These recent trademark cases have important implications for trademark law at a time when trademark infringement and counterfeiting are on the rise.
Trademark law has seen substantial developments in 2019 and 2020, with four major cases in the United States and Europe rising to the top. The U.S. Supreme Court (SCOTUS) issued two of those decisions, the most recent being especially significant because the court has not opined on the topic of trademark genericism in nearly 100 years. The other SCOTUS case dealt with the hotly contested topic of awarding profits obtained through innocent (unknowing) trademark infringement.
The U.S. Court of Appeals for the Eleventh Circuit also weighed in on trademark issues, hearing a case involving secondary infringement liability of landlords, while an EU court decided on the extent of secondary liability for online platforms such as Amazon.
Adding “.com” May Cure Genericism
Generic terms in trademark law are marks or brand names that describe a general class of product or service and are thus ineligible for protection as a trademark. Examples of generic terms include: “Cereal,” “Email,” or “Accounting Firm.” Some marks that are registered end up committing what is called “genericide.” This occurs when a term loses protection because, ironically, it becomes so well-known that it transitions from being a unique identifier to being used to cover an entire class of goods or services. It has long been the case that generic trademarks are ineligible for federal protection.
An interesting question was presented in USPTO v. Booking.com regarding what classifies a generic mark. Booking.com, an enterprise that maintains a travel-reservation website by the same name, sought to register the mark “Booking.com.” with the USPTO. The mark was ultimately denied by the USPTO because the Office felt that customers would understand Booking.com to primarily refer to a class of online registration services for travel, tours, and lodgings. The USPTO also argued that Booking is a generic term, and slapping “.com” onto a generic term doesn’t cure that. In this case, the Supreme Court disagreed with the USPTO and asserted that the mark’s meaning to consumers determines if it is generic, and consumers perceive “Booking.com” as a distinguishable entity. The court further asserted that if the “Booking.com” mark were generic, then “a consumer . . . could ask a frequent traveler to name her favorite ‘Booking.com’ provider.” The court pointed out that consumers don’t confuse Travelocity, a similar reservation service, with Booking.com. Ultimately, the court found that the terms “Booking” and “.com” should be analyzed as a single term at the USPTO when determining the term’s distinctiveness. Thus adding “.com” to the end of a generic term may just be enough to render the term eligible for federal trademark protection. This decision opens the door to federal trademark registration for brands that choose to market their product names and domain names simultaneously.
Innocent Trademark Infringers May Lose Profits
In another U.S. Supreme Court case, Romag v. Fossil, the Court examined whether a trademark infringer should lose its profits from innocent infringement. Romag manufactures fasteners that can be used in leather goods. Fossil came to an agreement with Romag by which Fossil would use Romag’s fasteners in its products. However, Romag later sued Fossil after discovering that the factories Fossil employed to make its products were using counterfeit Romag fasteners. Romag was awarded $6.7 million in Fossil’s profits over the infringement even though Fossil was an innocent infringer because they did not know that the fasteners were counterfeit. The Court of Appeals for the Federal Circuit said that Romag could not be awarded Fossil’s profits, but the U.S. Supreme Court disagreed. According to the Supreme Court, mens rea or the mental state of the infringer isn’t the only consideration for an award of infringer’s profits. It’s an important consideration, but not an absolute precondition. Section 1117(a) of Lanham Act does not mention mens rea even though the surrounding sections mention it expressly, so the Court asserted that this omission was intentional by Congress. This decision may cause confusion within the lower courts as they try to sift through the award differences between innocent and willful infringers.
Landlords May Be Liable for Contributory Infringement
In a third recent development in U.S. trademark law, the Eleventh Circuit weighed in on the issue of contributory infringement and secondary liability in Luxottica v. Airport Mini Mall.
Luxottica owns many notable brands you may recognize, such as such as Oakley, RayBan, and Sunglass Hut. In this case, Luxottica and Oakley sued Airport Mini Mall for allowing its subtenants to sell counterfeit sunglasses, despite multiple notifications by Luxottica of the infringement. The Eleventh Circuit determined that contributory liability extends to the landlord-tenant relationship where there is constructive knowledge of infringement including where the landlord was willfully blind to the infringement. Here, the court found that Airport Mini Mall had chosen to remain willfully blind to the infringement rather than act and was thus secondarily liable for the infringement. Because this case came from the Eleventh Circuit, it is important to pay attention to any potential circuit splits regarding this issue in the future.
Online Platforms May Be Liable for Contributory Infringement in Europe
Europe has also seen developments in secondary liability for infringement, most notably in the 2019 Louboutin v. Amazon case. Louboutin is a fashion brand that holds a trademark on its famous, red-sole high-heeled shoe design. In 2019, an EU court in Brussels heard a case brought by Louboutin against Amazon. According to Louboutin, Amazon promoted hundreds of product listings with counterfeit Louboutin goods on its French and German websites. The EU court determined that online platforms may be held liable for contributory infringement when its sellers promote counterfeit goods, and that liability can be imputed to anyone taking an active part in the commission of a sale who could control it, directly or indirectly. Here, these goods were advertised as “shipped and sold by Amazon” and some were either sponsored by Amazon or listed in targeted ads across the web.
How Does Louboutin Compare to Tiffany v. eBay?
There was a similar case in the U.S. Second Circuit in Tiffany Inc. v. eBay in 2010. In this case, Tiffany alleged that eBay contributorily infringed its trademark for hosting sellers that advertised and sold counterfeit goods using the Tiffany trademark. The Second Circuit reasoned that for liability to be extended to a third party: 1) the owner must identify specific cases of infringement that occurred; and 2) the owner must show that the defendant did not take action against the direct infringer even after being notified of their infringement. So how is this different from the outcome in the EU’s Louboutin? In Tiffany, eBay wasn’t held liable for contributory infringement because Tiffany only alleged general infringement against eBay. Louboutin, on the other hand, alleged specific infringement against Amazon. eBay also suspended specific sellers when notified of counterfeit Tiffany goods, whereas in Louboutin, Amazon allowed infringers to continue selling their counterfeit goods even when given notice of the infringement. Therefore, the Louboutin decision falls in line with the ruling in Tiffany.
As a result of these rulings, we can expect to see an increase in registration filings for companies named “(brand)”.com,” an increase in trademark infringement award appeals by “innocent” infringers, and an increase in lawsuits against both physical landlords and online platforms for contributory infringement.
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