Want to Engage in Anti-Competitive Trademark Bullying? Second Circuit Says: Great, Have a Nice Day!–1-800 Contacts v. FTC

16 06 2021

Technology & Marketing Law Blog
Eric Goldman
June 14, 2021

Starting in the mid-2000s, 1-800 Contacts sought to control how its competitors bought search engine advertising triggered by its (so-called) trademarks, a process I call competitive keyword advertising. To do this, 1-800 Contacts typically sued its competitors and then quickly entered into a no-money settlement agreement that required each party to stop bidding on each others’ trademarks.

To property maximalists, 1-800 Contacts’ efforts may sound like run-of-the-mill trademark enforcement. However, the scheme was actually extremely unusual (few, if any, other trademark owners did anything similar), and it had several pernicious effects. The settlements deprived consumers of additional helpful information from competitive advertising. The settlements distorted the keyword ad auctions that the search engines were trying to conduct. Most importantly, the settlements helped 1-800 Contacts avoid competing on price, which has allowed 1-800 Contacts to systematically charge higher prices to consumers (a point 1-800 Contacts freely admits).

1-800 Contacts’ competitors “voluntarily” entered into the settlement agreements, but they were goaded in part by 1-800 Contacts’ threat to wage lawfare against them if they didn’t. This threat wasn’t idle. 1-800 Contacts likely spent $1M+ suing a holdout to its settlement “deal,” Lens.com, even though Lens.com made only $21 of profit from competitive keyword advertising. (Lens.com claimed it incurred at least $1.4M of defense costs). In other words, 1-800 Contacts proved to the industry that it would engage in economically irrational litigation to punish any competitors who tried to compete against it on price.

Five years ago, the FTC initiated an administrative complaint against 1-800 Contacts. The FTC won at the initial administrative hearing and then at the Commission level.

Last week, the Second Circuit reversed and dismissed the FTC’s administrative complaint, saying that the FTC misapplied the applicable antitrust standard and did not make a strong enough evidentiary showing of an antitrust violation. This opinion is mostly antitrust inside-baseball, but I want to highlight a few things.

Case citation: 1-800 Contacts, Inc. v. Federal Trade Commission, 2021 WL 2385274 (2d Cir. June 11, 2021)

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The content in this post was found at https://blog.ericgoldman.org/archives/2021/06/want-to-engage-in-anti-competitive-trademark-bullying-second-circuit-says-great-have-a-nice-day-1-800-contacts-v-ftc.htm Clicking the title link will take you to the source of the post and was not authored by the moderators of freeforafee.com

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Three Keyword Advertising Decisions in a Week, and the Trademark Owners Lost Them All

4 06 2021

Technology & Marketing Law Blog
Eric Goldman
August 17, 2020
If you are a trademark owner suing over competitive keyword ads, you are almost certainly making a bad business decision, and your attorney might be milking your bank account. If you are an attorney representing a trademark owner in a competitive keyword ad lawsuit, please reexamine your professional decision-making to ensure that you are, in fact, prioritizing the best interests of your clients.

This is my first time blogging keyword ad cases in almost a year. However, in an odd coincidence, we got three rulings in the same week. When it rains, it pours. This post rounds up how trademark owners are doing in these cases (TL;DR: they lose). I don’t have a conclusion at the end of this post because, honestly, what’s left to say? If the conclusion to this post isn’t obvious after reading it, take off your plaintiff-colored glasses.

Passport Health, LLC v. Avance Health System, Inc., 2020 WL 4700887 (4th Cir. Aug. 13, 2020). Prior blog post.

Smash Franchise Partners LLC v. Kanda Holdings Inc., 2020 WL 4692287 (Del. Ct. Chancery Aug. 13, 2020)

Sen v. Amazon.com, Inc., 2020 WL 4582678 (S.D. Cal. Aug. 10, 2020). Prior blog post; and also referenced here.

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The content in this post was found at https://blog.ericgoldman.org/archives/2020/08/three-keyword-advertising-decisions-in-a-week-and-the-trademark-owners-lost-them-all.htm Clicking the title link will take you to the source of the post and was not authored by the moderators of freeforafee.com

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The Supreme Court’s Holding that Generic Terms Can Be Trademarks Is Not Fair to Struggling Startups

4 06 2021
IP Watchdog
Loletta Darden
August 17, 2020

At a time when small businesses are reeling, the Supreme Court decided to make life even more challenging for startups and mom and pop shops. The Court recently decided that a generic term combined with “.com” or “.net” could be registered as a federal trademark. If that sounds like no big deal to you, you have not thought it through. Based on the Court’s decision in United States Patent and Trademark Office et al. v. Booking.com, someone could register a trademark for autorepair.com. That would mean that Joe of Joe’s Auto Repair would have to get permission, and likely pay a licensing fee, to use the name Joe’s Auto Repair on his website and marketing materials. Multiply that by thousands of other generic business categories and the reality becomes clear.
 

The content in this post was found at https://www.ipwatchdog.com/2020/08/17/supreme-courts-holding-generic-terms-can-trademarks-not-fair-struggling-startups/id=124084/ Clicking the title link will take you to the source of the post and was not authored by the moderators of freeforafee.com

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A Generic Word Combined With “.Com” Can Create A Protectable Trademark

29 05 2021

LexBlog/99 park row
Felicia Boyd (US) & Andrea Shannon (US)
July 8, 2020

In United States Patent And Trademark Office, Et Al., v. Booking.Com B. V. (No. 19-46, Jun. 30, 2020), the Supreme Court held that the combination of a generic term with “.com”—referred to as a “generic.com term”–could be a protectable trademark.

