Case Presentation: Trade Secrets – Inevitable Disclosure Rule PepsiCo, Inc. v. Redmond

Group 15 & 16 to Presentation

More Examples of Trade Secret

HP – Current Case (Can Hurd work for Oracle)

MN Case– Pioneer Press sued Star Tribune in 2007– Claims Par Ridder stole trade secrets– Worked for Pioneer Press hired by Star Tribune– Violated employment agreement– Examining his home computers

General Motors Case– Purchasing “czar” left GM with 20 boxes of purchasing data

(that would now fit on one flash drive) and went to Volkswagan. Volkswagen eventually settled for $1.1 billion - $100 million dollar payment plus a promise to buy $1 billion in GM parts.

“leave his job for a year” His non-compete was not valid because not paid extra for signing it.

“…he violated the state’s trade secrets act and his common law duty of loyalty to the Pioneer Press”

“…[he] copied more than a dozen computer documents, including budgets, monthly profits, employee wages and how much advertisers were paying.”

Presentation Case: Del Monte Fresh Produce (P) v. Chiquita Brands(D), p. 92.Groups 19 & 20

v.

Covenant Not to Compete

Scope and Duration. Limited as to geographic scope and duration

Job Title. Scope of limitation, i.e. what jobs are prevented, is also significant

Intelus Corp. v. Barton – regarding nationwide non-compete in the computer software field……………….

EarthWeb v. Schlack – IT field, 1 year non-compete – court held too long given field.

Interesting Quote: “Eighty percent of employees will abide by them [a non-compete agreement] because they signed them. The fact is they're abused.” Mark Halligan, IP Attorney

Al Johnson’s Swedish Restaurant Sister Bay, WICan a restaurant stop other

restaurants from having goats on the roof? Sept. 2010 Lawsuit

Trademark Law

AOL v. ATT

“You’ve Got Mail”“IM”

“Buddy List”

Should you be able to trademark, “You’ve Got Mail,” “IM”, “Buddy List” “Just Do It” ?

WhoDat, Inc. wrote a song “Who Dat Say They Gonna Beat Dem Saints”NFL claims it owns the trademarkA lot of people believe it belongs to the city of New Orleans

Trademark the word “Yes”?Gubernatorial candidate Paul Thissen complained that Margaret Anderson Kelliher stole the word “yes” from her. Jan 31, 2010 Star Trib Article

“This Sick Beat” or “Party Like Its 1989” 

Trademark Defined

Word, symbol, name device or combination thereof used by a manufacturer or merchant to identity and distinguish its good.

Federal law and state law

Registered as a trademark

Types of Trademarks

Letters/Words– Apple– IBM– NBC

Pictures or drawings

Logos

Combinations (letters, logos, pictures)

•GOOGLE V. BLADE RUNNER•Google “Nexus” phone. Trademark in Nexus•Daughter of author Mr. Dick is challenging Google’s use of term nexus because of Mr. Dick’s 1968 novel, “Do Androids Dream of Electric Sheep?” •The book follows a bounty hunter chasing androids knows as Nexus-6 models. Daughter says Nexus One runs Google's Android operating system – too much to be a coincidence. Confusion?

Google Nexus Phone

Protected?

Lindt BunnyHauswirth Bunny

Bunny Lawsuit (EU) – Trade Dress•Lindt sued Hauswirth for tradement infringement. What do you think?•Hauswith scoured German libraries and found references to chocolate bunnies pre-dating Lindt. i.e. Lindt acted in bad faith (EU Standard used – not US) getting a trademark long used. •Plus Hauswith argued bunnies are shaped roughly the same because of production issues – not Trademark infringement because the shape is functional

Notice of Trademark

Registered in U.S. Patent and Trademark Office

® TM – User is using the item as a trademark

but has not filed SM – same for services

St. Cloud Trademarks

1111

Four Types of Trademark

Trademark Service Mark (for services – otherwise same) Certification Mark

– Underwriters laboratories– Good Housekeeping Seal of Approval– Additional rules to issue these marks

Collective Mark– Membership within an organization

Presentation Case, Trademark Protection – Color as a Mark, Qualitex Co. , v. Jacobson Products

Dry cleaning press pad

Group 4 & 1 Presentation

Color as a Trademark Continued

Each of these involved a trademark lawsuit over color, what do you think the court decided? Why?

