Intellectual Property Walter | Haverfield - A top ten Cleveland-based law firm

by Maria L. Cedroni

A recent U.S. Supreme Court decision about cheerleading uniforms is likely to have a significant impact on the fashion industry, prompting more designers to apply for and enforce copyright of their work.

In Star Athletica, LLC v. Varsity Brands, Inc., the court ruled that merely decorative, and not functional, elements in a cheerleading uniform can be protected by copyright.

Varsity Brands, Inc., which designs and sells cheerleading uniforms, has more than 200 copyright registrations. Those registrations include designs of lines, chevrons and colorful shapes that the company uses on its uniforms. Varsity Brands sued Star Athletica, a competitor, for infringing on its copyrights to the five designs shown below. At issue was whether the designs on the uniforms served the useful function of identifying the uniforms as cheerleading uniforms (in which case they are not protectable). Or whether the designs are solely “graphic designs” that are capable of existing independently because “they could be incorporated onto the surface of different types of garments, or hung on the wall and framed as art.”
The Supreme Court’s decision in Star Athletica provided necessary clarification on the Copyright Act. It found that (1) the designs on the cheerleading uniform “can be identified as features having pictorial, graphic, or sculptural qualities” and (2) “if those decorations were separated from the uniforms and applied in another medium, they would qualify as two-dimensional works of art [under the Copyright Act].” The court further reasoned that “[i]maginatively removing the decorations from the uniforms and applying them in another medium also would not replicate the uniform itself.” Accordingly, the court found that the designs are eligible for copyright protection. Notably, the court did not decide whether the particular designs at issue were otherwise copyrightable (e.g., whether the designs were sufficiently original to be copyrightable).

It remains to be seen how the new test will be applied in courts. But, in the meantime, the decision provides motivation to seek copyright protection for design elements included in useful articles (such as clothing, lighting fixtures, furniture, etc.).

Maria Cedroni is an attorney with Walter | Haverfield and concentrates on intellectual property law. She can be reached at mcedroni@walterhav.com or at 216-619-7846.

Manufacturers Thrive by Leveraging Intellectual Property

by D. Peter Hochberg

“Not only do patents provide legal protection against competitive activity, but they also can help generate interest and investment in a company and serve to recognize inventors for their creativity,” writes Walter | Haverfield partner Peter Hochberg in an article for Advanced Manufacturing. Hochberg explains how patents pay off over the long-term and boost a company’s reputation.

Trademarks and Service Marks – Can they be registered if functional?

by D. Peter Hochberg

There are many nuances and specific factors that the U.S. Patent and Trademark Office (USPTO) considers when deciding if a trademark (which indicates the source of the goods or services) is a candidate for registration. Before you invest the time and money into your application, read the following:

Trademark applications can be refused for registration on various grounds, establishing that the mark does not function as a trademark. These grounds include trade names, functionality, ornamentation, informational matter, descriptiveness, color marks and goods in trade, amongst others.

Trade Name:

A trade name is often the name of a business or a company. The term, trade name means any name used by a person to identify his/her business or location. Whether a mark serves solely as a trade name rather than a trademark requires consideration of the way the mark is used, which is established upon review of the specimen (such as a label) submitted with the application by the USPTO.

Trade Dress:

Trade dress means the appearance or design of a product or its packaging. Trade dress can include features such as the size, shape, color or combinations of color, texture and graphics. Additionally, in some instances, trade dress can even include color, flavor, sound and odor. When a trademark application is filed, the examining attorney at the USPTO separately considers two substantive issues, namely (1) functionality and (2) distinctiveness.

Any trade dress which is functional cannot serve as a trademark. That is, if the trade dress is essential to the use or purpose of the article, or if it affects the cost or quality of the article, it is considered to be functional and is non-registerable. For example, the color yellow to denote a specific source of lawn equipment may function as trade dress and therefore be registerable. On the other hand, the color yellow for traffic signals or signage is essential to the functionality of the goods (e.g. alerts traffic to yield) and therefore will most likely not be registerable.

Functional trademarks cannot be registered due to the distinction between patent law and trademark law. Utilitarian products can be protected through utility patents that have a designated life, rather than through trademark registrations which could be unlimited in their life. Upon expiration of a utility patent, the invention enters the public domain.

andnbsp; The examining attorney at the USPTO must review not only the content of the application but must also conduct independent research to determine if the mark is functional. The applicant then has the opportunity to rebut the examiner’s findings.

To determine whether a trademark is functional, the following factors are examined:

andnbsp;andnbsp;andnbsp; (1) The existence of a utility patent on the product

andnbsp;andnbsp;andnbsp; (2) Advertising showing utilitarian advantages of the trademark if it is a design

andnbsp;andnbsp;andnbsp; (3) Facts relating to alternative designs

andnbsp;andnbsp;andnbsp; (4) Facts indicating whether the design results from a relatively simple or inexpensive method of manufacture

While utility patents for the product are strong evidence that a trademark is functional, design patents indicate that the trademark is not functional. Aesthetic functionality relates not only to product performance, but rather to competitive advantages. For example, a black outboard motor was not registrable because it could be coordinated with a variety of boat colors.

Peter Hochberg is a partner in the Intellectual Property group at Walter | Haverfield. Peter can be reached at dphochberg@walterhav.com or at 216-928-2903.

Four Patent Challenges for the Sole Inventor and Tips to Succeed

by DeMarcus E. Levy

Patent applications worldwide have been on a steady rise in recent years, up by nearly eight percent in 2015, according to the World Intellectual Property Organization (WIPO). And here in the U.S., the number of applications grew by nearly two percent that same year. A majority of them come from large companies as independent inventors face a variety of challenges. However, if these challenges can be managed properly, the potential monetary return for independent inventors is worth the investment in time and money.

Before filing a patent, consider the following:

Cradle to grave patent costs:

The costs for filing a patent application, which include government filing fees and fees paid to a registered patent practitioner to prepare and file the application, can run into the thousands of dollars. All utility patents then undergo prosecution where the merits of a patent are often argued before the U.S. Patent and Trademark Office (USPTO). It’s basically a vetting process, which can also cost thousands of dollars. Then, after the patent is granted, it may be challenged before the USPTO or a federal court. The costs of litigation are so prohibitive that oftentimes cases are settled at no small expense. Plus, maintenance fees are due to the USPTO every few years after a patent is granted. Failure to pay them may result in a loss of patent protection. Early involvement by a registered patent practitioner can help you anticipate and/or mitigate some of these costs.

Disclosure to potential competitors:

Many inventors have a desire to sell an invention to a company that manufactures similar products. However, sole inventors may not always have patent (or patent pending) protection before presenting their idea to a manufacturer, and that leaves them vulnerable. The manufacturer may express disinterest, but subsequently file a patent based upon or related to the inventor’s idea. In such cases, the inventor’s remedies are limited. To avoid the problem in the first place, an inventor should present a non-disclosure agreement to the manufacturer as a pre-condition to presenting his/her idea. However, any recovery is often less than what an owner could receive from selling or licensing the rights to the patent or application. Plus, contesting inventorship before the USPTO or a federal court could prove costly, and the outcome of such a contest is uncertain. The more advisable course of action is to avoid a dispute in the first place by filing a patent application prior to any such meeting. Inventors should also consult with a patent attorney before any disclosure of the invention.

Novelty:

Filing a patent application without first determining if the invention is already on the market may be a waste of time and money. Therefore, it’s often advisable for a potential applicant to conduct a prior art search to gain a better sense of an invention’s patentability. A prior art search involves a review of the invention by a registered patent practitioner, an extensive review of prior art, and an honest assessment or estimation of whether the applicant’s invention is in fact new (novel). Depending on the circumstances and nature of the innovation, less exhaustive evaluations may also be performed.

