Category Archives: Witnesses

Google & Trademark Genericide – Be Sure to Ask the Right Question


It sounds like something you might put on your lawn to kill weeds. But in the world of brands and marketing, genericide is a killer of trademarks. It is what happens when a trademark becomes the common (generic) word for a product or service itself and is no longer protectable under trademark law.

Countless articles tell the stories of how trademarks lost their ability to distinguish the source of goods because they became generic. Examples include CELLOPHANE, LANOLIN, ESCALATOR, THERMOS, and ASPIRIN. See INTA’s Practical Tips on Avoiding Genericide.  

Genericide is one reason companies police how others use their trademarks. It is also a reason that companies create branding and trademark usage guidelines, like these for Intel, Apple, and Symantec. See also, A Guide to Proper Trademark Use.

Some guidelines, like those of Symantec, go beyond what to do, and explain why:

Proper usage aids consumers who depend upon Symantec’s goods and services and helps prevent Symantec Trademarks from losing their distinctiveness and becoming generic.

They may even explain what not to do:

Trademarks are adjectives and should be followed by the generic term they modify, such as “software” or “product”. Never use a trademark as a noun, a verb, or in the possessive form.

With all of this focus on how marks lose their distinctiveness by becoming generic, you may be thinking:

What is the deal with GOOGLE?

People seldom say, “Try searching for [whatever] using the Google search engine.” People instinctively shorten things and say, “Try googling it.” But shouldn’t that lead to Google becoming generic and incapable of serving as a trademark?

Not necessarily, said the Ninth Circuit Court of Appeal in Elliott v. Google, Inc., No. 15-15809, 2017 U.S. App. LEXIS 8583 (9th Cir. May 16, 2017). There is more to it. You have to ask the right question, and that is the TAKE-AWAY at the end of this article.

Initially, explained the court, the mere fact that the public sometimes uses a trademark as the name for a unique product does not immediately render the mark generic. Rather, a trademark only becomes generic when the “primary significance of the registered mark to the relevant public” is as the name for a particular type of good or service irrespective of its source.

Courts make that determination by applying the “who-are-you/what-are-you” test:

If the relevant public primarily understands a mark as describing “who” a particular good or service is, or where it comes from, then the mark is still valid. But if the relevant public primarily understands a mark as describing “what” the particular good or service is, then the mark has become generic. In sum, we ask whether “the primary significance of the term in the minds of the consuming public is [now] the product [and not] the producer.”

In Elliott v. Google, seeking show that Google had become generic, Elliott focused on how google often is used as a verb. [Well-known dictionaries define google as a verb.] The Ninth Circuit court, however, found Elliott’s claim to be flawed for two reasons: (1) a claim of genericide must always relate to a particular type of good or service; and (2) use as a verb does not automatically constitute generic use.

Genericide Must Relate to a Particular Type of Good or Service

Relation to a particular type of good or service, the court said, is infused throughout several sections of the Lanham Act (federal trademark law). A mark can be canceled if it “becomes the generic name for the goods or services . . . for which it is registered.” “If the registered mark becomes the generic name for less than all of the goods or services for which it is registered, a petition to cancel the registration for only those goods or services may be filed.” The relevant question under the primary significance test is “whether the registered mark has become the generic name of [certain] goods or services.”  15 U.S.C. § 1064(3).

The court then added that such a relation requirement is necessary to maintain the viability of arbitrary marks as a protectable trademark category. In other words:

If there were no requirement that a claim of genericide relate to a particular type of good, then a mark like IVORY, which is “arbitrary as applied to soap,” could be cancelled outright because it is “generic when used to describe a product made from the tusks of elephants.”

Trademark law recognizes that a term may be unprotectable with regard to one type of good, and protectable with regard to another type of good. Thus, the court said the very existence of arbitrary marks as a valid trademark category supports the conclusion that a claim of genericide must relate to a particular type of good or service.

Use as a Verb Does Not Automatically Constitute Generic Use

Moving to the second point, the court said a trademark may be used as a verb, or even as a noun, without becoming generic. In connection with Lanham Act amendments, the court noted the following from a Senate Report:

A trademark can serve a dual function—that of [naming] a product while at the same time indicating its source. Admittedly, if a product is unique, it is more likely that the trademark adopted and used to identify that product will be used as if it were the identifying name of that product. But this is not conclusive of whether the mark is generic.

