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The Abelman Firm Intellectual Property Report

June 1, 2004

Volume 3, Issue 3

Topics

Calendar (See Below)

News

Trademarks and Unfair Competition

Copyrights

Domain Names and Other Internet Matters

Discussions

Calendar   top

Marie Anne Mastrovito and Anthony A. Coppola, Partners, Abelman, Frayne & Schwab

June 2 PLI - Patent & High Technology Licensing New York, NY
June 2-5 ECTA -23rd Annual Conference Funchall, Madeira, Portugal
June 2 - 6 FICPI (ABC Section) Meeting of the American, British and Canadian National Section (ABC) and National Associations of FICPI New Castle, New Hampshire, U.K.
June 4 - 5 The Center for Negotiation Strategy - Cutting Edge Negotiation Strategy for Lawyers New York, NY
June 7 - 9 WIPO - Standing Committee on Copyright and Related Rights Geneva, Switzerland
June 11 AIPLA - Advanced Biotechnology/Chemical Patent Practice Seminar, Seattle, WA
June 11 AIPLA - Advanced Computer/Electronic Patent Practice Seminar Seattle, WA
June 16 - 20 ABA - 11th Annual Summer Intellectual Property Law Conference. Toronto, Canada.
June 17 - 18 LES - Advanced Negotiations Skill Seminar San Diego, CA
June 18 AIPLA - Advanced Biotechnology/Chemical Patent Practice St. Louis, MO
June 18 AIPLA - Advanced Computer/Electronic Patent Practice Seminar St. Louis, MO
June 19 - 24 AIPPI - XXXIXTH World Intellectual Property Congress. Geneva, Switzerland.
June 21 - 22 PLI - Advanced Patent Prosecution Workshop 2004: Claim Drafting & Amendment Writing San Francisco, CA
June 23 - 25 PLI- Fundamentals of Patent Prosecution 2004: A Boot Camp for Claim Drafting & Amendment Writing New York, NY
June 24 PLI - Intellectual Property Issues in Structuring Deals and Drafting Agreements 2004 Phoenix, AZ (and various sites via satellite)
June 25 AIPLA - Advanced Biotechnology/Chemical Patent Practice Wilmington, DE
June 25 AIPLA - Advanced Computer/Electronic Patent Practice Seminar Wilmington, DE
June 28 - 29 PLI - Intellectual Property Antitrust 2004. New York, NY.
June 29 PLI - Patent & High Technology Licensing 2004 San Francisco, CA
June 30 PLI - Patent & High Technology Licensing 2004 Beverly Hills, CA
July 1 PLI Prior Art 2004 Understanding Patent Law Section 102 New York, NY
July 7 PLI - How to Prepare & Conduct Markman Hearings 2004 New York, NY
July 8 - 9 WIPO - Seminar on the Madrid System of the International Registration of Marks, Geneva, Switzerland (Session in French Only)
July 15 - 16 PLI - What Every Litigator Must Know About Intellectual Property. New York, NY.
July 15 - 16 PLI - What Every Litigator Must Know About Intellectual Property (Videoconference). Boston, MA.
July 19 - 23 ICAAN - Mid-year Meeting Kuala Lumpur, Malaysia
July 21 PLI - How to Prepare & Conduct Markman Hearings 2004 San Francisco, CA
July 26 PLI - Understanding Basic Copyright Law 2004 New York, NY
July 27 PLI - Understanding Basic Trademark Law 2004 New York, NY
July 28 PLI - How to Prepare & Conduct Markman Hearings 2004 Atlanta, GA
August 7 - 13 ABA - Annual Meeting, Atlanta, GA
September 14 - 17 MARQUES - 18th Annual Conference. Rome, Italy.
September 21 - 22 INTA - Famous and Well-known Marks Forum Brussels, Belgium
September 27 - 28 PLI - 10th Annual Institute for Intellectual Property Law New York, NY
September 29 PLI - Preparing Patent Legal Opinions 2004 New York, NY
September 30 - October 1 ITMA - Autumn Conference Birmingham, England, UK
October 3 - 6 INTA - Trademark Administrator Conference 2004.
October 6 PLI - Preparing Patent Legal Opinions 2004 San Francisco, CA
October 7 - 8 PLI - Patent Litigation 2004 San Francisco, CA
October 7 - 9 FICPI - The 8th Open Forum Venice, Italy
October 12 - 13 PLI - Biotechnology and Pharmaceutical Law 2004 - Patents & Business Strategies New York, NY
October 14 - 16 AIPLA - 2004 Annual Meeting. Washington, D.C.
October 17 - 21 LES - 2004 Annual Meeting Boston, MA
October 20 PLI- Electronic Discovery Guidance for Corporate Counsel New York, NY
October 21-23 ECTA -48th Council Meeting Copenhagen, Denmark
October 25 - 26 >b>PLI - Patent Litigation 2004 New York, NY
October 27-28 The Center for Negotiation Strategy - Cutting Edge Negotiation Strategy for Lawyers New York, NY
October 28-29 The Sedona Conference - 5th Annual Patent Litigation Conference, Sedona, AZ
October 30 - November 1 Seoul International Conference - Seoul International Conference on Intellectual Property & Licensing Seoul, South Korea
November 4 - 5 The Sedona Conference- 6th Annual Antitrust Law & Litigation Conference, Sedona, AZ
November 4 - 5 PLI - Understanding the Intellectual Property License Chicago, IL
November 8 - 9 PLI - Patent Litigation 2004 Tysons Corner, VA
November 10 - 13 INTA - INTA Leadership Meeting. Phoenix, AZ.
November 15 - 16 PLI - Biotechnology and Pharmaceutical Law 2004 - Patents & Business Strategies San Francisco, CA; Costa Mesa, CA; Beverly Hills, CA
November 15 - 16 PLI - 14th Annual Advanced Patent Prosecution Workshop: Claim Drafting and Amendment Writing New York, NY
November 18-19 The Center for Negotiation Strategy - Cutting Edge Negotiation Strategy for Lawyers San Francisco, CA
December 1-2 The Center for Negotiation Strategy - Cutting Edge Negotiation Strategy for Lawyers Century City, CA
December 1 - 5 ICAAN - Year-End Meeting Cape Town, South Africa
December 2 - 3 INTA - International Forum 2004 Prague, Czech Republic
December 13 - 14 PLI - Understanding the Intellectual Property License 2004 San Francisco, CA; Beverly Hills, CA (via videoconference); Costa Mesa (via videoconference), CA; San Diego (via videoconference), CA; Seattle, WA (via videoconference)
2005 Events
January 26 - 29 AIPLA - Mid-Winter Institute Jacksonville, Florida
March 6 - 8 Helsinki Symposium - The Helsinki Symposium - The Enforcement of Intellectual Property Rights Helsinki, Finland

