UnIP (UnIntellectual Property): Common Law Trademark for “Optimal Pets”
The United States District Court for the Central District of California decided a trademark infringement dispute between two producers of pet vitamins and dietary supplements. Plaintiff, Optimal Pets, Inc. (“OPI”), began selling its pet vitamins and dietary supplements under the mark “Optimal Pets” in 2004, mainly via its website. By 2008, sales were minimal, and after a five year period, they had only sold approximately $35,000 worth of product. Sales occurred in many states, but not all, with not a single sale in 16 states during the five year period. OPI had not sought trademark registration with the USPTO or otherwise until after it discovered Defendants’ use of “Optimal Pet” in 2008 and after it had its attorney send a cease an desist letter to Defendant. Defendant did not cease and desist, and instead sought its own trademark registration and continued its sales and use of the trademark.
The issue was whether OPI had enforceable common law trademark rights, and in what geographic area. The jury found that OPI had established a senior trademark use of “Optimal Pets” throughout the United States. However, the jury was then asked to determine the geographical area, if any, in which Optimal Pets, Inc. had legally sufficient market penetration by considering each of the following four factors, giving each factor the weight that you determine to be appropriate under the circumstances of this case. The factors are: (1) the volume of sales of OPI’s Optimal Pets products, (2) the growth trends (both positive and negative) in the area; (3) the number of persons actually purchasing the Optimal Pets products in relation to the potential number of customers; and (4) the amount of Optimal Pets product advertising in the area. The jury found the absence of sufficient market penetration in 16 states, sufficient market penetration in 2 zip codes in which Defendants made no sales at any time, and it was unable to reach a unanimous verdict as to the rest of the country.
Thereafter, the Defendant sought judgment as a matter of law, pursuant to FRCP 50. The Court analyzed the above factors and held that OPI failed to establish common law trademark rights in any geographical area. Despite OPI’s argument, the Court further held that a competitor’s use of a name did not create common law trademark rights to that name.
Would this case have turned out differently if OPI was still using “Optimal Pets” effectively enough to get greater sales? It goes to show that just because a mark is used on an Internet website does not mean that it is sufficient to establish, let alone maintain, common law trademark rights. There needs to be sufficient market penetration (i.e. sales, growth, advertising in the specific geographic areas). An early application for trademark registration would have placed OPI in a far different position, and one of greater strength. Waiting until April 2009 to file its USPTO trademark application, according to this Court, was too late. I’ve said it before and I will say it again, file your trademarks early and often, and when successfully registered, enjoy nationwide priority.