The recently passed CARES EXTENSION ACT made several important changes to procedures in the Trademark Office and in federal court.   While some are favorable to trademark owners, others are meant to clear the Trademark Register of deadwood registrations that are not being used. 

Among other things, the new law establishes procedures to expunge the register of marks that have never been used for the goods and services listed (a growing problem with foreign-based registrations); a new basis for cancellation (the mark was never used for some or all of the listed goods and services); a procedure to provide information on a pending application that would be a basis for denial; and restoration of a presumption that trademark infringement creates irreparable harm.

The new law has several different features, not all of which are related.  It not only presents opportunities for both trademark owners and potential trademark infringers, but also presents new challenges and potential pitfalls.

Presumption of Irreparable Harm – Federal courts traditionally presumed that a showing of likelihood of confusion also meant that irreparable harm, a requirement for a preliminary or permanent injunction, should be presumed.  This is because the harm from infringement – confusion as to who makes the goods, and likely affect on good will – are difficult to quantify, and thus do not lend themselves to money damages.

But in a patent case eBay v. MercExchange (2006) the Supreme Court held that there is no presumption of irreparable harm.  Many courts applied that in trademark and copyright cases to mean that there is no presumption of irreparable harm as well.  The new law restores the presumption for trademark cases.

The new law will not likely have a major effect on litigation.  In the vast majority of cases, trademark owners have been able to show irreparable harm without a presumption.

But what trademark owners must be wary of is delay.  The presumption of irreparable harm is rebuttable. Before eBay, one of the most common ways to rebut the presumption was to show the trademark owner delayed.  This is particularly the case for preliminary injunctions; in one often cited Second Circuit case, a delay of only six weeks was enough to rebut the presumption.  So if a trademark owner wants an injunction, it should move quickly to stop the problem.

Expungement Procedures  -- The new law creates two ex parte expungement procedures, one directed to domestic registrations, the other to registrations based on foreign registrations.  Both allow any party to submit a petition to expunge a registration, along with evidence that the mark has never been used in commerce.  The Director of the Trademark Office reviews the petition, and if warranted, initiates a procedure, on notice to the trademark owner, that the registration may be cancelled.

This addresses a problem that has arisen in recent years involving fictitious registrations for marks that are never actually used.   Many such registrations have been obtained by foreign registrants, particularly from China and India.  The motivation seems to be Amazon, which requires a trademark registration in order to register as a merchant.

Parties who actively sell on Amazon often encounter such registrations as blocking their names, and the new procedures will be a way to expeditiously deal with the problem.

Third Party Submissions In Pending Applications
The new law also formalizes what previously was called a letter of protest.  If there is a pending application, anyone may submit evidence relevant to a possible refusal. The Director reviews it, and can include it in the examination file.

This can be an efficient and inexpensive way to oppose pending applications, without the expense and time of a formal opposition or cancellation procedure before the TTAB.  This is a good reason why trademark owners should use a monitoring service to be alerted to pending applications that may come too close to their trademarks.

Non-Use As A New Basis For Cancellation
The new law enacts a new basis for cancellation.  At any time after three years after registration, if one can show that the mark has never been used in commerce for all or even some of the listed goods, the registration is cancelled.  Unlike abandonment, intent is not a defense – no matter the owner's intent, if the mark has never been used, the registration can be cancelled.

This new section is a potential landmine for foreign registrations.  It is common practice in Europe to register for dozens or even hundreds of goods and services, intending to use the mark for only a few.  These registrations are then used to obtain U.S. registrations under either Section 44 of the Trademark Act or through the Madrid Protocol.  But the owner only uses the mark for a few of the listed goods and services.

Under this new basis for cancellation, the entire registration could be cancelled in that circumstance.  So foreign registrants must carefully consider the scope of their registrations, and omit any goods and services they do not intend to use. 

