[This post is part 1 of a 3 part IP Basics Series]

When discussing intellectual property (IP) it is sometimes easy to confuse the blurred line between the various species of IP such as copyrights, trademarks and trade secrets. But with a little background and understanding of the different works and types of information that are protected, the distinction between copyrights, trademarks and trade secrets becomes clearer.

A copyright is, essentially, the bundle of rights that an author has in an original creative work of expression. Those rights include the right to control the duplication of the work and to sell it for profit. A common type of work protected by copyright is a written work such as a novel. However, copyright can protect other types of works as well, such as paintings, movies, music, sculpture, works of architecture and design.

Among the important and fundamental limitations on the scope of copyright protection is the principal that a copyright protects the expression of a work and not abstract ideas. A copyright differs from other IP protections in that regard (compare this to patents and trade secrets which may protect original ideas and methods). Thus, copyright will protect the words of my written novel, but generally will not protect the abstract ideas or themes expressed in the story. For example, I could not put my name as author on the Harry Potter series of books and attempt to sell the books to the public. I could, however, write my own novel about an orphaned  child wizard who overcomes his evil arch nemesis. Of course, there are nuances and limitations that are beyond the scope of this post, such as the right to control “derivative works” and the point at which a knock-off character (say, my orphaned child wizard) might be so similar to the original that it infringes upon rights in a copyrightable character in a work. For example, Comedy Central recently attempted to prevent Stephen Colbert from bringing his Stephen Colbert character to the CBS The Late Show.

A trademark protects a “mark,” which may be a word, name or symbol, used by a particular proprietor to identify and distinguish the goods of that proprietor. See Cal. Bus. & Prof. Code § 14202(a). A trademark serves as identifier of the source of goods, as against competing products, and functions as a means of preserving a product’s reputation in the market place. Sun-Maid Raisin Growers of California v. Mosesian (1927) 84 Cal.App. 485, 494.  Examples of trademarks are the “Coca-Cola” name or a logo like the familiar Starbucks icon.

A “trade name” is a related but distinct concept. It connotes the identifier of a particular business, including what is often described as the goodwill—that is, the reputation built up in the marketplace—associated with the “good name” of the business. See Cal. Bus. & Prof. Code § 14202(d) (“‘Trade name’ means any name used by a person to identify a business or vocation of that person.”).

Thus, a copyright and a trademark protect distinct types of intellectual property. Copyright, simply put, protects original works of expression from copying for a limited period of time while trademarks protect expressions used to identify the source of goods in the marketplace and can last in perpetuity. Phoenix Entertainment Partners, LLC v. Rumsey (7th Cir. 2016) 829 F.3d 817, 825. Sometimes a company logo can be protected both by copyright and trademark law.

In the next post, we will consider the concepts of “trade dress” and “trade secrets.”

Hard Candy, LLC (“Hard Candy”) sued The Procter & Gamble Company (“P&G”), parent company to CoverGirl in the federal district court of Florida for 1) federal trademark infringement, 2) federal unfair competition, 3) common law trademark infringement, and 4) common law unfair competition over the alleged infringing design of Katy Perry’s makeup line with CoverGirl. Hard Candy alleges that P&G copied Hard Candy’s registered design marks in a confusingly similar manner.

Although Hard Candy did not specifically state what aspect of the Katy Perry CoverGirl makeup line infringes upon its design marks, it appears that Hard Candy is claiming that the logos/marks (capitalized words in black before and after a black heart shape) are similar in their overall design. See examples below.

Hard Candy cited the following three (3) registered design marks in support of its complaint against P&G:

In support of its argument that the Katy Perry CoverGirl makeup line is likely to cause confusion among consumers, Hard Candy alleges that they sell the same or similar products (cosmetics) and offer these products in the same channel of trade at similar price points to similar target customers. Hard Candy may also argue that the black heart shape design is the dominant feature of the marks and similar (if not identical) in both marks.

