U.S. Trademark Office Could Shut Down Within Weeks

USPTO Headquarters in Virginia

The U.S. Patent and Trademark Office only has enough reserve cash to avoid shutting down completely for "a few weeks," according to a top agency official.

Deputy Director Teresa Stanek told the agency's employees that the agency has enough leftover fee collections from prior years to operate as usual for "at least a few weeks," in the event the federal government does not manage to pass a law increasing the debt limit, which is reached on October 1.

The agency largely funds itself without the need for congressional funds by generating filing fees, but would nonetheless run out of cash and only be able to maintain IT functions in the event of a shutdown.

Congress is in the midst of a deep partisan divide over how to avert the shutdown, with a faction of Republicans in the House joined by a few Republican Senators both trying to use fear of the shutdown as leverage to de-fund the Affordable Care Act, also known as ObamaCare.

"Stop Islamization" Trademark Refused: Applicants Decry Political Correctness in Appeal

Image on AFDI Website

A U.S. federal trademark application for an anti-sharia law campaign known as "STOP ISLAMIZATION OF AMERICA" was filed by a group called the American Freedom Defense Initiative (AFDI), a pro-Israel group founded by controversial bloggers/commentators Robert Spencer and Pamela Geller.

The AFDI had been behind a grassroots movement that sought to stop the building of a mosque in lower Manhattan, near the Ground Zero World Trade Center site, claiming that the act would offend 9/11 victims' families.

Critics such as the Southern Poverty Law Center and the Anti-Defamation League have accused the AFDI of being an anti-Muslim hate group, alleging that it promotes a conspiratorial anti-Muslim agenda under the guise of fighting radical Islam" and "seeks to rouse public fear by consistently villifying the Islamic faith and asserting the existence of an Islamic conspiracy to destroy 'American' values." 

The Trademark Office refused the group's application for a trademark on the basis that it "consists of or includes matter which may disparage or bring into contempt or disrepute persons, institutions, beliefs or national symbols."

The Trademark Office ruled that it must apply a two factor legal test, asking: (1) What is the likely meaning of the matter in question; and (2) is that meaning referring to identifiable persons, institutions, beliefs or national symbols, and whether that meaning is disparaging to a substantial composite of the referenced group.

The Trademark Examiner concluded that, applying this test, the likely meaning of ISLAMIZATION refers to the act of converting to Islam, and that the proposed mark effectively disparages Muslims by implying that conformity to Islam is something that needs to be stopped.

The Trademark Office cited several cases supposedly supporting its conclusion.

However, on further examination, the cases that the Examiner cited were not necessarily relevant or helpful to its case, such as when the Trademark Office found THE MEMPHIS MAFIA for entertainment services not to be matter that disparages Italian-Americans or bring them into contempt or disrepute.

The Trademark Office had further cited the controversial proceedings finding that the WASHINGTON REDSKINS trademark should be cancelled on the same grounds.

The group appealed the Examiner's final refusal to the Trademark Trial and Appeal Board (TTAB), which affirmed the rejection.

Now, the group has appealed this decision to the United States Court of Appeals for the Federal Circuit, which hears appeals from final Trademark Office refusals to register trademarks.

In the appeal brief, the AFDI's lawyer argues that:

"Appellants [Geller and Spencer] are sympathetic to the USPTO’s politically correct sensitivities enticing it to protect Muslims and indeed Islam itself from even the slightest hint of disparagement in the form of public criticism, especially in the post-9/11 age with global terrorism conducted daily in the name of Islam and the Arab Spring featuring the Muslim Brotherhood’s Islamisation program for Egypt and elsewhere melting into murder and mayhem.

The problem with these sensitivities as applied to the denial of Appellants’ Mark is that the USPTO’s beef is not with Appellants or their Mark, but rather with terrorists who claim to speak in the name of all of Islam and all Muslims.  Appellants’ Mark does not.  

One of the AFDI's NYC MTA Advertisements

'Stop the Islamisation of America' has a specific meaning that Muslims and non-Muslims in America and indeed throughout the West embrace if they treasure liberty and religious freedom for all.  In a zeal to take on the role of parens patriae and to protect Muslims from every insult, the USPTO and the TTAB have both ignored the factual record and have simply assumed meanings and understandings of the terms of the Mark that have no factual or evidentiary basis.  There is no substantial evidence to support the TTAB’s Decision or the USPTO’s denial of the Mark."

The USPTO has yet to file its response.

