“You Should Put That on a T-Shirt”

The Doubtful Status of Promotional Material in Trademark Law

Anne Gilson LaLonde

Jerome Gilson

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(Rel.92A–4/2016 Pub.726) This article is the eighteenth in a Matthew Bender/LexisNexis series that began in 1999, written to coincide with the Annual Meetings of the International Trademark Association.

ANNE GILSON LALONDE

Anne Gilson LaLonde is the author of Gilson on Trademarks. She has worked on the treatise in various capacities for seventeen years and took over authorship from her father, Jerome Gilson, on January 1, 2006.

After graduating cum laude from Princeton University with a degree in philosophy, Anne graduated cum laude from the University of Michigan Law School, serving as Book Review Editor of the Michigan Law Review. She practiced at Sidley & Austin in Washington, D.C. in the firm's Litigation Practice Group before her judicial clerkship with the late Chief Judge Norma Holloway Johnson of the United States District Court for the District of Columbia.

Anne is a member of the Illinois and District of Columbia bars and the bar of the United States Supreme Court. She lives in Vermont with her family, and her e-mail address is [email protected].

JEROME GILSON

Jerome Gilson is a shareholder in the Chicago intellectual property law firm Brinks Gilson & Lione and was the original author of Gilson on Trademarks (1974). He graduated from the Northwestern Pritzker School of Law, served on the Northwestern Law Review, and has specialized in trademark and unfair competition law for over fifty years. He is admitted to practice before many United States District Courts, eight United States Courts of Appeals, and the United States Supreme Court.

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Prelude

Looming in the corner throughout this article is “the elephant in the room”: enforcing your trademark against someone using it on promotional goods. Courts and academics alike have long been divided on this controversial issue, and détente seems unlikely.

Some commentators reason that no one should need permission to place your mark on T-shirts, stickers and such, because consumers have the right to show their affection for it. Otherwise, you will have a trademark monopoly extending way beyond your primary business. And if consumers just want your brand on goods and don’t care who makes them, how can they be confused? What’s the harm?

In fact, this rationale is fraught with danger. If it were adopted it would unavoidably harm both trademark owners and the public. Accordingly, we propose a practical approach. It could well satisfy consumer desires, protect trademark rights and help competitors know when a license is necessary.

Readers concerned about this underlying conflict should review our discussion in Section VII. Watch out for the elephant’s trunk, though. It’s unpredictable . . . .

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TABLE OF CONTENTS

I. Introduction II. Laying Out the Issues III. T-Shirts and Tote Bags: The Epic Macy’s v. Strategic Marks Struggle IV. Obtaining Trademark Rights from Promotional Goods A. Use on Promotional Goods Can Establish Trademark Rights for the Promotional Goods Themselves B. Use on Promotional Goods Is Not Use in Commerce for the Goods or Services They Promote C. Use on Promotional Goods Can Show Trademark Strength or Secondary Meaning V. Barriers to Obtaining Trademark Rights from Use of Material on Promotional Goods A. Lack of Distinctiveness of Material on Promotional Goods i. Ornamental Material a. Ornamentation in Trade Dress, Design Patent and Trademark Law I. Trade Dress II. Design Patents III. Design Trademarks b. Ornamental Words c. Secondary Source Exception for Pre-Used Marks ii. Informational Material B. Aesthetic Functionality C. Goods in Trade VI. Likelihood of Confusion from Use of Mark on Promotional Goods A. Relatedness of the Goods B. Similarity of the Marks

C. Trademark Fame VII. Looking the Elephant in the Room Straight in the Eyes A. Tension Between Trademark Owners and Competitors B. Consumers, Confusion and Promotional Goods C. Harm to Goodwill D. Proposal: Likely Confusion from Related Promotional Items E. Dilution VIII. Conclusion IX. Coda

“You Should Put That on a T-Shirt” The Doubtful Status of Promotional Material in Trademark Law*

I. Introduction

Ben Warner, young associate at York, Sandalow & Griffin, leans in toward his computer, intently scanning the list on the screen.

A newspaper article about Ben Warner, town cemetery commissioner in Texas, and his lucrative ferret-training side business.

An Internet Movie Database entry for Ben Warner, featured stuntman in the low-budget indie film “You Dare Me? Huh? Come Over Here and Say That to My Face!”

A YouTube video made by Ben Warner, edgy British teen, on how to dance the tango with a stuffed gorilla.

“Ben!” snapped a familiar voice from my office doorway. “Are you doing a Google brand search on yourself again?” I frantically x’ed out the search engine list, wondering once again if someone was monitoring my every online move.

PUT THAT ON A T-SHIRT

Molly York, the senior partner at my firm, stood with her arms crossed, glaring at me. “You have a completely un-Google- searchable name, Ben. Waste of time.”

“I wasn’t—” I began, but Molly cut me off.

“Look, I’m busy deleting that whole malpractice thing from the firm’s Wikipedia entry, so you need to take my meeting with this lunatic cat sitter, or whatever she is.” She turned and stalked down the hall.

Tammy, my secretary, walked in, shaking her head. “Ben, Willadine Mosey is here to see you. She was Molly’s three o’clock. Now she’s yours.”

Ms. Mosey was a short, graying woman with a piercing look, a fuzzy yellow jacket and a case containing an exotic-looking Siamese cat. She placed her cat carrier on my desk and shook my hand firmly. “You’re Ben? I had an appointment with one of the name partners and now I’ve been handed off to you. Don’t disappoint me, Ben. My business may be small, but it’s important to me.”

“No, of course, Ms. Mosey. I’ll give you my full attention.”

“Right. Sit.”

I sat and Ms. Mosey continued.

“Ben, here’s my problem. It involves trademarks, which I hear you know something about. I put my fish-head logo onto a

PROMOTIONAL GOODS IN TRADEMARK LAW bunch of T-shirts and sold them at a local craft fair. I designed the logo myself, for Willadine’s Cautious Cat-Proofing. That’s what I want to do, you see. Be a professional cat proofer. Make houses safe for cats. Lots of potential hazards in your modern home, don’t you know.” The cat gave a low meow and Ms. Mosey patted the carrier. “Um, no, I wasn’t aware of that, Ms. Mosey. More of an iguana person myself.”

“Well, it’s a fact. But I want to be sure I have a trademark for my cat-proofing business. My neighbor Gina, she’s a crafty one. Sly devil. I think she’s aiming to open her own cat-proofing business. I went through her trash a few days ago and found a broken coffee mug with an awfully-similar fish-head logo. I don’t want her to beat me to it.”