While these factors are strong ammunition against Katy Perry/CoverGirl, it may be difficult for Hard Candy to argue that the overall commercial impressions are similar. For instance, the font and words before and after the black heart shape design look and sound different.  As a self-proclaimed make-up lover, I personally would not be confused by the design marks, especially if the CoverGirl logo is used in connection with the Katy Perry name and the black heart shape design. Both Katy Perry and CoverGirl have established their own brand for years and also have successfully campaigned together to promote this makeup line, which further differentiates themselves from other makeup lines. Nonetheless, it will be interesting as to how each paints the other.

Marijuana is still listed as a Schedule 1 Controlled Substance by the U.S. Drug Enforcement Agency,  but a number of states have legalized it, even for recreational use. What’s a cannabis related entrepreneur to do to protect his or her intellectual property?

IPWatchDog just published How Can You Protect Cannabis-based Intellectual Property Under Federal Prohibition, addressing many of the obstacles and opportunities in the marijuana IP arena, including my input on common law trademark rights.

We previously posted about the dispute between the National Park Service and Yosemite’s former concessionaire, Delaware North, over the trademark ownership of many historic Yosemite sites, including the Ahwahnee Hotel, Badger Pass, and Curry Village.

As of today, a new concessionaire officially takes over for Delaware North.  However, due to its ongoing trademark dispute with Delaware North, Yosemite has renamed many of its recreational areas to more uncontroversial names.  Have a reservation for the Ahwahnee Hotel?  You’re now staying at the Majestic Yosemite Hotel.  Hitting the slopes at Badger Pass?  Welcome to the Yosemite Ski & Snowboard Area.  Camping in Curry Village?  I think you mean Half Dome Village.

Those wedded to the old Yosemite names shouldn’t abandon all hope.  The name changes may only be temporary, depending on the outcome of any settlement agreement, litigation, or other contractual arrangement between the Park Service, Delaware North, and the new concessionaire.  But any workable solution may proceed at a glacial pace, given that Delaware North previously demanded $51 million in exchange for the rights to the names, while the Park Service only valued the trademarks at $3.5 million.

On December 22, 2015, in a potentially far-reaching decision, the Federal Circuit Court of Appeals held that Section 2(a) of the Lanham Act, which prohibits registration of disparaging trademarks, is unconstitutional under the First Amendment’s guarantee of free speech. While perhaps the most publicized “disparaging trademark” controversy this year centered around the Washington Redskins, whose trademark registrations were cancelled earlier this year in a decision upheld by a federal district court (the case is currently on appeal to the Fourth Circuit), this case before the Federal Circuit involved Simon Shiao-Tam, who applied to register the name of his band, “The Slants,”  for trademark protection.

Though the Portland-based band is comprised of Asian American musicians who had previously stated that the name’s intent was to reclaim the word, the U.S. Patent and Trademark Office (USPTO) refused to register the mark based on Section 2(a)’s prohibition against registration of trademarks that consist of “immoral, deceptive, or scandalous matter; or matter which may disparage…persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” This decision was affirmed by the USPTO’s Trademark Trial and Appeals Board.

Ironically, in the initial appeal of the matter to the Federal Court, neither Tam nor the government focused on the First Amendment argument. At oral argument in the initial appeal in January 2015, Judge Kimberly Ann Moore (who is also a Washington Redskins fan) invited the government’s attorney to discuss the First Amendment issue, which the attorney declined to do.  Writing for the majority, Judge Moore affirmed the USPTO’s refusal to register the mark, finding that there was substantial evidence supporting the USPTO’s finding that the term “The Slants” was disparaging and also rejecting Tam’s backup argument that Section 2(a) was a violation of the First Amendment. The Federal Circuit stated that it was bound by precedent, namely a prior 1981 case (In re McGinley) that had held the government’s refusal to register a disparaging mark does not prevent a party from using it (and therefore, there was no First Amendment violation). See the April 2015 opinion In re Tam.

However, in that same decision, in a lengthy section entitled “additional views,” Judge Moore urged the Court to revisit In re McGinley and to reexamine the First Amendment issue. Thereafter, the Court of Appeals decided on its own, and without the request of the government or Mr. Tam, to review the decision en banc before a full panel of judges and ordered briefing on the First Amendment question, leading to this latest decision.  Although not binding on the Fourth Circuit Court of Appeals, which will be hearing the Washington Redskins’ appeal next year, the Fourth Circuit could be persuaded to reverse the USPTO’s cancellation of the Redskins’ trademark registrations.