“Red Book” a legal publication

Red and White Can

Multi-color package

Trademark Search

Search – Patent and Trademark Office maintains an on-line

database.– Domain name search– State incorporation search

Cost $275-$375

Trademark Registration

Registration– You can register a trademark but it’s not required to register– Must be used across state, territorial or international lines– Advantages

Notice to world Evidence of ownership of the Mark Allows for suit in Federal court Makes for the registrant’s right to the mark virtually incontestable after five years

continuous use US Customs will help prevent illegal imports Provide basis for obtaining registration in foreign countries

Application– Good for 10 years – file an affidavit in 6th year showing it’s still in use– Intend to Use – 6 months to begin use

Presentation Case Trade Dress: Two Pesos, Inc. v. Taco Cabana, Inc. 25 v 26

Identify each as “arbitrary,” “fanciful,” “suggestive,” “descriptive,” or “generic” End-of-Chapter Q 2

Strength of Trademarks

Classification ProtectionInherently Distinctive Fanciful Marks Arbitrary Marks Suggestive Marks

Strong protection

Not Inherently Distinctive Descriptive MarksGeographic TermsPersonal Names

Protected once secondary meaning arises

Non-distinctive - Generic Not protected

Most common reasons that marks are refused trademark registration:

1. Scandalous. the proposed mark consists of or comprises immoral, deceptive, or scandalous matter2. False Connection to Person, Institution, Belief, …the proposed mark may disparage or falsely suggest a connection with persons (living or dead), institutions, beliefs, or national symbols, or bring them into contempt or disrepute3. Flag or Insignia. the proposed mark consists of or comprises the flag or coat of arms, or other insignia of the United States, or of any State or municipality, or of any foreign nation4. Person’s Name/President’s Name. the proposed mark consists of or comprises a name, portrait or signature identifying a particular living individual, except by that individual's written consent; or the name, signature, or portrait of a deceased President of the United States during the life of his widow, if any, except by the written consent of the widow5. Too Close to Existing Mark. the proposed mark so resembles a mark already registered in the Patent and Trademark Office (PTO) that use of the mark on applicant's goods or services are likely to cause confusion, mistake, or deception6. Descriptive Only. the proposed mark is merely descriptive or deceptively misdescriptive of applicant's goods or services7. Geographically Descriptive Only. the proposed mark is primarily geographically descriptive or deceptively geographically misdescriptive of applicant's goods or services8. Surname. the proposed mark is primarily merely a surname; and9. Functional. matter that, as a whole, is functional.

Disparaging or Scandalous Marks- Actions brought against the following. What do you think?

Marijuana TrademarksWSJ 7-19-2010• Maui Wowie•Chronic•Budtrader•Pot-N

Trade Dress

Distinctive Attributes – Package Shape - Coca-cola bottle shape– Color – Sweet-n-Low – pink coloring– Décor –how a store is presented

Package or Product Design– Package does not require a showing of secondary

meaning– Product design requires a showing of secondary

meaning Physical Features

– Distinctive and non-functional– If functional then patent law applies – companies

cannot use trademark law to obtain protection on functional features.

End-of-chapter Q: 11, Leatherman Tool v. Cooper Industries, Cooper copied Leatherman’s tool “almost exactly” Leatherman sued for violation of trade dress – result?

End-of-chapter, Q 10 Disc Golf Assoc. (DGA) manufactures golf “holes” and its patent expired in 1994. Champion Discs, a competitor copied the “hole” and DGA sued for trade dress infringement. Result?

Presentation Case:TrafFix Devices, Inc (P). v. Marketing Displays, Inc.(MDI) U.S. 23 (2001), p. 218Groups 23 & 24

WindMaster by MDI WindBuster by TrafFix

MDI Originally Created

TraFix did this second

Trade Dress Protection – Unregistered Trade Dress, Wal-Mart v. Samara Brothers

Samara Brother’s Clothing Samples

Marlboro Case

Facts: Marlboro sued King Mountain cigarettes for trade dress infringement.

Pebble Beach v. Tour 18 End-of-Chapter Q 6•Tour 18 replicates famous golf courses•Promotional material, tee markers, course signs and dinning room menu all reference famous courses – “Pebble Beach” French toast and “Pinehurst tuna salad”. •Copied Harbour Town’s famous 18th light house hole. •Famous courses sued for trademark and trade dress infringement – what’s the result?

