When Faux-Fur Birkin Bags Blur a Famous Mark in the Metaverse

July 1, 2023 · by ·

A year ago, this blog reported about the Hermès v. Rothschild case, a trademark infringement suit filed by French fashion house Hermès against artist Mason Rothschild.

Rothschild had created in December 2021 the MetaBirkins series, a series of 100 non-fungible tokens (NFTs) featuring digital images of blurry Birkin Hermès bags covered in fake fur. The NFTs, which are retaining digital records of ownership of the images on a blockchain, sold “for prices comparable to real-world Birkin handbags” as noted by Judge Jed S. Rakoff, from the U.S. District Court for the Southern District of New York (SDNY), in his May 18, 2022 Order, denying Rothschild’s motion to dismiss.

On December 30, 2022, Judge Rakoff denied the parties’ cross motions for summary judgment, with opinion to follow.

Plaintiff and Defendant had  both asked the Court to answer two questions:

  • Should the MetaBirkins be evaluated using the two-part Rogers v. Grimaldi test used when evaluating trademark infringement in artistic works or the Gruner + Jahr test used for general trademark infringement?
  • Whichever test is applied, do the MetaBirkins dilute the Hermès’ BIRKIN trademarks?

Judge Rakoff published his opinion on February 2, 2023. He reaffirmed, as he did in his May 18,  2022 Order, that the trademark infringement claim should be assessed under the Rogers v. Grimaldi test. However, as genuine issues of material fact remained, the second question had to be answered by a jury, who had to decide whether Rothschild’s decision to focus the series on the Birkin bag was made for artistic expression purposes or merely to use the BIRKIN trademark.

 

The Rogers test

Under the Rogers test, there is no trademark infringement if defendant uses a mark as the title of an expressive work, or as part of the expressive work if use of the trademark (1) does not have any artistic relevance whatsoever to the underlying work and (2) is not explicitly misleading.

For Judge Rakoff, the Rogers test must be used in this case because:

“Rothschild’s use of Hermès’ marks did not function primarily as a source identifier that would mislead consumers into thinking that Hermès originated or otherwise endorsed the MetaBirkins collection, but rather as part of an artistically expressive project.”

Judge Rakoff reasoned that the title “MetaBirkins” refered to both the NFT and the digital images with which it is associated and that  “MetaBirkins” did not, as argued by Hermès, refer only to the NFTs “separate and apart from the digital images” of the faux-fur bags. The NFTs are artistic expression.

Judge Rakoff noted further that Rothschild “viewed the project as a vehicle to comment on the Birkin bag’s influence on modern society”, stating in an interview that the series was “an experiment to see if [he] could create that same kind of illusion that [the Birkin bag] has in real life as a digital commodity”, and that he had decided to cover the bag in fake fur “to introduce “a little bit of irony” to the efforts of some fashion companies to “go fur-free.” Indeed , the artist wrote that the series“ inspired by the acceleration of fashion’s “fur free” initiatives and embrace of alternative textiles.”

While an artistic expression, the First Amendment could not be a defense. Judge Rakoff quoted the  Second Circuit Twin Peaks Prods., Inc. v. Publications 1993 case which held that even if a trademark’s use bears “some artistic relevance” to an underlying artistic work, such use is not protected by the First Amendment if it “explicitly misleads as to the source or the content of the work.”

The Second Circuit noted in Twin Peaks that ”the finding of likelihood of confusion must be particularly compelling to outweigh the First Amendment interest recognized in Rogers” and that the Polaroid factors must be applied to determine whether or not there is likelihood of confusion and thus trademark infringement.

Judge Rakoff explained that “the most important difference between the Rogers consumer confusion inquiry and the classic consumer confusion test is that consumer confusion under Rogers must be clear and unambiguous to override the weighty First Amendment interests at stake.”

The Rogers test was indeed used by a federal jury to determine whether or not the MetaBirkins infringed Hermès’ trademarks, but, following a six-day trial, a jury found on February 14, 2023,  that Rothschild was liable on the claims of trademark infringement, trademark dilution, and cybersquatting, that the First Amendment was not a defense, and awarded Hermès $133,000 in damages.

Trademark dilution and blurring

Hermès had also claimed trademark dilution and blurring, which refers to use of a famous trademark in a way which dilutes such famous mark by blurring or tarnishment.  A famous mark is defined by the Trademark Dilution Revision Act (TDRA) as widely recognized by the general U.S. consuming public as a designation of source of the mark owner’s goods or services.

