Trademark Review | May 2015
Attorneys’ Fees Might be More Readily Granted in Trademark Cases
Last year, the U.S. Supreme Court relaxed the standard for awarding attorneys’ fees to the prevailing party in patent infringement cases. Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014). The Court in Octane decided that the prevailing party need merely show that the case “stands out from the others” rather than the earlier standard that required showing the losing party’s case was “objectively baseless” and lodged in subjective bad faith.
The Lanham Act’s mandate to award attorneys’ fees in “exceptional” cases is identical to the Patent Act’s fee provision. In fact, the Supreme Court in Octane cited a Lanham Act case while defining “exceptional.” This has stirred speculation as to whether Octane’s lower bar for awarding fees should apply to trademark infringement cases.
Since the Octane ruling, several federal courts have applied the Octane ruling in trademark infringement cases, but one Connecticut federal judge refused to apply the Octane standard. In a recent trademark infringement case, the district court refused to award fees to the prevailing defendant on the basis that the motion for fees was untimely and the case was not sufficiently exceptional. On appeal, the Sixth Circuit overturned the ruling that the motion for fees was not timely filed, and remanded back to the district court to give full consideration to whether the case is exceptional enough to merit fees to the prevailing party. The Sixth Circuit noted that the fee-shifting provision in the Patent Act and the Lanham Act are identical and that “statutes using the same language should generally be interpreted consistently.”
Slep-Tone Entertainment Corpor v. Karaoke Kandy Store Inc. et al, Case No. 14-3117 (6th Cir., April 2015).
“BUYAUTOPARTS.COM” Deemed Generic for Online Retail Store Featuring Auto Parts
Applicant sought to register the mark BUYAUTOPARTS.COM on the Supplemental Register for “on-line retail store service featuring auto parts.” Unable to overcome the rejection of the application on the basis that the mark is generic, Applicant appealed to the TTAB and argued that “buy” does not identify a genus of services associated with “selling” and that the mark would be generic only if Applicant purchased auto parts from others. Applicant also argued that the “.com” suffix changes the commercial impression and makes the mark distinctive.
Not surprisingly, the TTAB did not agree with Applicant. The TTAB ruled that the genus was identified in the identification of services, and that general consumers of auto parts comprised the relevant public. The TTAB succinctly affirmed the refusal to register Applicant’s proposed mark based on the following findings: (1) “the central focus of any retail sales service is to facilitate a transaction in which a seller sells, and a buyer buys, a product”; (2) Applicant offers its auto parts for sale only, thus, buying auto parts is a central focus of the service; (3) the record shows that relevant members of the public use and understand the words “buy auto parts” as referring to the retail purchase and sale of auto parts; and (4) “.com” is widely understood to indicate the services are offered online.
In re Meridian Rack & Pinion DBA buyautoparts.com, USPQ2d 1462 (TTAB April 2015) [precedential].
Del Taco Loses Rights to its NAUGLES Trademark
Del Taco acquired the chain of 225 Naugles Mexican fast food restaurants in 1988 and subsequently began closing them down. The last Naugles restaurant was closed in 1995. An individual named Christian Ziebarth petitioned to cancel Del Taco’s federal trademark registration for NAUGLES on the ground that the mark had been abandoned. Del Taco failed in its attempt to convince the TTAB that it had not abandoned its rights in the Naugles trademark for restaurant services and its registration was cancelled.
Under the Trademark Act, a trademark is considered abandoned if use has been discontinued with intent not to resume such use. Nonuse for three consecutive years is prima facie evidence of abandonment.
Del Taco claimed it continued to use the Naugles mark in connection with restaurant services since 1995 because it had used the mark in advertising and on clothing. The TTAB explained that use of a mark in connection with services requires that the mark be used in the sale or advertising of the services and that the services are being rendered in commerce. Thus, use on clothing does not constitute service mark use for restaurant services when there are no restaurants operating under the Naugles name. To support its contention that it had not abandoned the NAUGLES mark, Del Taco submitted a one-page food menu displaying the phrase "Viva Naugles Viva Del Taco." Unfortunately, however, Del Taco's witness could not recall when the menu was created or used and testified that since working for Del Taco in 2009, he had not seen that particular menu. Del Taco also submitted web pages showing use of the "Viva Naugles Viva Del Taco" phrase on the history section of its website. The Board held that those pages merely described the history of the merger of the Naugles and Del Taco chains, and found they were clearly not advertisements for contemporaneously-rendered restaurant services. Finally, Del Taco claimed continued use of the mark because there is a "secret menu" at Del Taco restaurants whereby consumers can order food items previously offered in Naugles restaurants. The TTAB found that even if the record supported use of a secret menu, there was no evidence that the Naugles mark was used in connection with that secret menu. Rather, the evidence suggested that consumers would just order a particular food item. The TTAB concluded there was no evidence of continued use.