Statutory Bar:

When a patent applicant discloses his/her invention by using, selling, advertising and/or writing about it in publications, it’s often considered known to the general public. Under the American Invents Act, these activities may bar an owner from seeking patent protection if more than a year has passed since the owner used or disclosed his/her invention.

The above points are provided as a landscape of the patent procurement system and not intended to dissuade inventors from protecting their intellectual property rights. Rather, because of the value of the monopoly they offer, patents are worth pursuing for those who have invented truly novel (and non-obvious) concepts and can afford to secure, maintain and enforce such protection. Knowing the landscape and potential pitfalls (including costs) can be invaluable in the patent procurement process. To determine if patent protection is right for you, consult the patent professionals at Walter | Haverfield.

DeMarcus Levy is an attorney at Walter | Haverfield who focuses his practice on intellectual property law. He can be reached at dlevy@walterhav.com or at 216-928-2945.

5 Ways to Safeguard Your IP

by Kevin J. Soucek

A company’s intellectual property is a vital asset that should be protected. Walter | Haverfield Attorneys Kevin Soucek and Jamie Pingor list five ways that businesses can safeguard their IP in an e-article published by the Council of Smaller Enterprises (COSE), a division of the Greater Cleveland Partnership.

Is this the end of the bar against registrability for scandalous and immoral trademarks?

On December 15, 2017, the U.S. Court of Appeals for the Federal Circuit (CAFC) struck down the portion of the Lanham Act (aka the Trademark Act) which prevented immoral or scandalous trademarks from being registered with the United States Patent and Trademark Office (USPTO). The CAFC’s decision involved the term FUCT (In re Brunetti) which pertained to various types of apparel, including clothing for children and infants. However, the move did not come as a tremendous surprise. About seven months prior, the U.S. Supreme Court struck down the portion of the Lanham Act in a case (Matal v. Tam) which involved the mark, “The Slants.” The Slants decision, which was made on the basis of violating the First Amendment, received widespread attention for its seemingly groundbreaking nature. However, it was generally expected that the rationale of the Supreme Court in Matal v. Tam would be adopted by the CAFC and other lower courts in later decisions – which is precisely what has now occurred in this recent decision by the CAFC.

As noted, the issue in the Brunetti case was that the USPTO denied trademark registration to the mark FUCT. Its reasoning was that the term was considered to be scandalous and immoral in its nature, and therefore could not be protected as a federally registered trademark. The decision was appealed to the CAFC. The CAFC then essentially adopted the reasoning of the Supreme Court from its own earlier decision concerning The Slants and disparaging trademarks. In short, the CAFC determined that the restriction on registering trademarks for being “immoral or scandalous” is unconstitutional.

What does this now mean for trademark owners moving forward? Assuming that the CAFC decision in Brunetti is not appealed to the Supreme Court, it potentially opens the door for any number of terms that previously might have been considered immoral or scandalous to be registered as trademarks with the USPTO. That does not mean that all such marks will be registered since other aspects of trademark law still apply, such as the refusal to register marks that are merely descriptive or confusingly similar to a third party’s prior-registered mark. Perhaps too, the relevant portion of the Trademark Act might be rewritten in a manner that is deemed to be constitutional. Yet another possibility is that the USPTO might start taking a closer look as to whether these types of marks truly function as a trademark. And if not, then it could refuse registration for being merely informational matter. Of course, if this decision is appealed, then it would effectively continue to place any such marks on hold until the issue is finally resolved by the U.S. Supreme Court.

In the near future, we do anticipate an increase in new USPTO filings for trademarks that are potentially immoral or scandalous, as well as trademarks that are disparaging in nature. If you, as the reader, are the owner of such a trademark or have an intent to use such a mark as a trademark, then it would be prudent to file an application to register with the USPTO as soon as possible. That’s to avoid an owner of a potentially conflicting mark from filing first and obtaining an earlier filing date.

Sean Mellino is an attorney with Walter | Haverfield and concentrates on intellectual property law. He can be reached at smellino@walterhav.com or at 216-928-2925.

Five Ways to Protect Your Intellectual Property

by Kevin J. Soucek

The intellectual property you create is a vital asset. However, creating and maintaining a durable intellectual property portfolio can be costly. Many sophisticated entrepreneurs or business leaders forgo prioritizing protection of such intellectual property because it is often perceived as just another inessential expenditure, rather than a shrewd, strategic investment. Some overlook protecting their intellectual property because they are unsure about the ultimate profitability of their “protectable” ideas. Others are regrettably unmindful of the fact that some may attempt to copy or steal their intellectual property.

Whereas the age-old adage “the best defense is a strong offense” unequivocally applies to the field of intellectual property, it is critical to understand that intellectual property can be employed in both defensive and offensive situations. Therefore, investing a small sum to build up your intellectual property defense now will pay off in the long run, if you ever have to defend it. Plus, this investment will make your intellectual property more valuable.

Below are some examples of how to initiate protection of your intellectual property assets:

Educate yourself on the basics of copyrights, trademarks, trade secrets and patents.
Identify all of your registered and unregistered copyrights and trademarks, as well as any possible trade secrets.
Identify all of your patentable technology including products as well as business processes. With today’s first-to-file system, the sooner you file a patent application, the better – as such an application holds your place in line.
Ensure that any written contract or agreement (including employment and manufacturing agreements) thoroughly and explicitly protects (and defines ownership of) your intellectual property.
Contact Walter | Haverfield to learn about what means of protection may be available to protect your brand(s), product(s), know-how, original work(s), etc.

Properly protecting intellectual property is a valuable process; it is wise to undertake proactive measures to safeguard your intellectual property now to avoid costly defense later.

Kevin Soucek is an attorney at Walter | Haverfield who focuses his practice on intellectual property. He can be reached at ksoucek@walterhav.com or 216-619-7885.

Design Patents and Graphical User Interfaces

Design patents on graphical user interfaces (GUIs) are the fastest growing area in design patent applications at the U.S. Patent and Trademark Office. Peter Hochberg explains why these are so important in an article which appeared in the November issue of the Cleveland Metropolitan Bar Journal.

Patent and trademark registrations are on the rise; are your business assets protected?

Without patents and trademarks, some of the most valuable business assets in the U.S. would be left unprotected and vulnerable to misappropriation. In Crain’s Cleveland Business, James Pingor, chair of our Intellectual Property group, explains why legal protection for intellectual property should be a priority for business owners and entrepreneurs.

Adviser: Trademarks are more valuable than ever

Amazon.com launched a new program earlier this year to protect registered trademarks and crack down on counterfeiters. Sean Mellino, a partner in our Intellectual Property group, describes the program in Crain’s Cleveland Business and writes about the benefits of registering trademarks with the U.S. Customs and Border Protection.

Controversial trademarks still face uncertain future

It was nearly a year ago that Crain’s published my blog post headlined, “Will Chief Wahoo be around for another World Series?” So here we are again in familiar territory.

The Cleveland Indians had another great season (even though the post-season was shorter than most of us had hoped) and sales of Indians-themed apparel and memorabilia are through the roof. Although the answer to that question is “yes, Chief Wahoo is still here,” the fate of the Chief Wahoo logo as a protected, registered trademark remains undecided.

Many may have thought the debate was over—at least from a legal perspective — after the Supreme Court ruled this past summer that disparaging trademarks (like the one for the band “The Slants” which was initially refused registration for being disparaging towards Asian-Americans) were protected under the First Amendment free speech principle and could not be denied registration on the basis of being disparaging.

The U.S. Trademark Act had originally recited that a trademark may be refused registration if it consisted of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a connection with persons, institutions, beliefs, or national symbols, or bring them into contempt or disrepute.

However, what remains to be decided is whether or not trademarks that are considered to be immoral or scandalous may be registered. In other words, this is yet another matter for the courts to decide, which means the Chief Wahoo logo could still be protected as a registered trademark. Or not.