The jury found that the BIRKIN mark was blurred by Rothschild’s by blurring the  distinctiveness of the famous BIRKIN mark and diminished its capacity to identify and distinguish Hermès’ goods and services, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.

Cybersquatting

The jury also held in favor of Hermès, which had claimed that the <metabirkins.com> domain name was cybersquatting. To prevail on a cybersquatting claim, Hermès had to prove (1) that the BIRKIN mark was distinctive at the time <metabirkins.com> was registered; (2) that the <metabirkins.com> domain name is  identical to, or confusingly similar to, Hermes’ s BIRKIN mark; and (3) that Rothschild had a bad faith intent to profit from the BIRKIN mark.

The court’s instructions to the jury explained that when determining whether Rothschild acted in bad faith on this claim, the jury had to consider whether the artist used the domain name in connection with the offering of any goods or products and whether he “intended to divert consumers from the mark owner’s online location to a site that could harm the goodwill represented.”

Trademarks, symbols and humor

While the primary function of a  trademark is to indicate the source or a product or service, some trademarks have become symbol and are used by consumers to provide a desired cachet, one of luxury and exclusivity in the case of the BIRKIN trademark.

The Birkin bag created by Hermès was named after actress and singer Jane Birkin. While expensive, they sell well: as noted by Judge Rakoff in its February 2, 2023, opinion, since 1986, Hermès has sold over $1 billion worth of Birkin handbags in the United States, $100 million dollars’ worth in the past ten years. Both parties recognized that it is a “symbol of wealth and exclusivity.”

The MetaBirkins sold in total over $1.1 million through June 2022 and it is likely that at least some bought them as symbol of their wealth, taste, and sense of irony. However, unlike in the case of Jack Daniel’s Properties, Inc. v. VIP Products LLC, a case about dog chew toys resembling Jack Daniels bottles, the use of the BIRKIN mark was not humorous.

 

This post was first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments,  Stanford-Vienna Transatlantic Technology Law Forum.
The image of  of “Hermes Carriage Auto Body”  is courtesy of Flickr user Christopher Schmidt and is used, with no modifications, under a CC BY 2.0 license.

 

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A Study in Trademarked Characters

February 22, 2019 · by ·

The characters created by Disney, Marvel, and LucasFilms are valuable intellectual property and are protected both by copyright and by trademark. However, a recently decided case in the Southern District of New York (SDNY), Disney Inc. v. Sarelli, 322 F.Supp.3d 413 (2018), demonstrates that preventing the unauthorized use of such characters may not be as easy as expected.

In this case, Plaintiffs are Disney Enterprises, Marvel Characters and LucasFilm, all of which own copyrights and trademarks in many of the most famous characters in the world, such as Mickey Mouse, Hulk, and Chewbacca. These characters were first featured in movies like Frozen, The Avengers or Star Wars, and are now licensed or featured in derivative products such as comic books, video games, or theme parks. Their exploitation is highly lucrative.

When visiting Plaintiffs’ theme parks, one has a chance to meet the characters “in person.” This experience is also offered by Characters for Hire, a New York company offering, as the name implies, character hiring services. The company’s principal owner is Nick Sarelli (Defendant). Characters for Hire offers a service wherein actors dressed in costumes entertain guests during birthday parties or corporate events. For example, actors have allegedly dressed as Mickey, Elsa and Anna from Frozen, Captain America and Hulk from The Avengers, and Luke Skywalker and Darth Vader from Star Wars.

The contracts Defendants provided to their clients contained disclaimer language, stating, for example, that Defendants do not use trademarked and licensed characters. The contracts also warned clients that the costumes may differ from those seen in movies “for copyright reasons,” adding that “[a]ny resemblance to nationally known copyright character is strictly coincidental.”

These disclaimers did not appease Plaintiffs, who sent several cease and desist letters to Defendants before filing a federal copyright and trademark infringement suit and a New York trademark dilution suit.

While Judge Daniels from the SDNY granted Defendants’ motion for summary judgment and dismissed Plaintiffs’ claim for trademark infringement on August 9, 2018, he denied the motion to dismiss the copyright infringement claim and the trademark dilution claim.

The descriptive fair use defense failed

Plaintiffs claimed that the use of their trademarked characters to advertise and promote Defendants’ business, along with their portrayal by costumed actors, was likely to confuse consumers as to the origin of the services.
Defendants argued that their use of Plaintiffs’ characters was descriptive and nominative fair use, and that there was no likelihood of confusion.

Descriptive fair use is an affirmative defense to a trademark infringement suit, as Section 33(b)(4) of the Trademark Act allows “use… of a term or device which is descriptive of and used fairly and in good faith [but] only to describe the goods or services of such party, or their geographic origin.” In other words, a defendant can use plaintiffs’ trademarks in a descriptive sense, or to describe an aspect of his own good or service.