The AFDI has seen its fair share of federal litigation and previously triumphed. For example, in a federal lawsuit that it filed against the New York Metropolitan Transit Authority (MTA), the group succeeded in forcing the MTA to carry its advertisements on the sides of New York City buses and in the subways.

The MTA had rejected the group's advertisements, purportedly on the basis that they "demeaned" Muslims.  

The New York federal court found that the MTA had violated the Group's First Amendment rights, and ordered the MTA to run the ads.

"Cronut" Craze Inspires Trademark Filing Frenzy

Specimen of Use Submitted By Ansel to the Trademark Office

Greenwich Village New York pastry Chef Dominique Ansel, of the Dominique Ansel Bakery, claims to have launched the "CRONUT" -- a delectable pastry that is half-croissant, half-donut, in May 2013.  The line that forms outside the bakery each morning for the Cronut is reportedly 2 1/2 hours long.  Fans claim that the Cronut will "change your life."

Consequently, Ansel has filed for a federal trademark registration on the term as used in connection with baked goods. Wikipedia acknowledges Ansel as the creator of the pastry, and attributes the term to him, despite acknowledging the proliferation of imitators.  

Indeed, only weeks later, a Massachusetts individual named Stephen Foung filed an Intent-to-Use application with the Trademark Office for "THE CRONUT HOLE" as it would be used in connection with retail bakery shops.  Not long after that, a Texas establishment emerged, claiming that it intends to use the term "CRONUTS" in connection with baked goods and downloadable recipes. Bakery publications have dubbed the situation a "Cronut trademark scramble."

But Rosario Auddino of Auddino Bakeries, writes on that Ohio pastry shop's website:

The cronut !!!! WHAT ???? The DOUGHSSANT has been in Columbus/Hilliard Ohio for going on 20 years now.. 

Roy created this one night when he was covering a shift for an employee...New York can eat there hearts out ....The cronut has nothing on the...The DOUGHSSANT... 

Auddino similarly filed for a federal trademark on DOUGHSSANT in May, claiming a first use in commerce in 1994.

No word yet from the USPTO on who owns the trademark CRONUT, nor from critics on who makes the best pastry, but we will accept free samples and render a verdict on the latter.

U.S. Patent and Trademark Office Issues Trading Cards (No, Seriously)

In order to promote awareness of Intellectual Property and the value of inventions among America's youth, the United States Patent and Trademark Office has commissioned and issued a series of "trading cards," similar to baseball cards. The cards include biographical information about inventors, and describe some of their contributions to modern science and industry.

Popular cards include famous inventors such as Thomas Edison, George Washington Carver and Nikola Tesla.
Some of the cards are a bit more obscure and therefore may be far more valuable to serious collectors, such as the one for David J. Kappos, the current Under Secretary of Commerce and Director of the United States Patent and Trademark Office, seen at right.

Understanding Trademark Bullying

Many successful companies seeking to aggressively protect their intellectual property portfolio of valuable brands have been accused of becoming “trademark bullies.”  Their accusers argue that rather than using a reasoned, measured approach to address actual commercial threats, these large brand owners deliberately use the specter of civil litigation to threaten alleged infringers into submission.

Trademark infringement litigation may be brought either in federal court, or can also be commenced by opposing or seeking to cancel trademark applications in the United States Patent and Trademark Office (“USPTO”) in a lengthy and byzantine administrative proceeding that can last years and cost the parties thousands of dollars.  Because the cost of litigating trademark disputes can be prohibitive, especially for smaller companies or individuals, many accused infringers choose to settle or otherwise resolve their conflict without the merits of the underlying conflict ever being adjudicated.

Consequently, commentators -- and sometimes even the brands’ own customer base – have vocally accused some brand owners of overzealously enforcing their perceived trademark rights against others in a manner that smacks of bad faith or anticompetitive conduct used to squelch competition or free speech.

The issue has recently gotten so much attention, that Trademarkia has published its list of "biggest trademark bullies", and the USPTO itself released a report to Congress on the issue.

Why would savvy and well-represented companies sometimes risk going too far and potentially alienating their own customer base?  While every case is different, under existing U.S. Intellectual Property law, an established brand may very well face a Hobson’s choice:  risk the ire of an angry mob, or face ongoing brand erosion and even extinction in a world of ever-expanding fakes and imitators.  A few examples of alleged "trademark bullying" warrant mentioning:

• Chick-Fil-A sells more than $4B of sandwiches each year.  The company’s humorous “EAT MOR CHIKIN” trademarked slogan held up by aggrieved cattle (see right), became an instant hit for the company’s efforts at marketing and promotion.  When a small local farmer named Mr. Muller-Moore sought to federally register the “EAT MORE KALE” slogan in the U.S. Patent and Trademark Office, the corporation opposed his application on the grounds that his mark was likely to cause confusion with their slogan.

