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In this episode, guest Michelle Carter joins me to talk about trademark licenses and a basic idea of what a likelihood of confusion is.
In trademark licenses, it is imperative that the licensor insists upon having standards in the product and intellectual property in order to have the trademark license stand for goods or services. In the meanwhile, it is incumbent upon the trademark licensee to meet those standards lest there be liability for trademark infringement and breach of contract.
Speaking of trademark infringement, we discuss a couple basic cases of what a likelihood of confusion is between trademark owners. Then I discuss the need for a trademark search and due diligence before use of a trademark.
Here is a lightly-edited transcript of the discussion:
Anthony Verna:
And we’re off, aren’t we?
Michelle Carter:
Indeed. We are.
Anthony Verna:
Welcome to episode one, not zero of the Law & Business Podcast. I’m Anthony Vernon. I have a special guest with me. Say Hi.
Michelle:
Hello, listeners!
Anthony:
With me is Michelle Carter. What business are you in, Michelle?
Michelle:
I do public relations for select clients.
Anthony:
Yes. Very good. Welcome. Thank you. Of course. I’ve known you for a long time now. It is a pleasure to be here.
For those of you who forget who I am, I’m Anthony Verna. I’m a managing partner at Verna Law, PC where we do intellectual property, patent, trademark, copyright and advertising and promotion law. That’s a mouthful.
I am also going to be speaking at the Small Business Albany Exposition. October 1st I’m doing the opening remarks and I’m doing a seminar on trademark and copyright law for the small business owner. Although I never really liked the idea of being just a small business attorney, but, this is a small business exposition, isn’t it?
Michelle:
And it’s a good thing you’re not just for small business, but in all seriousness, it is a wonderful event. If you have a chance to check it out, you really should.
Anthony:
It’s October 1st in Latham New York. Did I pronounce it correctly? Okay, very good. And you can go to smallbusinessalbany.com if you want to register. Excellent.
This is the Law & Business Podcast.
It’s, what I find interesting is this intersection that a lot of people find that sometimes maybe law stifles their business. Sometimes they find that law helps their business and sometimes people are just confused because all they want to do is business and not worry about, what laws do you have any confusion in, in these particular areas?
I would say that, , I have seen with, with multiple clients that their, their ignorance of the law can certainly come back and bite them. So I always advise people to do the legal on the front end. You will thank yourself later. I promise.
Michelle:
That almost sounds like: you should hire an expert as well.
Anthony:
It does because experts have the, the, uh, ability to be expert in their field and actually know what they’re talking about.
Hmm. Now, now let’s go to people who, who sound as if they don’t know what they’re talking about. Because I heard, I have, you and I were talking earlier about Donald Trump obviously before we were recording, and he has sued Trump entertainment, which he doesn’t own. And part of, part of the issue is that he’s, he’s only minority shareholder of Trump entertainment. What he says doesn’t go, however, because it’s still called Trump Entertainment. It’s a license for the name Trump. And Trump is, has many federally registered trademarks. You can find “Trump” for the casinos, obviously for real estate. And, I’m sure for, I forget the Trump board game.
Do you remember? Do you remember Trump airlines?
Michelle:
I do. Yeah.
Anthony:
He was trying to set up something like a semiprivate charter starting out of Atlantic City to luxury spots, although I guess that didn’t really stick well. Did it?
Michelle:
Apparel.
Anthony:
I know there’s, there’s Trump apparel out there. It might be a picture of Donald Trump saying you’re fired. So it might be through like NBC or something like that. But so, so Trump is associated with many different industries and he has sued Trump entertainment because they built the Taj Mahal is, I think threatening to close if it isn’t close, I forget which casinos in Atlantic city or closing, but there’s the Trump Marina, there’s the Trump Taj Mahal, the Trump plaza, I forget which one is closing.
So he has sued for trademark infringement and a breach of contract. And he has said that the reason that the suit is in existence is because he wants to take the name Trump back out of the licensing agreement because Trump entertainment has not held, , his name to the standard that’s required of luxury standard of luxury that the Trump name requires.
Michelle:
Right. Well, I’ve read that his complaint is that the casinos as a whole really failed to meet industry standards, across the board, whether it’s services, food, operations, cleanliness.