For such a defense to succeed in the Second Circuit, a defendant must prove that the use was made (1) other than as a mark, (2) in a descriptive sense, and (3) in good faith (Kelly-Brown v. Winfrey at 308). This defense failed in the present case, as Defendants had not made a descriptive use of Plaintiffs’ marks. Instead, Judge Daniels found that their ads “were specifically designed to evoke [Plaintiff’s marks] in consumers’ minds…”

The nominative fair use defense also failed

Defendants also claimed that they used Plaintiffs’ marks to describe their own products. Such nominative fair use is a defense to a trademark infringement suit if such use “does not imply a false affiliation or endorsement by the plaintiff of the defendant” (Tiffany v. eBay at 102-103). But this nominative fair use defense also failed, as Defendants used Plaintiffs’ marks to identify their own service, which is hiring out characters for parties, rather than Plaintiffs’ trademarked characters.

Defendants’ use of characters was not trademark infringement
Judge Daniels used the eight-factor Polaroid test used by the Second Circuit in trademark infringement cases to determine whether Defendants’ use of Plaintiffs’ marks were likely to confuse consumers.

While Plaintiffs’ marks are undoubtedly strong (first factor), the similarity of the marks (second factor), weighed only slightly in Plaintiffs’ favor because Defendants used different names for their characters than Plaintiffs’ trademarked character names, e.g., “Big Green Guy,” “Indian Princess,” and “The Dark Lord” instead of Hulk, Pocahontas and Darth Vader.

The third and fourth Polaroid factors, the proximity of the goods and services, and the possibility that the senior user will enter the market of the junior user, were found to weigh in Defendants’ favor. There was no evidence that Plaintiff has plans to expand into the private entertainment service industry.

The fifth Polaroid factor, evidence of actual confusion, also weighed in Defendants’ favor, as there was no evidence that Defendants’ customers used the names of Plaintiffs’ trademarked characters when referring to Defendants’ services in online reviews or otherwise. Plaintiffs could not provide a survey proving customers’ confusion either.

Judge Daniels found the sixth factor, Defendants’ intent and evidence of bad faith, to also be in Defendants’ favor, since Defendants had put customers on notice that their services were not sponsored by or affiliated with Plaintiffs by using altered versions of Plaintiffs’ characters’ names and by removing Plaintiffs’ characters’ names in their online reviews.

The seventh Polaroid factor, the quality of Defendants’ products, was also in Defendants’ favor, as Defendants’ services, being of a lesser quality than Plaintiffs’, makes it likely that consumers will not be confused as to the source of the services.

The eighth Polaroid factor, consumer sophistication, also was in favor of Defendants, as Plaintiffs did not prove the sophistication level of Defendants’ relevant consumers.

Balancing these eight factors, the SDNY found no likelihood of consumer confusion and denied Plaintiffs’ motion for summary judgment on their trademark infringement claim.

Trademark dilution
Plaintiffs chose to claim trademark dilution under New York trademark dilution law, Section 360-1 of New York Business Law, and not under the Federal Trademark Dilution Act. This choice may have been made because the New York law does not require a mark to be famous to be protected, and a plaintiff only needs to prove the mark’s distinctiveness or secondary meaning.

Judge Daniels found that there was a genuine issue of fact as to whether Defendants’ use of Plaintiffs’ marks is likely to dilute Plaintiffs’ marks by tarnishment. A court will have to determine if Defendants provide services of poor quality.

Copyright

Plaintiffs argued that Defendants had “copied and used the images, likenesses, personas, and names of Plaintiffs’ characters…to promote and advertise its services online.” Defendants argued in response that the characters in which Plaintiffs own copyrights are based on prior works that are part of the public domain.

Both parties will have more chances to pursue their arguments as Judge Daniels denied the motion for summary judgment on copyright infringement. He found that Plaintiffs had presented as evidence screenshots from Defendants’ website and videos allegedly published by Defendants which had not been properly authenticated. More specifically, they had not been authenticated by someone “with personal knowledge of reliability of the archive service from which the screenshots were retrieved,” citing Specht v. Google, a 2014 Seventh Circuit case.

This post has been first published on the TTLF Newsletter on Transatlantic Antitrust and IPR Developments published by the Stanford-Vienna Transatlantic Technology Law Forum.

Image id courtesy of Flickr User Alan Levine, Public Domain.

