U.S. Court of Appeals for the Fifth Circuit, Camellia Grill Holdings, Inc. v. Upton Grill, L.L.C., Docket No. 18-30515

Sale of a Business, then

License Agreement

Trademark

Goodwill

Geographically Bounded Rights to Trademarks

Trade Dress

Breach of Contract

Louisiana Law

An attempt to simultaneously sell a restaurant and license associated intellectual property has led to ten years of litigation in state and federal court.

The Bill of Sale has a choice of law provision stating it is “governed by and construed in accordance with the laws of the State of Louisiana.”

Michael Shwartz and his family owned and operated the Camellia Grill restaurant on Carrollton Avenue (the “Carrollton restaurant”) for decades. He operated the business—the single restaurant—through a wholly owned corporation, Camellia Grill, Inc. In 1999, Shwartz formed CGH for the sole purpose of owning federally registered Camellia Grill trademarks.

In 2006, Shwartz agreed to sell the Carrollton restaurant to Hicham Khodr. On August 11, in the “Bill of Sale,” Shwartz sold to Uptown Grill, L.L.C. all his “right, title and interest in and to the . . . tangible property located within or upon” the Carrollton restaurant, including “all furniture, fixtures and equipment, cooking equipment, kitchen equipment, counters, stools, tables, benches, appliances, recipes, trademarks, names, logos, likenesses, etc., and all other personal and/or movable property . . . located within or upon the property.” On August 27, in the “License Agreement,” CGH licensed to The Grill Holdings, L.L.C. (“TGH”) the right to use certain defined “Marks.” These “Marks” included “all ‘Camellia Grill’ marks on file with the United States Patent and Trademark Office” and “all ‘trade dress’ associated with the ‘Camellia Grill’ Restaurant,” as well as blueprints, menus, and recipes. Section 5 of the License Agreement provides that the “Licensee acknowledges and agrees that all of the Licensor’s right, title and interest in and to the Marks shall remain the property of the Licensor.” The License Agreement also bound TGH’s affiliates and related companies.

(The marks are registered pursuant to the Lanham Act, 15 U.S.C. § 1051 et seq., which provides for federal trademark protection.)

Following state court litigation that ended in the termination of the License Agreement, Khodr filed a declaratory action to determine the parties’ respective rights in the Camellia Grill trademarks within or upon the Carrollton restaurant. Shwartz filed a separate action asserting trademark and trade dress infringement claims and breach of contract claims based on the continued use of Camellia Grill-related intellectual property following the termination of the License Agreement. The cases were consolidated.

(Shwartz and Khodr had previously signed a contract selling the Carrollton restaurant’s immovable property, which is not at issue.)
(The state court found that Khodr had breached the License Agreement and terminated that contract effective June 1, 2011. The Grill Holdings, L.L.C. v. Camellia Grill Holdings, Inc., 120 So. 3d 294 (La. Ct. App. 2013).)

The Bill of Sale conveyed all Shwartz’s “right, title and interest” to the “trademarks, names, logos, likenesses, etc. . . . located within or upon” the Carrollton restaurant. This court previously held that the Bill of Sale clearly “transfers to Uptown Grill the trademarks within or upon the Carrollton Avenue location.” Shwartz, 817 F.3d at 258. The question now is whether Shwartz retained any interest in the trademarks. He did not.

When interpreting a contract, “words of art and technical terms must be given their technical meaning.” LA. CIV. CODE ANN. art. 2047. “Trademark” is a technical term that must be given its technical meaning absent any other definition in the Bill of Sale. A trademark is a designation that identifies the source of goods and services and that has no independent significance separate from the goodwill of the business it symbolizes. As a technical matter, a trademark cannot be separated from the goodwill of a business. So, when an entire business is sold, as here, the goodwill and associated trademarks are necessarily transferred absent certain conditions not present here. Thus, the Bill of Sale unambiguously sold all rights to the Camellia Grill trademarks, and we cannot look to parol evidence to find otherwise.