In this way, the court said Congress has “instructed us that a speaker might use a trademark as a noun and still use the term in a source-identifying trademark sense.” That was the case in Coca-Cola Co. v. Overland, Inc., 692 F.2d 1250 (9th Cir. 1982), where Coca-Cola had sued a restaurant (Overland) for trademark infringement, and Overland countered that COKE was generic, claiming that customers ordered “coke” only in a generic (“soda”) sense. The court rejected that argument, noting that the mere fact customers ordered “a coke,” i.e., used the mark as a noun, failed to show “what . . . customers [were] thinking,” or whether they had a particular source in mind.

To accept Elliott’s argument, the court said, would require “evidence regarding the customers’ inner thought processes.” The court explained further in a footnote:

We acknowledge that if a trademark is used as an adjective, it will typically be easier to prove that the trademark is performing a source-identifying function. If a speaker asks for “a Kleenex tissue,” it is quite clear that the speaker has a particular brand in mind. But we will not assume that a speaker has no brand in mind simply because he or she uses the trademark as a noun and asks for “a Kleenex.” Instead, the party bearing the burden of proof must offer evidence to support a finding of generic use.

Relating it to Google, the court said that just as a customer might use the noun “coke” with no particular cola beverage in mind, or with a Coca-Cola beverage in mind, an internet user might use the verb “google” with no particular search engine in mind, or with the Google search engine in mind.

While Elliott had amassed a mountain of evidence ranging from expert surveys to dictionaries, it all focused on the public using “google” as a verb, and did not show evidence of “google” being a generic name for internet search engines.

Elliott also argued there is no efficient alternative for the word “google” as a name for “the act” of searching the internet regardless of the search engine used. But the court convincingly disposed of that argument:

Elliott must show that there is no way to describe “internet search engines” without calling them “googles.” Because not a single competitor calls its search engine “a google,” and because members of the consuming public recognize and refer to different “internet search engines,” Elliott has not shown that there is no available substitute for the word “google” as a generic term.


Ultimately, Elliott lost by focusing on the wrong question. Elliott focused on whether the relevant public primarily uses the word “google” as a verb, when the real question was:

…whether the primary significance of the word “google” to the relevant public is as a generic name for internet search engines or as a mark identifying the Google search engine in particular. 


The opinion includes analysis of several consumer surveys offered by Elliott. The court noted that consumer surveys may be used to support a claim of genericide “so long as they are conducted according to accepted principles.”

Two of Elliott’s consumer surveys, however, were excluded because they were not conducted according to accepted principles:

Specifically, these surveys were designed and conducted by Elliott’s counsel, who is not qualified to design or interpret surveys… [and, even] if the surveys were admitted, Elliott’s counsel would need to withdraw in order to offer testimony on the survey results.

For the latter point, the court cited Ariz. R. Sup. Ct. 42, E.R. 3.7 (“A lawyer shall not act as advocate at a trial in which the lawyer is likely to be a necessary witness . . . .”); see also Model Rules of Professional Conduct 3.7.

In California, see Rule of Professional Conduct 5-210 Member as Witness; but also see proposed California Rule 3.7 Lawyer as Witness (On March 30, 2017, the State Bar submitted the proposed rules to the California Supreme Court).



Copyright Defense Win Reversed – Proving Authorization to Copy is Defendant’s Burden

In a recent copyright infringement case about making and distributing copies of a painting, the Seventh Circuit Court of Appeals in  Ali v. Final Call, Inc. (7th Cir., Aug. 10, 2016, No. 15-2963) held that the district court misstated the elements of a prima facie copyright infringement claim and erroneously shifted to plaintiff the burden of proving that copies made and distributed by the defendant were unauthorized.  The opinion identifies some important pitfalls for copyright litigators, and offers some preventative guidance for those who make copies of or distribute the creative works of others.  [See THE TAKE-AWAYS below.]

Here are the basic facts:

Plaintiff Ali is an artist.  In 1983, Ali painted a portrait of Minister Louis Farrakhan (“Minister Farrakhan painting”), for which Farrakhan paid Ali $5,000.  Ali registered his copyright in the painting in 1997.  Defendant The Final Call (a newspaper for the Nation of Islam) sells various posters and prints.  The Final Call sold lithographs titled Allah’s Star of Guidance that featured a reproduction of Ali’s Minister Farrakhan painting.