 

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Defectum Humoris non Curat Lex: The Law Does Not Reward a Lack of Humor

February 22, 2016 · by ·

4003298384_46dd8c3f28_z (2)Plaintiffs in two recent Intellectual Property cases were urged from the bench to have a little bit more humor.

In the first case, Louis Vuitton Malletier, S.A. (Vuitton) sued My Other Bag, Inc. (MOB) for trademark infringement, trademark dilution, and copyright infringement in the Southern District of New York (SDNY). MOB moved for summary judgment and Judge Furman from the SDNY granted the motion on January 6, 2016.

MOB sells canvas tote bags printed with “My Other Bag…” on one side and drawings of luxury handbags, on the other. One of MOB’s bags features a drawing of a Louis Vuitton bag.The handbag at stake reproduced an image drawn to evoke a Louis Vuitton monogram bag, but which did not faithfully reproduce it. For example, the monogram of the MOB bag bears ‘MOB’ initials, not ‘LV’ as in the luxury bags.

Tara Martin, the founder of MOB, testified that the name of her company, “My Other Bag,” was inspired by the “My other car is [insert luxury car]…” bumper stickers often seen on the well-worn bumpers of beaten up or inexpensive cars. Judge Furman wondered if Plaintiff was “perhaps unfamiliar with the “my other car” trope. Or maybe it just cannot take a joke.”

Vuitton claimed the bag diluted its trademark by blurring , but the Judge Furman held that the MOB bags do not dilute the Louis Vuitton trademark by blurring, neither under the Lanham Act, 15 U.S.C. § 1125(c), nor under New York General Business Law § 360-l. Dilution by blurring has been defined by the Second Circuit as “the gradual diminishment of a famous mark’s acquired ability… to clearly and unmistakably distinguish one source through unauthorized use,” Hormel Foods Corp. v. Jim Henson Prods., Inc. The New York statute does not require the allegedly blurred mark to be famous.

Fair Use Defense to Trademark Dilution Claim

The Trademark Act provides for a fair use defense, as 15 U.S.C. § 1125(c)(3) provides that “[a]ny fair use … of a famous mark by another person other than as a designation of source for the person’s own goods or services, including use in connection with… identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner” is not dilution by blurring or by tarnishment.

While the Trademark Act does not define “ parody,” the Fourth Circuit defined it, in a case where Louis Vuitton was also the Plaintiff, as the juxtaposition of “the irreverent representation of the trademark with the idealized image created by the mark’s owner, ”Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC.

Judge Furman found that the MOB bag parodied Louis Vuitton bags and was therefore protected by fair use. The MOB bags clearly indicate to the ordinary observer “that the defendant is not connected in any way with the owner of the target trademark.” Judge Furman reasoned that this is precisely what MOB is conveying, by using the well-worn “my other car is [luxurious and expensive]” joke to convey that MOB bag is not a Vuitton bag, and further noted that

“That joke — combined with the stylized, almost cartoonish renderings of Louis Vuitton’s bags depicted on the totes — builds significant distance between MOB’s inexpensive workhorse totes and the expensive handbags they are meant to evoke, and invites an amusing comparison between MOB and the luxury status of Louis Vuitton.

And the fact that Louis Vuitton at least does not find the comparison funny is immaterial; Louis Vuitton’s sense of humor (or lack thereof) does not delineate the parameters of its rights (or MOB’s rights) under trademark law”

While New York law does provide a fair use defense, the SDNY considered that since New York anti-dilution law is “substantively similar” to federal law, both claims “may be analyzed together,” and noted that “courts have held that when a defendant establishes fair use for purposes of federal law, related state law claims also fail.“

No Infringement of Foot Bag Champion Right of Publicity

In another case, Martin v. Living Essentials, LLC, the holder of the world record for the most consecutive hacky sacks (a sort of footbag) kicks sued the maker of a five-hour energy drink. Martin claimed that Defendant’s commercial infringed his right of publicity rights under the Illinois Right to Publicity Act (IRPA) and also was false advertising under the Lanham Act, 15 U.S.C. § 1125. The commercial featured an actor pretending that Defendant’s energy drink had allowed him, in the last five hours, to perform such diverse feats as disproving the theory of relativity, swimming the English Channel (and back!), finding Bigfoot, and mastering origami while beating “the record for Hacky Sack.”

Judge John J. Tharp, Jr. from the Northern District of Illinois, started his order dismissing plaintiff’s claim with an Oscar Wilde quote: “It is a curious fact that people are never so trivial as when they take themselves seriously.”

Judge Tharp found the IRPA claim to be time-barred and dismissed it, but nevertheless discussed the claim and found it would not have succeed even if Plaintiff’s claim had not been time-barred.

