Exam ID No.: _____________ Law 760 — Trademarks and Unfair Competition Professor Litman Final Examination — December 2006 This examination consists of six (6) pages, plus an 18 page statutory appendix. Check now to make sure that your copy of the exam has all of the pages. Do not place your name on any of the exam materials — use only your Exam ID number.
INSTRUCTIONS This is a three (3) hour closed-book examination. Excerpts from the Lanham Act are included in an appendix to the examination should you want to refer to them. There are two questions, and they will receive equal weight in your grade. I suggest that you spend at least half the allotted time thinking about the questions and organizing your ideas before you begin to write your answers. Try to analyze the questions to determine which issues are fairly raised by the facts and which issues are extraneous. Be sure that you not only identify the determinative legal issues in your answers, but that you apply the law to the facts set out in the questions. I will give no credit to responses that simply state the law and do not apply it. You will also get no credit for raising extraneous issues, or for identifying issues but failing to analyzing them. Finally, I will subtract points from your score for flatly incorrect legal statements, so if you must guess, guess carefully. You may answer the exam on your laptop, by hand-writing in bluebooks or typing on plain paper. If you hand write your answers, write on every other line and on only one side of the page. The questions are drawn from real disputes that have occurred in real locations. Nonetheless, I do not expect you to apply the law of a particular Circuit to cases brought in its courts. For the purposes of the exam you should assume that all cases in your casebook are persuasive authority to all courts on all relevant issues. Good luck
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Question I 90 minutes You are a lawyer in the trademark division of the general counsel’s department of the Coca Cola Company. Coca Cola markets Coca Cola and more than eighty other beverages in the United States, including Sprite,
Fanta, Tab, and Fresca brand soft drinks, Burn, Full Throttle and Tab Energy energy drinks, Aquarius and PowerAde sports drinks, Odwalla and Minute Maid juice drinks, Nestea iced tea, and Dasani bottled water. The company protects all of its trademarks aggressively. Coke has hired an outside contractor to review each issue of the Official Gazette and pass along any items of potential interest. One of your jobs is to review these items and write short memoranda to your boss evaluating any legal concerns Coke might have and recommending a response where appropriate. This week, the following item of potential interest landed on your desk. The PTO has published for opposition two applications to register the trademark COCAINE for carbonated and non-carbonated soft drinks and energy drinks. A Las Vegas company named Redux Beverages filed the initial application to register the mark as an intent-to-use application on March 3, 2006. On September 25, Redux filed a second application to register a word-plusdesign mark:
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The second application was based on actual use in commerce and recited a first use-in-commerce date of June 30, 2006. The application claims the red-andwhite color scheme, the lettering of the word and the word itself: “The mark consists of the word "cocaine" in white lettering on a red background.” The same day, Redux amended its original application to claim actual use as of June 30. Both applications have been published for opposition in the most recent edition of the Official Gazette. You investigate, and establish that Redux is indeed marketing a cherryflavored energy drink under the COCAINE mark. The beverage is sold in individual 8.4 ounce cans, and is available at convenience stores in New York,
New Jersey, Texas, Nevada, California, and Washington DC. The energy in Cocaine, as with other drinks in the “energy drink” category, is supplied by sugar and caffeine. (The exception is Tab Energy, which is sugar-free.) Redux claims that a can of Cocaine has three times as much caffeine as a can of Red Bull or Full Throttle, and slightly more than a cup of Starbucks coffee. According to the label on the side of the can, the drink contains:
Ingredients: Carbonated Water, Dextrose, Citric Acid, Taurine, Natural Flavors, Sodium Citrate, Caffeine, D-Ribose, Salt, Sodium Benzoate, Inositol, Ascorbic Acid (Vitamin C), Sucralose, LCarnitine, Potassium Sorbate, Guarana Seed Extract, Pyridoxine Hydrochloride (vitamin B6), Cyanocobalomin (Vitamin B12), & FD&C Coloring.
Redux markets the drink using the slogans “Cocaine – the legal alternative” and “Cocaine – Instant Rush. NO Crash!” It has put up a website at to promote the beverage. The name of the drink has resulted in national news coverage, with a short report on Fox News TV, another
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report on MSNBC, a segment on Comedy Central’s The Daily Show, and several local television news features. USAToday, the New York Post, and the South Florida Sun Sentinel ran stories about the product launch. In response to some complaints about the product name, Redux posted the following message on its website:
We created Cocaine, in large part, because those that analyze the energy drink industry itself described energy drinks as "Speed in a Can" and "Liquid Cocaine." We thought, Why beat around the bush?" Why not just call an energy drink what is already being alluded to. And that's exactly what we did. Keeping in mind, that in doing so, we believe that you understand the difference between an energy drink and a controlled substance. However, within the past two weeks, many of the major television networks, local network news agencies and countless newspapers through the country and the world have sought to point out the fact that if you're drinking an energy drink called Cocaine, that you will try a controlled substance called Cocaine. Well, we think that kids today are neither ignorant, nor uninformed. We believe that you realize that drinking an energy drink will not turn you into that creepy, penniless, guy who is mumbling incoherently while walking through town but that use of the controlled substance very well might. In other words, you understand the difference between an energy drink and a controlled substance. However, if you don't - Please seek help immediately..
