Never a Dull Moment in the Business of IP – Summer Roundup and Look Ahead

Posted by on Aug 25, 2014

With Labor Day quickly approaching, and Back-to-Work and Back-to-School mentality haunting many of our minds, it’s a good time to reflect on what’s transpired in the IP world so far this year. From the Trademark Trial and Appeal Board (TTAB) revoking the Redskins’ registered trademark, to Aereo taking a hit in the U.S. Supreme Court over copyright in the clouds, the courts have had their hands full with intellectual property issues this year, and given the ever-changing landscapes we face business and technology wise, it doesn’t look like this will change anytime soon.

One particular story that caught the attention of legal professionals and sports fans alike, when the TTAB canceled six of the Washington Redskins’ trademarks stating they are disparaging to Native Americans. The Board’s opinion was split in a 2-1 vote. (Read the decisions here)

Despite this loss, the NFL team has continued its fight by filing a lawsuit in the U.S. District Court for the Eastern District of Virginia. While the issue centers around the team’s trademarks, they intend to present constitutional questions, such as free speech and whether it has been deprived of “valuable and long-held intellectual property rights.”

The Redskins’ have held the challenged marks for several decades, and because an appeal is now pending, they will remain protected until the case has made its way through the judicial system – a process that will definitely take years.

Elsewhere, in Petrella v. Metro-Goldwyn-Mayer, Inc., the Court held that if a claim for copyright infringement is brought within the three-year state of limitations under 17 U.S.C. §507(b) of the Copyright Act, laches may not be used as a defense to bar a claim for damages. Laches is an equitable defense used when there was an unreasonable delay in asserting a claim, right, or defense by an opposing party.

This case focused on the rights to Raging Bull, a 1980 film based on the life of boxing champion Jake LaMotta. LaMotta and Frank Petrella registered the copyright to the screenplay in 1963, and in 1976 they assigned theirs rights to Metro-Goldwyn-Mayer (MGM). More than 20 years later in 1998, Petrella’s successor and daughter, informed MGM of her belief that it was infringing on her copyrights to the screenplay. However, Petrella did not sue for copyright infringement until 2009.

MGM argued the 18-year delay in bringing suit was unreasonable and prejudicial, and that Petrella’s claim should be barred entirely based on laches. Both the district court and Ninth Circuit agreed with MGM, but the Supreme Court reversed the lower courts’ decisions saying that Petrella’s claims would not be barred because her assertions of infringement occurred within the Act’s three-year limitations period.

Although the Court ruled that laches may not be used to bar a claim if it is within the Act’s statute of limitations period, it did say that in extraordinary situations, laches can be used to bar equitable remedies.

For its upcoming term, the Supreme Court has added additional IP-related cases to its docket, including Hana Financial, Inc. v. Hana Bank. The Court will determine whether it is the job of the jury or the judge to decide whether an older trademark may be “tacked” to a newer one.

Under trademark law, “tacking” allows the mark’s owner to make slight changes to the mark without sacrificing ownership of the original one. This technique also permits the owner to use the priority date of the earlier mark as the priority date of the altered one.

In this case, Hana Bank, a Korean business, began providing its services to the United States under the name “Hana Overseas Korean Club.” Hana Bank used “Hana Overseas Korean Club” in English and “Hana Bank” in Korean in its advertisements during the summer of 1994. Hana Bank also included its logo on the advertisements, which is referred to as the “dancing man.”

Hana Financial, Inc. (HFI), was founded in California in the fall of 1994, and obtained federal trademark protection for its logo, a pyramid with the words “Hana Financial.” Hana Bank was aware of HFI and its advertisements, but did not take any action. However, HFI filed suit against Hana Bank alleging trademark infringement in 2007.

Hana Bank won the initial trial, with the jury finding the defendant used the “Hana Bank” mark in the United States continuously since before HFI’s use in 1995. The jury also concluded that Hana Bank’s trademark could be “tacked” to its 1994 advertisements.

HFI appealed the decision, arguing that tacking is a question of law for the court to decide and not one of fact for the jury. The Ninth Circuit affirmed, and the Supreme Court will now have the final say in the issue.

Another trademark case that the High Court is set to decide is B&B Hardware, Inc. v. Hargis Industries, Inc. The issues in this case are two fold; first, whether the TTAB’s finding of a likelihood of confusion precludes Hargis from re-litigating that issue in infringement litigation, in which likelihood of confusion is an element; and second, whether, if issue preclusion does not apply, the district court was obliged to defer to the Board’s finding of a likelihood of confusion absent strong evidence to rebut it.

B&B trademarked “Sealtight” in 1993 in conjunction with fasteners it sells in the aerospace industry. Hargis sells self-drilling screws in the construction industry under the trademark “Sealtite.” Hargis applied to register its mark in 1996, but B&B opposed the application and sued Hargis for infringement under the Lanham Act (15 U.S.C. § 1052(d)).

The TTAB denied Hargis’ application, finding that there was a likelihood of confusion between the parties’ marks. The case was appealed to district court, and a jury found for Hargis, with the Eighth Circuit affirming. This upcoming decision will be particularly important given that many trademark “bullies” like to sometimes test the waters, so to speak, in a TTAB action before launching a full-blown infringement attack on a competitor. For more information or to discuss your IP issues and needs, contact us today.