Tuesday, May 31, 2011

Zon's Education/Edutainment Blog

Below is a copy of my paper for Full Sail's last class. I found the Lanham Act which is the key document that describes all US trademark laws.

To Register or not to Register: The Lanham Act and Basic Natural Trademark Laws

Zon D. Petilla

Full Sail University

Many people consider if they should register their intellectual property (IP) with the United States Patent and Trademark Office (USPTO) when other successful independents have not (Scott, Straub, Kellett, and Guigar, 2008). For example, before becoming a TV show on AMC, Robert Kirkman protected ?The Walking Dead? as a ?TM? and not a ??? for register trademark (Kirkman, 2005 and Pennington, 2010). Thus, this paper is not to question the decision to register a trademark or not, but instead to explore how the Lanham Act protects natural trademarks through analysis of a court case. The case of Natural Answers Inc. versus Smithkline Beecham Corporation (d.b.a. GSK) explores how natural trademarks are protected under the Lanham act (Marcus, 2008). This paper will review this case in regards to trademark law then explore the implications as it relates to NeoGlow Entertainment?s future IP practices.

Summary of Facts from Court Case

Natural Answers from 2000 to 2002 developed, produced, and marketed herbal supplements such as ?HerbaQuit Lozenges?. Without Food and Drug Administration (FDA) approval, this product was marketed and produced to help people stop smoking by satisfying their physical and psychological cravings for Tobacco. Natural Answers filed trademark applications for both ?HerbaQuit? on April 12, 1994 and ?HerbaQuit Lonzenges? on May 27, 1995 with the USPTO. Unfortunately, both were rejected; nonetheless, in 2000, Natural Answers marketed and sold HerbaQuit Lozenges in drugstores, supermarkets, convenience stores, and over the Internet (Marcus, 2008). Thus, Natural Answers placed their product for public consumption and used their natural trademark rights under the Lanham Act (?Lanham (Trademark) Act (15 U.S.C.) Index,? n.d.).

Under the Lanham Act, Natural Answers? unregistered trademark for HerbaQuit was protected because the product was being marketed and offered to the public (Marcus, 2008 and ?Lanham (Trademark) Act (15 U.S.C.) Index,? n.d.). From March to April 2001, GSK showed interest in an agreement with Natural Answers but never established an official deal to distribute HerbaQuit. After 50,000 packages were produced, Natural Answers off-shelved HerbaQuit March 2002 and discontinued production November 2002. In 2003, after a failed attempt to solicit to the Philip Morris USA Inc., Natural Answers seemed to stop production and sales of HerbaQuit in open markets (Marcus, 2008).

GSK, seven months after HerbaQuit was not visible on store shelves in 2002, decided to launch an FDA approved anti-tobacco product called ?Commit Lozenges?. GSK advertised this motto with their product, ?the first and only stop smoking lozenge?, which discredited HerbaQuit being on the market first or at all. GSK had started development of their product in 1998 about four years after HerbaQuit; however, they had FDA approval in 2002 after applying for product approval in 2000. Moreover, GSK had a registered trademark as of 2003 for Commit Lozenges. By 2005, Natural Answers pursued a ten-count complaint against GSK with the United States District Court for the Southern District of Florida and later appealed the court?s decision in 2008 in the United States Court of Appeals, Eleventh Circuit, (Marcus, 2008).

The Legal Issue

Did GSK violate Natural Answers? trademark? Although Natural Answers filed a ten-count complaint related to GSK, for the purposes of this paper, the counts defined and listed in this section are more related to a potential direct violation of the Lanham Act. Also note, if the Lanham Act had been violated, then GSK would also more than likely be guilty of violating local state common laws as well (Marcus, 2008).

The following list defines the trademark infringements that Natural Answers accused GSK in relation to the Lanham Act and other related common laws:

? ?Federal Trademark Infringement under 15 U.S.C. ??1125(a)?: This relates to laws that protect both registered and well-known unregistered marks from other companies to market and sell similar products (USPTO, 2010). For example, Natural Answers held no registered trademark of their product; however, when their product was advertised and sold in stores, it was protected (Marcus, 2008).

