San Diego Trademark Attorney® Blog

October 2012 Archives

Google Fails To Shake Cybersitter AdWords Trademark Infringement Claims

October 25, 2012,

google.jpgSan Diego - Google Inc. cannot slip away from Cybersitter LLC's claims that it aided and abetted a competitor in misusing Cybersitter's trademarked name in advertisements drawing traffic away from Cybersitter's business, a Los Angeles federal judge ruled Wednesday.

Cybersitter, which developed, markets and sells an Internet content-filtering program, sued Google and ContentWatch Inc. over ContentWatch's marketing of its own Internet content-filtering software, Net Nanny, and its use of Google's AdWords paid advertising program.

A portion of Google's revenue comes from displaying sponsors' paid advertisements on its search engine and other websites. In response to keyword searches on Google's search engine, sponsors' paid advertising results, which it calls "sponsored links" are displayed with other search results.

The AdWords program specifically allows ad sponsors to purchase certain keywords that trigger the sponsor's ad whenever a Google user conducts a search through its search engine.

Earlier this year, Cybersitter learned that ContentWatch was running paid ads for Net Nanny through AdWords that included the Cybersitter trademark. When an Internet user would search on Google for Cybersitter or similar terms, ContentWatch's ads with the trademark would be displayed, often as the first result in the user's search, according to the court.

Google has violated federal and California laws by selling the right to use the Cybersitter trademark to ContentWatch, which in turn illegally uses the trademark in its online ads through the AdWords program, Cybersitter alleges. It has also wrongly permitted and encouraged ContentWatch's use of the trademark in its online ads, Cybersitter claims.

Judge Ronald S.W. Lew denied Google's motion to transfer the case to Santa Clara federal court, as well as its motion to dismiss Cybersitter's claims, saying Cybersitter had adequately pled and provided sufficient facts to support its trademark infringement claims.

"In sum, for the state law claims of trademark infringement, contributory infringement, and unfair competition, plaintiff has sufficiently pled the facts necessary to establish defendant's acts as independent torts that are not barred by [Communications Decency Act] immunity," Judge Lew said.

The judge did, however, grant Google's motion to dismiss Cybersitter's claim for unjust enrichment.

Facebook Abets Counterfeit NFL Gear Sales, Lawsuit Says

October 23, 2012,

football.jpg San Diego - A seller of officially licensed National Football League merchandise filed a putative trademark infringement class action against Facebook Inc. on Monday over its alleged complicity in publishing online advertisements for fake NFL apparel, accessories and more.

Inkies Sports Inc., which does business as Krystal's NFL Shoppe, is seeking to represent a class of retailers and wholesalers of officially licensed NFL apparel who have been harmed in their business by purveyors of counterfeit goods advertised on websites like Facebook, according to its complaint in New Mexico federal court.

As of 2011, ads for counterfeit NFL merchandise started showing up in sponsored ads on Facebook with increasing frequency, offering jerseys and other items for cut-rate prices alongside "pictures of what appears to any reasonable person to be authentic, officially licensed NFL merchandise," the complaint says.

"There is no way for a Facebook user to determine from the pictures and the text which accompanies the counterfeiters' ads whether the merchandise is authentic or not," it says.

Inkies says it began paying for sponsored ads on Facebook in February, but quickly discovered that its own marketing efforts were being overshadowed by those of the counterfeiters.

"Ads for counterfeit goods are regularly displayed on Krystal's Facebook page, leading even loyal customers to question whether these ads are supported, or even sponsored, by Krystal's," the complaint says. "Krystal's has inadvertently been placed in the untenable position of actually lending credence to the counterfeit ads, by virtue of Facebook's display of those advertisements on Krystal's page."

Inkies has lodged multiple complaints with Facebook about the ads to no response, according to the company.

The economic impact of the fraudulent ads on Inkies and other class members will probably run into millions of dollars, given the cut-throat nature of the world of low price internet retail, Inkies asserts.