“So have you actually cat-proofed any houses?”

“My own. Isn’t that right, Orion?” The cat meowed again.

“Unfortunately, that won’t be enough to get you service mark rights. You need to use the mark in commerce. We can apply on an intent-to-use basis if we decide you need a registration –”

“I’ve done more than intend to use my mark, though, Ben. I have trademarked my T-shirts, haven’t I?”

“Well, you may have rights for T-shirts, but probably not for your cat-proofing business.”

PUT THAT ON A T-SHIRT

“That seems wrong to me. But at least I can use my trademark to stop people like Gina from putting the logo onto stickers and magnets and mugs and things, right?”

“Possibly. It depends on whether your use on the shirts is promotional, informational, ornamental or actually trademark use.”

“Don’t think you can confuse me with fancy terminology, Ben. I want a straight answer.” Orion hissed.

Branded promotional goods, such as T-shirts, mugs and the like, are ubiquitous. But can trademark rights develop from such use, and how far can they be enforced? Let’s see what Ben needs to advise Ms. Mosey on her cat-proofing conundrum.

II. Laying Out the Issues

To date, there are 73,295 live trademark registrations for “T- shirts” in the USPTO database. There are 14,819 live registrations for “stickers,” 10,472 for “mugs” and 9,947 for “tote bags.” Some of these feature logos better known for other goods or services, but others are used only on shirts, stickers, mugs or bags.

All sorts of promotional items bear trademarks for unrelated products or services, and are given away or sold to market them. There is almost no limit, but mostly they cover T-shirts, stationery, notepads, caps, mugs, water bottles, candy wrappers, hats, buttons, magnets, bumper stickers, golf balls, mouse pads, towels, and keychains. You likely have a selection clogging your junk drawer.

PROMOTIONAL GOODS IN TRADEMARK LAW

The lowly T-shirt stands out. Its front is a cheap, popular billboard that allows anyone with a trademark, slogan, team name, artwork, gripe or political truth to go public. It is universal and unisex, and can even help in trademark registration. But it has a stigma and is looked at somewhat skeptically by tribunals, especially if the design or wording is ornamental, informational or otherwise non-distinctive.

The current cascade of promotional goods triggers several questions, including: What legal rights do they actually establish? Do such rights extend to all promotional goods? Can a trademark registration for T-shirts protect service mark rights for, say, a restaurant or sports team? Can use of a mark on promotional items buttress trademark strength for different goods or services?

We begin with a tantalizing case, settled in February 2016, that highlights some of these prickly issues.

III. T-Shirts and Tote Bags: The Epic Macy’s v. Strategic Marks Struggle

Between 1995 and 2005, Macy’s, Inc. acquired several department store chains, many of them retailing jewels: ABRAHAM & STRAUS, THE BROADWAY, ROBINSONS- MAY, FILENES, THE BON MARCHÉ, JOSEPH MAGNIN, I. MAGNIN, MARSHALL FIELDS, STRAWBRIDGE’S, HECHT’S and STERNS. Then, from 2005 to 2006, in an orgy of consolidation, it subsumed all of these store names into the MACY’S name, confirming on its website that “all regional

PUT THAT ON A T-SHIRT department store names are converted to the Macy’s brand.”1 The USPTO had registered several of the retailing marks to Macy’s before its rebranding, and some of its applications remain pending.2

Around 2010, Strategic Marks, an aggressive company that tries to re-establish unused trademarks (a/k/a “zombies”), began using many of the apparently-discontinued store names. On its website retrodepartmentstores.com, it trumpeted: “Bringing back all the old department stores you remember and loved.”3 Backing up its claim, Strategic Marks obtained federal registrations for JOSEPH MAGNIN, THE BROADWAY, THE BON MARCHE’ [sic], and ROBINSON'S for retail department store and online department store services.4 It also filed intent-to-use applications for FILENE’S, HECHT’S, I. MAGNIN & COMPANY, MARSHALL FIELD'S, STRAWBRIDGE’S, STERN'S and MAY COMPANY for a variety

1 See http://www.macysinc.com/press-room/macysinc-history/2000-present/default.aspx. See also http://www.macysinc.com/press-room/macysinc-history/overview/ default.aspx (“With the conversion of all Federated’s regional store nameplates in March 2005, Macy’s grew to about 425 locations across the country.”). 2 See, e.g., I. MAGNIN for handbags and shirts (U.S. Reg. No. 0980735) (registered March 26, 1974), ROBINSONS-MAY for retail department store services (U.S. Reg. No. 1793132) (registered Sept. 14, 1993), FILENE’S for retail department store services (U.S. Reg. No. 1960415) (registered March 5, 1996), HECHT’S for retail department store services (U.S. Reg. No. 1975936) (registered May 28, 1996). Pending applications include FILENE'S BASEMENT OF BOSTON, intent to use application for “[r]etail department store services; online retail department store services” (U.S. Ser. No. 86689620) (filed July 10, 2015), HECHT’s, use-based application for tote bags and t-shirts (U.S. Ser. No. 85781902) (filed Nov. 16, 2012), THE BROADWAY, use-based application for tote bags and t-shirts (U.S. Ser. No. 85781951) (filed Nov. 16, 2012). 3 See http://www.retrodepartmentstores.com/. 4 JOSEPH MAGNIN (U.S. Reg. No. 4081032) (registered January 3, 2012), THE BROADWAY (U.S. Reg. No. 4099878) (registered February 12, 2012), THE BON MARCHE’ (U.S. Reg. No. 4136284) (registered May 1, 2012), ROBINSON’S (U.S. Reg. No. 4165969) (registered June 26, 2012) (supplemental register).

PROMOTIONAL GOODS IN TRADEMARK LAW of online and other retail department store services.5 It has a pending use-based application for ABRAHAM & STRAUS for exclusively online retail department store services6 and one for MARSHALL FIELD'S for a variety of candies.7

Macy’s was indeed alarmed. In 2011, it filed a broadside trademark complaint against Strategic Marks in the Northern District of California. It claimed infringement, unfair competition and dilution of what it called its “heritage marks,” such as ABRAHAM & STRAUS, THE BROADWAY, ROBINSONS-MAY, FILENES and THE BON MARCHÉ. The following year, the USPTO granted registrations to Strategic Marks for four more marks for retail store services.8 And in a very bold move, Strategic Marks actually counterclaimed against Macy’s for infringing THE BROADWAY.

