Tootsie Roll is a candy and the subject of a trademark lawsuit and a funny personal story.  First the more serious trademark tale.  Tootsie Roll is, of course, a well-recognized trademark. Can the makers of Tootsie Roll prevent a footwear company from using the name Footzyrolls?

What do you think?  Here is a picture of the products: 

The makers of Tootsie Rolls recently sued the company that makes Footzyrolls, footwear that can be rolled up.  Trademark infringement usually occurs when one party uses a trademark similar enough to another party’s mark that consumers confuse the two parties’ products or services. But can a case be made if the goods in question are very different, like candy and footwear?  Yes, if the mark being infringed is considered famous.  This is called trademark dilution.  For more information on trademark dilution, read this article.

Here is the personal Tootsie Roll story.  When I was about 14 years old our family took a vacation to Florida. One night on the trip we were hanging out in the hotel room. My parents had bought my younger sister and me a bag of the bite-size Tootsie Rolls. Like most siblings we had to make sure the bag was split exactly even.  One for her – one for me.  Two for her – two for me.  You get the point.  The division of the bag was completed successfully.

After I left with my portion of the goodies, my sister noticed something on the hotel room floor. A small brown object. She beamed with joy believing I had dropped one of my precious candies and that she could claim it as her own. She greedily picked it up and discovered it was not a Tootsie Roll at all; it was a dead cockroach!  She screamed. I laughed. Really hard. We still laugh about it now.

By the way, Roach Motel is a federally registered trademark for roach traps and not the high-quality hotel my parents selected.

Should our copyright laws extend to fashion designs? The so-called Fashion Bill has been reintroduced in Congress.

Read more here.

The Texas Department of Transportation (TxDOT), owner of the mark DON’T MESS WITH TEXAS, recently sought a restraining order against the bookstore chain Barnes & Noble, Grand Central Publishing, Hachette Book Club USA and author Christie Craig over the sale of Craig’s romantic novel entitled “Don’t Mess With Texas“.  U.S. District Judge Sam Sparks denied the order and cited First Amendment rights, the relatively small amount of revenue involved, and the diversity between good and services.  Although TXDOT owns registration in the slogan for a wide variety of printed materials, books is not one of them.

For more details about this case, read the article, “Judge: Author Can ‘Mess with Texas’ All She Wants“.

For the last two decades, there have been a relatively small number of generic top-level domains (gTLDs) on the Internet. A gTLD is essentially the part of the domain name after the dot. But the number of gTLDs is about to increase dramatically.  On June 20, 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) announced that beginning on January 12, 2012, companies and organizations will be able to register virtually any gTLD they choose – for a price. The initial registration will be $185,000, with an annual renewal fee of $25,000.

For details about the implications of this change, read the article “New Top-Level Domain Names Available”.

The elite special forces of the U.S. Navy known as the SEALs have a nearly 50-year history of being the go-to teams for difficult small-unit military operations. So it came as no great surprise that SEAL Team 6 was the unit that stormed the compound of Al Qaeda leader Osama bin Laden on May 1, 2011.

A well-known company decided to capitalize on the attention given these brave heroes so soon after the incident, but faced with negative publicity, abandoned its efforts.

On May 3, 2011, three intent-to-use applications for the trademark SEAL TEAM 6 were filed on behalf of Disney Enterprises, Inc. of Burbank, California. The applications were for such diverse goods and services as clothing, toys, gymnastic and sporting articles, and even Christmas tree ornaments and snow globes. Although federal trademark registration requires use of the mark in commerce, applications can be filed prior to such use if the applicant has a bona fide intent to use the mark in the future. Once the mark has been deemed registrable by the examining attorney, the applicant has six months to allege use. For a fee, this deadline may be extended at six-month intervals up to a total three years, after which the application is considered abandoned. In 2010, a little more than half of all trademark applications filed with U.S. Patent and Trademark Office were intent-to-use, but to date less than 10 percent of those applications have matured to registration. By filing so early, Disney Enterprises was attempting to stake out its ownership of the mark for the goods and services claimed before anyone else does. But the public reaction to the applications were so negative that by the end of May, Disney filed express abandonments of all three applications. Several other applicants also filed for the trademark SEAL TEAM 6 or variations, and as of the writing of this post, at least four applications were still pending.