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The content in this post was found at https://www.lexblog.com/2020/07/08/a-generic-word-combined-with-com-can-create-a-protectable-trademark/ Clicking the title link will take you to the source of the post and was not authored by the moderators of freeforafee.com

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Marvel’s Venom Vs Spyder’s Venom: Industry Giants In TTAB Trademark Case

24 05 2021

LexBlog/99 park row
Mandour & Associates
November 24, 2020

IPNews® – On November 23rd, Marvel Characters, Inc. filed a trademark opposition against Spyder Active Sports, Inc’s trademark application for “Venom” which will be used to launch a new collection of ski gear.

Venom is the supervillain fictional character of Spider-Man comic books owned by Marvel. The American media franchise alleges that the trademark will cause consumer confusion, especially now that Marvel has recently launched its Venom 2 merchandise to the market.

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The Federal Circuit Reconsiders the Inherent Distinctiveness of Color Marks in In re Forney

27 12 2020

LexBlog
Paul Bost
April 21, 2020

On April 8, 2020, in In re: Forney Industries, Inc.,[1] the Federal Circuit reversed the Trademark Trial and Appeal Board’s finding that a color mark can never be inherently distinctive.  By so holding, the Federal Circuit controverts what had become conventional wisdom since the Supreme Court’s decisions in Qualitex Co. v. Jacobson Prod. Co., 514 U.S. 159 (1995) and Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (2000).

Based on its reading of the above precedent, the panel held that color marks on product packaging can be inherently distinctive.  In the instant case, Forney’s mark – a black bar followed by a yellow-to-red gradient – could be considered inherently distinctive.  Accordingly, the panel held that the Board erred by not assessing whether Forney’s mark was inherently distinctive.

The panel’s precedential decision is significant.  Persons interested in protecting color marks used on product packaging may now be able to obtain registration without showing secondary meaning.  Likewise, the holding may be adopted by other courts to allow plaintiffs asserting common law rights in color marks to do so without proof of secondary meaning.

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Federal Circuit Confirms Color Marks of Certain “Character” Can Be Inherently Distinctive for Product Packaging

16 04 2020

LexBlog
Sarah Bro
April 15, 2020

Reviewing a decision from the United States Patent and Trademark Office (“USPTO”) Trademark Trial and Appeal Board, the Federal Circuit vacated and remanded the Board’s refusal to register a trademark consisting of a gradient of multiple colors applied to product packaging, and relied on Supreme Court precedent in concluding that color marks can be inherently distinctive when used on product packaging “depending upon the character of the color design.” In re Forney Industries, Inc., Case No. 2019-1073 (Fed. Cir. Apr. 8, 2020) (O’Malley, J.)[precedential].

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Humvee Can’t Stop Depictions of Its Vehicles in the ‘Call of Duty’ Videogame–AM General v. Activision Blizzard

14 04 2020

Technology & Marketing Law Blog
Eric Goldman
April 3, 2020

It has unexpectedly turned into Videogame Law week here at the Technology & Marketing Law blog. This is my third videogame IP blog post this week. See my prior posts on tattoo copyrights and signature moves. All three rulings are decisive defense wins, a sign of how bogus videogame litigation has flooded the courts.

Today’s case involves the game Call of Duty, which prominently features Humvee vehicles throughout the game. Humvee asserted its trademark rights against Call of Duty, which is the kind of claim that can vex courts because trademark law wasn’t designed to regulate this kind of conduct. The court turns to the constantly baffling Rogers v. Grimaldi test to navigate the First Amendment overlay to the trademark claims. This turns into a trademark doctrine SNAFU. At least the court gets to the right conclusion.

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Case citation: AM General LLC v. Activision Blizzard, Inc., 1:17-cv-08644-GBD-JLC (S.D.N.Y. March 31, 2020)

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7th Circuit Upholds Trademark ‘Fair Use’ Doctrine

14 04 2020

LexBlog
John Mueller
April 11, 2020

[ed: this is not a new media case. However, it clarifies aspects of fair use as they relate to trademark, so is included here]

In an August 2019 decision, the 7th U.S. Circuit Court of Appeals upheld the earlier finding by the Northern District of Illinois of summary judgment that PepsiCo’s Gatorade division’s use of the phrase “Gatorade The Sports Fuel Company” on its Gatorade family of products did not infringe SportFuel Inc.’s SPORTFUEL trademark because the use of the “Sports Fuel” term by Gatorade was descriptive, not used in a source-indicative manner and thus a “fair use” of that term.

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International Trademark Registration: Nine Lessons Learned from Harry and Meghan

14 04 2020
IP Watchdog
Nouvelle Gonzalo & Nyja Brown & Eleanor LeBeau & Brittany George
April 13, 2020
One of a company’s most valuable assets is its trademark – its name, logo, color or slogan. A trademark or service mark establishes your company as the source of certain products (trademark) or services (service mark). This helps establish your company brand so consumers can easily recognize it. As we consider international trademark registration, there are some important lessons we can learn from the Duke and Duchess of Sussex, who tried to register a SUSSEX ROYAL trademark.
The content in this post was found at https://www.ipwatchdog.com/2020/04/13/international-trademark-registration-nine-lessons-learned-harry-meghan/id=120530/ Clicking the title link will take you to the source of the post. and was not authored by the moderators of freeforafee.com

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