Seattle Trademark Lawyer

Eric Goldman of the Technology & Marketing Law Blog had a great post April 9 about Utah’s key word advertising statute, which STL discussed here. In it, he links to bill sponsor Sen. Dan Eastman’s blog defending the statute, and offers an insightful critique. He concludes:

“Sen. Eastman’s intransigence (“I make no apologies”) is understandable but unfortunate. This law will fail in the courts, and it would be a true public service to declare a “mea culpa” than to waste a lot of Utah taxpayers’ money in a futile defense of the law.”

Prof. Goldman also links to other resources on this issue. It’s a good read.

On March 28, the Southern District of Texas granted a preliminary injunction in Pet Silk, Inc. v. Jackson, No. 06-2465, __ F.Supp.2d __, 2007 WL 951635 (S.D. Tex.), against two defendants based on the Trademark Dilution Revision Act. In doing so, it became the first district court to interpret the lessened burden of proof in a favor of the plaintiff.

Plaintiff Pet Silk (PSI) sells pet grooming products through distributors worldwide. It is the exclusive licensee of the registered trademark PET SILK. Defendants Robert and Maria Jacobson, doing business as MJM Company, were an approved distributor of PET SILK products for four years. MJM operated and continues to operate several websites, including www.petsilkonline.com and www.mjm-petsilk.com.

In July 2006, Pet Silk ended its relationship with MJM. With the exception of posting a disclaimer on one of its websites, however, MJM continued to hold itself out as a distributor or reseller of PET SILK products. Thereafter, Pet Silk brought suit and moved for a preliminary injunction seeking to enjoin MJM from using PET SILK in its domain name, from holding itself out as being authorized to sell PET SILK products, and from representing it has the capacity to enter into distributorship agreements where MJM would act as a wholesaler with the customer as a sub-distributor. The court granted the motion based on theories of infringement, dilution, and cybersquatting. 

Of particular interest is its analysis of the new dilution statute, discussed below.

To prove dilution, the court found Pet Silk needed to show: (1) its mark is famous and distinctive; (2) MJM adopted the mark after the mark had become famous; and (3) MJM caused a likelihood of dilution of the PET SILK mark.

First, even though MJM did not dispute that PET SILK was famous, the court considered whether the mark met the statutory definition. It found:

“The Pet Silk® mark has been registered on the Principal Register of the United States Patent and Trademark Office for the last 10 years and has been in use for the last 15 years at least. PSI has distributors all over the world. PSI testified, and MJM does not contest, that Pet Silk® has name recognition in the pet supply and dog grooming market. And, the Fifth Circuit has held that market fame is sufficient. [Note that this finding is likely error — though perhaps harmless — since the TDRA abolished niche market fame.] PSI has not licensed the use of its name in the domain of any of its distributors save a few in Europe that deal exclusively in Pet Silk® products. Therefore, the mark meets [15 U.S.C.] § 1125(c)(2)(A)’s definition of famous.”

The court also found “[t]he mark Pet Silk® is at least a suggestive mark, and therefore inherently distinctive.”

Second, the court found: “PSI has shown that its mark has been registered for 10 years. MJM and PSI did not enter into a distributorship relationship until 4 years ago. Absent evidence to the contrary, the court may presume that MJM adopted the mark after the Pet Silk® mark became famous.”

Third, the court addressed whether Pet Silk had established dilution by blurring. After reciting the six factors for dilution for blurring set forth in 15 U.S.C. § 1125(c)(2)(B)(1), the court found:

“The two marks are similar since MJM has incorporated Pet Silk® as part of its web domain name. And, in phone calls with potential Pet Silk® distributors, MJM has held itself out to be Pet Silk itself. So, the marks are similar because they are, in fact, the same mark. As discussed above, the Pet Silk® mark has achieved distinction in its market. Pet Silk® is internationally known for its pet-grooming products. Moreover, there can be no doubt that MJM intended to create an association with Pet Silk® when it put the name in its domain. MJM went so far as to set itself up as a type of “sub-wholesaler” by offering a reseller agreement to its customers.”

Finally, the court found: “[T]here was testimony at the hearing that actual association did occur. Some customers, upon calling the MJM number, were told by Maria Jackson that the only way to be become a Pet Silk® distributor was through her. MJM does not refute this testimony, but argues merely that [an]injunction is inappropriate because MJM has removed the reseller agreement from its web site and no longer offers reseller status to customers. Nevertheless, Pet Silk has demonstrated that MJM’s use of its mark meets all the factors under § 1125(c)(2)(B)(1).”

It’s final: the Western District yesterday entered a Stipulated Motion and Consent Judgment in Autodesk, Inc. v. Open Design Alliance, No. 06-1637, finding Open Design Alliance liable for infringing Autodesk’s trademark and permanently enjoining such infringement in the future. The stipulated order also dismisses the parties’ claims and counterclaims against each other without prejudice, enabling them to re-file such claims again in the future.