However, a search of the records reveals that Disney was not the first company to seek federal registration for the SEAL TEAM 6 trademark. In 2002, NovaLogic, Inc. of Calabasas, California applied for trademark registraiton of SEAL TEAM 6 for a variety of video game software and on-line computer gam eservices. In 2004, NovaLogic filed another application, this time for action figures and their accessories. Like Disney, NovaLogic filed its applications on an intent-to-use basis, and even though both applications were cleared for registraiton, the mark was abandoned for failure to allege use in the requisite amount of time.

Intent-to-use trademark applications can be a useful way to reserve a mark before it is used in commerce, but there are limits on how long that reservation can last. And once such an application has been abandoned, it clears the way for others to seek registration of the mark.

In a major setback to Righthaven, LLC in one of its copyright infringement cases, a federal judge recently ruled that defendants Kayse Jama and the Center for Intercultural Organizing (“CIO”) engaged in fair use as a matter of law when they posted an article from the Las Vegas Review-Journal (“LVRJ”) that was copyrighted by Righthaven (For background on Righthaven and its business model, see “Copyright Infringement in the Digital Age: Is Righthaven Using the Right Solution?”).

Using the four-factor legal standard for fair use (purpose and character of the use; nature of the copyrighted work; amount/substantiality of the portion used in relationship to the work as a whole; and effect of the use upon the potential market), Judge James Mahan ruled that Jama and CIO met all four criteria necessary to constitute fair use. One of the most surprising aspects of this ruling involves the third factor. Even though the defendants copied the article in its entirety, the judge ruled that the amount was reasonable. Mahan reasoned that because the purpose of the use was to educate the public, and the work was factual, “it would have been impracticable for defendants to cut out portions of the article or edit the article down.”

Regarding the fourth factor of fair use, the opinion also questions whether Righthaven, which is not itself a newspaper and is merely using the copyright to file infringement lawsuites, can claim LVRJ’s market as its own.

It remains to be seen how this ruling will affect the numerous other cases that Righthaven has filed against bloggers who have posted LVRJ content, but if the posting of an entire article can be considered fair use, and if Righthaven does not have an actual market to base its claims upon, this could jeopardize its other claims of copyright infringement.

Michael Atkins recently published an interesting post on his “Seattle Trademark Lawyer” blog entitled “Ninth Circuit Changes Dilution Standard”.  Unlike trademark infringement, which requires a likelihood of confusion between two marks, trademark dilution only applies to famous marks. If a mark lessens the capacity of a famous mark to identify and distinguish good and services, it may be diluting the famous mark. In a case involving the stitch designs on the pockets of Levi Strauss and Abercrombie & Fitch jeans, the Ninth Circuit reversed the district court’s decision, stating that the two marks no longer need to be “identical or nearly identical”.  Atkins posted side-by-side drawings of the two stitch designs.  Take a look and draw your own conclusions.

Several months ago, we published a blog post entitled “Copyright Infringement in the Digital Age: Is Righthaven Using the Right Solution?” discussing a spate of lawsuits filed by Righthaven, LLC against bloggers who posted content copyrighted by Stephens Media, the publisher of the Law Vegas Review-Journal.

Copyright and trademark attorney Ron Coleman, owner of the “Likelihood of Confusion” blog, recently posted an update on this topic.  Coleman, along with Las Vegas attorneys Marc Randazza and J. Malcolm DeVoy, filed an amicus brief on behalf of the Media Bloggers Association in one of these lawsuits.  This brief, which is posted in its entirety on Coleman’s blog, calls into question the propriety and scope of copyright statutory damages in this type of lawsuit. Much is at stake because statutory damages can greatly simplify the Plaintiff’s task of having to otherwise prove up actual damages.