On its Retro Department Stores website, Strategic Marks currently sells plain vanilla white T-shirts bearing the store logos with ® or TM symbols (Jelly beans, too, but no store logos on those).

5 FILENE’S (U.S. Ser. No. 85137196) (application filed September 24, 2010), HECHT’S (U.S. Ser. No. 85933433) (application filed May 15, 2013), I. MAGNIN & COMPANY (U.S. Ser. No. 85933434) (application filed May 15, 2013), MARSHALL FIELD'S (U.S. Ser. No. 85933442) (application filed May 15, 2013), STRAWBRIDGE’S (U.S. Ser. No. 85933451) (application filed May 15, 2013), STERN'S (U.S. Ser. No. 85933449) (application filed May 15, 2013), MAY COMPANY (U.S. Ser. No. 85137181) (application filed September 24, 2010). 6 U.S. Ser. No. 86228940 (application filed March 21, 2014). 7 U.S. Ser. No. 86040629 (application filed August 16, 2013). 8 Of those four, only the application for BON MARCHE’ was opposed; the opposition was withdrawn after briefing. Opp. No. 91199347.

PUT THAT ON A T-SHIRT

Strategic Marks succeeded in registering ROBINSON’S, THE BON MARCHE’ [sic] and THE BROADWAY for retail and online retail department store services, clothing stores and retail apparel stores with no more than screenshots of the website pages offering the T- shirts.9 But the ABRAHAM & STRAUS application went to a less sympathetic examiner. He refused to grant a registration for online or offline retail shopping based on the T-shirt specimen because

9 U.S. Reg. Nos. 4165969, 4136284 and 4099878.

PROMOTIONAL GOODS IN TRADEMARK LAW promotional products “generally must show a direct association between the mark and the services for which registration is sought.”10

On its website, Macy’s sold T-shirts with various logos, including ROBINSON’S-MAY, FILENE’S, THE BROADWAY, HECHT’S, and STERN’S. These each included the TM symbol.

10 Office Action July 1, 2014 for U.S. Ser. No. 86228940.

PUT THAT ON A T-SHIRT

It also sold bags such as the following:

PROMOTIONAL GOODS IN TRADEMARK LAW

Macy’s argued that it thus took affirmative steps to retain the goodwill of these marks for department store and other services.

The parties were not idle before the Trademark Trial and Appeal Board (“the Board”). There were twenty-seven opposition or cancellation proceedings pending between them, all suspended until the end of the federal court litigation.

In February 2015, Macy's filed another case against Strategic Marks, claiming infringement of MARSHALL FIELDS, HECHT’S, I. MAGNIN, STRAWBRIDGE’S, and STERNS. A year later, the district court granted Macy’s motion for partial summary judgment, holding that Strategic Marks’ sale of T-shirts bearing eight of the disputed trademarks was infringing.11 It relied in part on the fact that Macy’s had registered the marks for T-shirts before Strategic Marks began selling its shirts.

In yet another plot twist, the parties announced a settlement on February 29, 2016. Macy's transferred the rights to ROBINSONS-MAY, BAMBERGER'S, I. MAGNIN, BULLOCK'S, FOLEY'S and JORDAN MARSH to Strategic Marks, and retained the rights to its other "heritage" brands, according to press reports on the agreement.

IV. Obtaining Trademark Rights from Promotional Goods

Let us set the stage. Promotional goods, or collateral goods, bear trademarks but rarely identify the immediate manufacturer of

11 Macy’s, Inc. v. Strategic Marks, LLC, 2016 U.S. Dist. LEXIS 11676 (N.D. Cal. 2016).

PUT THAT ON A T-SHIRT the T-shirts, mugs, hats, key chains and bumper stickers.12 They typically promote others’ goods or services and tout the company or trademark depicted on the product. They can be sold en masse for buyers to show their admiration for their favorite sports team, television series or movie, or given away gratis at, say, an industry conference to promote a product or service. Consider, for example, the pervasive ballpoint pens handed out at a typical International Trademark Association Annual Meeting.

A. Use on Promotional Goods Can Establish Trademark Rights for the Promotional Goods Themselves

Because an airline, for instance, probably does not also make T-shirts, baseball caps or tote bags, it buys them from a company that applies client trademarks to all kinds of promotional products. And, voila, the airline has a variety of products emblazoned with its

12 E.g., Mary LaFrance, “Passing Off and Unfair Competition: Conflict and Convergence in Competition Law,” 102 TMR 1096, 1111 (2012) (“[T]he concept of merchandising involves using a mark on goods not specifically to identify their origin, but to capitalize on consumers' affection for the mark. Merchandising often involves placing a popular mark on goods that are different from the goods for which the mark is famous – for example, placing the FERRARI mark on a T-shirt.”) (footnote omitted); Thomas C. Folsom, “Space Pirates, Hitchhikers, Guides, and the Public Interest: Transformational Trademark Law in Cyberspace,” 99 TMR 1166, 1206 n.166 (2009) (“’Promotional’ goods are those that bear a trademark and yet are almost certainly not made by the mark proprietor.”); Lisa H. Johnston, “Drifting Toward Trademark Rights in Gross,” 85 TMR 19 (1995) (“A licensing agreement that permits a licensee to affix a trademark to products primarily to attract customers who wish to express allegiance, association, or sympathy with the trademark owner has been termed ‘promotional,’ ‘merchandise,’ or ‘character’ trademark licensing.”); Veronica J. Cherniak, Comment, “Ornamental Use of Trademarks: The Judicial Development and Economic Implications of an Exclusive Merchandising Right,” 69 Tul. L. Rev. 1311, 1312 (1995) (defining “promotional goods” as “merchandise adorned with the famous trade names and symbols of educational institutions, sports teams, musical groups, popular manufacturers, and the like”).

PROMOTIONAL GOODS IN TRADEMARK LAW logo to sell or give away. But can the airline or other company establish its own trademark rights for them? Very often it can, if it has already used its trademark or service mark for its primary business. Thus, a pet store, film company or coffee shop can own trademark rights for T-shirts, caps and bags without actually going into the apparel and accessory business.

