Perspectives: Two tribunals tackle three trademark tussles

“A great trademark is appropriate, dynamic, distinct, memorable, and unique.”

Design Artist Primo Angeli

Trademarks are one of the major triads of intellectual property (IP) law, along with copyrights and patents.

The 8th U.S. Circuit Court of Appeals made a couple of relatively rare forays into the topic of trademark in a pair of tussles decided with a week of each other earlier this year. The cases were varied. One consisted of a conventional trademark infringement dispute while the other one dealt with insurance coverage for a trademark dispute.

Meanwhile, the Minnesota Court of Appeals weighed-in with its own trademark case.

Despite these different frameworks, the outcomes were nearly the same: The former was reversed and the latter experienced a partial reversal and partial affirmance.

Confusion case

The recurring issue of consumer confusion underlying a trademark dispute was addressed by the 8th Circuit in overturning a preliminary injunction in H&R Block, Inc. v. Block, Inc., 58 F.4th 939 (8th Cir. Jan. 24, 2023).

The lawsuit concerned a logo used by a small company in connection with its tax services, which a large, nationally well-known competitor claimed was likely to cause confusion among consumers because it also provides tax and financial services under a comparable logo and brand name.

The lower court granted preliminary injunctive relief, blocking use of the confusing name and logo, based upon its determination that the claimant was likely to prevail on the merits of its trademark claim. But the case was appealed to the 8th U.S. Circuit Court of Appeals, which reversed in a 2-1 decision.

The trial court’s assessment of the four factors under the venerable Dataphase doctrine for preliminary injunctive relief in the 8th Circuit, Dataphase Sys. Inc. v C.L. Sys, Inc., 640 F.2d 109 (8th Cir. 1981), was erroneous and constituted an abuse of discretion. Those considerations include the threat of irreparable harm, balance of hardships if equitable relief is granted or denied, probability of success in the merits, and the public interest, essentially a compacted form of the “five factors” utilized in Minnesota state court jurisprudence under the familiar standard of Dahlberg Bros. v. Ford Motor Co., 272 Minn. 264, 137 N.W.2d 314 (1965). The crux of the reversal stemmed from the lack of evidence “identifying any consumer that [sic] ever actually was” confused.

Since the claimant did not present “substantial evidence” of a likelihood of confusion among consumers, injunctive relief was inappropriate. In the absence of such evidence, the claimant could not rely upon a “rebuttable presumption” of irreparable harm. Further, the claimant did not establish that it would actually suffer any such “actual harm” without injunctive relief.

A dissent by Judge Michael Melloy would have upheld the lower court decision due to the trial court judge’s analysis of “individual likelihood-of-confusion factors,” which the dissenting jurist felt was adequately taken into account in balancing the Dataphase preliminary injunction factors.

Declaratory decision

A decision by a trial court in a declaratory judgment action regarding insurance coverage was partially upheld and partially reversed by the circuit court in Cincinnati Insurance Company v. Jacob Rieger & Co., LLC, 58 F.4th 386 (8th Cir. Jan. 19, 2023).

The dispute centered on a defendant in a trademark case waiting five months to notify its liability insurance carrier that an infringement lawsuit that had been filed against it. The insurer refused to reimburse the company for legal fees it incurred during the five-month period when the carriers was unaware of the lawsuit, which was ultimately dismissed.

A subsequent declaratory judgment action led to denial of coverage, as the lower court granted the insurer in summary judgment, ruling that it had no obligation to cover the legal fees incurred during that five-month lapse.

Reviewing the decision, the 8th Circuit held that the insurer was not contractually obligated to reimburse the company for the legal fees incurred by its parent company because the parent company was not named in the underlying insurance policy. While affirming that portion of the trial court’s decision, the appellate court held that the lower court erred in failing to allow the insurer to raise the claim of “prejudice” due to the late notice of the lawsuit. Because that claim should have been allowed as an affirmative defense in the underlying lawsuit, that portion of the case was reversed and remanded for further determination by the lower court.

Ice issues

A state court trademark case was addressed by the Minnesota Court of Appeals in All-American Ice, L.L.C. v. American Arena, LLC, 2023 WL 2960746 (Minn. Ct. App. April 17, 2023)(unpublished). It affirmed in part, reversed in part, and remanded a dispute between competitors in the ice business, namely, selling ice arena accessories.

One of them sued for trademark infringement under the state trademark law, Minn. Stat. § 333.28, claiming that the other company’s name change to American Arena violated the rights of the existing All-American Ice moniker. A Dakota County jury found for the prior user, which the appellate court affirmed, rejecting the claim that because the other trademark was merely “a discretionary mark,” it lacked “distinctiveness,” which barred protection of the name.

A jury verdict for $50,000 for profits wrongfully obtained by the infringing party was upheld. That issue was not raised at trial, and there was sufficient evidence of the “likelihood of confusion” to sustain the infringement claim. A damage award of $340,000 for “actual damages” was set aside due to lack of evidence as well as remanding due to the lack of supporting factual findings to allow the trial court to “reconsider an award of attorney fees and treble damages “and for additional findings regarding injunctive relief.”

Prince photograph

These three trademark-related appeals were decided while another IP case involving Minnesota’s own native son, Prince, was decided two weeks ago by the U.S. Supreme Court in Andy Warhol Foundation For The Visual Arts, Inc. v. Goldsmith, No. 21-869, 2023 WL 3511534 (S.Ct. May 18, 2023) (unpublished). See “Warhol Foundation loses Prince portrait case” in the May 22, 2023, edition of Minnesota Lawyer. Heard by the justices near the beginning of their current term, Columbus/Indigenous People’s Day, Oct. 12, 2022, the Supreme Court case involved another well-known artist of another genre, the late Andy Warhol.

The courtroom clash involving those two marque individuals, Warhol and Prince, naturally stirred a great deal of attention, even outside of the narrow world of IP lawyers and interest groups, with particular resonance here in Minnesota, where the musician was born, raised, performed, lived and, regrettably, died.

The case involved images Warhol created of Prince as part of a 1984 commission for Vanity Fair. Warhol used a photo shot in 1981 by Lynn Goldsmith as a starting point, and Vanity Fair paid Goldsmith to license the photo. Warhol then created a series of images in bright-colored and bold style. Vanity Fair chose one of the resulting images to run in the magazine in 1984. Following Prince’s death in 2016, Vanity Fair ran a different image from the series on its cover, paying the Warhol Foundation for its use. Goldsmith received no money or credit, and it was that second use that the justices dealt with in the case.

The case turned on the “transformative use” branch of the “fair use” doctrine, which allows some unauthorized utilizations of copyright works for particular, limited purposes.

The court resolved the issue in favor of the photographer, holding that the “fair use” doctrine did not apply because the photographer and artist “have the same purpose,” commercial use. This pecuniary undertaking defeated the “fair use” defense.

But a dissent by Justice Elena Kagan, joined by Chief Justice John Roberts, lamented that the decision against the Warhol Foundation “will stifle creativity of every sort … [and] will make our world poorer.”

This trio of trademark cases, along with the copyright one, reflect the variations that occur when litigants clash over trademarks, which raise issues that can be interesting, informative, and intellectually challenging, too.

PERSPECTIVES POINTERS

Some unusual trademarks

• WWE Wrestling phrase: “Let’s get ready to rumble”
• Track Star Usin Bolt’s lightning bolt gesture;
• The word “baggies”
• The sound track for NBC television show “Law and Order”
• The bell ringing at the New York Stock Exchange floor to open daily trading; and
• The term “Realtor”

Marshall H. Tanick is an attorney with the Twin Cities law firm of Meyer Njus Tanick.

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