Intellectual Property News: KitKat, Williams Sonoma, Whole Foods, Skechers, Segway, GoDaddy, Apple

By | September 18, 2015

This wrap-up of recent intellectual property cases covers chocolate bar shapes, cookware designs, sneaker similarities, Korean TV copyright device, Quizno’s commercials, personal transporter technology, Oscar award domains, wines from Whole Foods, fair use of music tracks, the Apple-Samsung battle and more.

KitKat Defends Shape of Chocolate Bar

Nestle SA may find it harder to convince U.K. judges that the shape of its KitKat chocolate bar is distinct enough to trademark after the European Union’s top tribunal set strict limits on what qualifies for the status.

For a shape to deserve a trademark, owners must prove that consumers can recognize the product exclusively by that characteristic, and not in combination with another trademarked aspect, the EU Court of Justice said in a ruling Wednesday. The judgment gave both sides an opportunity to claim victory.

The EU court decision will help guide a U.K. tribunal handling a clash between Mondelez International Inc.’s Cadbury unit, the U.K.’s biggest chocolate maker, and Nestle over the Swiss company’s 2010 application to trademark the four-fingered chocolate bar, which brought in 40 million pounds ($61.7 million) a year from 2008 to 2010 in the U.K.

Cadbury separately is fighting an EU trademark Nestle got for the shape of its chocolate bar in 2006 in a case that’s been pending in a lower EU court since 2013. Any decision will determine whether the trademark is valid.

The KitKat was first sold in Britain in 1935 by Rowntree & Co., with the shape changing very little since then. Nestle, the world’s biggest food company, bought Rowntree Plc in 1998.

The U.K. Trade Marks Registry turned down the application to protect the shape of the chocolate bar in the U.K. in 2013 following the opposition from Cadbury.

The EU court Wednesday said trademark protection can’t be given if a shape “contains three essential features, one of which results from the nature of the goods themselves and two of which are necessary to obtain a technical result.”

Williams-Sonoma Sued by Maker of ‘Fiesta’ Ware

Williams-Sonoma Inc., the San Francisco-based retailer of cookware, home furnishings and home decor items, was sued for trademark infringement by a 144-year-old dinnerware company.

In a complaint filed Tuesday in Pittsburgh federal court, Homer Laughlin Co. accused Williams-Sonoma of infringing its “Fiesta” trademarks. The dinnerware company, based in Newell, West Virginia, said that it began making Fiesta ware in 1936, and said the line is so well-known it was even featured on a postage stamp in 2011 celebrating U.S. industrial design.

The alleged infringement occurred in a Williams-Sonoma catalog and through social media, according to court papers.

Homer Laughlin asked the court for money damages as well as a court order requiring Williams-Sonoma to remove all references to the “Fiesta” mark. Additionally, the dinnerware company asked the court to order the retailer to contact every customer who has received a product catalog or other advertisement to inform them that Williams-Sonoma “is not authorized to sell Homer Laughlin products” and that the products it offers aren’t Homer Laughlin products.

Williams-Sonoma spokeswoman Brooke Buchanan said in an e-mail that her company doesn’t comment on ongoing litigation.

The case is Homer Laughlin China Co. v. Williams-Sonoma Inc., 2:15-cv-01201, U.S. District Court, Western District of Pennsylvania (Pittsburgh).

Adidas Again Accuses Skechers of Being Sneaky on Sneakers

Adidas AG, the German sporting goods company, sued Skechers USA Inc. for trademark infringement involving sneakers.

The suit, filed in federal court on Portland, Oregon, Monday, is part of what Adidas claims is a long history of conflicts over Skechers’s alleged infringement of the German company’s shoe trademarks.

According to court papers, the dispute began in 1994, when Adidas noticed Skechers was selling shoes bearing parallel stripes that the German company said infringed its marks. That suit was settled in 1995.

The issue recurred, with multiple agreements between the two companies over Skechers’s alleged sale of shoes that were confusingly similar to the ones Adidas makes, the German company said in its pleadings.

The newest suit accuses Manhattan Beach, California-based Skechers of selling athletic shoes that infringe the Adidas “Supernova” trademarks and the trade dress of its Stan Smith shoes. In its pleadings, Adidas accuses Skechers of showing “a callous disregard for Adidas’ trademark and trade dress” as well as the “numerous agreements” between the two companies over various trademark issues in the past.