Harbour Town Lighthouse Hole

Hooters Case

Facts. Winghouse dressed its servers in a black running shorts and a black tank top similar to Hooters except the color.

Questions– Should Hooters be entitled to Trade Dress Protection? Why?– Is the “Beachy Décor” Protectable Trade Dress? Why? – What about trademark? On what?

Hooters of America, Inc. v. Winghouse of Florida, U.S. District Court Middle District of Florida, Orlando Florida, Case No: 6:03-cv-116-Orl-22JGG, (2004

Read Quote from Judge Appealed and confirmed 2007

Drama and the Law Tape

Rally Pizza

Link to video online

Presentation Case: Venture Tape Corp (P). v. McGills glass Warehouse (D) (1st. Cir 2008), p. 224 Groups 27 & 28

Versus

Counterfeiting

Aggressive form of trademark infringement Treble damages Criminal penalties

– $1 million per counterfeit mark– Fines up to $15 million– Prison terms up to 20 years

Beijing Silk Market

US Customs - IP Seizures

Seize and Destroy, or Remove trademark and sell•$1,743 Million Seized. U.S. Customs seized closed to $2 billion in products in fiscal 2013 for intellectual property violations (US Customs Website).•693 Arrests, 411 Indictments and 465 Convictions. •1,413 Domain Names Seized (for selling counterfeits)

Handbags/Wallets Top Category

US Customs - China Top Violator

Infringement – Likelihood of Confusion Test

Strength of Mark Similarity Similarity of products Likelihood they will enter each other’s

markets The extent of actual confusion The defendant’s lack of good faith in

adopting the mark The quality of defendant’s product The sophistication of the buyer (more

sophisticated, more expensive, less likely confusion)

Apple Computer is entitled to use the apple logo on its iTunes Music Store over objections from Apple Corps, Ltd, the guardian of the BeathlesWSJ, 5/9/06

Apple Records Logo

Dilution

Definition: the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties; or (2) the likelihood of confusion, mistake or deception

Why an Issue. Famous marks cast a long shadow and are entitled to protection against dilution. – Communicative Clarity– Mark easier to remember – without clutter of similar marks– Memories of consumers easier to recall and associate with mark– Makes the brand more visible

Must show mark is famous– The defendant adopted the mark after the plaintiff's mark became famous– The defendant's mark dilutes the plaintiff’s mark by diminishing the capacity of the mark to identify and distinguish goods

and services Elements to show mark is famous

– Distinctiveness of mark– Duration and extent of use of the mark– Extent of advertising of mark– The geographical area of trading of the mark– The channels of trade– The degree of recognition in the channels of trade– The nature and extent of use of the same or similar mark by others– Whether the mark is registered

Exceptions– Comparative advertising– Noncommercial use– News reporting

Examples:•Toys R US example: "Guns are Us" or "Guns Are We.“ FRIES “R” US in•Victoria’s Secret v. Victor’s Secret – changed to Victor’s Little Secret

Victor’s Little Secret

Mini Golf Hole

Dilution – Tarnishment and Blurring

Tarnishment– AdultsRUs– Candyland– Buttwiser– Bugwiser

Blurring. Occurs when, because of the junior’s mark, reference to the mark now brings to mind two users, where previously only the senior user came to mind.

– Test Plaintiff’s mark is famous Defendant adopted mark after plaintiff The use of defendant’s mark causes dilution Defendant's use of the mark is commercial in nature

– Lexis v. Lexus– Utah “Greatest Snow on Earth”

Court Test– Similarity of the marks– Similarity of the products– Sophistication of consumers– Predatory intent of defendants– Renown of the senior mark– Renown of the junior mark

McDonald’s lost lawsuit in Malaysia over McCurry Sept 2009

Ford F150 Ferrari F150

Feb 2011 Dispute

Intellectual Property Issues•Considered patent, chose not to do so? Idea was copied.•Created “Zorb” group of companies and sport became called “Zorbing” •Split with partners (sold Zorb) and started OGO•What do you call this activity? “Globe-riding activity” Who can call it that?