Anthony:
Is it, is it industry standards or is it Donald J. Trump standards?
Michelle:
I think that’s a fair question. He says the problem is industry standards.
Anthony:
On one hand there’s a federally registered trademark here and Trump is a federally registered trademark.
Especially in real estate and in the gambling industry, however you define the gambling industry. In this particular case we’re dealing with casinos because obviously gambling can be state lottery, gambling can be horse tracks. Here we’re dealing with casinos and hotels as well. It could be the hotel industry as well.
But I know that Trump is a federally registered mark.
When you’re, when, when a business owner is doing a licensing agreement, so we have the license or is the trademark owner and the licensee is the company that is paying for the license to use the mark. And this happens of course on all sorts of industries. And I always talk to clients and I always say: If you’re doing a registered trade marketing, you have a product that you think could be licensed or you think could take a license.
You need to think about this in both directions. for example, I have a client and, and I wanted the client to take the product and put it on apparel or find a company that would want to put it on apparel and kind of turn it into its own personality. And I can’t really go into more last night, lest I divulge attorney client privilege. But if you have something that, that, that can be put into other industries and maybe you’re just not the person who wants to be in the t shirt business, you can take your, your mark and license it to, , another company that would be able to do that. And in this particular industry, in this particular instance, Donald Trump is not an owner in Trump entertainment. So as a part of booting him out, when they did put him out as a majority shareholder, there was a licensing agreement for not just the name, but also the federally registered trademarks.
Now do those license agreements have requirements that the business be conducted at a certain level? Does he have any remedy there that in short, since I haven’t seen them, I don’t really know the answer to that question, but, but , they should and I don’t really care if I’m really care what the level of businesses like Trump is sitting here talking about the Trump luxury level.
We know that if you’re buying real estate in a Trump building is going to cost a lot more than, than what’s next door just because one building has the word Trump on it. , so yeah, there’s a level of luxury associated with the Trump name, but this should be true for every single license agreement. Licensed agreement needs to be thought of in several parts. One, the intellectual property to the actual product.
What are the standards of the product? And three, the cashflow. And for a lot of companies, the license agreement is not really a flat rate or it might be a flat rate per dollar amount. But for many license agreements, if you’re dealing with a product rather than services, because a tee shirt is going to be calculated radically different than services, than restaurant surfaces or casino services. I mean, how you count the money matters for a lot of products, they’re going to be things like returns. And so how you calculate the money or shipping, a contract is going to have those monetary considerations, but there needs to be an IP standard and there needs to be a product standard.
So for example, Trump isn’t going to put his name to , slumlord apartment at that point.
Okay, I’m being silly about that. I’m being totally silly about that.
It’s totally different than the Trump buildings, and on the Upper West Side of Manhattan or on the Jersey City waterfront, those are luxurious buildings. So the level in your license agreement of standard of quality has to be stated out in a license agreement. Because at that point, if the licensee fails to maintain the level under the contract, the licensee is able to be sued for breach of contract with, they’re not following the contract, but also for trademark infringement. Because one of the things that I harp about, and I know you’ve heard me harp about this, Michelle, is that trademark comes with a product and whether that product is good or a service, that’s what matters. And in this particular instance, the level comes with the trademark. And so if it’s a casino but it’s not a casino that’s making enough money or it’s not a casino that’s decorated properly or it’s not a casino that just attracts the right clientele.
It sounds a little ridiculous. I mean, what’s the actual quote in there? I know it’s, it’s sitting here. Oh, here it is. The license entities have allowed the casino properties to fall into an utter state of disrepair and have otherwise failed to operate and manage the casino properties in accordance with the high standards of quality. And luxury required under the license agreement. And, and while a lot of people , might laugh at such a statement, one of the issues here is, is just that that’s what’s in the license agreement. I don’t necessarily know that. And other state of disrepair is the proper, uh, phrase, , because I sure that’s not quite right, but I’ll just, all that has to happen is that’s not maintained to the proper level that was agreed to.
Michelle:
Now what if the licensee said, “Atlantic city is a failing city where we’re lucky that we have the doors open and we are maintaining this at a level that’s higher than some of the other casinos. Maybe not what it was, but it’s certainly a higher level of experience than you would experience somewhere else.” Does that meet the threshold?