Del Taco also argued it did not abandon the mark because it intended to resume use. The only evidence of that intent, however, was two internal marketing presentations made in April 2009 and June 2010 which the TTAB held was "much too late to save [Del Taco's] registration." The TTAB cited to Silverman v. CBS Inc. (9 USPQ2d 1778 (2nd Cir. 1989), in which the 2nd Circuit concluded that the statutory phrase "intent not to resume use" does not mean "intent never to resume use" but, rather, means "intent not to resume use within the reasonably foreseeable future."
Christian M. Ziebarth v. Del Taco LLC, Case No. 92053501 (TTAB April 2, 2015) [not precedential].
Mark Conveying Origin Of Ingredients In Product Is Descriptive
TriVita filed a trademark application for the mark NOPALEA for use in connection with dietary and nutritional supplements containing nopal juice. The examiner rejected the mark as descriptive because TriVita’s products would contain nopal, which is derived from “the nopalea plant.” The TTAB affirmed the rejection, noting multiple websites using Nopalea as the name of a genus of cactus used in food and supplements. Although the term nopal could refer to two different genera of cactus (Opuntia and Nopalea), the TTAB found that nopal and nopalea had been used interchangeably.
The Federal Circuit affirmed, concluding that substantial evidence supported the TTAB’s decision. The Federal Circuit agreed that, because nopalea and nopal had been used interchangeably, and because nopalea described a genus of cactus from which nopal juice is derived, consumers could conclude that TriVita’s products contained ingredients from the Nopalea cactus. The mark was thus descriptive of goods containing nopal juice. The Federal Circuit rejected TriVita’s argument that the average consumer would not be sophisticated enough to know the meaning of nopalea, noting that the TTAB had identified multiple instances of nopal and nopalea being used interchangeably. TriVita also argued that it could ensure that the mark would not be used descriptively because its products were available only through TriVita and its distributors, but the Federal Circuit saw no evidence to support the alleged non-descriptive use.
In re Trivita, Inc., Appeal No. 2014-1383 (Fed. Cir. April 17, 2015).
Federal Circuit Affirms Refusal To Register Disparaging Trademark
Tam filed an application to register the mark THE SLANTS as the name of his Asian-American dance rock band. The Examiner rejected the application under section 2(a) of the Lanham Act, which allows the refusal of “matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” The TTAB affirmed the Examiner’s refusal.
On appeal, the Federal Circuit affirmed and applied the two-part test of In re Geller, 751 F.3d 1355, 1358 (Fed. Cir. 2014), which determines (1) the likely meaning of the matter in question, and then (2) whether that meaning may be disparaging to a substantial composite of an identifiable group. The Federal Circuit found persuasive that, in published interviews, appellant stated, “I was trying to think of things that people associate with Asians. Obviously one of the first things people say is that we have slanted eyes.” It further noted other similar published remarks by appellant as well as the refusal of certain organizations to deal with the band, citing their objection to the “offensive and racist” name. This same evidence was used to determine that the mark was disparaging to an identifiable group.
Appellant further asserted the rejection was unconstitutional and violated his First Amendment rights of freedom of speech because it conditioned a benefit on relinquishment of speech. In addressing the First Amendment argument, the Federal Circuit applied the precedent of In re McGinley, 660 F.2d 481, 484 (C.C.P.A.), which held that rejecting a mark does not abridge the freedom of speech. Nevertheless, Judge Moore included an opinion which outlined the application of the First Amendment to Freedom of speech and argued that McGinley should be revisited in light of subsequent Supreme Court First Amendment rulings.
In re Simon Shiao Tam, Appeal No. 2014-1203 (Fed. Cir. April 20, 2015).