Infringe once, shame on you, infringe twice…

When can a court’s judgment for intellectual property infringement prevent a party for being sued again for the same type of conduct? In Marcel Fashions Group v. Lucky Brand Dungarees, Inc., the Second Circuit Court of Appeals explored such an issue. Both parties to the case make jeans, with the plaintiff (“Marcel”) owning a federal registration for the mark “Get Lucky” and the defendant (“Lucky Brand”) owning a federal registration for the trademark “Lucky Brand.”

The parties have been previously involved in multiple rounds of litigation over the Lucky Brand’s infringement of the mark “Get Lucky.” In 2003, this litigation resulted in a settlement forbidding Lucky Brand from using the mark “Get Lucky.” In 2005, another litigation ensued over Lucky Brand’s breach of the settlement agreement – Marcel emerged victorious, obtaining money damages against Lucky Brand for all breaches of the settlement since 2003 and a court injunction prohibiting Lucky Brand from using the mark “Get Lucky”; Marcel nevertheless failed to obtain injunctions against Lucky Brand’s use of other trademarks that include the word “lucky,” such as “Lucky Brand.” Leading to the present decision, Marcel and Lucky Brand clashed in litigation again in 2011, with Marcel once again suing Lucky Brand for money damages for infringement of the “Get Lucky” mark and seeking an injunction against the use of the mark “Lucky Brand”.   Lucky Brand argued that all claims in this litigation have already been decided in 2005 – that Marcel has already been compensated for all breaches of the 2003 settlement and that Marcel already tried, but failed, to obtain the injunction; accordingly, Lucky Brand argued, the lawsuit should be dismissed.

The Court of Appeals refuted Lucky Brand’s arguments and allowed the case to proceed forward. First, the Court reasoned, there is no sense in construing the 2005 decision as awarding damages for acts of infringement that have not occurred yet at that point of time. The Court also ruled that failing to obtain an injunction in a prior action does not prevent one from seeking the injunction in a later case; on the contrary, if money damages are not enough to stop infringement, the need for the injunction becomes clearer.   Thus, being found liable for infringement once does not immunize a party from being sued for new alleged acts of the same type of conduct.



A matter of tack

Yellow_push_pinIn —Hana Financial, Inc. v. Hana Bank et al., 574 U.S. ___ (2015), the U.S. Supreme Court addressed a split between circuits on determination of whether the “tacking” doctrine is available in a given case. Plaintiff Hana Financial, Inc. sued defendant Hana Bank for trademark infringement. Hana Bank is a Korean entity that was founded in 1971 as the Korea Investment Financial Corporation. In 2002, they began operating in the United States as “Hana Bank.” Hana Financial incorporated in California in 1994 and obtained federal trademark registration of their name two years later. At trial, Hana Bank raised the tacking doctrine in defense and the jury returned a verdict in their favor that was subsequently affirmed by the Ninth Circuit Court of Appeals.

“Tacking” is a lower court doctrine holding that two marks may be tacked when they are considered to be “legal equivalents” that “create the same, continuing commercial impression” such that consumers “consider both as the same mark.” Writing for a unanimous court, Justice Sotomayer observed that when the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decision maker that ought to provide the fact-intensive answer. Since “commercial impression” “must be viewed through the eyes of a consumer,” application of the “tacking” doctrine is a test that “falls comfortably within the ken of a jury.” Thus, when a jury trial has been requested (and the facts neither warrant a JMOL nor summary judgment), whether two trademarks may be tacked for purposes of determining priority will be a question for the jury.

A wonderful blend of juicy fruits

055-150x300On June 12, 2014, in POM Wonderful LLC. v. Coca-Cola Co., the U.S. Supreme Court held that a company may bring suit under the Lanham Act for unfair competition arising from false or misleading product descriptions, even though the Federal Food, Drug, and Cosmetic Act (FDCA) gives the Food & Drug Administration exclusive enforcement authority over misbranding of food and drink. Pom Wonderful LLC (“POM”) is a California business that grows pomegranates and distributes pomegranate juices, including a pomegranate-blueberry juice blend. POM sued The Coca-Cola Company (“Coca-Cola”) for unfair competition based on Coca-Cola’s sales of a pomegranate-blueberry juice blend through their Minute Maid subsidiary. While POM’s pomegranate-blueberry juice blend contained 85% pomegranate juice and 15% blueberry juice, Coca-Cola’s juice blend contained just 0.3 percent pomegranate juice, 0.2 percent blueberry juice, 0.1 percent raspberry juice, and 99.4 percent apple juice and was less expensive to produce and sell. (The pomegranate-blueberry component “amounts to a teaspoon in a half gallon.”) The Court applied established statutory interpretation rules to the Lanham Act and FDCA to find the acts to be complimentary, not preclusive. Although both acts concern food and beverage labeling, the Lanham Act protects commercial interests against unfair competition, while the FDCA protects public health and safety. As a result, competitors are free to bring Lanham Act claims for food and beverage labels that are also subject to regulation under the FDCA.

Use It (Correctly) or Lose It: Best Practices For Proper Trademark Usage

A trademark protects words, names, symbols, sounds, or colors that distinguish goods and services from those manufactured or sold by others and indicates the source of the goods and services. 15 U.S.C. § 1127.

Trademark rights are based upon use of the mark. Accordingly, proper use of a trademark is critical to obtaining registration and for maintenance of the mark, as well as in weighing enforcement of trademark rights against an infringer.

Below we present some general guidelines on proper trademark usage.

1. Provide Notice

For a trademark or service mark registered with the United States Patent and Trademark Office, use the ® symbol in connection with the trademark, which signifies a federally-registered mark. Use of the ® symbol is not permitted with non-federally-registered marks. Failure to provide notice of a registered mark can be considered misuse and could result in abandonment of the trademark, as well as a possible reduction in the amount of damages for infringement.

For non-federally-registered marks, use “TM” in connection with goods and “SM” in connection with services where common law trademark protection is claimed. Although not required, the use of “TM” and “SM” supports correct trademark usage as a source identifier.

The above notations are generally placed above the right end of the mark. If the mark is used repeatedly within a document, providing notice within the title and with the first use in the body is sufficient.

However, when using a mark as a reference to a corporate entity instead of as a brand, use of a notice symbol is unnecessary.

2. Distinguish the Mark

Along with providing notice, for trademarks that include words, consider offsetting the mark by using typography different than the surrounding text. For example, capitalize, underline, boldface, italicize, or use a different size of font for the mark to create a distinction in the mind of the public between the mark and the goods or services that are provided by your business.

3. Always Use the Mark as an Adjective

Be sure to only use the trademark as an adjective, never as a noun or verb, when in combination with the general term for the product or service offered, and never use the mark in place of the general term. For example, “use a Kleenex® facial tissue for a runny nose” is proper, while “use a Kleenex for a runny nose” would be improper.

4. Affix the Mark

A trademark must be “affixed” to a good or used in connection with a service to function as a source identifier. A trademark can be affixed by placing the mark directly on the good, on a tag or label attached to the good, or on packaging containing the good, while a trademark for a service can be affixed by using the mark in connection with advertising or other promotional materials, or placed on letterhead or invoices.

Do not affix a service mark to goods, or a trademark to services.