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Clearly there is no love lost between John Wayne Enterprises, LLC (“JWE”), the entity owned by John Wayne’s heirs which controls the intellectual property related to John Wayne, and Duke University.   Both have have been locked in battle over various trademarks incorporating the word DUKE.  The most recent skirmish involves a trademark application filed by John Wayne Enterprises, LLC (“JWE”)  for the following design mark for alcoholic beverages, excluding beer:

Duke University requested and was granted  an extension of time to potentially opposition to the registration of this mark.    Previously, Duke University opposed JWE’s’ application to register DUKE for restaurant services, claiming that the mark is likely to cause confusion with Duke University’s other DUKE trademarks and/or dilute Duke University’s famous trademarks. Specifically, Duke University alleged that:  “[JWE] seeks to register a mark that is substantially similar to [the University’s] famous mark DUKE, and that moreover is likely to be abbreviated simply as DUKE and expressed orally simply  as DUKE, for goods that are closely related to goods and services with which [the University’s] DUKE Marks are used…”

It appears that this time, JWE took John Wayne’s quote  “You tangle with me, I’ll have your hide.” literally and didn’t wait and see whether the University actually filed an opposition.  JEW filed a complaint for declaratory relief in the United States District Court for the Central District of California, requesting the court to declare that the above mark does not infringe or dilute any of the DUKE trademarks owned by Duke University.  In its complaint it alleges that “Duke University believes that products bearing John Wayne’s world renowned image and signature…will somehow be confused with being associated with Duke University.” Further, JWE alleges that “in light of the multiple Oppositions and Cancellation proceedings Duke University has filed against JWE and the claims made therein, JEW believes Duke University contends that JEW’s [registration and use of its marks] or any other mark that includes the term DUKE are likely to cause confusion with [the marks owned by Duke University] and intends to sue JWE for trademark infringement, notwithstanding that JWE’s use is directly associated with and expressly linked to John Wayne.”

Trademark Infringement

In determining whether JWE’s mark infringes any of the University’s marks, the court will follow the multifactor test established by AMF Inc. v. Sleekcraft Boats.  In applying this test the court will engage in the following analysis:

1. Strength or Weakness of the Plaintiff’s Mark. The more the consuming public recognizes the plaintiff’s trademark as an indication of origin of the plaintiff’s goods, the more likely it is that consumers would be confused about the source of the defendant’s goods if the defendant uses a similar mark.  The court will consider whether the University’s mark are strong marks.  If so, this would weigh in favor of a finding of confusion.  The court is likely to find that the University’s marks are strong.

2. Defendant’s Use of the Mark. If the defendant and plaintiff use their trademarks on the same, related, or complementary kinds of goods there may be a greater likelihood of confusion about the source of the goods than otherwise.  The court will consider the types of goods and services covered by the University’s marks.  The records of the trademark office do not reveal a DUKE mark owned by Duke University for any type of alcoholic beverages.  While there are various marks covering beverage glasses and containers and food and beverage services, unless Duke University is able to establish common law rights covering alcoholic beverages, its likely the court would not find these services similar enough to support a finding of confusion.

3. Similarity of Plaintiff’s and Defendant’s Marks. If the overall impression created by the plaintiff’s trademark in the marketplace is similar to that created by the defendant’s trademark in appearance, sound or meaning, there is a greater chance of likelihood of confusion.   Here, the court would consider whether, taken in their entirety, the marks are similar in appearance, sound and meaning.  JWE’s mark features a distinct and unmistakable design element of a cowboy (likely stylized after one of the numerous cowboy characters played by John Wayne).  Its likely that the court will determine that, not only does this cause the marks to be different in appearance, but it also causes JWE’s mark to give off a commercial impression that is different than any of the Duke University marks; that the bourbon is associated with John Wayne.  The court will likely find that these facts support a finding of no likelihood of confusion.

4. Actual Confusion. Evidence of actual confusion  strongly suggests a likelihood of confusion.  The court will consider any evidence of actual confusion.  If none, this will be a neutral factor.