Unfortunately (or fortunately, depending on which side you’re on), a decision in the challenge against the Chief Wahoo logo registration has been delayed pending the outcome of a case which involves the refusal to register a company’s FUCT brand of apparel, including clothing for children and infants.

FUCT has already been established as one of those provocative brands that seeks to differentiate itself and garner a loyal following through its strong, controversial graphics. But loyal following or not, the brand’s trademark registration has been refused for being scandalous and immoral. The decision is now under review by the Court of Appeals for the Federal Circuit.

Will scandalous or immoral trademarks eventually go the way of disparaging trademarks and be afforded protection as registered trademarks? Only time will tell. Should the Federal Circuit decide to allow the protection of scandalous/immoral trademarks, such as FUCT, we will likely see a significant uptick in the number of trademark applications being filed, including those for which registrations may have been previously denied.

There are, of course, many other factors to consider which can also affect whether or not such trademarks can be successfully registered. In the meantime, however, there are important lessons for business owners and would-be entrepreneurs to learn—and that is that the field of intellectual property (IP) law is constantly evolving. What can’t be registered today might be able to receive full legal protection in the future.

Beyond the legal ramifications is the reality that the court of public opinion can weigh heavily when it comes to the success of a brand. Remember back in the 1990s when the Washington Bullets changed the team name to the Washington Wizards to avoid potential negative publicity surrounding gun violence?

An important takeaway for business owners from all this controversy is that, unlike some other areas of law that don’t often see changes or court decisions, IP law is constantly evolving. So make sure you enter the registration battle with a knowledgeable professional well-versed in IP law to give your business the best chance of protecting some of its most valuable assets.

Ultimately, what does this mean for the Chief Wahoo logo? That still remains unclear. Even if those seeking to challenge the Chief Wahoo logo registration eventually strike out, perhaps we could still see a de-emphasis of the logo to appease any public opinion concerns. In this author’s opinion, a complete elimination of the Chief Wahoo logo is probably unlikely due to various other practical and legal factors, which are a topic for a different day (and blog post).

Sean F. Mellino is a partner in Walter | Haverfield’s Intellectual Property practice group.

This article was published in Crain’s Cleveland Business on October 16, 2017.

Patent and Trademark Registrations on the Rise – Are your business assets protected?

Let’s start with that oh-so-dreadful morning alarm on your iPhone®. That annoying sound forces you to get up from that oh-so-comfy Serta® mattress and sleepily walk to the kitchen to make that oh-so-delicious Starbucks® coffee.

It’s your morning routine. It’s a routine saturated by someone else’s intellectual property. That jingle on TV–trademarked. Your iPhone®–patented. The mattress– patented. Your Starbucks® coffee–trademarked. And let’s not forget that all-important coffee maker–also patented.

We have become a world cluttered with patents and trademarks–and for good reason. Without them, some of the most valuable business assets in this country would be left unprotected and vulnerable to misappropriation.

Trademarks refer to symbols, names or phrases that are legally registered to identify the source of a company’s product and/or service. A patent is a right granted by the government to inventors to exclude others from replicating and selling their products.

We, as consumers, observe and utilize numerous patents, trademarks and other kinds of intellectual property hundreds, if not thousands, of times a day. And they are becoming an increasingly larger part of our lives. According to the World Intellectual Property Organization’s statistical database, the number of patent filings in the U.S. jumped 45% from 2001 to 2015. In that same time period, trademark filings increased 51%.

Legal protection for intellectual property is a standard practice for many entrepreneurs and businesses. As a business owner, manager or entrepreneur, it should also become your priority.

Patents and trademarks are crucial to the success of your business and your business’s brand. They provide exclusive rights to a trade name and/or product innovation and offer protection against infringement of those rights.

Those rights also offer a competitive advantage in the marketplace. For example, a registered trademark on the name of your popular pasta sauce recipe means it can’t be replicated and sold by someone else. That’s critical to staying one step ahead of your competition and continuing to add value to your brand.

Without formal intellectual property protection, such as obtaining a patent or registering a trademark with the U.S. Trademark Office, your internet presence and online business are at risk. A competitor may use the name of your business for their business and optimize the capability of search engines to direct the online traffic to their site. That leaves you far behind in the shadows.

Therefore, it is advantageous to take the time to invest in protecting your most valuable assets. Our intellectual property attorneys have been helping to protect the brands and innovations of companies of all sizes for decades. We serve a broad base of clients who span the country and the world. Our depth of experience allows us to tackle even the most complex intellectual property issues while we focus on maximizing opportunity and revenue for our clients.

Jamie can be reached at (216) 928-2984 or jpingor@walterhav.com.

Questionably Offensive Trademarks Cleared for U.S. Registration

Court decision clears registration path for “questionably offensive” trademarks;
could possibly negate challenges to use of Chief Wahoo logo

By Jamie Pingor and Kevin Soucek.

“Questionably Offensive Trademarks Cleared for U.S. Registration,” also appeared online in Crain’s Cleveland Business on July 12, 2017.

On June 19, 2017, the U.S. Supreme Court ruled that the disparagement clause violates the Free Speech Clause of the First Amendment. This decision emanates from the case involving the lead singer of the rock group called “The Slants” who sought federal registration of the mark “THE SLANTS”. The registration was originally denied by the United States Patent and Trademark Office (USPTO) because the name was determined to be offensive to particular ethnic groups that have been described as having slant-eyes.

At issue in this case is a provision that prohibits the registration of a trademark “which may disparage persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” Since the disparagement clause applies to marks that disparage the members of a racial or ethnic group, the U.S. Supreme Court had to decide whether the clause violates the Free Speech Clause of the First Amendment. As a result, the U.S. Supreme Court had to consider three arguments that would either eliminate any First Amendment protection or result in highly permissive rational-basis review.

The Government’s arguments were: (1) that trademarks are government speech, not private speech, (2) that trademarks are a form of government subsidy, and (3) that the constitutionality of the disparagement clause should be tested under a new “government-program” doctrine.

In short, the U.S. Supreme Court stated that: (1) Trademarks are private, not government, speech; (2) that just about every government service requires the expenditure of government funds; and (3) that the disparagement clause cannot be saved by analyzing it as a type of government program in which some content- and speaker-based restrictions are permitted.

The U.S. Supreme Court stated that it is unmistakable the Government has an interest in preventing speech expressing ideas that offend, but that this idea strikes at the heart of the First Amendment. The U.S. Supreme Court further stated that speech that demeans on the basis of race, ethnicity, gender, religion, age, disability, or any other similar ground is hateful; but the proudest boast of our free speech jurisprudence is that we protect the freedom to express “the thought that we hate.”

Therefore, the U.S. Supreme Court held that the disparagement clause violates the Free Speech Clause of the First Amendment.

Only time will tell how much of an effect this ruling will have on U.S. trademark registrations moving forward. Perhaps this ruling will offer plausible protection to sports teams that use logos which could be viewed as disparaging?

For example, the Cleveland Indians’ Chief Wahoo logo, which remains popular among fans, has been viewed, by some, as a disparaging depiction. The Chief Wahoo logo remains a registered trademark; and the registration was recently renewed in March 2016. Will this ruling encourage the continued registration of the Chief Wahoo logo? Will others continue to petition for Chief Wahoo’s removal from the sport of baseball? Nonetheless, what remains clear is that the USPTO is not permitted to prevent certain disparaging speech expressing ideas with regard to trademark registrations.

Jamie Pingor is a partner and Kevin Soucek is an associate in the Intellectual Property Services group of Cleveland-based Walter | Haverfield LLP.

