IP Fridays – Episode 3 – the Petrella case by the US Supreme Court, the second part of the interview with John L. Welch of the TTABlog, and the latest about generic toplevel domains gTLDs

IP FRIDAYS

Co-Presenters:

Rolf Claessen and Kenneth Suzan

Episode 3 – May 30, 2014

RC = Rolf Claessen

KS = Kenneth Suzan

GF = Gordon Firemark, Entertainment Law Update Podcast

JW = John Welch, Author of the TTAB Blog

This is Elizabeth King of Conley Rose in Houston, Texas and you are listening to IP Fridays.com.

KS: Hello and welcome to this episode of IP Fridays. Our names are Ken Suzan and Rolf Claessen and this is THE podcast dedicated to Intellectual Property. It does not matter where you are from, in-house or private practice, novice or expert, we will help you stay up-to-date with current topics in the fields of trademarks, patents, design and copyright, discover useful tools and much more.

RC: First of all we are really happy that we get lots of feedback. One feedback comes from Gordon Firemark in Los Angeles.

GF: Hi guys. This is Gordon Firemark from the Entertainment Law Update Podcast at EntertainmentLawUpdate.com. I want to congratulate you on getting your new IP Fridays podcast up and running. I am looking forward to being a loyal listener. I also wanted to ask you about possibly interviewing you both about the experience of getting your podcast set up. I teach a course called Power Podcasting for Lawyers in which I teach lawyers all about the reasons why they should podcast and how to get set up and I think your experiences with your new show would be very instructive so I wonder if you would contact me. I am sending you my email address and if you would like to get in touch, I would love to record an interview over Skype one of these days. Thanks.

RC: Also, Ed Timberlake in Carrboro, North Carolina. He is a passionate trademark prosecutor who wants to be on the show. He will be on one of the next shows. And we got some really funny feedback from Bob Rees. Unfortunately it is a picture. He has patented some foam and bubble technology and he made a really nice picture “Thank God It’s Friday” with his bubble technology and you can have a look at it at www.ipfridays.com/rees.

We didn’t even start a month ago and we already have 444 downloads, that means 444 times people downloaded our shows and listened to them. That is really great given that we are in a very small niche of intellectual property. Most people come from the U.S., Germany and the U.K. We also already have 125 email subscribers. Thank you so much. If you want to tweet about us go to www.ipfridays.com/love and it will prepopulate a tweet where you can tell all your Twitter followers. You can also like us on Facebook at www.ipfridays.com/like and, of course, we are also on LinkedIn at www.ipfridays.com/linkedin.

I heard about a recent case decided by the U.S. Supreme Court. It is referred to as the Petrella case. It is a copyright case and it is about the doctrine of laches and since I am not really the copyright guy, Ken can you tell us about this case?

KS: Rolf, the United States Supreme Court recently issued an important decision with respect to the laches defense. The case is Petrella v. Metro-Goldwyn-Mayer, Inc.

Giacobbe “Jake” LaMotta is a formal professional boxer and World Middleweight Champion known for his several bouts against the legendary Sugar Ray Robinson. Later in life, LaMotta, along with writer Frank Petrella, told his story in a 1963 screenplay that the two later assigned to MGM Studios. MGM took the screenplay and produced the movie Raging Bull, directed by Martin Scorcese and starring Robert de Niro as Jake LaMotta. After Petrella passed away and his copyright interests passed to his heirs, his daughter renewed the copyright interest in the 1963 screenplay and sued MGM for copyright infringement. MGM eventually obtained dismissal of the case at the Ninth Circuit, based on the doctrine of laches which bars suits that involve alleged wrongful conduct that occurred outside of the copyright statute’s 3-year statute of limitations.

Justice Ginsburg, writing for the majority, held that laches did not operate in copyright infringement suits for damages. Justice Ginsburg held that the rolling 3-year statute of limitations, which limits both the time period in which the suit can be brought and the period for which damages can be sought, precluded use of laches. Justice Ginsburg did not completely eviscerate the laches defense in this context, as she leaves the door open for a laches defense under extraordinary circumstances. Those extraordinary circumstances include failure of plaintiffs to take readily available measures to stop infringement and when the relief requested by plaintiff would work as an “unjust hardship” on the defendant or innocent third parties. Justice Breyer wrote a dissent, joined by Chief Justice Roberts and Justice Kennedy, holding that the majority’s decision is too inflexible and removes a tool that courts have traditionally used to address inequity.

RC: Next on our list is the second part of the interview with John Welch of the TTAB blog. If you want to go to his blog please go to www.ipfridays.com/ttab. I met John Welch at the INTA meeting in Hong Kong and we sat together and this is what he had to say about recent case law.