Ali sued The Final Call for copyright infringement, alleging he never authorized The Final Call to create or distribute the Star of Guidance prints or lithographs.  The Final Call argued that Ali’s commission with Louis Farrakhan included permission to make copies, which in turn, authorized creation and distribution of the Star of Guidance lithographs.

The parties waived a jury, and the case was tried to the court.  The district court identified the key issue as “whether in agreeing to the commission with Minister Farrakhan back in 1983, Ali agreed to give the right to create and distribute the Star of Guidance prints.” It found that Ali had authorized the creation and distribution of the Star of Guidance prints/lithographs, based primarily on a letter Ali had sent in 2008 that said, in part, “The commission awarded by the minister for his oil and litho entitled The Star of Guidance…” Noted the district court, “That very plainly says in Mr. Ali’s own letter that the commission with Minister Farrakhan included lithographs and prints.”  Ali tried to explain that the letter was taken out of context, but the court discounted his explanations.

On appeal, Ali argued that the district court had misstated the elements of a prima facie copyright infringement claim and erroneously shifted to him the burden of proving that the copies were unauthorized.  The Seventh Circuit agreed, and reversed the district court’s judgment.

In summary, the Seventh Circuit Court of Appeal reasoned as follows:

To establish a prima facie case of copyright infringement, Ali only had to prove two things: (1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original.  The district court, however, also required Ali to prove that the copying was unauthorized.  That was error, because the defendant (The Final Call) has the burden of proving affirmative defenses like authorization (e.g., license).  Therefore, unless The Final Call could prove an affirmative defense (e.g., authorization to make and distribute copies), it was liable for copyright infringement.

[For more on establishing a prima facie case and burdens of proof, see Allocation of the Burdens of Proof – Burden of Producing Evidence.]

The Final Call did assert affirmative defenses of implied license (authorization) and laches [albeit late, as discussed in THE TAKE-AWAYS below].  However, believing that it was plaintiff’s burden to show that the copies were unauthorized, The Final Call decided to withdraw its affirmative defenses at the pretrial conference.  Because defenses had been waived, the Seventh Circuit held the district court had improperly relied on a waived implied license defense and an unasserted first-sale defense when the district court ruled in favor of The Final Call at trial.

Even if the defenses could properly be considered, the Seventh Circuit found that The Final Call failed to carry the burden of proving the elements of either defense at trial.

An implied license defense requires the defendant to prove that:  (1) a person (the licensee) requested the creation of a work, (2) the creator (the licensor) made that particular work and delivered it to the licensee who requested it, and (3) the licensor intended that the licensee-requestor copy and distribute his work.  The Final Call did not prove an implied license because (1) Farrakhan commissioned the portrait, not The Final Call, (2) Ali made the work Farrakhan requested and delivered it to Farrakhan, not The Final Call, and (3) no evidence showed that Ali intended for The Final Call to copy and distribute his work.  And even assuming Farrakhan may have had an implied license, no evidence showed that Farrakhan ever attempted to transfer a license to The Final Call.

Under the first sale doctrine, “once a given copy has been sold, its owner may do with it as he pleases (provided that he does not create another copy or a derivative work).”   The Final Call’s evidence, however, failed to prove that the lithographs at issue were from a batch of authorized copies.


While there are many sub-issues throughout the Seventh Circuit’s opinion, here are some important take-aways from Ali v. Final Call, Inc.:

As the first take-away, the burdens should now be clear:

To establish a prima facie case of copyright infringement, the plaintiff must prove two things: (1) ownership of a valid copyright (registered) in the work, and (2) copying of constituent elements of the work that are original.

If the plaintiff presents a prima facie case, the defendant has the burden to prove the elements of its affirmative defenses, such as the first sale doctrine, or authorization to make or sell another’s work, whether by express or implied license (or otherwise).

Another take-away concerns jury instructions.  While this was a court trial and didn’t involve a jury, lawyers and judges sometimes consult jury instructions as fairly solid statements of current law.  Interestingly here, the Seventh Circuit traced the district court’s error, in part, to the Seventh Circuit’s pattern jury instructions.  Instruction No. 12.2.1 states:

To succeed on his claim, Plaintiff must prove the following things:

1. [Describe the work] is the subject of a valid copyright;

2. Plaintiff owns the copyright; and

3. Defendant copied protected expression in Plaintiff’s copyrighted work.

I will explain what these terms mean…

Instruction No. 12.5.1 COPYING, appears to explain what “copied protected expression” means, and includes this bracketed language:

[In determining whether Plaintiff has proved copying, you may consider evidence that … Defendant had authority from Plaintiff to copy Plaintiff’s work.]

