Seattle Trademark Lawyer

Time once again for the STL grab bag!

• On Aug. 20, the Seattle Post-Intelligencer ran Ann Woolner’s syndicated column on Johnson & Johnson’s infringement dispute with the American Red Cross over ARC’s rights to the red cross. Ms. Woolner sided with Johnson & Johnson, concluding if the company “wants to keep what it claims as its 100-year old right to use the mark commercially, it had to either negotiate a compromise or sue. The Red Cross left it with only that one option.”
  
• On Aug. 19, law blogger Marc Randazza wrote a long post about Nautica Apparel Inc.’s TTAB proceeding opposing adult entertainer Shauna Tokumi’s application to register her screen name NAUTICA THORN as a trademark. He was ok with the notice of opposition until Nautica alleged that registration should be refused on the ground that the mark is scandalous or immoral: “Oh, see, now they went and made me mad,” he wrote. “In my opinion, this claim should subject Nautica® to sanctions. … “[I]t appears that Nautica’s® attorneys went way overboard with that claim. Section 2(a) only applies to the mark itself — not the services provided or identified by the mark. The USPTO isn’t supposed to delve into whether the product or services are immoral or scandalous, but solely whether the mark itself is (much to the chagrin of some examiners). This was a gross overreach and Nautica® should have to pay Shauna Tokumi’s fees for dismissing that count. It won’t happen, but they should.” As usual, Mr. Randazza provides a good read.
  
• I have been remiss in reporting on two Seattle law blogs. Really remiss in one case. Seattle attorney Venkat Balasubramani has been writing his blog, Spam Notes, since July 2006. He writes about “Electronic communications, privacy, identity theft, data protection, adware, spyware, and more.” He recently posted a disturbing story about a lawyer who was sanctioned after missing a settlement conference because the court’s minute order didn’t make it past his firm’s spam filter that had been installed earlier that same day. (The District of Colorado’s 10-page order awarding fees against the lawyer here). Ouch!
  
• I feel somewhat less guilty about the other blog, which I can almost passably characterize as “new.” It’s the Open-Government Blog, which Michele Earl-Hubbard and Greg Overstreet began publishing in May in connection with the opening of their new law firm, the Allied Law Group. They write about “open government issues of interest to regular citizens, media, trade associations, and government agencies,” including decisions on Washington’s Public Records Act, Open Public Meetings Act, and the media. These guys are the best at what they do, so I am sure you can count on the o-g blog for breaking news and analysis on Washington’s sunshine laws.

The Society for the Prevention of Trademark Abuse, LLC, completed its purchase of the trademark assets of Leo Stoller’s bankruptcy estate, the Society announced today. (Press release here; background on bankruptcy sale here.) Marks involved in the purchase include STEALTH, SENTRA, TRILLIUM, DARK STAR, TERMINATOR and others, including all registrations and applications owned by Central Mfg. Co. The Society stated its plan is “to convey the marks others may want/need to clear the way for their applications to proceed, [and] wind up all pending proceedings in a manner consistent with the known and trustworthy evidence.” In other words, to restore business as usual — at least to the state that existed before Mr. Stoller opened for business. Well done!

The Seattle Times reports today:

“Starbucks plans to open its first store in Russia next month in the Mega Mall north of Moscow, a spokeswoman said. The company’s business partner in Russia, Kuwait-based M.H. Alshaya, said earlier this year that it planned to open Starbucks shops in Moscow and St. Petersburg in August and have 10 stores in Russia by the end of the year.

“The company’s entry into Russia was delayed for years by a trademark dispute that was resolved last year.”

Here’s some background on the dispute. According to Russian news sources (stories here and here), Starbucks initially registered STARBUCKS as a trademark in 1997 when it began making plans to enter the Russian market. In 2002, however, a company called Press appealed to Rospatent, the Russian trademark office, for rights to the mark on the ground that Starbucks had not used it in the country for more than three years. Rospatent granted its request. Press then sold (or perhaps licensed) the trademark rights to OOO Starbucks, a company reportedly owned by Moscow lawyer — and trademark warehouser — Sergei Zuykov (pictured above). Mr. Zuykov reportedly then offered to sell (or, again, perhaps license) the mark to Starbucks in Leo Stoller fashion for $600,000. The parties litigated the matter before Rospatent, which Starbucks won in 2005. At the time, Starbucks said it had succeeded in cancelling a “pirated version of its logo.” The Seattle Times’ statement that the dispute was “resolved last year” suggests that Starbucks may have settled with Mr. Zuykov following its 2005 win, though that’s not clear.

Mr. Zuykov is a colorful character. A Moscow television news show about him on REN TV stated that “gaps in legislation” have allowed the 39 year-old lawyer to “capture” foreign trademarks and offer them back to their rightful owners. (Transcript here.) The show said Mr. Zukov began dealing in trademarks in August 1998 when he failed at selling car alarms. The show added that “many companies” have paid Mr. Zukov rather than “lose time and their reputation [in] the Russian market.” 