PART 2 OF THE INTERVIEW BETWEEN ROLF AND JOHN WELCH, AUTHOR OF THE TTAB BLOG

RC: So what do you think are the most important developments in the last couple of months that they decided on or did they change the rules?

JW: Well, the rules haven’t changed in a few years. There was a big change back in 2007 with a lot of the rules, but let’s not go back that far. I tend to look at these things in one year chunks mainly because I write an annual article that covers one year at a time. In past years, three or four years ago, the hot topic was fraud, but the Court of Appeals for the Federal Circuit kind of put the kibosh on that when it came down with its decision in In re Bose making it very hard to prove fraud before the Trademark Trial and Appeal Board because you have to prove that the applicant or registrant intended to defraud the Patent and Trademark Office and proving intent is very difficult. It can be done by circumstantial evidence but, to show how difficult that is, since the Bose decision came down in August 2009, there hasn’t been a single fraud claim upheld by the TTAB. So for all intents and purposes if fraud isn’t dead, it is seriously ill.

Another issue that kind of bubbled around for a while is dilution, but that seems to have died off too. Dilution claims are often thrown into an opposition proceeding but usually what happens is the opposer will plead both likelihood of confusion and dilution and if the mark is very strong, if it were strong enough to uphold and support a dilution claim, it is going to get really broad protection under the likelihood of confusion concept and often cases go off on likelihood of confusion and the Board declines to even consider the dilution issue. So although dilution is pleaded a lot, there are not very many decisions and the more recent decisions in the last couple of years have made it even more difficult than it was to prove dilution so that issue is kind of dormant at the Board too. You may ask what’s left.

In the last year or so I think there have been some interesting developments in the concurrent use area where one company or one party will use a mark in one section of a country and another party will use it in a different section of the country and then get into a clash at the TTAB in trying to decide whether and how to divide up the country. In the last year there have been three or four cases in which the junior user, the one who was second in line to use the mark, has wound up getting the entire country except for the area where the senior user was first and that is because the Board says that it has no bias towards the first user. The junior user who actually is expanding, while the senior user just sits where it started, the junior user is going to get most of the country and that is what has happened the last two or three times. What’s surprising about it is that there have been so few concurrent use cases in the last ten years to have four of them show up in the last eighteen months is pretty surprising. One often wonders whether concurrent use proceedings make any sense now that we have the Internet and everybody has the Internet website and everybody has sort of a nationwide presence that I think it’s possible that the Internet has killed concurrent use proceedings for trademarks for goods but for services, particularly restaurants, these happen to be restaurants and hotels, where they are kind of localized businesses and even though you have a Website, people from Arizona are not going to go to a restaurant in New Jersey so the Board kind of poo poos the Internet issue and is still deciding these concurrent use proceedings.

RC: So tell our listeners who are not from the U.S. and if you had a federal trademark and you only use it in one city you don’t have authority to deter anyone off, let’s say you are using it in San Francisco you cannot tell anyone off in New York?

JW: That’s a little bit different issue than concurrent use because concurrent use entails dividing up the country.

There are two issues. One is the issue of when you have a Federal registration and you go into some locality where there has already been a common law user who beats your priority date, you can’t stop that person. So a Federal registration in the United States gives you nationwide rights as of the filing date of the application that led to the registration but it doesn’t allow you to knock out people who are using the mark prior to your filing date. So I had this case a couple of times for a restaurant who wanted to go into Buffalo. My client already had a registration that went all the way back to 1978. Unfortunately, there was a restaurant in Buffalo that went back to 1958, so we could not stop them. In fact they could stop us from coming into Buffalo even though we had the federal registration and they didn’t because they had in the U.S. common law rights based on use. What causes a lot of these differences between U.S. law and say German law is that American law is a use base system and you develop common law rights based on use. Common law rights in your trading area. Ultimately you want to get a federal registration so that you can claim nationwide rights and constructive use as of your filing date so that you can knock out later users. But you can’t knock out earlier users so it is not a first to file, not a first to register system by any means.

RC: So what was the basis of the case that you were talking about, the restaurant case? Did they have like state marks or did they just have use marks?

