What is the Cost of Use Someone's Trademark?

If you ask Walmart what the cost of using someone else Trademark, the answer is $9.5 million.  Pursuant to the case of  Variety Stores, Inc. v. Wal-Mart Stores, Inc.[i]   Walmart was sued for the use of the Variety Store’s trademark Backyard in connection with the sale of grills and grilling supplies. 

Variety has USPTO trademark registration for Backyard in the category of the lawn and gardening supplies.  Variety has been using the trademark Background in the sale of grills and grilling supplies since 1983.

Before the Court is a case in which a larger company with deeper pockets for litigation selected a product name with the same dominant word as a smaller company by which to sell the same and similar items as that smaller company. The larger company knew of the smaller company’s use — and trademark — when it decided to use the name, but the larger company used it anyway


Walmart knowingly violated Variety’s trademark.  The jury awarded Variety $45,536,846.71 as a royalty for Walmart’s use of the trademark Backyard.  The jury also award Variety $50,000,000 in disgorgement of profits Walmart earned in the sell of the Backyard products[i]

[i] http://business.cch.com/ipld/walmart-02132019-14-217DOC570.pdf

[i] Variety Stores, Inc. v. Wal-Mart Stores, Inc., E.D.N.C. No. 5:14-CV-217

Where are Your Franchise Wrapped Vehicles?

Wrapped branded vehicles are a wonderful way to promote your franchise brand.  It is like a moving billboard.  But what happens when the vehicle is involved in an accident and is totaled?  What happens to the vehicles?
In the case of one Domino’s car, the whereabouts are now known.  It has been featured on the YouTube channel Samcrac.  Samcrac purchases and restores salvage vehicles.  There is no doubt that it is a Domino’s branded vehicle.  The hood has the Domino’s logo, it has a Domino’s car top and it is equipped with a Domino’s custom warming oven.
What is in doubt is what Domino’s can do about it.  Samcrac was notified by YouTube of a trademark complaint received.  Per YouTube’s complaint policy, Samcrac was encouraged to work something out with the complainant.  YouTube would do its own investigation.  If pursuant to its own investigation, YouTube found that a trademark violation was present, YouTube would remove the video.  But the video was never removed.
Next Samcrac received an offer to purchase the vehicle from the complainant.  The offer was low.  The offer to purchase had terms that Samcrac did not like.  Samcrac negotiated with the want-to-be purchaser, let’s delivery pizza to a school with disabled children and homeless shelters.  Can Samcrac be forced to sell the car to the Domino’s?  Samcrac has hired a lawyer and started a GoFundMe page.  https://www.gofundme.com/PizzaCar
In an update Samcrac shut down the donations saying in an update:

Hey guys, earlier I shut off all donations and refunded everyone. I’d like to greatly thank everyone who took the time to visit this page, and especially those who gave. I’ve been offered assistance for this matter, and will be giving a little more information in tomorrows video. Thanks again.

Trademark infringement is about preventing customer confusion as to the maker or provider of services.  Samcrac is not in the business of making or selling pizzas.  Samcrac’s position is there is no custom confusion.  Samcrac says it is making fair use of the trademark and Samcrac can’t possibly be forced to the sell the vehicle to the Domino’s franchisee.  Note, Samcrac never says it is Domino’s franchise that filed the YouTube complaint or the one who is demanding to buy the car.  To make matter worse.  Samcrac has acquired a second vehicle thanks to a tip from a YouTube viewer.
Samcrac has meritorious arguments and could win.  What a bad situation.

What is Amazon Doing [or Not Doing] About Counterfeits?

What do think?  Are counterfeits on Amazon a problem?  Is Amazon doing enough to prevent counterfeits?

Counterfeits are made in imitation of something else with intent to deceive https://www.merriam-webster.com/dictionary/counterfeit

Daimler say ‘yes’ and no Amazon is not doing enough to prevent counterfeits from being sold on Amazon.  In fact, Daimler has filed a court complaint against Amazon assuring just that.

