Tag: Intellectual Property

As first reported in the LA Times, Huy Fong Foods, Inc., the originator of the famous spicy Sriracha sauce, may have missed its opportunity to trademark the term “Sriracha”. David Tran, the owner of Huy Fong Foods, named his sauce after a coastal city in Thailand and believed that it would be difficult to register the Sriracha mark for that reason.

Sriracha-style sauces include a combination of chili paste, vinegar, garlic and sugar. There are several brands marketing sauces using this recipe and the name Sriracha, including Frank’s Red Hot, Kikkoman, Lee Kum Kee, Taco Bell and Pizza Hut. Tran initially considered other companies’ use of the word “Sriracha” as free marketing for his product and his sales have grown from $60 million to $80 million in the past two years, according to the LA Times. However, when McIlhenny Co., the maker of Tabasco, announced its plan to release a hot sauce using the name Sriracha, Tran admitted that Tabasco’s use of the Sriracha mark may present a problem for his company.

Fortunately, Huy Fong Foods registered its signature rooster logo and green-capped bottle that holds their famous Sriracha sauce and licenses the right to use these trademarks to specialty producers, which helps to market their sauce. It does not appear that Huy Fong Foods has any intention of registering the mark at this time. In the event that Huy Fong Foods were to attempt to register the Sriracha trademark now, the USPTO may find that the term has become too generic.

On January 9, 2015, Ted Poe (R-Texas) introduced the Foreign Counterfeit Merchandise Prevention Act (H.R. 236). The purpose of this bill is to amend the Trade Secrets Act to allow U.S. Customs and Border Protection to involve trademark and copyright owners in its investigation once it has seized a potential counterfeit shipment. A similar bill was previously introduced in 2012, but it was not passed.

Presently, U.S. Customs redacts bar codes and identifying marks before sharing photographs of the counterfeit merchandise with trademark owners pursuant to 18 U.S.C. §1905, which provides for a broad criminal prohibition of disclosure of information by officers and federal employees. The new bill creates an exception to 18 U.S.C. §1905 by explicitly allowing U.S. Customs to provide a trademark or copyright owner with information, samples and images of the counterfeit merchandise and retail packaging. The bill includes also includes an amendment to §42 of the Lanham Act, which allows U.S. Customs to provide information, digital images and samples (subject to a bond) to the trademark owner.

The bill was assigned to the Subcommittee on Crime, Terrorism, Homeland Security and Investigations of the House Judiciary Committee.

This article is provided as general information for clients and friends of Gibney, Anthony & Flaherty, LLP. It does not constitute, and should not be construed as, legal advice. The contents of this article may be considered attorney advertising in some states.

The Supreme Court ruled that trademark tacking is a question of fact for the jury to decide in Hana Financial, Inc. v. Hana Bank. Tacking allows a trademark owner to alter its mark while maintaining the older first-use date for the original mark. The new mark is “tacked” onto the older priority date.

In Hana Financial, the Plaintiff sued Hana Bank and others for trademark infringement and related claims. The trial court granted summary judgment to Defendants on the infringement claim, but the Ninth Circuit reversed and remanded the case back to the trial due to the factual issues relating to the priority issue. On remand, the jury found in favor of Defendants. The plaintiff moved for judgment as a matter of law, which was denied by the trial court. The plaintiff appealed this case to the Ninth Circuit claiming that the determination of whether a trademark may be “tacked” to a prior mark is a question of law that must be determined by the court, not a question of fact that may be decided by the jury. The Ninth Circuit affirmed the district court’s ruling. The case was then appealed to the Supreme Court. The Supreme Court also affirmed.

On December 15, 2014, Coca-Cola Co. filed trademark applications for the following hashtags: #cokecanpics and #smilewithacoke with the U.S. Patent and Trademark Office. These hashtags are currently being used on Twitter in connection with the company’s soft drinks. This is the first time that Coca-Cola has applied to trademark a hashtag.

Hashtags consist of a number sign followed by a word or phrase. Hashtags are a useful way to categorize conversations within and across multiple platforms, including Twitter, Facebook and Instagram. A user can click on the hashtag and see content posted by other users with the same hashtag. Other companies have already registered hashtags as trademarks. However, the law on the ownership of hashtags is still developing.

On October 28, 2014, the Supreme Court of Argentina ruled that search engines are not liable for unlawful third-party content appearing in search results. This groundbreaking ruling will have a significant impact on the question of intermediary liability in Latin America.

Maria Belen Rodriguez, a singer and model, sued Google, Inc. and Yahoo alleging that the search engines linked her name and image to sites containing porn and sexually explicit material. Ms. Rodriguez asked the trial court to order the Defendants (1) to remove all search results associating her name to websites of a sexual, pornographic, erotic or similar nature; (2) to remove all thumbnails depicting her image from the search results; and (3) to pay damages in the amount of AR$ 300,000 plus interests, as a result of the association of her name and personal image to sites of an offensive nature. The lower courts ruled that the search engines were not liable for third-party violations until a court ordered them to remove the illegal content.

On appeal, the Supreme Court held that search engines may be found liable for third party content if they have actual knowledge of its infringing nature and fail to take corrective steps thereafter. The Supreme Court further stated the type of notice that must be served on the search engines should establish actual knowledge. The Court of Appeals previously ruled that the Defendants weren’t negligent in reacting to the takedown order and thus, the Supreme Court found the search engines were not liable to Ms. Rodriguez.

On October 7, 2014, My Retirement Account Services, LLC sued the United States Treasury Department for trademark infringement.