Skechers didn’t respond immediately to an e-mailed request for comment on the suit.

Adidas asked the court for orders barring further infringement and for the seizure of all allegedly infringing products and promotional materials. The German company also asked for awards of money damages, attorney fees and litigation costs.

The case is Adidas America Inc. v. Skechers USA Inc. 3:15- cv-01741, U.S. District Court, District of Oregon (Portland).

Segway Accuses Washington Firm of Patent Infringement

China-based Ninebot Inc.’s Segway Unit sued a Washington State technology company for patent infringement.

The suit, filed in Delaware federal court, accuses Inventist Inc. of Camas, Washington, of infringing five patents that cover the Segway personal transporter. According to court papers, Inventist’s Solowheel personal transporters infringe the patents.

Segway said in its pleadings that all of its personal transporters have, since 2011, had a label affixed to them making reference to the patents that cover the technology within the devices. Bedford, New Hampshire-based Segway said that Inventist has acted “with willful blindness” to the fact that its products infringe the patents.

In addition to seeking money damages, Segway asked the court for awards of attorney fees and litigation costs, and is seeking a court order barring further infringement.

Inventist didn’t respond immediately to an e-mailed request for comment on the suit sent through the company’s website.

The case is Segway Inc. v. Inventist Inc., 1:15-cv-00808, U.s. District Court, District of Delaware (Wilmington).

Burning Man Says Quizno’s Commercial Infringes

Organizers of the Burning Man participatory arts festival that takes place in Nevada’s Black Rock Desert at the end of summer every year are not amused with a commercial run by a Colorado sandwich chain and are threatening legal action, Nevada’s Reno Gazette-Journal reported.

Quizno Corp.’s commercial, which satirizes the actions of participants in the festival, is using Burning Man’s intellectual property without permission, Jim Graham, a festival spokesman, told the newspaper.

Graham said there had been no contact from Quizno before the commercial appeared, and that festival organizers are consulting with legal counsel about what action to take, according to the Gazette-Journal.

The festival spokesman said that use of its name violates a core principle of decommodification associated with Burning Man, and that despite the well-known position Burning Man takes, every year after the festival, companies and individuals try to market themselves and their products by hitching them to Burning Man content, the newspaper reported.

Academy Told GoDaddy Acted in Good Faith as Domain Registrar

GoDaddy Inc. didn’t act in bad faith toward the Academy of Motion Pictures Arts and Sciences in failing to prevent the use of domain names that closely resembled the film group’s marks, a Los Angeles federal judge ruled.

The Beverly Hills, California-based industry group holds trademarks related to the Academy Awards and the Oscar logo. It sued Scottsdale, Arizona-based GoDaddy in 2010, claiming the website registrar deliberately infringed by “license, use, trafficking in, conversion and monetization” of Internet domain names confusingly similar to the Academy’s trademarks.

In a Sept. 10 ruling, U.S. District Judge Andre Birotte Jr. disagreed. He said that even though it may have been technically possible for GoDaddy to do more to prevent unauthorized use of the marks by its registrants, the “failure of the registrar to implement an overbroad trademark filter in 2007 simply because it was technically possible to do so does not translate to bad faith.”

He said that if GoDaddy was legally obliged to implement the sort of filter the academy had in mind, it would “effectively shut down” a significant part of the company’s business. The judge said the academy failed to prove GoDaddy acted with a bad faith intent and entered judgment in the registrar’s favor.

The case is Academy of Motion Picture Arts and Sciences v. Inc., 2:10-cv-03738, U.S. District Court, Central District of California (Los Angeles).

Whole Foods ‘Criterion’ Wines Draw Suit From Video Company

Whole Foods Markets Inc. was sued for trademark infringement by a publisher of home video editions of classic films.

According to the complaint filed Sept. 10 in Manhattan federal court, Criterion Collection Inc. claims the supermarket chain is infringing its marks by selling wine under the brand name “Criterion Collection.”

The video publisher said the public could believe, falsely, that some sort of affiliation exists between the wines and its movies.

According to court papers, Whole Foods responded to a cease-and-desist letter by modifying some of the copy on its website to identify its products as “Wines by Criterion” instead of “Wines by Criterion Collection,” featuring the word “Criterion” alone.

Criterion Collection called the correction inadequate and said Whole Foods in June began promoting “wines by Criterion Collection.”