“A trademark is merely a symbol of goodwill and has no independent significance apart from the goodwill that it symbolizes.” Sugar Busters LLC v. Brennan, 177 F.3d 258, 265 (5th Cir. 1999). A trademark “only gives the right to prohibit the use of it so far as to protect the owner’s good will” and so “cannot be sold or assigned apart from the goodwill it symbolizes.” Id.  So, trademarks are “incidents and appurtenances to businesses and trades. They have no independent existence . . . .” Holly Hill Citrus Growers’ Ass’n v. Holly Hill Fruit Prods., 75 F.2d 13, 15 (5th Cir. 1935); see United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918) (holding that it is a “fundamental error to suppose that a trademark right is a right in gross or at large” and that there is “no such thing as property in a trademark except as a right appurtenant to an established business or trade in connection with which the mark is employed”). Put another way, “trademark rights do not exist in the abstract, to be bought and sold as a distinct asset.” Berni v. Int’l Gourmet Rest. of Am., Inc., 838 F.2d 642, 646 (2d Cir. 1988); see also Mister Donut of Am., Inc. v. Mr. Donut, Inc., 418 F.2d 838, 842 (9th Cir. 1969) (“The law is well settled that there are no rights in a trademark alone and that no rights can be transferred apart from the business with which the mark has been associated.”). “If an assignee of a trademark also buys the total associated business, including physical assets and such intangibles as trade secrets, formulas and customer lists, then there is no doubt that the assignee has acquired the ‘good will’ associated with the trademark it has purchased.” MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION § 18:23 (5th ed. 2019). When a business is sold as a “going concern, trademarks and the good will of the business . . . are presumed to pass with the sale of the business.” Id. § 18:37 (calling this an “old and clear rule”).

Thus, trademark ownership and the related goodwill “impliedly pass with ownership of a business, without express language to the contrary.” Yellowbook Inc. v. Brandeberry, 708 F.3d 837, 844 (6th Cir. 2013). Moreover, to retain ownership after the sale of the business associated with the trademark, “the owner’s intent to resume producing substantially the same product or service must be manifest, some portion of the goodwill of the previous business must remain with the owner, and resumption of operations must occur within a reasonable time.” Berni, 838 F.2d at 647. When selling an entire business, the rights to associated trademarks are necessarily sold unless at least two conditions are met: (1) the contract expressly reserves some right and interest in the trademark, and (2) the seller retains some of the business’s goodwill. The latter condition is the most important, as no rights to trademarks can exist without the related goodwill.

No goodwill was expressly retained or remained to which otherwise free-floating trademark rights could attach, and Shwartz has never argued that he retained some part of the business’s goodwill. Without looking outside the four corners of the Bill of Sale, and given the technical understanding of the term “trademark,” the contract unambiguously transfers “all of Shwartz’s right, title, and interest” in the Camellia Grill trademarks.

It is of course possible to assign geographically bounded rights to trademarks. See MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 18:21 (5th ed. 2018) (“The sale of a geographically separate portion of a marketing business may be valid as a transfer of a separate and distinct goodwill.”). However, the validity of such an assignment relies on the premise that there exists another portion of the business with separate and distinct goodwill retained by the seller. See id. (citing Ky. Fried Chicken Corp. v. Diversified Packaging Corp., 549 F.2d 268 (5th Cir. 1977); Greenlon, Inc. of Cincinnati v. Greenlawn, Inc., 542 F. Supp. 890 (S.D. Ohio 1982); Cal. Wine & Liquor Corp. v. William Zakon & Sons, 8 N.E.2d 812 (Mass. 1937)). We have not been able to locate a case, and Shwartz points to none, where a trademark owner sells his sole business, assigns a related trademark only as to that single business location, and retains a right to use the trademark when no other business or portion of the business with goodwill symbolized by that trademark exists. The point is not that a geographically bounded right to a trademark can never be assigned. The point is that in the context of this transaction it could not.

Finding Khodr to be the owner of all trademark rights associated with Camellia Grill also comports with the policy of avoiding the fragmentation of trademark ownership. See  MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION § 16:40 (5th ed. 2018) (“When there is a dispute over who owns a trademark, the worst possible solution is to allow mark ownership to be shared among the warring parties.”). Finding that Shwartz retained some rights in the Camellia Grill trademarks would be contrary to a fundamental purpose of trademarks: identifying a single source of a product or service. This policy seems particularly applicable given the parties’ acrimonious and litigious history.