? ?Federal Trademark Infringement Based on Reverse Confusion under 15 U.S.C. ??1125(a)?: This relates to an infringement that happens when a product is marketed in a way that causes consumers to mistakenly connect one brand to another (?Reverse Confusion,? n.d.). For example, GSK had advertised the Commit motto as, ?the first and only stop smoking lozenge?; thus, Customers who were aware of HerbaQuit before of Commit might have thought the name had changed because to them HerbaQuit was the ?first? and ?only?; in turn, consumers may confuse HerbaQuit with GSK?s product (Marcus, 2008).

? ?Common Law Trademark Disparagement?: This relates to misleading claims caused by a competitor of a similar product on the same market (?Trademark Infringement and Product Disparagement,? n.d.). For example, GSK stated, ??only stop smoking lozenge?, to describe their Commit Lozenges, which could make people think that there are no other similar products on the market such as HerbaQuit (Marcus, 2008).

? ?Common Law Trademark Infringement?: This would be a violation of local state trademark laws (i.e. distribution issues affected by the marketing and selling of either product) (Marcus, 2008 and ?Common Law Trademark Rights, ?n.d.).

The Original and Appeals Courts? Analyses

Given the facts, the original court found that GSK was not guilty of the claims made by Natural Answers because Natural Answers abandoned their product; thus, any infringements or accusations of harm that happened to Natural Answers or their product ?HerbaQuit? was void. Upon a United States Court of Appeals review, Marcus (2008) noted: ?Under the Lanham Act, a trademark is deemed abandoned, and, thus no longer valid, ?[w]hen its use has been discontinued with intent not to resume such use.?? The United States Court of Appeals reviewed the evidence from the original case in these terms.

Marcus (2008) cites as precedent ?Cumulus Media, Inc. v. Clear Channel [Commc'ns], Inc., 304 F.3d 1167, 1173 (11th Cir.2002)?; meaning, if GSK proved that Natural Answers abandoned their product on the market, then GSK is not guilty of causing any harm to Natural Answers. As of 2002, the fact was Natural Answers showed no public intent to continue pursuit of their brand and had pulled their product off the public market. According to the Lanham Act, even though Natural Answers could argue they had a natural established trademark through various media forms such as the Internet, they no longer continued to market and offer their product for sale; in turn, they lost trademark protection under the Lanham Act (Marcus, 2008).
The Original and Appeals Court?s Final Decisions

By 2005, the original court?s decision sided on behalf of GSK not with Natural Answers because Natural Answers did not have FDA approval, a registered patent or trademark, or a product that was currently on the market. Thus, GSK was cleared against all claims made by Natural Answers because no apparent trademark violations were made. Natural Answers, feeling they still had a valid case, contested the original court?s decision and appealed (Marcus, 2008).

Upon a 2008 review by United States Court of Appeals, Judge Marcus (2008) had affirmed the original court?s decision based on the evidence that was presented and the state of Natural Answers? HerbaQuit Lozenges? production and market presence while GSK?s Commit Lozenges was on the market (Marcus, 2008). In regards to the sprit of the Lanham act and new precedent, Marcus (2008) did not feel this was a landmark case nor that any new exceptions should be made because Natural Answers was at the time not protected under the Lanham Act in anyway after the product was off the shelves in 2002.

Discussion

In hindsight, this case shows a company losing their trademark rights because they stopped marketing and selling their product to the general public. Simply put, before securing what was needed for a successful run, Natural Answers started product production and marketing. In regards to GSK negotiations, it seems Natural Answers feels they gave GSK an idea before GSK had filed for both FDA approval and a USPTO Trademark for their Commit Lozenges (Marcus, 2008).

In regards to their solicitations, Natural Answers went into production before exploring different options that could bring more credibility to their product. Before the case began, NeoGlow Entertainment (NE) believes that if there was more evidence (i.e. scientific studies) for Natural Answers? claims of what HerbaQuit could do, then more sponsors and investors would have been more interested in investing in the production and marketing of the product prior to 1998.

