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Monday
Aug012016

Craft Brewers Scrap Over Catchy Names

Business LitigationFranchise, Distribution & Litigation Attorney

by Samuel C. Wolf

818-907-3218

 

The craft-beer industry is running low on names. There are more than 4,600 craft breweries in the U.S. – California leading the nation with over 500, according to the Brewer’s Association.

Microbrew Attorney

Each microbrewery generally produces many individual beers and brewers are increasingly finding themselves at odds with others across the country. The legal battles to protect beer brands and corporate names from trademark theft are increasing quickly.

The U.S. Patent & Trademark Office (USPTO) has seen at least 25,000 active registrations and applications related to beer, according to a recent article published by The Wall Street Journal.   

Microbrew: What’s in the Name Just as Important as What’s In the Bottle

Most naming disputes get resolved in quasi-judicial USPTO proceedings. Others go further.

Last fall the Brooklyn Brewery sued a tiny unknown brewery in the San Joaquin Valley called Black Ops Brewing, claiming its name violated the trademark it had for a seasonal $30 imperial stout the New York brewery produces called Brooklyn Black Ops. Several months of litigation and one preliminary injunction later, and the Fresno operation is now called Tactical Ops Brewing Inc.  

Alcohol Distribution AttorneyBeer-namers also have to consider wine and spirits trademarks. Fireball Cinnamon whiskey maker Sazerac Co. recently opposed Martha’s Vineyard-based Bad Martha Brewing Company’s attempt to trademark “Fireball Beer,” leading the Massachusetts brewery to abandon the mark. 

It’s always cheaper to obtain a trademark registration than trying to prevent competitors from passing off a brand without statutory trademark rights – and much easier to enforce registered rights than rights under any common law principle. This is because federal registration provides constructive notice of the registrant’s claims of ownership and is prima facie evidence of the validity of the registered trademark and of the registrant’s right to use the trademark in commerce nationwide.

As the beer market gets congested, new brewers must proceed cautiously to avoid run-ins. Microbrewers should: 

  • Explore registrations early.

  • Conduct trademark availability searches using the USPTO’s Trademark Electronic Search System before investing in production.

  • Conduct Internet searches to assess common law usages of the proposed mark.

  • Assess any conflicting or similar marks prior to filing for a registration or adopting the mark.

These preliminary steps can help avoid costly disputes later on.  

Samuel C. Wolf is an attorney in our Franchise & Distribution, and Business Litigation Practice Groups. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Apr282016

Living Like a Prince, but not Dying Like One

Tax Law Certified SpecialistTax Law Certified Specialist

 

 

by Michael Hackman

818.907.3279

 

 

The media seems to be concerned with two primary subjects lately, and both topics continue to trounce each other in turn on social networks for attention:

1. The presidential elections

2. The death of Prince, and his lack of a will

Prince at the Los Angeles Forum, 4.22.11

We’ll worry about the elections later, but right now we should clear up a misunderstanding. It’s not the lack of a will that is so important. For a musician of Prince’s caliber – it’s more the lack of a trust and overall estate plan that is most critical.

Here in California, one needs a trust to avoid probate courts if real property is involved – a will won’t help your heirs in that regard, and probate is a very expensive process. 

Having only a will is fine for those who have smaller assets to bequeath, such as small sums of money, a car, jewelry etc. In California, up to $150,000 of otherwise probatable assets can be distributed without requiring a probate.

For those with real estate and larger financial assets, a trust is needed. Additionally, a will only goes into effect when a person passes away, whereas a trust can ensure care and stability during life; which is much more of a concern for those of us who are not living like rock stars.

Even a rock star like Prince should have had an estate plan though, particularly if the rumors of his prescription drug addiction turn out to be true. If an overdose or some other tragedy had left the musician incapacitated, Prince could have used an estate plan to determine who makes health and business decisions until he recovered.

Intellectual Property and Right of Publicity

The website TMZ is reporting that Prince had no will, though it’s entirely possible one will turn up eventually. In the meantime, the musician’s sister filed documentation in probate court to have Prince’s bank, Bremer Trust, administer the estate.

If there really is no will, and if an old but valid will turns up, it is likely that it will be different than what he would do if making decisions in the year before his death. For now it seems Prince’s siblings will divide proceeds from the estate under Minnesota law.