A full copy of the Federal Circuit’s en banc opinion can be accessed here.

Just coming off the heels of the lawsuit it filed against Marc by Marc Jacobs on April 8, 2015, adidas America, Inc., adidas AG, and adidas International Marketing B.V. (collectively, “adidas”) filed suit against Skechers USA, Inc. (“Skechers”) on September 14, 2015 in the United States District Court of Oregon for trademark and trade dress infringement, unfair competition, trademark and trade dress dilution, deceptive trade practices, and breach of contract. The company alleges that the Skechers “Onix” tennis-style sneaker infringes on one of its most iconic shoes, “the ‘Stan Smith’ sneaker, which adidas introduced in the early 1970s featuring a classic tennis-shoe profile with a sleek white leather upper, three rows of perforations in the pattern of the well-known Three-Stripe trademark, a defined stitching across the sides of each shoe enclosing perforations, a raised mustache-shaped colored heel patch, which often is green, and a flat tonal white rubber outsole.”

In its complaint, adidas outlined all the similarities between the adidas Stan Smith and the Skechers Onix.

In support of its infringement claims, adidas cites its various federal registrations for its famous “Three Stripe Mark” on athletic shoes.

Although the perforations on the Skechers Onix do not exactly mimic the three rows of perforations in the pattern of the well-known Three-Stripe Mark, it is hard to deny the striking similarities between the two sneakers. adidas is seeking various damages, including all profits derived from the infringing good, costs and reasonable attorneys’ fees, as well as an injunction to stop all sales and marketing of the infringing good.

After two years of battle in court, Tory Burch LLC (“Tory Burch”) wins $41.2 million ($38.9 million in damages and $2.3 million in attorneys’ fees) in its trademark infringement lawsuit against Lin & J International, Inc. (“Lin & J”), which was filed on May 31, 2013, in the U.S. District Court of the Southern District of New York. Tory Burch alleged in its 2013 complaint that Lin & J’s unauthorized use of Tory Burch’s federally registered trademarks and copyrighted works violated trademark counterfeiting, trademark infringement, trademark dilution, copyright infringement, and unfair competition laws.  In particular, Tory Burch claimed that Lin & J wrongfully reproduced earrings, necklaces, pendants, cuffs, bangles, and bracelets bearing unauthorized reproductions of Tory Burch’s famous TT Designs (see below).

Despite the apparent similarities, Lin & J had countersued Tory Burch for unfair trade practices, tortious interference with its business relationships, defamation, and trademark infringement. Lin & J claimed that its Isis Design is inspired by the Isis cross or a Coptic cross, which is a symmetrical cross with short, flanged bars, typically set in a circle. Nonetheless, in addition to finding that Lin & J had fabricated and destroyed evidence, the court ruled against Lin & J. This $41.2 million win for Tory Burch will be another notch added to her designer belt and not to mention her $3 billion (yes, with a “B” billion) empire.

Today’s topic is “tacking” and why you need to have at least some awareness of this important concept in the law of trademark.

Imagine Company A has been using a distinctive and well-known company logo on its product for years. Company A then decides to “refresh” its marketing, including rolling out a shiny, updated logo. Does Company A lose any trademark rights it may have established in the old company logo simply by updating its branding?

That is where “tacking” comes in. This concept allows a trademark owner to “tack on” the period of use of an earlier mark to the owner’s use of a subsequent mark where the “two marks are so similar that consumers generally would regard them as essentially the same.” Hana Financial, Inc. v. Hana Bank (9th Cir. 2013) 735 F.3d 1158, 1163-1164, cert. granted, 134 S. Ct. 2842 (2014) and aff’d, 135 S. Ct. 907 (2015); Hana Financial, Inc. v. Hana Bank (2015) 135 U.S. Ct. 907, 910 (two marks “may be tacked when the original and revised marks are ‘legal equivalents,’” meaning that the two marks that “‘create the same, continuing commercial impression’ so that consumers ‘consider both as the same mark.’”).