Defendant had argued that it had not used Plaintiff’s name or likeness in its commercial. However, this argument alone was not enough to dismiss the claim, as the IRPA broadly defines “identity” as “any attribute of an individual that serves to identify that individual to an ordinary, reasonable viewer or listener.” Being the holder of a footbag record is indeed part of Plaintiff’s identity.

But Judge Tharp found that the phrase used in the commercial, “the record for Hacky Sack,” does not identify Plaintiff, as it is “far too ambiguous to do so.” Judge Tharp pointed out that there are several other records listed as Footbag Guinness World Record, which Plaintiff himself admitted, thus “effectively conced[ing] the ambiguity of a reference to “the Hacky Sack record.”

But the most conclusive argument in favor of dismissing the case was that the commercial was meant to be a joke, and that the outrageous claims made by the actor “[were] not intended to be taken as true.” Judge Tharp also pointed out that the commercial includes a disclaimer, and portrays someone who not only holds a footbag record, but is also a physics genius, accomplished hunter, swimmer and origami master, which Plaintiff does not claim to be.

Judge Tharp concluded:

“To the maxim de minimis non curat lex, then, let us add a complementary proscription: defectum humoris non curat lex—the law does not reward humorlessness. Martin’s premise that the Commercial exploits his identity because someone might believe that the actor (or whoever he portrays) actually broke Martin’s record depends on an interpretation so blind to its comedic nature that it is unreasonable and therefore beyond the law’s protection.”

Plaintiff’s claims for false advertising claim under the Lanham Act also failed because the commercial is

“an obvious farce that would not lead anyone to believe that Martin, or anyone else, had actually accomplished all of the remarkable feats described. Even unsophisticated consumers would get the joke.”

Therefore, there could not have been any consumer confusion, and the commercial is “better described as farce than mere puffery—upon which no reasonable consumer would rely.“

The judges in these two cases pointed out that Plaintiffs lacked a sense of humor. But they also assumed that consumers (us!) generally have enough sense of humor as not to be confused as to the source of a product, or to the identity of a person. The law assumes that the average consumer has a sense of humor. It is comforting to know.

Image is courtesy of Flickr user RLEVANS under a CC BY-ND 2.0 license.

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TTAB: Fair Use Defense Not Successful in Trademark Dilution Cases if Defendant’s Use is Commercial

May 18, 2015 · by ·

On May 8, 2015, the Trademark Trial and Appeal Board (TTAB) sustained the New York Yankee’s opposition to the registration of three marks because they were likely to dilute by blurring some of the New York Yankees’ famous marks.

The case is interesting because the TTAB firmly stated that the fair use defense in trademark dilution cases, provided by the Trademark Dilution Revision Act, cannot succeed if Defendant’s use is commercial.

IET Products and Services, Inc. (Applicant) was seeking to register “THE HOUSE THAT JUICE BUILT” in class 25 for “T-shirts, baseball caps, hats, jackets and sweatshirts,” THE HOUSE THAT JUICE BUILT in class 21 for “Mugs”, and a design mark showing a top hat atop a syringe. As the TTAB did, we will consider THE HOUSE THAT JUICE BUILT to be one mark, regardless of the quote marks.55844535_950aeb37bf_z

The New York Yankees (Opposer) claimed that these three marks were likely to cause dilution by blurring of its design mark featuring a top hat atop a baseball bat and THE HOUSE THAT RUTH BUILT mark.

Dilution by Blurring

Dilution by blurring is defined by Section 43(c)(2)(B) of the Trademark Act as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” Such dilution can occur even in the absence of confusion or likelihood of confusion, Section 43(c)(1). It suffices that a substantial percentage of consumers are reminded of the famous mark when seeing the junior mark, even if they understand that the origin of the goods or services is not the famous mark.

The Court of Appeals for the Federal Circuit enumerated in Coach Servs. Inc. v. Triumph Learning LLC four factors which must be proven to prevail in a dilution by blurring claim:

(1) the plaintiff “owns a famous mark that is distinctive;

(2) the defendant is using a mark in commerce that allegedly dilutes the plaintiff’s famous mark;

(3) the defendant’s use of its mark began after the plaintiff’s mark became famous; and

(4) the defendant’s use of its mark is likely to cause dilution by blurring or by tarnishment.”