Anthony:
I would say that’s an interesting argument. I don’t know that it really is going to pass, again, when it comes to a license agreement, the agreement is the law of the case. We’re going to be determining what the standard is by what the agreement states and how specific the agreement is.
We’re not going to change the standard just because it’s in a certain particular city. We’re going to be dealing with the agreement. And so we’ll be looking at that. I mean, if, if a licensee or license or excuse me, wanting to license a product and the licensee was making a product that children could swallow, , I mean, do you think, do you think MLB or, or a team would love a product that children that wound up breaking in children were swallowing it?
I highly doubt. Yeah, I highly doubt that. So I would say that that those particular standards are not going to be because we’re in one particular position versus the other. It’s going to be just what is the standard of the agreement. I am, I’m sure that the analogy I gave isn’t perfect because we have inherent federal standards that a lot of us have grown up on, so from that particular standpoint, I don’t know if the analogy I made is completely perfect.
Michelle:
It makes sense.
Anhtony:
All right, good. I’m glad. I’m glad you think it makes sense. I mean I’m a lawyer, I tend to ramble about law and, and, and I’m here to keep you on track. Oh good. I’m glad somebody, yes, I’m sure. I’m sure anybody listening is probably glad that somebody is.
Michelle:
All right. So what’s next?
Anthony
Whatever you’d like to talk about is next. I have some, cases that I wanted to talk about as well because a lot of people don’t quite understand.
In trademark law that you can be sued for filing a trademark or that there’s a process for determining one trademark versus another trademark and how they get confused with each other.
Michelle:
Are you saying that when people try to file their own trademarks, they can get themselves into legal hot water?
Anthony:
Yes, I am. And I, love how the sarcasm comes dripping off of your tongue, but yes.
I’m not being sarcastic when I tell you that many of the clients I’ve had who have run into legal trouble is because they tried to do it themselves of course.
Michelle:
There’s a reason why we’re not specialists in law because we specialize in our own industries.
Anthony
And I’ll tell you sometimes, sometimes lawyers who focus on trademark law will in their exuberance for billable hours probably file cases that go a little far as well and, sometimes file a trademark application that absolutely conflicts with what else is out there. And we’ll look at a couple of those cases. But to take a step back, the first thing that, that any business should be doing when it comes to trademark law is due diligence and doing a trademark search and seeing what else is out there.
Let me give you an example here. Here’s a, here’s a trademark called Uncle Giuseppe’s Marketplace.
Michelle:
It rolls off the tongue. I would like some, some uncle Giuseppe’s today.
Anthony:
I’m very glad they didn’t use the Italian word, although I forget what the Italian word for uncle is.
It’s for, of course, sauces.
You can get your uncle Giuseppe’s sauce. But there was an uncle Giuseppe’s already a registered trademark for prepackaged frozen entrees consisting primarily of pasta and sauces for sale in food stores.
So you detect any conflicts there?
Maybe a little one.
Your competitor will notice the application? Or forget that it exists?
That’s not how it worked out. No, that’s generally not how it works out in this case as well. Would you like to guess what happened in this case?
Michelle:
I’m guessing someone had to withdraw their mark.
Anthony:
Yes. The petitioner who filed, I believe. Yes, it was uncle Giuseppe’s marketplace had the application canceled because there was already a previous one there. This was not a lawsuit as in two parties going head to head. This was an appeal. When you file a trademark somebody can, the examining attorney at the patent and trademark office, either gives you a thumbs up or thumbs down and there are reasons why you would get a thumbs down. In this particular case, the examining attorney said there’s already uncle Giuseppe in pasta.
Pre packaged frozen entrees consisting primarily of pasta and sauces for sale and food stores and, and basically said that’s really much like ready-made sauces.
I don’t know if this really feels common sense to me. I feel like I’m not talking a lot about law here. To me this feels like it’s common sense, same trademark, same goods and services.
Michelle:
It is common sense, but we all know in business,
Anthony:
Ooh, somebody cynical side’s coming out.
Michelle:
That’s an issue that could have been resolved with just a Google search.
