Tommy Gun Maker Sues Al Capone For Boozy Trademark Infringement

Saeilo Enterprises, Inc., current manufacturer of the old school Thompson submachine gun (left), often referred to as a “Tommy gun,” recently filed a lawsuit claiming trademark infringement against Chicago-based liquor company, Alphonse Capone Enterprises, Inc.  Capone Enterprises has no clear legal connection to the Chicago gangster of the 1920's, but is clearly attempting to profit from an association with the notorious Public Enemy Number One.

At issue is the fact that Capone Industries has been selling a new brand of vodka under the Tommy Guns name in a bottle that is intentionally shaped like a Tommy gun. 

Saeilo owns a federally registered trademark for TOMMY GUN in connection with actual firearms, and the trademark has been used constantly since 1920 in connection therewith (including use by the Chicago gangster, not the Chicago liquor company).

The gun maker is also the owner of a separate TOMMY GUN trademark that covers clothing. Saelio does not apparently own any federal trademark on the name for alcoholic beverages.


In contrast, Al Capone Enterprises owns a current federally registered trademark for TOMMY GUN for beer, wines and spirits.

The complaint, which was filed in federal court in Chicago in March 2013, alleges that Al Capone Industries does not have authorization to use the Tommy Gun trademarks on alcoholic beverages that carry a reproduction of the Tommy Gun name and distinctive shape. 

Additionally, Saeilo claims that Capone’s conduct not only violates federal trademark laws, but also Illinois state law and common law. Saeilo further brought claims under Illinois’ Trademark Registration and Protection Act, as well as the Illinois Deceptive Trade Practices Act.

As owner of the trade dress rights in the design of the Thompson submachine gun or “Tommy Gun,” Saeilo claimed that Capone’s unlawful use of the Tommy Gun trade dress was likely to cause “confusion or mistake and/or is likely to deceive consumers as to the affiliation, connection of association of [Capone] with Saeilo,” and of course, Saeilo seeks a permanent injunction and damages.

An interesting legal question arises as to whether and when phrases used to describe firearms can be legally trademarked by the gunmaker, or even by others, in connection with alcoholic beverages.

For example, the trademark of Colt Buntline Special .45 is owned by Colt's Patent Firearms Manufacturer. But Colt 45 in connection with clothing is owned by Pabst Brewing Company. It is unclear why Pabst does not own a federally registered trademark for Colt 45 in connection with its malt liquor beverages.

Mozilla Targets Spyware with Trademark Infringement Claims

Mozilla, the maker of the Firefox browser, is reportedly taking on a controversial surveillance company that has been accused of selling spyware to authoritarian regimes, by asserting trademark infringement claims.

Gamma Group, a British company, offers governments and law enforcement agencies spy Trojan programs that are designed to covertly infiltrate computers and gather data from hard drives, eavesdrop on Skype chats and other communications, and conduct "live surveillance through webcam and microphone," according to the company's marketing materials. 

The technology is supposed to be used solely to target criminals such as terrorists. However, a mounting body of evidence has linked it to attacks on activists or political opposition figures from countries including Bahrain and Ethiopia.

Last year, researchers had noticed that the spy tool had apparently been masking itself as Mozilla Firefox—tricking targeted users into thinking it was a legitimate application.

Mozilla has confirmed that it is planning to imminently issue a cease-and-desist notice to Gamma over what it alleges is a “misrepresentation of our copyright and trademarks.”

The development will come as another blow to Gamma, which was recently branded a “corporate enemy of the Internet” by Reporters Without Borders and is also currently the focus of ongoing legal action in the United Kingdom related to its spy tech sales. 

The company’s spokesman, Martin Muench, has previously stated that Gamma cooperates with export control agencies in Germany, the United Kingdom, and the United States, and “does not discuss its client base, its exports, or any of the operations which its clients may or may not be undertaking” on the grounds that doing so can “prejudice criminal or counter terror investigations and compromise the security of the members of the police or security services involved.”

The Declaratory Judgment Complaint -- Being Quicker on the Draw

As a routine practice, a brand owner's trademark lawyers send formal cease and desist letters to companies or persons who become accused of using a confusingly similar name or design without authorization.  

Such a letter is often sent before a lawsuit is filed.  
It is not legally necessary for a brand owner to send such a demand letter, but (depending on the circumstances) many brand owners believe that it is helpful to give notice before filing suit.


This process also allows the accused infringer to settle potential litigation for smaller (or no) damages, depending on the circumstances.  


For example, some infringers may agree to share their sales figures of accused products, and in doing so, deter the brand owner from seeking excessive damages.


Of course, there is never a guarantee that the brand owner will agree to settle, and these documents can have the opposite effect, and end up fueling litigation.


Trademark lawyers send out dozens, hundreds -- even thousands of such demand letters each year.  Most of the time, the recipients apologize, comply with the letter's demands and move on.
 In some cases, the unwise recipient just ignores the letter, leading to a second, usually more aggressive letter or a lawsuit.


But in some rare cases, if the recipient of a letter receives what could be interpreted as a legally baseless or overly aggressive threat leading to a reasonable apprehension of imminent litigation, he may opt for a highly aggressive strategy -- sue the brand owner first.  
In other words, he is quicker to the draw in gunslinger terminology.

