Tag Archives: trademark law

Trump Too Small: Supreme Court Upholds Lanham Act’s Restriction on Registering Marks With Living Individual’s Names Without Consent

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by Dennis Crouch

In an important trademark law and free speech decision, the Supreme Court held in Vidal v. Elster, 602 U.S. ___ (2024), that the Lanham Act’s “names clause” barring registration of a mark that “[c]onsists of or comprises a name . . . identifying a particular living individual except by his written consent”, 15 U.S.C. § 1052(c), does not violate the First Amendment. Writing for the Court, Justice Thomas distinguished this case from the Court’s prior decisions in Matal v. Tam, 582 U.S. 218 (2017) (disparaging marks) and Iancu v. Brunetti, 588 U.S. 388 (2019) (scandalous marks), which struck down other Lanham Act restrictions as unconstitutional viewpoint discrimination. Although content-based, the Court concluded that the names clause is viewpoint-neutral and consistent with the longstanding history and tradition of trademark law.

In the case, Steve Elster sought to register the trademark “TRUMP TOO SMALL” for use on t-shirts and other tchotchkes, referencing a comment made during a 2016 presidential primary debate. The USPTO refused the registration based on the Lanham Act’s “names clause,” which prohibits trademarks that consist of or comprise a name identifying a particular living individual without their consent.  Elster did not dispute that TRUMP referenced Donald Trump who was not directly involved in the case.

The Thomas opinion consists of Parts I-IV. However, part III was joined only by Justices Alito and Gorsuch, and so is not part of the majority opinion.  Chief Justice Roberts and Justice Kavanaugh joined I, II, and IV, and Justice Barrett joined Parts I, II-A, and II-B.  A key distinction among the justices is the role of history – with Justice Thomas indicating in Part III that history is dispositive. Justice Kavanaugh filed a concurring opinion, joined by Chief Justice Roberts, agreeing with upholding the names clause but suggesting a viewpoint-neutral provision could be constitutional even without such historical support. Justice Barrett filed an opinion concurring in part, joined by Justice Kagan, arguing the names clause is constitutional because it reasonably serves trademark’s source-identifying function, not based on history and tradition alone (Justices Sotomayor and Jackson joined parts of Justice Barrett’s opinion.)  Justice Sotomayor also filed an opinion concurring only in the judgment.

Lets look at the majority opinion: The Court first held the names clause is viewpoint-neutral because it applies regardless of the message conveyed and does not target particular views. This contrasts with the disparagement clause in Tam and immoral/scandalous bar in Brunetti, which the Court found impermissibly discriminated based on viewpoint.  However, the Court acknowledged the names clause is content-based since it turns on whether the mark contains a person’s name.

In my view, this aspect of the decision is in error — the use of an individual’s name (such as Trump) is at least as viewpoint based as the immoral/scandalous marks in Brunetti.  This is especially true if you recognize that an individual’s name is permitted to be registered – with permission.  But the problem here is that the court had found the restriction viewpoint based, it would have been hard pressed to find the names-restriction constitutional, which is the correct outcome.

Of course, even content-based speech restrictions are typically presumptively unconstitutional. Here though the court declined to apply strict scrutiny to this content-based. The court emphasized that trademark law has been content-based since the Founding without raising First Amendment concerns, reflecting the inherently source-identifying function of trademarks.

The Court traced the history of trademark law from English common law through the first American trademark statutes to the Lanham Act, showing restrictions have always been based on a mark’s content.  This history, in the Court’s view, establishes that content-based trademark rules have long coexisted with the First Amendment, so heightened scrutiny is unwarranted.

Turning to the names clause specifically, the Court found it has “deep roots in our legal tradition”, with restrictions on trademarking names “grounded in the notion that a person has ownership over his own name.”  See, Brown Chemical Co. v. Meyer, 139 U.S. 540, 542 (1891).  The Court also found no evidence the common law  or speech rights allowed using another living person’s name as a trademark without consent.  It explained this rule reflects trademark’s goals of identifying a product’s source and safeguarding the markholder’s goodwill and reputation.  A person “has no First Amendment right to piggyback off the goodwill another entity has built in its name.” San Francisco Arts & Athletics, Inc. v. U.S. Olympic Comm., 483 U.S. 522 (1987)).  Based on this history and tradition, the Court concluded the names clause comports with the First Amendment.  Although the limitations found in Brunetti and Tam were also longstanding, those are distinguishable by the court because they were deemed viewpoint based rather than viewpoint neutral.

In his concurring opinion, Justice Kavanaugh, joined by Chief Justice Roberts, agreed the names clause is constitutional based on the historical evidence, but suggested a viewpoint-neutral provision could satisfy the First Amendment even without such history.