The Board strongly believes in this concept: “There is no question but that a party need not be a manufacturer of goods to own and register a trademark.”13 In that case, from 1975, an examiner had refused registration for EXPO ’74 for handkerchiefs and T-shirts because they merely promoted the Seattle Exposition of 1974 and did not identify source. But, finding that the mark did indeed indicate the applicant, the Board disagreed.

In another case from that era, the Board found that consumers would see Amica Insurance Company as the source of AMICA or AMICA INSURANCE promotional items, such as paperweights, pens, golf balls, key chains, rulers and clipboards.14 As is common today, Amica used an outside vendor to imprint its logo and furnish the products. Even though some of the goods (cigarette lighters, pocket knives and ballpoint pens) bore the vendor’s trademarks as well, the Board nonetheless concluded that AMICA still served as a trademark for those goods.

13 In re Expo '74, 189 U.S.P.Q. 48 (T.T.A.B. 1975). See also Bobosky v. Adidas AG, 843 F. Supp. 2d 1134 (D. Ore. 2011) (finding it “well-established that even use of a mark as ornamentation on apparel manufactured by others qualifies as trademark use as long as the mark also serves the trademark purpose of identifying the source of the product”). 14 Amica Mutual Ins. Co. v. R. H. Cosmetics Corp., 204 U.S.P.Q. 155 (T.T.A.B. 1979) (holding that “a party other than a manufacturer, such as a merchant or distributor of goods, may acquire rights in and to a trademark used in the sale or distribution of the manufactured goods”).

PUT THAT ON A T-SHIRT

Many promotional items are freebies, handed out to stimulate later product or service sales, but this can also establish trademark rights without more. No money need change hands.15 A mark may be used “in commerce” even where its use is not immediately commercial or profit-motivated.16 In one case, the Board found that the owner of NASDAQ for stock market services did not show adequate use of its mark on promotional products, but cautioned: “We do not, by this finding, mean to imply that opposer's proof fails because it largely deals with give-aways and premiums bearing the NASDAQ mark, as opposed to the sale of such goods. . . .”17

15 15 U.S.C. § 1127 (“The word ‘commerce’ means all commerce which may lawfully be regulated by Congress.”). Cf. Lisa Kopf Krizman, “’But It’s For Internal Use Only!’ – A Guide for Trademark Counsel,” 91 TMR 964, 967 (2001) (“[M]arks used with goods given away as promotional items qualify for trademark protection. Therefore, for purposes of creating trademark rights, it is irrelevant whether a mark is being used on goods or services offered free of charge to employees.”) (footnote omitted). See also, e.g., United We Stand Am., Inc. v. United We Stand, Am. N.Y., Inc., 128 F.3d 86, 92-93 (2d Cir. 1997) (finding that use of a mark in connection with political activities can be use in commerce) (“The history and text of the Lanham Act show that ‘use in commerce’ reflects Congress's intent to legislate to the limits of its authority under the Commerce Clause, rather than to limit the Lanham Act to profit-seeking uses of a trademark.”); Modern Gp. v. Tiger Environmental & Rental Servs., LLC, 640 F. Supp. 2d 820, 825 (W.D. La. 2009) (finding that one can obtain trademark rights when renting out goods and noting that “valid trademark rights have been recognized in connection with goods which are given away free of charge”); McDonald's Corp. v. McKinley, 13 U.S.P.Q.2d 1895 (T.T.A.B. 1989) (“[A]pplicant inquired whether goods which are given away are considered to be ‘goods in commerce.’ In response to applicant's inquiry it is well settled that goods do not have to be sold in commerce in order to come within the ambit of the statute.”). 16 See 3 Anne Gilson LaLonde, Gilson on Trademarks § 11.03[2][e][iv]. 17 NASDAQ Stock Market, Inc. v. Antartica, S.r.l., 69 U.S.P.Q.2d 1718 (T.T.A.B. 2003).

PROMOTIONAL GOODS IN TRADEMARK LAW

There may also be a likelihood of source confusion between a product that is given away and one that is sold.18 For example, the Board found that use of MCTEDDY for hand-crafted teddy bears was likely to cause consumer confusion with a McDonald’s promotional teddy bear.19 The fact that a product is free, however, may sometimes suggest that it is not sufficiently related to a for-sale product for likelihood of confusion purposes.20

B. Use on Promotional Goods Is Not Use in Commerce for the Goods or Services They Promote

Last year, the Federal Circuit succinctly reminded us that a claim of “rendering of services” to obtain registration requires such services to be actually provided.21 Merely offering services to consumers is insufficient. Ergo, using a mark on promotional goods alone does not ordinarily qualify as service mark use in commerce. Nor does it in general qualify as use in commerce as a trademark for the products it promotes where it is not also being used in connection with those products.

Authority from the Board on this point is consistent. Last year, it found that promotional use of a mark on clothing did not constitute service mark use for the promoted services. Del Taco,

18 For more on likelihood of confusion and promotional goods, see § VI infra. 19 McDonald's, 13 U.S.P.Q.2d 1895 (The Board can find likelihood of confusion “if the opposer sells or gives away goods of the same general type as the applicant and those goods are identified by a mark which is confusingly similar to a mark used by the applicant on its goods.”). 20 See, e.g., King of the Mountain Sports, Inc. v. Chrysler Corp., 968 F. Supp. 568, 574 (D. Colo. 1997) (because defendants gave their jackets away as promotional items, they did not compete “even in a broad sense” with plaintiff’s clothing, sold for profit). 21 Couture v. Playdom, Inc., 778 F.3d 1379, 1380 (Fed. Cir. 2015).