5. Defendant’s Intent. Knowing use by defendant of the plaintiff’s trademark to identify similar goods may strongly show an intent to derive benefit from the reputation of the plaintiff’s mark, suggesting an intent to cause a likelihood of confusion.  The court will consider whether JWE’s intent in using DUKE was to refer to John Wayne or to refer to the University.  Its likely that JWE will present strong evidence that its use of DUKE was as a reference to John Wayne.  After all, one of John Wayne’s better known quotes is “I never trust a man who doesn’t drink.”

6. Marketing/Advertising Channels. If the plaintiff’s and defendant’s goods or services are likely to be sold in the same or similar stores or outlets, or advertised in similar media, this may increase the likelihood of confusion.  If Duke University does not use any of its DUKE marks in connection with alcoholic beverages, the court may find that there is not a significant overlap in the marketing channels.

7. Consumer’s Degree of Care. The more sophisticated the potential buyers of the goods or the more costly the goods, the more careful and discriminating the reasonably prudent purchaser exercising ordinary caution may be. Ordinarily, where a heightened degree of care is exercised by purchasers, this factor tends to favor a finding of no confusion.  However, since buyers of alcoholic beverages are generally not considered sophisticated purchasers, the court would consider the degree of care exercised by an ordinary consumer.

8. Product Line Expansion. If there is a strong possibility of Duke University expanding into the alcoholic beverage market, there is a greater likelihood of confusion. If Duke University is not able to show that it has made any overtures to use or allow use of its mark in connection with alcoholic beverages, this factor will not support a finding of likelihood of confusion.

Trademark Dilution

In a claim for trademark dilution, the owner of a famous mark can bring a claim due to either blurring or tarnishment.  Blurring occurs when a defendant uses or modifies the plaintiff’s trademark to identify the defendant’s goods and services, raising the possibility that the plaintiff’s mark will lose its ability to serve as a unique identifier of the plaintiff’s product. In considering whether JEW’s mark causes dilution of Duke University’s mark by blurring, the court will consider the following:

(i)  The degree of similarity between JWE’s mark and the Duke University’s mark. The court will likely find the marks not similar;

(ii) The degree of inherent distinctiveness in the University’s marks that have allegedly been infringed.  The court will likely find the University’s marks to be distinctive;

(iii) The extent to which Duke University is engaged in substantially exclusive use of DUKE as a trademark.  This will require some investigation by the court.  USPTO records show only one DUKE mark registered by JWE – DUKE’S PLACE for restaurant services.  This use is likely pursuant to a settlement agreement between JWE and the University.  Additionally,  records of the Trademark Trial and Appeals Board show that  the University has opposed the registration of almost every third party trademark application which includes DUKE. These facts could support a finding of dilution by blurring;

(iv) The degree of recognition of the Duke University marks.  The court will likely find them to be highly recognizable;

(v) Whether JWE intended to create an association with one or more of Duke’s mark.  As mentioned above, its likely that JWE will present strong evidence that its use of DUKE was intended to create an association with John Wayne and not the University; and

(vi) Any actual association between JWE’s mark and Duke University’s marks.

Dilution by tarnishment occurs when the reputation of a famous mark is harmed through association with another similar mark or trade name.  Here the court would consider whether there is any actual association between JWE’s mark and Duke University’s marks and if the University’s reputation is harmed by such association.  Even if the court found an association between the two marks, such association does not likely harm the University’s reputation.

Predictions:  A well known quote of John Wayne is “Out here, due process is a bullet.”  While the resolution of the present dispute will not be as quick, based on the facts as they are presently known, it seems that JWE will prevail.  It seems clear that JWE’s mark does not infringe any Duke University marks.   And while the outcome JWE’s request for judicial determination that its mark does not dilute any of the University’s marks is not as easy to predict, its likely that a court will be persuaded by the lack of similarity between the marks and find that a substantial influence in a finding of no dilution.

