that showed that although it used multiple spellings of its “Kühl” mark, it did not establish sufficient proof that it had extensively used all of them in commerce, and in particular, “Kuul” and “Kuhl,” such that it created a family of trademarks.

Likelihood of Confusion.  While there are at least 25 separate grounds that an Opposer may assert for the basis of a trademark opposition, by far, the most prevalent is likelihood of confusion pursuant to Section 2(d) of the Trademark Act.  In determining whether a likelihood of confusion exists under Section 2(d), the Board looks to several factors, with two key considerations being the similarities between the marks and the similarities between the goods or services.  In comparing the similarities between the marks, the Board, unsurprisingly, noted that closeness in spelling between the parties’ marks, and also concluded that consumers were likely to pronounce the two marks similarly.  In analyzing the similarity of the parties’ goods, the Board concluded that since there was ample evidence introduced of third-party party registrations and websites offering both bicycles and outdoor apparel together, this tended to support the conclusion that the Opposer’s and Applicant’s goods were similar.  The TTAB went on to find that since the parties’ goods were offered in the same channels of trade to consumers who exercise a low degree of purchasing care, confusion was likely such that the Opposition was sustained in favor of Opposer.

Practitioner’s Note:  Opposer was unsuccessful in convincing the Board that its “Kühl” marks were famous, despite the fact that it sells its products bearing the Kühl mark in over 1,0000 retail outlets nationwide.  This is due to the fact that Opposer’s introduction of advertising and sales figures alone did not provide context as to the level of exposure and recognition that consumers  might have had to the Kühl trademark in order for it to be considered famous.  The Kühl mark, was, however, deemed to be strong for purposes of the Section 2(d) likelihood of confusion analysis.

 

Trademark opposition filings increased in 2016, according to a recent report released by the United States Patent and Trademark Office.  A summary of comparative 2015 findings can be found in our publication here.

Highlights of the report include the following performance statistics for 2016 U.S. Trademark Trial and Appeal Board activities:

  • Trademark 0pposition filings totaled 5,881 compared to 5,290 in 2015
  • Trademark cancellation filings totaled 1,848 compared to 1,763 in 2015
  • Trademark appeals filings totaled 3,121 compared to 2,992 in 2015

For the same period, the TTAB issued 35 precedential decisions, which was within its target range of 35-40 per year.   The average pendency of precedential decisions was 32.5 weeks for final decisions, compared to 48.1 weeks for the previous annual time frame.  The average time of interlocutory orders was also reduced, going from 45 weeks in 2015 to only 25 weeks in 2016.    The length of inter partes cases, however, has not changed substantially, with the average of decided trademark opposition and trademark cancellation cases being 154.3 weeks from commencement to conclusion in 2016, compared to 161.2 weeks in 2015.

Trademark opposition considerations.    When contemplating commencing a trademark opposition, it is best to keep in mind the following:

  1.  Estimated duration.    Most trademark opposition cases settle before the trial phase, which means that statistically, the probability that it will go all the way to judgment is unlikely.   That being said, a company should be prepared for all contingencies.  This means taking into account factors that could either exacerbate or shorten the litigation process.
  2.   Early case assessment.   An early case assessment and plan of action is an integral part of a proactive trademark opposition litigation strategy.
  3.   Accelerated case resolution.    The U.S. Trademark Trial and Appeal Board has an accelerated case resolution (ACR) program that when used properly, can shorten the duration of a proceeding.   Details will be discussed in later posts.

To learn more about U.S. trademark oppositions or to discuss your company’s case, contact James Hastings at Collen.

A recent survey of global companies found that trademark infringement is on the rise.   The survey was conducted by Compumark, a leader in trademark research and brand protection solutions.   Despite the fact that 80 percent of the executives polled believe that trademark infringement is a growing problem, only fifty percent admitted to having comprehensive trademark watch services in place.

Highlights of the survey include the following:

  • 53 percent of respondents reported taking trademark enforcement actions against third-parties
  • 34 percent of respondents indicated that their company had to change a name due to possible trademark infringement issues
  • Numerous problems have arisen from trademark infringement, including loss of revenue (26 percent) and damage to brand reputation (21 percent)

Trademark Infringement Monitoring

Trademark enforcement strategies begin with best practices.  Brand owners and inhouse trademark counsel are advised to incorporate some or all of these tactics into their brand enforcement programs.

Trademark watch.   A trademark watch service is a great investment that monitors the USPTO and other national trademark registrars for confusingly similar applications.

Marketplace monitoring.    Companies such as Net Names offer brand owners comprehensive brand monitoring tools to notify brand owners when counterfeiters or unauthorized sellers are using a company’s trademarks without permission.