That bracketed language in Instruction No. 12.5.1 COPYING created confusion for the district court as to whether plaintiff Ali had to disprove authorization as part of his burden of proving there was “copying,” or whether authorization was solely an affirmative defense that The Final Call had the burden of proving.

[It is worth noting that the comments for use of Instruction No. 12.5.1 COPYING state, “This instruction should be used only when the plaintiff seeks to prove copying inferentially.  If the plaintiff offers only direct evidence of copying, then this instruction is unnecessary.”  Here, Ali and The Final Call had stipulated that the “Star of Guidance” contained the protected expression from the “Minister Farrakhan painting.”  In other words, Ali was not seeking to prove copying by inference.]

Nevertheless, the Ali v. Final Call opinion should prompt an evaluation of pattern jury instructions for copyright cases in all of the federal circuits.  For instance, one conceivably could make the same mistake based on certain portions of the Ninth Circuit’s Jury Instructions.  Instruction No. 17.0 includes “without authority” within its statement on LIABILITY FOR INFRINGEMENT, as follows:

One who [reproduces] [distributes] [performs] [displays] [uses] [prepares derivative works from] a copyrighted work without authority from the copyright owner during the term of the copyright infringes the copyright.

Similarly, in Instruction 17.4 COPYRIGHT INFRINGEMENT—ELEMENTS—OWNERSHIP AND COPYING, the first sentence references “without the owner’s permission”:

Anyone who copies original elements of a copyrighted work during the term of the copyright without the owner’s permission infringes the copyright.

The Ninth Circuit jury instructions, however, do have separate and distinct instructions for the defenses of implied license [No. 17.24 COPYRIGHT—AFFIRMATIVE DEFENSE – IMPLIED LICENSE] and the first sale doctrine [No. 17.25 COPYRIGHT—AFFIRMATIVE DEFENSE—FIRST SALE], which should make it clear that those are affirmative defenses that the defendant has the burden of proving.

Other take-aways from this case concern the importance of the pretrial conference and pretrial order.

As explained in DeliverMed Holdings, LLC v. Schaltenbrand (7th Cir. 2013) 734 F.3d 616, 628, the parties rely on the pretrial conference to inform them precisely what is in controversy, the pretrial order is treated as superseding the pleadings and establishes the issues to be considered at trial.  In order to preserve the pretrial order’s usefulness in focusing the parties’ efforts, a claim or theory not raised in the pretrial order should not be considered by the fact-finder (i.e., the judge in a bench trial or the jury in a jury trial).

The U.S. Supreme Court also has emphasized the importance of the pretrial order. As stated in Rockwell Intern. Corp. v. U.S. (2007) 549 U.S. 457, 474, “[C]laims, issues, defenses, or theories of damages not included in the pretrial order are waived even if they appeared in the complaint and, conversely, the inclusion of a claim in the pretrial order is deemed to amend any previous pleadings which did not include that claim.”  Thus, even an entirely new claim or defense in a pretrial order will be deemed to amend the previous pleadings to state the new claim or defense.

Here, The Final Call did not assert any affirmative defenses in response to the original Complaint or the First Amended Complaint.  And when plaintiff Ali filed a Second Amended Complaint, The Final Call did not file an answer asserting the defenses of implied license and laches until many months later.  By then, The Final Call’s answer was untimely, fact discovery had long-since closed, and Ali had filed a summary judgment motion that was fully briefed for decision by the court.  That prompted Ali to file a motion to strike The Final Call’s newly asserted affirmative defenses as untimely and prejudicial.

The district court never ruled on Ali’s motion to strike, however, because The Final Call withdrew the affirmative defenses (implied license and laches) at the pretrial conference.   The Final Call argued that it was Ali’s burden to prove the copies were unauthorized.  And it did not seem to matter, because at the Pretrial Conference, the district court judge said, “[I]f it turns out that lack of authorization is the plaintiff’s burden, then…the defendant can certainly — regardless of whether the defendant has waived irrevocably the ability to assert affirmative defenses, he can certainly make that argument against one of the elements of your claim.”

When the Seventh Circuit ultimately determined that the defendant has the burden of proving defenses such as implied license and the first sale doctrine, The Final Call’s withdrawal of its affirmative defenses at the pretrial conference turned out to be the “nail in the coffin.”

