Trademarks

There’s no better way to celebrate old friends than to visit them on their birthday.  So when the National Park Service’s birthday rolled around on August 25, Kat decided to fly to Yosemite.  Pictured here is her visit to Mariposa Grove to admire the majestic sequoias.

Happily, the National Parks had even more to celebrate.  Yosemite National Park, by the time of Kat’s visit, was able to restore the signage of several properties to their historic names.  Those properties include the Ahwahnee Hotel, the Wawona Hotel, Camp Curry, and the Badger Pass Ski Area.

Wait, what?  Why were their names changed in the first place?

In 2014, the National Park Service started looking for a new concessionaire company.  The winning company Aramark signed a contract purchasing all the furniture, equipment, and other physical assets of the previous concessionaire Delaware North, who had been providing their services to the National Park Service from 1993-2014.  Yosemite had used the above-mentioned names for the respective hotels, lodges, and resorts long before 1993; however, Delaware North registered trademarks for such names on its own despite such prior use by the Park Service.  As Aramark’s contract did not explicitly discuss any transfer of intellectual property, Delaware North argued that Aramark was unable to use “their” trademarks.

In response to Delaware North’s claims, the Park Service was forced to rename many properties as of March 1, 2016, when Aramark’s contract began.  The Ahwahnee Hotel was renamed the Majestic Yosemite Hotel, Camp Curry was renamed Half-Dome Village, the Wawona Hotel became Big Tree Lodge, and so on.  To long time visitors, these changes were hard to stomach.  While Delaware North offered to license the National Park Service “their” trademarks while the dispute was resolved, the Park Service refused, not wanting to acknowledge Delaware North’s rights as legitimate.

After a long negotiation process, Delaware North and the Park Service ultimately settled the resulting lawsuit in 2019.  The government ended up paying $3.84 million to Delaware North, while Aramark paid $8.16 million, and at the end of Aramark’s contract, Aramark will transfer ownership of the trademarks to the National Park Service at no cost.

While we are happy to see the matter resolved, what can be done to make sure such situations don’t happen in the future?  First, always read your contracts with specificity about intellectual property assets.  You need to make sure it is clear who owns and/or has rights in an particular asset.  You don’t want to build a brand around an intellectual property asset to which you don’t have all necessary rights. 

Alternatively, could there be some public policy exemption where the National Parks Service can own any and all trademarks regarding park areas and lodges?  Such a concept is not unheard of.  Congress has in the past granted statutory trademarks to a number of organizations.  In such a case, an organization does not file a trademark application with the federal authorities, but rather, Congress grants special protection to that organization through a statute within the U.S. Code itself.  Some organizations with such protection include Boy Scouts of America, the U.S. Olympic Committee, and maybe less familiar, the National Tropical Botanical Garden.  So what do you think?  Doesn’t the National Parks Service merit this special attention from our lawmakers?

– Kat Gavin, Esq.

Decorative, Ornamental, and Aesthetically Functional – A Cautionary Tale

They can be seen everywhere: funny phrases, beautiful works of art, and hip logos adorning hats, shirts, and apparel of all sizes and shapes.  But no matter how cool the design, catchy the slogan, or hilarious the pun, take caution before expending time and money trying to trademark or market your creative trademark.  Unfortunately, trademark law takes the on mantle of the grumpy old man whose yard swallowed many a Frisbee® and baseball of our youth, his catchphrase no longer the classic and effective “Get off my lawn,” but the much dryer “That’s decorative, ornamental, or aesthetically functional!”

The Trademark Office will refuse to register marks that are merely “decorative or ornamental.”  Meaning that if an applied-for mark is not being used as a source or brand identifier, but is rather a flashy design merely adorning the products being sold, such mark is ineligible for trademark registration.  Such objections usually arise if the mark is displayed only on the goods themselves, such as on the front of a tee shirt, and not in a manner that identifies the maker of such goods.  Thus, a decorative or ornamental objection can be overcome, or avoided altogether, if an applicant properly uses the mark in commerce as a source-identifier.  Trademark counsel will be able to advise regarding proper filing strategy for your mark.  However, once a mark is registered, it may still face an aesthetic functionality claim, if not properly utilized.

