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Supreme Court Will Decide Whether USPTO Can Refuse to Register “Scandalous” TMs

On January 4, the U.S. Supreme Court granted certiorari to the USPTO to decide whether the Lanham Act’s prohibition on the federal registration of “immoral” or “scandalous” marks violates the First Amendment. The Supreme Court’s decision to hear the case comes less than two years after it unanimously ruled in Matal v. Tam that a similar part of the trademark law that banned the registration of “disparaging” trademarks violated the First Amendment. In Matal, an Asian-American rock band called The Slants attempted to register its name for trademark protection, but was denied because the USPTO decided that the mark would be likely to offend Asian-Americans.

The case involves the USPTO’s denial of registration to a clothing line called FUCT because the mark was “scandalous.” In December 2017, the U.S. Court of Appeals for the Federal Circuit ruled that the government’s ban on registering profane, sexual and otherwise objectionable language violates the First Amendment. In the opinion, U.S. Circuit Judge Kimberly A. Moore wrote, “The First Amendment…protects private expression, even private expression which is offensive to a substantial composite of the general public.” The Court found, as it did in Tam, that the ban regulates the expressive component of trademarks and so cannot be treated as commercial speech, and that the clause could not satisfy strict scrutiny. Thus, the Court ruled that the ban on scandalous and immoral trademarks was unconstitutional.

According to the USPTO’s petition, however, the case is not about political speech because the “trade-mark registration program operates exclusively in the sphere of commercial speech.” It further explains that to determine whether a mark is scandalous, the Office asks whether “a substantial composite of the general public” would believe the mark to be scandalous, and it “generally defines ‘scandalous’ as ‘shocking to the sense of truth, decency, or propriety; disgraceful; offensive; disreputable; . . . giving offense to the conscience.’”

TTAB Reverses USPTO’s Refusal to Register Starbucks’ Green Circle Logo in One Application; Affirms Refusal in Another

In a consolidated opinion dated January 17, 2019, the TTAB decided successive appeals filed by Starbucks Corporation (“Starbucks”) from the USPTO’s final refusal to register two proposed marks consisting of “a green circle placed centrally on the front exterior side of white cup,” reversing the PTO’s final refusal in one case, and affirming the refusal in another.

Starbucks filed applications to register the two marks under Application Serial Numbers 86/689423 (the “‘423 Application”) and 85/792872 (the “‘872 Application”). The ‘423 Application featured a drawing of the proposed mark depicting a green circle placed centrally on the front exterior of a white cup. The PTO Examining Attorney refused the ‘423 Application on the grounds that the proposed mark was not a “substantially exact representation” of the marks shown in either of the two specimens submitted to the Trademark Office. The TTAB disagreed and reversed the PTO’s final refusal, finding that any differences between the drawing of the mark and the specimen were tantamount to a minor alteration which does “not create a new and different mark [with] a new commercial impression.”

The ‘872 Application similarly featured a drawing of the proposed mark depicting a green circle placed centrally on the front exterior of a white cup; however, unlike the ‘423 Application, Starbucks disclaimed that portion of the drawing representing the cup. The Examining Attorney refused the ‘872 Application on a number of grounds, including that Starbucks had not established that the mark had acquired distinctiveness.

In affirming the PTO’s final refusal, the TTAB concluded that the mark depicted in the ‘872 Application had not acquired distinctiveness. In particular, the TTAB questioned the probative value of a consumer marketing survey offered by Starbucks as evidence of acquired distinctiveness, noting several problems with the survey’s design.

A link to the TTAB’s 52-page decision can be found here.

McDonald’s Loses its EU Big Mac Trademark After Dispute With Irish Burger Chain

The Cancellation Division of the European Union Intellectual Property Office revoked McDonald’s trademark on the Big Mac burger after a dispute with Supermac, an Irish fast-food chain. In its decision, the EUIPO found that McDonald’s failed to provide sufficient evidence to prove genuine use of the name “Big Mac” in the EU.  In the case, Supermac argued that the trademark should be revoked because it “was not put to genuine use” in relation to the registered goods and services. The Cancellation Division agreed and found that the evidence submitted by McDonald’s was “insufficient to establish genuine use of the trade mark.” McDonald’s had submitted affidavits of company representatives from Germany, France, and the UK.  It also submitted website printouts where the term “Big Mac” was referenced.  The EUIPO, however, said about the websites that “it could not be concluded whether, or how, a purchase could be made or an order could be placed.”  The EUIPO further found that although McDonald’s had been able to demonstrate some evidence of use, it could not show the extent of such use.