Protect your creative assets – here and abroad

In an article published by Crain’s Cleveland Business on February 18, 2017 and titled, “Protect your creative assets – here and abroad,” D. Peter Hochberg maintained that, unless a company’s creative assets are protected with registered trademarks, it could be ripped off by it competitors or it may lose its marketing edge.

Protecting Trademarks in the U.S. and Abroad – Registration is easy and inexpensive; provides numerous benefits

If your business has a trademark but hasn’t registered it, one of your most valuable assets could be at risk. A key challenge is that many businesses that use trademarks are not even aware that they can and should be registered.

A trademark is a word, phrase, symbol or design, or a combination of any of these that identifies and distinguishes the source of the goods of one party from those of others. Registration of trademarks offers multiple benefits, including the ability to use the registered mark (®) adjacent to the trademark to clearly indicate that it is valuable enough to be registered with and protected by the United States Patent and Trademark Office (USPTO). Registration also gives the trademark owner access to the federal courts throughout the U.S. and the ability to register the trademark with the U.S. Customs and Border Protection Bureau. Failure to register a trademark can enable third parties to use it or something that is confusingly similar to market their own products, thereby devaluing what could have been a significant asset for the business.

In some cases, businesses use trademarks without realizing that they are trademarks and that they could be registered. Trademarks can exist in many forms including, but not limited to: names of specific products or services; logos for the business or particular products or services; specific colors used with products; characters used in corporate ads, such as pictures of babies, novel creatures, borders, outlines, etc; or product trade dress, which refers to visual characteristics of a product
or its packaging. Without the protection of registration, these marketing assets could be used by another company–perhaps a direct competitor–without easy recourse.

Trademarks can be registered if they are not confusingly similar to other already registered trademarks and if they pass an opposition process which allows the public an opportunity to oppose any published mark believed to be damaging to the opposer. Owners of unregistered trademarks unfortunately would likely not even be aware of the publication of a competing mark for opposition.

An easy, inexpensive registration process

Registering a trademark with the USPTO is relatively easy and inexpensive. The first step is to contact an intellectual property (IP) attorney who practices trademark law to determine if the trademark can be registered. The attorney will conduct a search of trademarks filed and/or registered at the USPTO to determine if any are “confusingly similar” to the trademark under consideration. During this process, the attorney considers key features of the trademark, including its visual appearance and meaning, to determine if anything could be considered “confusingly similar.” The cost of a search is usually less than $1,000.

The attorney must also determine if the mark is “merely descriptive,” which means it is descriptive of the goods or services with which it is used. If the mark “fails” this test, the attorney may advise the client to select a different trademark. Otherwise, the attorney will proceed to prepare an application for filing. It’s important to note that the trademark must already be in use in interstate commerce or the owner must have a bona fide intent to use the trademark in commerce in order for an application to be successfully filed. As part of the application process, the attorney will designate the goods and/or services with which the trademark is to be used. Typically it’s better to use the goods and/or services that are designated in the classification manual of the USPTO, since this will reduce the government filing fee. Typical fees are approximately $275 per class. In most cases, especially when dealing with smaller businesses, the trademark is only filed in one class to minimize costs.

The application is filed electronically online with the USPTO for review by an examining attorney often for less than $1,500. Assuming the application passes the examination, the trademark is then published for opposition before the Trademark Trial and Appeal Board. In most cases, there is no opposition filed. In some cases, there may be an applicant using the same or similar trademark for different goods and services. In these cases, applicants could sign an agreement to not use the trademark on those goods or services of the opposer.

The total cost for registering a trademark (assuming little or no opposition) is typically less than $3,000, not including the government filing fee. This is a relatively small investment considering the long-term potential value of the trademark. The average approval process takes between one and two years.

Protecting trademarks abroad

It’s important to note that a U.S. trademark registration is only valid and enforceable in the U.S. Business owners who are concerned about possible trademark infringement by goods or services made, used or sold in other countries, possibly for import into the U.S., can apply for foreign trademark registrations which are also relatively simple and inexpensive. According to reciprocal trademark laws between the U.S. and most foreign countries, a U.S. trademark applicant can file a corresponding application in nearly any other country within six months of the U.S. filing date and still obtain the effective filing date of the U.S. application.

It is possible to file applications in groups of countries for a reduced filing fee. Most countries in Europe, for example, belong to the European United Intellectual Property Office (EUIPO), so an applicant can file a single application and obtain a registration that is enforceable in all member countries of the EUIPO. Considering that many products are made in China and sold in the U.S., it is very common for U.S. trademark owners to also file applications in China.

Considerations for licensing trademarks

Trademarks can be licensed to other businesses, especially in cases where the business of the trademark registrant cannot be marketed in a particular region or to different classes of goods. However, licensing agreements should always require the licensee to meet certain quality standards in order to maintain the value and integrity of the trademark. Licensors should regularly police the use of the trademark by licensees. A license without an accompanying quality and policing agreement is referred to as a naked license and could lead to an invalidation of the registration.

The value of trademark registrations in an effort to protect valuable trademarks cannot be over-emphasized. As this article has documented, the process for registering trademarks in the U.S. and abroad is relatively easy and inexpensive, hopefully making trademark registration a consideration for even the smallest of businesses.

Peter Hochberg is a partner in the Intellectual Property group at Walter | Haverfield. He can be reached at 216-928-2903 or dphochberg@walterhav.com.

Will Chief Wahoo be around for another World Series? Latest related trademark battles could threaten longevity of controversial Indians icon

As seen in Crain’s Cleveland Business on November 15, 2016

No one would argue that the Cleveland Indians had a great run this past season. Thanks to their qualifying for the World Series, images of Chief Wahoo deluged our television screens, our print media and our social media postings. Beneath the fanfare, however, are some very serious legal issues that could ultimately challenge the long-term use and value of the Indians icon.

The battle over the appropriateness of using Chief Wahoo has been raging for years now. In 2014, when the Washington Redskins lost a legal battle to protect the registration of its own mascot and Redskins name, the questions around the continued use of Chief Wahoo again came to the forefront. More recently, another legal battle began when a band called “The Slants” attempted to register the band’s name which was considered to be disparaging against persons of Asian descent.

At issue is a federal law that bars the registration of trademarks which consist of or comprise immoral, deceptive or scandalous matter or matter which may disparage individuals. With all of the current focus on the rights of American citizens, there are some in the legal field who argue that this law, which is part of the 1946 Lanham Trademark Act, violates Americans’ rights to free speech. This is one of the arguments being used by the Washington Redskins, who are attempting to overturn the 2014 decision issued by the Trademark Board of the United States Patent and Trademark Office (USPTO) which resulted in the Redskins’ trademark registrations being cancelled — even after decades of using the familiar icon and name. Similarly, THE SLANTS mark was denied registration by the USPTO, but this decision was reversed on appeal by a Federal Court. The Slants’ case is expected to be heard by the Supreme Court sometime in mid-2017.

In early 2016, a similar attempt to cancel a Chief Wahoo logo registration was filed with the USPTO by an organization called People Not Mascots, Inc. There are also, of course, numerous protests and negative publicity involving Chief Wahoo. The matter at the USPTO involving the Chief Wahoo registration is suspended until the Supreme Court makes a decision on THE SLANTS.

So what does all this mean for the Chief Wahoo trademark? With the notoriety of the ongoing dispute involving the Redskins’ trademarks and the more recent publicity around The Slants, there is certainly the possibility that the use of Chief Wahoo could be abated. Of course, at a time when Cleveland is playing in the World Series, most fans don’t want to think about their team without their beloved Chief Wahoo. Depending on how the Supreme Court decides in The Slants’ case, it is something worth considering—perhaps not right now but not-too-far into the future.