Nevertheless, the Seventh Circuit’s opinion went on to analyze and explain how The Final Call had not proved the elements of implied license or first sale.  That analysis (in the final paragraphs of the opinion) highlights another key take-away:

By not clarifying whether it has the burden of proving a particular defense early in a case, a defendant may miss out on the opportunity to discover facts, and to identify, prepare, and call witnesses at trial that can establish facts supporting each element of its affirmative defenses.

As a final take-away from Ali v. Final Call, those who make or distribute copies of other’s works should be prepared to prove their right to do so by creating and maintaining records that show authorization or other defenses – even if it was many years ago.  As the Seventh Circuit noted, “if there is evidence of a license, it is most likely to be in the possession of the purported licensee.”



Trademarks – Timing, Intent and Use in Commerce

I have been following the twists and turns of Kelly Services Inc. et al. v. Creative Harbor LLC (ED Mich) — an interesting trademark dispute over priority in the mark “WorkWire” for a mobile application for use by employers and prospective employees.

Two opinions in Kelly Services v. Creative Harbor illuminate important rules and strategies regarding “intent-to-use” trademark applications and what it means to use a mark in commerce, particularly in the context of newer technologies like mobile apps.  [Note:  The final paragraph of this post lists the key take-aways.]

Creative Harbor claimed priority in the WorkWire mark based on two “intent-to-use” applications (“ITUs”) it had filed with the USPTO.  Kelly Services claimed priority based on having used the mark in commerce before Creative Harbor filed its ITUs.

In early 2013, Kelly Services began developing an iPad application (“App”) for distribution in the Apple App Store.  On February 4, 2014, it submitted the completed App to Apples iTunes Connect – the tool that software developers use to submit an App for approval and eventual sale in the Apple App Store.  After Apple informed Kelly Services that its Workwire App was rejected due to a metadata issue, Kelly resubmitted it the next day.  On February 17, 2014, Apple informed Kelly that the WorkWire App was approved and ready for sale.  Kelly’s WorkWire App was released to the public in the Apple App Store on February 19, 2014 sometime after 8:11 pm (EST).  The first consumer download of the Kelly WorkWire App occurred on February 20, 2014.

In September 2013, Creative Harbor’s founder independently had the idea to create a mobile app called “WorkWire” to connect employers and prospective employees.  Creative Harbor LLC was formed in early February 2014.  Around that same time, Creative Harbor sought advice on trademark protection from an intellectual property attorney.  On February 16, 2014, the attorney informed Creative Harbor that the WorkWire mark was available.  Three days later, on February 19, 2014, Creative Harbor filed its ITU applications at 6:28 pm and 7:56 pm (EST) with the USPTO.

Both Kelly Services and Creative Harbor filed motions for summary judgment, with the issue of priority to the mark being the key issue.

The district court’s first opinion, Kelly Servs., Inc. v. Creative Harbor, LLC, 2015 WL 5013873 (E.D. Mich. Aug. 21, 2015) (“Round 1”), established the facts described above, and determined that:

(1)  Kelly had not used the WorkWire mark in commerce before Creative Harbor filed its ITUs, and thus Kelly did not have priority based on its alleged prior use; and

(2)   Creative Harbor was not entitled to a judgment of priority based on the filing date (and time) of its ITU applications until it had completed the USPTO registration process.

Key to the court’s opinion concerning Kelly’s lack of priority based on its alleged prior use in commerce were the following:

1.  Ordinarily, priority to a mark is established “as of the first actual use of [the] mark” in commerce.  However, the Lanham Act allows a person not yet using a mark to file an anticipatory application for registration—i.e., an ITU application—on the basis of an intent to use the mark in the future.  If the ITU applicant later uses the mark in a commercial transaction and files a statement of use with the USPTO within the prescribed time frame, the mark is registered and the date the ITU application was filed becomes the applicant’s constructive-use date.  This gives the ITU applicant priority-of-use over anyone who adopts the mark after the constructive-use date.

2.  “Use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.  Use in commerce requires a genuine commercial transaction or an attempt to complete a genuine commercial transaction.  While the use need not be extensive nor result in deep market penetration or widespread recognition, there has to be an ‘open’ use, that is to say, a use has to be made to the relevant class of purchasers or prospective purchasers.  An ‘internal’ use cannot give rise to priority rights to a mark. The test for use in commerce is whether or not the use was sufficiently public to identify or distinguish the marked goods in an appropriate segment of the public mind as those of the adopter of the mark.  Sufficient public use has been found when a claimant offered its services to potential customers through numerous solicitations bearing the mark.