PUT THAT ON A T-SHIRT

LLC owned the NAUGLES mark for restaurant services, but closed its last restaurant under that name in 1995. In 2008, food blogger Christian Ziebarth wrote a post reminiscing about the old NAUGLES restaurants, and inspired by the many positive responses decided to open his own NAUGLES restaurant.22

The USPTO, however, refused his application because of Del Taco’s previously-registered NAUGLES mark, so he filed a petition to cancel the registration on abandonment grounds. A few months later, Del Taco applied to register NAUGLES for shirts, T-shirts, hats, and jackets, and the USPTO granted it a registration. Admitting no use of NAUGLES for restaurant services since 1995, Del Taco argued that because it still sold clothing bearing the mark, it had not abandoned its restaurant service rights. However, the Board rejected Del Taco’s attempt: “[U]se of a mark on collateral or promotional goods such as clothing does not constitute service mark usage for the identified services.”23

The Second Circuit has espoused the same view. Impressa Perosa, S.R.L. owned a restaurant in Milan, Italy called FASHION CAFÉ, and in the United States distributed “thousands of T-shirts, cards, and key chains with the [Milan] Fashion Cafe name and logo.” The court, however, refused to protect the mark against a domestic user because the giveaways were “insufficient to establish ‘use in commerce’ of the Fashion Cafe name absent proof that [the

22 For a full examination of the issues involved with zombie trademarks (those brought back to life by a third party after abandonment), see Jerome Gilson & Anne Gilson LaLonde, “The Zombie Trademark: A Windfall and a Pitfall,” 98 TMR 1280 (2008). 23 Ziebarth v. Del Taco, LLC, 2015 TTAB LEXIS 324 (T.T.A.B. 2015) (not citable as precedent). See also Mother's Restaurants Inc. v. Mother's Other Kitchen, Inc., 218 U.S.P.Q. 1046 (T.T.A.B. 1983) (distribution of promotional materials for a restaurant in the United States was not use of the mark in U.S. commerce for restaurant services).

PROMOTIONAL GOODS IN TRADEMARK LAW distributor] offered any restaurant services in United States commerce.”24

Although use of the AMERICAN EAGLE mark on T-shirts, hats and tote bags was not service mark use for fire truck manufacturing, it did help. There, the Fourth Circuit stated that “[n]either promotional use of the mark on goods in a different course of trade nor mere token use constitute ‘use’ under the Lanham Act.”25 Nevertheless, the “continuous promotion of the brand” on shirts, hats and bags, together with supporting testimony and a corroborating business plan, showed “some intent” to resume previously-discontinued service mark use. The court therefore denied a motion for judgment as a matter of law by the defendant on its abandonment claim.

Similarly, the use of a mark on promotional items does not support use for the promoted goods where it is not otherwise being used in connection with them. The Federal Circuit held, for example, that promotional use in connection with sales of “incidental” items did not constitute use for cigarettes where the cigarettes themselves were not offered for sale.26 Imperial Tobacco,

24 Buti v. Perosa, S.R.L, 139 F.3d 98, 103 (2d Cir. 1998). 25 Emergency One, Inc. v. American FireEagle, Ltd., 228 F.3d 531, 535-36 (4th Cir. 2000). See also Christopher T. Micheletti, “Preventing Loss of Trademark Rights: Quantitative and Qualitative Assessments of ‘Use’ and Their Impact on Abandonment Determinations,” 94 TMR 634, 658 (2004) (discussing the Emergency One case) (“The issue of a trademark owner's intent to resume use will often depend on solid proof of legitimate business excuses for the nonuse and proof of marketing plans and product development efforts geared towards future use of that mark. Nevertheless, where some form of continued use is made, it may also play a role in the intent to resume use determination.”). 26 Imperial Tobacco, Ltd. v. Philip Morris, Inc., 899 F.2d 1575, 1582 (Fed. Cir. 1990). See also Product Source Int’l v. Nashin, 2015 U.S. Dist. LEXIS 82821 (E.D. Va. 2015)

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Ltd. registered a stylized logo for cigarettes in 1981 based on a prior registration in the United Kingdom. Because Imperial Tobacco had not sold any cigarettes in the United States from the registration date to the date of Philip Morris’ filing, Philip Morris petitioned in 1986 to cancel it on abandonment grounds. The company had sold whiskey, pens, watches, sunglasses, and food under its mark, but the court emphasized that the company’s “concern with marketing incidental products did not excuse nonuse of [the mark] for cigarettes.”27

C. Use on Promotional Goods Can Show Trademark Strength or Secondary Meaning

The insatiable consumer appetite for familiar marked promotional goods may itself indicate that the marks signify origin.28 Such use can indeed foster trademark strength, as the Board found in the Harley-Davidson HOG case:

The catalogs that are in the record show that [Harley- Davidson’s] marks are used on collateral items because they are merchandising marks, that is, consumers purchase the goods because they prominently display the marks. Thus, although we do

(“[T]he mark must be affixed to or associated with the product in commerce, as opposed to mere promotional use.”). 27 Cf. Anvil Brand, Inc. v. Consolidated Foods Corp., 464 F. Supp. 474, 481 (S.D.N.Y. 1978) (use on promotional goods of leftover inventory of product labels after product was discontinued was not trademark use) (“The application of the . . . label to promotional goods was not a ‘use’ so as to defeat a finding of abandonment. The evidence is clear that the application of the labels was merely to exhaust existing inventory and not a trademark use designed to identify the source of the garment and the good will of the manufacturer.”). 28 For more on trademark strength, see 1 Gilson on Trademarks § 2.01[5].

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treat this du Pont factor as playing the dominant role that it can when a famous mark is involved, the strength of opposer's HOG marks, as shown by the evidence of record, favors opposer.29

One district court ascribed secondary meaning to long trademark use in addition to the mark's appearance “on a wide range of materials, including the [plaintiff's] machines themselves, and also servicemen's shirts, warranties, invoices, and various promotional items.”30 But not all courts are so hospitable. The Seventh Circuit, for example, found secondary meaning lacking when a candy company relied heavily on its promotional item use, announcing: “Consumers' perceptions, not producers' promotions, determine whether a mark has secondary meaning.”31

Of course, “producers’ promotions” may be and often are mirrored in “consumers’ perceptions,” and courts consider the nature and extent of advertising in determining secondary meaning.32 And

29 H-D Mich., Inc. v. Hog Cream Enters., 2005 TTAB LEXIS 99 (T.T.A.B. 2005) (not citable as precedent) (citation omitted). See also In re Miller Brewing Co., 226 U.S.P.Q. 666 (T.T.A.B. 1985) (listing the fact that “the mark has been used on collateral goods in the nature of promotional items” as one of several reasons the Board was persuaded to find applicant’s mark functioned as a trademark) (goods included menu clips, neon signs, key fobs, placards, laundry bags, glassware, bowling bags). 30 Miyano Mach. USA, Inc. v. MiyanoHitec Mach., Inc., 576 F. Supp. 2d 868, 881 (N.D. Ill. 2008). See also Deere & Co. v. MTD Holdings, Inc., 70 U.S.P.Q.2d 1009 (S.D.N.Y. 2004) (noting use of word mark or logo, as well as color scheme, on "collateral goods" such as “golf shirts, jackets, t-shirts, coffee mugs, toys, fishing lures, dinnerware, serving trays and ink pens” in finding secondary meaning of trademarks and trade dress). For more on secondary meaning, see 1 Gilson on Trademarks § 2.09. 31 Sunmark, Inc. v. Ocean Spray Cranberries, Inc., 64 F.3d 1055, 1061 (7th Cir. 1995). 32 1 Gilson on Trademarks § 2.09[6].