What would it mean if one were to successfully challenge the Chief Wahoo trademark registration? The effects would likely not be felt immediately. After all, the Indians have been widely using Chief Wahoo for decades. The loss of the registration would not mean they couldn’t continue using the logo. It is important to consider that trademarks are created as a result of use. However, without protection of the trademark by a federal registration, it may potentially be more difficult to justify the continued use of the trademark. Most organizations, whether they are manufacturers or sports teams, would agree that it’s not worthwhile to keep investing to build goodwill in something where there might be more difficulty to ensure sufficient protection.

Ultimately what will be the fate of our longstanding Chief Wahoo? Only time (and the courts) can tell. In the meantime, however, this situation provides some valuable lessons for entrepreneurs and corporations that have trademark assets worth protecting by registrations. For some organizations that couldn’t previously register a trademark that was seen as disparaging, offensive, immoral, or the like, they could potentially be able to secure a registration if the courts strike down the relevant provision of the federal law. If the court determines alternatively, then organizations that thought their controversial or offensive trademarks were protected could lose their registration, potentially making it more difficult to keep copycats at bay. In turn, it could be easier for organizations to challenge such offensive trademarks.

Organizations looking to create a new trademark should heed the current controversies, perhaps avoiding altogether a trademark that could be seen as offensive, and ultimately not registrable or easily challenged (not to mention the marketing issues surrounding such trademarks).

Whichever way the courts decide, the importance of registering a trademark cannot be overstated. Although a trademark can be created by adding a “TM” after the name or symbol with continued use, an official registration of that trademark makes it a legally protected asset across the country. Don’t make the mistake of leaving one of your company’s most valuable assets unprotected.

In the meantime, let’s celebrate a phenomenal season and look forward to an even more successful 2017 season!

Sean Mellino is a partner in the intellectual property practice group of Cleveland-based Walter | Haverfield LLP.

You Have a Design: How Do You Protect It?

by DeMarcus E. Levy

When attempting to protect the appearance of a product as opposed to its utility, either trademarks or design patents may be appropriate. It can be difficult to determine which type of intellectual property protection to pursue. Though they are separate protection vehicles, trademarks and design patents may well complement each other as described below:

Design Patents:

A design patent offers protection for the design for an article of manufacture, or put differently, the configuration, shape or surface ornamentation of a product or some combination thereof. This allows a manufacturer to reap the benefits of design efforts by making the production of knockoff products illegal. Assuming the protected product is of good quality, this builds good will with those who purchase the product. Unlike a utility patent, a design patent does not protect how the product functions, simply how it looks; it cannot be functional.

Trade Dress:

A registered trademark is essentially official recognition of a brand by the government. It identifies the manufacturer as the source of the products associated with the mark. Trade dress is a particular type of trademark that protects the design of a product (essentially the packaging, color, flavor, shape, configuration and other distinctive physical characteristics). Trade dress works to associate the design, and thereby the product, exclusively with its manufacturer. Like a design patent, a trademark cannot be functional.

Potential Remedies:

Infringement of a design patent can result in damages of a reasonable royalty fee and up to three times the amount found or assessed. Unlike utility patents or plant patents, design patent damages can also include the total profits of the infringing party but not less than $250. Note that, given recent Supreme Court precedent, if an article of manufacture (e.g. something made by hand or with a machine) protected by a design patent is one of many components that comprise a product, recovery may be limited to a portion of profits attributable to the protected component. Attorney’s fees may also be recoverable. Additionally, infringement may be stopped by an injunction prohibiting continued unauthorized use.

Infringement of trade dress may include court costs of the defendant, profits earned and an attorney’s fees. As with design patents, infringement may be stopped by an injunction prohibiting continued unauthorized use.

Which Vehicle to Choose:

The best vehicle to protect your product depends on a number of factors. You should consider how soon you want your protection to start, when it will end, and how the protection you choose will impact your business plan. A design patent can be obtained quickly—in a matter of months- allowing you to immediately prevent competitors from copying your design. Trade dress protection cannot be secured unless the applicant has used the mark in commerce and acquired secondary meaning (e.g. customers associate the mark exclusively with the manufacturer), which takes five years. A design patent expires 15 years after it is granted while trade dress, being a trademark, has an initial term of 10 years. But it may be renewed indefinitely for 10-year increments. Patent design protection remains even if the patent is never used. Conversely, trade dress must be used continually in commerce to be preserved. However, use of trade dress in commerce before securing a design patent may disqualify an applicant from securing a design patent for the same product or product component. As nothing prohibits simultaneous possession of both a trademark and a design patent, design patent protection and trade dress protection can be held simultaneously for the same product.

DeMarcus Levy is an attorney at Walter | Haverfield who focuses his practice on intellectual property law. He can be reached at dlevy@walterhav.com or at 216-928-2945.

Adviser: Beware of the blurred lines between professional and private social media

Walter | Haverfield attorney Jamie Pingor advises companies to adopt social media policies that protect their brands and limit what employees may post on their personal pages. His article appears in Crain’s Cleveland Business.

U.S. Supreme Court to Resolve Issue of Copyright Registration

The U.S. Supreme Court has agreed to review a case which should clarify the longstanding question of whether a copyright owner requires a federal copyright registration in order to bring a federal suit. The Supreme Court will hear the case (Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC) and is expected to clarify the issue when it begins its next session in October.

This development may likely underscore the importance of securing a U.S. copyright registration as soon as possible, if you don’t already have one. Any delay in securing official registration status may further expose a body of work to infringement or misappropriation to the point that it’s too late to recover adequate monetary damages.

Registering a copyright (which is the exclusive legal right given to an originator or an assignee to print, perform, film or record literary, artistic or musical material) is especially advisable because the federal courts have historically been divided on the issue. That, in turn, causes continued confusion for the public as to how most effectively (and when) to protect copyrights. For example, the Tenth and Eleventh circuits take the approach that an issued copyright registration is required to bring a lawsuit. There are others, such as the Fifth and Ninth circuits, that believe merely filing an application to register a copyright with the U.S. Copyright Office is sufficient to initiate a federal suit. Then there are circuits, such as the Sixth Circuit (which includes Ohio), that have not taken a formal position on the issue. However, the lower district courts in the Sixth Circuit appear to generally take the stance that a copyright registration is needed. Lastly, the U.S. Copyright Office itself has weighed in and believes the registration approach is appropriate.

The time it takes to secure a copyright registration can be more than a year from the time of filing an application. So, it is prudent for copyright owners to consider filing early and often, especially since the process is relatively inexpensive.

If you have copyright questions or concerns, please reach out to our Intellectual Property team. We’d be happy to help.

Sean Mellino is an attorney with Walter | Haverfield and concentrates on intellectual property law. He can be reached at smellino@walterhav.com or at 216-928-2925.

European Patent Office Says No to Artificial Intelligence

by Ed Caja

The European Patent Office (EPO) implemented two guidance changes in November that state that no patents may be given on artificial intelligence. The move on artificial intelligence patents mirrors the EPO’s stance on software, which is also prohibited, on a per se basis.

The office’s latest changes directly offer long-awaited clarity for U.S. entrepreneurs and businesses seeking intellectual property protection in Europe. However, uncertainty still remains in the U.S., where courts of all levels have issued unclear and arguably conflicting decisions on patent eligibility related to computing, which has even caught the attention of Congress. Lawmakers may look at possible changes to the law, but it’s unclear when (or to what extent) those changes may occur.

Business seeking clarity may also indirectly benefit from the changes in Europe, since even local computing may be caught in a web that is often worldwide (with considerations ranging from cloud computing to data privacy). Understanding that clarity may provide business advantages even to businesses here in the U.S.

Additionally, while the EPO guidance at first glance appears negative, that guidance does provide a path for protecting explicit technical uses of artificial intelligence. For example, the original EPO guidance related to software was also initially thought to be negative as to the protection of software, but in reality, software patenting is alive and well in the EPO.