    *The district court found that submission of the Kelly Workwire App to iTunes Connect for Apple’s review was not sufficient to constitute use in commerce because it was not sufficiently open or public to identify or distinguish its application in the minds of consumers.  The bilateral exchange between Kelly and iTunes Connect provided no notice of the Kelly WorkWire App to potential consumers—i.e., persons who might eventually download the Kelly WorkWire App from the Apple App Store. The court characterized Kelly’s submission of the App to Apple as a preparatory step to making the Kelly WorkWire App available to consumers, and noted that “[A]n applicant’s preparations to use a mark in commerce are insufficient to constitute use in commerce.”

Key to the court’s opinion that Creative Harbor was not yet entitled to a judgment of priority were the following points:

  1. ITUs—in and of themselves—do not establish priority to a mark.
  1. ITU applications merely establish an applicant’s constructive-use date, contingent on satisfying the other requirements for registration of the mark — using the mark in commerce and filing a statement of use with the USPTO within the prescribed time frame.

[Since Creative Harbor’s counterclaims against Kelly for unfair competition, trademark dilution, and intentional interference with prospective business all were based on Creative Harbor’s alleged priority rights, the court granted summary judgment to Kelly on those claims.]

At the end of Round 1, Creative Harbor appeared to be headed for a win (in terms of the mark), except for the paragraph at the end of the court’s August 21, 2015 opinion titled, “Supplemental Briefing.”  There, the court requested additional briefing on whether Creative Harbor had a bona fide intent to use the Mark on each and every one of the goods and services identified in the applications.  Noting that “At least one federal court has invalidated an entire intent-to-use application where the applicant lacked a bona fide intention to use the mark on all of the items listed in the application,” the court stated, “[i]f Kelly establishes that the Creative ITUs are invalid, Kelly may have priority over Creative Harbor based on Kelly’s use of the Mark.”  Accordingly, the court requested additional briefing on whether it should (1) decide the validity of the Creative ITUs or (2) leave that issue to the TTAB and stay this action pending the TTAB’s action on Kelly’s Notices of Opposition.

Following additional briefing, the district court filed its second opinion, Kelly Servs., Inc. v. Creative Harbor, LLC, 2015 WL 6108264, at *1 (E.D. Mich. Oct. 16, 2015) (“Round 2”), reconsideration denied, 2015 WL 6955406 (E.D. Mich. Nov. 10, 2015).

As to whether the court or the TTAB should decide the question, the Round 2 opinion notes that counsel for both parties “conferred and determined that the Court should decide the validity of the Creative ITUs.”

The parties having stipulated, the court went on to hold:

(1)  Creative Harbor had a bona fide intent to use the Mark on some, but not all, of the goods and services identified in the ITUs; and

(2)  the ITUs were invalid and ineffective because Creative Harbor had not deleted from the ITUs each of the goods and services on which it lacked a bona fide intent to use the Mark.

Therefore, because Creative Harbor’s ITUs were invalid, Kelly was entitled to summary judgment to the extent Creative Harbor’s claims relied on having priority to the mark based upon the filing date of its ITU trademark applications.

In reaching its decision, the court first set forth history of the Intent-to-Use trademark application, noting that before 1988, the Lanham Act required that a trademark applicant already be using the mark in commerce at the time the application was filed.  The Trademark Law Revision Act of 1988 “changed the Lanham Act by permitting [trademark] applicants to begin the registration process before actual use of [a] mark in commerce at the time of filing, so long as the applicant had a ‘bona fide intention … to use [the] mark in commerce’ at a later date.”

The court then noted recent guidance from M.Z. Berger & Co., Inc. v. Swatch AG, 787 F.3d 1368, 1374 (Fed. Cir. 2015), in which the Federal Circuit Court of Appeals explained:

*  “while the Lanham Act does not define the term ‘bona fide,’ an applicant’s good faith intent to use the mark in commerce ‘must be [objectively] demonstrable and more than a mere subjective belief.'”

*  “a trademark applicant’s intent must reflect an intention to use the mark consistent with the Lanham Act’s definition of ‘use in commerce’:  [T]he bona fide use of a mark in the ordinary course of trade and not made merely to reserve a right in the mark.”

The court noted that it was Kelly Services’ burden, as the party seeking summary judgment, to demonstrate that Creative Harbor lacked a bona fide intent to use the mark on all of the goods and services identified in the ITU applications.