A California businessman, Walter Liew, was recently sentenced to 15 years in federal prison after being found guilty by a jury on charges of trade secret theft, economic espionage, witness tampering and making false statements.  Mr. Liew, who had contracts with a Chinese company Pangang Group, was charged with stealing trade secrets from DuPont that included plans and information regarding a manufacturing plant.  The prosecutors allege that Mr. Liew helped the Pangang Group obtain these trade secrets to develop a manufacturing plant in China that would produce titanium dioxide, a white pigment.

Mr. Liew’s prosecution is another example of ongoing efforts by U.S. prosecutors to deter China from engaging in economic espionage and trade secret theft.  For more details about this case, please see http://www.bloomberg.com/news/2014-07-10/man-gets-15-years-prison-for-stealing-dupont-secrets.html.

On July 14, 2014 the EEOC issued its updated “Enforcement Guidance on Pregnancy Discrimination and Related Issues” (“Guidance”). The stated purpose of the Guidance is to provide information regarding the Pregnancy Discrimination Act (“PDA”) and the Americans with Disabilities Act (“ADA”) as they apply to pregnant employees. In addition to the new Guidance, the EEOC also issued a Q&A document and a Fact Sheet which both address the issues covered in the Guidance.

The Guidance summarizes the statutory protections for pregnant employees under the PDA and the ADA. The Guidance includes specific discussions of:

When employer actions may constitute unlawful discrimination on the basis of pregnancy, childbirth, or related medical conditions in violation of the PDA;
The obligation of employers under the PDA to provide pregnant workers equal access to benefits of employment such as leave, light duty, and health benefits; and
How Title I of the ADA (which went into effect over a decade after the PDA and was amended in 2008 to broaden the definition of disability) applies to individuals with pregnancy-related impairments.

The Guidance also discusses protections under various other laws like the FMLA, Executive Order 13152 which prohibits discrimination based on status as a parent, and certain state laws. It concludes with a section on best practices for employers. Copies of the Guidance, the Q&A document, and the Fact Sheet can be obtained at:

http://www.eeoc.gov/laws/guidance/pregnancy_guidance.cfm.

http://www.eeoc.gov/laws/guidance/pregnancy_qa.cfm.

http://www.eeoc.gov/eeoc/publications/pregnancy_factsheet.cfm.

Litigants know that obtaining a judgment against an adversary is only half the battle.  Sometimes the efforts a litigant must expend to collect on that judgment are just as significant, if not more so, than obtaining the judgment.  In looking for assets to satisfy a judgment, litigants are reminded that a defendant’s intellectual property, including any copyrights, may be subject to execution to satisfy an unpaid judgment. This issue was recently explored in a Ninth Circuit case titled, Hendricks & Lewis PLLC v. George Clinton (the funk music superstar).

Clinton was a pioneer in funk music starring in bands such as Funkadelic and Parliament.  During the last ten years, however, he racked up legal fees with Hendricks & Lewis in excess of $3 million.  Hendricks & Lewis obtained an arbitration award in excess of $1.6 million that was later confirmed as a judgment against Clinton.

After receiving only a portion of the outstanding judgment through various collection methods, Hendricks & Lewis asked a U.S. District Court to appoint a receiver who would then attempt to sell Clinton’s copyrights in his various music to help satisfy the judgment.  The District Court agreed and appointed a receiver to do so.  Clinton then appealed to the Ninth Circuit.

One additional set of facts that is crucial to the outcome of this case was the history of Clinton’s copyrights in his music.  In July 1975, Clinton, through his production company, Thang, Inc., entered into a recording contract with Warner Bros. Records in which he agreed to make master recordings of his performances with Funkadelic.  The agreement made clear that Warner Bros. was to own in perpetuity all rights in the recordings and that neither Thang nor Clinton would have any rights.  This included an acknowledgment that Warner Bros. owned the copyrights in the recordings.  Clinton signed a similar agreement again with Warner Bros. in 1979.  Later, Clinton and Warner Bros. had various disputes and in 1982 entered into a settlement agreement under which Warner Bros. agreed to relinquish its ownership, including its copyrights, in the recordings to Clinton. In 2005, a U.S. District Court in California recognized that Clinton was the sole owner of the copyrights for the recordings.

