Avoiding Trademark Headaches

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A small brewery based in Rutland, Vermont, was sued for trademark infringement by a large brewery based in Canada. In the case of Moosehead Breweries v. Hop’n Moose Brewing Company, Moosehead is claiming that Hop’n Moose’s use of the term “moose” as well as images of a moose in association with the sale of beer infringes Moosehead’s registered trademarks.

Regardless of how this dispute is ultimately resolved, this much is clear—this conflict was foreseeable.  In Trademark law, generally the first to use a mark for a type of goods is the one who holds the sole right to do so.  In this instance, Moosehead’s registered trademarks, which includes registrations to the marks MOOSE, MOOSEHEAD, and the image of a moose, all for beer, date back to the 1930’s while Hop’n Moose opened for business in 2014.  So…at the time Hop’n Moose launched its brewery, a trademark clearance search would have revealed that there was at least the potential for conflict regarding the use of anything to do with a moose being associated with beer.

In addition, Moosehead has been fairly aggressive in pursuing enforcement of its trademarks, and in all likelihood has substantially more resources to devote to trademark disputes than a newly started brewery.

Don’t Mix Your Drinks

The test for determining trademark infringement is whether there is a likelihood of people confusing two companies selling similar goods with similar marks.  A lot of people shrug and say, “you can tell the difference” or “it’s not a copy,” and figure they’re in the clear.  But it’s often not that simple. 

  • For one thing, marks do not need to be identical in order for infringement to occur—they just need to be similar.
  • A federal registration to MOOSE, in standard characters, covers all fonts, colors, and in many cases, any included designs and additional words or characters.  So the comparison of Hop’n Moose and MOOSE is based only on the words, not on any of the differences in imagery, color, or fonts and the penultimate question is whether the term HOP’N in front of MOOSE is enough to distinguish the source of the goods (ed. likely not).
  • Trademark law attempts to remove confusion as to the source of the products.  It is clear that a consumer would know that differently labeled beers are different beers, but would the consumer think two beers with the primary term “moose” in their name would come different breweries? (Consider how “Bud” is used in different ways and with different words, such as Bud, Budweiser, Bud Light, Bud Lime, etc., yet all of those are from the same company—that is the essence of trademark law, i.e., the consumer knows all those beers come from the same source.)
  • Lastly, there is an important distinction between technically not infringing a trademark and avoiding getting ensnared in a trademark dispute.  Even if an accused infringer is ultimately found not infringing, the trouble and expense required to demonstrate that in court can be overwhelming to any business. 

For many small businesses trying to get established, the last thing they need is to get a cease and desist letter (never mind having a lawsuit filed against them).  An accusation of trademark infringement can cause a major disruption to a business.  To hold your ground and prove there is no infringement could take years and exhaust the resources of the business.  The alternative is often to stop using the disputed trademark, which means a loss of substantial investments in developing a brand and having to redo a lot of hard work.  (In a very similar situation, Mooselick Brewing Co. was forced to stop use of “mooselick” by Moosehead Breweries, and ended up reopening as Granite Roots Brewing.)

Start with Clear(ed) Ingredients

Before starting any business, or launching a new product or service under a new mark (word, design, etc.), it is a good idea to perform a thorough trademark search.  A good trademark search will not only look at the USPTO trademark register—a thorough search will include a review of common law uses (uses online, corporate names, state registrations, etc.).  Importantly, your search should not be for only identical marks for the same goods/services, but instead should be for similar marks that are used on similar goods/services.

Even if your proposed trademark looks different and you have no intention of trying to tread on anyone else’s trademark rights, it is well worth making sure there are no potential trademark pitfalls before investing significantly in developing a market for a product with that trademark.  Knowing what marks are currently in use allows you to understand risks and hopefully avoid the hassle and expense of getting a cease and desist letter when you least can afford it (or at least not being surprised by it).

Individuals and Small Businesses Get Some Help from the USPTO – the Patent Pro Bono Program

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Image from the Patent Pro Bono Launch at the Burlington Generator in Vermont (left to right): Jim Grace, US Senator Patrick Leahey (VT), Justin Daniels of Proskauer Rose LLP, and Jennifer McDowell, the USPTO’s Pro Bono Coordinator

Image from the Patent Pro Bono Program Launch at the Burlington Generator (Patrick Leahy second from left).

When it comes to turning a great idea into a viable business, one of the most significant hurdles for many inventors is the cost of applying for a patent.  The United States Patent and Trademark Office (USPTO) has recognized this impediment and has, with the urging of Senator Patrick Leahy, launched the USPTO Pro Bono Program (the “Program”), which is available to all inventors and small businesses with limited resources.