Justice Barrett, in an opinion concurring in part joined by Justice Kagan, argued the focus on history was misplaced and the Court should have evaluated the names clause under a generally applicable First Amendment framework.  She contended content-based trademark rules are constitutional if they reasonably relate to trademark’s source-identifying purpose and preventing consumer confusion.  In her view, the names clause is constitutional under that standard because it helps ensure marks identify source and safeguards markholder goodwill. Justices Sotomayor and Jackson joined this portion of Justice Barrett’s opinion.

In a separate concurring opinion, Justice Sotomayor maintained the Court should have resolved the case based on its precedents rather than an ill-defined history-and-tradition test.  Drawing on cases involving limited public forums and government subsidies (where, IMO, speech rights are more tenuous), she argued viewpoint-neutral trademark criteria are constitutional if reasonable in light of trademark’s purpose.  The names clause satisfies that standard, in her view, because it facilitates source identification and prevents consumer confusion.

Elster provides important guidance on the constitutionality of content-based trademark registration restrictions, and also provides an indication that the Court is unlikely to further dismantle trademark law based upon free-speech grounds. The decision suggests provisions that have long been part of U.S. trademark law are likely valid, even if content-based, so long as they are viewpoint-neutral. However, the splintered reasoning leaves uncertainty about the proper framework for evaluating provisions without such historical pedigree.

Celebrity Names and Trademark Claims: Insights from the Hobbs Winery Case

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by Dennis Crouch

The Federal Circuit’s recent decision involving Paul Hobbs and Hobbs Winery raises a number of important issues for anyone investing in celebrities or influencers.  In the case, early investors in Hobbs Winery were unable to prevent Mr. Hobbs from using his name in other wine ventures, even though a registered mark on PAUL HOBBS was owned by Hobbs Winery. This case was decided on statutory grounds – with a holding that minority owners in a company are not authorized to bring a TM cancellation to protect a mark held by the company.  This is an important decision because it prevents the TTAB from being used to settle internal corporate management issues. (more…)

Generative AI and Copyright

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A few days ago I wrote an essay about the ongoing economic war between the leaders of the US and those of China, with a focus on the impact US attorneys representing Chinese clients. For the article, I used an AI tool to create some art for my publication. The image above shows the resulting four images. I chose the bottom right and had the AI enhance the image for publication by pushing a single button. I then did a cut and paste before publishing.

Although I didn’t contribute any of the expression seen in the work, after these actions and then publishing it, I actually feel some gut level of ownership. And, that I might be upset if someone else used _my_ image without permission.

My questions for you:

  • Do I deserve to “own” this image?
  • Should I be able to claim authorship?
  • Should I disclose my AI creation methodology when I use the image in published works?

Comment on LinkedIn: https://www.linkedin.com/posts/patentlyo_ai-publishing-art-activity-7059984906633842688-eGgf

 

Abitron v. Hetronic: Extraterritorial Application of U.S. Trademark Law

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by Dennis Crouch

The Supreme Court held oral arguments on March 21, 2023 in the international trademark case of Abitron Austria GmbH v. Hetronic International, Inc. and will be holding arguments on March 22, 2023 in the whisky dog toy trademark case of Jack  Daniel’s Property v. VIP Products.

Abitron was formerly the international distributor for Hetronic radio-remote-control products used largely for heavy machinery.  Hetronic products have a distinctive yellow-black coloring pattern.  At some point, Abitron began selling a competing product using the same pattern and same product names.  (Image above).  Hetronic sued and won a $90 million judgment based upon willful  trademark infringement and goodwill injury.  Hetronic also won on a contract claim, but contract law would not support this disgorgement remedy.

The $90 million award reflected the entire gross revenue of Abitron’s knockoff sales, 97% of those sales were outside of the USA.  As Abitron wrote in it its brief: these “were sales in foreign countries, by foreign sellers, to foreign customers, for use in foreign countries, that never reached the United States or confused U.S. consumers.”  Of course, this foreign anaphora omits a key domestic conclusion: the harm was directed to the USA and felt in the USA by the TM owner.  Of course, the leading justifications for TM law are tied to customer harm, and we only assign rights to the business unit because it quickly solves a collective action problem.  In that framework, any harm caused by Abitron is also felt abroad — with confusion of its non-us customers.

On appeal, the 10th Circuit sided with Hetronic and confirmed the award.  The U.S. Supreme Court then granted certiorari on the following question:

Whether the court of appeals erred in applying the Lanham Act extraterritorially to petitioners’ foreign sales, including purely foreign sales that never reached the United States or confused U.S. consumers.

