Posts Tagged: "Lanham Act"

In Vidal v. Elster, No. 22-704, the United States Supreme Court has heard argument and is expected to decide in the next several months whether Section 2(c) of the Lanham Act can prevent the federal registration of TRUMP TOO SMALL as a trademark for shirts and hats. Section 2(c) prohibits, inter alia, the registration of the name of a particular living individual without his consent. The issue in Elster is whether the First Amendment’s guarantee of free expression transcends Section 2(c)…. To the extent that Section 2(c) survives, in whole or in part, and apart from weighty constitutional concerns which the Court is expected to resolve, there are numerous other problems lurking in this old, dark and dusty subsection—which  are not particularly “small” at all—which only Congress can fix.

In October of 2023, a divided panel of the U.S. Court of Appeals for the Federal Circuit ruled in Great Concepts, LLC v. Chutter, Inc., 84 F. 4th 1014 (Fed. Cir. 2023) that a fraudulent filing for incontestability under Section 15 of the Lanham Act is not a proper ground for the Trademark Trial and Appeal Board (TTAB) to cancel a registration under Section 14 of the Act. In so holding, it endorsed prior rulings to the effect that fraud in filing a Section 8 affidavit of continuing use, or a renewal application under Section 9—acts of “maintaining” a registration—constitutes “obtaining” a registration within the meaning of Section 14, while rejecting earlier TTAB decisions that had treated Section 15 affidavits the same way.

The Lanham Act provides for special remedies in cases of trademark infringement “involving” the use of a “counterfeit” mark. 15 U.S.C. § 1117(b), (c); 15 U.S.C. § 1127. Absent “extenuating circumstances,” if the use of a counterfeit mark is intentional and knowing, the Act requires entry of judgment of three times the amount of actual damages or profits found, as well as an award of attorney’s fees. 15 U.S.C. § 1117(b). Alternatively, in any case of infringement “involving” a counterfeit mark, the Act provides for awards of statutory damages of up to $200,000; it provides for statutory damages of up to $2,000,000 if the use of the counterfeit mark was willful. 15 U.S.C. § 1117(c)…. In our view, a straightforward interpretation of the Act allows access to the special remedies in cases that involve knock-off products, as well as cases where an identical logo or word mark is used on the same type of product that is in the plaintiff’s trademark registration, even if the defendant’s products and/or their packaging do not resemble the plaintiff’s products.

Oral arguments were held yesterday in Vidal v. Elster, with most observers concluding that the justices are unlikely to grant trademark applicant Steve Elster’s bid to register the mark TRUMP TOO SMALL for t-shirts. Unlike the Court’s recent prominent trademark decisions in Matal v. Tam and Iancu v. Brunetti, there seemed to be little controversy on the part of the justices in Vidal v. Elster over whether the First Amendment is implicated here. Below is a roundup of comments from trademark practitioners on what they thought stood out during the oral arguments.

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Wednesday ruled in a precedential decision  that the U.S. Patent and Trademark Office (USPTO) Trademark Trial and Appeal Board (TTAB) cannot cancel a trademark based on the filing of a fraudulent declaration under Section 15 of the Lanham Act. Section 15 of the Lanham Act deals with acquiring incontestability status for an already-registered trademark. In the present case, the attorney for Great Concepts, LLC submitted a false declaration to the USPTO in an attempt to obtain incontestable status for the mark DANTANNA’S for a steak and seafood restaurant.

The U.S. District Court for the Eastern District of New York, in a decision published Monday, denied the defendants’ motions to vacate asset freezes in a case brought by Gilead alleging a massive HIV drug counterfeiting ring that involves “hundreds of millions of dollars’ worth” of fake medications. In January 2022, the court unsealed documents in the suit against a slew of defendants who Gilead said sold, marketed, and distributed counterfeits of its HIV medications. Gilead’s complaint sought immediate monetary and injunctive relief, including seizure at certain of the defendants’ premises, as well as relief for trademark and trade dress infringement and trademark dilution, among other alleged violations.

In Jack Daniel’s Properties, Inc. v. VIP Products LLC, a unanimous Supreme Court sided with Jack Daniel’s and sent dog toy maker VIP Products scurrying away with its tail between its legs. The decision held that VIP’s commercial use of a dog toy, designed to look like a bottle of Jack Daniel’s whiskey, complete with droll variations on Jack Daniel’s trademarks, is not entitled to First Amendment protections for artistic expression under the “Rogers test.” Rogers v. Grimaldi, 875 F. 2d 994, 999 (2d Cir. 1989). Instead, it is subject to the Lanham Act’s likelihood-of-confusion test to determine if consumers would be likely to confuse VIP’s dog toy with Jack Daniel’s, no matter how parodic. While the justices felt that artistic expression versus trademark use was cut and dried in this instance, that is not always the case in litigation focused on NFTs and the Metaverse.