In late January of this year, one of the leading interactive mobile entertainment companies in the world published an open letter on its website, addressing the debate that has been brewing about its intellectual property protection practices.  In this press release, King’s cofounder and CEO, Riccardo Zacconi, discussed his company’s belief that developers “have every right to protect the hard work they do and the games they create,” and pledged that King would continue to take “right and reasonable” action to defend themselves against those they believe are ripping off their IP.  One of the company’s most valuable assets is their immensely popular “Candy Crush Saga.”  Though the game itself is free to download and play, with millions of people playing it on their mobile devices every day, the virtual items available for purchase within the game reportedly helped the company earn over $450 million in revenue in last year’s December quarter.  Those figures are pretty remarkable, especially considering that the game launched less than two years ago.  An independent developer named Albert Ransom, however, is not impressed. Two years before Candy Crush Saga entered the marketplace, Ransom’s company, Runsome Apps, released a mobile game entitled “CandySwipe” in memory of his late mother.  According to Ransom, King’s flagship game is causing much consumer confusion and significant harm to his business.  Though many others have made the accusation, Ransom stops short of calling Candy Crush Saga a blatant copy of his work, for which he filed for trademark in 2010.  After King tried to register the Candy Crush Saga mark two years later, Ransom opposed their application and had been fighting it since.   King retaliated this February by adding a counterclaim for cancellation of Runsome’s CandySwipe trademark registration.  Their case was further strengthened by the fact that, earlier that month, they had officially acquired the rights to the “Candy Crusher,” a game that predated Runsome’s CandySwipe by two years.  As it takes five years of commercial use before the USPTO will consider a term “incontestable,” King’s ownership of the Candy Crusher mark—which was established in 2008—essentially outweighs their need to continue pursuing their US application for the “Candy” trademark, which Runsome had been opposing.  (King has no plans of abandoning their trademark of the term in the EU, however.)  Now that it has legal claim to the precedential Candy Crusher title, King can use it as ammunition in any future cases against companies trying to capitalize on a candy-related mark.

In his own open letter to King in response to this latest development, Ransom begrudgingly concedes defeat, saying “you win…I hope you’re happy taking the food out of my family’s mouth… your move to buy a trademark for the sole purpose of getting away with infringing on the CandySwipe trademark and goodwill just sickens me.”  (The original letter has since been taken down, leaving only a message thanking the public for their outpouring of support.)  Even the International Game Developers Association has issued a statement qualifying King’s recent conduct as “overreaching,” “predatory,” and contradictory to Zacconi’s own January statement, and vows to look into the matter more comprehensively.  Presumably, the folks at King are hoping that they can put all of these concerns to rest before their IPO, which is expected to debut later this year.  However, the disputes above—together with a separate case that they’ve brought against another developer over its use of the word “saga”—have been garnering the mobile entertainment giant a lot of bad press, particularly amongst the extremely vocal gaming community.  Social media channels and comment sections on articles about the ongoing trademark clashes have been flooded with people saying that they are uninstalling the Candy Crush game and pledging never to buy a King app again.  This does not bode well for King’s investment prospects if they are drawing the ire of the very demographic they claim to serve.

Coffee is coffee, and beer is beer, and never the twain shall meet.

It’s not likely that coffee giant Starbucks will be grabbing a cold one—or, sitting down for coffee, for that matter—with anyone from Exit 6 Pub and Brewery any time soon.  Jeff Britton, the owner of Exit 6 (a small craft beer nano-brewery in Cottleville, Missouri) received a cease-and-desist letter in mid-December from the law firm in charge of protecting Starbucks’ trademarks.  Apparently, a number of Exit 6 patrons casually dubbed one of Britton’s stout concoctions a “Frappicino” back in January of 2013, and three of them posted about it on Untappd, the social media network for beer enthusiasts.  The poorly-spelled moniker caught the attention of the Starbucks legal team, and they respectfully asked that the brewery discontinue use of the name that so closely resembled that of their trademarked Frappuccino frozen coffee drink.  Britton immediately complied, renaming his brew the “F-Word,” as per his sarcastic, yet remarkably good-natured response to the legal order.

