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Not all trademark law is aimed at protecting consumers. The Federal Trademark Dilution Act (“Act”) is aimed at protecting a company’s property right in its trademark. Dilution is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of competition between the parties or the likelihood of confusion, mistake or deception.” In essence, dilution forbids the use of a famous trademark by others in any manner that lessens the uniqueness of the mark. Again, the purpose of the dilution doctrine is not to protect the consumer, but to protect the property right and goodwill that a company has developed in a mark.

Dilution can be separated into two related concepts: blurring and 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 these cases, consumers are not confused as to the source of the mark. The original trademark, however, is lessened. For example, if a car company decided to sell cars under the trademark McDonalds, the link and image between the word “McDonald’s” and fast food is weakened.

Besides blurring, dilution can be caused by tarnishment. Tarnishment occurs when the trademark is used in an unsavory or unflattering manner. In a case last year, Hershey, the chocolate maker, claimed that an individual sold marijuana in packages that resembled Hershey products, the Hershey trademark was degraded by such use.

In order for a trademark owner to succeed on a trademark dilution claim, it must satisfy the elements of the claim. The first and most important aspect of a dilution claim is that the mark must qualify as a distinctive and famous mark. The Act states that courts should consider, but are not limited to, eight factors. These are:

1. The degree of inherent or acquired distinctiveness of the mark
2. Duration and extent of the use of the mark in connection with the goods and services
3. Duration and extent of advertising and publicity of the mark
4. Geographical extent of the trading area in which the mark is used
5. Channels of trade for the goods or services for which the mark is used
6. Degree of recognition of the mark in the trading areas and channels of trade used by the mark’s owner and the person against whom the injunction is sought
7. Nature and extent of use of the same or similar marks by third parties; and
8. When and how the mark was registered.

From these eight factors, it is clear that Hershey’s, in the above case, would constitute a famous mark based on its duration of use of its mark along with its advertising and publicity.

The traditional remedy in dilution cases is an injunction against the trademark violator. In addition, monetary damages may be rewarded if the defendant is found to have willfully intended to trade on the trademark owner’s reputation or to cause dilution of the famous mark.

One of the requirements for obtaining a patent is enablement. As set forth in 35 U.S.C. §112, ¶1, the specification of the patent must teach a person skilled in the art how to make and use the invention without undue experimentation. The enablement requirement must be satisfied at the time the patent application is filed for each claim. If a claim in a patent is not enabled, it is invalid.

In In re ‘318 Patent Infringement Litigation (Janssen Pharmaceutica N.V. v. Teva Pharmaceuticals USA, Inc. and related cases) (2009 U.S. App. LEXIS 21166, September 25, 2009), the Federal Circuit Court of Appeals addressed the issue of enablement. Janssen’s patent covered a method to treat Alzheimer’s disease with a chemical compound called galanthamine. Claim 1 of the patent was:

“A method of treating Alzheimer’s disease and related dementias which comprises administering to a patient suffering from such a disease a therapeutically effective amount of galanthamine or a pharmaceutically-acceptable acid addition salt thereof.”

The patent application was filed on 1986. The specification was slightly longer than one page and contained brief summaries of six scientific articles which discussed the use of galanthamine on humans or animals for various purposes. None of the six articles addressed the treatment of Alzheimer’s or dementia or the potential of galanthamine to treat those diseases.

The PTO examiner rejected the original claims on the grounds of indefiniteness and obviousness. The claims were found to be indefinite because they covered a method of “treating and diagnosing” Alzheimer’s and the examiner stated that diagnosis was not related to treatment. The obviousness rejection was based on several of the scientific articles disclosed in the specification which addressed the treatment of memory loss in animals.

In response to the office action, the inventor deleted the word “diagnosis” so that the claims covered only the treatment of Alzheimer’s, which overcame the indefiniteness rejection. The inventor overcame the obviousness rejection by asserting that the scientific studies on memory loss had no relevance to Alzheimer’s because they were conducted under unrelated circumstances. The inventor also stated that experiments on animal models related to Alzheimer’s had begun.

The patent was allowed and issued in 1987. The research on the animal models was not completed by the time the patent issued and was not provided to the PTO.

The inventor later licensed the patent to Janssen. Janssen then obtained FDA approval to treat Alzheimer’s with galanthamine. Shortly thereafter, several drug companies filed abbreviated new drug applications for generic versions of galanthamine. Janssen sued these companies for patent infringement.

At a bench trial, the defendants admitted infringement, but asserted that the patent was invalid as anticipated, obvious, and not enabled. The district court found that the patent was not anticipated or obvious but was invalid on the grounds that it was not enabled. The court held that the specification lacked utility, as the animal tests were not done, and that it was not enabled because it did not describe the dosage to be used.

