I posted about the Racebrook auction of ‘retired trademarks’ previously. The auction has now taken place and the NY Times reports on the auction winners. SHEARSON went for $45,000, MEISTER BRAU went for $32,500, VICTROLA was a steal at $1000. The gross total of winning bids was $132,000, for about two dozen of the 170 or so names offerred.
The residual value (and true owner) of ‘retired’ brands is the usual point of interest for such a story, however this caught my eye:
Mr. Reich does not own the names that were auctioned. Rather, he filed trademark applications for them with the federal Patent and Trademark Office on what is known as an intent-to-use basis — that is, declaring an intention to use the trademarks to sell goods and services in interstate commerce. The auction was selling his rights in those applications.
“You’re paying for a license for an interim period till the trademark issues” from the trademark office, said Gabe Fried, founding principal at Streambank in Needham, Mass., which handled the sale of intellectual property for brands like Circuit City, Duck Head apparel and KB Toys.
Ok, bear in mind that I have no background information as to the brands in questions or the relationship between the seller and auction winners. This is all speculation, unfettered by facts.
Section 10 of the Lanham Act, states that an applicant may not assign a ‘pre-use’ Intent to Use application (in other words, the applications that Racebrook or its agents own):
“Except for an assignment to a successor to the business of the applicant, or portion thereof, to which the mark pertains, if that business is ongoing and existing.”
To give a non-controversial (hypothetical) example of what’s allowed: the Times reports today that Fortune Brands may sell the JIM BEAM business. I assume that Fortune Brands may have pre-use ITU applications on record in its pipeline. The company that buys that business could lawfully have assigned to it those pending ITUs because its buying the underlying JIM BEAM business.
To give an example of what’s prohibited: somebody thinks up names all day, files trademark applications, and auctions them off. Congress specifically prohibited this when requiring a ‘bona fide intent to use.’ (rueful aside: the domain name market seems to be exactly what Congress didn’t want to exist for trademarks).
Mr Fried, in the article, refers to an ‘interim license.’ This suggests to me that the ITU applicant will likely retain ownership of the application, have the ‘purchaser’ begin use, then satisfy the user requirement with the licensee’s use.
This portion alone is not unusual. A movie company, for example, wishes to license a mark, say HARRY POTTER, in businesses in which it has never done business and will never do business in, let’s say vitamins or shampoo. It is uncontroversial that it had a bona fide intent to use (through licensees, possibly unknown to it on the day it files), and can satisfy its trademark registration user requirements with the use of its licensees. Assuming quality control by the trademark owner, so far, so good.
The twist here is that there is (probably) an agreement to assign the registration to the auction winner at a later date.
The most respected commentator in trademark law, Prof. McCarthy, has stated in the abstract that such an agreement to assign in the future doesn’t violate the letter of Section 10, simply because the assignment only takes place once the prohibition no longer applies. (McCarthy, Section 18:13, page 18-31, 2010 ed.)
Prof. McCarthy also states that such an agreement doesn’t violate the spirit of the law. I’m not sure he envisioned, however, a situation where an entity in no particular business, filed a portfolio of applications in disparate fields, and promotes the ‘sale’ of a ‘trademark’ through auction.
Auctions of ITU application would be, I think prohibited by trademark law but there may be (untested) loopholes.
There is a pending bill entitled the Combating Online Infringement and Counterfeits Act, known as COICA (not to be confused with Cloaca, which is the sex organ of the platypus). The bill would allow the Attorney General to bring an in rem action against any domain name found ‘dedicated to infringing activities.’
I was struck by COICA as a case study of the IP war of rhetoric. Pro-IP forces lauded the bill as a necessary tool against, for example, counterfeit drugs and airplace parts. Anti-IP forces (or more accurately, Anti-Pro-IP forces) immediately framed the bill as a censorship bill. See Patry for more on this.
Then, Senator Wyden of Oregon indicated that he was dead-set against the bill, which appeared to have killed COICA, at least during this session of Congress, and I stopped paying attention.
However, this week brought news reports that DoJ has indeed seized 82 domain names, many apparently located outside the US. A list of the seized names include BURBERRYOUTLET-US.COM, LOUISVUITONOUTLETSTORES4U.COM, DVDORDERONLINE.COM and TORRENT-FINDER.COM.
I wondered why was there a fuss over COICA, when DoJ believes it can perform such in rem seizures already. Prof. Post, blogging at Volokh, wondered that as well, and discusses the seizures and the constitutionality thereof.
Google is involved in a lawsuit, now on appeal, with Rosetta Stone about sale of keywords that reflects trademarks. Paul Levy, of the Public Citizen, reviewed Rosetta Stone’s brief and was concerned by the redactions (his concerns discussed here). He succeeded in making public an unredacted copy of the brief available. The unredacted brief, with formerly redacted portions circled, is here.
Among the redactions: Rosetta alleges that Google conducted internal studies that showed high (as in 94% in some cases) levels of consumer confusion resulting from use of a trademark anywhere in the text of an ad.
Another case interpreting an advertising injury clause – this time around – “advertising injury caused by offense committed in the course of advertising” arising out of “infringement of copyright, title or slogan.” Insured was accused of various counts of infringement. EDNY (Weinstein, J.): The duty to defend is broader than the duty to indemnify. Carrier had to defend
The word that he has trouble pronouncing is “intermediaries.”
This is an ad in today’s Times. It advertises an auction in December of ‘timeless trademarks.’ There are some recently defunct names such as INFOSEEK, CHAMPION INTERNATIONAL and SHEARSON as well as some blasts from the past such as BRANIFF, SNOW CROP and a real golden oldie, VICTROLA. The entire list is viewable here. It seems that there’s at least some residual goodwill attached to some of these names. On the other hand I’m not sure if anyone younger than me knows that there used to be a BOAC Airline. How would VICTROLA work for a streaming service? GENERAL CINEMA for a video-on-demand service?
What do you get if you buy? It’s not clear from the site (without registering). I looked up some of the names (INFOSEEK, VICTROLA, GENERAL INSTRUMENT) and see that they are the subject of ITU applications, presumably in the name of entities behind this auction. All the applications are pre-statement of use (as opposed to claiming dates of first use associated with the ‘original’ brand owners).
Section 10 of the Lanham Act controls assignment of pre-use ITUs. The ad provides a contact number to obtain the ‘history of each trademark.’ It would be interesting to know what assets remain from some of these brands.
The Town of Islip in Long Island owns and operates Macarthur Airport. Plaintiff obtained the domain name MACARTHURAIRPORT.COM in 2000 and put up a website around that time. Check out the official looking Transportation Security Adminstration banners on the top of the page. Check out the very small disclaimer at the very very bottom.
Plaintiff allegedly approached the Town of Islip with a proposal to operate the website and was rebuffed. Plaintiff has apparently operated the website all this time. The Town approached him in 2007 and began discussions which led nowhere. Plaintiff went out and registered a bunch more domain names. The Town began its own official website at FLYLIMA.COM (LIMA standing for Long Island Macarthur Airport and not the Peruvian city). Town brought a UDRP in August of this year which it apparently won (the decision, NAF 1339861) is not up on the NAF site yet). Plaintiff brings a DJ against the Town to stay the transfer.