UnIntellectual Property (UnIP): Trade Dress for Water Squirting Toys

The United States District Court for the District of Jersey, in an over 60 page opinion, has refused to issue a preliminary injunction based upon alleged infringement of trade dress.  Plaintiff, Buzz Bee, offers a product line entitled WATER WARRIORS, which includes the AVENGER, KWIK GRIP XL, ARGON, and XENON water squirting toys, and seeks to protect the trade dress for each model.  For example, Plaintiff identified its AVENGER trade dress, which was not registered with the USPTO as follows:

(i) a raised portion along the top of the rear body portion, having a downwardly sloping body element crossing forwardly along the rear body portion, a forward wavy top projection and a forward wavy lower projection with a wave-like arcuate design pointing rearward formed between the top projection and the lower projection; (ii) an irregularly shaped inlay having a forward point located in the rear body portion; (iii) a front and bottom body portion having a complementary wave-like shape to meet the rear body portion, a grip portion having a raised back, a downwardly extending trigger guard portion having an arcuate design inlay pointing forward, a forward raised conical portion; (iv) a forward stock portion having three sloped ridges; and (v) a cylindrical orange muzzle portion.
Defendant, Swimways, manufactures leisure and recreational water products, including a watergun product line from a manufacturer’s catalog while in discussions with Target for the sale of the same.  Swimways’ FLOOD FORCE line includes the AVALANCE, TSUNAMI, STORM, and STRYKER.
As evidence of the similarity between Buzz Bee’s and Swimways’ products, Plaintiff provided a February 12, 2014 post from the “BUFFDADDY NERF” blog, in which the blogger discussed similarities amongst the products.  Defendant countered with evidence of massive third party use of such products.
The Court first analyzed whether the trade dress claimed by Plaintiff was functional, to which it held: “The WATER WARRIORS trade dresses are not functional; Plaintiff has shown a likelihood of success with this element.”  However, Plaintiff’s efforts to obtain a preliminary injunction failed because, as the Court put it, “[u]pon the present record, Plaintiff has not demonstrated a likelihood of showing that its trade dresses have acquired secondary meaning,” after having analyzed each of the factors: (1) the extent of sales and advertising leading to buyer association; (2) length of use; (3) exclusivity of use; (4) the fact of copying; (5) customer surveys; (6) customer testimony; (7) the use of the mark in trade journals; (8) the size of the company; (9) the number of sales; (10) the number of customers; and, (11) actual confusion.  While the Court noted the similarity between the products makes it a difficult decision, the extraordinary remedy of an injunction ultimately favored denial.  That said, the Court seemed to provide a road map, so to speak, of ways Plaintiff’s case could be improved, including additional evidence.  One such piece of evidence, which always becomes a factor in secondary meaning cases relates to surveys and/or testimony, to which the Court said: “Perhaps as pretrial discovery progresses, Plaintiff will amass customer testimony or survey evidence that sheds light upon customer recognition of Buzz Bee’s products or confusion as to the source of Swimways’ products. Presently, this lack of customer evidence cuts against Plaintiff.”
This case is one worth keeping an eye on if it proceeds.  The Court’s analysis is, in my humble opinion, typical of these cases and provides an easy to follow, factor by factor, guide for trademark lawyers in these kinds of cases.  I wonder if a design patent had been pursued, and successfully, whether this case would be different.  Dual protection, with the trade dress remaining even after any such design patent expires, may have been the best IP protection route.  That said, it is always easy to critique after the fact, without knowing what discussion the IP lawyers had with the client and/or the client’s desires/budget/etc.
Buzz Bee Toys, Inc. v. Swimways Corp., CIV. 14-1948 JBS/KMW, 2014 WL 2006799 (D.N.J. May 15, 2014).
 

UnIntellectual Property (UnIP): Trade Secret for Software

The United States District Court for the Northern District of California has once again taught trade secret plaintiffs a hard lesson.  The Court granted Defendant’s motion to strike Plaintiff’s trade secret misappropriation cause of action for failure to identify the trade secret, which was alleged to be recruiting software, with reasonable particularity.

