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Posts Tagged ‘injunction’

The alleged infringing "Hell's Four Finger" Ring marketed by Alexander McQueen Trading Limited.

Someone didn’t do their homework, and it’s going to be a costly and embarrassing lesson.

The Hells Angels Motorcycle Club has sued the Alexander McQueen fashion house for trademark infringement.  The suit was filed October 25, 2010 in U.S. District Court in Los Angeles.  The club also named the Saks retail chain and Internet retailer Zappos.com as defendants for their roles in selling the allegedly infringing products. 

In its complaint, the Hells Angels club requests findings that the defendants infringed its trademarks and committed unfair competition and trademark dilution.  The club seeks an injunction preventing additional sales of the alleged infringing products as well as a recall of the alleged infringing inventory.  The Hells Angels ask that the inventory be delivered to a third party for destruction.  Finally, the club seeks money damages which it asks be multiplied because of the blatant and “exemplary” nature of the infringement, along with the club’s attorney fees for the action.

The alleged infringing "Hell's Knuckle Duster" Clutch marketed by Alexander McQueen Trading Limited.

The motorcycle club claims that Alexander McQueen Trading Limited, the fashion house founded by designer Alexander McQueen (who committed suicide earlier this year), infringed its winged skull design mark by using it in a multi-finger “Hell’s Four Finger” ring and “Hell’s Knuckle Duster” clutch handbag (see pictures.)  The suit also claims that the defendants infringed by marketing a jacquard dress and a pashmina scarf using the word mark HELLS ANGELS, without authorization by the club.

The Hells Angels club registered a winged skull design (which the club calls the “HAMC Death Head design”) in 2009 as U.S. Trademark Registration No. 3666916 for goods including “jewelry, jewelry pins, clocks and watches, earrings, key rings made of precious metal, badges made of precious metal, and chains made of precious metal.”  An image of the registered design appears at right, below.  In its complaint, the club claims use of the design since 1948.

An image of the "HAMC Death Head design" mark registered for various goods, including jewelry, by the Hells Angels Motorcycle Club.

The same design is registered separately (U.S. Reg. No. 3311550, issued in 2007) for “clocks; pins being jewelry; rings being jewelry.” In that registration the Hells Angels claim use of the mark on those goods since 1966.

What Happened Here?

This is, by all appearances, a tremendous blunder by Alexander McQueen Trading Limited, as well as Saks and Zappos.com.  You’re welcome to judge for yourself, of course, but to this observer the designs used by the defendants unquestionably are confusingly similar with the design registered by the Hells Angels.  The use of the words “HELL’S” and “HELL’S ANGELS” merely completed the effect, making it a virtual certainty that consumers would perceive some connection with the infamous motorcycle club.

Here, boys and girls, we have a perfect example of why marketers should always consult an experienced trademark practitioner well in advance of introducing a new product line.  It frankly seems hard to believe that marketers as savvy as those at the House of McQueen, Saks and Zappos.com could have failed to recognize the potential trademark implications of their actions here.  Perhaps they did. 

In any event, it’s highly unlikely that these product ideas would have survived a review by an attorney experienced in trademark law.  Right about now, it probably seems to the good people at the House of McQueen, Saks and Zappos that a review by their trademark attorneys would have been money well spent.

RING AND HANDBAG IMAGES COURTESY OF STYLITE.COM.

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Choosing a new brand name is not as simple as “Do I like it? Okay, let’s go with it!”  Whether it is to be your flagship brand or just a new product or service in your line, there are many factors to consider in choosing a new brand name.  In this post and the others in this series, I’ll walk you through the most important of those factors.

Didn't search your mark? Remember to dress nicely for court.

My earlier posts in this series discussed the importance of getting good legal advice, of understanding the function of trademarks, and of deciding whether your marketing plans require exclusivity on the name.   I also have discussed the strategic value of coming up with a list of potential name candidates and of having your name candidates consumer tested.  The next step is one that I cannot recommend strongly enough:

Step 6:  Have Your Trademark Candidates Searched

It is always a good idea to have a trademark search conducted before adopting any mark, to determine whether it is available for your use and registration.  Basically, you need to determine whether anyone else is using the same mark or a confusingly similar mark, for the same or related goods or services, and whether anyone else has registered or filed an application to register the mark.