Shwartz argues that finding the Bill of Sale to have assigned all trademark rights to Khodr is in direct tension with the License Agreement. If Shwartz sold all trademark rights to Khodr in the Bill of Sale, then Shwartz could not turn around and license these rights in the License Agreement.

(…) Given that all parties have always treated it as valid. The parties appear to have made a mutual mistake as to a material, basic assumption upon which the License Agreement was made: that Shwartz had rights to license. Under Louisiana law, this would render the License Agreement “relatively null.” LA. CIV. CODE ANN. art. 2031. Such a contract may be enforced. And relative nullity “may be invoked only by those persons for whose interest the ground for nullity [such as mutual mistake] was established, and may not be declared by the court on its own initiative.” Because Khodr is not attempting to nullify the License Agreement, we will enforce it as far as possible. However, as this court previously held, the License Agreement does not supersede or modify the Bill of Sale. Shwartz, 817 F.3d at 258 n.2. Therefore, Shwartz cannot sustain his claims of trademark ownership on the basis of the License Agreement.

We affirm the district court’s ruling that the Bill of Sale assigned all Camellia Grill trademark rights to Khodr.


Trade Dress

Trade dress “refers to the total image and overall appearance of a product and may include features such as the size, shape, color, color combinations, textures, graphics, and even sales techniques that characterize a particular product.” Test Masters Educ. Svcs., Inc. v. State Farm Lloyds, 791 F.3d 561, 565 (5th Cir. 2015). It is “distinct from a ‘trademark’ or a ‘service mark,’” and has been extended to the “overall ‘motif’ of a restaurant.” Id. at 564–65. The Bill of Sale unambiguously transferred “all furniture and equipment Shwartz contends constitutes trade dress, . . . trademarks, names, logos, and likenesses, etc.” at the Carrollton restaurant. Shwartz necessarily transferred the right to use any trade dress that existed there.

We affirm the district court’s ruling that the Bill of Sale assigned the trade dress associated with the Carrollton restaurant. Moreover, no abstract rights to trade dress could remain following the sale of the entire business. It follows that the Bill of Sale assigned all Camellia Grill trade dress rights to Khodr, much as all the trademark rights were assigned.

(The district court found that the alleged elements of the trade dress include: (1) the “straw popping” routine, (2) U-shaped counters, (3) audible order calling routine, (4) pink and green wall scheme, (5) separate pie cases on the rear wall at both ends of the cooking line, (6) stainless steel stemmed stools with green cushions, (7) individual counter checks handed to each customer, and (8) fluted metal design under the counters and above the cooking line.)

Even though we find all putative trade dress rights were assigned to Khodr in the Bill of Sale, we must still determine whether the License Agreement afforded Shwartz any enforceable contract rights (question remanded).

Breach of Contract (Louisiana law)

Under Louisiana law, damages for a breach of contract “are measured by the loss sustained by the obligee and the profit of which he has been deprived.” LA. CIV. CODE ANN. art. 1995.

Secondary Sources: 
MCCARTHY ON TRADEMARKS & UNFAIR COMPETITION § 18:23 (5th ed. 2019)


(U.S. Court of Appeals for the Fifth Circuit, March 29, 2019, Camellia Grill Holdings, Inc. v. Upton Grill, L.L.C., Docket No. 18-30515)

U.S. Court of Appeals for the Federal Circuit, Converse, Inc. v. ITC, Docket No. 16-2497

Import: Section 337:

Trademark:

Registered mark, Common-law mark:

Secondary meaning:

Word mark: Product-packaging trade dress: Product-design trade dress:

Restatement (Third) of Unfair Competition:

Appeal from the United States International Trade Commission in Investigation No. 337-TA-936.

Section 337 provides a remedy at the ITC for, among other things, “the importation into the United States, the sale for importation, or the sale within the United States after importation by the owner, importer, or consignee, of articles that infringe a valid and enforceable United States trademark registered under the Trademark Act of 1946.” 19 U.S.C. § 1337(a)(1)(C). On October 14, 2014, Converse filed a complaint with the ITC alleging violations of section 337 by various respondents in the importation into the United States, the sale for importation, and the sale within the United States after importation of shoes that infringe its trademark. The ITC instituted an investigation on November 17, 2014.