In doing so, the Court analyzed the California Civil Code, namely Section 2019.210:

For each trade secret, plaintiff must file, and serve on counsel, a statement, under seal, that should include:
(1) a summary of the specific trade secret;
(2) the background of the trade secret and a description of how each secret has derived independent, actual or potential economic value by virtue of not being generally known to the public:
(3) a description of how each secret has been the subject of reasonable efforts to maintain its secrecy; and finally
(4) each of the precise claimed trade secrets, numbered, with a list of the specific elements for each, as claims would appear at the end of a patent.

Defendant provided a three-page narrative and three barely-legible schematics. No explanation was provided for the schematics other than to say a “representation of Jobscience’s proprietary process and efficient solution is reflected in the following schematic diagram and screen shot examples.”  Having previously been warned, twice, by the Court that failure to provide additional identification or face dismissal, the Court finally dismissed the claim, without leave to amend.

This may sound harsh, but given the factual nature of trade secret misappropriation claims, especially when it comes to software, it aids in more efficient litigation.  Interestingly here, Plaintiff still may be able to satisfy its copyright infringement claim, but we shall see given that the remainder of this Opinion discusses issues concerning expert analysis.

Jobscience, Inc. v. CVPartners, Inc., C 13-04519 WHA, 2014 WL 1724763 (N.D. Cal. May 1, 2014).

 

 

UnIntellectual Property (UnIP): Trade Dress for Speaker Adapter

The United States District Court for the Middle District of Florida has granted Plaintiff’s motion for summary judgment with regard to Defendant’s trade dress claim in a speaker adapter.  Plaintiff filed the present lawsuit seeking declaratory judgment from the Court that its sale of a Jeep Wrangler aftermarket speaker adapter on eBay was not unlawful.  Defendant had offered a speaker adapter made of steel, with rounded corners, featuring holes for mounting, and includes hardware for installation.

Defendant has previously failed to acquire a design patent, despite having applied for one, because the application was incomplete, which led to it never being examined.  It also failed to acquire a copyright, again despite having applied for one.  The US Copyright Office stated: “[b]ecause all of the elements of the work you deposited are either related to the utilitarian aspects or function, or are subsumed within the overall shape, contour, or configuration of the article, there is no physically or conceptually ‘separable’ authorship as such. Consequently, we cannot register this claim.”  Nonetheless, when Defendant identified Plaintiff’s sales, it sent a cease and desist letter to Plaintiff, who complied with requests in an effort to avoid litigation.  However, when Defendant posted the letter on his Facebook page, Plaintiff took this action.

The Court focused its trade dress analysis on the design features of Defendant’s speaker adapter, which Defendant claimed was non-functional, including: (1) the presence of three mounting holes, (2) utilization of rounded corners, and (3) steel construction. The Court held that “each of these features is primarily functional and not entitled to trade dress protection.”  In doing so, the Court applied both the traditional test, in which a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article, as well as the competitive necessity test, in which a functional feature is one the ‘exclusive use of which would put competitors at a significant non-reputation-related disadvantage.’  Ultimately, it found that the mounting holes were to adapt to universal mounting devices, the rounded corners were for safety purposes, and the steel was to avoid corrosion. 

These cases are as factual as they come, and perhaps as factual as trade secret cases.  They are oftentimes, by their very nature, subjective.  Would an expert have helped?  What else could have been done to avoid functionality?  Was the design patent the best chance at an early indication as to protectability?  Who knows, but this case is very telling and important to trade dress claims.

Dynamic Designs Distribution Inc. v. Nalin Mfg., LLC, 8:13-CV-707-T-33TBM, 2014 WL 1576381 (M.D. Fla. Apr. 18, 2014).
 

Cheerleading Outfit Design Not Copyrightable

On March 21, 2014, in Copyrights, by Brian A. Hall

UnIntellectual Property (UnIP): Copyright for Cheerleading Outfit

Give me a U, give me an N, give me an I, give me a P, what’s that spell…UNIP.  That is exactly what the Plaintiff was left with after suing a competing chearleading outfit provider for copyright infringement.  The United States District Court for the Western District of Tennessee held that there was no copyright for these particular uniforms because the design elements could not be conceptually or physically separated from the utilitarian function.  In doing so, the Court specifically held that “the utilitarian function of a cheerleading uniform is not merely to clothe the body; it is to clothe the body in a way that evokes the concept of cheerleading.”

The Plaintiff has appealed to the Sixth Circuit, who may apply a different standard or find that the design pattern or ornamentation is indeed enough to qualify for copyright protection, apart from any utilitarian function.

