On May 8, 2015, the Trademark Trial and Appeal Board (“TTAB”) upheld an opposition instituted by the New York Yankees to block several trademarks from becoming registered. New York Yankees Partnership v. IET Products and Services, Inc., Opposition No. 91189692 (May 8, 2015)( The trademarks at issue in the opposition are shown below: 

THE HOUSE THAT JUICE BUILT		THE HOUSE THAT RUTH BUILT
	VS.
Applicant’s Marks		Yankees’ Marks

In addition to the trademarks shown above, the Yankees own—as you can probably guess—a plethora of trademarks relating to its baseball team. The Applicant, IET Products and Services, Inc. (“IET”) applied to register these marks back in 2008. In addition to a standard likelihood of confusion basis (i.e., one mark too closely resembles another so as to create confusion as to source, sponsorship or origin), the Yankees asserted a trademark dilution claim as well.

Trademark dilution differs from normal trademark infringement for several reasons. First, to win under a claim of trademark dilution, the owner of a mark does not have to prove a likelihood of confusion to protect its mark--the standard test for trademark infringement. Rather, the owner is tasked with proving its mark has become “famous” and use of the mark by a third-party causes dilution of the incredibly distinctive quality of the mark. Only a handful of marks can truly claim “fame” in the sense of trademark dilution. A couple examples of these marks are: XEROX, KODAK, COCA-COLA, and REEBOK. Under the Federal Trademark Dilution Act (“Dilution Act”), there are several factors in determining whether a mark is famous:

1. The duration and extent of use of the mark;

2. The duration and extent of advertising for the mark;
3. The geographic area in which the mark has been used;
4. The degree of distinctiveness of the mark (either through the nature of the mark itself, or through acquired distinctiveness);
5. The degree of recognition of the mark;
6. The method by which the product was distributed and marketed (the "channels of trade");
7. The use of the mark by third parties; and
8. Whether the mark was federally registered.

Proving whether a mark is “famous” for purposes of a trademark dilution claim is incredibly difficult, expensive and the results of such efforts are probably hard to predict. The reason the Dilution Act requires a high burden of mark owners is because once you prove fame, you do not have to prove two marks will be confused or that they are even used on comparative goods. Stated differently, an owner of a famous mark can potentially stop any third party use of its mark, even if there is no likelihood people would confuse the marks in the marketplace. This gives an incredible stopping power to the owner of the mark. Of course, there are additional hurdles to overcome under a dilution claim once an owner proves its mark is famous, including a showing that a third party use damages the distinctive quality of mark--something outside the scope of this particular post. However, the point is that the hard fought battle in dilution claims usually comes with proving a mark has achieved fame.

Of course the Yankees were able to prove the trademarks at issue have acquired fame, and that the use of the Applicant’s trademarks would dilute the distinctive quality of its marks. Therefore, the TTAB sustained the opposition and blocked the federal registrations of these marks.

Why this case is particularly interesting

While I truly enjoy writing about any and all trademark issues, even mundane opposition proceedings, this proceeding has an interesting twist to it. In a seeming act of desperation, the applicant attempted to defend itself with a claim that its marks are meant to act as a “parody” of the Yankees’ trademarks. There are limited exceptions for which a person may be able to use a “famous” mark. One of these defenses is called “fair use.” However, the “fair use” defense is based on the idea that an individual may use a famous mark in a non-commercial, non-source identifying manner.

The hilarity of the situation (for all the trademark nerds out there) is the fact that Applicant was essentially talking out of both sides of its mouth. As the TTAB pointed out, fair use for purpose of the dilution claim is reserved for non-commercial uses of a “famous” mark. The entire point of obtaining a federal trademark registration--at least for the most part--is for commercial use and to identify a source of a brand. Thus, the fact that Applicant was attempting to register these marks--for which a requirement of registration is use in commerce--is completely contradictory to its attempted “parody” defense to the Yankees’ dilution claim.

However, this story could have had a different ending. Had the Yankees’ brought an action against IET in a U.S. federal court, the “parody” defense may have actually been successful, at least under a copyright standpoint. While it would still be unlikely IET would have succeeded in federal court due to presumed nature of how it intended to use these marks, its interesting to note the different outcomes that can happen based on when, where and how you file a federal trademark claim.

Take-Away:

Decisions at the beginning of something like a trademark application can have many implications in future litigation. As such, keep in mind what your purpose is and determine the best way to move forward.