On appeal, Clinton argued that: (1) his copyrights were not subject to execution to satisfy a judgment; and (2) even if they were, he was entitled to protection under section 201(e) of the Copyright Act which forbids the “involuntary transfer” of a copyright.

The Ninth Circuit began by recognizing that judgment collection proceedings are governed under state law.  Washington law provides that: “All property, real and personal, of the judgment debtor that is not exempted by law is liable to execution.”  Although the Ninth Circuit could not find any cases that held that a copyright was subject to execution, the U.S. Supreme Court had long ago held that a judgment debtor’s interest in a patent could be assigned to satisfy a judgment.  The Ninth Circuit reasoned “that where copyright case law is lacking, ‘it is appropriate to look for guidance to patent law ‘because of the historic kinship between patent law and copyright right law.’’”  The Court also found it relevant that it had previously held in a case arising out of California, in Office Depot, Inc. v. Zuccarini, 596 F.3d 696, that a judgment debtor’s internet domain name could also be subject to execution.

In light of this precedence, the Ninth Circuit concluded that Clinton’s copyright interests in his music could be subject to execution to satisfy the judgment.  To avoid this result, Clinton argued that he was entitled to protection under section 201(e) of the Copyright Act.  That provision provides, in pertinent part, “When an individual author’s ownership of a copyright … has not previously been transferred voluntarily by that individual author, no action by any governmental body … purporting to seize, expropriate, transfer or exercise rights of ownership with respect to the copyright … shall be given effect. …”  Clinton argued that the lower court’s order requiring the receiver to attempt to sell Clinton’s copyrights was in effect a seizure or taking in violation of section 201(e).

The Ninth Circuit began by looking at the history of the section and noted that it was intended mainly to “protect foreign authors against laws and decrees purporting to divest them of their rights” in their copyrights.  Essentially, the U.S. was concerned that the Soviet Union would forceably seize any copyrights held by dissidents in the Soviet Union and try to use those copyrights to prevent the publication of their works, such as “One Day in the Life of Ivan Denisovich” outside the Soviet Union.  Congress, in enacting section 201(e), wanted “to reaffirm the basic principle that the United States copyright of an individual author shall be secured to that author, and cannot be taken away by any involuntary transfer.”

The Ninth Circuit held, however, that this provision did not protect Clinton.  First, the Court found that the “author” of the recordings was Warner Bros. (ant not Clinton) since Clinton and his production company were “deemed [Warner Bros.] employees for hire” in their various agreements.  Because Warner Bros. was considered the “author” of these recordings for purposes of section 201(e), Clinton could not obtain any protection from this subsection.

Second, Clinton argued that the recordings were not “works for hire” and that he (and not Warner Bros.) was the original author.  The Court held that even if this was the case, Clinton had voluntarily transferred his interests to Warner Bros. and thus the protections of section 201(e) did not apply by its terms because the copyrights had been “previously `transferred voluntarily by that individual author’.”

The Court likewise rejected a couple of other arguments raised by Clinton on appeal.  It affirmed the District Court’s decision to appoint a receiver who could dispose of the copyrights in order to satisfy the outstanding judgment.

This case is a reminder to litigants that when facing difficulties in collecting on a judgment, to look to see whether the judgment debtor has any intellectual property, such as copyrights or patents, which may be available to satisfy the judgment.

The long-awaited decision by the United States Supreme Court on business method patents was issued on June 19, 2014.  Unfortunately, the decision raised more questions than it answered.  The expectation was that the Supreme Court would clearly explain the difference between unpatentable abstract ideas and patentable software, including business methods.  Instead, the Court issued a very narrow decision with broad, but uncertain ramifications.  The Court applied a test it has previously relied upon, striking down all of the patents in the case and expressly stating that it was not opining on the patentability of software or business methods in general.

