By J. DeVoy
OWN RIGHTHAVEN’S “COMMERCIAL GOODWILL” LOLOLOLOLZ!
Odd story. Basically, some dart fan joins the Southern California Darts Association. They snub him by not using his middle initial, unlike, say, the SAG forcing Michael Fox and Jim Bullock to add middle initials. So, he finds out that there is no corporation with that name (as the former corporate entity lapsed). He registers a corporation with that name and tries to stop the association from using that name. After some surprising initial success, he met with a big ole Fail.
Not sure why he met with initial success (and no, I’m not making a pun regarding the snub), since this is a pretty straight forward issue. These folks were using the name. You can’t bounce them out simply by incorporating with that name. That would be like discovering that “The Beatles” never formed a corporate entity, so you register “The Beatles, Inc.” and try to keep Sir Paul and Ringo from making appearances together as a “Beatles Reunion”. Prior use, for the win.
Last week, the Navajo nation sued Urban Outfitters for trademark infringement, trademark dilution, unfair competition, and a violation of the Indian Arts and Crafts Act for selling products branded as “Navajo” at its stores. The products? “Hipster Panties,” socks, and of all things, a flask. Yes, a flask. Complaint here.
The incredible un-coolness of that just stuns me. Urban Outfitters should know better than to use a Native American tribe’s name on its products without permission. But, to not only misappropriate the Navajo nation’s name, but to put it on a flask? Really? Really?
I’m certainly not the most politically correct guy, and I won’t be winning any sensitivity awards this year. But, you don’t need to be an anthropologist to have a clue about what a toll alcoholism has had on the Native American population. Urban Outfitters are a bunch of dicks. I hope the Navajos kick their ass.
U.S. District Court Judge Nathanael Cousins recently denied Facebook’s motion for default judgment against Faceporn.com, a website operating out of Norway, for trademark infringement. Judge Cousins said the court lacked personal jurisdiction over the defendants and recommended that the case be dismissed.
Facebook originally brought suit against Thomas Pedersen and Retro Invent citing ten causes of action, including trademark dilution, violating the Facebook mark and wall mark, among others. The court concluded that Facebook failed to show that the defendants had purposefully directed their activities at California, pursuant to the three-pronged Calder test. In order to show that a defendant expressly aimed the intentional conduct at a forum state, the Ninth Circuit requires that the plaintiff show “something more.” The court determined that Facebook failed to show “something more” because “they did not establish that “Faceporn’s users in California were an integral component of Faceporn’s business model and profitability.”
Instead, Facebook attempted to argue that jurisdiction was proper because the defendants intended to target Facebook by “offering a pornographic version.” Facebook further claimed that the plaintiff can establish that nonresident defendant aimed its conduct at the forum by showing that the defendant illegally copied elements of a plaintiff’s mark for the purpose of competing with the plaintiff.
The court reasoned that this argument failed because Facebook and Faceporn are not in direct competition with each other, and therefore Facebook could not prove that the defendants’ conduct was directed at California. Additionally, the court said that Facebook failed to show how Faceporn “garnered revenue from their operation of Faceporn at Facebook’s expense or that Faceporn has diverted any of Facebook’s potential customers.”
Had Faceporn more directly targeted Facebook’s audience, Facebook might have been able to establish personal jurisdiction. But Judge Cousins correctly assessed that the audience for pornography is much more narrow than the audience for a general social networking site.
Read the full order below.
By J. DeVoy
Vegas Inc., which provides excellent coverage of Las Vegas’ legal developments (such as its remarkable dedication to the Righthaven saga), reports on a lawsuit filed by the operator of Piranha Night Club and 8 1/2 Ultra Lounge against Krave over the domain name <piranhalv.com>. Historical note: from 2004 to 2008, Krave was home to the theatrical adaptation of John Stagliano’s / Evil Angel Video’s Fashionistas.
The Complaint is available here. It alleges a fairly common cybersquatting claim: The <piranhalv.com> domain name was registered by Krave’s operators and its agents in derogation of Piranha’s trademark rights, as it was supposedly done to mislead and confuse the consuming public. The Complaint also alleges trademark infringement under 15 U.S.C. § 1125(a) and at common law; it goes on to seek an injunction, and a declaration that the Piranha Night Club’s operator is the proper owner of the domain name.
In the Complaint’s other causes of action, though, it invokes some claims one doesn’t always (or even often) see in trademark matters: Unfair, Deceptive and Fraudulent Business Practices under NRS 598A; Intentional Interference with Prospective Economic Advantage; Tortious Interference with Contractual Relations, and; Piercing the Corporate Veil under NRS 74.787 (since the domain name registrant is a party other than Krave’s owners/operators).