ABA - American Bar Association
AIPLA - American Intellectual Property Law Association
AIPPI - Association Internationale pour la Protection de la Propriete Intellectuelle
ECTA - European Communities Trade Mark Association
FICPI - Federation Internationale des Conseils en Propriete Industrielle
ICANN - Internet Corporation for Assigned Names and Numbers
INTA - International Trademark Association
ITMA - Insititute of Trade Mark Attorneys (UK)
LES - Licensing Executives Society
MARQUES - Association of European Trade Mark Owners
PLI - Practicing Law Institute
WIPO - World Intellectual Property Organization

NEWS

Trademarks and Unfair Competition

European Community: Enlargement of Community    top

On May 1, 2004 ten new member states joined the existing 15 member states of the European Community. The ten new member states are:

Czech Republic, Estonia, Cyprus, Latvia, Lithuania, Hungary, Malta, Poland, Slovenia, and Slovakia.

Existing Community Trademark applications and registration are automatically extended to these new member states.

A Community Trademark now covers the following 25 countries:
Austria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Slovenia, Slovakia, Spain, Sweden, and the United Kingdom.

European Community: Amendment of Article 5 - Who May Own A Community Mark    top

Article 5 of the Community Trademark Regulations concerning persons who can own a Community Trademark has been amended.

Initially Article 5 of the Community Trademark Regulations provided (paraphrased):

  1. The following natural or legal persons, including authorities established under public law, may be proprietors of Community trade marks:
    1. nationals of the Member States; or
    2. nationals of other States which are parties to the Paris Convention for the protection of industrial property; or
    3. nationals of States who are domiciled or have their seat or who have a real and effective commercial establishment within the territory of the European Community or within a State which is a party to the Paris Convention; or
    4. nationals which according to published findings accord to nationals of all the Member States the same protection for trade marks as it accords to its own nationals.

As a result, there was a question as to whether companies (and individuals) based in countries such as the British Virgin Islands, Bermuda, the Channel Islands, the Cayman Islands and Saudi Arabia were qualified to hold a Community Trademark.

Article 5 was amended on February 19, 2004 and now provides that:

“Any natural or legal person, including authorities established under public law, may be the proprietor of a Community trade mark”.