Should the Coca Cola Company be concerned whether Redux succeeds in registering its marks? Write a memo to your boss. Evaluate whether the company should take any action in response to the publication of these two applications in the Official Gazette. Describe the course of conduct you would recommend, and explain the reasons for your recommendations.
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Question II 90 minutes The Apple Computer Company produces Macintosh computers, which occupy a tiny percentage of the computer market, and iPod® brand portable digital audio players, which dominate the digital audio player market. More than 70% of portable digital audio players sold in the United States are iPods. In addition to selling computers and portable digital players, Apple Computer operates the iTunes virtual music store, which allows consumers to download individual recorded songs, albums, television episodes, movies and podcasts to play on their iPod. Material purchased from the iTunes store will not play on competing digital players. Apple also distributes iTunes software, which makes it easy for iPod owners to transfer music to their iPods from CDs or to purchase, download, and manage songs from the iTunes music store. Apple has three iPOD trademark registrations for handheld digital audio players and related software, and has pending use-based applications to register “iPOD NANO”, “MADE FOR iPOD” and “iPOD SOCKS.” Three other companies have registered “IPOD” on the principal register: Chrysalis Incorporated registered IPOD for office furniture in 1992; Newport Financial registered IPOD for books and software used in the financial services industry in 2001, and Nonin Medical registered IPOD for pulse oximeters in 2004. Apple has recently filed intent-to-use applications to register iPODCAST as a service mark for “electronic transmission of streamed and downloadable audio and video files via computer and other communications networks,” and “POD” as a trademark for “portable and handheld digital electronic devices for recording, organizing, transmitting, manipulating, and reviewing audio files.” The PTO has not yet granted or denied either of those applications. Podcast Ready is a Houston, Texas, company that makes podcasting software. Podcast Ready operates a free podcast portal at , which collects links to podcasts available for download, and facilitates podcast subscriptions. The company also distributes two software products: feedCaster™ software, which facilitates recording and distribution of podcasts, and myPodder™ software, a podcast management tool for consumers. Podcast Ready has not registered either feedCaster or myPodder on the principal register. This past September, Apple Computer Company sent a cease and desist letters to Podcast ready, claiming that its unregistered PODCAST READY and myPODDER marks infringed Apple’s registered iPOD trademarks. “Your use of PODCAST READY and MYPODDER is likely to confuse consumers into mistakenly believing Apple is associated with your products and services,” the
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letter explained. “Your use of IPODCAST READY and MYPODDER also would dilute the distinctive quality of Apple’s IPOD® mark….” In response to the letter, Podcast Ready filed a declaratory judgment action seeking a declaration that its PODCAST READY and MYPODDER marks do not infringe Apple Computer’s rights under the Lanham Act. Apple filed a counterclaim for infringement, false designation of origin, and dilution under the Lanham Act, and seeks both an injunction and damages. Apple Computer has now filed a motion for a preliminary injunction. The Oxford American Dictionary defines “podcast” as “a digital recording of a radio broadcast or similar program, made available on the Internet for downloading to a personal audio player.” The evidence submitted to the court tends to show that podcasting began in 2004 as a method of distributing downloadable episodes of Internet radio programs. Adam Curry, who hosted an Internet radio program, devised software that he named “iPodder” to distribute his program to subscribers by downloading it onto their Apple iPods. Others quickly devised different software that allowed programs to be downloaded to iPods and to competing digital audio players. Internet DJs and subscribers adopted the term “podcast” for their programs, based on a suggestion made in February, 2004, British newspaper column seeking a name for amateur Internet radio. “What to call it,” the columnist wrote. “Audioblogging? Podcasting? Guerilla Media?” Apple Computer contends, and Podcast Ready concedes, that “podcast” derives from a combination of the mark “iPOD” with the word “broadcast.” In June of 2005, Apple introduced a new version of its iTunes software, modified to allow it to be used as a podcast download and management program. Since then, Apple Computer’s iTunes online music store has maintained a website for podcasts at , at which it makes tens of thousands of podcasts available at no charge. Podcast Ready began operations in October 2005, and opened its website on March 15, 2006. It introduced its myPodder software in April. A year ago, the developers of iPodder software changed the name of their program to “Juice” in response to pressure from Apple Computer. The Pew Internet project estimates that 12% of Internet users have downloaded at least one podcast. As of November, 2006, a Google search for “podcast” yields about 123,000 results (including multiple hits for both Apple Computer and Podcast Ready), as well as eight sponsored results (from entities that are neither Apple nor Podcast Ready). You are a clerk to the district judge hearing the case. Draft an opinion.
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