On Wednesday, the Supreme Court heard oral argument in the case of Already, LLC d/b/a Yums v. Nike, Inc. As we reported previously, that case arose from an appeal of the Second Circuit’s decision affirming the Southern District of New York’s holding that a covenant not to sue entered in a trademark dispute ended the case and controversy between the parties. We enclose the full transcript of the oral argument.
Earlier today, the United States Court of Appeals for the Second Circuit issued its long-awaited decision in Christian Louboutin S.A. v. Yves Saint Laurent America Holding, Inc.. The Appellate Court decision reversed the lower court’s finding that a single color can never serve as a trademark for fashion. It also found that Louboutin’s red, lacquered shoe outsole had acquired distinctiveness and is protectable as a trademark. However, the Court went on to state that the trademark is “limited to uses where the red outsole contrasts with the color of the remainder of the shoe.” The case has now been remanded to the District Court for further proceedings.
On January 12, 2012, ICANN, the Internet’s domain name registration watch dog, began accepting applications for new generic Top-Level Domains (gTLDs) to add to those already in existence, including .com, .net, .biz and others. Under the new scheme, any company can apply for a gTLD, thereby expanding the domain name system (DNS). Ultimately, this expansion will change the Internet forever. Each new gTLD poses an incremental risk for trademark owners who are already under heavy assault in cyberspace from cybersquatting (registering, trafficking in, or using a domain name with bad faith intent to profit from the goodwill of a trademark owner), brandjacking (assuming the online identity of another entity for the purposes of trading on another’s brand equity), and typosquatting (registering URLs with common misspellings) by those seeking to generate illicit profits. According to the Coalition Against Domain Name Abuse (CADNA), cybersquatting already costs trademark owners more than $1 billion each year due to lost sales, lost goodwill, and increased enforcement costs. However, with a major increase in gTLDs, many corporations fear an expansion in expensive litigation to enforce their brands and trademarks.
On November 16, 2009, the Supreme Court denied a petition for certiorari in the case of Harjo v. Pro-Football, Inc. The underlying action was brought by Native American activists (“Harjo”) who challenged the Washington Redskins’ right to register its team name and logos on the basis that they are scandalous, disparaging and may bring Native Americans into disrepute or contempt. Marks that do any of those things are not entitled to registration, as provided by Section 2(a) of the Lanham Act, 15 U.S.C. § 1052(a). The sole issue submitted for the Supreme Court’s review, however, was whether the activists’ claim was barred by laches, as found by the U.S. Court of Appeals for the D.C. Circuit. Under the Lanham Act, the grounds on which a trademark registration may be cancelled become limited once the registration has existed for five years. For example, after that point, no challenge may be brought on the basis that the mark is merely descriptive. However, the Lanham Act specifies that certain claims may be brought “at any time,” including that a mark is disparaging, that it has been abandoned, or has become generic. 15 U.S.C. § 1064(3). The issue submitted for the Supreme Court’s review...