Libya: New Trademark Application Now Possible   top

On April 23, 2004 the U.S. Treasury announced the signing of a general license permitting the filing of new trademark applications in Libya commencing April 29, 2004. The status of applications and registrations filed prior to April 29, 2004 remain blocked unless a specific license is obtained.

Pakistan: New Trademark Law   top

Effective April 13, 2004 a new trademark law came into effect in Pakistan. This TRIPs compliant act replaces the old 1940 Act and provides, inter alia, a broad definition of trademark and the introduction of service marks.

Pakistan Joins Paris Union    top

On April 22, 2004 Pakistan acceded to the Paris Convention for the Protection of Industrial Property ("Paris Convention"). Pakistan will join the Paris Union and the Paris Convention will become effective in Pakistan on July 22, 2004.

Syria Joins Madrid System   top

On May 5, 2004 Syria acceded to the Madrid System. The Madrid Agreement and the Madrid Protocol will come into force in Syria on August 8, 2004.

United States: Madrid Protocol Statistics   top

On November 2, 2003 it became possible, under the Madrid Protocol of the Madrid System, to extend International Registrations to the United States or to obtain International Registrations claiming the USPTO as the Office of Origin.

As of May 18, 2004, WIPO has received:

  1. 4041 requests for extensions of International Registrations to the United States. Of these requests, three have now been approved for publication.
  2. 889 applications for International Registrations claiming the USPTO as Office of Origin.

United States: Of Beanie Babies and “Reverse Passing Off”    top

Frank Terranella, Associate, Abelman, Frayne & Schwab

A federal appeals court has reversed the dismissal of a suit against the maker of the popular “Beanie Baby” dolls.

Peaceable Planet began selling a plush toy camel called Niles in the spring of 1999. The name was chosen to evoke the large river in Egypt where camels are indigenous. The company sold a few thousand of these toy camels in 1999. In March of 2000, Ty Inc., the maker of the popular “Beanie Babies,” began selling its own toy camel, also called Niles. Ty sold almost two million in one year.

Peaceable Planet brought suit for trademark infringement, false advertising, consumer fraud and product disparagement. The district court found that Niles was a descriptive trademark because it was a man’s name. The owners of descriptive marks must show that their mark has acquired distinctiveness before they can claim exclusive rights. Since Peaceable Planet could not show that the public associated Niles with their toy, the court dismissed its suit.

On appeal, the circuit court disagreed that the mark was descriptive. The court said that the “rule” that personal names are not protected as trademarks until they acquire distinctiveness does not apply if the public is unlikely to see the mark as a person’s name. Here, the court said, Niles is not a common name. In fact, the public is more likely to get the connection between the Nile River and the camel than they are to think of Niles as a first name. The court also noted that in addition to being a somewhat rare personal name, Niles is also the name of towns in Illinois and Michigan. It is certainly not “primarily” merely a personal name. In short, the court found Niles to be suggestive rather than descriptive and no acquired distinctiveness was necessary in order for the plaintiff to claim trademark rights. The appeals court reinstated the trademark infringement claim.

The crux of Peaceable Planet’s trademark complaint was that because Ty is so large a company, people would believe that Peaceable Planet’s Niles doll is actually a Ty doll. This is known as “reverse passing off.” The appeals court said that if the plaintiff can prove that a substantial number of consumers think that its camel is actually Ty’s, it will be entitled to a remedy because the value of its own trademark will have been damaged. The court said that it will not be enough for the plaintiff to show that consumers think that its Niles is a pirated version of the Ty doll because then there would be no confusion as to the source of the doll.

The appeals court also vacated the dismissal of the false advertising and consumer fraud claims, but it affirmed the dismissal of the product disparagement claim. The panel reasoned that even if consumers thought that Peaceable Planet’s camel was a pirated version of the Ty doll, that would not mean that they thought it was inferior in quality. The worst they could think is that the plaintiff as a pirate was unethical. The court noted that this would be a defamation claim and the complaint did not contain such a claim.

Finally, the appeals court said that while ordinarily there would be no grounds for naming the individual owner of a corporate defendant as a co-defendant, here there was evidence that Ty Warner may have been personally involved in the decision to name the Ty camel Niles. Under the circumstances, the court would not dismiss the claims against him.