Plaintiff apparently needs to cheer harder.

Varsity Brands, Inc. v. Star Athletica, LLC, No. 10-cv-02508 (W.D. Tenn. March 1, 2014).

 

UnIntellectual Property (UnIP): Trademark for Suction Cup Design

The United States District Court for the Western District of Pennsylvania granted Defendant’s motion for summary judgment, which stemmed from the lawsuit by a trademark applicant against the Judge in the Trademark and Trial Appeal Board (TTAB) proceeding, who had affirmed the Examining Attorney’s refusal to register the trademark application for a suction cup design.

The Court analyzed the typical functionality factors, including:

1. Whether a utility patent exists that discloses the utilitarian advantages of the design sought to be registered;
2. Whether applicant’s advertising touts the utilitarian advantages of the design;
3. Whether alternative designs are available that serve the same utilitarian purpose; and
4. Whether the design results from a comparatively simple or inexpensive method of manufacture.
Having a registered utility patent for the design immediately placed the Plaintiff in a tough position.  The Court went on to analyze each factor and granted summary judgment to Defendant, thus finding that the suction cup design was not entitled to trademark protection.
Surprised?  I am not, but I appreciate the dedication of the Plaintiff, wow.
Adams Mfg. Corp. v. Rea, CIV.A. 12-1430, 2014 WL 978116 (W.D. Pa. Mar. 12, 2014).
 

SalesForce Reports Not a Trade Secret

On March 12, 2014, in Trade Secrets, by Brian A. Hall

UnIntellectual Property (UnIP): Trade Secret for Certain Customer Relationship Management Software Reports

This case from the Court of Chancery of Delaware involved the alleged possession and misuse of a fire alarm and fire protection system company’s proprietary information by certain of its former employees.  One former employee, in particular, upon termination, began working for an entrepreneur that started a similar business.  Plaintiff alleged that defendant copied the company’s proprietary information and trade secrets for the purpose of bringing that information to the new fire alarm and fire protection system business.  In particular, defendant copied, while working for his former employer, (1) a contacts report and (2) a sales opportunity report, both of which were generated by Salesforce.com (“Salesforce”), which is a “customer relations management tool” that Plaintiff uses to store data such as contact information, sales information, and proposal information for each of its customers.  Plaintiff paysapproximately $15,000 per year to use Salesforce and allegedly has spent thousands of dollars customizing the database to meet its specific needs.  While the Court, following a trial, addressed several causes of action, I am focused solely on the trade secret misappropriation cause of action, pursuant to the Delaware Uniform Trade Secrets Act (DUTSA), which was denied.

At issue are the two reports noted above.  The “contacts report” contains the names, addresses, and phone numbers for Plaintiff’s main contact at each of its clients.  The “opportunities report” contains Plaintiff’s potential business prospects, including the location and nature of the job and Plaintiff’s assessment of how likely it is to secure the project.  The Court first addressed whether either of these reports “derive[d] independent economic value” by virtue of the information “not being generally known to” and “not being readily ascertainable by proper means by” others.  The Court found that the “opportunities report” satisfies this criterion, but the “contact list” does not.  The Court reasoned that the “opportunities report” includes valuable information beyond just the names of the opportunities, such as how much Plaintiff has bid on certain projects and how Plaintiff became aware of the opportunity.  Since the vast majority of the opportunities were created by some combination of cold calling, customer referrals, and repeat business from existing customers, these opportunities are “generally known.” The Court determined that it also is unlikely that a potential competitor to Plaintiff could produce the same list of opportunities without spending significant time and money to develop an existing customer base and solicit new business.
Equating the “contacts report” to a client or contact list, the Court held that it was not a trade secret, and in doing so relied upon its previous holding:
The market of the product or service involved is the main factor in determining whether a client list constitutes a compilation deriving independent economic value from not being generally known by other persons who can obtain economic value from its disclosure or use. If the buyers are easily identified, it is unlikely that their identities will hold independent economic value even when the identities are considered confidential.107
It held that Plaintiff has not carried its burden of proving that the identities of its customers cannot be easily determined, such as by using knowledge of the industry and replicating such a list.  Plaintiff’s attempt to argue that the “contact report’s” inclusion of key decision makers somehow made it qualify as a trade secret also failed because the Court recognized that such information could be identified through proper means.
Ultimately, the Court held that “neither the contacts report nor the opportunities report constitutes a protectable trade secret under DUTSA because Wayman has not shown that the reports were the “subject of efforts that are reasonable under the circumstances to maintain [their] secrecy.”  The Court based its decision on the fact that, although SalesForce was password protected, there were no policies regarding confidentiality or confidentiality provisions in any employment agreements, employment handbooks, etc.
This case was of particular interest to me because my law firm uses SalesForce and has a very robust contact and opportunity reporting structure in order to manage prospective client and existing clients alike.  We do far more than password protect, and the practice of law’s restrictions would introduce additional complexities in the event of any similar fact pattern.  Nevertheless, users of SalesForce or other comparable customer relationship management software should be mindful of this decision.

