Seattle Trademark Lawyer

Yesterday, the Trademark Trial and Appeal Board heard oral argument in the cancellation proceeding Hormel Foods brought against Seattle-based Spam Arrest over the registration of SPAM ARREST as a trademark. STL attended the hearing in New York, where the Board presided in a special sitting.

Here’s some case background: Spam Arrest, LLC, makes software that reduces unsolicited commercial email, otherwise known as “spam.” In 2003, it obtained Registration No. 2701493 for SPAM ARREST in International Class 009 for “computer software, namely, software designed to eliminate unsolicited commercial electronic mail.” In doing so, Spam Arrest disclaimed any trademark rights to the word “spam.” It allegedly began using the mark in commerce in 2002.

Hormel Foods Corp. and Hormel Foods, LLC, make the well-known canned meat products sold under the registered trademark SPAM. Hormel allegedly began using SPAM as a trademark in the 1930’s. Since then, it has expanded its and its licensees’ use of SPAM beyond canned meat products to include a wide range of goods, such as t-shirts, video games, a downloadable screen saver, and a Broadway show. It now owns a “family” of SPAM registrations, including SPAMARAMA, SPAMBURGER, and SPAMTASTIC. 

In May 2003, Hormel filed a petition to cancel Spam Arrest’s registration on grounds of dilution and likelihood of confusion. In its answer, Spam Arrest denied Hormel’s claims, primarily arguing that “spam” is generic, that the public is not likely to confuse a maker of software with a maker of meat products, and that Hormel had either acquiesced or sat on its rights in allowing the word “spam” to become a synonym for unwanted commercial email. Thereafter, Spam Arrest conceded that Hormel’s trademark is famous.

(Additional background on the case, Cancellation No. 92042134, is available in the Patent and Trademark Office’s TTABVUE database, as well as here and here.)

Friday’s hearing was presided over by TTAB Chief Judge David Sams, Judge Ellen Seeherman, and Judge Gerard Rogers.  

Hormel began its argument by stating it coined the term SPAM 70 years ago. Therefore, when the consuming public first heard the term, it exclusively thought of Hormel. Today, it argued, brand awareness of SPAM is “nearly universal,” with “up to 100 percent” of consumers surveyed associating it with Hormel.

Hormel did not dispute that “spam” is generic for unwanted commercial email. Yet, it argued that “44.7 percent” of consumers still have “Hormel and the famous brand come to mind” when encountering “spam” in this generic context. 

The board mainly questioned Hormel on dilution and likelihood of confusion. In particular, the board asked whether the generic portion of a mark is even capable of causing dilution. The board also questioned whether consumer confusion is likely when the public has come to associate the brand with Hormel and the generic term with unsolicited commercial email. 

On the dilution claim, Chief Judge Sams asked: Both sides conceded it is a generic term. Can you have dilution when a term is generic?

Hormel responded: Yes. “Spam” is not the generic or common name of computer software of any kind. SPAM ARREST is a weak trademark. It is irrelevant that SPAM is disclaimed because you have to consider the entire trademark.

Later, Chief Judge Sams asked: Can anyone use SPAM in a generic sense? Doesn’t your position sound like a right in gross?

Hormel responded: For famous marks, it does get pretty close to a right in gross. Dilution is the appropriate remedy for a mark like SPAM.

On likelihood of confusion, Judge Seeherman asked: Don’t we have two different meanings for the marks?

Hormel: Not really. The brand SPAM when used on all things still carries a meaning quite apart from canned meat. There’s an iconic statement about it. I don’t want to limit the meaning to canned meat.

Judge Seeherman: When the defendant uses SPAM for a product that filters unwanted email?

Hormel: That’s defendant’s intended meaning. But if someone sees SPAM ARREST, the likelihood is that people will think there is some sponsorship or affiliation with Hormel.

Spam Arrest began its argument by stating: This case presents an issue the Board has not considered. May the owner of a famous trademark that’s also a generic term prevent a party from using the mark in the generic sense?

It argued that its registered mark should be considered as a whole, stating: SPAM and SPAM ARREST are not seen as essentially the same.

Spam Arrest also argued that any “whittling away” of SPAM’s distinctiveness occurred “long before Spam Arrest used SPAM” in its trademark because consumers began to associate “spam” with unwanted commercial email fifteen years ago. Spam Arrest likened the public’s association with unwanted email as an ocean and Spam Arrest’s influence on that use as a raindrop in the ocean. 

Judge Seeherman asked: Because SPAM has two meanings, does that mean you can’t have dilution?

