Seattle Trademark Lawyer

Easy come, easy go.

On April 4, LifeWise Assurance Co. filed a trademark infringement lawsuit in Seattle claiming that rival Regence Life and Health Insurance Co.’s adoption of LIFEMAP infringes LifeWise’s LIFEWISE trademarks. (STL post here.)

The suit came three days after Regence Life allegedly changed its name and house mark.

Nineteen days after filing, LifeWise voluntarily dismissed its complaint without prejudice. LifeWise could do so as a matter of right because Regence Life had not yet answered.

Boringly good? I don’t know, but its lawsuit was boringly short.

Time will tell whether LifeWise’s trademark infringement lawsuit will be
“boringly good.” (Screen shot from LifeWise’s Web site)

Health insurer LifeWise has sued competing health insurer Regence Life for trademark infringement.

LifeWise Assurance Co. and affiliates claim Regence Life and Health Insurance Co.’s adoption of LIFEMAP infringes their LIFEWISE registered trademarks.

Both health insurers do business in Washington and Oregon.

LifeWise filed suit after Regence Life allegedly changed its name to “LifeMap Assurance Company” and its house brand name to LIFEMAP. The change allegedly occurred on April 1.

“The new corporate and brand names represent an obvious and intentional copy of the ‘LifeWise Assurance Company®’ and ‘LifeWise®’ servicemarks, and are confusingly similar to the LifeWise® branded products and services offered by Plaintiffs,” the complaint alleges.

LifeWise filed suit on April 4. Regence Life has not yet filed its answer.

The case cite is LifeWise Assurance Co. v. Regence Life and Health Insurance Co., No. 12-00568 (W.D. Wash.).

Big keyword advertising decision today: the Fourth Circuit decided Rosetta Stone v. Google.

The court did the right thing. It vacated the district court’s exceedingly Google-friendly decision incorporating sloppy analysis and incorrect application of trademark law, and remanded for the Eastern District of Virginia to reconsider the case in light of proper standards.

In the end, I think the result will be the same — on re-examination, Google won’t be directly or indirectly liable for counterfeiters’ purchase of Rosetta Stone’s trademark as a search engine keyword. But this time, the analysis won’t be tortured and misleading. 

For example, the district court found Google wasn’t liable for selling Rosetta Stone’s trademark as a keyword because its use of the mark was functional. That finding stood the functionality doctrine on its ear. The proper place for functionality analysis is to examine the plaintiff’s trademark (or, more commonly, trade dress) for whether it serves a useful purpose. (A trademark isn’t protectable as a trademark if it serves a useful purpose other than identifying the product’s source.) The district court instead examined the defendant’s use of the trademark, which was strange, wrong, and not helpful.

The Fourth Circuit left no room for the district court to get it wrong on remand.

“The functionality doctrine simply does not apply in these circumstances. The functionality analysis below was focused on whether Rosetta Stone’s mark made Google’s more product more useful, neglecting to consider whether the mark was functional as Rosetta Stone used it. Rosetta Stone uses its registered mark as a classic source identifier in connection with its language learning products. Clearly, there is nothing functional about Rosetta Stone’s use of its own mark; use of the words ‘Rosetta Stone’ is not essential for the functioning of its language-learning products, which would operate no differently if Rosetta Stone had branded its product ‘SPHINX’ instead of ROSETTA STONE. Once it is determined that the product feature — the word mark ROSETTA STONE in this case — is not functional, then the functionality doctrine has no application, and it is irrelevant whether Google’s computer program functions better by use of Rosetta Stone’s nonfunctional mark.

“As the case progresses on remand, Google may well be able to establish that its use of Rosetta Stone’s marks in its AdWords program is not an infringing use of such marks; however, Google will not be able to do so based on the functionality doctrine. The doctrine does not apply here, and we reject it as a possible affirmative defense for Google.”

The Fourth Circuit similarly vacated the district court’s dismissal of Rosetta Stone’s claims for direct trademark infringement, contributory trademark infringement, and dilution. It affirmed the district court’s dismissal of Rosetta Stone’s claims for vicarious trademark infringement and unjust enrichment.

The decision is what I had expected, and what I had hoped for. It requires district courts to apply trademark principles with rigor and gives the non-moving party on summary judgment the benefit of the reasonable inferences that can be drawn from the evidence presented, in accordance with established summary judgment principles.