Wayman Fire Prot., Inc. v. Premium Fire & Sec., LLC, CIV.A. 7866-VCP, 2014 WL 897223 (Del. Ch. Mar. 5, 2014).

 

Hookah Shape Not Copyrightable: Plaintiff Gets Smoked

On March 10, 2014, in Copyrights, by Brian A. Hall

UnIntellectual Property (UnIP): Copyright for Hookah Water Container

The United States Court of Appeals for the Ninth Circuit has upheld a District Court’s grant of summary judgment in a copyright infringement case involving a hookah water container.  The Plaintiff, the owner of a copyright registration for the sculptural shape of the water container through which tobacco can be smoked, got smoked in this case.  The Court held that the shape of the hookah was not copyrightable because it was physically and conceptually inseparable from the utilitarian function of the hookah.  Put another way, this Court deemed that it should not have been registered but instead should have received a functionality refusal.

It is worth noting that had the Plaintiff relied upon some particular design, such as the skull and crossbone image on its hookah, it may still warrant copyright protection.  That said, this Defendant did not use any such design, and thus Plaintiff was left to base its claim upon the shape of the hookah alone.

Inhale, Inc. v. Starbuzz Tobacco, Inc., Case No. 12-56331 (9th Cir., Jan. 9, 2014).

 

You Decide: Is Facebook a Trademark Bully?

On February 27, 2014, in Trademarks, by Brian A. Hall

I often review decisions that detail an overzealous Plaintiff that claims certain intellectual property rights only to be rebuked by a court of law, thus ending up with UnIP and possibly even labeled as a bully.  A relatively highly publicized case involving Facebook raises the question as to whether Facebook is (1) being overzealous with enforcement of its trademark (i.e. a trademark bully) or (2) acting as a trademark owner should in order to avoid a likelihood of consumer confusion, dilution, or other harm to its mark.  Let me be clear, to date, there has been no decision that invalidates the FACEBOOK trademark and such a result is not possible in the context of the present dispute.  However, whether Facebook is a trademark bully or an active and legitimate trademark enforcer is the question to be answered in a dispute involving a pet-themed social network called Facepets, who has applied for a federal trademark.  You can learn more about the case from WIPR.

Let the debate begin…

 

Trademark Licensee Estoppel Doctrine

On February 21, 2014, in Trademarks, by Brian A. Hall

Trademark Litigator Alert!!!

A recent case out of the U.S. District Court for the E.D. of Tennessee discussed an issue that should be of interest to any trademark litigator – the licensee estoppel doctrine.  The Court, entertaining motions in limine, held that “equities weigh in favor of applying the doctrine of licensee estoppel with respect to the “invisible fencing” mark. Fido’s Fences must only rely upon post-termination evidence in demonstrating that IFI’s mark is generic.”  Put another way, the Court found that it is not fair for a trademark licensee to be able to attack the trademark rights of the trademark licensor prior to or during the term of the trademark license.  However, the Court did limit the doctrine and allow the trademark licensee to challenge the trademark licensor’s trademark after the termination of the licensee, just as any third party (with standing) can attach the genericness of a trademark.  See below the most relevant language from the decision below:

The doctrine or theory of licensee estoppel provides that a licensee should be, in many cases, “estopped from claiming any rights against the licensor which are inconsistent with the terms of the license.” Westco Group, Inc. v. K.B & Associates, Inc., 128 F.Supp.2d 1082, 1091 (N.D.Ohio 2001). For instance, after obtaining the benefit of a trademark license but breaching the terms thereof, a licensee should not be able to “benefit from its own malfeasance” by “challeng[ing] a licensor’s ownership of a trademark.” Id at 1086–89; see also Big Boy Restaurants v. Cadillac Coffee Co., 238 F.Supp.2d 866, 873–74 (E.D.Mich.2002).The Supreme Court of the United States has done away with licensee estoppel in the patent context, but the doctrine remains part of trademark jurisprudence. Lear, Inc. v. Adkins, 395 U.S. 653, 674, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969); But see, Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 328–29 (6th Cir.1973) (distinguishing Lear ).