Daimler argues that Amazon ‘facilitates the sale of an exorbitant number of counterfeit and infringing goods’ through its platform, counterfeit activity which has increased since 2015 when the company began inducing Chinese manufacturers to list on its U.S. and European e-commerce platforms. http://www.ipwatchdog.com/2017/11/15/daimler-trademark-lawsuit-amazon-infringement-counterfeits/id=90101/

To exemplify this point in its complaint, Daimler republished in its compliant the finding of a consumer advocacy organization that sent over 32,000 notice of infringing item to Amazon. http://www.ipwatchdog.com/wp-content/uploads/2017/11/CACD-2-17-cv-07674-1.pdf
Amazon has an anti-counterfeit policy.  It is a rather simple no tolerance policy.  Here it is:

Amazon Anti-Counterfeiting Policy
Customers trust that they can always buy with confidence on Amazon.com. Products offered for sale on Amazon.com must be authentic. The sale of counterfeit products, including any products that have been illegally replicated, reproduced, or manufactured, is strictly prohibited.
We take product authenticity very seriously. It is each seller’s responsibility to source and sell only authentic products. If you sell counterfeit goods, we may immediately suspend or terminate your selling privileges and destroy inventory in our fulfillment centers without reimbursement. In addition, we do not pay sellers until we are confident our customers have received the products they ordered, and if we determine that a seller account has been used to engage in fraud or other illegal activity, remittances and payments may be withheld or forfeited. The sale of counterfeit goods can also lead to legal action by rights holders and civil and criminal penalties.
We are constantly innovating on behalf of our customers and working with manufacturers, content owners, vendors, and sellers to improve the ways we detect and prevent counterfeit products from reaching our marketplace. We work hard on this issue every day because we know that our customers trust that they are buying authentic products when they shop on Amazon.com. This is why we stand behind the products sold on our site with our A-to-z Guarantee. We also encourage anyone who has a product authenticity concern to notify us, and we will investigate it thoroughly and take any appropriate actions.

Amazon has an online complain process for filing a complaint of trademark infringement, counterfeiting, and copyright infringement.  However, Daimler reports that in following Amazon’s online complaint process

Amazon has done little to address these issues, despite having the knowledge, opportunity, and means to do so.

Anecdotally, we concur we have followed the Amazon online process with no result but frustration without proper outcome.
Daimler is asserting claims of:

  • Trademark Infringement under Sections 32, 34, and 35 of the Lanham Act
  • Trademark Dilution under Section 43(c) of the Lanham Act
  • Unfair Competition under Section 43(a) of the Lanham Act
  • Common Law Unfair Competition/Trademark Infringement
  • Trademark Infringement under California Trademark Law
  • Violation of California Consumer Protection Act

Daimler is seeking a judgment against Amazon for monetary statutory damages Amazon’s wrongful use of the Marks, including reasonable attorneys’ fees and costs; and treble [3 times] damages upon a finding of willfulness in Amazon’s unlawful acts.
Awesome case.  Surely import to all trademark owners of product markers and sellers.  We will keep you posted as this case progresses.

Copycat Advertising may not be Trademark Infringement.

Image by http://morguefile.com

Is there anyone that does not remember the dance from the movie Dirty Dancing where Patrick Swayze picks up Jennifer Gary?  Now, picture a man and pig in the same images.  Och.  Not pretty.
Ameritrade did just that.  As a commercial for its products it did a rendition of the Dirty Dancing scene using a pig and a man and they took the line from the movie ‘Nobody puts a Baby in a Corner,’ and changed it to: ‘Nobody puts your 401K in the Corner.’ The makers of Dirty Dancing, Loins Gate Entertainment, did not care for the image either.  They sued TD Ameritrade claiming, among other things, False Association and Unfair Competition, Statutory and Common Law Unfair Competition, Trademark Infringement, and Trademark Dilution.  I especially like the False Association.  A pig and man dancing is truly false association.
The court agreed. The court held that there could be a false association and unfair competition claims in the case.  This claim was allow to proceed.
However, the court said: No, it is not trademark infringement and dilution.  Remember, trademark protection is all about protecting consumers from confusion, confusion about the maker of the product.  In this case, there is no confusion that makers of Dirty Dancing provide 401K services or endorse TD Ameritrade products and services.  Hence, no trademark infringement.  Further, ‘Nobody puts a Baby in a Corner,’ and changed it to: ‘Nobody puts your 401K in the Corner’ are too dissimilar to warrant a trademark dilution claim.
This is a good little ditty of a case to remind us about what trademark is designed to protect and what it is not designed to protect.


Knock Out



When can Others Exercise Fair Use of the Franchise Name?

Fast Food-3
In-N-Out Burger has no relationship with DoorDash.  Yet, DoorDash is offering and delivering In-N-Out Burgers.  In-N-Out Burger has a beef with this.  In-N-Out Burger has filed a complaint against DoorDash.  In a statement to eater, In-N-Out Burger Spokesperson says:

DoorDash is using our food and trademarks in a way that implies we have some kind of partnership or agreement with them, when that is not the case. We have asked DoorDash several times to stop using our trademarks and to stop selling our food. Unfortunately, they have continued to prominently use our trademarks and serve our food to customers who believe that we are responsible for their delivery.