If an owner is allowed to tack on to prior use, updating a trademark (such as a tradename, a product slogan or logo style) does not result in abandonment of or loss of priority in the use of the trademark.

Tacking furthers the policy aims of trademark law because it prevents the loss of valuable trademark rights while still allowing for reasonable innovation in the market. As the Ninth Circuit of Appeals explained in its decision in Hana Financial, Inc. v. Hana Bank, a decision recently affirmed by the United States Supreme Court:

“Tacking” is permitted because “[w]ithout tacking, a trademark owner’s priority in his mark would be reduced each time he made the slightest alteration to the mark, which would discourage him from altering the mark in response to changing consumer preferences, evolving aesthetic developments, or new advertising and marketing styles.” … Moreover, “[g]iving the trademark owner the same rights in the new mark as he has in the old helps to protect source-identifying trademarks from appropriation by competitors and thus furthers the trademark law’s objective of reducing the costs that customers incur in shopping and making purchasing decisions.”

Hana Financial, Inc. v. Hana Bank, supra, 735 F.3d at 1164, quoting Brookfield Communications, Inc. v. West Coast Entertainment Corporation (9th Cir.1999) 174 F.3d 1036, 1048.

However, here is the real lesson for the day—the courts have made it abundantly clear that the doctrine of tacking is “exceptionally narrow” and, therefore, you must tread lightly when you endeavor to alter the look or feel of any existing trademarks, especially things like company logos or product slogans. Brookfield Communications, Inc. v. West Coast Entertainment Corporation, supra, 174 F.3d at 1036, 1047-1048. The standard for tacking has been described as “exceptionally narrow” and “exceedingly strict.” The marks “must create the same, continuing commercial impression” and the later mark should not “materially differ from or alter the character of the mark attempted to be tacked.” Id. at 1048. So when the marketing folks come up with all of those great ideas to jazz up the company branding, make sure to give thought to the impact on trademark rights and confer with trademark counsel if necessary.

Taking big hits is quite familiar to professional football teams.  The hit laid down by a federal District Court on July 8, 2015, however, is one that Washington’s professional football franchise will remember for a long time.  District Court Judge Gerald Bruce Lee upheld the cancellation of federal registration for the team’s “Redskins” trademarks, holding that “the (1) dictionary evidence; (2) literary, scholarly, and media references; and (3) statements of individuals and groups in the referenced group show that the Redskins Marks consisted of matter that ‘may disparage’ a substantial composite of Native Americans during the relevant time period.”

June 18, 2014, the USPTO’s Trademark Trial and Appeal Board (“TTAB”) had issued a decision cancelling the team’s six federal registrations for trademarks that include the term “Redskins.”  The team brought suit in federal district court to challenge the TTAB’s decision.  Judge Lee’s ruling denied the team’s motion for summary judgment and granted cross-motions for summary judgment by the TTAB and the group of Native Americans that brought the proceedings before the TTAB.

The Redskins’ Trademark Registrations Have Not Actually Been Cancelled . . . Yet

Like the TTAB’s decision, the District Court decision does not go into effect immediately. Its decision is subject to appeal, and the team has already indicated that such an appeal will be forthcoming. As such, even if the decision ultimately stands, the case will not likely be final for some time. The registrations will remain on the federal register of marks and not be listed in the USPTO’s records as “cancelled” until after the case has made its way through the courts.

The Redskins Will Not Have to Change Their Name

Even if the Court’s decision stands, the Redskins will not be compelled to change the name of the franchise. The decision speaks only to the team’s right to register the “Redskins” marks, not to its right to use the name.

The Team Can Still Sue Those Who Infringe on the “Redskins” Mark

Should the Redskins ultimately lose their federal trademark registrations, they will not likely lose their ability to protect their exclusive use of the marks. Trademark rights in the United States come from use of a mark on or in conjunction with goods or services, not merely from the additional step of federal trademark registration. Indeed, this last step is optional.