Here is where an attorney experienced in the practice of trademark law can be of great value to you.  That attorney can obtain the necessary searches for you, evaluate the search results, and provide you with an analysis of the marks’ availability and registrability.

Search Early, When It’s Easy to Start Over

For obvious reasons, it is best to do this as early as possible, before you spend money on implementing or advertising the mark you’re interested in using.  That way, if the search identifies a problem with the mark, you will not have wasted time, money and effort on an unusable mark.  Also, your ranked list of candidates will allow your attorney to move efficiently through the list in case your top preferences are unavailable.

Failure to Search Invites Disaster

It’s almost impossible to overstate the importance of having your mark(s) searched.  If you don’t consumer test your names, you may end up with a brand name to which consumers don’t react as well as you had hoped.  Not good, but something you can work over time to fix.

On the other hand, if you fail to search your mark for availability and registrability, the potential downside is much, much worse.  If you blunder into a conflict with someone already using your mark, you could find your product or service almost instantaneously pulled from the market, by order of a federal judge.  How’s that for a full-stop on your product launch?

After I posted a link to this article on another forum, a perceptive reader commented that not searching a trademark is like playing Russian roulette.  He was right – in fact, it’s like playing the game with a gun that can still blow your brains out a week, a month, six months, even a year after you pull the trigger.  You never know when an infringement challenge is going to come out of the woodwork.

When going through the search process, you should bear in mind that with the proliferation of brands, products and services on today’s market a trademark can almost never be assessed as an absolute no-risk green light.  Usually an attorney issuing a trademark opinion will structure it as an assessment of the level of risk in proceeding with the name.  Taking that risk assessment into account, you the marketer can decide whether you want to accept the risk level and move forward.

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So, you’re ready to take your business onto the Internet, and the most sensible way to do that is to register your well-known trademark as a domain name.  You try to do so, but learn that another party already has registered your trademark as a domain name.  Your brand may have been cybersquatted.  What are your options?

Jolly Roger

By the time you see the flags, it may be too late - cyberpirates have already made off with your valuable trademark.

“Cybersquatting” is a term that was coined to describe the bad faith registration and use of another party’s trademark as a domain name, with the intent to profit somehow from the good will of that trademark.  The term harkens back to the practice of illegal tenants “squatting” in derelict or condemned buildings.

A party injured by cybersquatting can sue under the Anticybersquatting Consumer Protection Act, or ACPA.  The ACPA became a part of the U.S. trademark statute, also known as the Lanham Act.

(I should point out here that trademark owners injured by cybersquatting also can proceed through arbitration under what are called the Uniform Domain-Name Dispute-Resolution Policy, commonly referred to as the “UDRP” approach.  I will be discussing the UDRP approach in an upcoming related article.  This approach can be quicker and significantly less expensive than proceeding under the ACPA, though it also offers a narrower range of remedies.)

The ACPA defines cybersquatting (which the statute refers to as “cyberpiracy”) as “registering, trafficking in, or using” a domain name that is identical or confusingly similar to another party’s distinctive trademark, “with a bad faith intent to profit from that mark.”  If the complaining party’s trademark is deemed a “famous” mark under the law, cybersquatting also occurs where the domain name would “dilute” the famous mark by tarnishing or blurring the public’s perception it.

Bear in mind that the domain name used by the cybersquatter need not be (and in fact, often is not) identical to the trademark at issue.  One practice that domain pirates quickly adopted is “typosquatting,” which involves registering common misspellings of a trademark as domain names.  When an unwary web-user accidentally types the misspelled trademark, he or she is taken to the pirate’s site.  The ACPA is broad enough to cover this practice, provided it can be shown that the misspelled domain name is confusingly similar to the plaintiff’s trademark.

The ACPA’s definition of cybersquatting creates several issues of proof for the would-be plaintiff, which I will discuss in an upcoming article.  For now, let’s examine the remedies that the ACPA provides for those injured by cybersquatting.

If a violation of the ACPA is found, the court can order the forfeiture or cancellation of the offending domain name, or its transfer to the trademark owner. The trademark owner also can recover up to three times his or her actual damages.  Actual damages include any profits the cybersquatter made through his use of the domain, along with any losses sustained by the trademark owner through the cybersquatters activities (such as lost sales or harm to the mark’s reputation.)

The trademark owner also has the option of foregoing actual damages and instead taking statutory damages (similar in nature to the copyright statutory damages I discussed in an earlier post) in the amount of $1,000 to $100,000 per domain name.  The statutory damages amount is left to the court’s discretion – presumably, the more odious the cybersquatter’s actions, the higher the award.

