Seattle Trademark Lawyer

I still don’t think it’s a good poster-boy (or girl) for trademark bullying, but the NYT published a follow-up article saying Procter & Gamble had settled its dispute with a mom-owned personal care products company. (See STL post about the NYT’s first article.)

The dispute arose over P&G’s prior use of WELLA for hair care products and the startup’s adoption of WILLA for skin care products.

Both NYT articles used the dispute to discuss trademark bullying — as if P&G had over-reached in asserting its rights.

I’m all for the mainstream media’s help in familiarizing the public with issues that trademark practitioners work with every day. In fact, I’m grateful for it. I just — again — question whether the WELLA vs. WILLA dispute is a good vehicle for introducing the issue. I don’t at all see P&G as being another Monster Cable — threatening everyone under the sun who uses MONSTER as a trademark in any context, regardless of whether confusion would be (even remotely) likely.

Again, P&G didn’t do itself any favors when it used overbearing language in contacting the startup. It wasn’t exactly graceful when it told the owner-mother that if she did not immediately drop her trademark, it would resort to “lengthy and expensive alternative measures.” Still, it doesn’t seem at all unreasonable that the owner of WELLA for personal care products would not want a new entrant to start using WILLA also for personal care products.

To me, the media’s depiction of the suit shouldn’t have been big vs. little. It would have been more accurate (though I guess less interesting) to portray the dispute simply as prior user vs. later user.

So how was the dispute resolved? The article says terms are confidential, but the startup will get to keep using WILLA.

Generic! The Western District finds Glassybaby’s
design (left) is incapable of functioning as a trademark

Glassybaby’s popular votive candle holder design is generic.

The Western District made that finding on Sept. 30, granting the motion for summary judgment that defendant Provide Gifts, Inc., d/b/a Red Envelope, brought attacking Glassybaby, LLC’s trade dress claim.

Western District Judge Marsha Pechman previously had dismissed the Seattle company’s complaint against the defendant sellers and manufacturers of competing votive designs for failing to describe its claimed trade dress. (STL post here.) After allowing Glassybaby to amend its complaint, the court found the company wrongly relied on the Patent and Trademark Office’s conclusion that Glassybaby’s trade dress was not generic.

“Glassybaby’s trade dress is generic and incapable of trademark protection. The mark describes the rough dimensions of a round glass container with convex sides, a thick, clear base, and a wide top. The mark only answers the question ‘what-are-you’ not ‘who-are-you.’ It gives no indication of the source and merely describes on particular species of the genus of round containers. Permitting trade dress protection for this item would also unnecessarily grant Glassybaby protection over a broad number and types of small, round containers, which runs contrary to the principles behind extending Lanham Act protection to trade dress. This is similar to the outcome in a case before the Second Circuit, relied on by Defendants: Jeffrey Milstein, Inc. v. Gregor, Lawlor, Roth, Inc., 58 F.3d 27 (2d Cir. 1995). The court there found die-cut greeting cards cut in the outline of color photographs of an animal, person, or object were generic because the product design only described a species of a genus, not a source-identifying trade dress. Here, with even less concrete detail of the product, nothing about the unregistered trademark identifies the source of what is simply a type of round, glass container approximately 3.75 inches high and 2.5 inches wide. This is simply a species of the genus of round containers and is generic as a matter of law.

“Glassybaby has not raised any dispute of material fact showing that its trade dress is not generic. Glassybaby primarily relies on the PTO’s finding that the unregistered trade dress is not generic. Yet, nowhere has Glassybaby explained why the Court is bound by that determination. At best, in a direct appeal from the PTO, which this is not, the Court reviews the PTO’s findings for substantial evidence. Here, the PTO’s finding is not supported by substantial evidence and fails to consider or apply the relevant authority. The PTO merely concluded that ‘products that combine the curved sides and thick, clear base with the specified dimensions [presented by Glassybaby] do not appear to be so commonly available for sale as to support a finding that the mark is generic.’ The PTO does not strictly apply the legal test for genericness or explain why the number of similarly sized and shaped votives impacts the determination of genericness. The PTO’s conclusion is at odds with Ninth Circuit law. A trade dress for a product design that answers only the ‘what-is-it’ question is generic. The Court is convinced Glassybaby cannot pass this test with its trade dress, regardless of whether there [are] abundant or few similarly sized and shaped glass containers. The PTO’s finding does not suffice to raise a genuine issue of fact.”

