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					M ARCH 2009, VOL. 48, NO. 3



                              INTELLECTUAL PROPERTY
                                              The newsletter of the ISBA’s Section on Intellectual Property Law




                                                                                              If you’re getting this
Obamas for sale: How                                                                          newsletter by postal
                                                                                                 mail and would
much is too much?                                                                               prefer electronic
                                                                                               delivery, just send
                                                                                                an e-mail to Ann
By Steven L. Baron & Lindsay H. LaVine1; sbaron@mandellmenkes.com, llavine@mandell-
menkes.com ; Mandell Menkes LLC, Chicago; © Mandell Menkes LLC, 2009                               Boucher at
                                                                                              aboucher@isba.org

   A
           s President Obama’s star has       the Ty Girlz line “Bubbly Britney” and
           risen, so too has the world been   “Precious Paris” are both blondes, and
           introduced to his daughters,       “Lucky Lindsay” is a redhead.4 These          prevailing party11 and punitive if the con-
Malia and Sasha, ages 10 and seven,           appear to be the likenesses of pop prin-      duct was willful.12
who appeared on television during the         cess Britney Spears, celebutante5 Paris           The first hurdle for the Obamas would
Democratic convention and stood at            Hilton, and actress Lindsay Lohan.            be to show that Ty used Malia and Sasha’s
their parents’ sides on election night and         The Obama girls, however, are not        “identities.” Under the Act, “‘Identity’
inauguration day. Apparently unable           pop princesses, do not have their own         means any attribute of an individual that
to let the world’s love affair with the       television show on the Disney channel         serves to identify that individual to an
Obamas pass it by, Oak Brook-based            and have not reached the age of major-        ordinary, reasonable viewer or listener,
toymaker Ty, Inc., creator of the popular     ity. They are in the public eye, probably     including but not limited to (i) name, (ii)
Beanie Babies, released the two new-          unwittingly, solely by virtue of their        signature, (iii) photograph, (iv) image, (v)
est additions to its “Ty Girlz” line of       father running for and being elected          likeness, or (vi) voice.”13 Notwithstanding
dolls—“Marvelous Malia” and “Sweet            President of the United States.               Ty’s late-breaking suggestion that it
Sasha”—available for $9.99 per doll.               Does the Obama family have legal         selected the dolls’ names based solely on
Aimed at young girls, other Ty dolls have     recourse for the use of Malia and Sasha’s     their beauty, the timing of the introduc-
names such as: “Amazing Abby,”“Kool           identities? The answer is most likely, yes.   tion of the dolls, the combination of the
Kayla,”“Beautiful Brianna,” and “Sizzlin’     Most states, including Illinois, protect      two names together and the fact that the
Sue.”2 Initially, it seemed, Ty was pleased   against the unauthorized use of an indi-      dolls have black skin coloring make Ty’s
to make the connection between the            vidual’s identity for commercial purposes.    intentions fairly transparent.
dolls and the First Daughters, but Ty later   The so-called right of publicity extends to       As to the second element of a claim
backtracked, saying that the names were       all people, regardless of whether they are    under the Act—absence of written
chosen because they were beautiful            public figures or private citizens.           consent—we assume that Ty neither
and did not have any connection to the             At minimum, the Illinois Right of        solicited nor procured the consent of
Obama girls.3                                 Publicity Act (the “Act”)6 would likely       Malia and Sasha’s parents. As to the third
    If “Sweet Sasha” and “Marvelous           govern because Ty, Inc. is headquartered      element, under the Act, “‘Commercial
Malia” are indeed modeled after the First     in Oak Brook, Illinois and the Obamas         purpose’ means the public use or holding
Daughters, this would not be the first        maintain a residence in Chicago.7 The         out of an individual’s identity (i) on or in
time Ty has used celebrities with unique      Act requires that a party obtain written      connection with the offering for sale or
names to sell its dolls. For example, in      consent to use an individual’s identity       sale of a product, merchandise, goods, or
                                              for commercial purposes. To prevail on        services; (ii) for purposes of advertising
                                              a claim in Illinois, a plaintiff must prove   or promoting products, merchandise,
   IN THIS ISSUE                              that her identity was: (1) used without       goods, or services; or (iii) for the purpose
                                              her (or, in the case of a minor, her par-     of fundraising.”14 While the Act does not
                                              ents’) permission, (2) appropriated by the    apply to use of an identity for “non-com-
                                              defendant, and (3) used for commercial        mercial purposes, including any news,
                                   ..... 1    purposes.8 Under the Act, the prevailing      public affairs, or sports broadcast or
                                              plaintiff may be entitled to an injunc-       account, or any political campaign,”15 Ty,
                                              tion,9 and actual damages and profits of      Inc. would be hard-pressed to convince a
                                              the defendant or $1,000, whichever is         trier of fact that the sale of its “Marvelous
                                   ..... 2
                                              greater.10 In addition, the court may, in     Malia” and “Sweet Sasha” dolls—at nearly
                                              its discretion, award attorney fees to the    $10 apiece—was for anything other than
                                                        Intellectual Property