“Now Sergei lives in a fabulous house in the center of Moscow and drives a Mercedes. The money he has got from the new business allows him to support four family members. He thanks God for that crisis and for the new times.”

Mr. Zuykov told the show that “I, at least, do not regard [my acts] as pure piracy. It is not piracy at all. There was a plan, the one you were talking about when trademarks were annulled because they had not been used. This plan is covered by the Paris Convention for the Protection of Industrial Property in 1896.”

On August 14, the Supreme Court of British Columbia denied Issaquah, Wash.-based Price Costco International’s motion to enjoin Surrey, B.C.-based Welcome Warehouse Ltd.’s planned use of PRICECO WAREHOUSE as a trademark in connection with warehouse-style retail stores. Though the court found Costco had made a strong showing of likelihood of confusion, it found the request was premature in light of the parties’ ongoing proceedings before Canada’s Registrar of Trade Marks.

In January 2005, Welcome Warehouse applied to register PRICECO WAREHOUSE. Price Costco, which owns Canadian registrations for PRICE CLUB, PRICE COSTCO, and PRICE COSTCO and Design, opposed the application. In August 2005, the Registrar issued an Approval Notice for the application, signifying it had initially decided that PRICECO WAREHOUSE was registrable.

In December 2005, Welcome Warehouse instituted separate proceedings before the Registrar to expunge Costco’s registrations of PRICE CLUB, PRICE COSTCO, PRICE COSTCO and Design on the ground that Price Costco had abandoned those marks when it rebranded its stores as Costco. (It seems safe to assume that expungement proceedings before the Registrar of Trade Marks are similar to cancellation proceedings before the Trademark Trial and Appeal Board.) Those proceedings are ongoing today.

The court accepted Price Costco’s unchallenged survey evidence showing that 44% of those answering believed that a general merchandise retail store called “Priceco Warehouse” is owned by or affiliated with Costco. Yet, in light of the pending proceedings before the Registrar of Trade Marks and the fact that Welcome Warehouse had not yet used the mark in commerce, Justice Eric Rice was reluctant to grant Costco’s injunction request.

“In my view, it would be unjust to decide this dispute where the alleged infringement consists only of the defendant exercising its rights under the Trade-marks Act to apply to the Registrar,” the court found. “It is not a frivolous application by any means. The evidence of continued use and benefit by the plaintiff is little enough to make the case for abandonment at least arguable.

“As it is, the evidence before me of passing off and infringement falls short. There has been no evidence of actual use of the PRICE WAREHOUSE mark, or anything similar, and no evidence of intention to use it until the Registrar rules in the defendant’s favour.”

The court concluded that Costco and its Canadian affiliate will have a “good case for the remedies they seek if the Registrar decides in their favour and if the defendant does not quit its ambition to have ‘Priceco’ as its trade mark.” The court stated that plaintiffs may renew their application if injunctive relief becomes necessary after the expungement proceedings have concluded.

The case cite is Price Costco Int’l, Inc. v. Welcome Warehouse Ltd., 2007 BCSC 1227, No. SO67934.

The Seattle-based Coffee Politics blog continues to analyze the deal Ethiopia and Starbucks struck in June over the marketing and licensing of Ethiopia’s specialty coffee designations. In particular, it explores the meaning of common law trademark rights and the effect of the parties’ decision to define their rights in terms of “designations” rather than “trademarks.” The officials who negotiated the deal for Ethiopia told the blog last month that the term “designation” offered the country broader rights than “trademark” because it encompassed common law marks. (STL’s recent discussion of the issue here.)

Based on that statement, Coffee Politics polled some intellectual property attorneys for an explanation. Here’s the consensus as to what it found those rights mean in practice:

“In the United States, trademark rights arise through use. Meaning, if a mark is used in connection with goods or services as an indicator of source (i.e., if it’s used as a trademark), then the holder has trademark rights. Those trademark rights can stop a late-comer from using a confusingly similar mark in connection with goods or services. To that extent, the owner of a common law mark has the exact same rights as the owner of a federally-registered mark.

“The main differences between rights stemming from registration and those stemming from common law are that federal registration: (1) gives the beholder presumption of being the exclusive owner of the mark in the United States, (2) the mark will be cited by the United States Patent and Trademark Office (USPTO) against future applicants wishing to register a confusingly similar mark, thereby preventing some confusingly similar marks from becoming registered, and (3) the presumed owner can use the ‘circle-R’ (®) designation to indicate to third parties that they should not adopt a mark that’s too close.

“Depending on the terms of agreement, therefore, common law rights might give Ethiopia, at least in the U.S., not only the temporary protection during the contract period, but also may lead to developing a viable brand in the long run. That is, assuming that all (or most) US distributors recognize Ethiopia as the sole owner of the marks and continue to work with Ethiopia in promoting the names for a longer period of time — long enough to distinctly identify the product ‘coffee’ and acknowledge that ‘Sidamo’ [one of the subject indications] is the only source of that distinct brand, the prospects for Ethiopia to tap into the benefits of branding are real.”

This is a nice discussion of basic trademark principles. Glad to see them being put to good and practical use!