Finally, in suitable cases a successful plaintiff can get an injunction prohibiting further cybersquatting by the defendant, and in “exceptional cases,” can also recover attorney’s fees from the cybersquatter.

Where the cybersquatter is offshore and therefore not subject to the jurisdiction of U.S. courts, a provision of the ACPA allows the injured party to proceed “in rem,” or directly against the domain name itself.  In these cases the only remedy is that the domain will be awarded to the plaintiff.

If your trademark has been cybersquatted, the ACPA provides a range of legal options you can use against against the pirate.  My next article will discuss what your law suit must show, in order to get an award of the remedies provided by the ACPA.  Another related upcoming article will discuss the UDRP approach and evaluate the respective benefits of ACPA vs. UDRP.  Stay tuned for more discussion!

PHOTO COURTESY OF FLICKR USER REITVELD, UNDER THIS CREATIVE COMMONS LICENSE.

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 My last post discussed the issue of brand proximity, by which I mean the co-existence of other identical or similar brand names for other goods or services.  I mentioned that it is not necessary that there be no other users of your name whatsoever.  Rather, there should be no other users of the mark for goods or services so similar to your own that consumers will believe there is a connection between the two products – either that they are made by the same company, or that there is some other connection such as licensing or approval of one use by the other user.

Figure of Justice

Don't be misled - in real life, she takes off the blindfold and examines your mark and your motives.

This (mistaken) belief that some connection exists between two trademarks is the key to a court’s determination of the issue of trademark infringement.  If the two trademark uses at issue are similar enough that it is reasonably likely that consumers will make such a mistake (a circumstance that is called “a likelihood of consumer confusion” in trademark jargon), then the court will find trademark infringement.  In that case, the court almost always will issue an injunction, ordering the later (or “junior”) trademark user to stop using its mark.  In some cases, the court also will order the infringing later user to pay damages to the earlier (or “senior”) user.

How does the court make this determination?  Does it try to project itself into the minds of the public?  Of course, judges cannot read the minds of the purchasing public and formulate a collective viewpoint.   Instead, the judge considers a list of factors formulated by courts in prior decisions.  The list of factors may vary slightly depending on which U.S. Circuit Court of Appeals rendered the decision applicable in your area, but the similarities greatly outnumber the minor differences.

Generally, the court will consider these factors:

Ÿ  the strength of the senior user’s mark (if the plaintiff’s mark is generic, highly descriptive, or widely used by unrelated parties, the law suit will fail);

Ÿ  the similarity of the marks themselves (often the uses are not identical – so how similar are they?);

Ÿ  the similarity of the respective goods and the trade channels through which they are advertised and sold (e.g., are both products sold through sporting goods stores?);

Ÿ  whether consumers have evidenced any actual confusion between the two uses (“Dear Sony – I bought your SONNY brand HDTV and it’s a piece of junk!  I’ll never buy anything from you again!”); and

Ÿ  what level of care the public is likely to use in buying such goods (generally speaking, cheap goods = little care, while expensive goods = greater care.) 

For obvious reasons, the court will first satisfy itself that the plaintiff’s mark is strong.  The next thing the judge will assess is the degree of similarity of the marks and the goods or services.  If they are not reasonably similar, the court will not look any further. 

Beyond these initial considerations, the most decisive of these factors probably is that of whether any actual consumer confusion has occurred.  Since the test for infringement is whether a likelihood of consumer confusion exists, a court obviously will not need to see much actual confusion before deciding that such a likelihood exists.

Another “super factor” that the court may consider is the defendant/junior user’s intention in selecting the mark.  If the evidence suggests that the defendant chose the mark with the intention that confusion occur (to provide a competitive boost, for instance, by riding on the plaintiff’s brand good will), then in some jurisdictions the court will go as far as to assume that the junior user succeeded in that effort, and find infringement.

Of course, other factors may come into play, and these factors are all indirect ways for the judge to assess the likely consumer reaction to the two brands at issue.  Usually, attorneys on both sides of the law suit will also conduct consumer surveys to try to get a direct read on purchaser understanding.  If properly conducted to avoid leading those surveyed, these surveys can be a potent tool in proving or disproving infringement.

PHOTO COURTESY OF FLICKR USER MIRA66, UNDER THIS CREATIVE COMMONS LICENSE.

