Seattle Trademark Lawyer

Beijing’s Yashow Clothing Market.
Fakes here today, gone tomorrow, back next week. (Photo by STL)

STL is back in Beijing!

I’ll be moderating a panel on online liability next week as part of the ”IP Protection in the Information Age” conference at Renmin University. It’s sponsored by the University and the Center for the Advanced Study and Research on Intellectual Property. 

That’s my excuse for being here. But while traveling, I do like to point out trademark items of note.

Here’s a quick one. A lawyer here took me to the Yashow Clothing Market, a building (pictured above) reputed to be full of counterfeit designer clothes. It’s in Sanlitun, a neighborhood filled with restaurants, bars, and Caucasians.

The problem was, there were’t many fakes to be seen. Sure, there were Starbucks, Manchester United, and Miami Heat t-shirts that probably (certainly) weren’t authentic, but the fake Izods, Gucci, and Burberry shirts I’d been promised were nowhere to be found.

My friend asked one of the salespersons. There was a raid last night, she said. All the fakes are gone.

But don’t worry, the salesperson said. Try back in two weeks and you’ll find what you’re looking for.

Big keyword advertising decision today: the Fourth Circuit decided Rosetta Stone v. Google.

The court did the right thing. It vacated the district court’s exceedingly Google-friendly decision incorporating sloppy analysis and incorrect application of trademark law, and remanded for the Eastern District of Virginia to reconsider the case in light of proper standards.

In the end, I think the result will be the same — on re-examination, Google won’t be directly or indirectly liable for counterfeiters’ purchase of Rosetta Stone’s trademark as a search engine keyword. But this time, the analysis won’t be tortured and misleading. 

For example, the district court found Google wasn’t liable for selling Rosetta Stone’s trademark as a keyword because its use of the mark was functional. That finding stood the functionality doctrine on its ear. The proper place for functionality analysis is to examine the plaintiff’s trademark (or, more commonly, trade dress) for whether it serves a useful purpose. (A trademark isn’t protectable as a trademark if it serves a useful purpose other than identifying the product’s source.) The district court instead examined the defendant’s use of the trademark, which was strange, wrong, and not helpful.

The Fourth Circuit left no room for the district court to get it wrong on remand.

“The functionality doctrine simply does not apply in these circumstances. The functionality analysis below was focused on whether Rosetta Stone’s mark made Google’s more product more useful, neglecting to consider whether the mark was functional as Rosetta Stone used it. Rosetta Stone uses its registered mark as a classic source identifier in connection with its language learning products. Clearly, there is nothing functional about Rosetta Stone’s use of its own mark; use of the words ‘Rosetta Stone’ is not essential for the functioning of its language-learning products, which would operate no differently if Rosetta Stone had branded its product ‘SPHINX’ instead of ROSETTA STONE. Once it is determined that the product feature — the word mark ROSETTA STONE in this case — is not functional, then the functionality doctrine has no application, and it is irrelevant whether Google’s computer program functions better by use of Rosetta Stone’s nonfunctional mark.

“As the case progresses on remand, Google may well be able to establish that its use of Rosetta Stone’s marks in its AdWords program is not an infringing use of such marks; however, Google will not be able to do so based on the functionality doctrine. The doctrine does not apply here, and we reject it as a possible affirmative defense for Google.”

The Fourth Circuit similarly vacated the district court’s dismissal of Rosetta Stone’s claims for direct trademark infringement, contributory trademark infringement, and dilution. It affirmed the district court’s dismissal of Rosetta Stone’s claims for vicarious trademark infringement and unjust enrichment.

The decision is what I had expected, and what I had hoped for. It requires district courts to apply trademark principles with rigor and gives the non-moving party on summary judgment the benefit of the reasonable inferences that can be drawn from the evidence presented, in accordance with established summary judgment principles.

The case cite is Rosetta Stone Ltd. v .Google, Inc., No. 10-2007 (4th Cir. April 9, 2012).

Last post about China, for now.

But I return in June with a UWSL program, so there’ll be more then.

Anyway, I saw this poster when leaving China on my way back to Hong Kong. 

I’ll leave snark to others. The U.S. and China both have a long way to go to get counterfeiting and piracy under control. But it’s nice to see the issue has both governments’ attention.

(Photo by STL)

Wikipedia “went dark” Jan. 18 to protest PIPA and SOPA,
displaying this page instead

Last week, Congress went from PIPA and SOPA to OPEN.

These are the acronyms for the federal bills aimed at curbing the sale of counterfeit goods through foreign Web sites.

It was a remarkable change. Congress had broadly supported the Senate’s Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act (PIPA or PROTECT-IPI) and the House’s similar Stop Online Piracy Act (SOPA). Indeed, the Senate was scheduled to vote on PIPA on Jan. 20.

But Google, Wikipedia, and other online providers fought back. They argued the bills’ authorizing the Justice Department to order search engine providers to remove foreign Web sites that sold counterfeit goods from search engine results — rendering them invisible for practical purposes — constituted censorship, turned search engine providers into the Internet police, and unfairly threatened them with liability if they did not comply.

So on Jan. 18, they launched a coordinated campaign against the bills. Wikipedia, most dramatically, “went dark” by making its content inaccessible to illustrate what would happen to a violating site if the bills passed. Google and others implored visitors to oppose the legislation.

That same day, both the House and Senate introduced a compromise bill, the Online Protection and Enforcement of Digital Trade Act (OPEN). The new bill moves enforcement authority to the International Trade Commission, directs compliance efforts at payment processors and advertisers doing business with foreign Web sites that are “primarily” and “willfully” infringing the trademarks and copyrights of U.S. owners, and gives the site owners an opportunity to be heard. It also excepts Web sites that follow reasonable notice-and-takedown policies when IP owners complain about infringing content.

And, voila, congressional support for PIPA and SOPA seemingly evaporated. Even some of the bills’ co-sponsors withdrew their names and said they would oppose the measures if put to a vote.

It’s remarkable how quickly it happened. Not to mention how PIPA and SOPA instantly became cocktail party fodder — and not just with intellectual property lawyers.

The text of OPEN is accessible here; Wikipedia treatment here. At first blush, I’m in favor of it. Some parts of our economy are getting hammered by counterfeiters. Our enforcement tools are expensive and cumbersome. If a counterfeiter, its Web site host, and its domain name registrars are all located in Foreign Country X, a rational counterfeiter may very well take his chances with a U.S. court whose power only extends to U.S. borders. OPEN seems to address that problem, and isn’t as heavy-handed as PIPA and SOPA.

Until someone convinces me otherwise, I think it’s a big improvement over the status quo.

Counterfeit! Wizard’s authentic (left) and Marticek’s counterfeit cards

In December, Seattle card-game maker Wizards of the Coast LLC sued New Jersey resident Victoria Marticek and a number of other defendants in the Western District for counterfeiting.

Among other things, Wizards alleged that Ms. Marticek uploaded YouTube videos depicting counterfeit cards for use in Wizards’ “Magic: The Gathering” game and encouraged consumers to purchase such cards through her online business, MTGReplica, and third party Web sites such as Etsy.com and iOffer.com.

Wizards alleged Ms. Marticek had offered at least 82 different counterfeit cards for sale.

Ms. Marticek agreed to a confession of judgment with a permanent injunction and monetary relief in the amount of $14,500. Judge Thomas Zilly entered the judgment Jan. 11.

Wizards’ similar claims remain pending against the other defendants, who have not answered Wizards’ complaint.

The case cite is Wizards of the Coast LLC v. Redmore, No. 11-02090 (W.D. Wash.).