The case is Peaceable Planet, Inc. v. Ty, Inc. and H. Ty Warner, (7th Circuit No. 03-3452, April 2, 2004)


Copyrights

Inexact Copy Infringement: Tufenkian Import/Export Venture v. Einstein Moomjy    top

Marsha G. Ajhar, Partner, Abelman, Frayne & Schwab

It is axiomatic that a new work of copyrightable expression which is either based on or incorporates pre-existing material is entitled to protection only as to the new authorship; it cannot “extend” or reclaim copyright to any other material, including content that is in the public domain. 17 U.S.C. 103(b). Difficulty arises, however, when the work that incorporates public domain or otherwise pre-existing third party material is asserted in a copyright infringement action and the accused infringing work is based on the same public domain material, either independently or as it is contained in the asserted work. The Second Circuit addressed this issue, among others, in its recent decision in Tufenkian Import/Export Venture v. Einstein Moomjy et al., 338 F.3d 127 (2d Cir. 2003).

In the Tufenkian case, the parties were (and are) designers and importers of Tibetan rugs. Tufenkian produced, imported and sold a carpet it called the “Floral Heriz” (“Heriz”) and alleged that a rug called the “Bromley 514" created, imported and sold by the Defendants infringed the Heriz copyright. Defendants countered that the Heriz was based on two public domain works, that Tufenkian was not entitled to a copyright inasmuch as it failed to author sufficient original new expression to warrant protection and that any similarity between the Heriz and Defendants’ Bromley was due to the fact that they shared common public domain design sources.

The district court agreed and granted Defendants’ cross-motion for summary judgment, holding that the “total concept and feel” (or “overall aesthetic”) of the Bromley was not the result of copying protectible elements from the Heriz design. Instead, the court found, the similarity was due to the defendants’ use of similar public domain elements in combination with their own original efforts. 237 F.Supp.2d 376 (SDNY 2002), 63 USPQ2d 1214 (SDNY 2002). The court observed that “[i]n comparing the two parties’ works, this Court must factor out the prominent public domain elements incorporated into Floral Heriz. These elements play a significant role in the overall appearance of the plaintiff’s work, even if plaintiff has managed to create a distinguishable variation thereon: the original, public domain aesthetic nevertheless still predominates. Since plaintiff’s copyright does not extend to those public domain elements...failure to factor them out would grant plaintiff protection to public domain elements that the public has a right to copy.” 63 USPQ2d at 1222.

Reversing the district court, Judge Calabresi, writing for the panel, addressed what he called the “conundrums of infringement by inexact copies.” Judge Calabresi noted that the district court “was surely correct to factor [the public domain] ... elements [from the Heriz and Bromley] out.” 338 F.2d at 135. “For copying,” the appellate court reasoned, “is not unlawful if what was copied form the allegedly infringed work was not protected, for example, if the copied material had itself been taken from the public domain.” Id. However, Judge Calabresi found that in its comparison of the two rugs the district court failed to consider - apart from total concept and feel - whether material portions of the Bromley infringed on corresponding parts of the Heriz. ... ‘Total concept and feel’ should not be viewed as a sine qua non for infringement - similarity that is otherwise actionable cannot be rendered defensible simply because of a different ‘concept and feel.’” Id.

Even though the “total concept and feel” of the asserted and accused works may be readily distinguishable, the danger remains that an inexact copy of a public domain work, if stemming from a third party interpretive derivative work, can result in liability for copyright infringement. In the Tufenkian case, Judge Calabresi’s decision was influenced, in part, by his observation that the defendants had copied Tufenkian’s selective elimination of certain design motifs and elements from the public domain works on which its Heriz was based. In essence, one reason the Bromley was found substantially similar to the Heriz was not only that it had taken “something” from the Heriz design but that it also had taken “nothing” (i.e., empty space) that the Court found entitled to protection. 338 F.3d at 136.

It is entirely appropriate and fair to create a design for a product based on public domain works. However, the Tufenkian case shows that a party doing so can still run afoul of the copyright laws. The better practice is to use the public domain work directly, either alone or in combination with new matter which has been independently created, rather than to refer to another’s interpretation of that work as primary source material. Careful and thorough documentation of the public domain sourcing and the addition of any independently created material added also is an advisable precaution.

  1. “The copyright in a compilation or derivative work extends only to the material contributed by the author of such work, as distinguished from the preexisting material employed in the work, and does not imply any exclusive right in the preexisting material. The copyright in such work is independent of, and does not affect or enlarge the scope, duration, ownership, or subsistence of, any copyright protection in the preexisting material.”
  2. AFS represented Defendants Michael Nichols-Marcy and Noreen Seabrook Marketing, Inc. in this action.
  3. Depictions of the rugs at issue may be viewed by clicking on the icons below.

