Most Important US Trademark Court Cases of 2015 (Personal and Very Unofficial Version)

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Most Important US Trademark Court Cases of 2015 (Personal and Very Unofficial Version)

This time of year most folks reflect on the year that passed, looking into the new year. Newspapers and magazines compile various rankings. Legal publications come up with lists of most important cases or events of 2015. The Sputnik Blog will not miss this opportunity and do some reflecting and ranking of its own.

The Sputnik Blog discussed many trademark cases in 2015. Some of those cases made it to various unofficial rankings of most important US legal cases. Take for example, Top 10 Trademark Rulings Of 2015 of IP360.

(IP360 is part of Law360, which is a daily online newsletter on various areas of law popular among American lawyers, particularly in Big Law.)

This Blog has recognized the importance and actually discussed 3 out of 10 in IP360’s top 10 trademark rulings, including two in top three. This Blog also got one case as an honorable mention (out of 4). Not bad, given that the Sputnik Blog focuses not just on trademarks, but on all IP and some litigation and even corporate law that impacts IP owners. And unlike the subscribers of IP360, this Blog’s readers do not have to pay for getting access to the Blog’s postings.

The Sputnik Blog agrees that number 1 should be B&B Hardware Inc. v. Hargis Industries Inc. This is a U.S. Supreme Court’s ruling in March 2015: decisions handed down by the Trademark Trial and Appeal Board (TTAB) could, in certain situations, later be considered binding on a federal court. See Sputnik Blog's posting.

The Supreme Court noted:

“When the usages adjudicated by the TTAB are materially the same as those before a district court, issue preclusion should apply… The fact that the TTAB and district courts use different procedures suggests only that sometimes issue preclusion might be inappropriate, not that it always is.”

B&B Hardware immediately increased the importance of registration disputes before the TTAB.

The case ranked number 2 in IP360—the Federal Circuit’s ruling In re: Simon Shiao Tam—came out on December 22, 2015, just before the Holiday season in the Western world. The ruling was in favor of a band called The Slants that was denied a registration on the grounds that its name was a racial slur. The Federal Circuit, an appeals court, overturned a pervious ruling that upheld the United States Patent and Trademark Office's (USPTO) rejection of the band's application by striking down a provision of U.S Trademark Act as unconstitutional, Section 2(a). Under Section 2(a), the USPTO could reject trademarks it deemed offensive or disparaging to others. The Court has said that a ban on federal trademark registrations for words that “disparage” people is a violation of the First Amendment to the U.S. Constitution (guaranteeing the freedom of speech, among other basic rights of an individual).

It was undisputed that the term “slants” refers to people of Asian descent. The Urban Dictionary defines “Slants” as “epicanthic fold or epicanthal fold or epicanthus is a skin fold of the upper eyelid, covering the inner corner of the eye.” In fact, the leader of the band, Simon Tam, who is of Asian descent, admitted to the derogatory meaning of the term. He explained that the band had chosen the name in order "to undercut slurs about Asian-Americans that band members heard in childhood, not to promote them."

It has been long since a federal court had invalidated a provision in U.S. Trademark Act. Many experts agree that the Slants case is headed to the U.S. Supreme Court. The Blog might still write about this case in more detail, as the analysis of the First Amendment might be interesting to many.

Also, one cannot but notice that the Slants decision may be a game-changer for the Redskins organization, an American football team based in Washington DC. The organization lost its trademark registrations for its REDSKINS based on the same provision in TTAB in 2014.

Earlier in 2015, in July, in Pro-Football, Inc. v. Blackhorse et al, U.S. District Judge Gerald Bruce Lee in Virginia affirmed the TTAB 2014 decision to cancel Washington Redskins’ trademark registrations on its controversial name and logo. The term “redskins” arguably is offensive to Native Americans.
This case is number 3 according to IP360. The Virginia Judge also shot down the team’s protest that the federal ban on offensive marks is unconstitutional:

“Simply put, the court holds that cancelling the registrations of the Redskins marks ... does not implicate the First Amendment as the cancellations do not burden, restrict or prohibit [the team's] ability to use the marks.”

Did the Virginia Judge get that backwards? According to the Federal Circuit’s subsequent ruling in Slants, Yes, he did. Essentially the Federal Circuit’s Court shared Justice John Marshall Harlan’s famous expression "one man's vulgarity is another man's lyric."

But the Slants decision does not overrule the Redskins decision, although the inconsistency is obvious. Federal Circuit’s decisions are not directly binding on the court in another circuit such as Redskins’ court in Virginia. However, experts almost universally agree that the Supreme Court would take on the constitutionality of the Section 2(a) provision. So, it remains to be seen. Maybe the Federal Circuit got it wrong, not the Virginia Judge.

The Supreme Court’s decision on trademark tacking in Hana Financial Inc. v. Hana Bank made it to number 8 in IP360. In Hana Bank, the Court said that juries, rather than judges, should make the key ruling on whether to apply the doctrine of “tacking.” Tacking allows trademark owners to retain a priority first-use date even if they slightly modify their mark over the years, “tacking” the old date onto the updated the mark.

I would put Hana Bank in top 5 not only because it was the Supreme Court's first substantive trademark ruling in 10 years, but also because of the significance of this case for trademark registration purposes, not just for trademark litigation. Please see Sputnik Blog posting.

Another case discussed by the Sputnik Blog concerning the registration, which also achieved an “honorable mention” in IP360, was Couture v. Playdom Inc.

There, on March 2, 2015, the Federal Circuit said a service mark can only be deemed “used” in commerce, a key requirement for a registration, when the service has actually been rendered, not when it’s merely been advertised. This case is important in determining the date of first use of a service mark. This in turn is important for priority purposes. Also, remember, you generally cannot register a mark unless you used the mark in U.S. In the context of a service mark, this means you need to provide a service to a customer physically located in U.S.

Cases that did not make to the Sputnik Blog, but have been featured in various “Top Cases” are not necessarily less important. (Unfortunately, there is only 24 hours in a day.) In particular, one more case deserves discussion. The Federal Circuit’s ruling in Frito-Lay North America Inc. v. Princeton Vanguard LLC in May 2015 overturned a trademark office ruling that the Pretzel Crisps brand name was too generic to be registered as a trademark. IP360 ranks it as number 10, but I would put this case higher.

There, Snyder's-Lance uses Pretzel Crisps brand name for flat, cracker-like pretzels. The TTAB had canceled the mark as generic at Frito-Lay’s request. The Federal Circuit Court, on appeal, said the Board took “short cuts” in doing so, namely by considering each word rather than the mark as a whole:

“Where, as here, the record is replete with evidence of the public’s perception of the term PRETZEL CRISPS as a whole, it is unclear why the board would resort to analyzing the terms individually or why it would believe doing so would aid its analysis.”

Federal Circuit’s ruling on Pretzel Crisps has important ramifications for registering trademarks that consist of two or more descriptive terms, but when the entire combination may be quite original or has acquired recognition among the purchasing public. In particular, this case helped our client, ArtsQuest, to register its Musik Fest brand (albeit on the Supplemental Register, for now), in connection with organizing and conducting its nationally acclaimed festivals in Lehigh Valley, Pennsylvania in August, although the USPTO’s trademark examiner would not admit.

What do you think were the most important decisions in 2015, and what cases (other than review of the Slants and Redskins) shall we watch for in 2016?

Text © Maxim A. Voltchenko 2016

* This piece is not intended to be a review of U.S. court cases. This posting may not necessarily represent the views of the author’s employing law firm. Although every effort has been made to verify the accuracy of items in the Sputnik Blog®, readers are urged to check independently on matters of specific concern or interest.