Seattle Trademark Lawyer

A reader posted the following comment to yesterday’s post about the CreAgri v. USANA priority case: “I have to wonder what happened with Plaintiff’s common law (California) trademark claims. The opinion seemed to focus on the narrow federal issue of whether the ‘use in commerce’ was lawful. From what I can tell, it doesn’t state that the requirement would be the same for common law TM claims.

“I guess I could look through all the docs on PACER, but if you have an idea of how the federal claim & state claim interact on this “lawful” priority issue, I would be interested to hear it.”

I was curious, too, so I looked at the underlying summary judgment order that the Ninth Circuit affirmed. CreAgri alleged five state-law claims: violation of Section 17500 of the Business & Professions Code (false advertising); violation of Section 17200 of the Business & Professions Code (unfair or unlawful acts); common law unfair competition; intentional interference with economic relationship; and negligent interference with economic relationship.

The Northern District found: “Each of these five state law counts are wholly predicated on USANA’s alleged acts of trademark infringement. For the reasons stated above [relating to priority and “lawful” use in commerce], Creagri cannot prove a claim of trademark infringement and, consequently, cannot establish any of its state law claims.”

The Ninth Circuit summarily agreed. In a footnote, it stated: “Summary judgment was also properly granted as to CreAgri’s non-trademark infringement claims and USANA’s request for declaratory judgment, as these claims also hinged on Olivenol’s trademark priority — or lack thereof — over Olivol.”

Good question. I hope this answers it.

The Ninth Circuit today determined a trademark priority case based not on the first use in commerce, but on the first “lawful” use in commerce.

Plaintiff/Appellant CreAgri, Inc., began selling the dietary supplement OLIVENOL before defendant/Respondent USANA Health Services, Inc., filed its intent-to-use application to register OLIVOL for nutritional supplements. However, it was undisputed that at all times before USANA’s priority date, the OLIVENOL supplement violated federal labeling laws.

Based on this violation, the Northern District of California granted USANA’s motion for summary judgment dismissing CreAgri’s infringement claim. The Ninth Circuit affirmed. It wrote: 

“If ‘use in commerce’ were the only requirement for acquiring trademark rights, then CreAgri would have an easier path to establishing priority of its mark because it began selling Olivenol more than one year before USANA’s intent to use application was filed.

“But the inquiry does not stop with use in commerce. It has long been the policy of the PTO’s Trademark Trial and Appeal Board that use in commerce only creates trademark rights when the use is lawful.”

The Ninth Circuit’s published opinion in CreAgri v. USANA, __ F.3d. __, 2007 WL 92684 (9th Cir.), is available here.

Mark your calendars — Graham & Dunn will host a roundtable on “Legal Issues in Marketing and Advertising” at noon on January 30. The event is sponsored by the International Trademark Association, which coordinates registration ($45 per person, including lunch) and provides the discussion outline with suggested reading. This a great opportunity to mingle with your fellow Seattle trademark professionals and keep up with new developments in the law. Hope to see you there!

After a seven-day bench trial in October, the Central District of California this month found that KETTLE is generic for potato chips.

Plaintiff Classic Foods International Corp. sought a declaratory judgment that its use of the term “kettle” in its “Kettle Classics” brand potato chips did not infringe defendant Kettle Foods, Inc.’s rights in its “Kettle Chips” brand of potato chips. Defendant counterclaimed, alleging that plaintiff infringed its KETTLE mark, which defendant argued was protectable as a descriptive mark in which it had secondary meaning.

Judge Cormac Carney found that KETTLE was generic for a type of potato chip, namely, kettle chips, making it unprotectable as a trademark. In the court’s words:

“The evidence is overwhelming that the terms ‘kettle’ and ‘kettle chips’ refer to a particular type, category, or genus of potato chips. Kettle chips are chips that either have been, or appear to have been, cooked in a kettle. Moreover, consumers and producers alike have come to use the term ‘kettle chip’ to describe a potato chip that is hand-cooked, crunchy in texture, and sweeter in flavor. Thus, any descriptive function performed by ‘kettle’ or ‘kettle chips’ describes attributes that are shared by all chips in the kettle chips category. The primary significance of the terms is to identify a type of potato chip and, therefore, they must be generic.”

The court’s January 2 memorandum of decision entering judgment for plaintiff is accessible here.

Cisco Systems, Inc., may have abandoned its IPHONE trademark. The affidavit of use that Cisco filed last year to maintain its registration reportedly was supported by a photo of the packaging of a CIT200-branded phone that only had the IPHONE mark attached to it with a sticker. As ZDNet’s Ed Burnette explained in his Dev Connection blog:

“A search of product reviews of the CIT200 shows no mention of the word iPhone. The first mention appeared in December 2006 when Cisco unveiled a series of new products bearing the iPhone name. It was not until then that the CIT200 was rebranded under the iPhone moniker.”

If Cisco really failed to use IPHONE, it would lose its rights in the mark and not be able to support at least some of its claims against Apple Inc. Indeed, if Cisco’s affidavit of use contained a false statement of fact, its registration could (and should) be cancelled.

The next company with priority for IPHONE? According to Mr. Burnette, it is Ocean Telecom Services LLC, which he says is “widely regarded as a front company for Apple.”

If this surprising development is true, it’s no wonder Apple didn’t agree to license the mark from Cisco last week as was widely expected.