Trademark Opposition.  When a third-party applies for an application that is confusingly similar to a company’s brand name, a trademark opposition or cancellation proceeding may be instituted.

Rapid enforcement.    Agile enforcement mechanisms such as cease and desist letters, and Amazon or Google takedown notices, can be cost-effective means to stop the unauthorized use of trademarks without the need of filing a trademark infringement lawsuit.

Companies with effective trademark enforcement programs have well-developed plans in place, and constantly review them to ensure that the company’s business priorities are aligned with its brand enforcement budgets and goals.

Trademark opposition proceedings are contested matters before the U.S. Trademark Trial and Appeal Board (TTAB).  The complaint, known as a Notice of Opposition, is filed by the Opposer, who may allege several grounds for refusal of a trademark application.   Once the Notice of Opposition has been served upon the Defendant, the TTAB will issue an Order setting forth the relevant dates for each successive phase of the proceeding.  This includes the time to file an Answer, the initial conference, initial disclosures, discovery, and trial dates.  The failure to comply with the case management dates could irreversibly jeopardize a party’s rights.

Here are three considerations when preparing and filing an Answer to a Notice of Opposition:

Step #1.   Consider the rules.   Trademark opposition guidelines may be found in the Trademark Board Manual of Procedure.   The Manual sets forth the various statutes, rules, and case precedent applicable to trademark oppositions.  This includes all requirements and deadlines that must be adhered to in an inter partes proceedings before the Board.  Practitioners should refer to it often, as it provides a solid foundation to ensuring that the case stays on track.

Step #2.  Review the Complaint.   The Notice of Opposition must contain (1) a short and plain statement of the reason why opposer believes it would be damaged by the registration of the opposed mark (i.e., opposer’s standing to maintain the proceeding); and (2) the grounds for the opposition.   Standing generally requires that the Opposer have a real interest in the outcome of the proceeding and that the allegations of damages have a reasonable basis in fact.  An Opposer may raise any available statutory ground for opposition that negates the defendant’s right to registration, including likelihood of confusion, mere descriptiveness, or that the Applicant lacked a bona fide intention to use the mark at the time of fling.

Step #3.   Draft the Answer.    The requirements for a properly drafted Answer may be found in TBMP Section 311.   While there is no standard format for an Answer, it is generally best to answer each numbered paragraph of the complaint by providing a short statement either admitting or denying the alleged facts.  If you cannot do so, then state that you have insufficient facts to either admit or deny the claims.  The Answer is not the place to respond to the merits of the Notice of Opposition.  In conjunction with the Answer, a list of  possible affirmative defenses and potential counterclaims should also be considered.

As a defendant in a trademark opposition proceeding, it is important to have a well-crafted answer, affirmative defenses, and counterclaims, where appropriate.  Depending on the facts of the case and relative strengths of the parties’ positions, doing so could provide needed leverage at the discovery conference and later settlement discussions.

In a case that could have far-reaching implications, the U.S Supreme Court  has ruled that an Asian-American rock band is entitled to a federal trademark registration of its name.

The band, The Slants, had originally had its trademark application refused by the Trademark Office because “the applied-for mark consists of or includes matter which may disparage or bring into contempt or disrepute persons, institutions, beliefs or national symbols” in violation of Trademark Act Section 2(a).  The Slants thereafter appealed the Trademark Office’s decision to the Federal Circuit Court of Appeals, which held in a 9-3 vote that the USPTO could not refuse registration of  “disparaging” marks under The Trademark Act since it violated the First Amendment.  The matter has now been finally decided by the U.S. Supreme Court.

Writing for the Court in an 8-0 decision, Judge Alito stated that contrary to the government’s contention, trademarks are private, not government speech:

This Court exercises great caution in extending its government-speech precedents, for if private speech could be passed off as government speech by simply affixing a government seal of approval, government could silence or muffle the expression of disfavored viewpoints.

The Trademark Trial and Appeal Board had previously acknowledged that its guidelines “for determining whether a mark is scandalous or disparaging are somewhat vague and the determination of whether a mark is scandalous or disparaging is necessarily a highly subjective one.” As reported by Nina Totenberg of NPR and various legal commentators, there now exists the possibility that other names deemed disparaging by the Trademark Office will now be registered.  This includes most notably, the ongoing dispute involving the name Washington Redskins.  And if as the Court states, that “speech may not be banned on the ground that it expresses ideas that offend,”it seems that this may open up a Pandora’s box into other marks that may be deemed to be “scandalous or immoral” under The Trademark Act as noted by Jess Collen in his Forbes article.