TTAB Rules Little Caesars DEEP!DEEP! DISH Descriptive

Little Caesars restaurant attempted to register its DEEP!DEEP! DISH trademark for pizza.  The company conceded that “Deep Dish” was a descriptive term for pizza.  It claimed, however, that the mark had acquired distinctiveness and was part of a family of marks that reinforced its acquired distinctiveness.

Little Caesars argued that its burden to prove acquired distinctiveness should be lower since the mark is a unitary phrase with a different commercial impression than the words do separately.  The company claimed that the repetition of the word Deep, with the explanation point.

The company also relied on the “family of marks” doctrine which would expedite the public’s recognition of a mark that shares a similar characteristic as another mark.

The Trademark Trial and Appeal Board (TTAB) held that:

“in an ex parte proceeding under Section 2(f), an applicant may adduce, and an examining attorney must consider, evidence of the existence of a family of marks offered to help prove acquisition of distinctiveness for a new member of the putative family.”  The board stated that Little Caesers had failed to prove the elements necessary to establish a family of marks:

  1.  that the mark shares recognizable common characteristics with the family;
  2. that the mark is distinctive;
  3. that the mark has been promoted in such a way as to create “recognition among the purchasing public that the common characteristic is indicative of a common origin of the goods or services.”

The Board held that repetition of a descriptive word with an exclamation point  was too abstract to constitute a common characteristic with a family of marks.  The Board stated that to recognize such a family of marks would “effectively grant Applicant an exclusive proprietary right to an unbounded variety of merely descriptive double word marks”, making it similar to a Phantom Trademark, which is a mark that incorporates an element that is subject to change, such as the date, a geographic location, or a model number.  An example of a Phantom Trademark is the FOR DUMMIES set of books.

With respect to the distinctiveness of the DEEP!DEEP! DISH mark, the Board found that the family claimed by Little Caesars did not repeat an element already recognized by consumers as indicating source, but merely repeated common descriptive words in relation to pizza.

With respect to the promotion factor, the Board found that despite Little Caesars having provided evidence of promotion since 1980, the promotion only showed the popularity of its products and not an indication of consumer recognition of the marks as source indicators.  The advertisements provided by the company also contained other trademarks which made it impossible for the Board to know the extent to which the advertising benefitted the DEEP!DEEP! DISH trademark or the other trademarks also listed in the advertisements.

Changes to the Trademark Trial and Appeal Board (TTAB)

Effective January 14, 2017, all Trademark proceedings (oppositions, cancellations, concurrent use and ex parte appeal proceedings) which are already in progress are subject to the following changes:

  1.  All pleadings and submissions need to be submitted through the Electronic System for Trademark Trials and Appeals “ESTTA”.
  2. Service of all papers must now be made by only email unless stipulated otherwise by the parties.
  3. Service by mail no longer entitles the respondent an additional 5 days to respond.
  4. Deadlines for submissions to the TTAB that are initiated by a date of service are 20 days.
  5. Responses to summary judgment and to requests for discovery remain at 30 days.
  6. Discovery request must be served early enough to allow for responses prior to the close of discovery (this should be an interesting issue).
  7. There will still be a duty to supplement discovery after the close of discovery.
  8. Motions to compel initial disclosures must be filed within 30 days after the deadline for serving initial disclosures.
  9. Prior to the first pretrial disclosure deadline, motions to compel discovery, motions to test the sufficiency of responses or objections, and motion for summary judgment must be filed.
  10.  There is a limit of 75 requests for production, requests admissions, and interrogatories.
  11. Testimony may be submitted by affidavit or declaration.
  12. Under Trademark Rules 2.122, 2.123, and 2.125 there are new rules for the submission of trial evidence and deposition transcripts.
  13. For proceedings filed on or after January 14, 2017, the TTAB’s notice of institution constitutes service of complaints.

For further resources you may consult https://www.uspto.gov/trademarks-application-process/trademark-trial-and-appeal-board-ttab, which contains the Notice of Final Rulemaking in the Federal Register on October 7, 2016, at 81 F.R. 69950.