This process is called invoking declaratory judgment jurisdiction.  The reason is that the plaintiff is seeking a "declaration" that he is not infringing.

Upon receiving a cease-and-desist letter, the recipient may seek a tactical advantage by instituting declaratory judgment litigation in a more favorable jurisdiction.
  The end result may require the sender of the cease and desist letter to appear in a distant court, at their own expense, in a case that it never would have actually brought.

The declaratory judgment plaintiff also could catch the overly aggressive brand owner off guard, and put it in the posture of being a defendant rather than a plaintiff.
  This tactic seems to have worked, at least initially, for the recipients of a cease and desist letter from the Subway sandwich chain's lawyers.


In 2011, Subway's lawyers sent a cease-and-desist letter to Casey’s General Stores, a midwest convenience store operator, demanding that it stop using the word “footlong” to describe its sandwiches.

Casey’s struck back with a declaratory judgment lawsuit against Subway, arguing that the chain has no trademark rights to what it considered to be a generic term.


The suit noted that Subway has tried to register the mark protection for “footlong,” but was refused by a trademark examining attorney who was skeptical of the distinctiveness of the term, noting that restaurants across the country use the word to describe submarine sandwiches on their menus.


Thus, Subway became the unwilling defendant in a declaratory judgment case brought by an accused infringer, putting the validity of its very trademark in jeopardy.

Daunting Math Facing Brand Owners

The new reality on the Internet is a game of very large numbers -- a reality that brand owners and content creators trying to protect their intellectual property rights online may find depressing.  

Here are a few statistics to ponder:

Between 1995 and 2013, the number of Internet domain names registered went from 15,000 to 250,000,000.

There are nearly 150,000 new domain names created each and every DAY.  Even taking deletions and expirations into account, there is still a net gain of tens of thousands of new domain names created every single day, 365 days a year.  In addition, there are estimated to be 634,000,000 websites, with 51,000,000 added each year.

It is currently estimated that 2.4 BILLION people use the Internet worldwide, with 1.1 billion of them in Asia alone.

The statistics also demonstrate that counterfeiting on the Internet is similarly skyrocketing.  For example, domain name registrants frequently register names that cybersquat upon the established rights on trademark owners.

In the 1990's, Congress passed the Anti-Cybersquatting Consumer Protection Act (ACPA), to give rights owners a vehicle for protecting themselves by filing suit in federal court.  Brand owners can also initiate Uniform Domain Name Policy (UDRP) proceedings.  But litigation under the ACPA/UDRP can be expensive and time-consuming.

A very successful and aggressive brand owner may be able to set aside several hundred thousand dollars per year to budget for proactive brand protection on the Internet.

But is that even enough?

Given the massive scale and scope of counterfeiting on the Internet, this math presents a very daunting reality.

Assuming 20 newly-created domain names registered each day infringe upon a brand owner's rights, in one year alone, a trademark owner would need to spend hundreds of thousand of dollars getting all of them locked and transferred under Court Order.

Of course, a new infringer lurks around every corner, so there is nothing to stop new domain names from being created tomorrow, and the day after that, and so on.

A brand owner may hire a team of attorneys and investigators dedicated to combating this escalating problem.  But counterfeiters can find armies of extremely cheap labor to draw upon for programming, coding, marketing and distribution of counterfeit goods.

Therefore, in a long drawn out war of attrition, the math facing brand owners is daunting.

The solution?

First, brand owners need to act MUCH more aggressively and diligently.  The problem is not going away.  By ignoring the problem, it will only get worse.

Second, brand owners need to lobby the government for much more stringent penalties and enforcement mechanisms.  Individual ACPA and UDRP proceedings against infringing domain names made sense in the 1990's, but today they are anachronistic given the scope and scale of the problem.

Some brand owners have been creative and have filed large-scale litigations that have shut down thousands of domain names through sweeping Court Orders in a single case.  However, these cases have inherent limitations, and need to be filed repeatedly.

Third, ICANN needs to begin to adopt policies that are pro-brand owner, rather than pro-infringer.  The core economic dilemma is that ICANN (and its affiliated registries and registrars) stand to gain tens of millions of dollars in fees each year from newly-created domain names, and therefore have little incentive to protect the intellectual property rights of the few.  Their economic incentives, in fact, are quite in the opposite direction.

When "Wants" and "Likes" Collide

Facebook is being sued by a Michigan company that claims that its "WANT" button is being infringed upon by the social media giant.

CVG-SAB, based in Farmington Hills, Michigan, owns the website wantbutton.com, and claims that it began marketing its button in September 2010, to allow consumers to keep a list of desired products and services online.  Tommy Bahama, Burlington Coat Factory and others are current customers of CVG-SAB.  

Facebook began using a "WANT" button that takes users to non-Facebook sites where they can purchase merchandise.  

The lawsuit claims that CVG-SAB has already experienced instances of actual consumer confusion, having allegedly received inquiries into whether the new Facebook platform is related to it.

In response, Facebook filed a counterclaim, alleging that the "want" button uses a common, everyday term that cannot be protected -- a difficult legal strategy to press, considering Facebook claims monopoly ownership of the "LIKE" button.