Creative Harbor’s identifications of goods and services in its trademark applications went far beyond any bona fide intended use, as shown in the deposition of Creative Harbor’s CEO, which included testimony:

  • that he (CEO) asked his attorney to file the Creative ITUs in order “to protect this brand … in case the brand got bigger; in case it diversifies a little bit.”
  • that the services and goods listed on the Creative ITUs “were defined with the idea of protecting my present and future exploration of this name—of this brand.”
  • that at the time his attorney drafted the Creative ITUs, he (CEO) “had clear ideas for some of them, and some of them were meant for future exploration.”
  • that he acknowledged that some of the listed “services mightbe of future importance” and that they “mightprotect my endeavors in the future that I have….”
  • that while the goods application stated an intention to use the Mark with “computer game software,” he (CEO) testified that Creative Harbor did “not” intend to use the Mark “with a game.”
  • that while the services application stated an intention to use the Mark in connection with “professional credentialing verification services … on behalf of others,” he (CEO) acknowledged that he simply “wanted to keep the option open to at some point do that.”
  • that the services application stated an intention to use the Mark in connection with “employee relations information services,” but when asked about that listing, he (CEO) did not know what it “refers to.”
  • that while the services application stated an intention to use the Mark in connection with “employment staffing consultation services,” he (CEO) explained that Creative Harbor included this service because “maybe at some point[the application] would have consulting in there, maybe some kind of career advisor, something like this.”
  • that while the services application stated an intention to use the Mark in connection with “business consulting” services, he (CEO) conceded that he “wanted to make sure [that] was there included” because the company “could” perhaps perform those services “at some point” in the future.

These points, the court found, showed that Creative Harbor did not have a bona fide intent to use the Mark on each and every one of the goods and services listed on the Creative ITUs.

Finding that Creative Harbor had not identified any objective evidence that it had a bona fide intent to use the Mark in connection with many of services and goods listed on the Creative ITUs, such as employee relations information services, business consulting services, professional credentialing verification services, computer game software, and/or computer hardware for integrating text and audio, the court held that there was no material factual dispute as to whether Creative Harbor had a firm intent to use the Mark on all of the listed services and goods in the Creative ITUs: it did not.

The court then turned to the remedy – what should it do?

Initially, the court noted that when an ITU applicant has no bona fide intent to use its mark in commerce on any of the goods or services listed in its application, the ITUs are deemed ineffective and the applicant is barred from registering the mark.

However, the court said it was less clear what happens when an applicant, like Creative Harbor, has a bona fide intent to use a mark in commerce on some, but not all, of the listed goods and/or services.

Reviewing decisions of the Trademark Trial and Appeal Board, the court identified the rule as follows:  “absent fraud, an ITU applicant may cure an overbroad listing of goods and/or services by deleting from its application the goods and/or services on which it lacks a bona fide intent to use the mark.”

The court also cited Spirits Int’l, B.V. v. S.S. Taris Zeytin Ve Zeytinyagi Tarim Satis Kooperatifleri Birlgi, 99 U.S.P.Q.2d 1545 (T.T.A.B. 2011), for the proposition that a “lack of bona fide intention to use the mark with respect to any of the goods in each class … [an] opposition against the classes in their entirety would be sustained.”

The court then posed the question:  “What if an ITU applicant fails to delete from its application the goods and/or services on which it lacked an intent to use its mark?  Under those circumstances, should a tribunal void the entire application or should the tribunal, itself, delete the goods and/or services for which the required intent was lacking?”

Because Creative Harbor argued that it had bona fide intent, and did not voluntarily remove services (e.g., employee relations information services, business consulting, professional credentialing verification services) and goods (e.g., computer game software, computer hardware for integrating text and audio) for which it had no bona fide intent to use, the district court invalidated the Creative Harbor ITUs in their entirety.

Acknowledging that the result may appear harsh, the court reiterated that an applicant may not use an ITU “merely … to reserve a right in a mark.”  Because Creative Harbor filed its ITUs to broadly reserve the Mark for use in a “brand” it  “might” develop, and when Kelly raised Creative Harbor’s lack of intent, it failed to cure the problem by deleting the services and goods on which it did not intend to use the mark, and instead forced Kelly to continue litigate the validity of the Creative ITUs, voiding the Creative ITUs did not strike the Court as a disproportionate or extreme remedy.