International Implications of the Lanham Act – Trader Joe’s

Trader Joe’s, a grocery store that operates stores through the United States, successfully implicated the provisions of the Lanham Act against a Canadian company that was buying Trader Joe branded products in Washington State and brining them across the border to sell in its Vancouver store.  The U.S. Court of Appeals for the Ninth Circuit stated “We hold that the extraterritorial reach of the Lanham Act is a merits question that does not implicate federal courts’ subject matter jurisdiction” and that the resale of Trader Joe’s goods without proper quality control measures and at higher prices could affect United States Commerce by harming Trader Joe’s reputation.

The Washington State Trader Joe’s noticed that a particular customer was coming in a number of times weekly to purchase large amounts of items.  The customer, Michael Hallatt, operated a store called Pirate Joe’s 22 miles north of the Washington State Trader Joe’s.  The Pirate Joe’s store uses a similar red lettering logo as Trader Joe’s.  The lawsuit claims that Mr. Hallett has spent more than $350,000 buying Trader Joe’s products for resale.

The lower Court had initially dismissed the suit stating that United States Courts do not have subject matter jurisdiction over trademark infringement occurring only in Canada.   The Court stated “Plaintiff does not state a claim upon which relief can be granted because the [Washington laws]  do not apply where no Party is a Washington resident, all allegedly wrongful conduct occurs out of state, and any harm to Washington residents is extremely tangential if existent.”  The Court of Appeals, however, found that Trader Joe’s had to sufficiently allege an impact on United States commerce and that it was injured by the actions of Hallett.  Trader Joe’s argued that it was suffering reputational harm as Hallett was not exercising sufficient quality control over the products, many of which are perishable.  Trader Joe’s lawyer stated that customers of Pirate Joe’s could mistakenly associate the Trader Joe’s brand with overpriced goods (Hallett was selling the goods for more in his store) and inferior customer service.

Pirate Joe’s website at www. piratejoes.ca currently states:

“Pirate Joe’s is an unaffiliated unauthorized re-seller of Trader Joe’s products (we were sued, they lost, they appealed, they won a second try). We stock what we are asked to stock by Trader Joe’s lovers who don’t always have the time (or a car or a passport) to head south to Bellingham (the nearest Trader Joe’s). We buy retail from Trader Joe’s then import everything legally and add Canadian compliant ingredient and nutrition facts labels. We have to pay the rent and the help (and the label supplier), so prices are about 30-40 percent higher than at Trader Joe’s. We also import other brands Canadians are duped out of. If you have a request we can usually get it for you within a week (no cheese – call your representative in government).”

In addition, the website states “We love a good Fight! (Hey TJ’s, we love you too).  In order to bring the Trader Joe’s goods into Canada he had to comply with NAFTA, which made most of the goods duty free.  However, he had to create a barcode system to summarize the products because he brought so much into Canada.  He also had to print out new nutrition labels for the products to meet Canadian regulations.

After the first Trader Joe’s found out what Hallett was doing he was banned from that store so he started shopping at the Seattle Trader Joe’s.  There is currently a sign in his store that states “We pay sneaky people to shop for us at TJ’s.  (Mike has been Banned)”.   Mr. Hallett even put an advertisement on Craigslist seeking a “co-pirate for undercover work” with a “well-established international grocery smuggling operation.” Additionally, after he was sued Hallett remove the letter p from his sign so that it now reads “Irate Joes”.

His defense in this case would seem to be the concept of the first sale doctrine and grey market goods.  Once you buy something you are free to resell it to someone else so long as you do not alter the product in a way that confuses consumers

If Trader Joe’s were to open in Canada it could sue him there for trademark infringement – but this has apparently not happened yet.

Florida Breach of Contract or Unjust Enrichment

In Florida, a Plaintiff may not recover on both a breach of contract claim and an unjust enrichment claim.  Nonetheless, both claims may be pled in the alternative, though only one can ultimately survive.  In Florida every contract contains an implied covenant of good faith and fair dealing.  This implied covenant protects the parties’s reasonable expectations under the contract.  The same is true under the Uniform Commercial Code.  However, for their to be an implied covenant of good faith and fair dealing there must be an express contract, whether verbal or in writing.  In Florida a contract requires an offer, an acceptance, and consideration (something given and received of value).  A breach of contact requires 1)  a valid contract, 2)  a breach of the terms of the contract, and 3) damages caused by the breach of contract.