The court dismissed Glassybaby’s claims for dilution and violation of the Consumer Protection Act for the same reasons.

The court’s finding could have a big impact on Glassybaby. Its conclusion that the company’s product design is incapable of protection would seem to allow competitors — under trademark principles at least — to copy Glassybaby’s trendy design without liability.

The New York Times last week coincidentally featured Glassybaby’s challenges in breaking into the New York market. The company may face an even more significant challenge following the court’s order.

The case cite is Glassybaby, LLC v. Provide Gifts, Inc., No. 11-380 (W.D. Wash. Sept. 30, 2011) (Pechman, J.).

I’ve been busy!

That’s my excuse for not staying more on top of recent developments in the Experience Hendrix, L.L.C. v. Hendrixlicensing.com, Ltd., litigation involving use of Jimi Hendrix’s name and likeness in connection with the sale of art. The case has had some big implications along the way, including the Western District’s finding that portions of the Washington right of publicity statute are unconstitutional (STL post here).

Long story short, the case went to trial. After motions for summary judgment and settlement of defendants’ state law counterclaims, the only issues that remained were plaintiffs’ damages on their trademark infringement claim; defendants’ liability for violating Washington’s Consumer Protection Act; and the damages that flowed from any such violation.

On May 9, the jury found for plaintiffs. After a 3+ day trial, the jury deliberated for 1.5 hours and awarded plaintiffs $306,650 in lost profits and $60,000 in defendants’ profits on the infringement claim; and $750,000 in injury to reputation, $300,000 in injury to goodwill, and $306,650 in lost profits on the CPA claim.

Defendants moved for a judgment as a matter of law or for a new trial, arguing that much of the damages award was not supported by the evidence. They did not challenge the jury’s award of defendants’ profits or their liability under the CPA. Plaintiffs moved for treble damages under the CPA and for attorney’s fees.

On Sept. 21, Western District Judge Thomas Zilly pared back most of the jury’s award. He granted defendants’ motion for judgment as a matter of law and granted their motion for a new trial in the event an appeal results in the being case remanded. The court denied plaintiffs’ motion for treble damages and granted in part and denied in part their motion for attorney’s fees.

In the end, the court entered judgment against defendants imposing a permanent injunction and awarding $60,000 representing the undisputed amount of defendants’ profits attributable to their trademark infringement, plus $50,000, constituting reasonable attorney’s fees under the CPA, for a total award of $110,000.

Perhaps most interesting is the observation that businesses do not have “reputations”; they only have “goodwill,” so the award of damages for both reputation and goodwill elements was improper. The court also found the amount of the awards was based purely on speculation.

“[C]ontrary to plaintiffs’ position, Washington courts have consistently defined reputation as merely one component of a business’s goodwill. Similarly, Washington’s Department of Labor and Industries has explained by way of regulation that goodwill is ‘the value of a trade or business based on expected continued customer patronage due to its name, reputation, or any other factor.’.

“Thus, the Court’s unchallenged supplemental instruction to the jury that reputation and goodwill are synonymous comports with Washington law, as well as the observation by a district court in our circuit that business entities do not have reputations per se, but rather have goodwill. The jury’s verdict awarding vastly different amounts for injury to reputation and injury to goodwill cannot be reconciled with the Court’s instruction that, for a business, reputation and goodwill are the same thing.

“If these duplicative awards were supported by substantial evidence, the Court would face the difficult task of crafting an appropriate remedy, whether it be striking one award in favor of the other, offering plaintiffs the option of either accepting a remittitur or submitting to a new trial, or simply requiring a new trial. The Court need not, however, engage in such analysis because the damages at issue are based entirely on speculation. The jury was provided no evidence from which it could determine the diminution in value, if any, of plaintiffs’ goodwill as a result of defendants’ violation of the CPA. Plaintiffs proffered no estimate, by way of expert testimony or otherwise, of the value of their goodwill either before or after defendants’ wrongful conduct. Indeed, plaintiffs’ counsel conceded during discussions concerning the related jury instructions that ‘[t]here’s not a specific number in evidence.’”