The parties’ stipulation summarizes the dispute as follows:

“In this action, plaintiff Autodesk, Inc. (“Autodesk”) sued defendant Open Design Alliance (‘ODA’ or ‘Defendant’) for trademark infringement and false designation of origin based on ODA’s improper simulation of Autodesk’s TrustedDWG^TM authentication mechanism and use of the AUTODESK® trademark (U.S. Reg. No. 1,316,772). On November 22, 2006, the Court held a hearing on Autodesk’s application for a temporary restraining order and order to show cause. The Court found that Autodesk had demonstrated both a strong likelihood of success on the merits and the possibility that it faced immediate, irreparable injury from ODA’s conduct, and granted a temporary restraining order.”

Based on the parties’ agreement, the Western District entered an order that includes the following finding:

“ODA’s simulation of Autodesk’s TrustedDWG technology was not necessary to achieve interoperability with Autodesk software, nor was ODA’s simulation of Autodesk’s TrustedDWG technology necessary to achieve interoperability with the software product of any third party. ODA’s simulation of Autodesk’s TrustedDWG technology infringed Autodesk’s rights in its federally registered AUTODESK® mark, in violation of Sections 32 and 43 of the Lanham Act. Judgment on its claim for injunctive relief under the Lanham Act is entered in favor of Autodesk.”

The parties also agreed to a permanent injunction with the following terms:

“The Court hereby permanently RESTRAINS AND ENJOINS ODA, its agents, servants, employees, attorneys, and all others in active concert or in participation with Defendant, from simulating Autodesk’s TrustedDWG technology, including but not limited to the Autodesk watermark and/or TrustedDWG code, without Autodesk’s authorization; and from distributing DWGdirect libraries or other ODA software that use or incorporate or simulate Autodesk’s TrustedDWG technology or that otherwise insert or mimic the unauthorized Autodesk watermark and/or TrustedDWG code. For the sake of clarity, the Consent Judgment neither binds nor benefits any ODA member(s) acting on its or their own accord, and not in active concert or participation with the ODA.”

The parties agreed to bear their own attorneys’ fees and litigation costs incurred in the dispute.

The forthcoming issue of the IndUS Business Journal looks into Starbucks’ complaint that an Indian entrepreneur’s plan to open 25 cafes under the STARSTRUCK name and mark infringes the STARBUCKS name and mark. The article, “Starbucks in trademark battle with Indian company,” quotes the entrepreneur, Shahnaz Husain, as saying she decided to open her own coffee shop while visiting a Starbucks store in London. The article says “Starstruck” cafes will feature a “glamour theme, complete with posters of Hollywood movie stars.” Ms. Husain states she chose the name “because she wanted to distinguish it” from Starbucks.

Despite that sentiment, Starbucks objects. Its spokesperson, T. May Kulthol, states that Starbucks has long owned the rights to its name and logo in India. She said Starbucks will press the issue in court if Ms. Husain’s company refuses to adopt another name.

The article quotes STL’s publisher on the process a court would likely go through to decide the issue. Since it seems odd to quote an article quoting me, I’ll just say I stated my belief that a court would consider the likelihood of confusion between the two marks, focusing on similarities in the apperance, sound, and meaning of the marks, as well as the competing goods or services. If the court determined the later mark created a likelihood of confusion with the earlier mark, it would find in favor of the earlier user.

So do I think STARSTRUCK infringes STARBUCKS, when both marks are used for cafes? You bet. Out of the infinite number of possible combinations of letters, numbers, and symbols Ms. Husain could have selected for her new chain of cafes, she just happened to pick one so close to the most famous brand in the coffee business? Doesn’t seem likely.

On March 19, Utah Governor Jon Huntsman, Jr. (pictured below), signed a bill into law that bans some forms of key word advertising. The Trademark Protection Act, SB 236, establishes a new type of mark called an Electronic Registration Mark. Once a mark is electronically registered, the statute prohibits use of the Electronic Registration Mark to trigger advertising for a business, goods, or services of the same class as those represented by the Electronic Registration Mark.

In particular, the bill makes a person liable to the registrant of an Electronic Registration Mark if that person, without the registrant’s consent, “uses an electronic registration mark to cause the delivery or display of an advertisement for a business, goods, or a service: (i) of the same class … other than the business, goods, or service of the registrant of the electronic registration mark, or (ii) if that advertisement is likely to cause confusion between the business, goods, or service of the registrant of the electronic registration mark and the business, goods, or service advertised.”

Is this regulation constitutional? Is it prudent? Will it spawn a new class of cybersquatters? Stay tuned. This statute is sure to be dissected and debated in the weeks to come.