The case is Alice Corporation Pty. Ltd. v. CLS Bank International, 2014 U.S. Lexis 4303 (U.S. Supreme Court, June 19, 2014). Alice Corporation’s patents were directed to a computer-implemented process of minimizing “settlement risk” – the risk to a party in a financial transaction that the other party would not perform the transaction, by creating an intermediary using “shadow” financial records of both parties.  The claims covered the computer system to perform the process, the computerized method itself, and a computer-readable medium with the instructions to perform the method.

Alice Corporation had sued CLS Bank for patent infringement.  The district court had granted summary judgment for CLS Bank on the grounds that all of the claims were not eligible for patent protection as they were directed to an abstract idea.  A panel of the Federal Circuit Court of Appeals had reversed the district court, but then, in an en banc hearing, affirmed the district court in a set of multiple opinions.  A plurality of the Federal Circuit found all of Alice Corporation’s claims patent-ineligible, relying on the Supreme Court’s 2012 decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012).

The Supreme Court unanimously affirmed the Federal Circuit’s decision.  The Court applied the “framework” it had set forth in Mayo for determining whether a claim is directed to a patent-ineligible law of nature, natural phenomenon, or abstract idea, or to a patent-eligible application of those concepts.  Under that framework, a court must first determine whether the claim is directed to a patent-ineligible concept.  If the answer to the first question is yes, then the second step is to decide whether the elements of the claim, individually or as a combination, “transform the nature of the claim’ into a patent-eligible application.”  (2014 U.S. Lexis 4303 at *16.)

In applying the Mayo framework to Alice Corporation’s patent claims, the Court answered the first step affirmatively.  The Court found that the claims were directed to the abstract idea of an intermediate settlement.  (Id. at *17.)  The Court compared Alice Corporation’s method of using an intermediary third party to minimize settlement risk to the method of hedging against financial risk in price fluctuations that the Court had held to be an abstract idea in Bilski v. Kappos, 561 U.S. 593 (2010).  According to the Court, both methods were “fundamental economic practice[s] long prevalent in our system of commerce.”  (Id. at *20.)

The Court then analyzed Alice Corporation’s claims under the second Mayo step.  The Court explained that the use of a computer does not necessarily transform a patent‑ineligible abstract idea into a patent-eligible invention.  (Id. at *22, *26.)  General purpose computers or related components do not make a claim patent-eligible as the Court said, at *26:

“Stating an abstract idea while adding the words ‘apply it’ is not enough for patentability eligibility.  [citation omitted.]  Nor is limiting the use of an abstract idea ‘to a particular technological environment.’  [citation omitted.]  Stating an abstract idea while adding the words ‘apply it with a computer’ simply combines those two steps, with the same deficient result.”

The Court explained the long-standing rationale for excluding abstract ideas from patentability, at *14:

“We have described the concern that drives this exclusionary principle as one of pre-emption.  See, e.g. Bilski, supra, at 611-612 (upholding the patent ‘would pre-empt use of this approach in all fields, and would effectively grant a monopoly over an abstract idea’).  Laws of nature, natural phenomena, and abstract ideas are ‘the basic tools of scientific and technological work.’  [citation omitted.]  Myriad, supra, at ___ (slip op. at 11).  ‘[M]onopolization of those tools through the grant of a patent might tend to impede innovation more than it would tend to promote it …’”

With respect to computer-implemented inventions, the Court stated, at *26-27:

“Given the ubiquity of computers [citation omitted], wholly generic computer implementation is not generally the sort of ‘additional feature[e]’ that provides any ‘practical assurance that the process is more than a drafting effort designed to monopolize the [abstract idea] itself.’”

The Court held that Alice Corporation’s claims did nothing more than instruct the user how to perform the abstract idea of an intermediated settlement on a generic computer using generic functions.  (Id. at *28-*29.)  The claimed function was “purely conventional.”  Id.