The case cite is Experience Hendrix, L.L.C. v. Hendrixlicensing.com, Ltd., No. 09-285, 2011 WL 4402775 (W.D. Wash. Sept. 21, 2011) (Zilly, J.).

I don’t usually post on Fridays, but I thought I’d be remiss if I didn’t point out the NYT article yesterday on trademark bullying.

It led into the issue using Procter & Gamble’s objection to a startup’s use of WILLA based on P&G’s prior use of WELLA, both in connection with personal care products.

The article’s definitely worth a look, but I’m not sure WELLA vs. WILLA is the best example of trademark bullying — even if P&G is big and the startup is small. That said, P&G didn’t do itself any favors when its cease-and-desist letter threatened if the startup didn’t immediately drop its mark, P&G would pursue “lengthy and expensive alternative measures.”

Interestingly, the article states the startup expects to pay $750k defending its right to use the mark.

Trademark bullying or no, if I were a startup, there’s no way I could justify spending that kind of cash defending my right to use my chosen mark. I also question whether the startup did a trademark search to see whether its contemplated mark was likely to get it into this kind of scrape before it invested in the mark. (The startup chose WILLA because it’s the name of the owner’s daughter.) Sentiment aside, I can’t imagine the fight is worth it.

Chicago… I proclaim it the most beautiful city in America.

I just made a crack commando visit to the Windy City.

Or as I have decided, the most beautiful city in America.

I long thought San Francisco deserved that honor, but I was wrong.

Chicago. What a town.

I blew in town for barely 24 hours to talk about the Rosetta Stone v. Google keyword advertising appeal. With oral arguments scheduled to be heard in Richmond tomorrow, it was a pretty timely discussion. I was asked to focus on Rosetta Stone’s side, which was easy. Of course, the Eastern District of Virginia got the result right: Google shouldn’t be liable for selling trademarks as sponsored links in its search engine results. But taking Rosetta Stone’s position in the Association of Intellectual Property Firms’ panel discussion was a no-brainer given how badly the Eastern District of Virginia stumbled on the way to the right result.

One of the issues in the case was contributory infringement — whether Google should be liable for enabling counterfeiters to infringe Rosetta Stone’s trademark. That led to a discussion of the Ninth Circuit’s Sept. 9 decision in Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. — which also involved contributory liability.

In that case, Louis Vuitton complained to Web host Akanoc Solutions that some of Akanoc’s customers had been selling counterfeit Louis Vuitton merchandise on their Web sites. Indeed, Louis Vuitton complained on 18 separate occasions, and Akanoc did not act on the warnings.

The result? The Northern District of California jury charged Akanoc with actual knowledge of the trademark infringement and slapped it with a damages award of $31,500,000.

The Ninth Circuit pared the award back to $10,500,000, but affirmed the jury’s finding of contributory infringement.

In doing so, the court found: “Plaintiffs asserting contributory trademark infringement claims must prove that defendants provided their services with actual or constructive knowledge that the users of their services were engaging in trademark infringement. An express finding of intent is not required.”

The court found that Akanoc’s continuing to allow its customers to operate Web sites about which Louis Vuitton complained 18 times made Akanoc separately liable.

Back to Rosetta Stone. According to Rosetta Stone’s appellate brief, the language software company provided evidence it complained to Google about 200 instances of sponsored links advertising counterfeit product. Yet, after receiving such notice, Google continued to sell Rosetta Stone trademarks as keywords to those same advertisers. The court seemingly ignored this evidence when it granted Google’s motion for summary judgment.

Louis Vuitton ought to give the Fourth Circuit pause tomorrow when it considers the propriety of the district court’s decision.

The case cite is Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., __ F.3d __, 2011 WL 4014320, Nos. 10-15909 and 10-16015 (9th Cir. Sept. 9, 2011).