I think that sometimes, especially when we’re starting new businesses, we will get an idea or a concept and we’ll fall in love with it and we will pursue it at all costs, even if it doesn’t necessarily make business sense. And I think this is a perfect example of having your idea and, and needing to be flexible with it so that you can have it continue and grow into a successful product.
Anthony:
I agree with you on that and there have been plenty of times when I have told a client, you need to start over. You need to find something else. You need another trademark.
Michelle:
Does it mean that your frozen food is terrible or that that’s not going to sell? It just means you need to call it something else. And I’m sure it was uncle Giuseppe’s recipe and I’m sure he was someone who was very important to you, but you know what, maybe consumers will identify with uncle g’s better.
Anthony:
I mean that, that’s, that’s possible. That’s an interesting question now. But uncle g’s be different than uncle Giuseppe’s. Now that’s an interesting question. I hadn’t thought about that.
Michelle:
I didn’t even go to law school, but, what else this points to me is that there are issues here such as common words at the moment. I would say that you have to make sure that stuff that is commonly associated with your goods or services are, not really in use. Seeing Giuseppe there reminds me of how stereotypical Sanchez Epi, but just the word Giuseppe in general. You take a look around at what Italian foods are called and, maybe, avoiding words like Giuseppe or Francesca or things that are already heavily associated with Italian food and Italian culture in the United States might be something to shy away from.
Anthony:
Sure. And, and I think in that particular aspect, when you’re doing branding and you’re a business owner is speaking with a branding company and business owners should be speaking with branding companies. This goes back to hire an expert. India does. And in this particular case, you might want to do your trademark search while you do your branding, so that your branding company and your lawyer work together. Absolutely. And, and you’ll have to, as a business owner, you kind of have to deal with, maybe some confidentiality issues on how your lawyer can work with a branding company, but the need to at least need to speak to each other and say: here’s what we’re thinking of. Here’s what a good trademark is versus here’s what a good brand is. Because sometimes a good brand is, is very descriptive.
And in trademark law, you can’t have a descriptive word or phrase as a registered mark unless it has what we call secondary meetings. So you need to be flexible between what’s a good brand and what’s a good trademark. In this particular case, I probably would’ve just said lucky you’re calling it uncle Giuseppe’s really. Even if there isn’t an uncle Giuseppe’s out there, is there something that’s less stereotypical that that can put something in the mind? But here the standard is, are the goods and services the same?
Are the goods and the mark not the same, but are they similar, economically related? And is the mark similar enough in sight and sound in meaning? So that in that you put those two together so that consumers get confused when they look at two products and they see the same trademark and they’re very similar.
If a consumer thinks the two products are going to come from the same company, then there’s that likelihood of confusion. We’ll notify the owner of junior trademark.
Michelle:
In this particular case, to help consumers find you either.
Anthony:
That’s very true.
What I like about trademark law is that it’s about helping a business do business. And if, and if a consumer can’t find you, you’re not going to be able to do business. If a consumer thinks that you’re coming from some of the, your product is coming from another company, you’re not going to be able to do business. There’s just going to be confusion. So this area of law helps the businesses actually do business.
The standard just like I had said before, is that the goods need only be sufficiently related that consumers would be likely to assume upon in countering the goods under similar mark that the goods originate from are sponsored or authored by authorized by or otherwise connected to the same source. And in this particular case, the company that was applying for the uncle Giuseppe’s marketplace, showed that the owner tried to argue that there are differences between ready-made sauces and pasta and sauce entrees. However, the examining attorney at the patent and trademark office defended the patent and trademark offices positioned by showing Amy’s. I know these products quite well.
Michelle:
They’re usually vegetarian, right?
Anthony:
Yes.
Amy’s has an Amy’s brand pasta sauces and Amy’s brand premade entrees composed of macaroni and a creamy cheese sauce.
Now, the one thing I will say is that it’s interesting how the patent and trademark office attorney is using a macaroni and cheese dish. And we’re talking about Italian food. So I’m sure a lot of people listening had red, , tomato sauce, which I grew up calling gravy, uh, stuck in their heads, , so I would say that, , , sauce is sauce regardless of what’s in it under trademark law purposes, sauces, sauce. , also there’s this little brand called Newman zone. I think you’ve heard of Newman’s own?