Based on the application of the Mayo framework, the Court concluded that Alice Corporation’s method claims were not patent eligible.  The Court summarily reached the same conclusion as to the system claims, stating that the hardware described in the claims was “a handful of generic computer components.”  (Id. at *31.)  Lastly, the Court reached the same conclusion as to Alice Corporation’s computer-readable media claims.

In its decision, the Court stated that it was cautious in its approach.  In trying to explain what is patent-eligible, the Court said, at *15:

“[w]e tread carefully in construing this exclusionary principle lest it swallow all of patent law.  [citation omitted.]  At some level, ‘all inventions…embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.’  [citation omitted.]  Thus, an invention is not rendered ineligible for patent simply because it involves an abstract concept.  See Diamond v. Diehr, 450 U.S. 175, 187 (1981).  ‘[A]pplication[s]’ of such concepts ‘to a new and useful end,’ we have said, remain eligible for patent protection.”

Despite its suggestion that claims “involving” abstract ideas are still patent eligible, many practitioners are concerned that software is going to be more difficult to patent.  Even though the Court did not even use the word “software”, its decision struck down the three ways that software is typically claimed.  Perhaps the Federal Circuit will limit the impact of the case by narrowing its application to financial processes, but, even so, it is clear that software will be now much harder to patent, much more uncertain, and more costly than it was before.

The California legislature has a number of important bills pending passage that would significantly affect employers. We are following these bills closely so that employers can be prepared for what 2015 may bring. Click here for a look at the status of the bills of interest to California private-sector employers as the legislature begins its summer recess on July 3.

With the prevalence of smartphones in today’s society, one cannot help but to have at least heard of Google’s Android operating system.  This operating system came about with the intent of competing with the superpower known as Apple’s iPhone.  Of course, when Google released this platform for the first time in 2007, the Android operating system was perceived to be the first generation.  Recently, however, an Illinois man asserted that perhaps Google’s Android was not the first generation.  Well, not quite, but he did assert that Google infringed his federally registered trademark, “Android Data.”

During the Dot.com Boom of the late 1990s Erich Specht decided he wanted to get into the lucrative software business.  As such, in 1998, he founded a suite of e-commerce software that became known as Android Data Corporation (“ADC”).  Through his entity, he intended to license software to his would-be clients, and provided website hosting and computer consulting services.   Two years after the company’s inception, Mr. Specht applied to the United States Patent and Trademark Office for federal registration of the “Android Data” mark.  The mark was registered in 2002.

Unfortunately for Mr. Specht, by the end of 2002, his company had hit the end of the road.  It ceased all major operations, lost the bulk of its clients, and moved its headquarters into Mr. Specht’s home.  Mr. Specht then caused ADC to transfer the Android Data mark to his wholly-owned company, The Android’s Dungeon Incorporated (“ADI”).  For the remainder of the year, Mr. Specht attempted to sell ADC’s assets, including the mark, but was unable to find a willing buyer.  He kept the ADC website running for a short period thereafter, but eventually allowed the registration for the company URL to lapse.

Five years later in 2007, Mr. Specht made a meager attempt to revive the use of the Android Data mark by trying to promote his software suite to catalog companies and sending out mass mailings bearing the mark.  These efforts were fruitless.  A few months after, Mr. Specht attempted to license his software to a healthcare consulting firm, but that also failed.  He did not attempt to use the mark again until April 2009, when he attempted to bring his website back from the dead under a slightly different URL.

During the tumultuous years for Mr. Specht’s company, another start-up company, Android, Inc., began developing what eventually became the Android operating system.  In 2005, Google purchased Android, Inc.  Two years later, in 2007, Google released a beta version of the Android software to the public.  This release preceded Mr. Specht’s attempt to revive his use of the Android Data mark by approximately one month.  About a year after the release of the beta version of the Android software, T-Mobile US, Inc., released the first smartphone to run the Android operating system.  Since that release in 2008, Google has continued to use the Android mark in commerce.  Google even attempted to register the mark with the United States Patent and Trademark Office, but its application was denied when the trademark examiner found there to be a likelihood of confusion with Mr. Specht’s Android Data mark.  Nonetheless, Google continued to use the mark in commerce.