We like to watch our clients succeed!  Client Collin Morgan of Hip Happenings, LLC, recently appeared on the today’s Money segment of TodayShow.com discussing “5 Tips for the Coupon Newbie.”  Here’s the link to the video.

Collin is the founder of Hip2Save.com, a highly successful blog dedicated to helping people save money.  As noted on her blog, this is Not Your Grandma’s Coupon Site.

We wish Collin and Hip2Save continued success!  See her blog at Hip2Save.com.

Social networking giant www.facebook.com was in the news again recently when the Wall Street investment firm Goldman Sachs pumped $500 million into the enterprise.  With a membership of more than 500 million subscribers and an estimated value of about $50 billion, Facebook more closely resembles a sovereign state than a website.  Because of its high monetary value and seemingly limitless growth potential, a number of people have attempted to lay claim to this cyber-goldmine.  One such prospector, Paul D. Ceglia, is staking his claim on a nearly eight-year-old contract he allegedly entered into with Mark Zuckerberg, the founder and CEO of Facebook, Inc.

Ceglia claims that in the spring of 2003, he contracted Zuckerberg (a student at Harvard University at the time) to develop a database and programming language called StreetFax.  According to the contract, Zuckerberg was to be paid $1,000 for his work on the StreetFax project.

Under current copyright law, whoever creates an original work of authorship, such as a computer program, is considered its author.  The author is also the owner of copyright unless there is either a written agreement assigning the copyright to another person or entity, or the work was created by an employee in the course of his employment.  In cases of works made for hire (either by agreement or by employer-employee relationship), the employer or commissioning party is considered to be the author.

Because Zuckerberg was an independent contractor, a relatively simple work-for-hire agreement between him and Ceglia could have been drafted to assign the rights to the StreetFax software to Ceglia.  However, the matter was complicated by another project that Zuckerberg was working on, a project in which Ceglia wanted to invest.  This project eventually developed into the multi-billion dollar venture known as Facebook.

Rather than draft a separate investment agreement for the Facebook project, an agreement entitled “‘Work for Hire’ Contract” was drawn up that comingled the two projects.  Ceglia agreed to pay Zuckerberg $1,000 for half interest in the StreetFax software and an additional $1,000 for half interest in the project “designed to offer the students of Harvard university [sic] access to a wesite [sic] similar to a live functioning yearbook with the working title of “The Face Book‘.”  Regarding “The Face Book,” Ceglia was to acquire an additional 1% interest for each day the project was delayed beyond the completion date of January 1, 2004.  Since Zuckerberg didn’t complete the project until February 4, 2004, Ceglia claims he now owns 84 percent of Facebook.

After Ceglia finally filed suit against Zuckerberg and Facebook, Inc. in state court in upstate New York on June 30, 2010, the judge issued a temporary restraining order preventing Zuckerberg and Facebook from selling or transferring any assets.  The case has since been removed to federal court, where Zuckerberg and Facebook filed a motion to dissolve the TRO.  A hearing on this motion was held July 20, and the TRO was allowed to expire three days later.

There are a number of problems with Ceglia’s case. First and foremost is whether his claim is barred by the statute of limitations, which in New York State is six years for contracts.  Assuming he somehow overcomes this legal obstacle, there is a question as to whether Zuckerberbg actually signed the contract, which was neither witnessed nor notarized.  During the hearing, Facebook’s attorney stated that “whether he signed this piece of paper, we’re unsure at the moment,” but also claimed that there were “serious questions” about the contract’s authenticity.

Another problem is the chronology of events. The contract was allegedly signed on April 28, 2003, but Zuckerberg didn’t register the domain name thefacebook.com until January 2004, and even the predecessor to The Face Book, Facemash, wasn’t created until late autumn of 2003.

It remains to be seen how this case will finally be decided, but one thing is certain.  Since no one knows in advance what the ultimate value of intellectual property like software will be, it’s vitally important to clearly establish from the beginning who owns the rights to such intangible assets.