Here are some take-aways:

  1. When entrepreneurs or a companies have identified a mark and services or goods on which the mark will be used, filing of an Intent-to-Use application can secure priority over others who also may be seeking to use the same mark (or one that is confusingly similar), even if they are closer to actually using the mark in commerce.
  1. It is important to discuss the likely and intended use of the mark with counsel both before filing an ITU, and throughout the registration process.
  1. It is critical to assess the bona fide intended use of the mark once a third party has challenged the intended uses stated in an ITU, and to voluntarily delete goods and services for which no bona fide intended use is present, particularly when the questioned goods or services fall within a class of goods or services that is essential to the ITU applicant’s business and plans for the mark.
  1. It is important to carefully research and consider the preferred forum when certain registration related issues are being considered, particularly when the court provides an opportunity for input on which forum will determine issues like validity of trademark applications (including ITUs).
  1. With the benefit of hindsight from this case, it seems fairly important that deponents, and particularly applicants, executives or persons most knowledgeable from an organization, be familiarized with the rules and purposes of trademark registration and procedures, and evolving case law interpretations of terms like “use in commerce” and “bona fide” intent to use.
  1. For developers of mobile apps (or services/products with submission or approval processes similar to the manner in which the Apple Store reviews mobile applications), it is important not to rely on the submission date or solely on the availability-for-sale date to establish priority based on use in commerce.


A Shield, But Not a Sword – Patent Assignor Estoppel

In Semiconductor Energy Laboratory Co., Ltd. v. Yujiro Nagata, — F.3d —, 2013 WL 490991 (Fed.Cir. 2013), the Federal Circuit Court of Appeal upheld the dismissal of SEL’s lawsuit for lack of subject matter jurisdiction. 

Nagata, a co-inventor on a patent owned by SEL, had assisted SEL in a patent infringement suit against another party in 2002-2003, and was paid for his cooperation and services.  In SEL’s 2009 suit against Samsung, however, Nagata did not cooperate with SEL as SEL had assumed.  Instead, Nagata assisted Samsung and gave testimony repudiating his signature on the declarations and assignments he had signed during patent prosecution in 1991.  SEL claims it settled the Samsung case for less money because Nagata’s testimony impugned the enforceability of the patent. 

SEL then sued Nagata, seeking to use the doctrine of assignor estoppel (whereby “an assignor sued for infringement may not defend or counterclaim that the patent he assigned is invalid or unenforceable”) offensively in a Declaratory Relief claim against Nagata, arguing that assignor estoppel imposed a “duty of fair dealing … on an inventor who assigns intellectual property rights that are protected by the Constitution.”  SEL argued this established subject matter jurisdiction because SEL’s right to relief “necessarily depends on resolution of a substantial question of federal patent law.” 

The Federal Circuit held, “our jurisprudence does not create a federal cause of action for assignor estoppel,” explaining it is “a form of estoppel, and with rare exception, estoppel is a shield; it is an affirmative defense, not a claim for relief on its own.”  Importantly, the court noted, “The relief requested by SEL is akin to seeking a declaratory judgment of patent validity, which is not a viable cause of action.” 

Accordingly, because SEL’s claim of assignor estoppel did not create a cause of action, SEL’s case (other state law claims) lacked a basis for subject matter jurisdiction in federal court.

Echoing the district court, the Federal Circuit noted, “The appropriate remedy, if any, for SEL to foreclose Nagata’s relevant, factual testimony might have been to challenge his credibility in the crucible of cross-examination during the Wisconsin case [against Samsung], not to bring collateral litigation against him under a nonexistent independent cause of action.”  Interestingly, however, the district court’s dismissal order reveals that Nagata had agreed to assist Samsung in the litigation “as a paid consultant for the U.S. law firm defending Samsung,” and that Nagata “was to receive $52,500 from Samsung, regardless of the hours he worked, with additional compensation at the rate of $350 an hour.” (emph. addedSemiconductor Energy Laboratory Co., Ltd. v. Yujiro Nagata, 2012 WL 177557 (N.D.Cal. 2012).  Other than its mention of the “crucible of cross-examination,” the Federal Circuit did not address the Samsung-Nagata compensation arrangement, which the district court called, “arguably troublesome.” 

The Take Away: 

1.         Assignor estoppel is an affirmative defense (i.e., a shield), and may not be used offensively as the basis for a federal cause of action (i.e., a sword). 

2.         Times change, and so do witnesses.