TRADEMARKS AND DECEPTIVE PRACTICES
IPSI Final Exam-July 17, 1998


This exam has two sections-a multiple choice section and a short answer section. Please place your answers on the exam itself, do not use a blue book. The exam is openbook and you may take any written material you wish into the exam with you. Do not work with any of your classmates during the exam. All statutory references are to the Lanham Act unless otherwise indicated.

Multiple Choice (36pts. total)--Choose only one answer from the alternatives presented for each question and circle the letter corresponding to that answer. If you believe that more than one answer is correct, choose the answer that represents the best of the alternative answers.

1. Budget Rent-A-Car Corp., in existence since 1958, is the third largest worldwide car and truck rental system, with 3,200 airport and local market locations in 120 countries, including the United States. Since 1972, the company has owned a U. S. federal registration for the word mark "Budget," specified for use in advertising vehicle rental services; in 1978, the company sought and was granted incontestable status for 'Budget" for the services specified in the registration.

(4pts.) 1.l A chain of bicycle rental stores known as "Spin" recently opened in Northern New England, advertising its low cost transportation under the slogan, "Budget Wheels," If Budget Rent-A-Car charges infringement of its incontestably registered mark through Spin's use of its advertising slogan, which of the following subsections sets forth Spin's best argument for overcoming the conclusive evidentiary effect of in ontestability?

(a) 33(b)(2),

(b) 33(b)(3).

(c) 33(b)(4).

(d) 33(b)(5).

(e) 33(b)(8).


(4 pts.) 1.2 Assume that, instead of renting bicycles, Spin only sells bicycles. Prior to proving a 33(b) defense, which of the following assertions constitutes Spin's best argument that Budget Rent-A-Car's incontestable registration is merely prima facie evidence of validity of the word mark "Budget" for purposes of infringement litigation.

(a) Budget Rent-A-Car's 15 affidavit for the word mark "Budget" specified vehicle rental services.

(b) The word mark 'Budget'' is famous only for vehicle rental services.

(c) Spin did not intend to cause confusion among the consuming public as evidenced by the fact that it only sells bicycles and does not rent them.

(d) Individuals who purchase vehicles tend to be more sophisticated consumers than those who rent them.

(e) "Budget" is not a strong mark for purposes of the Polaroid factors analysis because it is descriptive of low cost rental transportation.


2. Herb grower, Jim McDonald, began using the mark 'McDonald's Farm" in 1956 to advertise his services to gourmet restaurants nationwide, and his business has flourished since that time. McDonald's Corp., opened its first fast food restaurant in Des Plaines, Illinois, in 1955, and, two years later, began expanding to its present-day size of over 10,000 restaurants worldwide with over $14 billion in annual sales. McDonald's Corp. expends over $400 million annually for advertising and promotion and estimates that over 95% of the American population has eaten at a McDonald's restaurant. Recently, McDonald's Corp. sued Jim McDonald under 43(c) for blurring of the "McDonald's" mark, which is federally registered for, among other things, restaurant services.

(4pts.) 2.1 On a motion for a preliminary injunction, McDonald's Corp. will not be able to establish a probability of success on the merits because:

(a) The "McDonald's" mark is not a famous mark.

(b) Reasonably prudent consumers are not likely to be confused as to the origin or sponsorship of services rendered under the "McDonald's Farm" mark.

(c) McDonald's Corp. markets its services to a different consumer base than does Jim McDonald, hence, the parties do not utilize the same channels of trade.

(d) Jim McDonald began using the "McDonald's Farm" mark in 1956.

(e) None of the above.


(4pts.) 2.2 Assume that, in addition to the cause of action under 43(c), McDonald's Corp. charged Jim McDonald with dilution under California state law. Assume also that, prior to the lawsuit, Jim McDonald obtained a federal registration for "McDonald's Farm." Which of the following constitutes an accurate statement?

(a) McDonald's Corp.'s federal registration preempts a state cause of action for dilution.

(b) Jim McDonald's federal registration constitutes a complete bar to the state cause of action for dilution.

(c) A federal cause of action under 43(c) preempts a state cause of action for dilution.

(d) Jim McDonald's federal registration does not constitute a complete bar to the state cause of action.

(e) None of the above.


3. Copycat Co. originated its most recent product, "Wipeout" solvent, by analyzing and copying the chemical components of a popular driveway cleaner marketed by Dow, Inc., known as "Banish" solvent. The formula for Dow's more expensive product is not protected by patent, copyright, or trade secret. Copycat's driveway cleaner contains the following claim on its label: "Wipeout solvent has SUPER CLEANING POWER because it contains the same ingredients found in Banish solvent." Although the two solvents contain the same ingredients, their methods of manufacture are different, resulting in Banish solvent's greater cleaning power.

(4pts.) 3.1 If a court finds Copycat liable under 43(a) for deceptive advertising, included in its probable reasoning will be:

(a) That the claim is literally false because its necessary implication is that identical ingredients result in identical cleaning power.