The following from McCarthy on Trademarks is instructive:

Many courts have adopted a view of trademark license estoppel under which a former licensee may challenge the licensor’s title, but only on facts which arose after the license contract has expired. That is, the estoppel covers only facts which occurred during the time frame of the license. As to facts which occur thereafter, the exlicensee is in the same position as any other challenger of the validity of the mark. For example, the Trademark Board applied the licensee estoppel rule to prevent a former licensee of the REALTOR mark from challenging the mark as being a generic name for real estate agents. The facts on which the genericness challenge was based arose prior to and during the challenger’s 20 years as a dues-paying member of the REALTOR association.

3 Thomas J. McCarthy, McCarthy on Trademarks and Unfair Competition § 18:63 (4th ed.2006).

Invisible Fences, Inc. v. Fido’s Fences, Inc., 3:09-CV-25, 2014 WL 558672 (E.D. Tenn. Feb. 11, 2014).
 

Although this case did not result in a finding that the claimed copyright, an architectural design for a building, was not protectable as a whole, it is particularly enlightening because it drives home several important concepts for any copyright litigator, including:

1. Architectural works are entitled to “specific copyright protection,” which does have limitations, as set forth in the Copyright Circular for Copyright Claims in Architectural Works and discussed by this Federal District Court in Miami:

Architectural works, and other compilations, have “specific copyright protection” in that the copyright protects the exact work itself; only subsequent works which copy the work’s specific expressions and designs will infringe upon that protection. The precise expression in the plan which was submitted to the United States Copyright Office is the work which is protected. However, certain standard elements which do not comprise the expression are not protectable. For example, the Eleventh Circuit has held that there are a finite number of ways buildings such as condominiums, homes, and offices can be arranged and such arrangements are not protectable. See Intervest, 554 F.3d 914; Howard v. Sterchi, 974 F.2d 1272, 1276 (11th Cir.1992). This must be the case because, to borrow a phrase used by the Ninth Circuit in a photography case, “the range of protectable expression” is limited by the fact that the work is architectural. Ets–Hokin v. Skyy Spirits, Inc., 323 F.3d 763, 766 (9th Cir.2003).

A plaintiff cannot use copyright to control the right to unoriginal arrangements, and so the protection afforded architectural works must be specific. An architectural copyright is not “minimal” or “thin” because the copyright does protect what it was issued to protect, i.e. the plan submitted to the Copyright Office. A copyright of an architectural work is a full-fledged copyright which protects the specific expression embodied in the plan which was issued a copyright by the Copyright Office

2. The question of substantial similarity is ripe for decision at the Motion to Dismiss stage, and does not have to wait until Summary Judgment.

[T]he “substantial-similarity” test is more often correctly administered by a judge rather than a jury—even one provided proper instruction. The reason for this is plain—the ability to separate protectable expression from non-protectable expression is, in reality, a question of law or, at the very least, a mixed question of law and fact.

3. Although the entire expression of an architectural design may be protected as a copyright, “the number of condominium units per floor, the height of the building, and the height of the ceilings are not features over which Plaintiff, or anyone, could claim a valid copyright.”

4. Detail, detail, detail.  What I mean by this is best evidenced by the analysis in this opinion.  Simply put, even if the concept is the same, the expression is what counts, and how that expression is achieved is considered.

I love this decision because it is detailed and well-reasoned.  It does, however, sound a bit unfair to the Plaintiff if indeed this was not a case of independent creation, but the facts are the facts.  Architects, designers, and others would be well-served to understand the scope of their copyright rights, and this opinion provides a roadmap.
Sieger Suarez Architectural P’ship, Inc. v. Arquitectonica Int’l Corp., 13-21928-CIV, 2014 WL 585883 (S.D. Fla. Feb. 14, 2014).