a commercial purpose.                           Efforts by the Obama administration to            famous.” See <http://www.urbandictionary.
    Even though it appears that the             police the First Family’s image would be          com/define.php?term=celebutante>.
Obamas could state a viable claim               time-consuming and expensive. Filing                  6. Illinois Right of Publicity Act, 765 ILCS
against Ty, it is unlikely that they would      litigation against every retailer of unau-        1075/1 et seq. (1999)
                                                                                                      7. We focus on Illinois law but recognize
expend political capital on such a mis-         thorized Obama goods would be a logis-
                                                                                                  that many other states have right of publicity
sion. While there have been some law-           tical and public relations nightmare.             common law and statutory law that would
suits filed involving political figures suing       Insofar as Ty is concerned, as this           potentially apply.
for violation of their right of publicity,      article is submitted to press, Ty’s Web               8. 765 ILCS 1075/30; see also Brown v. ACMI
a recent Westlaw search netted zero             site states that its “Marvelous Malia” and        Pop Division, 375 Ill. App. 3d 276, 873 N.E.2d
reported decisions. In 2004, Gov. Arnold        “Sweet Sasha” dolls have been “retired.”19        954 (1st Dist. 2007).
Schwarzenegger sued an Ohio company             Now, of course, the law of supply and                 9. 756 ILCS 1075/50.
over a bobblehead likeness in a suit            demand kicks in and industrious market-               10. 765 ILCS 1075/40.
and tie, posing with an assault rifle and       ers on eBay are offering the dolls as a pair          11. 756 ILCS 1075/55.
ammunition. The governor’s legal team           for as much as $169. But, there’s good                12. 765 ILCS 1075/40(b).
                                                                                                      13. 765 ILCS 1075/5.
fired off a strongly worded cease and           news: shipping is free.
                                                                                                      14. Id.
desist letter,16 to which the company’s         ___________                                           15. 765 ILCS 1075/35(b)(2).
lawyers countered that it was parody                1. Mr. Baron is a partner and Ms. LaVine          16. See Cease and Desist Letter from
protected by the First Amendment.17             is an associate with the law firm of Mandell      Lavely & Singer PC to Todd D. Bosley of
Several months later, the parties reached       Menkes LLC.                                       Ohio Discount Merchandise, Inc. available
a settlement whereby the company was                2. Available at <http://ty.com/newhome>.      at <http://www.thesmokinggun.com/
able to manufacture modified bobble-                3. See Andrew Hermann, Chi. Sun-Times         archive/0430042arnold1.html> (Apr. 29, 2004).
head dolls (sans guns) in exchange for a        available at: <http://www.suntimes.com/               17. John Broder, Schwarzenegger Files Suit
                                                news/politics/obama/1393399,CST-NWS-              Against Bobblehead Maker, N.Y. Times, May 18,
portion of the profits being donated to
                                                dolls23.article>, (Jan. 23, 2009); and Meghan     2004.
Schwarzenegger’s charity.18                     Streit, Crain’s Chi. Bus available at: <http://       18. Lynda Gledhill, Governor’s Bobblehead
    No doubt, there is much public inter-       www.chicagobusiness.com/cgi-bin/news.             Says Farewell to Arms, San Francisco Chronicle,
est surrounding the First Family. Gauging       pl?id=32717>, (Jan. 22, 2009).                    Aug. 3, 2004 at A-2.
from the unprecedented interest in the              4. See <http://ty-girlz.ty.com/>                  19. <http://ty-girlz.ty.com>
campaign, inauguration, and all things              5. The Urban Dictionary defines celebu-
Obama, interest will continue to build.         tante as “a socialite who is famous for being