There’s Newman’s own premade skillet meals comprised of pasta and sauce and of course Newman’s own pasta sauce is also sold separately. And, of course, we can talk about Barilla, Barilla brand pasta and sauce prepared entrees and you can find Barilla brand pasta sauce all by itself.
So as far as the PTO is concerned, the food is food. I don’t know that I would say that food is food. The PTO, and trademark law in general, does believe that apparel is apparel. Because if you’re wearing, , whether you’re wearing say a good suit or you’re wearing underwear or you’re wearing a swimsuit or , clothing is clothing because those machines that are making the really good find suit can be stopped and you can load new patterns into it and that can then be a swimsuit and a new materials. And then you can stop that and you could change the materials and then you can make underwear and , or whatever. So apparel is apparel that I will, that I will grant. I don’t necessarily believe that food is food, but I can see where you’re going with that. But in this particular case, certainly we can see that a pasta and sauce, frozen entree dinner is going to be similar, at least economically related to just a jar of sauce regardless of what the sauce is. So I’m in that particular case, it’s the same trademark, same goods and services. It’s something to be avoided.
Michelle:
Fair enough. Excellent.
Anthony:
We have another case and I’ll go quickly on that one that I wanted to bring up.
As the moral of the story is, speak with your attorney first, do some research before you file your mark. Because unfortunately as far as this case was concerned, I’m sure that filing the mark was not the first step that they took.
Michelle:
Well, it could have packaging, they could have branding, they could have logos. And all of that money is now gone.
Anthony:
And I will tell you that there are attorneys listed in this particular case. So obviously I don’t know what was done beforehand. I’m not going to assume that a trademark was just filed and then let’s, and then they just decided to see what would happen afterwards, but one never knows. , but yes, I would do the research. I would do the due diligence first because if there’s something out there and it’s no, you want to know that of course I’ll tell you what sometimes. , sometimes I will do what is called a quick and dirty search and the quick and dirty search cannot give me a yes, but it can give me a no answer to a client. So yes, if I were to go on Google or the patent and trademark office a website and I were to have typed, , uncle Giuseppe’s, I’m sure I would have found this particular registration. I probably would have had further discussions with my client as to this particular issue because if the applicant were senior to the registration, then that the applicant would have had the ability to cancel the registration. Okay. And that’s not what was argued here.
Michelle:
For those of us who don’t speak legal, what you’re saying is that the person who just got rejected, if they could prove that they’ve been doing business under the, the Uncle Giuseppe name for 50 years and the existing mark was by a company that’s only five years old, they could have challenged that. Yes, exactly. Not the case here or just strictly speaking.
Anthony:
Let me praise Michelle Carter, law-to-English dictionary. We have our translator.
Michelle:
So what’s next?
Anthony:
It’s something that a lot of people like to deal with and that is: recycling.
Here’s a mark called Green Depot and its services are identified as recycling. Do you like that green depot?
Michelle:
Kinda catchy. I guess so.
Anthony:
I mean, you’re not a fan.
Michelle:
I mean, when I hear Green Depot, I’m thinking of a place that I can go and buy solar panel chargers for my laptop and rechargeable batteries and green like Home Depot, except for green, but I can see making it for green products.
Anthony:
So, in this particular case, the examining attorney at the patent trademark office found three separate green depot marks already in existence.
Oops.
One of them represented online retail store services featuring home improvement products, retail stores, featuring home improvement products. There you go. There you got right.
Maybe I have heard of Green Depot biofuel for “public advocacy to promote awareness of biofuel.” That seems to make sense.
There’s Three Green Depo 360 Network and that is for “marketing and advertising, ecologically friendly consumer services and construction and design professionals.”
And then there’s something just called Green Depot. I will tell you that the goods and services description is so long that it is practically obscene. You do want to be careful about your really long goods/services description. It’s a page long.
I will just say it says more about retail store services and everything that, that the retail store should, should sell making it look like a home depot.
Michelle:
Sure.