First Factor: Fame

Section 43(c)(2)(A) of the Trademark Act considers that a mark is famous “if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner.” Courts may use four non-exclusive factors to determine if a mark is famous, which are:

  1. The duration, extent, and geographic reach of advertising and publicity of the mark.
  2. The amount, volume, and geographic extent of sales of goods or services offered under the mark.
  3. The extent of actual recognition of the mark.
  4. Whether a mark is registered.

The TTAB found the Top Hat Logo design mark of the New York Yankees to be famous for dilution purposes. The mark has been used for more than 50 years and is displayed at Yankees Stadium during the team home games, which have been broadcast on several national networks, such as ESPN or ABC, on the MLB Network. The mark has also been used in connection with sponsorship with other brands, such as Pepsi-Cola, and has been also used on apparel and on the Yankee’s uniforms.

The TTAB also found THE HOUSE THAT RUTH BUILT mark to be famous for dilution purposes. This mark refers to the original Yankee Stadium in New York, which was nicknamed as such after Babe Ruth joined the team in 1920, shortly after the opening of the stadium, and drew huge crowds there because of his slugging abilities and his huge personality. Opposer introduced as evidence some 2,600 newspaper articles published from 2000 to 2007 containing both “Yankees” and “the House that Ruth Built.” The TTAB found it to be “strong evidence not only that the public and press have come to view THE HOUSE THAT RUTH BUILT as an indicator of source for Opposer … but also that it is a famous mark.” The first dilution element is thus satisfied.

The TTAB found that Applicant used its mark in commerce, as an application based on intent to use a mark in commerce under Trademark Act Section 1(b) satisfies the commerce requirement under the Trademark Dilution Act, and thus the second dilution factor was satisfied. Under the third dilution factor, Opposer had to prove its marks became famous before Applicant filed its intent-to-use application. This was the case here, and the third dilution factor was satisfied. The marks were registered, and so the fourth factor was also satisfied, and the TTAB found both Opposer’s marks to be famous.

Fourth Factor: Whether Applicant’s Mark are Likely to Cause Dilution

The Trademark Act enumerates six non-exhaustive factors which a court may consider to determine whether a mark is likely to cause dilution by blurring. These factors are:

(i) The degree of similarity between the mark or trade name and the famous mark.

(ii) The degree of inherent or acquired distinctiveness of the famous mark.

(iii) The extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark.

(iv) The degree of recognition of the famous mark.

(v) Whether the user of the mark or trade name intended to create an association with the famous mark.

(vi) Any actual association between the mark or trade name and the famous mark. 

First Likely to Cause Dilution by Blurring Factor: Degree of Similarity between the Mark and the Famous Mark

When determining whether a mark is likely to dilute a famous mark by blurring, the TTAB does not conduct a Section 2(d) likelihood of confusion analysis, but, rather, examines the degree of similarity or dissimilarity of the marks, in their entireties as to appearance, connotation, and commercial impression, Research in Motion Ltd. v. Defining Presence Marketing Group Inc., 102 USPQ2d 1187, 1198 (TTAB 2012).

The TTAB found that the Applicant’s Top Hat and Syringe design mark does trigger consumers to conjure up Opposer’s famous Top Hat and Baseball Bat design mark. When the two marks are presented side-by-side, “[t]he overall similarity between the two design marks is immediately apparent. Each incorporates a circle and features a similarly patterned top hat resting atop a slender object leaning to the right.”

Applicant argued that its word mark was an “irreverent” version of Opposer’s word mark and “an expressive and jocular reference to the newsworthy and public issue of the use of performance enhancing drugs (“PEDS”) by Major League Baseball (“MLB” players – including players affiliated with Opposer’s baseball club”. For the TTAB, Applicant’s word was sufficiently similar to Opposer’s mark to triggered consumers to conjure up Opposer’s famous word mark.

Second Likely to Cause Dilution by Blurring Factor: Degree of Inherent or Acquired Distinctiveness of the Famous Mark

The TTAB found Opposer’s Top Hat design mark and word mark to be inherently distinctive, and thus this factor favored the New York Yankees.

Third Likely to Cause Dilution By Blurring Factor: Extent to Which the Owner of the Famous Mark is Engaging in Substantially Exclusive Use of the Mark.

The TTAB found no evidence of any third-party use of Opposer’s Top Hat design. Applicant had argued that Opposer’s work mark had already been diluted by seven other marks, such as THE HOUSE THAT FRIED CHICKEN BUILT or THE HOUSE THAT JACK BUILT and produced printouts of their registration and Internet printouts displaying these marks. However, the TTAB was not convinced as “[t]hird-party registrations are not evidence of use” and Internet printouts only prove the existence of these websites, not that the public may have been aware of the information there published. Also, Applicant did not introduce any evidence “as to the extent of the use and promotion by third parties of their HOUSE THAT _____ BUILT marks,” which is necessary to assess whether a particular use is so widespread that it does have an impact on consumer’s perceptions.