PUT THAT ON A T-SHIRT such proof is routinely deemed circumstantial evidence that a trademark denotes a particular source.33

V. Barriers to Obtaining Trademark Rights from Use of Material on Promotional Goods

As we have seen, it is possible to obtain trademark rights for T-shirts, stickers, mugs and tote bags themselves. Still, not all material placed on a T-shirt — materials such as logos, designs, words, patterns, etc. — is created equal in terms of qualifying for trademark protection.

The most daunting obstacle is proving that consumers actually believe that such use identifies source.34 Whether the mark is placed directly on a product, or on a hangtag, sticker or label, consumers must see it as indicating a source for it to be protected.35 As the Board once put it, “not every designation that is placed or used on or in connection with a product necessarily functions . . . as a trademark for said product; not every designation adopted with the intention that it performs a trademark function and even labeled as a trademark necessarily accomplishes that purpose.”36 As we explain, material deemed “ornamental” or “informational” will not qualify.

33 Id. at § 2.09[6][c]. 34 E.g., Graeme W. Austin, “Trademarks and the Burdened Imagination,” 69 Brooklyn L. Rev. 827, 899 (2004) (“A key conceptual problem with the use of trademarks for promotional goods is that the trademarks on promotional goods frequently do not serve as badges of origin of goods or services.”). 35 Board of Regents, The University of Texas System v. Southern Illinois Miners, LLC, 110 U.S.P.Q.2d 1182 (T.T.A.B. 2014) (finding no evidence in the case that consumers inspect hangtags to verify the origin of a product). 36 American Velcro, Inc. v. Charles Mayer Studios, Inc., 177 U.S.P.Q. 149 (T.T.A.B. 1973).

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We set aside the possibilities of copyright protection for such material to concentrate on the reach of trademark law.

A. Lack of Distinctiveness of Material on Promotional Goods

Material on promotional goods lacks trademark potential if it is “ornamental” or “informational,” two ways the courts and Board articulate the absence of distinctiveness. If it has become an established trademark for other goods or services, however, consumers are more likely to recognize it on promotional goods as being distinctive.

i. Ornamental Material

Courts refuse to enforce trademark rights in promotional goods they deem “ornamental” simply because they do not indicate source. And the user’s intent is of no moment.37 There is no ornamentation litmus test, though, and in the end a court or the Board must grapple with the perplexing issue of consumer perception.

However, to confound the issue, promotional material may be both ornamental and source-indicating.38 If it serves “primarily as a source indicator” and is “only incidentally ornamental,” it can still

37 E.g., TMEP § 1202.03. See 1 Gilson on Trademarks § 2.11[2][f] for more on color as ornamental. 38 E.g., Rock & Roll Hall of Fame & Museum, Inc. v. Gentile Prods., 134 F.3d 749, 755 (6th Cir. 1988) (“We recognize, of course, that a designation may serve both ornamental and source-identifying purposes.”).

PUT THAT ON A T-SHIRT be registered and enforced.39 The ultimate issue of consumer perception controls, guided by the impression the material makes on consumers (supplied in part by consumer surveys or individual testimony), the type and cost of goods, other uses of the material, and industry custom.

a. Ornamentation in Trade Dress, Design Patent and Trademark Law

The chameleon-like term “ornamental” has yet another double meaning: protection on the one hand and rejection on the other.40 I. Trade Dress

One seeking to protect trade dress strives for ornamental character and eschews functional. The candidate can show that a feature is “merely an ornamental, incidental, or arbitrary aspect of

39 TMEP § 1202.03 (emphases added). See also Deborah S. Cohn, “Mere Ornamentation and Aesthetic Functionality: Causing Confusion in the Betty Boop Case?” 101 TMR 1218, 1220 (2011) (“In assessing whether . . . decorative or ornamental matter functions as a mark, the USPTO considers where it falls along a continuum, ranging from matter that is source-identifying and registrable, to purely ornamental matter that is incapable of trademark significance and unregistrable under any circumstances.”). 40 The usually-sophisticated Second Circuit confused the two meanings of “ornamental” in its opinion allowing trademark protection for the red lacquered outsole of a shoe that contrasts with the adjoining upper portion. Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206 (2d Cir. 2012). The defendant sought cancellation of the registration at issue on the ground that the color was merely ornamental and not distinctive. The court attempted to clarify in a footnote that an “ornamental” feature is one that fails to serve a purpose in product design, and does not affect the use of the product or the cost of its manufacture. Id. at 214 & n.4. In doing so, it conflated distinctiveness and functionality.

PROMOTIONAL GOODS IN TRADEMARK LAW the device” and is hence nonfunctional.41 Ornamental designs, then, “are the antithesis of utilitarian designs,”42 which are unprotectable as trade dress. The Sixth Circuit offered the anachronistic example of an automobile tail fin as “a purely ornamental feature that contributes no demonstrable benefit to the operation or efficiency of the designed product.”43 The court contrasted the overall design of a grease pump as functional, though, because each element exists “for some practical benefit or reason.” And the Ninth Circuit found the chilling trade dress of a skull-shaped vodka bottle to be “purely ornamental” (though not in the sense of beautiful) and protectable, serving no utilitarian purpose.44

41 TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 30 (2001). 42 Clicks Billiards, Inc. v. Sixshooters, Inc., 251 F.3d 1252, 1260 (9th Cir. 2001) (“[T]rade dress cannot be both functional and purely aesthetic.”). See also Leatherman Tool Gp., Inc. v. Cooper Indus., Inc., 199 F.3d 1009, 1013 (9th Cir. 2000) (distinguishing functional from “ornamental” features). 43 Groeneveld Transp. Efficiency, Inc. v. Lubecore Int'l, Inc., 730 F.3d 494, 505 (6th Cir. 2013). 44 Globefill, Inc. v. Elements Spirits, Inc., 473 Fed. Appx. 685 (9th Cir. 2012). See U.S. Reg. Nos. 4218759, 4195505, 4043730, 3933245 and 3942593.