The consequences of committing fraud in trademark filings
By Richard B. Biagi and Jeremy M. Roe; Neal & McDevitt, LLC, Northfield, IL; Copyright © 2008 Neal & McDevitt, LLC. All Rights Reserved.*




    O
            ne area of growing interest         clear—if an applicant commits fraud by            tion. Fraud is also a defense to claims
            in trademark law today is the       providing a misstatement of goods or              of trademark infringement and unfair
            Trademark Trial and Appeal          services use in a single-class trademark          competition, pursuant to Section 33(b)
Board’s (“TTAB” or “Board”) position            application, the resulting registration           of the Lanham Act, 15 U.S.C. § 1115(b).
toward the commission of fraud on the           may be cancelled in its entirety upon             The issue of fraud on the PTO gained
U.S. Patent and Trademark Office (“PTO”)        challenge. For a multi-class application,         particular prominence after the TTAB’s
in trademark applications, statements of        fraud may potentially result in the can-          decision in Medinol Ltd. v. Neuro Vasx,
continued use, and renewals. Generally,         cellation of the mark within the interna-         Inc., 67 U.S.P.Q.2d 1205 (T.T.A.B. 2003).
fraud may be committed when a trade-            tional class of nonuse or misstated use.1         Prior to Medinol, the TTAB required a
mark applicant alleges use of its mark          While a finding of fraud does not neces-          showing of bad faith on the part of the
on a variety of goods and services, but         sarily eliminate a mark owner’s common            applicant to justify a finding of fraud—
in fact is not actually using the mark on       law rights, the owner does lose the ben-          and thus possible cancellation—of a
each and every of the goods and services        efits of a federal registration.                  trademark registration. But in Medinol,
listed in the application. Fraud may be                                                           the Board stated that specific intent to
alleged in an opposition or cancellation          Origins of the Fraud on the PTO                 defraud the PTO is not necessary; rather,
proceeding and is actionable even if an                       Doctrine                            the standard is whether the applicant
innocent error.                                    Section 14 of the Lanham Act,                  knew or should have known that it was
    While the fraud doctrine has been           15 U.S.C. § 1064, provides a series of            making false, material representations of
in place for many years, the TTAB case-         grounds upon which a registered mark              fact in connection with the application.
law continues to evolve. Indeed, under          may be cancelled, including committing            For instance, in Medinol, the trademark
today’s standard the consequences are           fraud in procuring a federal registra-            owner signed a Statement of Use for


2                                                                                                           Vol. 48, No. 3, March 2009
                                                       Intellectual Property