The New York-based video publisher asked the court to bar the use of the phrase “Criterion Collection” to describe any goods or services sold by the Austin, Texas-based grocery chain. Additionally, Criterion Collection asked for damages, attorney fees and litigation costs.

Whole Foods didn’t respond immediately to an e-mailed request for comment on the lawsuit.

The case is The Criterion Collection Inc. v. Whole Foods Market Inc., 1:15-cv-07132, U.S. District Court, Southern District of New York (Manhattan).

Universal Music Group Told It Needs to Consider ‘Fair Use’ First

Ruling in a case brought by a Pennsylvania mom who used Prince’s song “Let’s Go Crazy” to accompany her brief piece showing her toddler dancing, a federal appeals court said that under the Digital Millennium Copyright Act, Universal Music Group should have considered whether adding the music track to the video constituted fair use before making the takedown request.

Stephanie Lenz of Gallitzin, Pennsylvania, sued the music company in July 2007 after Google Inc.’s YouTube video-sharing site removed a video she posted. Universal objected to Lenz’s use of “Let’s Go Crazy” and filed a takedown request under the Digital Millennium Copyright Act.

She claimed that copyright law’s “fair use” provision permitted her use of the music.

In March 2012 the court ruled that Lenz — who is being assisted by the San Francisco-based digital-rights group Electronic Frontier Foundation — didn’t sue in bad faith. Universal had asked for a dismissal of the case.

U.S. District Judge Jeremy Fogel, ruling in January 2013, rejected the music company’s request to dismiss the case. He said that Universal failed to establish that Lenz is barred from collecting damages if she prevails in her claim that her use of the music fell within the boundaries of fair use. Universal then appealed to the San Francisco-based U.S. Court of Appeals.

In addition to finding that copyright holders have a duty to consider whether someone’s use of content is within the “fair use” provision before sending the takedown request, the appeals court said Lenz can ask a jury to award her damages as a result of the music company’s action.

The case is Lenz v. Universal Music Group Inc., 5:07- cv-03783-JF, U.S. District Court, Northern District of California (San Jose). The appeal is Lenz v. Universal Music Corp, 13-16106, U.S. Court of Appeals for the Ninth Circuit (San Francisco).

Apple Wins Against Samsung

Apple Inc. won an appeals court ruling that may force Samsung Electronics Co. to stop using some features in its smartphones and tablets.

A U.S. appeals court said Thursday that Apple was entitled to a narrow order that prevents the Korean device maker from using Apple’s slide-to-unlock, autocorrect and quicklinks features.

The decision might have far-reaching consequences in how disputes are resolved when it comes to complex devices and help patent owners limit copying by rivals. The ability to block use of an invention is a powerful tool that increases the price tag when negotiating settlements.

For Apple, it gives the iPhone maker additional firepower when it comes to resolving this four-year-old dispute with its biggest rival.

Apple won a $119.6 million jury verdict in May 2014 from Samsung which was found to have infringed its patents for the slide-to-unlock, autocorrect and quicklinks features. Even so, the trial judge declined to issue an order forcing Samsung to remove those features from its mobile phones, saying monetary damages would be adequate.

Apple argued that, if it weren’t able to control use of its inventions, it may lose market share and its reputation as an innovator.

“The right to exclude competitors from using one’s property rights is important,” the Federal Circuit ruled in a 2-1 decision. “And the right to maintain exclusivity — a hallmark and crucial guarantee of patent rights deriving from the Constitution itself -— is likewise important.”

The case ruled on Thursday is Apple Inc. v. Samsung Electronics Inc., 14-1802, U.S. Court of Appeals for the Federal Circuit (Washington). The lower-court case is Apple v. Samsung, 12-cv-630, U.S. District Court, Northern District of California (San Jose).

Korean TV Networks Awarded $65 Million in U.S. TyPad Suit

A Los Angeles federal court awarded three Korean television networks more than $65 million in a copyright case involving a device that enabled circumvention of copyright protection technology.

U.S. District Judge R. Gary Clausner entered a default judgment in favor of Munhwa Broadcasting Corp., Seoul Broadcasting System and Korean Broadcasting System. He found that the networks copyrights and trademarks were valid and enforceable and infringed by TyPad, a device distributed by three Chinese companies.

In addition to barring further infringement, Clausner awarded the networks $65.3 million in damages.

The case is Munhwa Broadcasting Corp. v. Doon Hyun Song, 2:14-cv-04213, U.S. District Court, Central District of California (Los Angeles).

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