Once a consumer clicks on one of the counterfeiters' ads and places and order, the merchandise arrives postmarked from China, and it immediately becomes apparent that the merchandise is substandard, Inkies says. Since the Chinese government blocks access to Facebook, counterfeiters in China need an intermediary, Inkies claims, such as the advertising firm AdSage, which is also named as a defendant in the complaint.

North Face Shuts Down "Butt Face" Apparel Maker With Trademark Contempt Ruling

October 18, 2012,

fleece.jpg San Diego - The makers of a parody line of clothing named "The Butt Face" have been held in contempt for violating a 2010 injunction barring them from any use of The North Face Apparel Corp.'s trademarks or similar names, according to a consent judgment filed Tuesday.

A Missouri district court ordered James A. Winkelmann Sr., James A. Winkelmann Jr. and their company Why Climb Mountains LLC to stop using The Butt Face trademarks or any other reproduction, counterfeit, copy or imitation, specifically including parody, of The North Face's trademarks. The clothing makers must also cease any communications of any kind about The North Face or their now-defunct clothing lines The South Butt and The Butt Face.

The Winkelmanns are enjoined from passing off any product as somehow related to The North Face or using any name likely to dilute, confuse or deceive. They must also turn over all domain names and Twitter accounts that violate the prior injunction or the current order, the court said.

The defendants must turn over any goods bearing The Butt Face trademark for destruction, and disgorge payments of $65,000 The North Face previously made to them.

The 2010 consent injunction came as part of a settlement agreement, under which the Winkelmanns agreed not to use The South Butt trademark or any other similar names that might be confused with The North Face. The North Face first brought its infringement claims against the Winkelmanns in 2009.

Since the entry of that consent injunction, the Winklemanns created Why Climb Mountains and knowingly and intentionally engaged in conduct in direct violation and reckless disregard of the injunction, with the intent to trade on The North Face's fame, goodwill and trademarks, The North Face's contempt motion, filed in August, said.

"The Winkelmanns used the original lawsuit as a lucrative marketing device to promote sales of their infringing products through a media blitz," the motion said. "We assume they will attempt to same here. Thus the sooner this matter is heard and resolved, the better."

Fifth Circuit Says Mission Burrito Trademark Suit Has Legs

October 16, 2012,

burrito.jpg San Diego - The Fifth Circuit on Thursday ruled that Mexican food company Gruma Corp. has valid claims for trademark infringement against the Texas fast food chain Mission Burrito, reversing a Texas district court's dismissal of Gruma's case.

Gruma, which markets its products nationwide under the Mission trademark, sued Mission Burrito owner Mexican Restaurants Inc. in September 2009 for infringement and dilution. The district court ruled that there was no likelihood of confusion between the two trademarks and no dilution, and tossed Gruma's complaint.

The district court erred in its legal analysis of the claims, and proper application of the relevant factors favors Gruma, the appeals court ruled.

Gruma's Mission products include tortillas, tortilla chips, taco shells, guacamole dip, and salsa. The company has obtained 29 federally registered trademarks for the Mission brand since 1982. The Mission logo includes the word under a Spanish-style bell tower with a rounded top, usually in red, orange and white.

Mexican Restaurants, meanwhile, owns several different Mexican concept restaurants in Texas and elsewhere, including the Houston-based Mission Burrito restaurants, which first started in 1995 and obtained a Texas trademark in 1997. The restaurants are considered fast-casual and serve tortilla chips, dips and salsa, and fresh tortilla- based Mexican food items such as burritos, tacos, and quesadillas.

The Mission burrito logo is the top of a Spanish mission style church topped by a cross in black and white. Mexican Restaurants obtained a federal trademark for the logo and name in 2008.

The district court correctly found that four of the relevant factors favored Gruma, but misapplied the law relating to two others and erred in not fully analyzing two more which should be at least neutral, if not in Gruma's favor, the company argued on appeal.

The appeals court agreed, noting the visual similarities between the two trademarks.

"We find it inescapable that both are clearly employing the device of a mission-style tower associated with Mexico and South Texas to draw an association with the name Mission and the Mexican food each party sells," the Fifth Circuit said.