None of this would have made the news, however, had Exit 6 not posted about the incident on its Facebook page on December 26th.  Along with a brief summary of the matter, Britton published copies of the cease-and-desist letter, his tongue-in-cheek reply…and a scan of the $6 check that he sent along with his response, indicating that it represented “the full amount of profit gained from the sale of those three beers.”  (He said they should put it towards the legal fees of the attorney who wrote him the letter.)  The story quickly went viral, and by the time 2014 rolled around only a few days later, Britton was being interviewed not only by local news stations, but by the likes of Fox and ESPN.  Online coverage exploded as well, with stories appearing everywhere, from NPR and The Huffington Post to legal blog Above the Law.  Most outlets also published the now-infamous correspondence in its entirety.

In this case, while Starbucks clearly had cause to be concerned about dilution of their trademark, their letter seems to have turned into a PR backfire.  With news and social media channels lighting up with people virtually high-fiving Exit 6 for putting Starbucks in its place, the strip mall brewery is reportedly enjoying an influx of new customers, thanks to all the free publicity, and online commenters are claiming to swear off Starbucks altogether.

Trademark infringement is a very real concern, and companies have the right and the responsibility to protect their registered marks, else they risk diluting—or even losing— them.  A few years ago, such a case would probably not have gotten much traction (if any) in the news.  The trademark holder would send its letter, the suspected infringer would either comply or go to trial, the two parties would “stand presently at the great judgment seat,” and the case would be fought, settled or won behind the closed doors of the courtroom.  Over time, however, the court of public opinion has become a lot more vocal; and thanks to social media, it’s very common that customers (or even the general public) are driving the perception of brands even more than the brands themselves are.  Furthermore, many people can’t resist taking the side of a small-business David when he’s facing off against a big ol’ corporate Goliath meanie.  For this reason, companies nowadays have to think long and hard about whether sending a cease-and-desist order to say, a small business in the boondocks, will be worth their while or too big a risk.

In yet another David vs. Goliath legal battle, online travel-planning startup Pintrips filed a motion earlier this month to dismiss a case brought against it last October by social bookmarking site Pinterest.  Pinterest claims it has monopoly rights on certain contextual uses of the word “pin” online, and says that the defendant has been encroaching on that monopoly by utilizing the term on some of the pages of its site.  Pintrips, in turn, is now fighting back, asserting that the word “pin” is too generic to be claimed solely by one entity, and is fair game for anyone to use.  As one means of support for its argument, Pintrips lists numerous other major companies that use the “pin” term in various places within their products, without incurring the wrath of Pinterest.  Besides, claims Pintrips, they are a price-comparison tool, and “not a social media platform” in the business of sharing visual images, which differentiates them even more from Pinterest.  Furthermore, a court in Europe recently found that Pinterest doesn’t even hold the trademark for its own name—London startup Premium Interest claimed it first.  Thus, Pinterest seems to be on rather shaky ground lately, when it comes to the strength of its brand.The main theme of Pintrips’ appeal appears to be an accusation that “specious claims” are being relied upon to strong-arm a “hard-working startup” as a result of Pinterest’s presumed frustration at not having done their due diligence at the outset to register the marks of some of their key terms.  Pinterest, however, claims that it has successfully applied for registration of the “pin” mark (though, they have yet to register it), and that the burden of proof now lies in the hands of the defendant to provide evidence that the term is already used so ubiquitously elsewhere, so as to be considered “generic.”  Pinterest has won six previous trademark infringement cases related to attempted registrations using the “pin” prefix, so perhaps they are cautiously optimistic about prevailing in this case, as well.

Considering the potentially daunting legal fees looming for small startup Pintrips, and the threat of losing ground on the branding front for heavily venture-funded Pinterest (not to mention taking a big hit when it comes to their market valuation and any IPO hopes they’ve been harboring), both sides have something to lose here.  As a rule, judges’ decisions on cases such as these tend to involve highly subjective interpretation, particularly when it’s difficult to determine or prove whether there exists any actual consumer confusion between two similar marks, or whether the defendant intended to ride the coattails of the plaintiff’s brand or not.  Given this subjectivity, the fate of this case may even ride on whether or not the judge (or eventual jury) is familiar with either or both of the sites in question.  With the “pin” term currently being used freely in other, more high-profile contexts both online and offline, it will be interesting to see whether this turns out to be a fight well-picked for the social bulletin board–sharing site…or whether the motion to dismiss is granted, nipping this case in the bud.