(…) It is confusing and inaccurate to refer to two separate marks—a registered mark and a common-law mark. Rather, there is a single mark, as to which different rights attach from the common law and from federal registration. E.g., In re Int’l Flavors & Fragrances Inc., 183 F.3d 1361, 1366 (Fed. Cir. 1999) (“The federal registration of a trademark does not create an exclusive property right in the mark. The owner of the mark already has the property right established by prior use . . . . However, those trademark owners who register their marks with the [Patent and Trademark Office (‘PTO’)] are afforded additional protection not provided by the common law.”); In re Deister Concentrator Co., 289 F.2d 496, 501 (CCPA 1961) (“The Lanham Act does not create trademarks. While it may create some new substantive rights in trademarks, unless the trademarks pre-exist there is nothing to be registered. Neither does it create ownership, but only evidence thereof.”); J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 19:3 (5th ed. 2017 & Supp. 2018).

(…) All trademarks, in order to be valid or protectable, must be distinctive of a product’s source, and “courts have held that a mark can be distinctive in one of two ways.” Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 210 (2000). “First, a mark is inherently distinctive if ‘its intrinsic nature serves to identify a particular source.’” Id. (quoting Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768 (1992)). “Second, a mark has acquired distinctiveness, even if it is not inherently distinctive, if it has developed secondary meaning, which occurs when, ‘in the minds of the public, the primary significance of a mark is to identify the source of the product rather than the product itself.’” (quoting Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 851 n.11 (1982)); see also 15 U.S.C. § 1052(f).

(…) The Supreme Court has held that unlike word marks and product-packaging trade dress, product design trade dress can never be inherently distinctive. Wal-Mart, 529 U.S. at 216. As a result, “a product’s design is distinctive, and therefore protectable, only upon a showing of secondary meaning.” Id. Accordingly, Converse must show that its mark has acquired distinctiveness, i.e., secondary meaning.

(…) Because the relevant date is so important to the secondary- meaning analysis, we find that a specific determination of secondary meaning as of the relevant date must be made. In any infringement action, the party asserting trade-dress protection must establish that its mark had acquired secondary meaning before the first infringing use by each alleged infringer. See, e.g., Braun, Inc. v. Dynamics Corp. of Am., 975 F.2d 815, 826 (Fed. Cir. 1992) (holding that “a claim of trade dress infringement fails if secondary meaning did not exist before the infringement began” and placing the burden of proof on the plaintiff); McCarthy, supra, § 16:34 (noting that the purported “senior user must prove the existence of secondary meaning in its mark at the time and place that the junior user first began use of that mark” and collecting cases); Restatement (Third) of Unfair Competition § 19 cmt. b. (Am. Law Inst. 1995 & Supp. 2018). In this respect, Converse argues that it is entitled to rely on the presumption of validity afforded to registered marks. We do not agree that this presumption applies to infringement that began before registration.

(…) For infringement in the period after registration, the Lanham Act entitles the owner of the registered mark to a presumption that the mark is valid, see 15 U.S.C. §§ 1057(b), 1115(a), including that it has acquired secondary Meaning.

(…) We conclude that Converse’s registration confers a presumption of secondary meaning beginning only as of the date of registration and confers no presumption of secondary meaning before the date of registration. Thus, with respect to infringement by those respondents whose first uses came before the registration (including all of the intervenors), Converse must establish without the benefit of the presumption that its mark had acquired secondary meaning before the first infringing use by each respondent.

(…) Secondary meaning determination: (“To determine whether a mark has acquired secondary meaning, courts consider: advertising expenditures and sales success; length and exclusivity of use; unsolicited media coverage; copying of the mark by the defendant; and consumer studies.”) (…) Consumer studies (linking the name to a source).  Today we clarify that the considerations to be assessed in determining whether a mark has acquired secondary meaning can be described by the following six factors: (1) association of the trade dress with a particular source by actual purchasers (typically measured by customer surveys); (2) length, degree, and exclusivity of use; (3) amount and manner of advertising; (4) amount of sales and number of customers; (5) intentional copying; and (6) unsolicited media coverage of the product embodying the mark.