Petition.  At oral arguments, Lucas Walker (MoloLamken and former Gorsuch clerk) argued on behalf of the adjudged infringer; Matthew Hellman (Jenner & Block and former Souter clerk) argued on the other side; and Masha Hansford (SG’s office) largely sided with petitioner.

Although U.S. law is generally thought to not apply extraterritorially, trademark law has had a somewhat different path triggered by the Court’s decision in Steele v. Bulova Watch Co., 344 U.S. 280 (1952), which allowed for collection of damages for foreign infringement.  Petitioners here both distinguish Steele and suggest that it could be overruled.

In my view, this level of extraterritorial application creates a sovereignty conflict, with the USA extending its reach unduly into the realm covered by trademark and competition laws of other nations.  Sovereignty principles recognize the independence of each nation and are built upon principles of non-interference — that nations should not interfere with the internal affairs of other nations.  This is a situation that calls for the court to exercise comity and abstain from extending its reach absent a clear statement and authorization from Congress. Rather, if a trademark holder wants to sue for confusing sales made in Europe, Europe is the location where the parties should deal with the issue.

Trademark Registration: 100% THAT BITCH

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by Dennis Cxrouch

In re Lizzo LLC (TTAB 2023)

In a new precedential opinion, the TTAB has sided with the musical artist Lizzo — agreeing to register her mark “100% THAT BITCH” for use on apparel.  The Trademark Examining Attorney had refused registration on “failure-to-function” — concluding that the phrase was a commonplace expression used to express a well-recognized sentiment.

The phrase comes from Lizzo’s 2017 song Truth Hurts (remade in 2019) that has become a viral sleeper hit.  The original line in the song is “I just took a DNA test, turns out I’m 100% that bitch.” But Lizzo herself did not create the phrase. Rather, Lizzo apparently saw a social media meme about being 100% that bitch and then added it to her song.  The examining attorney concluded that “evidence that consumers may associate the phrase with the famous singer/song because it was a lyric in the singer’s song does not entitle the applicant as a singer-songwriter to appropriate for itself exclusive use of the phrase.”

On appeal, the TTAB reversed the refusal.  Unlike patents and copyrights, trademark law is not designed to reward the creative endeavor of invention or authorship.  Rather, trademark is designed as a consume-protection and market-function tool and so focuses on consumer perception.  Here, the evidence suggests that the mark is being used in an ornamental fashion (rather than as simply words) and that ordinary consumers associate the mark with Lizzo.  Even though she didn’t create the words – she is the one who made them popular and transformed the “lesser known phrase to more memorable status.”  On those grounds, the TTAB concluded that the mark is registrable and thus reversed the denial.

A few years ago the mark would have also been rejected as scandalous, but that issue has been off the table since the Supreme Court’s FUCT decision.

Read the TTAB Decision here: Lizzo TTAB Decision

 

 

Upcoming Supreme Court Oral Arguments in IP & Tech Cases

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by Dennis Crouch

The Supreme Court will be handling some significant cases over the next few months that may have a major impact for folks working in IP & Tech fields. The following is brief list sorted by the date of oral arguments.

  • Feb 21 – Gonzales v. Google (Does the safe harbor of CDA Section 230 shield Google from liability for encouraging users to view offending videos).
  • Feb 22 – Twitter v. Taamneh (Can Twitter be held liable for providing a service that aids and abets terrorism, despite its substantial non-violative uses).
  • March 21 – Abitron v. Hetronic (Extraterritorial application of US Trademark Law — damages from foreign sales).
  • March 22 – Jack Daniels v. VIP (Commercial humor leading to fair use or no-infringement/dilution in the TM context)
  • March 27 – Amgen v. Sanofi (Full Scope Enablement: How much description is enough to satisfy the enablement requirement).
  • April 17 – Slack v. Pirani (For securities liability, what causal link is required between misleading statement and the purchase of shares).
  • April 18 – Groff v. DeJoy (Should Title VII of the Civil Rights Act be given more teeth to protect religious liberty in the employment context).
  • April 19 – Counterman v. Colorado (When does speech rise to a “true threat”, unprotected by the First Amendment.  Here, it was a series of unsolicited Facebook direct messages.  The question is whether his intent (mens rea) matters, or can he be convicted based only upon the reasonably perceived threat of the recipient.).
  • April 24 – Dupree v. Younter (If SJ is denied on a question of law, must the party reassert the issue in JMOL in order to preserve the issue for appeal. Although not a patent case, this issue comes up all the time in patent litigation).
  • April 25 – Yegiazaryan v. Smagin (When can an injury to a foreign plaintiff’s “intangible property” serve as the basis for a RICO claim).