In the first trial involving non-fungible tokens, or NFTs, trademark rights and a First Amendment defense, a jury in New York City earlier this month found an artist had violated the trademark rights of Hermés, the iconic French fashion house.
At issue was the artist’s NFT depictions of Hermés’ Birkin bags and his use of the BIRKIN mark in connection with his art. NFTs are digital depictions of art that reside not on walls or shelves of collectors but in the cloud, accessible via the owner’s computer.
Chief Justice Warren Burger admonished the ABA in 1984, “Our litigation system is too costly, too painful, too destructive, too ineffective for a civilized people.” The Chief added, “For many claims trials by the adversarial contest must in time go the way of the ancient trial by battle and blood.” Copyright trademark and trade secret trials may be among the most expensive legal contests, and I am pretty sure the Chief would have recommended mediation.
The number of civil cases that reach trial in the federal courts is a very small percentage of the total cases filed; probably less than 5 percent. The road to settlement, however, can be long and very expensive. We can get these cases settled early on! Continue reading →
The federal Lanham Act goes beyond trademark protection and establishes causes of action, as well, for unfair competition, false advertising, and false association. Section 43(a), however, does not contain a statute of limitations for claims that arise under the Lanham Act for any of these improper activities. That’s different from the Copyright and Patent Acts which each provide for limitations and apparently that’s the way Congress wants it.
This article originally appeared in the Association of Corporate Counsel: Baltimore’s Focus magazine (3Q2022, p. 7-9). Written by Jim Astrachan, Kaitlin Corey, and Donna Thomas.
A trademark infringement suit awarding Variety Stores $95 million dollars against Walmart is instructive as to what the courts in the Fourth Circuit require to establish trademark infringement and willful trademark infringement. Variety Stores, Inc. v. Walmart Inc., 852 Fed. Appx. 711 (4th Cir. 2021) (unpublished).
While the large monetary award has been resolved behind the scenes through a confidential settlement following Walmart’s successful appeal relating to the trial court’s jury instructions concerning whether Walmart acted willfully, the magnitude of the award and the Court’s explanation of what is required to establish trademark infringement are worthy of discussion. This is especially important for those who are called upon to advise their client about whether a trademark is clear and available for use. The analysis for clearing a trademark for use is similar to the analysis that applies to determining whether a client will succeed if it sues on the grounds of trademark infringement.
The recently enacted Trademark Modernization Act will help trademark owners enforce and preserve their rights against infringement. Remedies for infringement of a trademark includes monetary damages to compensate the mark’s owner for its pecuniary loss, including recovery of the infringer’s profits, and the owner’s damages. Continue reading →
The Lanham Act imposes on a trademark’s owner the requirement that the mark be used lawfully in commerce. If it is not, the USPTO should refuse to register it, and if registered the registration should be canceled. As well, unlawful use of a trademark in commerce has been applied as an affirmative defense to infringement in the case of registered marks, and there is no basis to distinguish, for this purpose, registered and unregistered marks. It’s just that the tested cases have been with registered marks.
Federal courts are prone to apply licensee estoppel to prevent a trademark licensee from challenging its prior licensor’s rights in the mark. If, of course, a licensee can establish that the prior licensor has no rights in the mark-at-issue, that licensor will not be able to enforce its rights in the mark. Those circumstances will often arise when the prior licensor sues it prior licensee because the latter continues to use the mark following expiration of the license.