Next, we address the significance of the trademark owner’s and third parties’ prior uses of the mark. We conclude that the ITC relied too heavily on prior uses long predating the first infringing uses and the date of registration. The secondary meaning analysis primarily seeks to determine what is in the minds of consumers as of the relevant date. (…) The most relevant evidence will be the trademark owner’s and third parties’ use in the recent period before first use or infringement.

Secondary authorities: J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 19:3 (5th ed. 2017 & Supp. 2018); Louis Altman & Malla Pollack, Callmann on Unfair Competition, Trademarks and Monopolies § 26:101 (4th ed. 2012 & Supp. 2018).

(U.S. Court of Appeals for the Federal Circuit, Oct. 30, 2018, Converse, Inc. v. ITC, Docket No. 16-2497, Circuit Judge Dyk)

La présente procédure initiée sous l’angle de la Section 337 discute :

- la distinction entre marque découlant de la Common law et marque enregistrée, les deux ne formant qu’une seule marque, à laquelle différents droits sont attachés, par l’opération de la Common law et par l’opération de l’enregistrement respectivement.

- la marque qui est distinctive de manière inhérente, en ce qu’elle sert à identifier une source particulière, et la marque qui n’est pas distinctive de manière inhérente mais qui a développé son caractère distinct par le fait que dans l’esprit du public, elle identifie la source du produit plutôt que le produit lui-même (on parle dans ce second cas d’une marque qui a développé une signification secondaire).

Au contraire d’une marque verbale ou au contraire d’une marque de nature « product-packaging trade dress », la marque « product design trade dress » ne peut jamais être distinctive de manière inhérente.

Dans toutes actions en violation du droit à la marque, le demandeur doit établir la date à laquelle la marque a acquis « secondary meaning », et cette date doit être antérieure à la première violation. Mais dès l’enregistrement s’applique la présomption de validité de la marque, et la présomption d’acquisition de « secondary meaning ».

L’avant-dernier paragraphe ci-dessus donne une liste très complète des facteurs à considérer pour déterminer si la marque a ou non acquis « secondary meaning ». Six facteurs sont décrits.

OTR Wheel Engineering, Inc. v. West Worldwide Services, Inc., Docket No. 16-35897

Trademark: Registration requirement: Trade dress:

If a trademark is not registered, then a plaintiff may still assert a claim for infringement of its protectable trade dress right, but that plaintiff bears the burden to establish distinctiveness and non-functionality. Talking Rain, 349 F.3d at 603. Thus, if a mark is cancelled, a claim for infringement may still be pursued based on an unregistered mark. Dep’t of Parks & Recreation for State of Cal. v. Bazaar Del Mundo Inc., 448 F.3d 1118, 1131 (9th Cir. 2006) (citing Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir.2001)). In other words, fraud on the PTO “does not affect the mark’s validity, because a trademark need not be registered to be enforceable.” Specialized Seating, Inc. v. Greenwich Industries, LP, 616 F.3d 722, 728 (7th Cir. 2010); cf. J. Thomas McCarthy, 6 McCarthy on Trademarks and Unfair Competition § 31:60 (5th ed. 2018). Thus, if a defendant establishes that a mark was obtained through fraud on the PTO, the burden shifts back to the plaintiff to establish distinctiveness and non-functionality. See Tie Tech, 296 F.3d at 783; see also Talking Rain, 349 F.3d at 603. The plaintiff always maintains the burden to establish consumer confusion.

(…) OTR argues that it pled an unregistered trade dress claim by asserting a claim under section 43 of the Lanham Act, 15 U.S.C. § 1125. It was not enough to simply cite section 43, however, because that section covers both registered and unregistered marks. GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 1199, 1204 n.3 (9th Cir. 2000) (“The provision at issue here—§ 43—protects against infringement of unregistered marks and trade dress as well as registered marks.” (citing Kendall-Jackson Winery, Ltd. v. E. & J. Gallo Winery, 150 F.3d 1042, 1046 (9th Cir.1998)). OTR’s reference to section 43 did not by itself signal an unregistered trade dress claim.