Anthony:
The applicant, was Green Depot for recycling. The patent and trademark office attorney said, no, you can’t do it. And then the applicant appealed. And in this particular instance we’re dealing with, marks with designs in them. What happens often is that a trademark attorney is going to say, no, look, there’s a design. No, look, look that word as differently styled than this were,
Michelle:
It’s funny that you point that out because obviously listeners can’t see this, but I can see the logos that are associated with these, these various companies and I might not know that they are different businesses because they are all very similar. They have all in some way taken the o and depo and made a leaf out of it.
Anthony:
Okay. So, so the fact that, and you realize that these are the same company.
Michelle:
Oh, okay.
Anthony:
These are the same company. This is, this is one company and then, and then the others, right. So we only have two companies here, the one that’s applying for it. And all of these other ones are the same company yet. Right. So it’s not like the PTO is letting six companies use “green depot”. Every single one of these previous registrations is from the same company.
That’s why those look the same. I’ll have the same designer. Right, exactly. Now the, as you can see, the applicant looks very different than the registered trademarks. So, the first thing that, that this trademark attorney does is he goes different though. Look there different designs. It’s because, he’s got nothing else right.
He’s got nothing else. Because the words are exactly the same. And even the board discussed the trademark trial and appeal board discussed the fact that the marks look similar. Here it is. Applicant’s mark has the letter o formulated in the shape of a fruit with two leaves on top.
Michelle:
I think that’s supposed to be a globe. Not, not, not a fruit. I don’t think it’s supposed to be like a pineapple.
Anthony:
And the cited registration has the letter o shaped itself as a leaf. I’m going to tell you this right now, that had never ever come to be enough to create a difference because effectively the words matter. Right? Okay. So the words matter, not necessarily the design or the stylization of words that’s not going to matter as much. Then the applicant tried to describe, tried to claim that the terms green and depo themselves are weak so that the registered marks are not protectable in and of themselves.
And that’s an interesting argument except that I would, I would tend to agree that green does go towards recycling or, , environmental consciousness for lack of a better phrase. I think that’s okay. So while the board said the green is highly suggestive or merely descriptive for recycling services, that’s it. It is not necessarily descriptive for the other services that were stated here, such as the retail store or advertising, concern, ecologically friendly consumer services. Right. So while there is some relationship, it’s not necessarily the same, whereas we’re just saying, recycling.
Relationship.
That is where the trademark describes the relationship. So that’s an issue also. These are the only two companies with green and depot in the same mark. So it’s not as if there are a ton of people coming up saying, “Oh, green depot!”
It’s not quite like Walkman, everybody started calling it a Walkman
We were kids and they all had Walkmen.
Michelle:
We would go xerox something.
Anthony:
Well, yes. But that’s now your dating, , and you’re not that old.
Anthony:
You are not old enough to know that without knowing me.
The, the issue of course of how different the goods and services were, , was one that of course does come up. However, uh, the examining attorney from the patent and trademark office had a number of third party websites and other references that referenced the use of recycling with retail home improvement services.
You can probably Google that yourself.
Therefore the board said that recycling in today’s world is a very much related services to home improvement. Okay.
Therefore the marks themselves were disallowed. I don’t think that is quite as clear cut as the last one, but I think that a little bit of work probably would have shown that.
Michelle:
I don’t really think that that’s that big of a leap.
Anthony:
I agree.
I’m, I’m not going to talk about any more cases, but I think we talked about the fact that you need to do the due diligence, right?
In order to create a marketing need to talk to experts, you need to talk to your branding company. Any branding company will do is hire branding company and have the branding company and your IP lawyer work somehow work hand in hand. And remember, if you’re going to license, your mark; frankly I think if you’re going, if your business is going to have a registered mark, it should be stuck somewhere in the back.
Like what else could this mark be used for other than the core business, right.
There are standards in licensing. I’ve done licensing apparel, apparel licensing agreements, and you need to make sure that that standard is there regardless of the license. Makes a lot of sense. Alrighty. I guess we’re going to be finished. How’s that sound?
Michelle:
I think that sounds good.
Anthony:
Wonderful. How can people reach you?
Michelle:
Oh, they can go to my website, Michelle-carter.com. Michelle with two L’s as it should be spelled.
Anthony:
And of course you found me, so I hope everyone knows how to reach me. But, uh, you can visit my law website at vernalaw.com.
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