Briefings from the Trademark Universe

Steven A. Abreu

By Steven Abreu. A member of our Trademark Practice Group

February 2015 IP Update

From Sunstein’s trademark curiosity desk, here is a look at some recent developments:

  • Tacking: When owners of similar trademarks argue over who has superior rights to the mark, the question often arises as to which owner first used it.  This may give rise to the further question of whether a modification of the mark over time results in a different mark (and therefore a shorter period of use of the current mark), or whether the uses of the variants can be “tacked” to each other so that the owner can claim one long, continuous period of use.  The U.S. Supreme Court has held that this is a question of fact, not law, and thus in a jury trial it is a matter for the jury to decide.
  • Quantifying the value of marks: A study published by Markables, a trademark valuation service, demonstrates the value of trademarks by analyzing the figures in the most expensive brand acquisitions of 2013. Among these acquisitions were expensive brands such as HJ Heinz, Corona (beer), Joseph A. Bank (clothier), Saks Fifth Avenue (department store) and Skippy (peanut butter). The study compared the total purchase price paid for the acquisition less the value of tangible assets acquired, such as equipment, inventory and receivables. The difference between the two figures is attributable to brand value. For the top 20 acquisitions in 2013, the average percentage of the total purchase price attributable to the value of the brand is 34%. Thus, in deals reaching into the billions, the value of the brands, the trademarks, and a robust trademark protection strategy was evident.

For example, Markables valued the Heinz brand alone at $12 billion when the tangible assets were subtracted from the overall purchase price. The Sprint brand, used in telecommunications, was valued at $6.4 billion. Further down the list at number 16, Wish Bone, a salad dressing brand name, was valued at $348 million.

World Trademark Review observed that the Markables study highlights the role of brands and, by extension, trademark protection, as a “direct contributor to the corporate bottom line.”

  • So-and-so sucks: Vox Populi Registry recently won a yearlong battle to be appointed by ICANN as the registry in charge of the .sucks top-level domain. The .sucks domain has caught the attention of a number of industry insiders for its peculiar pricing structure. Originally it was announced by Vox Populi that a one-year registration for a domain on the .sucks registry would cost $25,000 to trademark owners to register in the “sunrise period.” Concerns over profiteering on the backs of trademark owners prompted Senator Rockefeller of West Virginia to write a letter to ICANN chairman, Dr. Stephen Crocker, regarding the domain. “Will your organization allow a third party to purchase and operate ‘ICANN.sucks’?” the senator wrote.

Vox Populi has been reported to be rethinking its pricing structure. One wonders whether pressure from ICANN or the US Senate has had an impact. CEO John Berard told internet publication Domain Incite that the company has been rethinking its pricing strategy. “We are considering something much more in line with current pricing practices,” he said.

  • Preclusive effect of agency ruling: The US Supreme Court recently heard oral arguments in B&B Hardware, Inc. v. Hargis Industries, which centers on the important issue of whether a Trademark Trial and Appeal Board finding as to likelihood of confusion between two marks should have a preclusive effect if the same issue is litigated in district court. TTAB proceedings are held to determine whether a mark should be registered (or stay registered) and do not decide whether a mark may be used in commerce without infringing another mark. If a TTAB decision is given preclusive effect in district court, its importance to the parties will be much greater. Based simply on the tenor of oral argument, it is difficult to predict how the court will rule.
  •  Club without a name: Steaua Bucharest, a Romanian soccer team, and a frequent competitor in Europe’s top league, the UEFA Champions’ League, lost a trademark battle against the Romanian Army at the country’s top appeals court. Steaua Bucharest had ties to the Army from the club’s founding in 1947, but when the club was sold in 2004 those ties were severed. According to the ruling, Steaua Bucharest had to cease use of the Steaua portion of the mark with immediate effect.

A rain-drenched game played this month at Steaua’s home stadium featured strips of tape obscuring mentions of Steaua, leaving only “Bucharest.” The uniforms carried no team logo and the scoreboard omitted the club crest, leaving only mention of “hosts.” Reports indicate that home team fans chanted “LET’S GO HOSTS.” For the time being the club remains a team with no name, just happy to get out of the rain.