So, knowing how to protect software innovation even when software per se may not be protected could be key to leveraging the certainty provided by the EPO guidance changes.

Call us to see how we can help you protect your innovation.

Ed Caja is an attorney at Walter | Haverfield who focuses his practice on intellectual property law. He can be reached at ecaja@walterhav.com or at 216-619-7871.

The Business of Patents

by Ed Caja

Why would someone, or some business, want to file for or ultimately obtain a patent? The short answer is that there are many different answers and reasonings, and inventors, entrepreneurs and businesses should make a balanced assessment on an ongoing basis.

What a patent provides is not a right to do something or have something. Rather, a patent is an exclusionary right that prohibits others from doing something. In other words, instead of giving someone a right to do something, a patent provides the patent owner the right to enforce (often through the threat of a lawsuit) the ability to keep (or prohibit) others from making, using, selling, importing or exporting something.

The processes behind how a patent is granted often appears mysterious and sometimes overwhelming to those outside of the patent world. In reality, it’s often more of an assessment of give and take between two parties, the inventor and the United States, represented by a federal employee, the patent examiner. Once an application for a patent is filed, it is assigned to a patent examiner to assess if a patent should, or should not, be granted. Essentially, the job of the examiner is to weigh the legal requirements of the patent system against the inventive (and claimed) material from the inventor. That’s to determine whether the person (or business behind the person) pursuing a patent has provided enough (and enough of the right stuff) inventive detail to be granted an exclusive right to the claimed technology.

One key to remember is that this examination step is only a first stage in a comprehensive patent strategy. Obtaining a granted patent may be all that one desires. Sometimes, inventors are only interested in having a patent, for example, to frame as wall art. In that case, the first stage will be sufficient. Alternatively, enforcing the rights that are granted with a patent may invoke additional stages. Enforcement, by way of Cease and Desist letters or litigation, can lead others to challenge the validity of the patent either in the Federal Court system or at the U.S. Patent Office (USPTO). These additional stages will undoubtedly bring about additional costs, and the patent strategy of a business plan should anticipate these costs. While costs associated with the first step of obtaining a patent is necessary, additional steps may also be necessary based on the answer to the question of why, and what one wants to do with a patent once obtained.

Focusing in on that first step of obtaining a patent should include a consideration of how much to pay for a patent. Unfortunately, there is often no easy answer to this question as every invention and strategy is different.

Having or even pursuing a patent can serve as a signal of perceived exclusivity. Oftentimes, doing enough to establish ‘patent pending’ is sufficient to alert the market that a business is serious about protecting their intellectual property. An issued patent provides tremendous value to its owner and serve as a symbol of exclusivity, accomplishment or capability. Patents may also be a signal to investors that the concept has value, and investors should consider investing with the patent holder (or sometimes the applicant). For businesses already engaged in a market sector, patents may serve as a symbolic shield in a market area, making it difficult for competitors to enforce other patents or technology in a particular area. Further, depending on strategy, patents may also serve as an offensive tool or symbolic weapon to stake out new market areas.

It is important to note that, while a patent strategy can be somewhat tailored to an applicant’s business intentions and goals, it nevertheless requires a significant monetary investment. However, in exchange for the exclusive monopoly granted to the patent holder by the U.S. government, obtaining a patent is oftentimes one of the best strategic decisions businesses or inventors make to obtain market share.

We’re here to help tailor a patent strategy that fits with your business, market and most of all, long-term intentions.

Ed Caja is an attorney at Walter | Haverfield who focuses his practice on intellectual property law. He can be reached at ecaja@walterhav.com or at 216-619-7871.

Supreme Court: Copyright Applications Don’t Give Ability to Sue

On March 4, 2019, the U.S. Supreme Court unanimously ruled that a copyright owner must have a federal copyright registration in order to sue a potential infringer in federal court. Simply filing a federal copyright application is not enough to file a federal suit.

The decision comes after the court agreed to review a copyright litigation case in 2018 with the intent to clarify the longstanding question of whether a copyright application or registration was needed to file a lawsuit (Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, et al.).

Until today, federal courts have historically been divided on the copyright lawsuit issue. That, in turn, caused continued confusion for the public as to how most effectively (and when) to protect a copyright (which is the exclusive legal right given to an originator or an assignee to print, perform, film or record literary, artistic or musical material).

The Supreme Court’s ruling underscores the importance of securing a U.S. copyright registration as soon as possible. Any delay in filing an application, and then securing an official copyright registration from the U.S. Copyright Office, may further expose a body of work to infringement or misappropriation to the point that it’s too late to recover adequate monetary damages. Such a delay may also prevent a copyright owner from timely asserting his or her rights against a potential infringer.

It can take more than a year from the time of filing an application to the point of securing a copyright. Therefore, it is prudent for copyright owners to consider filing early and often, especially since the process is relatively inexpensive and offers significant benefits and advantages. Most importantly, a copyright owner should be ready to take immediate action if and when an infringement or misappropriation issue arises.

If you have copyright questions or concerns, please reach out to our Intellectual Property team. We’d be happy to help.

Sean Mellino is an attorney with Walter | Haverfield who focuses his practice on intellectual property law. He can be reached at smellino@walterhav.com or at 216-928-2925.

Inking the Deal on Body Art: Determining Who Owns the Rights to Your Tattoo

Once reserved for sailors, ex-cons and members of biker gangs, tattoos today adorn the arms, legs, necks, torsos and faces of more than 45 million Americans, roughly 13 percent of our nation’s population. The extraordinary proliferation of tattoos―and their elevation to art―has created a thought-provoking challenge for intellectual property attorneys.

A series of high-profile lawsuits has begun to measure the extent to which U.S. copyright law applies to tattoo art. One such lawsuit involves LeBron James’s tattoo artist. The Cleveland Heights-based artist is suing the makers of the “NBA 2K” video game series for copyright infringement. The artist claims that he holds the rights to James’s tattoos, and those of other basketball players he has inked. Those tattoos appear on computer-generated versions of the players in the games. The game makers apparently did not obtain permission to include the tattoos, and recently, a federal judge ruled that the artist can seek statutory damages related to the copyright violations.

The artist who designed and placed several tattoos on WWE wrestler Randy Orton is also suing 2K games, as well as WWE, in federal court. She alleges the companies used her copyrighted designs for commercial purposes and without her consent in a number of video games featuring Orton.

Both cases are ongoing.

But Are They Copyright Worthy?

A review of similar high-profile lawsuits, including one filed in 2011 by the tattooist responsible for Mike Tyson’s iconic face tattoo, does little to answer the question of whether tattoo art deserves copyright protection. S. Victor Whitmill sued Warner Bros. for copyright infringement after a character in the movie, The Hangover: Part II, woke up following a night of heavy drinking wearing a replica of Tyson’s unique tattoo. In court documents, Whitmill contended he “has never been asked for permission for, and has never consented to, the use, reproduction or creation of a derivative work based on his original tattoo.” Settled out of court under undisclosed terms, the case leaves many to ponder if U.S. copyright law can be successfully applied to tattoos, and if it does, who owns the rights to reproduce them.

According to 17 U.S.C. § 102, copyright protection extends to “original works of authorship fixed in any tangible medium of expression…from which they can be perceived, reproduced, or otherwise communicated.” Based on this definition, tattoos appear to meet copyright standards since they are in fact fixed in a tangible medium (the human body) and can easily be reproduced and communicated in photographs and digital media.

It is an opinion that the federal copyright office seems to share. In 2011, Tyson’s tattoo artist successfully received a registration for the design as artwork on a 3D object. In addition, Tyson signed a release indicating “all artwork, sketches and drawings related to his tattoo as well as any photographs of the tattoo are property of Paradox-Studio of Demographics,” the business entity under which Whitmill operated.