Unjust enrichment, on the other hand, does not arise when there is an express contract.  Unjust enrichment arises in situations where there is a contract implied by law where although there is no express contract, there is a benefit conferred on one party and it would be unfair for that party to retain the benefit without compensating the party conferring the benefit.  This could occur in a situation such as when an unconscious patient is brought to the emergency room for treatment the patient did not request but was provided anyway for the health of the patient.  In this situation, the law implies “an obligation imposed by law to do justice even though it is clear that no promise was ever made or intended.”  John D. Calamari & Joseph M. Perillo, The Law of Contracts 1-12 (2d ed. 1977) and Tipper v. Great Lakes Chem. Co., 281 So. 2d 10, 13 (Fla. 1973).  Unjust enrichment can also be available when, although there is an express contract, that contract is ruled unenforceable due to circumstances such as incapacity of an individual to enter into a contract (underage, not of sane mind), impossibility of performance, or the statute of frauds (which requires certain types of contracts to be in writing to be enforceable).

Whether to include both a claim for breach of contract and unjust enrichment or merely a claim for one or the other is a decision that the lawyer will need to make based on the circumstances of the particular case and what potential remedies are available under each cause of action.

The European Community Trademark and BREXIT

THE EUROPEAN COMMUNITY TRADEMARK

 

The European Community Trademark is a system whereby a trademark owner may file one trademark application with the Office for Harmonization in the Internal Market (OHIM), in one of the designated language, which, once registered, gives the trademark owner rights in all countries of the European Union. Under European Council Regulation (EC) No. 40/94, a single application submitted to a central office will result in a registration valid in all the Member States of the European Union.

 

OHIM, located in Alicante, Spain, first began accepting Community Trademark applications on January 1, 1996.

 

The Community Trademark does not abolish national trademark protection but allows registrations which coexist with national trademarks.   The Community Trademark is often a cost effective and simplified means of obtaining protection in European countries rather than seeking registrations in various European countries individually. An applicant files only one application and pays the costs of prosecuting only one application, rather than prosecuting applications for each separate country.

 

The Community Trademark is available to European companies and non-European companies alike.   With some limited restrictions, nearly everyone is eligible to file for a Community Trademark.  Only non-European, non-Paris Convention and non-World Trade Organization (WTO) member states that do not accord reciprocal rights to foreign applicants are excluded.

 

The Official languages under which a Community Trademark may be filed are English, French, German, Italian, and Spanish. The language requirement may pose a problem for applicants whose native language is not one of the five official Community Trademark Office languages.

 

Businesses who already own a trademark registration in one of the European Union countries may claim a priority registration date in that mark provided that the protection sought is no broader than that provided by the earlier national registrations.  Given this priority, once the Community Trademark application is granted, the national registration can be allowed to lapse, as the earlier national priority will be embodied in the Community Trademark registration.  Likewise, a Community Trademark application, if objected to by various EU countries, can be converted into a national registration in an individual EU country, while retaining the priority date of the CTM application.

 

Once important aspect of having both national and CTM registrations existing simultaneously is that an applicant should conduct a Trademark Search both of the CTM register as well as the registers of each individual EU countries.  Prior registrations, whether identical or confusingly similar to the applicants mark, both in individual countries and on the CTM register, can serve to block registration of a company’s trademark.

 

Once a Community Trademark application is filed, a search report is generated listing various similar or identical registered and pending marks, giving the applicant the opportunity to withdraw the application. Other European member states conduct their own searches and notify the Office of any conflicting registrations found.

 

USE OF THE MARK

 

While trademark rights in general are perpetual, in the United States and most other countries, to keep a trademark in effect the mark must be used in commerce.  Failure to use the mark for a certain period of time will lead to its abandonment.  Under the Community Trademark system, use in only one of the member states constitutes use in the entire Community sufficient to keep the mark in effect.