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II. Design Patents

Design patents are in this sense analogous to protectable trade dress, being granted to the inventor of “any new, original and ornamental design for an article of manufacture.”45 If a design feature serves only a functional purpose, rather than being ornamental, it is clearly not entitled to design patent coverage.46 The existence of a design patent is “presumptive evidence of non- functionality, evidence that may support a similar trademark claim.”47

III. Design Trademarks

On the other hand, in attempting to protect a design trademark, an ornamental feature often kills trademark rights.48 Consumers will generally not perceive as trademarks design features that only decorate or embellish a product. As the late Justice Antonin Scalia stated in Wal-Mart v. Samara:

45 35 U.S.C. § 171(a). 46 Leatherman Tool Gp., 199 F.3d at 1013; Seiko Epson Corp. v. Nu-Kote Int'l, Inc., 190 F.3d 1360, 1368 (Fed. Cir. 1999) (“The ‘ornamental’ requirement of the design statute means that the design must not be governed solely by function, i.e., that this is not the only possible form of the article that could perform its function. A design patent is for a useful article, but patentability is based on the design of the article, not the use. The design may contribute distinctiveness or consumer recognition to the design, but an absence of artistic merit does not mean that the design is purely functional.”) (citation omitted); Hupp v. Siroflex of Am., Inc., 122 F.3d 1456, 1460 (Fed. Cir. 1997) (“A design or shape that is entirely functional, without ornamental or decorative aspect, does not meet the statutory criteria of a design patent. . . . [However, the] function of the article itself must not be confused with ‘functionality’ of the design of the article.”). 47 Fuji Kogyo Co., Ltd. v. Pac. Bay Int'l, Inc., 461 F.3d 675, 683 (6th Cir. 2006). 48 E.g., TMEP § 1202.03(a) (“Matter that is purely ornamental or decorative does not function as a trademark and is unregistrable . . . .”).

PROMOTIONAL GOODS IN TRADEMARK LAW

Consumers are aware of the reality that, almost invariably, even the most unusual of product designs -- such as a cocktail shaker shaped like a penguin -- is intended not to identify the source, but to render the product itself more useful or more appealing.49 The Board channeled this idea in denying registration for the following features for a variety of clothing items, including not only jeans but also gloves, belts, hats and mountaineering boots:

49 Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 213 (2000).

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Recognizing pocket-stitching as common jeans ornamentation, the Board ruled that a design feature that is a “mere refinement” cannot be inherently distinctive. It also considered “the size, location and dominance of the designs,” finding these to be “emblazoned” across the garments and bereft of any source-indicating commercial impression.50 The USPTO seems inconsistent, however, awarding principal register registration to each of the following, only some with acquired distinctiveness:51

50 In re Right-On Co., 87 U.S.P.Q.2d 1152 (T.T.A.B. 2008). See also In re Ghailian, 2011 TTAB LEXIS 287 (T.T.A.B. 2011) (denying registration for pocket-stitching on jeans; holding that “purchasers and prospective customers for applicant's goods would be unlikely to regard this design as identifying and distinguishing applicant's jeans and indicating their source, without a showing that the design had acquired distinctiveness”) (not citable as precedent). 51 U.S. Reg. Nos. 4730733, 4317197, 4457332.

PROMOTIONAL GOODS IN TRADEMARK LAW

and some without:52

52 U.S. Reg. Nos. 4777600, 4429305, 3336202.

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Clearly, the subtleties of pocket-stitching “marks” could well fill an article, a challenging case study defining when decorative designs are or are not source-indicating.53

b. Ornamental Words

Puzzlingly, the courts and Board regularly use an arcane meaning of “ornamental” to refer to words on T-shirts and the like that defies its settled dictionary meaning. The standard reference The American Heritage Dictionary of the English Language defines “ornamental” as follows:

53 See generally 1 Gilson on Trademarks § 2A.12[3] for more on protection of apparel and fashion design under trademark law.

PROMOTIONAL GOODS IN TRADEMARK LAW

adj. Of, or relating to, or serving as something that serves as an adornment or decoration. n. Something that serves as ornamentation, especially a plant grown for its beauty54

Lexicographers would swoon if they learned the meaning of “ornamental” being applied to words on T-shirts that convey a message other than source indication.55 Yet slogans and political messages are neither adornments nor ornaments as one would find on a Christmas tree, nor are they expressions of beauty.

The USPTO denied registration of the phrase BLACKER THE COLLEGE SWEETER THE KNOWLEDGE for T-shirts, sweatshirts and shirts on the ground that “[c]onsumers are likely to perceive the slogan as primarily ornamental and not as a source indicator.”56 It also refused to register the phrase NO MORE RINOS! (an acronym for “No More Republicans In Name Only”) for shirts, buttons and stickers, in part because it was ornamental.57

54 The American Heritage Dictionary of the English Language 1241 (4th ed. 2000). 55 See TMEP § 1202.03(f)(i) (“Slogans or phrases used on items such as t-shirts and sweatshirts, jewelry, and ceramic plates have been refused registration as ornamentation that purchasers will perceive as conveying a message rather than indicating the source of the goods.”); Ithaca Industries, Inc. v. Essence Communications, Inc., 706 F. Supp. 1195, 1206 (W.D.N.C. 1986) (“Words can, in some situations, serve both an ornamental and a trademark function. Words emblazoned on the front of T-shirts, on decals, and the like have been held to constitute trademarks in particular cases. In such dual-function cases, however, the words must ‘identify the source of the goods and distinguish the goods from those that are sold by others,’ in the eyes of the consumers.”) (citation omitted). 56 In re Pro-Line Corp., 28 U.S.P.Q.2d 1141 (T.T.A.B. 1993). 57 In re Hulting, 107 U.S.P.Q.2d 1175 (T.T.A.B. 2013). See also, e.g., Damn I'm Good, Inc. v. Sakowitz, Inc., 514 F. Supp. 1357 (S.D.N.Y. 1981) (finding “Damn I'm Good” on bracelets to be ornamental, not source-identifying); In re Society for Preservation of Equal Rights for Men, Inc., 1997 TTAB LEXIS 142 (T.T.A.B. 1997) (affirming refusal of registration of SPERM for t-shirts, standing for Society for Preservation of Equal

PUT THAT ON A T-SHIRT

The Board concluded that consumers would perceive the designation as no more than a political slogan. And a district court similarly found HERE FISHY, FISHY as printed over a fish hook design on T-shirts and hats to be ornamental and therefore not a trademark.58 In none of these cases was “ornamental” used in the dictionary sense. A simple “not distinctive” would have been an improvement.

