TRADEMARKS AND DECEPTIVE PRACTICES

Mid-Semester Quiz

October 5, 1999

Professor Lars S. Smith

INSIRUCTIONS:

The quiz is open-book and you may take any written material that you wish into the exam with you. Do not work with any of your classmates during the quiz. All statutory references are to the Lanham Act unless otherwise indicated.

Please provide your answers in the spaces provided on the exam, and limit your

a I nswers to the space provided. No consideration will be given to answer written on any
other piece of paper. Place your exam number at the top right hand comer of this
cover sheet.

You have one hour to complete the quiz unless otherwise instructed by the proctor. You may earn a total of 30 points on this quiz- the quiz contains 13 questions. All questions are worth 2 points each, except Question 11, which is worth 6 points. Pace yourself accordingly.

Fact situation for Questions 1 to 3.

Concord Coffee, Inc. owns a nationwide chain of coffee shops. It prides itself on selling the hottest coffee in the country under the mark LAVA JOE. Unfortunately, the paper cups available today are incapable of keeping the coffee hot for long, or adequately protecting customers from serious bums from LAVA JOE coffee. Therefore, the company has designed an insulating wrapper for its cups that keeps the coffee hot, and prevents injury to its clients. The wrapper is made of a insulating paper material, which is colored silver. A feature of the wrapper is that it has many ridges, which makes the cup look like it is wrapped in corrugated metal. The look is very distinctive, and customers associate the silver wrapper with LAVA JOE coffee. No patent has been obtained.

Manchester Munchies, Inc., wanting to jumpstart its own chain of coffee shops, decides to sell coffee using cups which are silver colored and have ridges, which are reminiscent of Concord's wrapper. However, the ridges on Manchester's cups do not provide any insulating capability. Fortunately, the flavor of the coffee, and not its temperature, is Manchester's major selling point.
 

1 . If Concord sues Manchester for infringement of its unique wrapper, what is Manchester's best defense? What is the policy reason for that defense? (2 points)

2. What arguments should Manchester make to overcome Concord's evidence that consumers associate the wrapper with LAVA JOE brand coffee? (2 points)
 

Assume for purposes of question 3 only that the Concord has in fact obtained a utility patent on the wrapper. The claims in the patent (i.e. the invention which is covered by the patent) describe the wrapper itself, and the ridges, which insulates the coffee cup and prevents the coffee from burning customers. However, no mention is made of any other feature of the wrapper.

3. Assuming that Manchester's cups do not infringe on Concord's patent, what feature or features of the wrapper can Concord claim function as a trademark? What evidence will Concord need to show in order prove protectable trademark rights in such feature or features in order to prevail? (2 points)

Fact situation for Questions 4 and 5

The White Mountain Pen Company has produced fancy and expensive pens for many years. One particular brand of pen was the EXCELSIOR, which it sold from 1912 to 1968. It had a very unique and distinctive design, including a white star on the cap, three gold rings on the bottom, and the pen was colored royal blue. This was Vvute Mountain's most expensive pen , and so sold the pen in limited numbers. The company has not produced any more since 1968. However, it became well known among consumers that it was one of the finest pens available, and consumers still associate the EXCELSIOR, and its design, with White Mountain.

4. In September, 1999, Papermate starts to market a low cost copy of the EXCELSIOR, which copies the trade dress exactly, but which Papermate markets under the name PEN-ULTUvIATE for $1.50. If White Mountain sues for infringement, what is
Papermate's best argument that it is not infringing White Mountain's trade dress? Describe what elements Papermate will have to prove to prevail. (2 points)

5. Given that White Mountain does not currently market the EXCELSIOR, what theory will White Mountain rely on to support the validity and enforceability of its trade dress? (2 points)

6. In advising your client about a trademark, what two things should you do before ordering a full search from trademark searching company? (2 points)

7. What two main purposes do courts generally ascribe to protecting trademarks under the Lanham Act? (2 points)

Fact situation for Questions 8 and 9.