Aesthetic functionality is a murky area of trademark law that traces its roots to a comment in the 1938 Restatement of Torts: “When goods are bought largely for their aesthetic value, their features may be functional because they definitely contribute to that value and thus aid the performance of an object for which the goods are intended.”  Essentially, a mark is aesthetically functional if consumers are purchasing products for the mark itself, and such mark is not acting as a source-identifier.  This is not to say that a mark cannot act as both the reason a consumer purchases a particular product and a source identifier.  Consider the Nike swoosh.  Consumers buy all manner of goods prominently bearing the iconic swoosh, and we can reasonably infer that at least some of these consumers are buying these goods because of the design.  However, Nike has spent considerable effort in establishing itself as a brand, and consumers are not simply buying products because they like the swoosh design aesthetically, but also because they have brand loyalty to Nike and/or like Nike as a company.

Problems arise when consumers purchase products because of “interest in the specific names, independent of the reputation the companies developed when selling the products” LTTB LLC v. Redbubble, Inc., Case No. 18-cv-00509-RS, at *6 (N.D. Cal. Jul. 12, 2019).  A recent case in California, LTTB LLC v. Redbubble, Inc., highlights this distinction.  In LTTB, plaintiff LTTB brought suit against Redbubble, Inc. regarding numerous products featuring LTTB’s registered trademarks for LETTUCE TURNIP THE BEET (the “Marks”) for sale on Redbubble’s website.  LTTB LLC, at *2.  Redbubble successfully sought summary judgment claiming, in part, that the Marks were aesthetically functional.  Id.  The court held that LTTB was selling the pun, “Lettuce Turnip the Beet,” itself, stating:

The products are simply the vehicle for distributing the claimed “trademark,” rather than the other way around, where a trademark is used to identify the source of the goods. While companies that have already established s famous mark for selling a product—for instance Coca-Cola, Volkswagon, Audi, or Nike—may thereafter be able also to exploit consumer interest in the mark by selling t-shirts or other products emblazoned with such marks, and preclude others from doing so—that simply does not present an equivalent issue.

Id. at *7.

LTTB’s Marks could serve simultaneously as a functional component of a product and a trademark, if the typical consumer not only purchased the goods for its aesthetic appeal, but also inferred from the Marks that the goods were produced, sponsored, or endorsed by LTTB.  LTTB LLC, at *8 (citations omitted).  However, the court held that LTTB presented no evidence that a purchaser of “Lettuce Turnip the Beet” products could infer from the use of the pun that such products were “produced, sponsored, or endorsed by any particular person or entity.”  Id. at *8.  Thus, consumers bought these products not because they originated from a specific producer, but because of the pun itself, which is a clear example of aesthetic functionality.  Additionally, even though LTTB’s marks had achieved “incontestability” on the Federal Trademark Register, statutory incontestability “does not preclude challenges based on arguments that the marks are ‘functional.’”  Id. (citing 15 U.S.C.§ 1115(b)(8)).

To avoid claims of aesthetic functionality, trademark owners must ensure their marks act as source identifiers.  In order to best protect your designs and slogans, we always recommend you consult a licensed trademark attorney.  Counsel can help you to develop a comprehensive strategy to ensure maximum protection.

 

– Fred Freeman, Esq.

Canadian Trademark Law Changes

On June 17, 2019, Canada will enact new regulations aimed to bring Canadian trademark law in line with other companies like the United States.  Below are pertinent changes that will affect how you file and/or maintain your Canadian trademark registrations.

Nice Agreement and Filing Fees:

The Nice Classification, established by the Nice Agreement (1957), is an international classification of goods and services for identifying and registering trademarks.  The Nice Classification system is updated every five years, and the latest version includes 45 classes, with classes 1-34 representing goods and classes 35-45 representing services.  An applicant seeking to register a trademark can choose from these classes as appropriate for its goods/services.  Since the system is recognized in numerous countries, this helps to streamline applying for trademarks internationally.