JW: No, they had common law use. We had a federal registration. I’ll tell you it was Pizzeria Uno was the restaurant and there was an outfit called Uno Pizza that had been in a little pizza shop in Buffalo for many years. Pizzeria Uno wanted to go in and put a restaurant in. Unfortunately it was five miles away from Uno Pizza and that outfit had the right to stop us. Ultimately it was settled but they did have the right to stop us based just on their common law use without any registration at all because of their trading area. Now their trading area may have been no more than a 30 mile radius around this little shop, but unfortunately we were coming in five miles away. Now, on the other side of the coin is the same client, Pizzeria Uno, went to Las Vegas and there was a restaurant there called Pizza Uno but that Pizza Uno had started in the 80’s so it was after our 1978 priority date so Pizzeria Uno was entitled to go in and knock them out and so what we did was as we were preparing to go into Las Vegas we kept writing this guy saying that we are coming out there and we will be there next week but he refused to budge so we had to sue him and the judge enjoined him from using the mark Pizza Uno because of our nationwide priority. So once we had the registration we had the right to go to any location and knock out a later user because what the statute gives the registrant is constructive use across the country. So no one who starts after the priority date can claim that they started in good faith because they were on constructive notice whether they knew about you or not. I can tell you the guy in Las Vegas was not happy.

RC: I can imagine.

JW: He went stomping out of the courtroom as the judge rendered his decision. So, anyway, the United States of course is a party to the Paris Convention, but in the United States, none of the federal government has not implemented the well-known marks provision of the Paris Convention so we get some interesting cases about that issue. Probably the most well-known cases involve the Grupo Gigante grocery company which sued a local outfit out in California and there have been a couple cases out in New York too, one involving an Indian restaurant whose name I can’t remember right now, but I’m talking about the TTAB so there is a recent case in the Trademark Trial and Appeal Board called Bayer vs. Belmora in which Bayer petitioned to cancel Belmora’s registration for the mark FLANAX. Bayer uses this mark around the world, except for the U.S., and they use it in Mexico, but they have no use in the United States and they admitted to no plan to use it in the United States because they sell something else called ALEVE in the United States which is I guess you could say is a substitute for FLANAX. Belmora has a registration for the mark FLANAX in the United States for the same type of drug. It’s not exactly the same but I believe it not quite as strong as the Mexican version, but Belmora was selling FLANAX to aim towards a Latin American and Mexican audience in the United States. Bayer brought an opposition on four grounds. Three of them were thrown out on summary judgment. They claimed likelihood of confusion and fraud but those claims could not win because they had no use in the United States. They claimed a right under the Paris Convention but that didn’t work because the United States hasn’t implemented the Paris Convention with regard to well-known marks. So they wound up relying on a provision of the Federal Trademark Act called Section 14(3) which allows one to knock out a registration, it applies only to registrations, to knock out a registration if the mark is being used to deceive the public. Now, the Board went through some gyrations to find that Bayer’s reputation was being harmed in the United States. Albeit it wasn’t selling in the United States, its reputation was really in Mexico, so it is a very interesting extension by the TTAB into new territory vis-a-vis well-known marks. Commentators in the United States think that the United States should recognize the well-known marks doctrine and should allow such a claim but it has never done so and this is the latest case to bring that issue to a head. It’s probably going to go up on appeal and it should raise some real interesting issues. That was a rather gigantic step by the Board and I think on appeal it will bring these issues to a head once again and reinvigorate the clamor for new legislation to implement the well-known marks doctrine.

RC: Thank you very much for being our guest today and we really appreciate your time to tell us more about the TTAB and the general procedures and some interesting strategies and cases. Thank you very much.

JW: Thank you Rolf. It was a pleasure.

RC: If you want to know more about John Welch and visit his Website please go to www.ipfridays.com/ttab.

Next up is Ken who has the latest about generic top level domains.

KS: Rolf, trademark practitioners have indeed been following news about the new gTLD space. One particular gTLD that has been drawing lots of attention is .luxury and if you want to go out and get a .Luxury domain name, you will have to shell out about $799.99 for that domain name. That is second behind .rich which carries a hefty price tag of $2,500.00. That hasn’t stopped numerous trademark owners who got into the action early by filing approximately 600 sunrise trademarks during the sunrise registration period. Some of the notable brands include: Hermès, Chanel, Versace, Gucci, Cartier, Valentino, Van Cleef & Arpels and Armani. All of those companies have secured their brands in the .Luxury space. This is definitely something that trademark practitioners should look at with their clients when they are considering particular places to register their domain names. It’s undoubtedly the case that this particular space will be important in the luxury goods market. I will continue to follow this development as well as other things in the gTLD space and will have more information in the weeks to come.

KS: That’s it for this episode. If you liked what you heard, please show us your love by visiting ipfridays.com/love and tweet a link to this show. We would be so grateful if you would do that. It would help us out to get the word out. Also, please subscribe to our podcast at ipfridays.com or on iTunes or Stitcher.com. If you have a question or want to be featured in one of the upcoming episodes, please send us your feedback at ipfridays.com/feedback. Also, please leave us a review on iTunes. You can go to ipfridays.com/itunes and it will take you right to the correct page on iTunes. If you want to get mentioned on this podcast or even have comments within the next episode, please leave us your voicemail at ipfridays.com/voicemail.

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