How can this be?  Can some do that?  Can someone else use your trademark?  Trademarks are words, sounds, symbols, which tell the consumer [buyer] who made or is providing the good or services being offered.  The theory is that customers buy products or goods based on the maker or provider.  Trademark laws and principals prevent the use of other trademarks in way that leads to customers being confused about who is the maker or provider of services.  Trademarks’ protection, has nothing or little to do with protecting trademark owners [unlike copyright and patent protection, which the creator or inventor].
Under limited circumstances, others may use your trademarks, for example to denote or reference your products or goods.  Hence, this is perhaps DoorDash’s defense.  This defense goes something like this:  ‘We, DoorDash, may use In-N-Out Burger trademarks, because we are referring to the actual In-N-Burger products.  We are not offering In-N-Out Burgers knockoffs.  We deliver the real thing.  There is no confusion here.’

Read Why Trademarks Should Only Be Used as Adjectives.  Click here or go to:  http://wp.me/p2wEH7-2YZ

This argument is called fair use.  There are number cases were fair use claims have been upheld and the use of the trademark is found permissible by the courts, dispute the trademark owner discontent.  Lexus.com is a notorious example.  A re-seller of the Lexus cars secured the url www.buy-a-Lexus.com to sell used Lexus cars.  The court held the re- seller’s use of the Lexus name in the re-seller’s url was permissible because the resale was selling used Lexus cars.
Trademark Fair Use
Then there are cases where fair use has not been upheld by the court.  We will follow the case.  As of this posting DoorDash has not filed an answer in the case.

Discover more information about Trademarks and Franchising.  Sign-up for our newsletter!


Click here!

Why Trademarks Should Only Be Used as Adjectives

Shiny Registered Trademark Symbol
Last week I attended a Continuing Learning Education presentation at the Northern Kentucky Chase College of Law.  One of the presenters, Alan Datri, resident of the Memphis Bioworks Foundation and former senior consultant with the World Intelligent Property Organization [WIPO], made a thought provoking statement.

He said:  Trademarks should only be used as adjectives. 

Think about that.  According to Wikipedia, an adjective is a describing word, the main syntactic role of which is to qualify a noun or noun phrase, giving more information about the object signified. http://en.wikipedia.org/wiki/Adjective
The reservation of trademarks as only an adjectives prevents the trademark from becoming generic.  Here is what the Trademark Examining Manual of Procedures says about Generic Terms.  http://tmep.uspto.gov/RDMS/detail/manual/TMEP/Oct2012/TMEP-1200d1e6993.xml

1209.01(c)   Generic Terms

Generic terms are terms that the relevant purchasing public understands primarily as the common or class name for the goods or services. In re Dial-A-Mattress Operating Corp., 240 F.3d 1341, 57 USPQ2d 1807, 1811 (Fed. Cir. 2001); In re Am. Fertility Soc’y, 188 F.3d 1341, 1346, 51 USPQ2d 1832, 1836 (Fed. Cir. 1999). These terms are incapable of functioning as registrable trademarks denoting source, and are not registrable on the Principal Register under §2(f) or on the Supplemental Register.

When a mark is comprised entirely of generic wording and some or all of the wording in the mark is the phonetic equivalent of the generic wording, the entire mark may not be disclaimed, even in the proper spelling, and approved for registration on the Supplemental Register. The disclaimer does not render an otherwise unregistrable generic mark registrable. See TMEP §§1213.06 and 1213.08(c).

The essence of the trademarks is that they are unique and they associated with a specific manufacturer or provider of the goods or services.   Hence, when we hear ‘Just Do It’ we think of Nike, and when we hear iPhone we think of Apple.  The tagline and product name is unique and we immediately identify the manufacturer.
Wikipedia site the following former trademarks as being generic.  Aspirin, heroin, and thermos. http://en.wikipedia.org/wiki/Generic_trademark.  Now, I am not going to expand on heroin, but let’s look at one of the other terms.  ‘Take some aspirin for your headache.’  In that sentence, the word aspirin is used as noun.  It does not actually mean the brand aspirin.  Now let’s switch it up a bit.  ‘Take some Bayer aspirin for your headache. ‘   The word Bayer is an adjective in the sentence and it references to the brand manufacturer Bayer.  The use of the word Bayer as an adjective rather than a noun, protects the trademark from being used as a generic term for all aspirins.  It sounds knit picky, but think about it.  It is a brilliantly simplistic way to protect a trademark from becoming generic.
Once a trademark is generic it cannot be protected.  It has no uniqueness.  It no longer references to the manufacturer or provider.  It can lose its registration with USPTO.  So, think about it.  And, think about how you use your trademark!

Get free information that matters to your business and your brand.  Sign-up for Blog newsletter!

Click Here