Spam Arrest: No. When “spam” is used in connection with a generic term, consumers recognize it’s used in connection with obnoxious email. When the word “spam” is used in connection with spam-elimination software, dilution is impossible. Any dilution has already occurred. Spam Arrest doesn’t make a dent in the dilution that has already occurred.

Judge Rogers asked: Hormel seems to refer to “spam” as a slang term. Spam Arrest’s definition doesn’t show the word is slang. Is it still a slang term or is it part of the current lexicon?

Spam Arrest: It’s not a slang term. Hormel’s brief says it’s a generic term. Both sides submitted dictionary defintions saying it means unwanted commercial email.

The Board then questioned Spam Arrest on its contention that Hormel’s survey evidence is unreliable because, among other things, it was based on a mall survey. Judge Seeherman, in particular, asked why that constituted a flaw. Spam Arrest responded that since SPAM products are sold in shopping malls and Spam Arrest’s software is only sold through the Internet, the results were skewed in Hormel’s favor. Judge Seeherman asked if any anti-spam software was sold in malls. Spam Arrest answered that such software was available at stand-alone stores like CompUSA but generally was not available in malls.

Finally, Judge Rogers asked about Spam Arrest’s acquiescence defense. Spam Arrest responded that Hormel had posted a statement on its website (apparently gone now) that it did not object to the public’s use of “spam” as a slang term referring to unwanted email, and has never attempted to stop the public’s use of the term in that way.

Judge Seeherman asked if Hormel had ever told Spam Arrest in particular it could use “spam” as part if its trademark. Spam Arrest responded that Hormel had “told the world” that it was ok to use “spam” as a generic term and that Spam Arrest was a subset of that population. Spam Arrest later conceded this evidence better supported its laches defense.

Both sides argued for 30 minutes (and probably longer). Both made very good presentations. It also was clear that the panel was well-prepared. The case is now in the panel’s hands. My strong suspicion is the panel will uphold the PTO’s decision to register SPAM ARREST and deny Hormel’s petition due to the widespread generic use of the term. That’s how I would decide the case if I were on the panel.

The hearing was attended by approximately 75 persons as part of the Practising Law Institute’s excellent continuing legal education program entitled, “Navigating Trademark Practice Before the PTO 2007: From Filing Through the TTAB Hearing.”

N.B.: Attendees were told not to record the proceeding. Therefore, I had to resort to taking notes as fast as I could. It was a little easier for me to take down Hormel’s argument than Spam Arrest’s because Hormel’s attorney spoke a little slower. It was a little easier to take down questions from Chief Judge Sams and Judge Seeherman than Judge Rogers for the same reason. Though I made every effort to be accurate, the statements in this post attributed to various speakers are likely not perfect. That’s why I generally did not use quotation marks.

I’m here in New York attending the Practising Law Institute’s CLE, “Navigating Trademark Practice Before the PTO: From Filing Through the TTAB Hearing.” Today we covered a lot of ground, from trademark clearance, to bases for registration refusal, to ex parte appeals. Despite this diverse lineup, there was one issue that seemed to come up over and over: fraud.

Fraud on the PTO occurs when a person makes a material misrepresentation of fact that the person knew or should have known was false or misleading. It can occur, for example, when a trademark owner files a declaration of use stating it has made actual use of its mark with all of the applied-for categories of goods. If that statement is not 100% accurate, it is subject to challenge and the entire registration may be cancelled. One presenter stated that the belief that upwards of 50% of registrations may be vulnerable to attack on this ground.

That’s a shocking statistic. In response, the Trademark Trial and Appeal Board is stepping up its enforcement efforts. While cancelling a registration because of fraud used to be unheard of, it’s now becoming fairly common. One need look no further than last month’s decision in Hurley Int’l LLC v. Volta, No. 91158304 (TTAB 2007), to gauge the Board’s recent attitude. (Discussion in the TTABlog here.) In that case, the applicants represented to the PTO that they had used the subject mark in connection with all of their applied-for classes of services. In the subsequent opposition proceeding, however, they admitted in discovery they had not used the mark with some of the services. Upon learning this, the opposer moved for summary judgment on the ground of fraud. The pro se applicants blamed their error on health problems and their ignorance of the law. 

The TTAB was not persuaded. It concluded: “The fact that applicants allegedly misunderstood a clear and unambiguous requirement for an application based on use, were not represented by legal counsel, and were suffering health problems does not change our finding of fraud herein.”