(b) That the claim falls outside the realm of acceptable comparative advertising.

(c) That the claim is material because consumers are likely to rely on it in deciding to whether to purchase Dow's popular product or a less expensive alternative.

(d) That the claim is made in "commercial advertising and promotion" even though it only appears on the product label.

(e) All of the above.


(4 pts.) 3.2 Assume that Dow introduced testimony at trial from Copycat's CEO stating that, at the time the company made the claim, it was in possession of test data showing the inferiority of Wipeout solvent as compared to Banish solvent. Having established Copycat's liability under 43(a), will Dow prevail on a motion for attorneys' fees and why or why not?

(a) Yes, an award of attorneys' fees is mandatory.

(b) Yes, exceptional circumstances can be shown.

(c) No, exceptional circumstances cannot be shown.

(d) No, attorneys' fees are not available for a cause of action for deceptive advertising.

(e) None of the above.

(4 pts.) 3.3 The claim "SUPER CLEANING POWER," viewed by itself, i.e., without any reference to ingredients, is:

(a) Actionable under 43(a)(1)(A) because the claim might confuse consumers as to the source of the products at issue.

(b) Actionable under 43(c) because the phrase is famous or at least commonly used by most manufacturers of cleaning products.

(c) Actionable under 43(a)(1)(B) because the claim is likely to be material to consumers' purchasing decisions.

(d) Actionable under 43(c) because the phrase is so commonly used that it dilutes any trademark significance in the phrase.

(e) None of the above.


4. Greta Garbled, an unknown actress, appeared in a 1995 remake of Alfred Hitchcock's classic film, Psycho. Unfortunately, Greta was unable to scream with convincing terror in the famous shower murder scene, and the director of the remake replaced her voice with a previously-recorded scream from the actress, Jamie Lee Curtis. Ms. Curtis, nicknamed the "Scream Queen" as a result of her signature scream accompanying her appearance in a series of low-budget horror movies, was not informed of nor was she credited with the use of her voice in the remake.

(4pts.)4.1 The failure to seek and obtain Ms. Curtis' consent to the use of her signature scream in the remake is actionable under 43(a) because:

(a) Appropriation of Ms. Curtis' scream without her consent constitutes misappropriation of her persona as a celebrity.

(b) Ms. Curtis' First Amendment rights outweigh the First Amendment rights of the director of the remake.

(c) Misappropriation of Ms. Curtis' voice constitutes an invasion of her privacy and 43(c) is an extension of the state-created right.

(d) The facts are analogous to the facts in Midler v. Ford Motor Co.

(e) All of the above.

(4pts.) 4.2 The failure to properly credit Ms. Curtis for the use of her signature scream in the remake is actionable under 43(a) because:

(a) It is likely to result in embarrassment and humiliation to Ms. Curtis.

(b) It is passing off,

(c) It is express reverse passing off.

(d) It is a violation of Ms. Curtis' right to privacy.

(e) None of the above.


Essay (34 pts. total)-Please confine your responses to the lined area, but do not feel compelled to fill the entire area. Cite case law only if the question specifically asks you to do so.

(10 pts.)
5. (a) Can a defendant challenge the validity of an incontestably-registered trademark if the defendant can show that the mark, although originally a fanciful mark, has become generic through improper public usage of the mark and the trademark holder's failure to police such usage? (b) Support your conclusion with specific references to the Lanham Act. [place your response on the next page]

(24pts.)
6. Lemmon Motors sells used Toyota automobiles in a three state area and refers its customers to an independent chain of automobile repair shops doing business under the trade name "The Toyota Experts." The chain adopted the name in 1996 at the insistence of Lemmon because Lemmon knew the cars it was selling would need repairs and wanted to refer its customers to a shop whose name would instill confidence in the ability to do the repairs correctly. Before adopting the mark, the owner of the repair chain extracted a guarantee from the president of Lemmon Motors that he would pay the chain's legal fees if it was sued by Toyota Motor Co., the manufacturer of the automobiles to be repaired, for trademark infringement.

A U. S. federal registration for the mark "Toyota" has been owned by Toyota Motor Co. since 1976 for use in conjunction with the sale and repair of automobiles. Since the late 1970's, Toyota Motor Co. has sold millions of automobiles nationwide and achieves annual U. S. sales in excess of a billion dollars. Recently, Toyota Motor Co. has become aware of The Toyota Experts because it has received numerous phone calls and letters complaining that repairs at the chain's facilities are not being performed correctly'. the letters and calls assume incorrectly that The Toyota Experts is a manufacturer-authorized repair chain. Consumers pay a great deal of money for automotive repairs--Toyota Motor Co. does not want to lose its customer base for such services and, so, it sues The Toyota Experts under 32(l)(a). During discovery, Toyota Motor Co. learns why the chain adopted its trade name, and the manufacturer amends the complaint to name Lemmon Motors as a defendant.

Analyze Toyota Motor Co.'s chances of prevailing against each defendant in this action. Cite relevant case law. [place your response on the next page]