Dwayne and Delilah Tarbow are a brother and sister singing duo who have been performing country music on the rodeo circuit in the Southwestern United States (Specifically, throughout Arizona, New Mexico and Texas) since January 1993. Recently, Dwayne and Delilah received a letter from a lawyer for Tarbow Records demanding that the two singers cease and desist from performing under the designation "The Tarbows." The letter indicates that the company has used the trademark "Tarbow Records" in conjunction with the sale of classical violin recordings in all major urban areas on the Atlantic Coast since September 1992, and that the company has held a usebased federal registration for the mark since September 1993. Tarbow filed its Lanham Act Section 15 affidavit in January 1999.

8. In order for Dwayne and Delilah to show that they have the right to continue to use the mark, what type of defense is available to them, and what are the elements of that defense? What additional fact will you need to know in order for Dwayne and Delilah to prevail ? (2 points)

9. If Dwayne and DeMah prevail, how will their use of the mark be limited? (2 points)

10. Jim Jones has owned and operated a small chain of restaurants in Southern Maine under the mark FINEST KIND since 1962, and still continues to do so. In 1988, Sue Smith, the manager of the Portland restaurant decided to strike out on her own. She asked Jones if she could open a FINEST KIND restaurant in Manchester, NH. Because Jones and Smith had become close friends over the years, Jones agreed. No written agreement was executed, but Smith did agree to make a single payment of $ 10,000 for use of the name. Smith opened two more restaurants under the name FINEST KIND, in 1992 and 1995. Jones verbally agreed to Smith's use of the name on these restaurants. However, Smith did not pay Jones anything for the right to do so. Jones has never been to any of Smith's restaurants, and has never consulted with Smith about operating the restaurants. Recently, a FINEST KIND restaurant was opened in Boston, by Tim Taylor. Taylor does not know either Jones or Smith, and has asked neither for permission to use the name. If Jones sues Taylor, who will prevail? (2 points)

(a) Jones, because the payment of $ 10,000 shows that Jones intended to keep ownership of the mark and to maintain the goodwill in the mark.

(b) Jones, under the doctrine of implied good will, because Smith and Jones are goods friends and good will is implied as between friends.

(c) Taylor, because Jones failed to transfer any good will to Smith and thus their arrangement amounted to a naked license of the mark.

(d) Taylor, because Jones's acquiescence of Smith's use of the mark from 1988 to 1999, an eleven year period, amounted to an abandonment of the mark.

(e) Taylor, because Jones failed to control the nature and quality of the services provided under the mark.

Fact situation for Questions 11 to 13.

ABC Corp., a chemical company, has developed a new type of floor cleaner which also waxes the floor while it cleans. It is odorless and colorless. During the process of developing the product, the marketing department has chosen three potential marks to use to name the product. These are "Sporon," "Nice n' Brite," and "KleanWax."

11. Please provide a short explanation to the marketing department of the nature of these three potential marks, and the advantages and/or disadvantages of using each of them. (6 Points)
 

ABC Corp. decides to use the mark NICE N'BRITE for the floor cleaner. Starting in January, 2000 it starts marketing the product in the Northeast via newspaper ads such as in the New York Times, the Boston Globe and the Manchester Union Leader. The product hits the store in February. However, NICE N'BRITE takes off very slowly. Sales throughout the Northeast are a meager $ 10,000 in February, and achieve only $25,000 by May, 2000. In June, ABC stops advertising to revamp its marketing campaign; however, it leaves the product on the shelves. Sales continue, but only at a very low rate.

XYZ Corp starts selling its own NICE N'BRITE cleaner in March 2000 on the West Coast, including California and Oregon. Product sales are so high that XYZ announces in a press release that it *intends to start selling its product nationwide by September 2000. ABC sues in July to stop XYZ from using the NICE N'BRITE mark anywhere in the United States claiming that it has prior rights in the mark. XYZ counterclaims, arguing ABCs use was insufficient to develop trademark rights in NICE N'BRITE, and that only XYZ's use created rights in the mark.

12. What are ABC's best arguments to overcome XYZ's claims, and to support that
ABC has prior nationwide rights in the mark? (2 points)

13. What arguments will XYZ's make in order to prevail in this case? (2 points)

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