Sorting Out Ownership Before the Ink Dries

All of this leads to the question, who truly owns the tattoo on a client’s bicep? The artist or the person wearing it the rest of their lives?

Unlike the artist in Tyson’s case, most tattooists don’t utilize releases, primarily because their clients are not famous, and there is little to no chance the art will be replicated. However, for those who work with celebrities and professional athletes like LeBron James and Randy Orton, a release may be the best way for them to establish ownership and set clear limits on the commercial use of their work from the outset.

For the recipient of a tattoo, there are several factors to consider when determining if and how copyright protection may apply to their newly inked body art. For starters, if the art is an original design, a tattooist may choose to license the design for reproduction, or agree that the tattoo is the product of a work-for-hire engagement. That will mitigate the possibility of copyright infringement. Finally, tattoo wearers whose art is reproduced may seek protection from potential lawsuits under the fair use defense. That said, fair use is quite broadly defined, and therefore highly subject to interpretation by the courts―hardly a failsafe strategy.

Until case law catches up with the explosive popularity of tattoos, ink lovers with celebrity status would be well served to follow the lead of the NFL Players Association, which has recommended that all players protect themselves by requesting releases from artists every time they get a new tattoo. For the average Jane or Joe, a candid discussion with their tattooist on ownership before getting inked should suffice.

Jamie Pingor in an attorney at Walter | Haverfield and chair of the Intellectual Property team. He can be reached at jpingor@walterhav.com or at 216-928-2984.

*This article also appears in Crain’s Cleveland Business.

Trademark Oppositions: A Play for Your Playbook

by Kevin J. Soucek

The National Collegiate Athletic Association (NCAA) is playing defense once again to protect its valuable trademarks for MARCH MADNESS® via a trademark opposition.

In short, if a party determines that it could be harmed by the registration of another party’s mark, they can file a trademark opposition against the potential registration of that other party’s trademark.

For example, the NCAA recently filed a trademark opposition against T2MA, Inc.’s trademark application to

register the mark, “MARCH MULLIGANS.” T2MA said the mark would be used for entertainment purposes such as online sweepstakes and other contests – which could possibly include basketball tournaments. This potential use of “MARCH MULLIGANS” in connection with basketball raises a concern for the NCAA. That’s because allowing “MARCH MULLIGANS” to be associated with basketball could confuse consumers in the U.S. marketplace and thus, weaken NCAA’s own March Madness brand.

The NCAA’s trademark opposition against T2MA’s “MARCH MULLIGANS” is on-going; but this is not the first time that the NCAA has made a play in defending its trademarks.

In a pending case filed in 2018, the NCAA opposed a trademark opposition filed by Xooker, LLC for “BASKETBALL MADNESS” in connection with downloadable games. Prior to that in 2017, the NCAA filed a trademark opposition against La Preferida, Inc. for “MUNCH MADNESS” in connection with food goods, which resulted in this trademark application being refused registration.

The NCAA has also successfully filed trademark oppositions against the following trademark applications: MARCH IS ON!; MARCH MATNESS; PLAYERMADNESS; and APRIL MADNESS, among others.

Most may be aware of playing offense by obtaining a trademark registration for one’s own goods and/or services. However, it is advantageous to have a full playbook; and it may be a clutch play to include defensive plays, such as engaging in trademark oppositions of marks desired by others, which may be concerning to one’s own trademark(s).

In summary, defense can be the best offense if there are any concerns about potentially brand-diluting trademarks. Therefore, it is vital to contact an experienced trademark attorney to discuss the strategic options available to protect one’s brand, and intellectual property at-large, because there is more to the game when it comes to enforcing and protecting one’s intellectual property.

Kevin Soucek is an attorney at Walter | Haverfield who focuses his practice on intellectual property. He can be reached at ksoucek@walterhav.com or at 216-619-7885.

Jamie Pingor in a partner at Walter | Haverfield and chair of the Intellectual Property team. He can be reached at jpingor@walterhav.com or at 216-928-2984.

Upcoming Changes in Canadian Trademark Laws and Practice

Intellectual Property, Trademarks, Domain Names & Copyrights

Beginning June 17, 2019, sweeping changes to Canadian trademark laws will finally be in effect. The transition comes after longtime lingering rumors. United States entities that conduct business in and are trademark owners in Canada should be aware of some of these key changes. The ultimate goal is to align Canadian practice with other jurisdictions worldwide.

Requirements of Filing Applications and Prosecution Process
First, new Canadian applications will have to comply with the classification system of goods and services that is already used in the U.S. Historically, Canadian applications had all goods and services included together. These changes mean that attention will have to be paid to the various classes of goods and services, with which U.S. trademark registration owners should already be familiar.

Second, new trademark applications filed in Canada will no longer have to include dates of first use. Furthermore, asserting actual use will not be required for a trademark application to proceed to registration. The result of this change means that an intervening party could potentially secure a Canadian registration without proving use in Canada. In other words, there could be an increase in squatters or trolls obtaining Canadian trademark registrations, to the detriment of valid Canadian trademark owners. In turn, a valid trademark owner in Canada might have to address this intervening registrant which could complicate its ability to secure its own registration in Canada. This emphasizes the importance of filing applications in Canada sooner rather than later when there is trademark use in Canada, or when it is anticipated in the near future. There will clearly be an increased value in “first to file” under the new Canadian system.

Third, the expansion of Canadian laws to help protect non-traditional trademarks (such as colors, scents, tastes and moving images) is an interesting development. Other jurisdictions, including the U.S., have already been affording protection to non-traditional trademarks, so this will be a welcome change that helps increase the range of Canadian trademark protection. However, non-traditional trademarks will still be subject to examination for distinctiveness (much like in the United States). So it could be difficult to obtain registrations of non-traditional marks unless the trademark owner can provide substantial evidence of extensive use and promotion in the Canadian market.

Registration Term and Renewals
The term of a Canadian trademark registration will be 10 years for registrations issued after June 17, 2019, instead of 15 years under the current system. The term for registrations that are already in existence before June 17, 2019 will remain at 15 years. Importantly, they will not be converted to a 10-year term until the next renewal deadline arises. Furthermore, any Canadian registration renewed after June 17, 2019 will need to be amended to place the goods and/or services into appropriate separate classes. This means that there could be a cost savings in renewing a Canadian registration prior to June 17, 2019.

Fees
The adoption of the classification system mentioned above results in a new filing fee system. As is done in the United States, the trademark application filing fee will be based on the number of different classes of goods and services. In the new Canadian system, this fee will be $330 (CDN) for the first class, plus $100 (CDN) for each additional class of goods and/or services. This is a significant change. Instead of having a single filing fee, regardless of the number of classes of goods and services, new applications could have drastically higher filing fees if many different classes are included. A small consolation is that the $200 registration fee will be eliminated.

It may be worthwhile for U.S. trademark owners to review and audit their own portfolio to determine if any cost-savings steps should be taken before June 17, 2019. If you have trademark questions or concerns, either in the United States or in Canada, please reach out to our Intellectual Property team. We’d be happy to help.

USPTO Now Requiring U.S. Representation for All Foreign Trademark Applicants, Registrants, or Parties

by Kevin J. Soucek and James J. Pingor

Effective August 3, 2019, the United States Patent and Trademark Office (USPTO) will require all applicants, registrants, or parties (including Canadian attorneys) not domiciled in the United States to be represented by a U.S. attorney before the USPTO. This new requirement is in response to a recent surge in filings from foreign applicants, in an effort to combat the growing problem of foreign individuals, entities, and applicants from failing to comply with U.S. law.

In the past, Canadian attorneys could represent clients before the USPTO without having to be represented by a U.S. attorney. In addition to other foreign applicants and entities, this new rule now also applies to Canadian applicants, registrants, or parties. Nevertheless, Canadian trademark attorneys and agents will continue, if eligible, to be recognized as additionally appointed practitioners who can represent their Canadian clients, although the USPTO will correspond only with the appointed U.S.-licensed attorney.