Mr. Specht eventually sued Google over its use of the Android mark for trademark infringement under the Lanham Act in the United States District Court for the Northern District of Illinois, Eastern Division.  Mr. Specht also named the founders of Android, Inc. and the Open Handset Alliance (an industry consortium created to foster innovation in mobile phone technology) as defendants.  However, the district court dismissed all defendants except Google.  Google answered the allegations and counterclaimed that Mr. Specht had abandoned the mark and that the mark should be canceled.

Google moved for summary judgment on its counterclaims. The district court found that Mr. Specht had abandoned the mark in 2002 when the business ceased its major operations.  The court held that the few isolated uses by Mr. Specht thereafter did not constitute continued use or an intent to resume use.  As such, the court found that Mr. Specht had forfeited any right he had to the mark, and his claims failed as a matter of law.  The district court also granted Google’s request to cancel Mr. Specht’s mark.

The 7th Circuit heard the matter on appeal and addressed whether the evidence demonstrated that Mr. Specht’s mark had been abandoned in 2002.  This analysis was pivotal to the decision below because if the mark had been abandoned in 2002, then Google could not have infringed Mr. Specht’s right in the mark through its use of the Android operating system in 2007.  15 U.S.C. section 1127; Central Manufacturing, Inc. v. Brett, 492 F.3d 876, 881 (7th Cir. 2007).

A trademark is abandoned when its “use in commerce” is discontinued with no intent to resume use.  15 U.S.C. section 1127; Rust Env’t & Infrastructure, Inc. v. Teunissen, 141 F.3d 1210, 1214 (7th Cir. 1997).  The Lanham Act provides that “nonuse for three consecutive years shall be prima facie evidence of abandonment.”  15 U.S.C. section 1127.  In order to overcome the prima facie presumption, the party must provide evidence that excuses the nonuse or demonstrates an intent to resume use of the mark.  Sands, Taylor & Wood Co. v. Quaker Oats, Co.,  978 F.2d 947, 955 (7th Cir. 1992).

The 7th Circuit found that Mr. Specht discontinued use of the Android Data mark at the end of 2002 when he shut down ADC and transferred its assets to ADI.  Mr. Specht argued that his attempts to sell his business’ assets in 2003 and 2004 constituted an intent to resume use, but the court found that an attempt to sell assets of a business is different from using the goodwill of a mark to sell a business’ goods or services.  As such, the court found that the foregoing uses did not constitute use of the mark in commerce.

Mr. Specht also argued that his website bearing the trademark continued to operate until 2005, and such a website constitutes a bona fide use in commerce.  Nonetheless, the court pointed out that Mr. Specht did not identify any goods or services that Android Data Corp. could have provided through the website.  As such, the website did not constitute a use in commerce either.  Finally, Mr. Specht argued that his two sales efforts in 2007 constituted evidence of commercial use, but the court disposed of this argument by citing to case law holding that sporadic attempts to solicit business are not a “use in commerce” meriting the protection of the Lanham Act.

In light of the court’s finding that Mr. Specht had abandoned the Android Data mark by 2007, the mark had thereby returned to the public domain.  Thus, Google’s appropriation of the mark beginning in 2007 was proper and the mark has been in continuous use since that time.  As such, Google is the “senior user” of the mark and entitled to federal trademark protection under the Lanham Act.

The take away for owners of valuable marks is quite clear—use it or lose it.  If you want to keep your established trademark rights, you must continue to use them in commerce, or clearly document your intent to resume their use.  As Erich Specht learned the hard way, an attempt to sell your business’ assets, including the registered mark, to third parties is insufficient to maintain protection under the Lanham Act.  Thus, it is imperative to your rights as the owner of a federally registered trademark that you continue its use in commerce or have clear evidence to demonstrate your intent to resume.