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The Chicago Sun-Times reported on October 14 that Ty Inc., the Chicago-area company famous for its BEANIE BABIES® plush toys, has sued Target Corporation in federal district court for trademark infringement, for using the name BEANIE in connection with the sale of plush toys not made by Ty. 

Ty alleges that Target is using the term on in-store signage for a HELLO KITTY® plush lamb toy.  HELLO KITTY toys are marketed by the Japanese company Sanrio Company, Ltd.  It appears that Sanrio is not implicated in the lawsuit.  Ty has requested that the court issue an order enjoining Target’s use of BEANIE.

[picapp src=”b/8/6/b/62.JPG?adImageId=5839218&imageId=3668971″ width=”500″ height=”428″ /]

Ty Inc. introduced “Sweet Sasha” (L) and Marvelous Malia (R) dolls earlier this year.  Despite the resemblance, a Ty Inc. spokesperson claimed the names do not refer to President Barack Obama’s daughters.  Uh, okay, right.

Ty owns a U.S. Trademark Registration for BEANIE BABIES, of course.  It also owns U.S. Trademark Registration No. 3,451,670 covering the mark BEANIES® for “plush toys,” along with registrations for many other BEANIE-formative marks such as E BEANIES® and BEANIES 2.0®.

The complaint includes a photo of the offending use, taken in a suburban Chicago Target store.  Comments from James P. White, Ty’s Chicago-based attorney, indicate that Ty assumes the use is chain-wide since “usually, these big national operations advertise and market their products in a similar fashion in each store they own.”

Ty claims it warned Target in September to stop the use, but received no response to its warning.  This case looks to me like a perfect candidate for a speedy settlement. 

As reported previously in this blog, Target also is the defendant in a trademark infringement suit brought earlier this month by prestige handbag maker Coach Inc.

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For the first substantive post here, I thought I would honor the obsessions interests of certain unnamed family members and report on a current ruckus in the designer bag industry.  The story here is that mega-retailer Target Corporation has been sued for trademark infringement by Coach Inc., the marketer of costly prestigious COACH® brand handbags and personal accessories. 

Coach brought its suit in federal district court in the Southern District of New York, where the company is headquartered.  The complaint asserts that this summer, mass merchandiser Target began selling bags which are “exact and/or confusingly similar reproductions of Coach’s Ergo designs and Signature Patchwork designs.”  

Coach’s Ergo bags apparently are designed to be ergonomically correct (sidebar: good luck protecting that mark), while the Signature Patchwork (ditto) bags are pieced together using patches of different fabrics.  Coach has, not surprisingly, asked the district court to issue an injunction preventing Target from selling the bags.  It also seeks undetermined damages and attorney fees.

Coach’s Ergo bags look like this:

coach-ergo-patchwork-bag

This bag also happens to feature one iteration of the Signature Patchwork design. 

My online review of Target’s handbag line turned up any number of fabulous bags, but nothing that looked to this reporter like an “exact and/or confusingly similar reproduction” of the Coach handbag.  Of course, Target very likely pulled the bag(s) in question once the suit was filed.

Since I don’t have a picture of Target’s bag to give you, the least I can provide is an image of the company’s famous logo:

target-logo

Presumably, Target Corporation didn’t consider the “vexatious litigation” angle when selecting its brand name and logo.

For those keeping track, the two companies have a history of friction, and this is not the first time Coach has sued Target for infringement.  Coach filed suit in 2006, claiming that Target sold counterfeits of Coach’s Python Signature Striped Demi purse.  Coach dismissed the suit after only three weeks when it came to light that the bags in question were legit Coach bags purchased by Target “at a major department store liquidation sale.”  Coach also currently has a suit pending against Brown Shoe Company for infringement of the Ergo and Signature Patchworks bags.

Coach maintains a page on its website as well as a telephone hotline, both devoted to reporting COACH counterfeits.  The web page points out that “counterfeit quality is typically poor,” and goes on to intone that COACH counterfeiters “illegally profit at the expense of Coach and affect the entire economy through lost revenues and taxes.”  Frankly, I had no idea that the luxury handbag market was such a dominant force in our national economy.

I have not seen the actual complaint as yet, and thus have no basis to provide my own vaunted SOLID GOLD™  analysis of whether Target’s bags infringe.  Stay tuned for further comment when I have more information.

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