The restaurant business could also be a natural area of expansion for Gruma, thus increasing the likelihood of confusion, the appeals court ruled, in contradiction to the district court's finding.

TTAB Rejects "Verde" Power Supply Trademark As Merely Descriptive

October 10, 2012,

power on.jpgSan Diego - The U.S. Patent and Trademark Office's Trademark Trial and Appeal Board has affirmed a PTO examiner's refusal to register the trademark "Verde" to Verde Power Supply Inc., saying the proposed trademark as used in connection with the company's goods is only descriptive.

Verde Power Supply refused to provide the examiner with information she requested during the registration process about the company's business operations, on the grounds that doing so would reveal its trade secrets, the TTAB said. TTABlog first reported the board's ruling on Wednesday.

The company applied to register the trademark in January 2010 for electrical and electronic devices for power supply technology, including power supply units, current-voltage converters, DC converters and electronic power supply circuitry.

After the company declined to divulge its claimed trade secrets, the examining attorney asked whether the goods are energy efficient or environmentally friendly. Verde Power Supply did not acknowledge the questions or provide any information regarding the goods, and did not mention them on appeal either, the TTAB said.

"Applicant did not contest the revised request on the ground that it would require applicant to divulge trade secrets, or that it was not legitimate; applicant did not make any response to this request whatsoever," the board said.

The examiner's questions regarding energy efficiency and environmental friendliness were proper to ask, as they concern facts that pertain to the descriptiveness refusal, the TTAB said.

Noncompliance with a legitimate requirement for information or materials can, in and of itself, be a valid basis for denying registration, according to the board.
"We make the presumption that the answers to the examining attorney's questions would be unfavorable to applicant, and that applicant's goods are both environmentally friendly and energy efficient," it said.

The trademark "Verde" would directly and immediately convey to the purchasers of electrical and electronic devices that the equipment in question is environmentally friendly, the board said.

TTAB Judge Ellen Seeherman dissented from the majority ruling, saying that the PTO has failed to prove that "Verde" is merely descriptive.

The office has not shown that Spanish-speaking purchasers of Verde Power Supply's goods would understand "Verde" as having the meaning of energy efficient or environmentally friendly, or that those purchasers would immediately understand from the trademark athat the goods have those qualities, she said.

PTO Gets Tough On Green Trademark Claims

October 5, 2012,

kumquat_tree_.jpgSan Diego - The U.S. Patent and Trademark Office has quietly adopted a more stringent approach to registering "green" trademarks, in practice if not in policy, requiring that applicants demonstrate their genuine environmentally friendly qualities.
Trademark examiners have reportedly started to deny increasing numbers of applications for green trademarks that do not include a statement of environmental friendliness. The trend was first noted by TriplePundit.com in early October, and Forbes subsequently picked up the story, but neither article directly cited hard evidence in support of the reports.

The PTO is said to be refusing the trademark applications on the grounds that the Lanham Act allows it to deny applications that contain deceptive content. Such a justification could suggest that the PTO is taking the initiative to aid in combating the practice of "greenwashing" products that do not actually live up to their green claims.
The PTO, for its part, said no policy change was afoot.

"Contrary to recent reports, the PTO has not adopted a new policy for trademark applications that include the word 'green,'" a PTO representative said Friday. "In fact, there has been no recent policy statement or change in this area."
"All applications are reviewed for statutory compliance with the provisions of the Trademark Act, including Section 2(a) which prohibits the registration of deceptive matter (among other things)," the representative said.

The PTO declined to comment on whether any recent denials of applications could have given rise to policy rumors.

The office doesn't have to adopt or announce any formal new policy to subject green trademarks to greater scrutiny, though, trademark attorney Michael Tschupp said. The PTO already has guidelines and procedures in place for examiners confronted with potentially deceptive matter in a trademark, and that guidance includes provisions for environmental claims, he said.

Tschupp, the proprietor of green trademark news blog SustainableMarks.com, said his own clients have not yet reported any newly aggressive approaches to their green trademarks on the part of PTO examiners. Applicants can expect to see more denials based on deceptiveness going forward, though, he said.