Established with the enactment of the America Invents Act, the Program aims to match inventors with volunteer patent attorneys who can assist them with their patent applications on a pro bono basis. In general, the Program is open to individuals and small businesses who meet the resource eligibility requirements.  The Program is managed regionally, with Vermont being a part of the Patent Pro Bono Program of New England.  To be eligible, individual inventors must have an adjusted gross income of less than 300% of the federal poverty guidelines (as of this writing, 300% of the poverty guidelines is $35,640 for an individual and $72,900 for a household of four, as examples) and small businesses must have a total gross income of less than $150,000.  In addition, any inventor seeking assistance under this program must have progressed in the development of his or her invention enough to be able to describe in sufficient detail to allow someone to make it.

Inventors wishing to take advantage of the Program must first apply through the appropriate regional program (the New England Program is available here: http://artsandbusinesscouncil.org/patent-pro-bono-program/), pay a small fee ($55 as of this writing), provide some documents to establish eligibility, and complete a training module to help them become more familiar with the patent process.  Keep in mind that further fees will be due as patent office fees, which can range from several hundred dollars to well over a thousand, must be paid by the inventor.

Pro bono services for patent work is a relatively new area, but has seen rapid growth since an initial pilot program in Minnesota in 2011.  However, since the volunteer patent attorneys are not obligated to accept every eligible inventor in the program, it remains to be seen whether there will be enough attorneys, or, more precisely, enough attorney time, to meet the demand for pro bono patent services as more inventors with limited resources become aware of the program.

Dunkiel Saunders is excited to be a part of the Program so as to assist Vermonters and those throughout New England in pursuing patents to their inventions.  The practice at Dunkiel Saunders is dedicated to serving all inventors and has a special emphasis on those focusing on alternative energy, education, health care, and other inventions that advance social and environmental causes.

Patent Troll Legislation Update

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CaptureSeveral states passed laws in the last year to go on the offensive against patent trolls, following in Vermont’s footsteps. Some variants of Vermont’s law of note:

1. Several states have codified the jurisdiction of the state courts to include the conduct of out-of-state patent trolls. However, it’s fairly clear that this provision cannot pass constitutional muster – personal jurisdiction is simply not established by the mere sending of a demand letter. With that said, however, it would be interesting to see how this would play out with the AG of a state involved and with the law being interpreted as a quasi-criminal matter (for example, Louisiana’s AG is the only entity allowed to go after patent troll activities). As Judge Toor made clear a few weeks ago, the constitutional protections offered to patent holders to send demand letters may not be as broad if their conduct trends toward nefarious activity.

2. Several states did not include a bond – it may be that this is already allowed generally in their jurisdictions, but it seems odd not to mention or delineate any boundaries.

3. Some states only allow their AG’s to prosecute patent troll activity.

Interestingly, no state has attempted to take on some of the more vexing activities of patent trolls. For example, there is no attempt to get past the endless shell corporate structures that these entities employ to avoid potential liability. I would think that a state could require an entity to provide notice to the state (similar to what Minnesota negotiated with MPHJ) of its desire to send an infringement letter and in that notice the state could require a) evidence of actual use of the patented technology by the entity and/or b) identification of the real party-in-interest with assets sufficient to present a bond (could they be required to register as a foreign corporation?). This would at least make the AG aware of patent litigation activity in the state (if a troll is sending thousands of letters, requiring notice may dissuade them from doing so).  But I’ve talked about some of these issues before.

Links to each state’s legislation and a brief summary of the differences from Vermont’s law are just below:*

VERMONT:

Standard Bad Faith/Good Faith Assertions of Patent Infringement used.

Bond: Motion by target, determination by court. Troll must post bond equal to good faith amount target would pay to litigate the assertion (not to exceed $250K).

Damages: Standard range of damages.

ALABAMA: No significant differences.

GEORGIA: No significant differences.

IDAHO:

Includes 3 year statute of limitations.

Regarding Bond: No upper limit (typically $250K) imposed by statute. The target of a patent troll must establish a reasonable likelihood that a person has made a bad faith assertion.

LOUISIANA:

Only the state’s attorney general has the authority to investigate and pursue claims.

Person’s (or entities) from outside the state making an assertion in-state is subject to the jurisdiction of the state.

No bond provision.

MAINE: No significant differences.

MARYLAND: No bond provision.

MISSOURI: No bond provision.

OKLAHOMA: Only state attorney general has authority to investigate and pursue claims.

OREGON: No bond provision.

SOUTH DAKOTA:

Includes an exception for publicly traded companies and patent owners using the patent in manufacturing and production of products and materials (in addition to the VT exceptions for higher education and technology transfer organizations for higher education institutions).

TENNESSEE: No bond provision.

UTAH: No significant differences.

VIRGINIA:

No bond provision.

Person from outside the state making an assertion in-state is subject to the jurisdiction of the state.

$2,500 civil penalty for each infraction.

WISCONSIN: No bond provision.

*Many thanks to Mathew Kryman, student at Vermont Law School and former intern at Dunkiel Saunders, for his help in analyzing the statutes.

*Thanks also to Rupalee Rashatwar, Program Coordinator/ Acting Legislative Coordinator at the National Association of Attorneys General for the compiling the legislative activities.