Bromley
Heriz


Domain Names and Other Internet Matters

European Union: .EU Domain Name    top

On April 30, 2004 The European Commission published the rules governing the .eu domain name system. The .EU domain space is currently anticipated to commence operation in December 2004.

Haiti: Domain Name Registry Opens    top

The Haitian domain name registry has opened and is accepting names in the .HT and .COM.HT domain name spaces.

Moldova: .MD Registry Resumes Activities    top

The .md domain name space resumed accepting domain name applications on a first-come, first-served basis on May 1, 2004. The registry is being operated by a company called max.md. .md is the country code Top Level Domain (ccTLD) for Moldova, and is being promoted as the domain of choice for the healthcare industry.


Discussions

CAN I USE THAT MARK? SEARCHING AND CLEARING A PROPOSED TRADEMARK   top

Stephen J. Quigley, Associate, Abelman, Frayne & Schwab

You have a new product or are about to launch a new service and you need a name for it. Whether you employ a marketing firm, conduct focus groups, or just pick a word that sounds good, you should not venture forth before assuring that the proposed mark will not infringe the rights of anyone else.

Trademark Searches

The most reliable means of determining whether a proposed mark is available for use and, if desired, registration in the U.S. Patent and Trademark Office (“PTO”), is to conduct a trademark search. A search generally comprises a two step approach:

  1. A “knock-out” scan is conducted of the PTO records. This generally looks only for identical marks and its primary value is to alert you if there is a registration or application which directly conflicts with your proposed mark. If a conflict does exist, the cost of a full trademark search can be avoided.
  2. If the knock-out scan does not surface any obvious conflicts, a full search can be undertaken by Abelman, Frayne & Schwab’s in house trademark search professionals. In addition to the PTO records, the full search covers state trademark registrations, business name and product directories, trade and consumer publications, other “common law” sources, Internet web sites and domain names. The full search seeks not only identical marks, but also all similar marks identifying goods and services related to those covered by the proposed mark.

Searching minimizes the risk of an unwelcome and potentially costly surprise. No matter how well you think you know your industry, profession or field, it is virtually impossible to be cognizant of every mark or name in use. This is especially true of marks that have been filed in the PTO on an intent to use basis. These applications, which establish proprietary rights in the proposed mark, can linger for up to four years before the applicant is required to actually begin commercial use of the mark.

The Search Discloses an Identical or Similar Mark

If an identical or highly similar mark is disclosed in a search, you will not necessarily be precluded from using or attempting to register your proposed mark. Trademark infringement analysis considers not only the similarity between the marks, but also the respective goods or services, channels of trade, actual confusion, quality of the respective goods or services, good or bad faith of the junior user, and the sophistication of the customers.

For example, suppose you have selected ALPHA as a trademark. A search will disclose that there are more than 70 current U.S. registrations for ALPHA, owned by nearly as many unrelated entities. If your product or service is not similar to any of the existing ALPHA goods or services, the chances are your use and registration of ALPHA will not infringe anyone else’s mark.

Even if the search discloses a direct conflict, it may not necessarily doom your proposed mark. For example, a registered mark may have been abandoned but, because registrations in the United States are issued for ten year periods, it appears to be current. In this instance, a further investigation may be warranted. The Internet is a good place to start. If the mark in question appears on the registered owner’s web site, it’s a pretty good bet that it is presently in use. However, merely showing up on a web page is not conclusive proof of use. Ultimately, you may require the services of an agency which specializes in trademark investigations. Be cautious, however, when investigating a mark which is the subject of an intent to use application. The mark could be under active consideration, but may not appear on a web site and the customer service representatives or marketing staff may not be aware of it.

What if I Don’t Have a Search Done?

Neither federal trademark law nor the Patent and Trademark Office require a trademark search before using or filing an application to register a mark. However, if you are sued for infringement, the determination of likelihood of confusion will depend, in part, on whether your mark was adopted in good or bad faith. Courts have consistently held that relying on competent counsel’s review of a trademark search is an indicia of good faith, even if the mark is ultimately ruled to be infringing.

On the other hand, although no court has found bad faith solely because a trademark search was not undertaken, the failure to do so may be regarded as a factor in an assessment of the infringer’s good or bad faith. Therefore, the failure to search a proposed mark could have a direct bearing on whether monetary damages and attorneys’ fees are awarded against the infringer.


Copyright © 2004, Abelman Frayne & Schwab. All rights reserved.
Lawabel, Abelman, L Design, P Design, S Design, T Design, W Design, and Abelman, Frayne & Schwab are trademarks of Abelman, Frayne & Schwab



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