When a trademark conveys some information about a product that is not accurate, the PTO has two basic options, Tschupp said: refuse to register it on grounds of misdescriptiveness, or go a step further and refuse it as deceptive.

A misdescriptiveness refusal can be overcome, and still leaves open the possibility of registering the trademark on the supplemental register, rather than the principal register, Tschupp said. A refusal based on deception, though, is more serious, making the trademark unregisterable under any circumstances, and that is what applicants are now starting to see at the PTO, he said.

An increase in those refusals for green trademarks could lead to challenges to environmental friendliness claims showing up in trademark infringement disputes and litigation, Tschupp said.

"As people are now having to explicitly make these claims in their applications, defendants are going to be able to challenge the underlying environmental benefit of these products," he said. "It basically creates a whole new defense."
The reports of green trademark refusals come on the heels of the Federal Trade Commission's recent updates to its Green Guides on environmental marketing claims.
The Green Guides outline general principles that apply to all environmental marketing claims and provide guidance regarding many specific environmental benefit claims. The guides explain how reasonable consumers likely interpret each such claim, describe the basic elements necessary to substantiate it, and present options for qualifying it to avoid deception.

Both the PTO and FTC developments can be seen as part of a greater attempt to crack down on greenwashing on the part of the Obama administration, according to Tschupp. Trademark examiners in particular now have much better guidelines for defining what is and is not green to use as a basis for deceptiveness decisions, Tschupp said.
"They have a measuring stick they didn't really have before," he said.

Wrigley At Risk Of Sugar-Free Gum Trademark Infringement

October 2, 2012,

chewing_gum_wrigley.jpgSan Diego - There is enough of a possibility that William Wrigley Jr. Co.'s Swerve sugar-free chewing gum is infringing a trademark for the name Swerve for artificial sweeteners to consider a preliminary injunction barring Wrigley's use of the name is warranted, an Illinois federal judge ruled Friday.

Swerve IP LLC had asked for the preliminary injunction in Wrigley's declaratory judgment lawsuit seeking to avoid liability for infringing Swerve IP's trademark. Judge Harry D. Leinenweber put off his final decision on Swerve IP's motion until a hearing can be held, but ruled that it is possible for Swerve IP to succeed on the merits of its argument.

Swerve IP holds the trademark for the word Swerve in relation to the company's all-natural non-sugar sweetener, which it has used since 2001. The U.S. Patent and Trademark office officially registered the trademark in September 2009, covering natural sweeteners including a large class of food and candy products.

The sweetener is sold through online retailers and some physical stores, and is used in the commercial manufacture of some food products, but Swerve IP hopes to expand into more mainstream markets, including chewing gum, according to the judge.
Wrigley's popular "5" brand of chewing gum, meanwhile, features a flavor called Swerve, so named because it allegedly changes flavors as it is chewed. The gum is mainly sold in grocery and convenience stores.

Wrigley learned of Swerve IP's trademark in 2010, and at that time applied to register the trademark for the word Swerve in relation to chewing gum. Swerve IP opposed the registration, and the matter remains pending before the PTO's Trademark Trial and Appeal Board.

The gum maker launched its Swerve flavor in July 2011, and a few months later Swerve IP sent it a cease and desist letter, which prompted Wrigley to file its declaratory judgment complaint after settlement talks arising from the TTAB proceeding failed.
Testimony given so far reflects a concern that Swerve gum's flooding the market would undermine the sweetener's independent reputation for being all-natural, the judge said. Such a fear implicitly reflects the assumption that the customer would connect the brands, consistent with a reverse confusion theory, he ruled.

From the consumer's perspective, the Swerve trademark is arbitrary as to the sweetener but suggestive as to the gum, and so is therefore protectable, Judge Leinenweber said.
It appears that other manufacturers, and even Wrigley in the 1980s, have co-branded gum and candy products with sweeteners, according to the judge. Accordingly, the public may well believe that Swerve sweetener has somehow become affiliated with sugar-free Swerve gum, he said.