Janssen appealed. The Federal Circuit Court of Appeals affirmed the trial court’s decision.

The Court of Appeals discussed both the enablement and utility requirements:

“The utility requirement prevents mere ideas from being patented. As we noted in Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997), ‘patent protection is granted in return for an enabling disclosure of an invention, not for vague intimations of general ideas that may or may not be workable…Tossing out the mere germ of an idea does not constitute enabling disclosure.’”

The court further stated:

“The utility requirement also prevents the patenting of a mere research proposal or an invention that is simply an object of research. Again as the Supreme Court stated in Brenner ‘a patent is not a hunting license. It is not a reward for the search, for compensation for its successful conclusion.’ [Citation omitted.] A process or product ‘which either has no known use or is useful only in the sense that it may be an object of scientific research’ is not patentable. [Citation omitted.] As we observed in Fisher, inventions do not meet the utility requirement if they are ‘objects upon which scientific research could be performed with no assurance that anything useful will be discovered in the end.’”

The court explained that patent applications for methods of treating diseases usually include test results to satisfy the utility requirement. The test results need not be Phase II (human trials), but rather may be from animal tests or in vitro research.

The court found that the patent application, however, did not include any test results. The six scientific articles clearly did not provide evidence of utility because the inventor had stated during the prosecution of the patent that those references did not relate to the method of the invention and did not render it obvious.

Janssen argued that utility was demonstrated by analytic reasoning and that test results were not necessary. The court noted that Janssen’s suggested reasoning was not included in the specification and was therefore irrelevant.

The court concluded:

“Thus, at the end of the day, the specification, even read in the light of the knowledge of those skilled in the art, does no more than state a hypothesis and propose testing to determine the accuracy of that hypothesis. That is not sufficient. [Citation omitted.] ‘If mere plausibility were the test for enablement under §112, applicants could obtain patent rights to “inventions” consisting of little more than respectable guesses as to the likelihood of their success. When one of the guesses later proved true, the “inventor” would be rewarded the spoils instead of the party who demonstrated that the method actually worked.’”

Missouri teenager Jimmy Winkelmann grew weary of his high school classmates’ blind and materialistic infatuation with The North Face products, and decided something had to be done. Mr. Winkelmann’s answer was to come up with his own competing apparel line to mock the ubiquitous North Face fleece jackets found on his high school campus. He called his line “The South Butt” and designed a suspiciously similar logo to that of The North Face.

According to ABC news, Winkelmann said the idea for The South Butt was born a few years ago when he and his high school pals were poking fun at the kids at their private high school who satisfied their need to belong by buying the exact same jackets and vests. “People thought it was so cool to wear The North Face fleeces,” he said. “Everybody had to have them.” The term “South Butt” started as a joke, he said, and “then it just, like, escalated.” Winkelmann turned to his uncle, who owned a business printing marketing items like T-shirts and pens, for help in manufacturing the first South Butt T-shirts. Ultimately, The South Butt clothing line expanded to include T-shirts, ladies’ track shorts, both $19.99 each, and fleeces, which retail for $75.29. Winkelmann claims the entire company was founded not to rip-off The North Face, but to get people thinking about the alternatives.

The North Face apparently does not want people thinking about alternatives. In August, lawyers for The North Face sent Winkelmann a cease and desist letter requesting that Winkelmann stop using The South Butt name, and The South Butt logo. There are undoubtedly similarities between the two logos. Both logos are red squares with white lettering and design. The North Face logo features a half-dome with three ridges. The South Butt logo uses a similar design, but upside down, and with two ridges that Winkelmann confirmed are meant to infer “butt cheeks.”

The North Face’s counsel wrote to Winkelmann that the companies’ logos are similar enough to possibly cause “consumer confusion as to the source, sponsorship or affiliation of particular promotions and services that could dilute or tarnish the distinctive quality of the famous and distinctive [The North Face] marks.” The North Face requested that Winkelmann stop sales, production and promotion of his product, and also asked him to drop his trademark application for The South Butt LLC and its logo.

To respond to The North Face’s missive, Winkelmann enlisted attorney Albert Watkins, who is a friend of Winkelmann’s father and reportedly traded his services for a good bottle of red wine. Mr. Watkins wrote to The North Face: “I am compelled to respectfully disagree with the posture or assertion that ‘The South Butt’ would in any way give rise to confusion on the part of any person. In fact, the sense of parody employed by Jimmy within the context of his South Butt undertakings clearly demonstrate a respectful, if not flattering ‘anti-North Face’ posture designed in all respects to distinguish itself from any and all North Face products.”