The case is Manhattan West LLC v. Century Partners Ltd. et al., 2:11-cv-01898 in the District of Nevada, and may be worth a PACER notification for those interested in trademark and domain name disputes.
Christian Louboutin tried to distinguish its shoes from others by giving them a shiny red lacquered sole. The company takes the position that the red sole functions as a trademark — that it helps consumers know the source or origin of the shoes.
In general, colors can be trademarks. See Qualitex v. Jacobson Products, 514 U.S. 159 (1995). Think of the Owens Corning fiberglass insulation’s iconic pink color, or the blue Tiffany boxes. Those colors are protected as trademarks, and no competitors may use them without running afoul of the Lanham Act.
However, trademarks are about promoting competition – not stifling it. Therefore, if something is “functional,” then it can not be the subject of trademark protection.
“The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm’s reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature. It is the province of patent law, not trademark law, to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time, 35 U.S.C. §§ 154 173, after which competitors are free to use the innovation. If a product’s functional features could be used as trademarks, however, a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity).”
Under the doctrine of “aesthetic functionality,” something can be solely aesthetic, but it would be anti-competitive to permit one company to monopolize the feature. For example, in Brunswick Corp v. British Seagull, Ltd., 35 F.3d 1527 (Fed. Cir. 1994), the Federal Circuit considered the case of Mercury outboard engines. Mercury sought trademark protection for its black engines, but the Federal Circuit upheld the TTAB’s decision that black was “dejure functional because of competitive need.” The Court compared the black engines to Owens-Corning’s pink fiberglass. While the pink in the fiberglass serves no real purpose except to tell you who made the stuff, a black engine will appear smaller than other colored engines (black is slimming, after all) and black goes with a greater variety of hull colors. Therefore, trademark protection for pink fiberglass is ok, but every engine manufacturer has a right to make black engines.
So how does this apply to the Christian Louboutin Shoes?
Manhattan federal judge Victor Marrero found that the red was aesthetically functional. Christian Louboutin S.A. v. Yves St. Laurent Am., Inc., 778 F. Supp. 2d 445 (S.D.N.Y. 2011).
Christian Louboutin himself has acknowledged significant, nontrademark functions for choosing red for his outsoles… he stated that he chose the color to give his shoe styles “energy” and because it is “engaging.” He has also said that red is “sexy” and “attracts men to the women who wear my shoes.” … The outsole of a shoe is, almost literally, a pedestrian thing. Yet, coated in a bright and unexpected color, the outsole becomes decorative, an object of beauty. To attract, to reference, to stand out, to blend in, to beautify, to endow with sex appeal — all comprise nontrademark functions of color in fashion.
The red outsole also affects the cost of the shoe, although perhaps not in the way Qualitex envisioned. Arguably, adding the red lacquered finish to a plain raw leather sole is more expensive, not less, than producing shoes otherwise identical but without that extra ornamental finish. Yet, for high fashion designers such as Louboutin and YSL, the higher cost of production is desirable because it makes the final creation that much more exclusive, and costly.
Because the use of red outsoles serves nontrademark functions other than as a source identifier, and affects the cost and quality of the shoe, the Court must examine whether granting trademark rights for Louboutin’s use of the color red as a brand would “significantly hinder competition,” that is, “permit one competitor (or a group) to interfere with legitimate (nontrademark-related) competition through actual or potential exclusive use of an important product ingredient.”
The court found that it would hinder competition.
Fashion is dependent on colors. It is subject to temporal change. It is susceptible to taste, to idiosyncrasies and whims and moods, both of designers and consumers. Thus, at any moment when the market and the deities of design, by whatever fancy they decide those things, proclaim that “passion” is in for a given season and must be expressed in reds in the year’s various collections, Louboutin’s claim would cast a red cloud over the whole industry, cramping what other designers could do, while allowing Louboutin to paint with a full palette. [*455] Louboutin would thus be able to market a total outfit in his red, while other designers would not. And this impediment would apply not just with respect to Louboutin’s registered “the color red,” but, on its theory as pressed in this litigation, to a broader band of various other shades of red which would be available to Louboutin but which it could bar others from using.
Louboutin has now filed an appeal with the Second Circuit. See Christian Louboutin wants his red soles back. If I’m the bookie for this case, I’d give 20:1 odds that he loses. First of all, he’s appealing the denial of a preliminary injunction. That requires him to show that the lower court abused its discretion when issuing the denial. Second, the record seems quite clear that giving a fashion designer a monopoly over one color in a design would be as anticompetitive as letting one boat manufacturer have a monopoly on black engines.