Fourth Likely to Cause Dilution by Blurring Factor: Degree of Recognition of the Famous Mark

The TTAB found this factor to be neutral for Opposer’s Top Hat design mark, as there was not enough evidence to infer the degree of recognition of the mark. However the TTAB found THE HOUSE THAT RUTH BUILT to be a widely recognized mark.

Fifth Likely to Cause Dilution by Blurring Factor: Whether User of the Mark Intended to Create an Association with the Famous Mark

Applicant admitted that its marks create an association with Opposer’s marks, but claimed that its Syringe Top Hat design mark and its word marks were fair use. Indeed, Section 43(c)(3)(A) provides for a fair use and a parody defense against dilution claims. However, the fair use defense failed in our case as the TTAB pointed out that “Applicant’s argument ignore[d] the language of Section 43(c)(3)(A)… which limits the fair use exclusion as defined in the statute to use of a famous mark other than a designation of source for the person’s own goods or services.” Also, section 43(c)(3)(C) limits the fair use exclusion to “noncommercial use.” In other words, the fair use defense cannot apply in dilution cases if the use is commercial and acts as a designation of source.

Applicant also claimed that its Syringe Top hat design mark and its work marks were a parody, and that a parody, it was successful because it created an association with Opponent’s design mark. But the parody defense failed, because the TTAB refused to consider the parody defense as part of its assessment of the dilution, because Applicant’s marks were used in commerce.

The TTAB thus strongly signals that parody defenses are not likely to be successful in dilution cases, as it “[found] it virtually impossible to conceive of a situation where a parody defense to a dilution claim can succeed in a case before the Board.” The TTAB expressly stated that this case was an opportunity “to modify [its] prior suggestion in Research in Motion that an alleged parody should be considered as part of [its] dilution analysis even when parody does not provide a safe harbor for a defendant.” The TTAB had followed in its Research in Motion decision the Fourth Circuit Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC 2007 decision. In this case, the Court had held that the dog toy “Chewy Vuiton,” which sold for less than $20 and crudely represented a Louis Vuitton bag was a successful parody of the Louis Vuitton bags and trademarks. Another court, the 10th Circuit, had found in 1987 that using “Lardashe” as a mark for larger-size women’s blue jeans was a successful and permissible parody of “Jordache” jeans, Jordache Enterprises, Inc. v. Hogg Wyld, Ltd. In Louis Vuitton Malletier, the Fourth Circuit found the pet toy to be “an irreverent, and indeed intentional, representation of an LVM handbag, albeit much smaller and coarse.” In our case, the fact that the goods sold under Applicant’s marks were the same (tee-shirts and mugs) than the ones sold by Opposer may have influenced the TTAB’s decision.

If Applicant would not have, well, applied to register the trademarks, but, instead, would have used them in, say, a blog written to denounce PED use in major league baseball, the parody defense would have likely be successful, as the use would not have been in commerce. The TTAB found the sixth dilution by blurring factor, the actual association between the mark and the Famous mark to be neutral, as only twenty-two shirts bearing Applicant’s marks, and no mugs, had been sold. This was indeed a very limited use of the marks in commerce. However, the marketing plans of Applicant are unclear, and they may very well have anticipated greater sales.  The Yankees did not strike out at the TTAB.

Image of Yankee Stadium is courtesy of Flickr user Severin St. Martin under a CC BY 2.0 license.

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Filed Under: Sports Law, Trademark · Tagged: , ,

Adidas Files Trademark Infringement Suit Against Marc Jacobs Over Stripes

April 15, 2015 · by ·

U.S. law does not grant copyright protection to clothes, because they are considered by the Copyright Act to be useful articles which cannot be protected by copyright. Indeed, under Section 101 of the Copyright Act, “the design of a useful article… shall be considered a pictorial, graphic, or sculptural work [and thus protectable by copyright] only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” That means that if a part of the design of the garment can be separated from the useful part of the garment, this separate part can be protected by copyright.3963999187_399a43d93d_z

Fashion companies can also protect some of their designs by applying for a patent or by registering them as a trademark. Such is the case for Adidas’ three stripes design, which is also a registered trademark (the Three-Stripes Mark).

Does that mean that no other designer may feature three parallel stripes, or even four parallel stripes, on a particular garment? This will have to be decided by the District Court of Oregon, where adidas America and adidas AG (Plaintiffs) filed suit on April 8 against Marc Jacobs International, LLC (Defendant), claiming that that a Marc by Marc Jacobs’s jacket featuring four parallel stripes on its sleeves infringes adidas’ Three-Stripes Mark.