The U.S. Supreme Court (SCOTUS) ruled today in Abitron Austria v. Hetronic International that Sections 1114(1)(a) and 1125(a)(1) of the Lanham Act are not extraterritorial in nature and that “‘use in commerce’ provides the dividing line between foreign and domestic applications of these provisions.” The decision of the U.S. Court of Appeals for the Tenth Circuit, which upheld a $96 million damages award for Hetronic, was thus vacated and remanded. Justice Alito authored the opinion for the Court and Justices Jackson and Sotomayor each filed concurring opinions—though Sotomayor’s concurrence reads more like a dissent.  

The U.S. Supreme Court held today in Jack Daniel’s Properties v. VIP Products that the Rogers test, used to “protect First Amendment interests in the trademark context,” is not relevant “when an alleged infringer uses a trademark as a designation of source for the infringer’s own goods.” The Court therefore vacated the U.S. Court of Appeals for the Ninth Circuit’s ruling that said VIP’s dog toy mimicking a Jack Daniel’s whiskey bottle was an expressive work entitled to First Amendment protection. Justice Kagan authored the unanimous opinion for the Court, while Justice Sotomayor, joined by Justice Alito, and Justice Gorsuch, joined by Justices Thomas and Barrett, each filed concurring opinions.

Can the Lanham Act apply to the conduct of foreign entities occurring entirely outside the United States and, if so, what is the test? The Supreme Court will soon decide this issue in Abitron v. Hetronic, potentially resolving a long-standing circuit split where six different tests presently co-exist. It will mark the first time since the Court’s 1952 ruling in Steele v. Bulova Watch Co. that it has spoken on extraterritoriality as it relates to the Lanham Act. Steele found that the Lanham Act does apply to a U.S. citizen using a registered U.S. trademark on spurious Bulova watches, many of which were bought by U.S. citizens in Mexico and brought back to the United States. Steele did not address whether the defendant’s U.S. citizenship, or his sourcing of parts from U.S. suppliers, were necessary conditions to subject matter jurisdiction. Enter Hetronic.

The Dominion Voting Systems lawsuit against Fox News attracted lots of attention. Claims of defamation, damages of $1.6 billion, the role of the First Amendment, and the press’ right to free speech were all key talking points around this lawsuit. What was not a part of these discussions were the implications to Fox’s trademark, FOX NEWS®. This case, even though it just settled, may have just cost Fox News a lot more than the $787.5 million settlement and the subsequent departure of Tucker Carlson—it could cost their name and brand.

The U.S. Supreme Court today heard oral arguments in Abitron Austria GmbH v. Hetronic International, Inc., which asks the Court to consider whether the U.S. Court of Appeals for the Tenth Circuit erred in applying the Lanham Act extraterritorially to Abitron’s foreign sales, “including purely foreign sales that never reached the United States or confused U.S. consumers.” The Justices struggled with the appropriate reach of the Lanham Act and whether reversing the Tenth Circuit would require overruling Steele v. Bulova Watch Co., 344 U.S. 280, 282-285 (1952), but overall seemed to be considering the need for a new or narrowed test to account for the realities of modern commerce.

On February 27, the U.S. Supreme Court granted a motion for leave filed by the U.S. Solicitor General to participate in oral argument, as well as for divided argument and for enlargement of oral argument time, in Abitron Austria GmbH v. Hetronic International, Inc. While the Court’s decision to grant the motion shows its interest in the Solicitor General’s arguments in favor of limiting the extraterritorial reach of the Lanham Act, a reply brief filed the same day by petitioner Abitron argues that the federal government’s proposed legal tests still go too far in allowing Lanham Act claims to reach foreign infringing sales. Last September, the U.S. Solicitor General filed a brief representing the views of the federal government on the issues in Abitron Austria, a case which asks whether the U.S. Court of Appeals for the Tenth Circuit erred in awarding civil remedies under the Lanham Act for infringement of U.S. trademarks through purely foreign sales that neither reached the United States nor confused U.S. consumers. In its brief, the Solicitor General urged the Supreme Court to grant Abitron’s petition for writ of certiorari and rein in the Tenth Circuit’s approach toward awarding Lanham Act damages for foreign infringing sales.

The American Bar Association (ABA) filed an amicus brief on February 3 with the U.S. Supreme Court asking the Court to clarify issues related to the application of the Lanham Act to trademark disputes that cross international borders. The ABA filed the brief in the Abitron Austria GmbH v. Hetronic International, Inc. trademark case, in which the U.S. Court of Appeals for the Tenth Circuit affirmed a $90 million damages award for trademark infringement based on infringement that occurred almost entirely outside of the United States.