Therefore, the Board granted the opposer’s motion for summary judgment and denied the applicants’ motion to amend their application to correct the error as being too little, too late.

From today’s presentations, it sure looks like fraud challenges are here to stay. Trademark owners who think their registration may be vulnerable to such an attack should think hard about re-applying for registration. Just make sure any new application is based on facts that are rock-solid.

On Thursday and Friday, I will be attending the Practicing Law Institute’s CLE program on “Navigating Trademark Practice Before the PTO 2007: From Filing Through the TTAB Hearing” in New York. Among other things, this will enable me to report on the oral argument in the Hormel v. Spam Arrest cancellation proceedings, over which a three-judge panel from the U.S. Trademark Trial and Appeal Board will be presiding in a special sitting. (Discussion on this case here.) It also will enable me to meet fellow bloggers and STL readers from the Big Apple. If you’d like to have a cup of coffee (I’m from Seattle, after all), drop me a line.

(Photo credit: www.salwen.com)

Last week was an interesting week in the blawgosphere.

The Trademark Blog wrote about Horphag Research Ltd. v. Garcia, the Ninth Circuit dilution case Seattle Trademark Lawyer recently discussed.

The TTABlog reported that the Trademark Trial and Appeal Board has lifted its prohibition on citing unpublished TTAB decisions. Now, “a decision designated as not precedential is not binding upon the TTAB but may be cited for whatever persuasive value it might have.” The TTAB’s notice, which appeared in the January 23 Official Gazette, is available here. This is good news for TTAB practitioners.

The 43(B)log and the TTABlog both discussed Google’s RICO lawsuit against Leo Stoller’s companies. In it, Google alleges that Mr. Stoller’s companies “are engaged in a scheme of falsely claiming trademark rights for the purpose of harassing and attempting to extort money out of legitimate commercial actors, both large and small,” including attempts to settle an alleged dispute over the GOOGLE trademark for $150,000. The New York Times and many others have written about Mr. Stoller’s alleged practice of purporting to own trademarks in gross, opposing third-party efforts to use or register such marks, and offering to “settle” with those parties. Mr. Stoller’s alleged practices have local implications. He has offered to “settle” with at least one Seattle company and probably others. It will be interesting to see what happens with Google’s suit.

Finally, TMBrandingCap discussed O’Charley’s Management Co., Inc. v. Darden Concepts, Inc., in which plaintiff alleged that defendant’s ROCKY RIVER trademark for restaurants is confusingly similar with plaintiff’s STONEY RIVER mark for restaurants. The lawsuit was filed last week in the Middle District of Tennessee.

Three things come to mind. First, the restaurant vs. restaurant trademark suit happens everywhere, including Seattle. Just last week, STL reported on the lawsuit over MOONSTRUCK and MOONRAY for cafes. In recent memory, the Western District has also seen disputes over IN-N-OUT BURGERS and IN-N-OUT PIZZA, and THE ROCK WOOD FIRED PIZZA & SPIRITS and ROCKO’S BRICK OVEN PIZZA. Second, these disputes are not limited to restaurants. The lessons they provide apply equally well to other trademark uses. And third, these disputes are easy to avoid. As Neil Melliship of the Canadian Law Blog recently wrote in the context of real estate development, these disputes “can normally be avoided by conducting due diligence through comprehensive trademark searches before committing to a particular mark for a new project.” This means trademark lawyers need to educate clients (and other lawyers in their firm) about trademark issues early on — and not only the clients with big trademark portfolios. It means talking with all clients, from the owner of a one-location restaurant to the hotel chain that’s planning its next development.

Let’s hope this coming week’s events are just as interesting.

Seattle-based Spam Arrest LLC sent out a press release today publicizing its dispute with Hormel Foods Corp. over Spam Arrest’s registration of SPAM ARREST in connection with “software designed to eliminate unsolicited commercial electronic mail.” Hormel seeks to cancel Spam Arrest’s registration in a case now pending with the Trademark Trial and Appeal Board. The TTAB will hear oral argument on February 23.

Spam Arrest claims it is the only company besides Hormel to obtain a federal registration for a mark containing the word SPAM. That’s true, though there are 33 applications for registration pending.

Spam Arrest states that it has spent almost $500k in the dispute.

Isn’t “spam” generic for unwanted commercial email? Spam Arrest thinks so — it disclaimed any trademark rights in that term. Obviously, Hormel begs to differ.

The TTAB’s last decision in the case — its March 30, 2005, order denying Spam Arrest’s motion for summary judgment — is available here.