Once implemented, any foreign applicants who file a trademark application with a filing basis under section 1, section 44 or section 66(a) will be informed in an Office Action that an appointment of a qualified U.S. attorney is required. The applicant will have the usual period of six months to respond to an Office Action, and failure to comply will result in abandonment of the application.

The USPTO anticipates that the requirement will have the benefit of generally reducing costs to applicants, registrants, or other parties. It will also provide greater value to consumers who rely on registered marks. Further, the USPTO expects that the requirement will not only aid the USPTO in its efforts to improve and preserve the integrity of the U.S. trademark register, but will also ensure that foreign applicants, registrants, or other parties are assisted only by authorized practitioners who are subject to the USPTO’s disciplinary rules.

Walter | Haverfield’s Intellectual Property group regularly counsels foreign associates worldwide in extensively handling various trademark matters before the USPTO. Please contact us should you need assistance.

Kevin Soucek is an attorney at Walter | Haverfield who focuses his practice on intellectual property. He can be reached at ksoucek@walterhav.com or at 216-619-7885.

Jamie Pingor is a partner at Walter | Haverfield and chair of the Intellectual Property team. He can be reached at jpingor@walterhav.com or at 216-928-2984.

The Sweet Smell of Differentiation: Protecting Brand Intangibles as Trademarks

Intellectual Property, Trademarks, Domain Names & Copyrights

Intellectual Property, IP Litigation, Trademarks, Domain Names & Copyrights

In the never-ending quest to prove to consumers that a product is truly unique, manufacturers in recent years have begun to seek trademark protection on intangible brand qualities, such as scent. In 2014, Verizon registered a “flowery musk scent” as a trademark to pump into their larger retail stores in order to distinguish itself from other communications and consumer electronics retailers. In 2007, dental care product manufacturer Lactona produced toothbrushes infused with a trademark-registered strawberry scent.

What seems like a promising source of competitive advantage can prove quite difficult to achieve―and not yet a viable alternative to conventional trademarks―as evidenced by the fact that only around a dozen scents are currently registered as trademarks in the U.S. This figure, which stands in sharp contrast to the millions of conventional logos, phrases and designs currently registered with the United States Patent and Trademark Office (USPTO), is largely attributable to the fact that non-conventional trademarks are extraordinarily difficult to both secure and protect as registrations.

That Indefinable Something Can Be Difficult to Define

In a 2015 article published in The Wall Street Journal, it was noted, “In the U.S., you have to show that a fragrance serves no important practical function other than to help identify and distinguish a brand.” This means that products whose primary function is scent, such as perfumes and air fresheners, are not eligible for protection.

In 2018, a case involving Hasbro’s efforts to register the scent of its iconic children’s PLAY-DOH® brand modeling compound as a trademark reignited the conversation around non-traditional trademarks. Described in the USPTO trademarks register as a ‘sweet, slightly musky, vanilla fragrance, with slight overtones of cherry, combined with the smell of a salted, wheat-based dough,’ the scent received trademark protection from the USPTO. This was a win for Hasbro, but does this open the door for others seeking similar protection of the intangible properties of their products?

The bar remains high. The U.S. Supreme Court holds that the features of any product are not inherently distinctive. What this means for manufacturers who wish to secure a non-traditional trademark is that they must unequivocally demonstrate that a scent, taste or sound is distinctly unique and clearly serves as a source-identifier through secondary meaning. This is not an impossible task, but applicants should be aware that the time and costs associated with meeting the Supreme Court’s high and exacting standards can be onerous.

Sniffing Out a Solution

As the law continues to evolve in response to changing consumer perceptions, intellectual property offices are simultaneously creating new technologies to allow manufacturers to protect non-conventional trademarks associated with their products. Despite this progress, there is still a long way to go before scent, taste and sound are afforded the same protections as tangible product designs and attributes. In the near term, it is recommended that potential applicants continue to secure protection of their intellectual property via traditional routes such as word, logo and design trademarks.

Given the complexity of these and all matters concerning intellectual property, companies would be well advised to seek the counsel of a trademark attorney familiar with the nuances of protecting non-traditional trademarks before submitting applications for trademark registration with the USPTO.

Jamie Pingor is a partner at Walter | Haverfield and chair of the Intellectual Property team. He can be reached at jpingor@walterhav.com or at 216-928-2984.

*This article also appears in Crain’s Cleveland Business.

Don’t Leave Yourself Exposed with a Naked Trademark License

by Kevin J. Soucek and James J. Pingor

Clothing your trademark license with certain contractual provisions can possibly cover an otherwise uncomfortably bare exposure.

An owner of a trademark has a duty to ensure the consistency of its trademarks, as well as the good(s) and/or service(s) under which its trademarks are used. If a trademark owner enters into a license agreement and fails to include adequate quality controls over a licensee’s use of its licensed trademark, this trademark owner could lose its trademark rights due to a legal doctrine referred to as the “Naked Licensing Doctrine.”

Naked licensing can lead to situations where the public is deceived or misled, due to a separation between the trademark and the expected quality of good(s) and/or service(s). In other words, once a trademark no longer functions as a source identifier (i.e., functioning as a symbol of a known quality of the good(s) and/or service(s)), the trademark effectively loses its significance as a source identifier. Even if the goods and/or services are of similar quality, the lack of provisions controlling such quality can lead to problems. Oftentimes in these situations, once this significance is lost, the trademark can be deemed to have been abandoned under trademark law.

One example of naked licensing involves Freecycle, an Arizona non-profit dedicated to facilitating the re-use of unwanted items of others. The Ninth Circuit Court, in this instance, considered whether the trademark owner (i.e., Freecycle) had adequately controlled its licensees’ use of marks so as to prevent naked licensing. In this case, Freecycle allowed its licensees to use its trademarks without written licenses. Freecycle argued, in part, that it exercised control over its licensees through guidelines and policies published online. The Court rejected Freecycle’s argument and not only found that Freecycle failed to retain contractual control over the quality control provisions, but that Freecycle did not have actual control over the quality control provisions. In turn, the Court concluded that Freecycle engaged in naked licensing.

To comply with the current state of trademark laws, there are a number of legal provisions for addressing and/or monitoring the quality of goods produced and/or services provided under a trademark that must be incorporated in a trademark license agreement to prevent naked licensing. An example of such a provision generally includes an agreement where the licensee will agree to use the licensed trademark in accordance with such quality standards as may be reasonably established by the licensor. Nevertheless, including these provisions in a trademark license does not by itself protect the trademark. Even if these provisions are encompassed in a trademark license agreement, the trademark owner should make sure to also monitor, and if necessary, enforce the quality control provisions throughout the term of the license in order to preserve the inherent value of the licensed trademark. Any failure to enforce could also be considered an abandonment of the trademark.

Naked licensing is also a risk that should be assessed prior to any potential merger or acquisition. Prospective buyers and sellers should be aware of the potential detriments that a naked trademark license arrangement can pose relative to the strength and viability of a licensed trademark.

Therefore, it is prudent to seek out meaningful counsel and contact an experienced trademark attorney to discuss such potential licensing issues. Walter | Haverfield’s trademark attorneys regularly counsel clients in such licensing matters.

Kevin Soucek is an attorney at Walter | Haverfield who focuses his practice on intellectual property. He can be reached at ksoucek@walterhav.com or at 216-619-7885.

Jamie Pingor is a partner at Walter | Haverfield and chair of the Intellectual Property team. He can be reached at jpingor@walterhav.com or at 216-928-2984.

*This article also appears in Crain’s Cleveland Business.

A Tough Lesson in Global Intellectual Property Law