video

Lost Trademarks

Lost – Trampoline– Kerosene– Corn Flakes– Yo-Yo– Escalator

At Risk – Kleenex, From Web Site “These KLEENEX® Facial Tissues have softness, strength

and absorbency for your everyday needs.” – Frisbee, from web site “Whether you're at the beach, lake, or park – keep the party

alive with an original Frisbee® disc! “– Xerox – now protected through better effort – see book

Protecting a Mark– Use as an adjective – not a noun – “Rollerblade in-line skates”– Never use a verb – “I am Rollerblading” “FedEx it” “Xerox it”– Expand use into more products– Track ad expenditures– Register– Use continuously – Register infringing domains– Engage watch services

Notice “Brand”

End-of-Chapter Q 8Harley-Davidson “Hog”

Logo from Grottanelli’s (the Hog Farm’s owner) web site

Defenses to Infringement Cases

Fair Use– manner

used– Good faith– Likely

confusion Surname Parody

Examples of Bad Faith?Chinese Company Overseas Co.

Honga (motorcycles)

Honda (motorcycles)

Chery (cars) Chevy (cars)

Wumart (retail) Wal-Mart (retail)

Redberry (e-mail devise)

Blackberry (e-mail devise)

Presentation Case: Mattel, Inc.(P) v. MCA Records, Inc.(D) (9th Cir), p. 221 Groups 29 & 30

Versus

http://www.youtube.com/watch?v=ZyhrYis509A

Jordache v. Hogg WyldLardashe jeans with a pig’s head and feet sticking out of the pocket

•Hogg Wyld argued that it had chosen the “Lardashe” as a more polite variant of a childhood nickname of one of its founders, and that it had not intended any similarity with the Jordache mark.”•Clavin Swine, Sow-Soon and Horse’s ashe

North Face Tag Line: “Never Stop Exploring”South Butt Tag Line: “Never Stop Relaxing”

Hormel Foods v. Jim Henson (Muppets creator) End-of-Chapter Q:4

Video -Spa’am v Spam– What are the likely causes of action?– Defenses?– How would you resolve this case?

Read from case– Experts on case– Causes of Action

Remedies

Injunction Actual damages Profits infringer made Treble damages – reluctant to do so unless

willful and necessary to recover costs Attorneys fees in exceptional cases

International Issues

US first to use the mark Most other countries

– first to register – Typically must use the mark within reasonable

time period 3-5 years

International IssuesRe-Importation

Company exports – Often for lower prices for exports

Desire to expand market share Maybe less income in other market No expense for advertising in other market

– Does not want goods sold in U.S. Re-Importer brings them back

– Not a trademark or copyright violation because actual goods from trademarked company

Material Differences test– If goods are materially different then it is a violation– Cabbage Patch Kids with Spanish names meant for Spain– US Video with foreign language instructions

Notice language

Defenses to Trademark Infringement – Ebay Case

• Tffany sued Ebay for selling fakes• Louis Vuitton won similar case against

Ebay lost in France• Ebay won in U.S. • Ebay promptly removed counterfeits

when notified but did not do so at time of placement.

• “This ruling appropriately established that protecting trademarks is the primary burden of rights owners – not marketplaces like Ebay” Rob Chesnut Legal Counsel for EBAY

Other Trademark Issues – Marketplaces

See Appropriation

Facts:•Joseph Abboud, a famous and successful designer in men’s suits, sold the trademark to his company, Joseph Abboud, for $65 Million in 2000.•Abboud in August of 2007 announced the launch of jaz, a new company selling suits.•Abbound plans on using “a new composition by designer Joseph Abboud.” •New suits more expensive $895 starting price versus $695.•New trademark holder took out an ad in a magazine that Abboud would likely see that said “the finest trademark lawyers in the world wear Joseph Abboud.”

Discussion Questions•Can Abboud use the phrase with his name in it? What are the issues?

WSJ August 6, 2007

Other Trademark Issues – A Person’s Name

•“For the Cure”•“Kites for the Cure”

Other Trademark Issues – Charities

An arbitrator for the United Nations' patent agency, WIPO, ruled that New York-based Keith Malley must cede control of the "thesimpsonsmovie.com" site to Twentieth Century Fox,

Domain Name Searchhttp://smallbusiness.yahoo.com/domains/

Nike suit to get justdoit.net (it owns .com and .org)

“sucks.com” –chasebanksucks.com

Other Trademark Issues – Marketplaces