The case cite is Rosetta Stone Ltd. v .Google, Inc., No. 10-2007 (4th Cir. April 9, 2012).

David Donoguhe’s Chicago IP Litigation Blog features a new decision from the Northern District of Illinois.

The punch line is if you’re a corporate officer, you can’t expect to find protection behind the corporate shield if you were involved in directing your company to infringe a trademark.

That may come as a surprise, but the law’s by no means unique to the Seventh Circuit. A case out of the Central District of California last year summarizes the rule of law in these parts as well:

“An individual who personally directs a corporation in committing trademark infringement, or who personally commits those acts, is personally liable for that infringement.

“This is particularly true when a single individual is the corporation’s sole shareholder, sole officer, and sole manager, and performs the infringing acts himself; that person will be individually liable for the intellectual property infringements committed by the corporation. Such personal liability does not depend on piercing the corporate veil.”

See Partners for Health & Home, L.P. v. Seung Wee Yang, No. 09-07849, 2011 WL 5387075 (C.D. Cal. Oct. 28, 2011).

This means that regardless if you’re at the helm of a big company — or serve as both CEO and chief bottle washer at a small company — you can be personally liable if your firm is on the hook for trademark infringement.

In other words, you personal assets could be at risk. That’s not to mean the sky is falling. It’s just to say that you could have more of a personal interest in how your company’s trademark case turns out than you might have thought.

Yesterday’s post was about false advertising, which got me thinking…. What are things a competitor can’t do in competing with you to make a sale?

Here’s a quick rundown:

• It can’t create a likelihood of confusion with you, if you came first. This is the essence of trademark infringement. A later-adopter can’t come into your market with a name or brand that is likely, i.e., probable, to confuse consumers into thinking that its goods or services come from you, are approved by you, or are affiliated with you. It doesn’t matter if your trademark is registered, since trademark rights automatically arise from use. It doesn’t even matter if your competitor was innocent in creating the likelihood of confusion. If its brand, company name, product name, or other marketing tool tends to mislead customers into thinking your competitor’s goods or services come from you, you may be able to put a stop to it. Caveats exist, but this is where the inquiry starts.
• It can’t misrepresent its product or your product. The right to free speech isn’t unlimited. Just like you can’t yell “fire” in a crowded theater, your competitor can’t lie about the qualities of its product or make a false comparison to your products. That means Honda can say Toyota’s cars are wimpy (in its humble opinion), but it can’t say its cars get twice the gas mileage Toyotas get when that’s not true (since it’s a statement of fact that’s provably false). 
• It can’t use your trademark in its domain name. This is cybersquatting. It means no one — regardless of whether they’re a competitor — can register your trademark (or a confusingly similar variation) as part of its domain name in the hopes of either ransoming the domain name to you or profiting from Web traffic that was meant for your site. The Lanham Act provides for statutory damages that begin at $1,000 and go up to $100,000 per infringing domain name, as well as an award of attorney’s fees. Again, there are caveats, but the Anticybersquatting Consumer Protection Act gives trademark owners a big stick to use against bad actors that hope to take wrongful advantage of your brand in their domain names.
• It can’t use your brand as a search engine keyword. Maybe. This is still up in the air. But the Central District of California last year slapped one law firm from buying its competitor’s trademark as a search engine keyword, finding its doing so constituted willful trademark infringement. The court doubled the trademark owner’s lost profits to $292k and awarded it attorney’s fees. See Binder v. Disability Group, Inc., 772 F. Supp. 2d 1172 (C.D. Cal. 2011). It’s still a gray area, but Binder might get traction. It’s certainly gotten some courts’ attention.
• Other things your competitor can’t do. If your brand is a household name, no one (competitor or not) can use it in a way that would tend to lessen the impact your brand has on consumers. That’s trademark dilution. If you manufacture goods, no one can put your trademark on goods that aren’t made by you. That’s counterfeiting. A competitor can’t say its goods — most commonly agricultural products — come from your special part of the world if they don’t. (This means a shellfish company can’t say its oysters come from pristine Penn Cove when they were grown in less favorable waters.) That’s a false designation of origin. 

This list isn’t exhaustive, and there are a lot of gray areas. But hopefully this will help you put a label on your competitor’s bad acts when you know in your gut what they’re doing isn’t fair.

Next time: You mean they can get away with that? Things competitors can say about your products and you in the course of honest competition.