Trademark Law

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By: Scott Hervey

Brand licensing transactions can be structured in a wide variety of ways.  However the fundamental purpose remains the same; to give a third party the right to benefit from the goodwill and economic value associated with an established mark.  Regardless of the structure of the transaction, there are key deal terms that all brand owners need to consider in all licensing transactions. 

1.         Consider Equity.           Most licensing transactions take the form of a contractual relationship whereby the brand owner (licensor) grants the licensee the right to use a brand for a specific purpose in exchange for a royalty.  Although this arrangement is fine for most instances, in certain circumstances it may be more advantageous to the licensor to take a different approach.   For example, the licensor and licensee can form an entity and then have the entity enter into a license agreement with the licensor, which has certain advantages.  First, if the venture is one that lends itself to possibly being acquired by a third party, by virtue of having an equity position, the licensor can participate in the purchase or any other liquidity event.  Obviously a license agreement could also be structured to protect against a licensor not participating in the sale of the licensee. There are however other good reasons to consider running the transaction through an entity.Continue Reading Six Key Points in Negotiating Brand Licensing Agreements

By: James Kachmar

The Ninth Circuit recently addressed the availability of a wide variety of damages in a trademark infringement case. In Skydive Arizona, Inc. v. Quattrocchi  (2012 U.S. App. LEXIS 5100), the Court analyzed the various types of damages that are available to litigants in a trademark infringement action.

Skydive Arizona, Inc. (“Skydive”) operates one of the largest skydiving operations in the world.  Defendants operated an internet and telephone based advertising service which made skydiving arrangements for its customers as well as offered coupons for various skydiving centers.  Defendants operated several internet domain names that were strikingly similar to Skydive’s trademark and apparently falsely advertised that it was the owner of several skydiving centers in Arizona.  In addition, Defendants sold skydiving certificates that allegedly misled customers into believing that Skydive Arizona would accept them for their skydiving center.Continue Reading Skydiving and Trademark Infringement Damages

So many of us have become hopelessly addicted to our Blackberry smartphones and personal messaging devices that the devices are frequently referred to as “Crackberries.”  Seeking to capitalize on this addiction, beginning in December 2006, Defining Presence Marketing Group (“DPMG”) sought to register four trademarks covering various iterations of the phrase “Crackberry.”  Claiming their use was a parody of the ever popular Blackberry device, DPMG based their trademark registration on use of the Crackberry mark in connection with “Web-based marketing services, computer services, online chat rooms, and apparel.”  All four of the Crackberry marks were published for opposition in late 2007. 

Research in Motion (“RIM”), owner of the Blackberry trademark has been embroiled in patent litigation for most of the 21st century and apparently has not had its fill of intellectual property-related litigation.  Not long after DPMG’s applications were published, RIM initiated opposition proceedings challenging all four of the Crackberry marks.  DPMG defended its applications by asserting that Crackberry was a parody of the Blackberry name, and as such would not cause confusion among consumers.  RIM disagreed, claiming that use of the Crackberry marks was likely to cause confusion and ultimately would cause dilution of the Blackberry trademark. Continue Reading The Blackberry Might be Addictive, but Don’t Call it a Crackberry

By: Jeffrey Pietsch 

Naked licensing is not as fun as the name suggests. Rather it can mark the end of a trademark owner’s exclusive right to their trademark. Naked licensing occurs when the trademark owner fails to exercise adequate quality control over the licensee.  This usually occurs when a trademark owner grants a third party the right to use a trademark with little or no restrictions.  Naked licensing could also occur when a trademark owner fails to enforce quality control provisions in the license agreement.  The failure of the trademark owner to control the use of its trademark by third parties may result in the trademark ceasing to represent the quality of the product or service the consumer has come to expect.   The Ninth Circuit stated that such licensing is “inherently deceptive and constitutes the abandonment of any rights to the trademark by the licensor.” 

In one such case before the Ninth Circuit, a licensee sought declaratory relief against a trademark owner on the grounds that the trademark owner abandoned its rights in the trademark by granting naked licenses to others.  The trademark in question, FREECYCLE, was owned by The Freecycle Network (“TFN”) and used by TFN to identify TFN’s services known as “freecycling.”  Freecycling is the practice of giving an unwanted item to another so that it can continue to be used as intended.Continue Reading Naked Licensing: Trademark Owners Beware

It only took four days, but four days was enough time for New York City fashion designer Joseph Mbeh to file an application with the United States Patent and Trademark Office seeking to register a trademark for “Blue Ivy Carter NYC.” Not coincidentally, “Blue Ivy” is the name chosen by Beyoncé and Jay-Z for the daughter born to them on January 9, 2012. The application is still pending before the United States Patent and Trademark Office, and alleges that Mbeh first used this mark “at least as early as January 9, 2012.”

Similarly, as you may recall, it was nearly a year ago when Governor Sarah Palin filed a trademark application seeking registration of her own name. Although Ms. Palin’s application was the topic of many jokes on late night television programming, as will undoubtedly be the case regarding the “Blue Ivy” mark as well, you may be surprised to learn that the Trademark Act of 1946 contains specific provisions allowing a person to obtain a trademark covering their name. Chapter 1300 of the Trademark Manual of Examining Procedure (“TMEP”) defines the criteria which, if met, permit a person to successfully obtain a trademark covering their name. Not unlike other trademark applications, the application must cover a mark which identifies the goods or services associated with that mark, and must function as an indication as to the source of those goods or services while distinguishing them from others. As a result, any person may seek registration of their name, provided they can demonstrate that their name is so distinctive that the public immediately thinks of them when the name is heard. Continue Reading Is A Trademark Application An Appropriate Gift At A Baby Shower?