Plaintiffs allege that this constitutes trademark infringement, trademark dilution, and unfair and deceptive trade practices. They are asking the District Court of Oregon to permanently enjoin Defendant from manufacturing and selling these models, or other models which would similarly infringe on the Three-Stripes Mark, to stop using this mark, and to order the destruction of goods and materials using the mark. They are also asking the court to award them monetary and punitive damages and to enjoin Defendant to disgorge all profits from the sale of the allegedly infringing goods.

The case is Adidas America, Inc. v. Marc Jacobs, 3:15-cv-00582.

The Three-Stripes Mark

Plaintiffs own several trademarks for three parallel stripes on garments, as, for instance, the registered trademark No. 2,058,619 for “sports and leisure wear, namely shirts” which consists of “three parallel bands positioned along the length of each sleeve of a shirt.” It also owns several trademarks which use the term “3 stripes,” such as THE BAND WITH THE 3 STRIPES mark, which is registered in class 25 for sport and leisure wear.

Plaintiffs contend that the public recognizes these three-stripes as an indication of origin of adidas  goods, and listed in its complaint several uses by the media of three stripes “when describing adidas and its products.

Adidas Y-3 line

The adidas Y-3 line is designed by Japanese designer Yohji Yamamoto. It was first introduced in 2002 and is sold in department stores and in adidas’ stores. Many of the Y-3 clothes feature three stripes on their shoulders, front or back, or on the sleeves.

Marc Jacob’s Jacket

Plaintiffs allege that a jacket manufactured and sold by Marc Jacobs infringes the Three-Stripes Mark. The complaint provides photographs of the jacket which features four stripes on its sleeves, a design which the complaint states is likely to be confused by the public for an adidas Three-Stripe Mark.

Similarity and Trademark Infringement

As this is not a copyright infringement suit, but a trademark infringement suit, the court will not examine if both designs are substantially similar. Instead, it will examine if the stripes featured on Defendant’s model is recognized by the general public as an indication of origin of goods, and if there is a likelihood of confusion between the stripes as used by defendant on its jackets and the Three-Stripes Mark. The Oregon district court will use the Ninth Circuit Sleekcraft factors to determine a likelihood of confusion. These factors are the strength of the mark, the proximity of the goods, the similarity of the marks, evidence of actual confusion, the marketing channels used, the degree of care exercised by customers, the defendant’s intent in selecting the mark, and the likelihood of expansion of the product lines.

It remains to be seen if the court will be convinced that four stripes on a garment infringes the Three Stripes Mark. However, if Plaintiffs are unsuccessful in their trademark infringement claim, they may still be successful in their dilution claim.

Trademark Dilution

The complaint also alleges that the Three-Stripe Mark is famous, and that its unauthorized use by Defendant dilutes its distinctiveness in violation of 15 U.S.C. § 1125(c), which entitles the owner of a famous mark to an injunction against a third party using a mark in commerce “that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.”

Since October 2006, when the Trademark Dilution Revision Act was enacted, a Plaintiff only needs to prove a likelihood of dilution, not an actual dilution. The Act defines a famous mark as a mark “widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner,” which may be determined by the courts using several factors, such as the duration, extent, and geographic reach of advertising and publicity of the mark, the amount, volume, and geographic extent of sales of goods or services offered under the mark, and the extent of actual recognition of the mark. The Three-Stripes Mark is certainly famous, and is also certainly distinctive.

Dilution by blurring is defined by 15 U.S.C. § 1125(c) as an “association arising from the similarity between a mark or trade name and a famous mark that impairs the distinctiveness of the famous mark.” The law lists several factors which may be used by the courts to determine whether the junior mark is likely to cause blurring, including the degree of similarity between the mark or trade name and the famous mark, the degree of inherent or acquired distinctiveness of the famous mark, the extent to which the owner of the famous mark is engaging in substantially exclusive use of the mark, the degree of recognition of the famous mark, whether the user of the mark or trade name intended to create an association with the famous mark, and any actual association between the mark or trade name and the famous mark.

Therefore, even if the court would find that the stripes on the Marc Jacobs jacket do not infringe Plaintiffs’ trademark, the court may still find that they are so similar as to dilute the Three-Stripes Mark.

Image is Courtesy of Flickr user Kick Photo under a CC BY-ND 2.0 license.

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Filed Under: Fashion Law, Trademark · Tagged: , ,