My Retirement Account Services, LLC, located in Murray, KY, is the owner of the federally registered trademark GETMYRA.COM, for individual retirement account services. The plaintiff claims to have used the common law mark MYRA to identify and distinguish its services since at least as early as 2009. They have also applied to register it with the United States Patent and Trademark Office. On January 28, 2014, President Obama gave his State of Union Address, during which he announced his plan to create a new retirement savings program to be called “myRA.” After the State of the Union Address, the plaintiff alleges that it saw a substantial increase in visitors. The Complaint states that, “At 8:00 p.m. on January 28, 2014, the site experienced a 1400% increase in sessions, as compared to the hour before.” The site continued to receive a significant number of visitors following the speech.

Notably, on January 30, 2014, the United States Department of Treasury filed an application to register “myRA” for retirement savings program services. The United States Patent and Trademark Office rejected the application and cited the GETMYRA.COM registration as confusingly similar to the “myRA” mark.

In the Complaint, the plaintiff claims that the “myRA” mark is confusingly similar to its own marks. The plaintiff claims that this is reverse confusion. Specifically, the plaintiff is concerned that consumers are likely to believe that the plaintiff is the infringer and thus, it has suffered damage to its reputation and goodwill.

On September 17, 2014, the Judiciary Committee of the U.S. House of Representatives approved the Trade Secrets Protection Act. The bill, sponsored by George Holding (R-NC), is a companion bill to the previously reported Defend Trade Secrets Act of 2014, currently before the Senate Judiciary Committee.

Both bills would create a private right of action for trade secrets theft and include provisions allowing ex parte seizure orders to preserve evidence. There is concern that these seizure provisions could be used for anti-competitive purposes. Specifically, there is fear that start-up companies would be subject to abusive litigation by larger competitors.

Supporters of the bill contend that the seizure provisions will be used for extreme situations and there are protections in place to prevent abuse. The seizure provisions include the same high threshold as other ex parte seizures by federal courts. For example, the bill requires that the movant show “an immediate and irreparable injury” and that the party is “likely to succeed in showing that the person against whom seizure would be ordered misappropriated the trade secret and is in possession of the trade secret.” Parties subject to an unlawful seizure are entitled to attorney’s fees and damages.

Both bills have bipartisan co-sponsors and continue to gain support from several major companies, including Microsoft Corp., General Electric Co. and DuPont Co.

TVEyes provides a service that records all content broadcast by over 1,400 television and radio stations. It then compiles the content in a searchable database for subscribers including the United States Army, the White House, members of Congress and police departments across the country. TVEyes is a for-profit company with revenue over $8 million. TVEyes is only available to businesses, not the general public. It has approximately 2,200 subscribers who pay $500 per month. Subscribers are required to sign a contract limiting the use of downloaded clips to internal purposes. Before each download, TVEyes’ website states that content may be used only for internal review, analysis or research.

Fox News Network, LLC sued TVEyes, Inc. for copyright infringement, misappropriation and unfair competition.  In its decision the court provided the following example of the service TVEyes performs. If one performed an internet search for a recent amber alert for a missing child, it would not yield the same results as would a TVEyes search result. The internet search would provide only the segments of content that the television networks made available. TVEyes will index, organize and present the content on each of the 1,400 stations. Judge Hellerstein stated, “Without TVEyes, the police department could not monitor the coverage of the event in order to ensure the news coverage is factually correct and that the public is correctly informed.” Fox News filed the lawsuit because it was concerned that TVEyes will divert viewers from its news programs, commentary programs and websites. Fox News publishes about 16% of its television broadcast content online.

To assess fair use, the court addressed the following factors: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

The Court focused on the first factor stating, “[TVEyes] creates a database of otherwise unavailable content…The Internet does not and cannot house the entirety of this content because Fox News, for example, does not provide all of its content online. Thus, without TVEyes, this information cannot otherwise be gathered and searched. That, in and of itself, makes TVEyes’ purpose transformative…”

The court found that TVEyes’ copying of Fox News’ broadcast content for indexing and clipping services constitutes fair use; however, it did not decide the issue of fair use for the full extent of TVEyes’ service, due to insufficient evidence. The court also found that the misappropriation claims were preempted by the copyright claim.

On August 29, 2014, the Ninth Circuit held that Amazon.com, Inc. (Amazon) could not be held vicariously liable for the conduct of certain participants in its affiliate-marketing program.

The plaintiff, Sandy Routt, an artist and designer of jewelry, apparel and collectibles, alleged that certain participants of Amazon’s affiliate marketing program used her copyrighted photographs on their websites without her consent. She sued Amazon for vicarious copyright infringement and for false designation of origin.

In order to successfully sue for vicarious copyright infringement, Routt had to allege that Amazon had (1) the right and ability to supervise the infringing content; and (2) a direct financial interest in the financial activity. Routt alleged that Amazon’s operating agreement with its affiliates prohibits copyright infringement and gives Amazon the power to monitor participants’ websites and terminate noncompliant participants. She further argued that this operating agreement gave Amazon the ability to affect the conduct of the participants so Amazon should be vicariously liable for the participant’s conduct.

The Court held that, even if Amazon may terminate the account of any participant who has infringed on another copyright, that termination would not put an end to the participants’ infringement. The plaintiff failed to show that Amazon exercises any direct control over the participants’ activities.

Similarly, Amazon does not have joint ownership or control over the participants’ infringing websites and the operating agreement expressly disclaims the existence of any partnership or agency. Therefore, the plaintiff failed to state a claim for vicarious liability under the Lanham Act.

The Ninth Circuit affirmed the district court’s dismissal of the first Amended Complaint against Amazon.