If the bank is approved as Trustee, it will have to determine the values of Prince’s real property (mansion, grounds, memorabilia, etc.) as well as that of his intellectual property, including an issue called right of publicity. Right of publicity puts a value on the musician’s name and image.

We saw this same issue come up when Michael Jackson passed away. The case is still unresolved, eight years after the King of Pop died, and there is no immediate end in sight. Appraisers for the IRS and the estate argue over the value of Jackson’s master recordings, likeness, right of publicity and other details.

Estate Planning for Intellectual Property

Any artist who engages in creation for profit, inventors, and business owners, should include intellectual property rights in their estate planning.

1. Copyrights in the United States exist for the author’s life plus an additional 70 years (if the work was created after 1978). For a “joint work prepared by two or more authors who did not work for hire,” the term lasts for 70 years after the last surviving author’s death. For works made for hire and anonymous and pseudonymous works, the duration of copyright is 95 years from first publication or 120 years from creation, whichever is shorter. Heirs may profit from copyrights until they come to term.

2. Duration of publicity rights (use of name, likeness, voice, image, signature) vary from state to state. In at least 13 states (including California), it runs for 70 years, from the date of the artist’s death.  

3. Trademark rights do not expire so long as they are actively used.  In most countries to maintain trademark registrations, the owner must renew the registrations every 10 years. 

4. For patents, the term is 20 years from the filing date of the application (for those patents filed on or after June 8, 1995. Design patents have a term of 15 years from issuance (for applications filed on or after May 13, 2015).

All intellectual property can be distributed among heirs, just as other property can. But ownership rights may be determined by actions the original author or owner of the intellectual property did during their lifetime.

For example, let’s imagine the album Purple Rain was never released, and left in the famous vault at Paisley Park. Prince may have bequeathed or transferred during his lifetime the original sheet music or recording to one heir, the rights to digital reproductions to another, and the right to turn the song or album into a movie, to a third.

Taxing Challenges for Prince’s Estate

Considering Prince’s habit of living large and presumably, having some unresolved debts;  his personal wealth; innumerable real property assets; and undetermined values for intellectual property assets, the probate courts will be a long time in unraveling how the musician’s estate should be administered. Currently, a very conservative estimate runs at $250 million, which could potentially result in $120 million going to state and federal governments. (Unlike California, Minnesota has a state estate tax.)

So what’s the lesson here? Don’t let nearly half of your net worth go to the government, when it could be better used by your family, friends, or a worthy charity.

Prince was apparently charitably inclined. If he had made gifts to charity through a will or trust, a significant amount of estate taxes could have been saved. Further, to the extent he was making charitable donations during his life, those beneficiaries will now no longer receive support from the music icon's largesse. Prince's legacy in this regard is apparently, no more.

 

Michael Hackman is a Certified Specialist in Tax Law (State Bar of California Board of Legal Specialization), and Chair of our Tax Planning and Trusts & Estates Planning Practice Groups. 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Thursday
Jun192014

2nd Down: Washington Redskins Franchise Loses Trademark Territory

 

Franchise Agreement LawyerState Bar Certified Specialist, Franchise & Distribution Lawby Tal Grinblat
818.907.3284

 

Yesterday's U.S. Trademark Office's ruling that six of the Washington Redskins' trademark registrations – some  owned since 1967 – are disparaging and should be cancelled, have some wondering whether any trademark is safe.

Trademark AttorneyWhat’s to prevent a group of people in the future coming together and claiming that the Minnesota Vikings or New York Yankees registrations are disparaging to people of Scandinavian descent, or to those who reside in the North Eastern United States? Should they be cancelled as well?

With the promised appeal of this decision, it is clear the Redskins franchise won't have to change their name anytime soon.  But the question persists: can marks be deemed disparaging over time, and then be subject to attack?   

In its ruling, the USPTO’s Trademark Trial and Appeal Board, found the following:


  • The word REDSKIN on its face is and always has been a racial designation.

  • The word REDSKINS is a plural of the word REDSKIN.

  • The word REDSKIN on its face refers to the real or imagined skin color of Native Americans.
  • Racial slurs often refer to real or imagined physical differences.

  • Before 1966 no dictionary in the record included a usage label for the term REDSKIN.

  • Beginning in 1966 and continuing to 1990, usage labels in dictionaries indicating the term REDSKIN to be offensive, disparaging, contemptuous or not preferred, first appear and then grow in number.