(…) We pause to note that OTR’s unregistered claim was only precluded to the extent that it asserted a broader claim than the registered claim. As noted above, registration only provides a presumption of validity, shifting the burden to the defendant to rebut either distinctiveness or non-functionality. Tie Tech, 296 F.3d at 783. If a registration is cancelled, for example, due to fraud on the PTO, then the claim survives but becomes more difficult to prove. See Bazaar Del Mundo Inc., 448 F.3d at 1131. Perhaps appreciating that fact, OTR argues that its unregistered claim encompassed “something more” than what was covered by the registered claim. OTR describes that “something more” as the OTR tire’s “overall appearance, including the sidewall and its relationship to the road.” To assert this broader claim, however, OTR was required to clearly plead the claim in the complaint, and it did not.

Secondary sources: J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition § 31:60 (5th ed. 2018).

(U.S. Court of Appeals for the Ninth Circuit, July 24, 2018, OTR Wheel Engineering, Inc. v. West Worldwide Services, Inc., Docket No. 16-35897, J. Clifton, for publication)

Droit des marques. Trade dress (terme juridique qui se rapporte à des caractéristiques de l'aspect visuel d'un produit ou de son emballage, donnant une indication de l'origine du produit aux consommateurs). Une action en violation de la marque peut être déposée même si elle n’est pas enregistrée, ou peut être maintenue même si l’enregistrement est annulé. Il en va de même en cas d’action en violation de la présentation (protégée) du produit associé à la marque (trade dress). 15 U.S.C. § 1125 (Section 43 du Lanham Act) (false designations of origin, false descriptions, and dilution forbidden), peut être invoqué que la marque soit ou non enregistrée.

L’action en violation d’une marque qui n’est pas enregistrée pose davantage de problèmes de preuve que dans le cas d’une marque enregistrée. Le sachant, le demandeur dans l’action en violation d’une marque enregistrée doit veiller à alléguer la violation de l’ensemble des caractères liés à la marque, même ceux qui ne ressortent pas de l’enregistrement : de la sorte, si l’enregistrement est considéré comme invalide, le demandeur aura maintenu la possibilité d’alléguer la violation des caractéristiques qui exorbitent l’enregistrement.

OTR Wheel Engineering, Inc. v. West Worldwide Services, Inc., Docket No. 16-35897

Trademark: Designation of origin: Passing off: Reverse passing off: Trade dress: Confusion: Competition law: Consumer law: Packaging: Design: Copyright:

(…) OTR sells tires for industrial use. One of OTR’s products is a tire called the “Outrigger.” OTR obtained a registered trademark on the Outrigger name and a registered trade dress on the Outrigger tire tread design.

OTR Wheel and Samuel West are competitors in the business of selling industrial tires. West asked one of OTR’s suppliers to provide him with sample tires from OTR’s molds, and he asked the supplier to remove OTR’s identifying information from the tires. West wanted to use the tires to obtain business from one of OTR’s customers. OTR sued West, asserting various claims under the Lanham Act and state law.

(…) The primary issue before us is whether West can be found liable for reverse passing off under the Lanham Act. (…) (False Designation of Origin: Reverse Passing Off) (…) Pursuant to the Supreme Court’s opinion in Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003), a claim for reverse passing off cannot be brought to prevent the copying of intellectual property. We conclude that West did not simply copy OTR’s intellectual property but passed off genuine OTR products as his own, so we affirm the judgment holding him liable for reverse passing off ((…) The jury could therefore conclude that the development tires were taken from part of an anticipated OTR (Solideal) order and were genuine OTR products, not just copies).

(…) The panel affirmed the district court’s rejection of a proposed jury instruction asserting a claim for infringement of an unregistered trade dress. The panel explained that a registered claim converts to an unregistered claim if the registration is invalidated; thus, a plaintiff does not need to separately plead the identical unregistered claim. But where the unregistered claim would cover something more than the registered claim, a plaintiff must put a defendant on notice of such through the pleadings.

