JOLT Digest

Ninth Circuit Remands Cybersquatting Case
By Debbie Rosenbaum – Edited by Amanda Rice

Lahoti v. Vericheck Inc., No. 08-35001 (9th Cir., Nov. 16, 2009)
Opinion

On November 16th, the Ninth Circuit held that the district court’s finding that the mark “VeriCheck” was an inherently distinctive, legally protectable mark was based in part on erroneous legal reasoning and in part on valid reasoning. Accordingly, it vacated the lower court’s award of summary judgment in favor of the defendant and remanded. However, the Ninth Circuit affirmed the district court’s finding that the counterclaim defendant acted in bad faith. The court noted that it is proper for a court to consider the fact that the PTO has allowed others to register the mark at issue without requiring a showing of secondary meaning as weighing in favor of a finding of inherent distinctiveness.

The Ninth Circuit held that because the district court did not rely exclusively on the proper legal standard, its finding that Disputed Mark was distinctive must be vacated — even if there may have also existed proper legal grounds for finding the mark distinctive. The court also held that Lahoti acted at least “partially in bad faith” by gambling that the district court would agree with his interpretation of trademark law. He knew or should have known that he would risk cybersquatting liability if his gamble failed.

BNA and Michael Atkins, a Seattle trademark lawyer, provide relevant overviews of the case. (more…)

Facebook, Inc. v. Power Ventures, Inc.
By Gary Pong – Edited by Eric Engle

Facebook, Inc. v. Power Ventures, Inc., Case No. 08-cv-05780-JF (N.D. Cal. Oct. 22, 2009)
Order (Hosted by SPAM NOTES)

The United States District Court for the Northern District of California has granted a motion by Facebook to dismiss counter-claims and strike affirmative defenses in its ongoing case against Power Ventures (Power.com). In his order, United States District Judge Jeremy Fogel wrote that Power.com’s answer and counter-claim relied on legal conclusions which were not directly supported by factual allegations. Judge Fogel went on to note that antitrust claims, like those made by Power.com, “require a ‘higher degree of particularity in the pleadings.’” The order gives Power.com 30 days to amend its pleading.

TechCrunch provides an overview of the issues involved in this case. The Financial Times and Eric Goldman’s Technology & Marketing Law Blog comment on the decision. (more…)

Back to Drawing Board for Pa. State Legislature in Protecting Trademark Holders
By Brittany Blueitt – Edited by Stephanie Weiner

Commonwealth of Pennsylvania v. Omar, No. J-162A-B-2008 (Pa. Oct. 5, 2009)
Majority Opinion (Baer, J.)
Concurring Opinion (Castille, J.)
Dissenting Opinion (Eakin, J.)
Dissenting Opinion (Greenspan, J.)

On October 5, the Supreme Court of Pennsylvania affirmed two consolidated Centre County Court of Common Pleas decisions dismissing criminal trademark counterfeiting charges on the ground that Pennsylvania’s Trademark Counterfeiting Statute, 18 Pa. Cons. Stat. § 4119, is unconstitutionally vague and overbroad.  The court held that the statute is unconstitutional because it criminalizes a substantial amount of speech protected by the First Amendment of the United States Constitution.  Commonwealth v. Omar, No. J-162A-B-2008, slip op. at 10 (Pa. Oct. 5, 2009).

IP Spotlight provides an overview of the case. CNBC features an extended analysis of the decision.  The Madisonian declares the decision overly formalistic. (more…)

By Sharona Hakimi

EU Court Advisor Supports Google Keyword Searches in Trademark Suit

On September 22, Reuters reported that an advocate general to the European Court of Justice, the EU’s highest court, stated that Google did not infringe trademark rights of luxury goods maker Louis Vuitton (LVMH). Google sells keywords that use the company’s trademarks, but Advocate General Poiares Maduro concluded that trademark protections do not extend to search advertising keywords because they are not considered a product sold to the public. ZDNet’s Richard Koman argues that this decision does not account for brand confusion arising from keyword searches, and demonstrates the court’s “misunderstanding of the Web as something tangential to ‘real’ commerce.” Although the Luxembourg-based court follows the opinions of its advocates general in most cases, the judges will give their final judgment at a later date.

Facebook Shuts Down Beacon Ad Software as Part of Lawsuit Settlement

Ars Technica reports that on September 18, Facebook announced it will shut down its controversial Beacon ad software as part of a settlement for a class-action privacy suit. The Beacon software, launched in November 2007, allowed off-Facebook activities to be published in users’ news feeds without their explicit consent. After over a year of legal disputes regarding the software, Facebook decided to settle with complaining users, agreeing to discontinue Beacon and offering $9.5 million to create a foundation that would “fund projects and initiatives that promote the cause of online privacy, safety, and security.” Facebook’s director of policy communications said that the company has “learned a great deal from the experience.” The settlement proposal still awaits a district court judge’s approval.

FCC Proposes Net Neutrality Rules for Internet Service Providers

The New York Times reports that on September 12, the chairman of the Federal Communications Commission proposed new regulations regarding net neutrality for Internet service providers. The proposal would bar providers from blocking or slowing Internet traffic on the basis of content. Consumer advocates of the policy say networks should not be able to deter users from accessing lawful Internet content or applications by restricting bandwidth. Wired’s Dylan Tweeny warns that the proposed rules may be difficult to enforce, stifle overall service due to capacity limitations, and decrease innovation in a market that has flourished without government intervention. The rules will formally be proposed in an open FCC meeting in October.

CAFC Requires a Clear and Convincing Intent to Deceive
By Adrienne Baker – Edited by Stephanie Young
In re Bose Corp., No. 2008-1448, 2009 WL 2709312 (Fed. Cir., Aug. 31, 2009).
Opinion

On August 31, the Court of Appeals for the Federal Circuit (”CAFC”) reversed and remanded the Trademark Trial and Appeal Board (”TTAB”) decision, which ruled that fraud is committed when a registrant or applicant makes material misrepresentations it knows or should have known to be false or misleading.  The CAFC held the TTAB applied the should-have-known standard too broadly and thus ruled a registrant or applicant must have specific intent to deceive the U.S. Patent and Trademark Office in order to fraudulently acquire a trademark.  The evidence supporting the registrant’s or applicant’s intent to deceive must be clear and convincing.  The CAFC ruling significantly limits, if not overturns, Medinol v. Neuro Vasx, Inc., 67 U.S.P.Q.2d 1205 (T.T.A.B. 2003), in which the TTAB adopted the should-have-known standard.

The TTABlog provides an overview of the case.  Allen’s Trademark Digest, in addition to providing a detailed history of trademark fraud, criticizes the decision and asserts that the Bose holding implies that registrants and applicants have no duty of candor.  Furthermore, the article asserts the CAFC ruling is contrary to the Lanham Act and the Trademark Law Revision Act (”TLRA”) statutory definitions of “use.” (more…)