For the 2003 Philip Morris USA Inc. Deal, Natural Answers simply needed money to continue, and approaching Philip Morris seemed a desperate attempt by Natural Answers to keep their product running because by that time GSK?s product was on the market with FDA approval (Marcus, 2008). How can NE avoid a similar issue related to its products? When we put a product out, we see it through; meaning, before fully committing to production, we will secure partnership agreements and necessary resources needed for successful product launches.

Considering applications of this case, NE has a better understanding of how registered and natural trademarks work under the Lanham Act. According to the Lanham Act and this case, ?Web-presence? is not enough to maintain a natural trademark. The purpose of a trademark is to help consumers identify one brand over the other; in regards to products, a business must attempt to sell a product not only market it in order to maintain their natural trademark rights under the Lanham Act (USPTO, 2010 and ?Lanham (Trademark) Act (15 U.S.C.) Index,? n.d.).

In conclusion, NE?s practices remain unchanged in our product and service development. We continue to develop strategic partners, sponsors, and investors in relationship to our projects, products, and services. Of course, studying this case has filled in many grey areas of what we should trademark and why. For example, the ?popularity? or ?well-known? argument in the Lanham Act directly corresponds to our web-presence because the ?popularity? of NE or it?s products and services could be brought into question in relation to trademark and common law disputes (?Lanham (Trademark) Act (15 U.S.C.) Index,? n.d.). Pending our filling date, NE or a name related to NE will be a registered trademark sometime in 2012; on the other hand, our related products will more than likely fall under natural trademarks. As mentioned before, Kirkman?s ?The Walking Dead? is not a registered trademark, but the company that publishes his products, ?Image Comics?, has a registered trademark with USPTO (Kirkman, 2005 and Scott, Straub, Kellett, and Guigar, 2008). Future NE research will be more directed to Internet trademark law and common laws in regions that NE will market or sell products in. As laws change, our education must continue (Finnegan, 2011).

References:
Common Law Trademark Rights (n.d.) (Trademark) Act (15 U.S.C.) BitLaw. Retrieved on April 19th, 2011 from http://www.bitlaw.com/trademark/common.html

Finnegan (2011) Internet Trademark Case Summaries. Retrieved on April 20th from http://www.finnegan.com/publications/updatenewsletters/itcs/

Kirkman, R, (2005). The Walking Dead. Berkley: Image Comics

Lanham (Trademark) Act (15 U.S.C.) Index (n.d.) BitLaw. Retrieved on April 19th, 2011 from http://www.bitlaw.com/source/15usc/

Marcus (2008) Natural Answers Inc v. Smithkline Beecham Corporation

April 9th, 2011 from: http://caselaw.findlaw.com/us-11th-circuit/1206578.html

Pennington, G. (2010) AMC picks up 'Walking Dead' for Season 2 Retrived on April 18th 2011 from http://www.stltoday.com/entertainment/television/gail-pennington/article_38e970f8-eb7f-11df-a05c-0017a4a78c22.html

Reverse Confusion (n.d.) Reverse Confusion. Retrieved on April 19th, , 2011 from http://definitions.Reverse Confusion.com/r/reverse-confusion-trademark/
United States Patent and Trademark Office (2010). Office of the Administrator for Policy and

External Affairs: Well-known Marks [Webpage]. Retrieved on April 20th, 2011 from http://www.uspto.gov/ip/global/trademarks/ir_tm_marks.jsp

Scott, K, Straub, K, Kellett, D, and Guigar, B. (2008) How to Make Webcomics. Berkley: Image Comics

Trademark Infringement and Product Disparagement (n.d.) The Business Litigators Retrieved on April 20th from http://www.thebusinesslitigators.com/lawyer-attorney-1404046.html

Source: http://zons-education-edutainment.blogspot.com/2011/05/to-register-or-not-to-register-lanham.html

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