  • From the mid-1960’s to 1996, the word ‘redskin(s)’ has dropped out of written and most spoken language as a reference to Native Americans.

  • From at least the mid-1960’s to 1996, the words ‘Native American,’ ‘Indian,’ and ‘American Indian’ are used in spoken and written language to refer to Native Americans.

  • The usage labels appear and the use of the word redskin(s) disappears because it is increasingly recognized that the term is offensive and disparaging during the relevant time period as Native Americans raise awareness about the offensive nature of the term redskin(s).

The Board concluded that “petitioners have shown by a preponderance of the evidence that a substantial composite of Native Americans found the term REDSKINS to be disparaging in connection with respondent’s services during the relevant time frame of 1967-1990." Accordingly, the Board held the six registrations must be cancelled as required under Sections 2(a) and 14(3) of the Trademark Act.

 

USPTO: Second Down and Years to Go

So what is the import of the Board’s decision?

First, much will depend on the appeal and whether the Redskins franchise is able to persuade the Federal Circuit that the Board was wrong again (this is the second time the Board held the marks disparaging, the first decision was later overturned by the courts due to the equitable defense of laches).  The Redskin registrations will remain effective while the case is on appeal.

Second, even if the Board’s ruling is upheld, the Board’s power is limited to cancelling the registrations.   The team will continue to own and be able to protect its marks without the registrations based on common law rights. So while the team will lose some presumptions and statutory benefits of owning their registrations – even without the registrations – the team can still monitor, police and pursue infringers.

 

The Red Zone: Political Correction, Tradition, and Federal Law

But there are other factors at work as well. 

Growing pressure from notable politicians – including 50 senators asking the NFL to initiate name change efforts – civil rights groups like the NAACP, and coalitions representing Native Americans, is on the rise. Proponents for the change say the league should be more politically correct overall, since the NFL is the recipient of federal tax breaks. 

The 50 senators who signed the letter to NFL commissioner Roger Goodell cite several laws protecting Native American Culture, including the American Indian Religious Freedom Act, the Native American Languages Act, the Indian Arts and Crafts Act, and the Native American Graves Protection and Repatriation Act. They also cited the Donald Sterling/Clippers controversy as reason to get professional sports leagues to clean up their branding.

So in the end, even if the Redskins can legally continue to use their name (with or without a registration), the ultimate question will be whether the political pressure will be too overwhelming and change becomes inevitable. 

Tal Grinblat is a Trademark Attorney and Shareholder at our firm. Contact him via email: tgrinblat@lewitthackman.com, or 818.907.3284.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.

Tuesday
Dec172013

Trademark Disputes – Lessons Learned by Roubaix-ing Owners the Wrong Way

by Stephan Mihalovits 

Roubaix, like Champagne, is a locale in France – though the town is known more for being the end point of the Paris-Roubaix Cycling Race, than for grapes.

Specialized is a bike maker well-known among professional cyclists. They carry a line of Roubaix road bikes that run thousands, sometimes tens of thousands, of dollars.

Enter Dan Richter, a Canadian veteran who opened Café Roubaix Bicycle Studio in Cochrane, Alberta. Richter began his career by building custom bike wheels and other cycling products – Richter Bicycles moved to Cochrane in 2012 and became Café Roubaix.

It didn't take long for Specialized, understandably wanting to protect its brand, to send Richter a "cease and desist" letter regarding his use of Roubaix for his business this summer. Like most cease and desist letters, it threatened a lawsuit should Richter refuse to change the name of his brick and mortar store. The shop owner, not having the funds to fight the cycling giant, resigned himself to losing this particular battle.

 

Social Media: Specialized Bumps in the Road

 

It all looked like an easy cross to the Roubaix finish line for Specialized, until the Calgary Herald got wind of the story.

Cycling enthusiasts reading of Richter's uphill battle took up his cause, and carried the fight to social media. Many changed their twitter handles to include Roubaix in their names. Others protested with hate tweets. Specialized's Facebook page took hits regarding company boycotts and suggestions for establishing a legal defense fund for Richter.

That's when a U.S. company, Advanced Sports International (ASI), stepped in.

As it turns out Specialized was out of bounds in making its claim. ASI owns Fuji Bikes and holds the trademark for Roubaix in the United States. Steve Frothingham of ASI said Specialized lacked the authority to pursue a trademark case against the owner of the small bike shop.