its NEUROVASX mark on catheters and             its trademark THE SIGN (used with a vari-
stents, but the trademark owner did not
actually use the trademark on catheters.
                                                ety of entertainment services) on some
                                                of the services in its application constitut-
                                                                                                    Intellectual Property
The Board cancelled the trademark in its        ed fraud. In dicta, the Board hinted that
                                                                                                  Published at least four times per year.
entirety, finding that the owner knew or        a misstatement of goods and services,
should have known that its Statement of         amended prior to publication, would not            Annual subscription rate for ISBA
Use was false.                                  amount to fraud.                                            members: $20.
     After Medinol, there was uncertainty           In University Games Corp. v. 20Q.net,       To subscribe, visit www.isba.org or call
over what exactly constituted fraud.            Inc., Opp. Nos. 91168142, 91170668                          (217)525-1760
In addition to false statements of use          (T.T.A.B. 2008), the Board held that an
involving an application, fraud may also        applicant is entitled to a “rebuttable                            Office
be committed by submitting a false              presumption” that there was no willful                     Illinois Bar Center
statement of continued use (i.e., Section       intent to deceive the PTO if the applicant                  424 S. 2nd Street
8 affidavit) or a misstatement that a           amends its application prior to publica-                  Springfield, IL 62701
trademark specimen was actually used in         tion. In University Games, the registrant       Phones: (217) 525-1760 OR 800-252-8908
interstate commerce. Further, fraud may         initially applied for the trademark
                                                                                                             Web site: www.isba.org
also be found in Section 1(b) intent-to-        TWENTY QUESTIONS for board games,
use applications. The TTAB has held that        T-shirts, and promotional materials. After                         Editor
an applicant must have, at the time of          the Examining Attorney determined that                          Daniel Kegan
filing, a bona fide intent to use its trade-    the goods description was improper,                       79 W. Monroe St., Ste. 1320
mark on all of the goods and services           the registrant deleted references to                       Chicago, IL 60603-4969
within its application.                         T-shirts, paper products, and videos, and                        Associate Editor
                                                its application was registered. During a                          Reginald J. Hill
        Recent Interpretations                  cancellation proceeding, the applicant                            330 N. Wabash
    In Sierra Sunrise Vineyards v. Montelvini   for the trademark 20Q for entertainment                           One IBM Plaza
S.p.A., Cancellation No. 92048154 (T.T.A.B.     services claimed that the registrant had                         Chicago, IL 60611
2008), the TTAB cancelled the registration      committed fraud by initially claiming
                                                                                                        Managing Editor/Production
for MONTELVINI VENEGAZZU (used with             use of the TWENTY QUESTIONS mark
                                                on T-shirts and promotional materials.                      Katie Underwood
wines, spirits and liqueurs) because the
                                                The Board disagreed, finding that the                     kunderwood@isba.org
trademark owner fraudulently claimed
continued use on liqueurs in its Section        applicant failed to rebut the presumption         Intellectual Property Section Council
8 declaration of use. The Board’s decision      that the registrant had no willful intent                 Joseph T. Nabor, Chair
in Sierra Sunrise underscores the key fact      because it amended its goods descrip-                  Kristin L. Lingren, Vice-Chair
that reliance on a foreign application          tion prior to publication.                               Dale R. Kurth, Secretary
for a U.S. registration requires use in U.S.                                                          Eugene F. Friedman, Ex-Officio
(interstate) commerce on each and every                   Best Practices and                                    Kelley M. Gilbert
good and service in the application.                      Recommendations                                      Theresa V. Johnson
    In Herbaceuticals, Inc. v. Xel                   Given the current enforcement                             Marron A. Mahoney
Herbaceuticals, Inc., 86 U.S.P.Q.2d 1572        practices of the Patent and Trademark                           Brian R. Michalek
(T.T.A.B. 2008), the Board cancelled            Office, avoiding fraudulent statements in                       Amir I. Mohabbat
four registrations for the mark XEL             trademark filings should be a top priority                      Charles L. Mudd
HERBACEUTICALS, each of which was               for mark owners and trademark practitio-                        Alan R. Singleton
a single-class application for a variety        ners. Indeed, there are several practices                       Eric R. Waltmire
of herbal remedy goods. Finding that            that trademark owners and practitioners
the mark owner was not in fact using                                                                   Carl R. Draper, Board Liaison
                                                can implement to lessen the possibility
the mark on each and every good as                                                                       Lynne Davis, Staff Liaison
                                                of committing fraud.
alleged in its statements of use, the                                                                Steven L. Baron, CLE Coordinator
                                                     For the individual applicant, such as               Lisa M. Nyuli, CLE Liaison
Board dismissed the mark owner’s plea to        a small business filing on its own behalf,
partially cancel the registrations only for     it is imperative that the initial trademark     Disclaimer: This newsletter is for subscribers’ personal
                                                                                                use only; redistribution is prohibited. Copyright Illinois
the goods of nonuse. Instead, the Board         application only cover those goods and          State Bar Association. Statements or expressions of
stated that “if fraud can be shown in the       services upon which the proposed mark           opinion appearing herein are those of the authors and
procurement of a registration, the regis-       is actually being used, or alternatively        not necessarily those of the Association or Editors, and
tration is void in the international class or                                                   likewise the publication of any advertisement is not to
                                                upon which there is a bona fide intention       be construed as an endorsement of the product or ser-
classes in which fraud based on nonuse          to use the mark. A bona fide intention          vice offered unless it is specifically stated in the ad that
has been committed.”                            should be more than a mere business             there is such approval or endorsement.
    Also, until recently, the TTAB remained     plan—it should entail actual efforts to         Articles are prepared as an educational service to
silent regarding whether a correcting           begin use of the mark on those goods            members of ISBA. They should not be relied upon as a
                                                                                                substitute for individual legal research.
amendment to a description of goods             or services, or at the very least, concrete
                                                                                                The articles in this newsletter are not intended to be
and services prior to publication avoided       plans to commence use in the near               used and may not be relied on for penalty avoidance.
fraud. In Hurley International LLC v. Volta,    future. Further, it is best practice that       Postmaster: Please send address changes to the Illinois
82 U.S.P.Q.2d 1339 (T.T.A.B. 2007), the         the signing party for the application           State Bar Association, 424 S. 2nd St., Springfield, IL
Board held that an applicant’s nonuse of        has personal knowledge of actual use.           62701-1779.



