2H 2016 Quick Links, Part 3 (Trademarks and Domain Names)


* Evoqua Water Technologies LLC v. M.W. Watermark LLC, 2016 WL 4727432 (W.D. Mich. Sept. 12, 2016)

Paragraph 1 of the injunction prohibits the use of marks beginning with “J-,” except pursuant to a fair use. Watermark argues that its use of the term “J-Mate” is a fair use. The blog article described Plaintiff’s product, which is arguably a fair use, but that is certainly not how J-Mate was used every instance….

Using the term J-Mate in keyword tags or in the title of web pages advertising Watermark’s sludge dryer is not a fair use, and is likely to confuse. At the very least, it leads to “initial-interest confusion,” which occurs when a user interested in a particular brand of product searches for that product in a search engine and is led to a competitor’s page promoting a different product. See Gibson Guitar Corp. v. Paul Reed Smith Guitars, LP, 423 F.3d 539, 549 (6th Cir. 2005) (discussing initial-interest confusion).

Defendants’ website was the fourth or fifth search result when using Google to search for “J-Mate.” After finding Watermark’s website, a customer reading the site could readily believe Watermark sold genuine J-Mate parts or products, or that DryMate was an improved version of the J-Mate dryer, made by the same entity. This belief would have been reinforced by the blog post touting DryMate as a “direct replacement” for the J-Mate dryer. Consequently, the Court finds that Defendants violated the clear terms of the injunction by using J-Mate on Watermark’s website.

Ugh. Yes, this is a 2016 case.

* Board of Regents of the University of Houston System v. Houston College of Law, 2016 WL 6037243 (S.D. Tex. Oct. 14, 2016):

“Simply invoking the term ‘initial-interest confusion’ does not state a viable claim.” This Court agrees; more is required.

But Defendant fails to acknowledge that, here, more is provided. Prospective students are likely to further investigate Houston College of Law not necessarily because of their initial interest in the law school, as Defendant suggests, but rather because the mark seemingly bears the imprimatur of UH’s well-known brand—in other words, because of initial-interest confusion. And not only is Defendant benefitting from the goodwill of a stronger brand,158 the stronger brand is that of a direct competitor.159 UH and Defendant offer the same set of services through the same media to the same potential purchasers in practically the same location. In other words, not only does the confusion afford Defendant credibility during the early stages of a transaction, it does so at the direct expense of the University of Houston. Indeed, while Defendant notes that consumers’ confusion will dissipate as soon as they visit Defendant’s homepage, the most prominent portion of the webpage is essentially a list of the best reasons to choose Defendant’s law school over UH’s.

Notwithstanding the opposing digits of confusion, Defendant contends prospective law students exercise such a high degree of care that they are highly unlikely to choose a law school while still confused as to the school’s identity. That may be true—purchasing a legal education typically (and hopefully) involves months of thorough research—but this fact alone does not preclude finding a likelihood of confusion prior to the purchase (i.e., initial-interest confusion). If it did, sellers of goods or services that involve extended purchasing processes would be effectively outside the ambit of the Lanham Act’s protection, leaving competitors free to appropriate the senior user’s goodwill with impunity, and allowing them to gain “credibility during the early stages of a transaction.” And it is in the early stages of the transaction when prospective law students are the least sophisticated and most susceptible to confusion, especially when such similar marks are involved.

* Search Engine Land: Bidding on the competition: Is it really worth it? In many industries, competitive keyword advertising is a prisoner’s dilemma. The article’s suggestion to negotiate a cease-fire with competitors is a high-risk strategy. See FTC v. 1-800 Contacts.

* Cedar Valley Exteriors, Inc. v. Professional Exteriors, Inc., Case No. 13‐CV‐2537 (PJS/TNL) (D. Minn. June 29, 2016):

Plaintiff Cedar Valley Exteriors, Inc. (“Cedar Valley”) brought this action against defendant Professional Exteriors, Inc. (“Professional Exteriors”), alleging that Professional Exteriors infringed two registered service marks. Cedar Valley’s service marks are highly unusual in two respects: First, both marks are for a color–specifically, the color orange. And second, both marks are extraordinarily broad. Together, the two marks appear to cover any use of any shade of orange in any article of clothing or any form of advertisement related to any aspect of the construction industry. Thus, for example, the use of orange safety vests on a construction site would appear to be encompassed by the registered marks—something that would no doubt come as a surprise to thousands of contractors.

How Cedar Valley was able to persuade the United States Patent and Trademark Office (“PTO”) to register such marks is a mystery, particularly given that Cedar Valley has used only particular shades of orange; used it only on shirts, lawn signs, and a few other advertising items; and used it only in connection with a narrow slice of the construction industry. But the PTO did register the marks, and, as a result, this lawsuit raises a number of difficult legal and factual issues.

This matter is before the Court on the parties’ cross‐motions for summary judgment on Cedar Valley’s claims under the Lanham Act, 15 U.S.C. § 1051 et seq., and under the Minnesota Deceptive Trade Practices Act, Minn. Stat. § 325D.44. For the reasons that follow, the Court grants the motions in part and denies them in part, and orders that Cedar Valley’s registrations be substantially amended

* IFS Financial Services v. Touchstone Financial of Midvale, 2016 WL 4750173 (D. Utah Sept. 12, 2016)

The parties’ agreement is that defendants abandon their use of social media accounts connected to the Touchstone name no later than November 1, 2015, and in furtherance of that abandonment, delete all social media accounts utilizing any of the Touchstone marks. An affidavit verification of compliance is then required. In addition, a separate paragraph addresses a November 1, 2015 requirement to eliminate defendants’ internet presence related to Touchstone marks, which includes (1) removing any reference to Touchstone marks from websites under defendants’ control (including a designated but non-exclusive list of websites); (2) “take all steps necessary to take down from any website they do not control” any reference to Touchstone marks associated or affiliated with defendants; and (3) “hereafter assist Plaintiffs however necessary, and at his own cost, to remove any additional vestiges on the Internet, or in social media, or in other digital or non-digital formats” any reference to Touchstone marks associated or affiliated with defendants.