On July 1, 2014, California’s minimum hourly wage will increase from $8.00 to $9.00 per hour. The minimum wage will increase again on January 1, 2016 to $10.00 per hour. Most employers are aware of the increase and are prepared to comply by paying their minimum wage workers $9.00 per hour starting July 1, 2014. However, what many employers have overlooked is that the increase affects their minimum salary obligations for their white collar exempt employees.

Under California law, if an employer classifies an employee as exempt under the “executive,” “administrative,” or “professional” exemption (“white collar” exemptions), they must meet certain exemption requirements. One requirement is that the employee earns a set weekly salary of no less than two times the state minimum wage for a full-time employee. Currently that wage is $640.00 per week (or $33,280 per year). On July 1, 2014, the set salary requirement will increase to $720 per week (or $37,440 per year).

As a result, in addition to increasing the hourly rate of pay for minimum wage employees, employers should evaluate the compensation paid to their white collar exempt employees and ensure it meets the minimum salary requirement. Failure to pay the minimum salary requirement can result in the loss of the exemption which can open a whole host of potential liability – e.g. failure to pay overtime.

Finally, the California Department of Industrial Relations (aka Labor Commissioner) has updated all Wage Orders to reflect the new minimum wage (see section 4). Employers should post the updated Wage Order applicable to their industry or business along with their other employment law posters. Wage Orders can be obtained at the Labor Commissioner’s website – www.dir.ca.gov.

By: Intellectual Property Group

The 2013 NFL season was not kind to the Washington Redskins, and after winning only 3 games and losing 13, there are many in the Washington Redskins organization who might have wanted to hide behind a new name.  Now they might have to.

The USPTO officially cancelled the Washington Redskins trademark registration stating that the team’s name is offensive to Native Americans.  Although it is unusual for the trademark office to take such action, this move is consistent with the Trademark Manual of Examining Procedure, Section 1203.01, as well as Section 2(a) of the Lanham Act, which provide that trademarks which disparage or belittle any group are not permitted to be registered under federal law.

Although the cancellation of a federal trademark registration does not mean that the Washington Redskins must stop using their name, cancellation of their trademark might significantly reduce the overall value of the team.  A significant source of revenue for most professional sports teams comes from the sale of a variety of licensed products bearing the team name and logo.  Ownership of a valid and enforceable trademark registration in connection with this name and logo helps a sports team to control this intellectual property, license it, and otherwise exclude other parties from profiting through unlicensed use of the marks.  Cancellation of the federal registration will remove a significant number of enforcement tools available to the Washington Redskins, rendering it potentially more difficult to exclude others from using their marks.

Periodically the Trademark Office receives applications for registration, or complaints about an already registered mark, which contain “immoral, deceptive or scandalous matter” or is disparaging to “people, institutions, beliefs, or national symbols.”  Although it is a somewhat rarely cited basis for the rejection or cancellation of a trademark, the Washington Redskins join a dubious list of marks that have run afoul of this provision.  For example, in 2012, the Court of Appeal for the Federal Circuit affirmed the Trademark Office’s rejection of a trademark application covering the rather graphic name of a rooster shaped lollipop product, on the grounds that the name affixed to this particular product was “immoral or scandalous.”

Yet in a different case, the Old Glory Condom Corporation was granted a federal trademark registration in connection with American flag-adorned condom packages.  The apparent discrepancy between this outcome and the Redskins or lollipops highlights the seemingly impossible task faced by the Trademark Office – to discern what type of mark might be “immoral or scandalous” or otherwise offensive to members of the public, while considering the fact that what is vulgar to one person often is not in the eyes of another.

In light of the significant number of protestations received from Native American communities across the country, and a growing public concern about the use of a racial slur such as “Redskins” for the name of a professional sports team, the Trademark Office’s decision in this case likely was easier than debating about lollipops or condoms.  Now that they have tackled the Redskins, perhaps the Trademark Office will knock Chief Wahoo of the Cleveland Indians out of the park.