• Famous fashion house Louis Vuitton has serially sued Hyundai for a Super Bowl advertisement that depicted a basketball emblazoned with the LV logo, had a case against the makers of the movie Hangover 2 dismissed, and famously demanded that University of Pennsylvania Law School remove a promotional poster.

• Hansen Beverage Company, maker of the popular “MONSTER ENERGY DRINK” sent Rock Art Brewery a letter demanding that Rock Art cease and desist its use of “VERMONSTER” as a trademark for beer.  Ultimately, after a public outcry on Twitter, the parties settled their dispute outside of court, with Rock Art permitted to keep selling their brew.

• Non-profit Susan G. Komen for the Cure opposes dozens of trademark applications for wording that includes “FOR A CURE” or “FOR THE CURE.”  When the charity opposed an application for “MUSH FOR THE CURE” sought by a local non-profit, it became national news. 

So what do each of these four examples have in common? Each circumstance may seem like an example of brand protection gone awry, and perhaps they are.

However, Difficult Legal Lines Must Inevitably Be Drawn

It is worth reminding their critics that if each of these brand owners had not acted to draw a line in the sand, they would undoubtedly face the prospect of closer and closer copyists, and eventually encounter even more widespread infringement.  Where any specific line between infringer and innocent victim is drawn in each case is another matter, but it is clear that a legal line still must be drawn somewhere, and the clear incentive for brand owners under current law is to be zealously protective of their investment in their brands.

One legal reason for brand owners to be zealous is that in the event of a brand owner’s complete failure to act, their targets may be entitled to legally rely on the affirmative defense that their delay has been inexcusable.  This potentially crippling defense is known as “estoppel by laches” or “laches” for short.  The laches defense is also sometimes described as "estoppel by acquiescence."

Similar to an undefined statute of limitations, laches may be available as a defense when an infringer was actually known about by the Plaintiff, or even should have been known about under the circumstances, and the delay in bringing suit was inexcusable.

An essential element of laches is the requirement that the party invoking the doctrine has somehow changed its position as a result of the delay.  In other words, the defendant is now in a worse position than at the time the claim should have been brought.  For example, the delay in asserting the claim may have caused the defendant to open up more stores, hire more employees and build up its own reputation in reliance on the brand owner’s unfair inaction.

Even worse yet, if a brand owner fails to act against numerous infringers in the marketplace, it may very well face the dire prospect of losing its trademark altogether under a doctrine known as “genericide.”  

Some words that started out as brand names and “killed” by such widespread genericide are: aspirin, bundt cake, cellophane, dry ice, escalator,
 granola, kerosene, linoleum, minibike, nylon,
 pogostick, tarmac, thermos, touch-tone, trampoline,
 yo-yo and zipper.

In each of these cases, the brand owner failed to act to sufficiently police the marketplace to stop widespread third-party unauthorized uses.  Ultimately, these erstwhile brands passed into the netherworld of “dead” trademarks, devoid of legal protection altogether.

But Are These Extreme Historical Examples of Genericide that Can’t Recur Today?

Harris Interactive released a list of products ranked by brand equity, a measure of the brand's popularity with U.S. consumers.  Among the top 10 are Ziploc food bags, Hershey’s Milk Chocolate Candy Bars, Kleenex Facial Tissues, Clorox Bleach, WD-40 Spray Lubricant, Heinz Ketchup, Windex Glass Cleaner and Campbell’s Soups.  In other words, some of the most valuable and well-known trademarks in the world.

It is clear from this list alone that success in today's marketplace can be a double-edged sword.  The companies who manufacture these products have done an incredible job in advertising and marketing them, so successful in some cases that the brand name is in danger of becoming a genericized trademark.  If the companies on this list aren't zealous, they could end up losing the trademark for the products that they have worked so hard to market successfully.

Ultimately, trademark law is intended to protect consumers and companies from confusion with established brands.  Quality control and brand reputation are crucial in today's marketplace, and zealous trademark protections are a perfectly logical and legal way to protect customers from fraud, and to give companies the tools they need to protect their valuable investment.  In conclusion, in this age of rampant counterfeiting and infringement, it is important to fully understand why in their zeal to protect their valuable brands, aggressive tactics can seem like a viable option for brand owners, even if sometimes they risk going too far.