ASI reached out to Richter, telling him he can continue to use the name under a license, which ASI is willing to grant. ASI noted it believes Richter did not intend for his customers to confuse the bike shop with the Roubaix line of bikes, and that consumers should be able to tell the difference.

 

Trademark Disputes & Lessons Learned

 

This tussle between various users of the same mark shows how important it is to read the lay of the land before engaging in a trademark dispute.

Whether it knew about ASI, or whether it knew but didn’t care, Specialized should have known its own rights were inferior to another company.  Companies should tread cautiously before seeking to enforce a mark that may stir a competitor with superior rights.

The second lesson is another example of how public relations must be considered in trademark disputes.

In an age when social media can deliver gossip instantly, companies should consider ways of resolving trademark disputes without creating potentially harmful PR. These could include phone calls instead of letters, or more conciliatory language.

Problems are seldom resolved when a lawyer writes a scorched-earth letter. More often, this approach bolsters the other side, and the dispute becomes intractable. With a firm message and reasonable language, trademark holders can better get a handle on their legal and public relations issues.

 

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
Monday
Jun032013

Oprah Winfrey’s Fair Use Defense Rejected

Business LitigationSan Fernando Valley Business Litigation Lawyer

 

by Nicholas Kanter

818.907.3289

 

On Friday, the Second Circuit ruled that the owner of a motivation services business (Simone Kelly-Brown) can continue with her trademark infringement lawsuit against media mogul Oprah Winfrey.

Kelly-Brown owns a trademark registration for “Own Your Power.”  She uses the trademark in connection with her motivational services business. After Kelly-Brown applied to register her trademark, Oprah (along with her production company, publisher and others) produced a magazine, event and website using the phrase “Own Your Power.”

Kelly-Brown sued Oprah and others claiming the unauthorized use of her trademark constituted infringement, false designation of origin and other Lanham Act claims. The District Court dismissed Kelly-Brown’s claims, finding Oprah’s use of the mark was fair use. Kelly-Brown appealed, and the Second Circuit reversed, finding Oprah did not show that her use of “Own Your Power” was fair use.

 

Fair Use: What it Takes

 

The Court found the defendant must show the following to prove fair use: “that the use was made (1) other than as a mark, (2) in a descriptive sense, and (3) in good faith.”  The Court ruled Oprah did not satisfy any of these three elements. Here’s why:

Use as a Mark: To determine if Oprah used the words as a trademark, the court asked whether she used “Own Your Power” as a symbol to attract public attention. The Court found Oprah used the phrase prominently in several unique instances, including: the cover of the October 2010 issue of OWN; in connection with an Own Your Power event; promotion of the Own Your Power event, among other uses.

In a Descriptive Sense: In analyzing the use of the phrase on the magazine cover, the Court found that the phrase did not describe the contents of the magazine, as opposed to other phrases on the cover (e.g., How to Tap Into Your Strength, Focus Your Energy, etc.)  which were displayed on the cover in smaller print and did describe the contents of articles in the magazine.

Good Faith: Finally, the Court found Kelly-Brown alleged facts to suggest Oprah had knowledge of her “Own Your Power” trademark and chose to use it anyway. Specifically, Kelly-Brown alleged that Oprah (through her production company Harpo) obtained an assignment of rights from the prior owner of the registered “OWN ONYX WOMAN NETWORK” trademark during the creation of Oprah’s “OWN” network “to avoid an infringement action from the mark’s original owner.”  

Kelly-Brown further alleged that this transaction suggests that Oprah conducted a trademark search for the word “Own,” and that such search would have discovered Kelly-Brown’s “Own Your Power” mark. Thus, the Court concluded Oprah could have had knowledge of Kelly-Brown’s mark, and thus her use was not in good faith.

Because the Second Circuit found Oprah could not satisfy the elements of a fair use defense, the Court ruled that Kelly-Brown can continue with her trademark infringement claim.

Nicholas Kanter is a Trademark Dispute and Litigation Attorney at our Firm. Contact him via email, for more information regarding intellectual property and trademark enforcement: nkanter@lewitthackman.com.

 

Disclaimer:
This Blog/Web Site is made available by the lawyer or law firm publisher for educational purposes only, to provide general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand there is no attorney client relationship between you and the Blog/Web Site publisher. The Blog/Web Site should not be used as a substitute for obtaining legal advice from a licensed professional attorney in your state.
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