Mr. Watkins’ letter invokes a primary affirmative defense raised by defendants in response to trademark infringement claims. Winkelmann’s defense rests on his claim that The South Butt represents a protected parody of The North Face’s trademark rights. Trademark parody involves the appropriation of another’s mark as a well known element of popular culture, and then building on it to contribute something new for humorous effect or social commentary. The Fourth Circuit’s decision in Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC, 507 F.3d 252 (“Louis Vuitton”) is an important trademark parody decision because it provides a detailed analysis of the parody defense to trademark infringement claims.

Haute Diggity Dog, LLC was a company that sold a number of parody pet products including products named Chewnel No. 5, Jimmy Chew, Dog Perignonn, Sniffany & Co., and Dogior. The product which was the subject of the Louis Vuitton lawsuit was Haute Diggity Dog’s parody pet toy called CHEWY VUITON. The toy mimicked the shape, design and color of a Louis Vuitton handbag, but was intended as a chew toy for dogs. Unfortunately for Haute Diggity Dog, Louis Vuitton was not amused by such haute couture for dogs. In fact, Louis Vuitton was so doggone incensed, it filed a lawsuit against Haute Diggity Dog alleging trademark infringement of its Louis Vuitton mark.

The first question facing the Court was whether or not CHEWY VUITON was a trademark parody. As stated by the Court, a trademark parody is a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark’s owner. It must convey two simultaneous and contradictory messages: that it is the original, but also that it is not the original and is instead a parody. This latter message not only differentiates the parody from the original but must also communicate some articulable element of satire, ridicule, joking or amusement.

The Fourth Circuit found Haute Diggity Dog’s use of CHEWY VUITON was a parody. The CHEWY VUITON toy was found to be similar in its name, monogram, design and coloring, which clearly indicated to the Court that the toy was an imitation. The Court also noted that all of the design and name elements were different. (e.g., Chewy/Louis, Vuiton/Vuitton). Each of the design elements Haute Diggity Dog selected to create the parody was close, but not identical to the design elements of the Louis Vuitton handbags

The Court then turned to the question of whether Haute Diggity Dog’s parody infringed upon Louis Vuitton’s trademark rights. The Court found that the strength of the Louis Vuitton mark was a factor that weighed in favor of Haute Diggity Dog. Normally, a strong mark favors the senior trademark owner, but, in the case of a parody, the fame of the mark allows consumers to readily perceive the target of the parody. Similarity of the marks themselves also favored Haute Diggity Dog. The Court found that the parody was sufficiently blatant so as to easily invoke the famous Louis Vuitton trademark in the mind of consumers, yet still distinguish the products. The similarity, or in this case dissimilarity, of the products also was in Haute Diggity Dog’s favor as one product was a $20 dog chew toy and the other was an expensive designer purse. With respect to similarity of facilities and advertising channels, the Court found it relevant that Haute Diggity Dog’s products generally were sold at pet stores with other pet products, including other parody products, while Louis Vuitton handbags generally were sold in Louis Vuitton boutiques or department stores and advertised in high-end fashion magazines. Based upon these circumstances, the Court found that Haute Diggity Dog did not infringe upon Louis Vuitton’s trademark.

Will Mr. Winkelmann’s “The South Butt” brand prevail against The North Face’s infringement claim? The question is difficult to answer with certainty. Undoubtedly, The South Butt was intended by Winkelmann to invoke The North Face brand in the minds of consumers for the purposes of mocking blind consumer allegiance to The North Face brand. However, unlike the facts in Haute Diggity Dog, Winkelman’s products do not seem to be readily distinguishable from The North Face products. Winkelmann sells a South Butt fleece jacket, just like the North Face does. Winkelmann apparently markets his South Butt apparel to the same consumers that the North Face does. These facts tend to support The North Face’s position, and may cause trouble for Winkelmann.

What can be said with certainty is if you intend to use a trademark parody in your business, you must be prepared to be sued, or at minimum, harassed by a larger and more well-known company. By definition, the more famous a trademark, the more likely a parody will be effective. Is your trademark important enough to be on the other side of a large and presumably well-funded adversary like Louis Vuitton? Unless you are lucky enough to have counsel like that of Mr. Winkelmann who will conduct your defense for a good bottle of wine, you must be prepared to expend a considerable sum in legal fees to prove that your mark is a parody and does not infringe upon the rights of another company

This is about a birthday card. Not just any birthday card mind you. This birthday card, produced by Hallmark Cards, depicts a cartoon waitress, dressed in an apron, serving food to a restaurant customer. However, not just any waitress could create such a controversy requiring an appeal to the 9th Circuit. This waitress has, for her head, an oversized photograph of Paris Hilton’s head, and is engaged in witty banter with the customer wherein the cartoon waitress with the oversized Paris Hilton head states Paris’ trademarked (yes, she did file for Federal trademark protection) phrase, “That’s Hot.” What’s all the fuss about? Apparently Hallmark forgot to ask the young heiress if they could use her picture on their card.