Under Canada’s previous trademark laws, goods and services descriptions did not require Nice Classifications — applicants needed only to pay a single $250 CAD fee and to describe their goods/services in “ordinary commercial terms.”  One of the significant advantages of the previous Canadian regime was the ability to file with respect to an unlimited range of goods and services, and still only pay a single application fee.  Under the new law, the initial application fee will be $330 CAD for one class and $100 for each additional class in which an applicant wishes to file.

Additionally, for existing Canadian registrations, after June 17, 2019, registrants will need to pay per class for renewed marks as well.  The current renewal fee is $350 CAD, but will increase to $400 CAD, plus $125 for each additional class.

Overall, these changes will make filing for trademark protection in Canada more expensive moving forward.  In order to avoid paying additional fees per class, you may choose to file any new marks and/or renew any existing marks now.

The above changes bring Canadian trademark law in line with many other jurisdictions, including the United States, where applicants are required to separate the descriptions of goods and services according to the Nice Classification system, and to pay a fee for each class claimed in connection with any particular mark.

Shorter Renewal Period:

Previously, registrants were required to renew trademark registrations every 15 years in Canada.  The new revisions will reduce the renewal period to only 10 years.  You may choose to renew your marks in Canada before June 17, 2019 for an additional 15 years of protection.  If you renew a mark in Canada after June 17, 2019, your trademark will be valid for only 10 additional years, after which you must file an additional renewal (essentially losing 5 years of protection for the same cost).

Removal of “Use” as a Requirement for Registration:

Under prior Canadian law, no registration could be issued for a mark until the applicant officially declared use of the trademark in Canada.  Applications based on use in Canada had to contain a date of first use, and applications based on proposed use could not proceed to registration until a Declaration of Use was provided.  The new law removes the use requirement.  After June 17, 2019, an applicant will be able to file and obtain a registration for a mark without ever having used the mark in Canada.  This is similar to intent-to-use applications in the U.S. Under the new system, being the first to file an application will be extremely important, and you may wish to prioritize your Canadian applications in the future.

Madrid Protocol:

Canada’s new law adopts the Madrid Protocol which allows applicants to file an international application within a centrally-administered trademark system.  The applicant may select the member states in which they wish to obtain national protection.  These international applications must be based on a domestic registration or pending application for an identical trademark.  After June 17, 2019, applicants may designate Canada in new International Applications, or as a Subsequent Designation in existing registrations.  We recommend seeking legal counsel prior to filing under the Madrid Protocol, as there are additional considerations and requirements to be taken into account.  Please contact our offices with any questions you may have regarding filing under the Madrid Protocol.

Distinctiveness:

The new Canadian law empowers Canadian trademark examiners to object to a trademark application on the basis that the applied-for mark is not distinctive.  Previously, examiners’ review process was more limited.  After June 17, 2019, new applications may be rejected if an examiner’s “preliminary view is that the trademark is not inherently distinctive,” which will likely lead to more substantive objections during the examination process than in the past.

You May Wish to Consider:

• Filing new applications, particularly Multi-Class Applications, before June 17, 2019
  • Canada’s filing fee is $250 now, but will increase to $330 (plus $100 for each additional class) on June 17.
• Renewing Canadian registrations before June 17, 2019
  • You may want to renew before June 17, 2019 regardless of when renewal is due to reduce costs — the current renewal fee is $350, but it will increase to $400 on or after June 17 (plus $125 for each additional class).
• Filing immediately to protect key brands in Canada. Trolls will be active and may try to acquire rights in your marks due to the lack of a use requirement in pending and new applications as of June 17, 2019.
  • Employing watch services for key brands in Canada.
• Designating Canada in new Madrid Protocol international applications, or in existing registrations as a Subsequent Designation, starting June 17, 2019.
• The impact of the new law on any pending Canadian applications you may have.

 

Please feel free to contact us with any questions.  – Rina Van Orden, Esq.