Based on their longstanding use of the marks in question, the Redskins likely enjoy common law trademark rights independent of federal trademark registration. Should the team be stripped of federal registration, it could still pursue infringers through lawsuits based on these common law rights.

Lack of Registration Does Have Practical Consequences

While the Redskins may still bring suit to enforce common law trademark rights, losing federal registrations will eliminate the presumptions of ownership and of a nationwide scope of rights that come with federally-registered trademarks. Common law trademark rights exist on a state-by-state basis. This means that the Redskins would have to establish the legitimacy of their common law rights to use the marks in every infringement suit they file. As discussed above, however, it is likely that the Redskins will have little difficulty in establishing the existence of such rights.

Where losing the registration of their trademarks has the greatest potential to harm the team in the short term, however, is in the corresponding loss of the ability to record the registrations with the U.S. Customs and Border Patrol Service, which blocks importation of infringing or counterfeit goods. Without support of the Customs department, the market may be flooded with inexpensive Redskins gear.

The P.R. Battle Within the Case

In the long term, we wonder whether the team’s decision to persist in fighting this battle in the Courts will ultimately result in insurmountable pressure to change the team’s name.  Public awareness of the concerns around the name increases with every appeal (and every court loss).  Celebrities and politicians are increasingly hostile to the team’s use of their name.  As the matter seems destined for the Supreme Court, it is worth asking: Win or lose, is it only a matter of time before the “Redskins” become a relic of the past?

In our previous post, LEGO Tries New Angle To Guard Its IP Against Upstart MEGA BLOKS, we wrote about LEGO’s efforts to protect its IP against alleged knock-off brick makers.  LEGO has now scored a victory in its ongoing efforts in its war against knock-offs.  In a ruling handed down on June 16th by the General Court of the European Union, the court rejected a bid by Best-Lock, a competitor of LEGO, to invalidate LEGO’s registration of a European Union trademark based upon the shape of its LEGO minifigs.

Back in 2000, LEGO obtained a trademark registration for the shape of its classic miniature person figurines, affectionately known among LEGO fans as “minifigs.”  That European Union trademark registration, termed a Community Trade Mark (CTM), was granted by the European Union’s Office for Harmonization in the Internal Market (Trade Marks and Designs) or “OHIM.”  In 2011, Best-Lock filed an application with OHIM seeking a declaration of invalidity of LEGO’s minifig trademark.  LEGO intervened in the case to defend its trademark registration.  After the application was rejected and that rejection was upheld by an OHIM appeal board, Best-Lock appealed the case to the General Court of the European Union.

The European Court considered whether LEGO’s trademark was invalid under regulations governing CTM registrations that bar registration where the trademark consists exclusively of a shape determined by the nature of the goods themselves or consists exclusively of the shape of goods necessary to obtain a technical result.

Best-Lock argued that LEGO’s minifigs have connectors on their heads and holes on their feet and other characteristics that allow them to interconnect with building blocks, hence rendering their shape functionally necessary to obtain a technical result.  An earlier LEGO CTM registration for its LEGO brick had been rejected for that very same reason.

This time, the Court sided with LEGO.

The Court observed that the first question was what were the “essential characteristics” of the contested mark.  Those essential characteristics were described by the Court as the shape of the head, body, arms and legs necessary to have the appearance of a human figure.  Those shapes are not dictated by any technical function.

Even if the parts of the minifig that allow for connections to LEGO’s brick system (like the stud on the top of the head) could be described as having a technical function, the Court reasoned that those characteristics were secondary to the essential characteristics of the mark and the overall impression conveyed by the mark, its human figure shape.  The toy’s overall shape that constitutes the trademark is not directly related to any technical function that the toy is designed to achieve.

As the Court explained, “[Best-Lock] neglected to mention what technical result a toy figure might be supposed to achieve” and that “…the fact that the figure in question ‘represents a manikin’ and may be used by a child in a play context was not a technical result.”  See Best-Lock (Europe) Ltd. v. Office for Harmonization in the Internal Market (Trade Marks and Designs (OHIM) (2016) Judgment of the General Court, June 16, 2015, Case No. T-396/14.