Hilton sued Hallmark for misappropriation of publicity under California common law as well as other causes of action. Hallmark defended against Hilton’s right of publicity claim based on the First Amendment. Hallmark also brought a unique defense to the table, one that isn’t usually seen in standard right of publicity cases. Hallmark moved to strike Hilton’s right of publicity claim under California’s anti-SLAPP (“Strategic Lawsuit Against Public Participation”) statute.

California’s anti-SLAPP statute is designed to discourage lawsuits that are brought to deter common citizens from exercising their political or legal rights. The language of the statute explains that “it is in the public interest to encourage continued participation in matters of public significance, and…participation should not be chilled through abuse of the judicial process.” Usually the anti-SLAPP statute arises in connection with litigation relating to the defendant speaking out about an important public issue. In past cases, such matters have included union elections (Macias v. Hartwell, 55 Cal. App. 4th 669); political campaign statements (Conroy v. Spitzer, 70 Cal. App. 4th 1446); homeowner protests (Foothills Townhome Ass’n v. Christiansen, 65 Cal. App. 4th 688); and investigations into the use of charitable funds (Dove Audio, Inc. v. Rosenfeld, Mayer & Susman, 47 Cal. App. 4th 777). My research did not uncover any anti-SLAPP litigation involving a birthday card – until now.

California’s anti-SLAPP statute provides that a complaint which arises from the defendant’s right of petition or free speech under the United States or California Constitution in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim. The terms, “act in furtherance of a person’s right of petition or free speech under the United States or California Constitution in connection with a public issue,” include:

1. any written or oral statement or writing made before a legislative, executive, or judicial proceeding, or any other official proceeding authorized by law;
2. any written or oral statement or writing made in connection with an issue under consideration or review by a legislative, executive, or judicial body, or any other official proceeding authorized by law;
3. any written or oral statement or writing made in a place open to the public or a public forum in connection with an issue of public interest;
4. or any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue or an issue of public interest.

Hallmark’s unique defense focused on the fourth element. The court recognized the birthday card qualified as free speech, and Hallmark claimed that because the card was a parody of Hilton, it was in connection with an issue of public interest. Hilton argued that the birthday card was commercial speech and that such speech cannot, as a matter of law, raise a public issue under the anti-SLAPP statute.

The court disagreed with Hilton’s position and found that the card itself was not commercial speech. Commercial speech is speech that merely advertises a product or service, and the card is not advertising for a product – it is the product. The court stated that although the card is sold for profit, that does not make it commercial speech for First Amendment purposes.

Concerning whether or not the Paris Hilton card is in connection with an issue of public interest, the court agreed with Hallmark. Paris Hilton is a person in the public eye and a topic of widespread public interest. Arguably not the same as a union voting controversy, but the court stated that the statute is to be interpreted broadly.

Although Hallmark made a threshold showing that Hilton’s suit falls under the anti-SLAPP rubric, that did not prevent Hilton from litigating her right of publicity claim. Even though Hilton’s claim arises out of Hallmark’s free speech, as long as Hilton can substantiate a legally sufficient claim, the anti-SLAPP statute would not prevent her bringing such claim.

Addressing Hallmark’s First Amendment defense, the court cited to Comedy III Prods., Inc. v. Saderup and noted that “when an artist is faced with a right of publicity challenge to his or her work, the artist may raise as an affirmative defense that the work is protected by the First Amendment inasmuch as it contains significant transformative elements or that the value of the work does not derive primarily from the celebrity’s fame.” If the celebrity likeness is the “very sum and substance” of the work in question, then it is not transformative – it has not become primarily the defendant’s own expression rather then the celebrity’s likeness.

Ultimately the 9th Circuit did state that Hallmark’s card is not transformative as a matter of law. The court also clearly identify the two ends of the spectrum: “literal, conventional depictions of the Three Stooges drawn in charcoal and sold on t-shirts” – not transformative as a matter of law; half human/half worm cartoon characters incorporated into a larger story – transformative as a matter of law. The oversized head of a blond “celebra-heiress” superimposed on a cartoon body on the front of a greeting card – for the trial court to decide.