The ordered revocation is retroactive and takes effect as of the date in which the application for revocation was filed, which is April 11, 2017; McDonald’s still has the right to appeal the decision.

Mongols Motorcycle Gang to Lose Trademarked Logo, Jury Decides

On January 11th, a jury in the U.S. District Court in Santa Ana, stripped the Mongols Motorcycle group of its trademarked logo after previously finding the entity, Mongol Nation, guilty of racketeering and conspiracy in December of 2018. This means that the Mongols will have to forfeit their legal interest in the word “Mongols,” along with some of their patches, which prosecutors said were used to distinguish members who have committed murder or engaged in acts of violence on behalf of the gang. The decision to seize the logo follows a decade long pursuit by prosecutors to dismantle the Mongols after 77 members were infiltrated by the U.S. Bureau of Alcohol, Tobacco, Firearms, and Explosives in 2008 and convicted of racketeering. A hearing was scheduled for January 8th, 2019 to argue the terms of the forfeiture; a judge could also impose fines at a later sentencing hearing.

The case is filed in the Central District Court of California and is captioned USA V. Mongol Nation, an Unincorporated Association No. 15-50442 (9th Cir. 2017). A docket for the case can be found here. Click here to be redirected to the related NYTimes article.

Netflix Sued Over Alleged ‘Choose Your Own Adventure’ Trademark Infringement

On January 11th, the Vermont-based publisher of the Choose Your Own Adventure book series filed a complaint against Netflix for infringing on the “Choose Your Own Adventure” trademark. Chooseco LLC claims that the interactive episode, ‘Bandersnatch,’ from the Netflix show Black Mirror is so dark that it will disparage the books’ reputation. In their complaint, Chooseco states that “the use of Choose Your Own Adventure in association with such graphic content is likely to cause significant damage, impacting our book sales and affecting our ability to work with licensing partners in the future.” The episode, which was released on December 28th, 2018, is centered around a video game designer who asserts that his video games are based on “Bandersnatch…a Choose Your Own Adventure book.” Chooseco claims that Netflix had pursued a license to use “Choose Your Own Adventure”’ in connection with films and interactive cartoons, but failed to secure the license after actively negotiating with Chooseco. Chooseco claims that they subsequently sent a cease and desist letter to Netflix prior to the release of the Bandersnatch episode.

Chooseco is seeking injunctive relief and damages of at least $25 million for the alleged infringement. The case is filed in the United States District Court in Vermont and is captioned Chooseco LLC v. Netflix, Inc., 2:19-cv-00008. A copy of the complaint can be found here. Click here to be redirected to the related article on The Verge.

Red Bull Files a Trademark Infringement Suit Against a New Jersey Gas Station

Red Bull accused Milton Lukoil gas station of selling Red Bull drinks that are not authorized for sale in the U.S. These drinks are “materially different” from those sold in the U.S., and do not fulfill all the U.S. regulatory requirements. The complaint asserts that the drinks were intended for sale in South Africa and other countries and thus are not appropriately labelled, travel through unauthorized supply chains, and lack a toll-free U.S. number for consumers to call with questions or concerns, among other deficiencies.

Red Bull alleges counts for trademark infringement, and unfair competition in violation of the Lanham Act and New Jersey law. The complaint alleges that Milton Lukoil’s acts “have injured Red Bull’s business reputation and relations with retail accounts in the United States by causing customer dissatisfaction, a diminution in value of the goodwill associated with the RED BULL Marks, and a loss of Red Bull’s sales and market share to its competition.” Red bull intends to enjoin Milton Lukoil from selling the drinks and seeks attorney’s fees.

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