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Your source for news, updates and guidance on all things trademarks and intellectual property.

Alt Legal Connect Session Summary: InRecent Exposure: Current Topics in Trademark Law

Alt Legal Team | September 13, 2021
4 min read

On Monday, September 13, Anne Gilson LaLonde, author, Gilson on Trademarks, Rebeccah Gan, Partner, Wenderoth, Lind & Ponack, LLP, and Irene Lee, Partner, Russ, August & Kabat presented the session, “InRecent Exposure: Current Topics in Trademark Law.” The presenters discussed current trademark law developments including the TMA, new expungement and reexamination proceedings at the USPTO, and the return of the presumption of irreparable harm. They also noted important, timely cases dealing with dog toys and the First Amendment, fair use and the Lil Nas X Satan Shoe, and Redbubble, SHOP SAFE, and online contributory liability.

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Session Summary

Anne, Rebeccah, and Irene expressed their perspectives on new proceedings outlined in the Trademark Modernization Act: expungement and reexamination.  The new proceedings open up the playing field for applicants waiting to acquire rights to marks that are registered but not in use. The new proceedings allow applicants to file a petition which may quickly and efficiently cancel marks not in use/marks which owners were unable to provide a specimen for upon renewal. The presenters also dove into elements of nominative fair use and aesthetic functionality, bringing in modern examples such as Jack Daniel’s and Louis Vuitton dog toys, Lil Nas X’s Satan Shoes, and Redbubble.

Trademark Modernization Act

Anne opened the discussion with the new proceedings in the Trademark Modernization Act – addressing expungement and reexamination, and presumption of irreparable harm. The new expungement proceeding allows applicants to file a petition against any registration no matter the basis, giving the mark registrant a two-month response deadline. Nonuse is now also being considered a ground for cancellation for any time after the first three years post-registration. Rebeccah expressed her opposition to the new proceedings, “I don’t welcome these tools. I’d like to point out that first exam has now ballooned to over six months. I have not seen a gear-up in staffing, I don’t know how they’re going to possibly do this in a timely way.”

Rebeccah further commented that she doesn’t see an efficient or effective communication process for these petitions under the new proceedings and is unhappy with the post-registration audit system, “I think the PTO treats every registrant as if they make a t-shirt or a hat.” Rebeccah expressed her belief that it may be unfair for registrants who make things such as high-tech goods as it may take more than 1-2 months to produce a specimen in time for the response period to the petition.

Fair Use Cases

Rebeccah and Irene then proceeded to discuss fair use cases, bringing up examples of expressive works and the First Amendment, and what may constitute “fair use.” Irene described the elements of nominative fair use and how that may apply to the 2021 example of MSCHF x Lil Nas X’s Satan Shoe, where Nike filed a lawsuit against MSCHF and their collaboration with Lil Nas X in creating a shoe using Nike’s Air Max 97 shoes.

Rebeccah and Irene went on to discuss what it means to argue that a product is an artistic expression and what the lawsuit may do to other parties who resell customized versions of popular shoes. Irene brought attention to classic and nominative fair use, describing nominative fair use as a “modified likelihood of confusion test” where a party may use another party’s product/service and modify it. Irene described the three elements of nominative fair use:

  1. The product/service must be one not readily identifiable without use of the mark at issue.
  2. Only so much of the mark may be used as reasonably necessary to identify the product/service.
  3. The user must do nothing that would suggest sponsorship or endorsement by the mark holder.

Irene noted that in the Lil Nas X Satan Shoe case, because there were overwhelming incidents of actual confusion, Nike was able to file a lawsuit against the manufacturer. Also notable, MSCHF’s counsel did make an argument under the First Amendment. However, no lawsuit was filed against the “Jesus Shoe,” created in 2019, using the same shoe as the “Satan Shoe” (Nike Air Max 97).  Anne then raised the question, “how much expression do you need to put in?”

Expressive Works

Next, Rebeccah transitioned into a discussion on the case VIP Products LLC v. Jack Daniel’s Properties, Inc. 953 F.3d 1170 (9th Circ. 2020)”, where a liquor bottle-shaped squeaking dog toy with the label “Bad Spaniels”  was determined to be an expressive work entitled to First Amendment protection as parody. Rebeccah used the Jack Daniel’s case as an example of what characteristics may count towards “artistic” or “expressive”, which may lead to the collapse of any type of commercial speech down to being shielded from infringement. Rebeccah brought up another case, LTTB LLC v. Redbubble – Inc., 840 Fed. Appx. 148 (9th Circ. 2021)” where the court determined that although LLTB had several incontestable trademark registrations, the pun used by Redbubble was aesthetically functional.

SHOP SAFE ACT

Anne then discussed a pending bill that may be on track to become law, the SHOP SAFE Act (Stopping Harmful Offers on Platforms by Screening Against Fakes in E-Commerce). Anne described the bill as “trying to make a dent in the enormous number of counterfeit goods being sold on online platforms.” A platform may be contributorily liable for the sale of counterfeit goods when it intentionally induces a third party to sell counterfeits or continues to supply its services to a third party it had reason to know was selling counterfeits. Irene commented on the Act, “Realistically, I just don’t know how that would be feasible. From the trademark owner’s point of view, we do have a number of clients who have been using trademarks continuously for years… but they don’t have a registration.” Both Irene and Rebeccah agreed that successfully registering a trademark for the products your client is selling is one of the safest steps you can take to protect your branding and goods.

Top takeaways from the session include:

  1. Take the step to register (+ maintain!) your brand, mark, goods, or services.
  2. A party may create a product using the goods/service of another party under fair use.
  3. Nominal fair use may be rejected if likelihood of confusion is determined.

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