At the outset, the court notes that the settlement agreement explicitly anticipates that after deleting the businesses’ Touchstone-related social media accounts and taking all the steps they could to remove Touchstone-related content from websites both controlled by them and controlled by third parties, “additional vestiges” of Touchstone marks associated and affiliated with defendants would continue to need monitoring and removal. The court finds that the parties’ anticipation of this fact defeats plaintiffs’ claim that defendants breached these terms of the contract. The November 16, 2015 Affidavit of Tami Parris identifies that the businesses’ social media accounts, including Facebook, Twitter, Pinterest, Flickr, Instagram, Tumblr, and various blogs, were deleted or deletion requests were made. Although plaintiffs subsequently complained that defendants had not deleted such accounts, the record did not initially reveal any details to support plaintiffs’ assertions. Ms. Parris’ affidavit also certified that

Any website referencing the name Touchstone over which the entities have control has been deleted. At this point in time there may be third party sites making the connection between the name Touchstone and the defendant entities. The defendant entities have taken all known steps at this point to remove any connection to the Touchstone name.

Although the plaintiffs’ motion to enforce did not initially claim that Ms. Parris’ assertion was incorrect, at oral argument plaintiffs introduced this claim and provided several examples demonstrating the existence of largely third-party internet sites making connections between defendants and the Touchstone mark. Because there was insufficient evidence for the court to evaluate whether the social media and internet presence terms had been materially breached, the court ordered plaintiffs to identify with specificity any ongoing infringing social media and internet presence. For the sake of fairness given the court’s authorization for plaintiffs to supplement the record, the court also authorized defendants to make their own efforts to both identify and clean up content alleged to constitute a breach of the agreement.

Upon review of both parties’ supplemental information, the court did not find any of defendants’ Touchstone-referencing business social media accounts still in existence. Of twelve specifically identified social media pages allegedly breaching the parties’ agreement, nine were attributable to the failure by Michael Gibbons, a shareholder and manager of the defendants’ Springville location, to modify all instances of the word “Touchstone” or a photo of the former “Touchstone Financial” signage in profile and other sections of his personal and group Twitter, Facebook, Pinterest, LinkedIn, Foursquare, and Google Plus pages. With the exception of the Pinterest account, which did not have any content and appeared to have been an account established only for the purpose of viewing other Pinterest pages, Mr. Gibbons’ social media accounts all showed evidence of modifications reflecting good faith efforts at compliance as early as September 10, 2015. One LinkedIn account referenced by plaintiffs is owned by a former employee. One Google Plus reference to the Touchstone mark was a review written by a former customer. The last account referenced was that of another owner, Danny Gibbons’ LinkedIn page, which also showed evidence of good faith efforts to comply with the change in the company’s name. For their part, defendants specifically identified their experts’ efforts to search, delete, and/or modify (where deletion was impossible) all vestigial social media content identified by plaintiffs and themselves, and noted that as to customer reviews and former employees, defendants had no ability or access to control that content.

The court finds that these few social media references, which showed evidence of compliance efforts, have not deprived plaintiffs of the benefit of their bargain. Additionally, there is clear evidence that defendants’ expert has or will have completely cured future references to Touchstone on defendants’ social media accounts except where a few customers or a former employee reference their interactions with defendants when they were known under the Touchstone name. Plaintiffs have not shown how such limited references have damaged or will damage them. Accordingly, the court finds that there is no breach of an essential term because defendants have acted with good faith and dealt fairly with plaintiffs with respect to the social media accounts.

As for the “elimination of internet presence” provision, there is no question for the court that the third-party references identified by plaintiffs and defendants’ expert constitute the “additional vestiges” anticipated by the parties’ agreement. Defendants’ expert outlined in careful detail his elimination of many such “vestiges” and his efforts and anticipated success in eliminating the remaining “vestiges.” Plaintiffs’ second supplemental response showed that defendants’ expert was largely successful, reducing alleged vestigial references identified by plaintiffs from 119 to 37 and reducing alleged vestigial references identified by defendants from 64 to 15.5. The court further notes that the agreement’s term “additional vestiges” contemplates the reality that defendants’ compliance with this provision cannot be perfect, and finds it unreasonable for plaintiffs to require defendants’ perfection in removing third-party content prior to undertaking their own obligations under the agreement. Therefore, the court cannot find that plaintiffs have been deprived of the expected benefit of their bargain. Rather, the court concludes that defendants are not willfully or wrongfully maintaining an internet presence using plaintiffs’ mark and specifically finds that defendants’ efforts, which have been made at their own expense, are reasonably likely to cure any “vestiges” remaining. Defendants have acted with good faith and dealt fairly with plaintiffs.

* Merriam Webster on why the word “skittles” is in the dictionary

* WSJ: Hopportunity Cost: Craft Brewers Brawl Over Catchy Names as Puns Run Dry

* Austin American-Statesman: UT to doughnut shop: Yeast and desist

* CNN: Iceland is suing a supermarket that’s using its name

* Shontavia Johnson, Trademark Territoriality in Cyberspace: an Internet Framework for Common-Law Trademarks, 29 Berkeley Tech. L.J. (2015). Related blog post.

Domain Names

* Doug Isenberg: What We Can Learn from URS Decisions (Hint: Not Much)

* The Register: Simply not credible: The extraordinary verdict against the body that hopes to run the internet. Independent review tears into ICANN board and staff.