Vol. 48, No. 3, March 2009                                                                                                                               3
                                                     Intellectual Property

Willful blindness by the signing party is     ing registration, the owner must renew       applicant’s proposed mark, or instituting
no defense to fraud. As stated in Medinol,    its mark for an additional ten years by      a cancellation proceeding against a
the appropriate standard is whether the       filing a Section 9 Renewal Application       subsisting registration, the trademark
applicant knew or should have known           together with a Section 8 Affidavit of       owner and its counsel must first consider
the statement was false.                      Continued use. In each of these contexts,    whether its own mark is vulnerable to
    If the applicant is a general practi-     the attorney should actively question the    cancellation based upon a fraudulent
tioner or in-house counsel, she should        client to ensure that use is continuing      description of goods and services.
request some level of proof from the          on all goods and services. In the event      __________
client that it is actually using the mark     that use ceases on one or more of the           *Richard B. Biagi, rbiagi@nealmcdevitt.
or has a bona fide intention to use it on     goods or services, it is imperative that     com, and Jeremy M. Roe, jroe@nealmcdevitt.
every good and service. Also, while it        those goods/services be deleted from         com, are intellectual property and marketing
may be more costly initially, the attor-      the Affidavit of Continued Use in order      law attorneys at Neal & McDevitt, LLC, www.
ney may recommend filing a separate           to avoid fraud and subjecting the entire     nealmcdevitt.com. The views and opinions
application for each international class of   registration to potential cancellation.      expressed here are solely those of the authors.
goods and services to simplify the appli-          For any type of trademark applicant,
                                                                                               1. While this article was in process, the
cation process and minimize the risk of       if an error in the statements regarding      TTAB decided G&W Laboratories, Inc. v G W
committing fraud.                             actual use or intended use becomes           Pharma Ltd., Opp. No. 91169571 (T.T.A.B. Jan.
    The trademark attorney should take        evident early in the application process     29, 2009) (precedential), holding that “each
an active role in the continuation and        (prior to publication of the application),   class of goods or services in a multiple class
renewal of the client’s trademark registra-   the applicant should promptly amend its      registration must be considered separately
tions. Between the fifth and sixth year       goods and services description to avoid      when reviewing the issue of fraud, and judg-
following registration, the mark owner        fraud.                                       ment on the ground of fraud as to one class
must submit a Section 8 affidavit stat-            Finally, if a trademark owner is con-   does not in itself require cancellation of all
ing continued use on every good and           sidering pursuing litigation for trade-      classes in a registration.”
service. At each ten year point follow-       mark infringement, opposing another




                                                                                                                         Vol. 48 No. 3
     Permit No. 820
                                                                                                                          March 2009
     Spring eld, Ill.
          PAID                                                                                       Spring eld, Illinois 62701-1779
     U.S. POSTAGE                                                                                    Illinois Bar Center
     Non-Pro t Org.                                                                                Intellectual Property

				
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