 

Five years’ nonuse of a mark renders a registration vulnerable to cancellation, although as indicated above use in one EU member state is deemed use in all of them.

 

OPPOSITIONS

 

 

Oppositions may be brought on the basis of other Community Trademarks, national registrations or applications, and other prior rights.  A benefit to opposers is that a single opposition proceeding can affect the entire Community Trademark filing, rather than having to oppose in each individual country.

 

Applications may be opposed within three months of publication for opposition for opposition purposes.  An opposer can file in any of the five languages of the Office, but must provide translation at his own expense if he does not choose one of the two languages of the application in question. Applications that are opposed successfully, or are otherwise refused, may be converted into national applications retaining the original priority date.

 

Where for a period of five years, the proprietor of an earlier national registration has acquiesced in the use of a later CTM in the member state in which the earlier trademark is protected, there shall be no basis for invalidating or opposing the CTM. This does not apply to use of the CTM in the other member states.

 

RENEWAL

 

A Community Trademark Registration is renewable every ten years.   The renewal in all countries covered by the Community Trademark may be accomplished through a single filing.  The costs and administrative benefits of a single renewal filing with a single fee, versus many filings and fees, are great. .

 

LICENSES AND ASSIGNMENTS

 

A License to use mark is an effective way for a trademark owner to utilize its rights in the mark.  The license gives a third party the right to use the mark under the terms and conditions laid out by the licensor.  A license can be either exclusive or non-exclusive, and can lay out the territories in which it is effective.  Payment of a royalty is usual in connection with obtaining a license.  Recordal of a license at the Community Trademark Office is required to be effective against third parties. The benefit of this is that, like with renewal, only one recordal in Alicante is necessary. Assignments must also be recorded to be effective against third parties.

 

INFRINGEMENT

 

Actions for infringement, and appeals therefrom, are brought in the individual member states in courts specially designated to hear Community Trademark matters, which will apply EU law, rather than national law.

 

CONVERSION INTO NATIONAL APPLICATIONS

 

Under the Regulation and Rules, a party whose Community Trademark application is rejected, either based on prior rights or for other reasons, can convert the application into separate national applications that retain the Community Trademark application priority date.

 

BREXIT

 

In June of 2016 the people of the United Kingdom voted to remove themselves from the European Union.  Under Council Regulation (EC) No 40/94 of December 20 1993 and Council Regulation (EC) No 207/2009 of February 26, 2009, there is nothing stated about what would happen to European Community Trademarks if a member of the community were to leave.  However, given that the United Kingdom has left the Union, it is likely that European Community Trademarks will no longer be recognized in the United Kingdom.  Trademark owners could thus lose all of their rights.  More than likely however, after negotiation with the European Union, the United Kingdom will reach some resolution for converting European Community Trademarks into United Kingdom national trademarks.  It remains to be seen at this time what form of agreements will be reached to prevent Community Trademark owners from losing their rights in the United Kingdom, while at the same time keeping some continuity in the harmonization of how the use and registration of marks are treated under the various laws.

 

CONCLUSION

 

The European Community Trademark is a streamlined and cost-effective mechanism for obtaining trademark rights in the European Community.  Through one filing and one filing fee an applicant can obtain a registration covering all of the countries of the European Union.  This can be particularly beneficial for U.S. companies doing business in Europe.  Further, the requirement that use of a mark must only be made in one country of the EU, allows US companies to be able to focus on only those European countries of interest to them under their mark, while allowing room for them to expand their products or services to other EU countries covered by their trademark.

 

 

 

The Miami Law Offices of Michael D. Stewart can assist you in these and a variety of other issues.  You may contact us at Michael D. Stewart, Esq. * Law Offices of Michael D. Stewart * 200 SE 1st St., Suite 701 * Miami, Florida 33131 *

 

http://www.themiamilaw.com

 

1-305-590-8909 Telephone * 1-866-438-6574 Toll-free

 

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