Wednesday, October 21, 2009

Stephen W. Feingold: "Why You Should Think Twice Before Accepting a 2(f) Registration"

Steve Feingold took some heat when his client, Chippendales USA, Inc., recently sought to register its "Cuffs & Collar" costume mark on the basis of inherent distinctiveness. [TTAB decision, now on appeal, TTABlogged here; appellate brief here]. Chippendales already owned an incontestable, Section 2(f) registration for the same mark, so what was the point? Steve answers his critics here.

Stephen W. Feingold
Kilpatrick Stockton LLP

We have all been there. The Examiner has rejected your client’s application to register a mark on the ground of mere descriptiveness under § 2(e)(1). Assuming that it will take approximately five hours of lawyer time (including research to find the most compelling cases to counter the Examining Attorney’s argument) and two hours of paralegal time, this exercise is going to cost the client at least $3,000. Then when you consider the time you will spend explaining the issue and the pros and cons to the client, well, the cost is more likely closer to $5,000. Of course, you cannot even promise the client it is going to win, though if you do lose you know that your chances on appeal to the TTAB on this issue are slim.

These factors naturally push an attorney to consider filing a Section 2(f) amendment. If the mark has been in use for a while you may even be able to get the Examining Attorney to accept a simple declaration stating how long the mark has been in use. Who would not want to save the client more than $3,000 in fees, not to mention the embarrassment of predicting you will be able to overcome the examiner’s argument only to have to explain later that all litigation is risky and the other time-honored consolations muttered by the losing attorney for years? And, realistically, the truth is that most trademark registrations are never enforced so there is a good chance that the whole question of whether the 2(f) notation has any meaning will never come up, at least not until you are long gone.

I think that there are some very important reasons why a client and counsel who sincerely believe that the subject mark is not descriptive should fight hard to prove that fact to the examining attorney., without falling back on acquired distinctiveness under Section 2(f).

First, according to § 1212.02(b) of the TMEP, the claim of acquired distinctiveness, once entered on the certificate of registration, is an admission that the mark is not inherently distinctive. It is true that during the pendency of the examination one can claim both inherent and acquired distinctiveness without any admission. But once entered on the certificate of registration there is no reason to believe that the 2(f) notation would not act as an admission. For instance, while Section 24 of the Lanham Act expressly provides that registration on the Supplemental Register is not an admission that the mark does not have acquired distinctiveness, there is no similar provision with respect to a 2(f) registration

Remember, one of the most important likelihood-of-confusion factors is the strength of the mark. Savvy trademark lawyers know that strength can refer to two things: conceptual strength and market strength. Unfortunately, this distinction sometime gets lost in the case law and a good lawyer can always find cases suggesting that the fact that a mark is conceptually weak makes it a “weak” mark. Plus weak marks have far narrower zones of protection than strong marks. Conversely, strong marks are presumed to have much more protection power. For instance, in one case I argued right after the passage of the FTDA, a judge found that because a particular mark was “strong” it was also famous and therefore subject to dilution protection. It was no doubt cases such as that one are what caused the Second Circuit to later adopt a rule that dilution protection under the FTDA extended only to marks which were inherently distinctive. Of course, that ruling was overturned by the most recent amendment to the Federal Trademark Dilution Act, but who knows when a similar bright line rule might be adopted in some other context? In fact, it appears that Google will not enforce its takedown policy with respect to key words if it believes the mark at issue is not inherently distinctive.

I have also heard others argue that whatever limitations there are disappear after the registrant files a Section 15 declaration of incontestability. After all, once that declaration is on file your mark is no longer subject to attack in court as being descriptive without secondary meaning. That argument misses the point. The defendant can still argue that the zone of protection for your mark depends on the establishment of secondary meaning for any goods not within the four corners of the identification of goods or services. A similar question was recently considered by the Southern District in Victoria Secrets Brand Management v. Sexy Hair Concepts, 2009 WL 955795 (S.D.N.Y. 2009), which found that the fact that a mark was incontestable did not preclude consideration of the descriptiveness of the mark and its secondary meaning in determining the scope of protection for that mark.

But the most compelling reasons to fight the 2(f) battle are to avoid the headaches and additional cost your client will incur every time you seek to enforce your client’s rights in any area outside the four corners of the identification of goods and services. The infringer is going to demand evidence of acquired distinctiveness with regard to those additional goods/services You will reject that argument, but it takes time and money and, in my experience, the willingness to go to court to fight this battle at least a couple of times so your client can point to some consent judgments (or better) in its favor.

When you consider the cost of establishing this record of enforcement (which will easily run in excess of $10,000), you will recognize that fighting this battle with the USPTO will be a relative bargain.

Of course, this discussion presumes that your client’s mark is in fact inherently distinctive and that you have strategies for establishing that fact before the PTO. It never makes sense to fight a losing battle. But if you believe your client has a decent shot at winning, this is a battle that I strongly believe should be fought.


At 7:22 AM, Blogger SugarPop145 said...

These are all interesting, theoretical points.

But in going to war in federal litigation over a trademark I have never understood the failure to present persuasive evidence of sales, advertising and reputation in the mark - in other words, evidence of secondary meaning. That is true even if the mark is, in fact, arbitrary and fanciful. In all cases you need to persuade a judge or jury that you have something of great value worth protecting.

So essentially I disagree with this. If a mark is, in fact, to be used, I would sidestep the distraction of a PTO examiner tiff over 2(f) evidence and take the registration. To enforce the mark artfully in court you'll need to present this evidence and more, in my view.

At 7:49 AM, Blogger R J-M said...

All well and good, except the SEXY HAIR registration in the VSecret case you reference issued with no claim of acquired distinctiveness, the PTO never having raised an objection of descriptiveness. The District Court in considering Sexy Hair's summary judgment motion elected to look at whether the mark which is the subject of an incontestable registration was descriptive.

At 10:09 AM, Blogger said...

You may be right in assuming that an infringer might not get the idea as easily to require proof for acquired distinctiveness if the registered mark is inherently distinctive. Since, however, inherent distinctiveness of the registered mark was only determined with respect to the goods and services listed, any additional goods/services will require a new determination.

At 6:54 PM, Blogger Stephen said...

For those who may be following this case, I note that in its brief supporting the TTAB's decision, the Director went out of its way to address the question of whether there was a material difference between a registration issued under section 2(f) and one that was not. The Director asserted that there was a difference and stated that he was addressing this issue in order to address any concerns the Federal Circuit might have in light of the TTAB's obvious skepticism that there was any difference between a 2(f) registration and one that was not so limited.


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