The Lanham Act prohibits conduct that would confuse consumers as to the origin, sponsorship, or approval of goods or services. See Slep-Tone Entm’t Corp. v. Wired for Sound Karaoke & DJ Servs., LLC, 845 F.3d 1246, 1249 (9th Cir. 2017); see also TrafFix Devices, Inc. v. Mktg. Displays, Inc., 532 U.S. 23, 28 (2001). To prevent consumer confusion, the Act allows the producers of goods and services to enforce trademark rights. 15 U.S.C. §§ 1114, 1125(a); see also Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209–10 (2000). A trademark is “any word, name, symbol, or device. . . used or intended to be used to identify and distinguish goods from those manufactured or sold by others and to indicate the source of the goods.” 15 U.S.C. § 1127. In addition, the Lanham Act protects more than words and symbols. It also protects a product’s “trade dress,” which includes the packaging, dressing, and design of a product. TrafFix Devices, 532 U.S. at 28; Wal-Mart, 529 U.S. at 209.

Section 43(a) of the Lanham Act prohibits a person from using “in commerce any word, term, name, symbol, or device. . . which . . . is likely to cause confusion . . . as to the origin. . . of his or her goods.” 15 U.S.C. § 1125(a). The term “origin” in section 43(a) lends itself to two causes of action for “passing off” based on false designation of origin: passing off and reverse passing off. “Passing off . . . occurs when a producer misrepresents his own goods or services as someone else’s. ‘Reverse passing off,’ as its name implies, is the opposite: The producer misrepresents someone else’s goods or services as his own.” Dastar, 539 U.S. at 27 n.1.

(…) In Dastar, the Supreme Court explained that the term “origin” in section 43 “refers to the producer of the tangible goods that are offered for sale, and not to the author of any idea, concept, or communication embodied in those goods.” Id. at 37. Thus, a reverse passing off claim cannot be brought to prevent the copying of intellectual property. Copying is dealt with through the copyright and patent laws, not through trademark law. Id. At 33–34.

(…) To prove a claim under section 43(a), a plaintiff must establish a likelihood of consumer confusion. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 780 (1992). Thus, in order to prevail on its claim for reverse passing off, OTR was required to prove that consumers would likely be confused as to the origin of Outrigger tires that had their identifying information removed. The likelihood of confusion inquiry “generally considers whether a reasonably prudent consumer in the marketplace is likely to be confused as to the origin or source of the goods or services.” Rearden LLC v. Rearden Commerce, Inc., 683 F.3d 1190, 1209 (9^th Cir.2012). Thus, the jury had to determine whether a hypothetical consumer would likely be confused. Evidence of actual confusion was not required. Network Automation, Inc. v. Advanced Sys. Concepts, Inc., 638 F.3d 1137, 1151 (9th Cir. 2011). The jury was shown pictures of an OTR production tire and the West development tire. Comparing the two tires, a reasonable jury could conclude that consumers would be confused by tires that lack the identifying information.

(U.S. Court of Appeals for the Ninth Circuit, July 24, 2018, OTR Wheel Engineering, Inc. v. West Worldwide Services, Inc., Docket No. 16-35897, J. Clifton)

1 ) Trade dress : terme juridique qui se rapporte à des caractéristiques de l'aspect visuel d'un produit ou de son emballage, donnant une indication de l'origine du produit aux consommateurs. Trade dress peut être enregistré, comme une marque (ici une partie du design d’un pneu).

2 ) Les bases légales des actions en violation du droit à la marque. Le Lanham Act ne protège pas que la marque comprise comme combinaison de mots et de symboles. Il protège aussi le « trade dress » du produit, notion qui inclut le « packaging », le « dressing » et le design du produit.

3 ) Un exemple de « reverse passing off ». Notions et bases légales de « passing off » et de « reverse passing off » : ces concepts juridiques visent à combattre la confusion portant sur l’origine d’un produit.

4 ) Notion de confusion du consommateur.

5 ) Si dans la procédure en violation du droit à la marque l’enregistrement de celle-ci est déclaré invalide, la procédure peut se poursuivre, la marque dont la violation est alléguée n’étant plus considérée comme enregistrée. Le demandeur ne pourra cependant faire valoir que les allégués et les moyens de droit qui découlent de ses mémoires.