Another court called a spade a spade when Juicy Couture, Inc. claimed common law protection for its T-shirt slogans and phrases: Wear Juicy, Juicy Pop Princess, Be Juicy, Juicy Girls Rule and The Joy of Juicy.59 The court instead determined they were not distinctive and thus would not be perceived as source indicators: T-shirts are a particularly ineffective medium through which to establish an inherently distinctive mark. In our culture, t-shirts often serve as personal billboards, carrying phrases that convey meanings that can range from the entirely personal to political to humorous.

The court also inferred that, because it did not attempt to register the slogans, Juicy Couture never really thought they were trademarks.

Harley-Davidson opposed registration for SCREAMIN’ EAGLE for a variety of items, including jewelry, posters, wallets,

Rights for Men) (“It is our view that the word sought to be registered is a primarily ornamental feature and, therefore, is not likely to be perceived as anything other than part of the thematic whole of the ornamentation of applicant's shirts.”). 58 Go Pro, Ltd. v. River Graphics, Inc., 2006 U.S. Dist. LEXIS 23067 (D. Colo. 2006). 59 Juicy Couture, Inc. v. L'Oreal USA, Inc., 2006 U.S. Dist. LEXIS 20787 (S.D.N.Y. 2006).

PROMOTIONAL GOODS IN TRADEMARK LAW mugs and clothing.60 It claimed that the mark clashed with its prior use of the phrase on jewelry, belt buckles, decals and clothing, which the applicant insisted was no more than “ornamental.” But the Board held that Harley-Davidson could rely on collateral, promotional goods for priority purposes, and upheld the opposition.

c. Secondary Source Exception for Pre- Used Marks

A trademark used on promotional items that was originally used on other goods or services may be ornamental but nonetheless registrable for the promotional items. Such a mark, when used on T- shirts, key chains, buttons, beach towels, mugs, caps and the like, serves as a “secondary source.”61 It refers not to the manufacturer of these items but to the original source, the one that is using its mark on them to promote its own goods or services. Secondary source is not secondary meaning, but instead identifies the original mark owner as the source, albeit secondary.62

60 H-D Mich., Inc. v. Boutique Unisexe El Baraka, Inc., 2004 TTAB LEXIS 595 (T.T.A.B. 2004) (not citable as precedent). 61 TMEP § 1202.03(c). 62 TMEP §§ 1202.03, 1202.03(c). See also Cohn, 101 TMR at 1220 (“[W]here an applicant provides proof of a primary use of a mark to identify source, such use may establish that consumers would be familiar with the mark and transfer that recognition of the mark as a source indicator to this secondary use of the mark.”); In re Lululemon Athletica Can., Inc., 105 U.S.P.Q.2d 1684 n.4 (T.T.A.B. 2013) (“In the context of an ornamentation refusal, ‘secondary source’ simply means that the use of the design or words would be perceived by the consumer as an indicator of source due to the applicant's prior use or registration of the mark for other goods or services (not the applied-for goods). . . . In both cases, the consumer would understand the mark on clothing to refer to the applicant's previously established mark for other goods or services.”).

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The district court in the Macy’s case, for example, found that the department store’s original use of its marks was not ornamental but instead indicated “a secondary source of origin, e.g., the source of a shirt other than the direct manufacturer.”63 The court stated that Strategic Marks chose the marks because they were well known and there was ongoing “favorable consumer recollection and feelings towards the brands.” The court also noted that Macy’s T-shirts included the TM symbol and understandably rejected the argument of Strategic Marks' branding expert that consumers would not connect “the token use of the old store marks on souvenirs or promotional items such as 'totes and T's,' with what once were grand businesses and retail platforms that were vibrant and engaging parts of their communities.”

To qualify for registration of the secondary source of an original mark now used ornamentally on promotional goods, an applicant may show that (a) it has registered the same mark for other goods or services, (b) it has used the mark in commerce on such other goods or services, or (c) it owns a use-based application for the mark as used non-ornamentally on such other goods or services.64 However, the facts control, and ornamental uses still will not automatically identify a secondary source,65 and five years of use will not tend to prove that ornamental material has acquired distinctiveness.66

63 Macy’s, Inc., 2016 U.S. Dist. LEXIS 11676 (“Where as here the mark is arbitrary and has a well-known association with a source (as here) rather than constituting some generic term without any such association, and particularly where "TM" appears next to the mark or the accused products, the marks are not ornamental.”). 64 TMEP § 1202.03(c). 65 See, e.g., In re Astro-Gods, Inc., 223 U.S.P.Q. 621 (T.T.A.B. 1984). 66 TMEP § 1202.03(d).

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Nevertheless, the Board has generally approved secondary source arrangements, recognizing the “familiar practice of extending a mark's use, for advertising or promotional purposes, to collateral merchandise such as articles of clothing.”67 So, say, a violin trademark used on T-shirts can serve as a trademark for T-shirts because the musical instrument manufacturer is their secondary source.68

Similarly, Paramount Pictures Corporation applied to register the following trademark for decals:

The examiner found the mark ornamental, but the Board concluded that “the paired names ‘MORK & MINDY,’ while certainly part of the ornamentation of the decal, also indicate source or origin in the

67 In re Zildjian, 1997 TTAB LEXIS 388 (T.T.A.B. 1997) (not citable as precedent) (“It is common knowledge that logo-imprinted products, such as shirts, jackets, caps and various novelties, are widely used as promotional items for a diverse range of goods and services.”). See also In re McGroder, 2001 TTAB LEXIS 256 (T.T.A.B. 2001) (not citable as precedent) (“[T]he Board, in other cases, has stated that the licensing of commercial trademarks for use on collateral products such as clothing, which are unrelated in nature to goods on which the marks are normally used, has become a common practice in recent years.”); Turner Entertainment Co. v. Nelson, 38 U.S.P.Q.2d 1942 (T.T.A.B. 1996) (“It is common knowledge and, in the present case, undisputed that video games, t-shirts, beach towels, caps and other logo-imprinted products are used as promotional items for a diverse range of goods and services. . . .”). 68 In re Zildjian, 1997 TTAB LEXIS 388.

PUT THAT ON A T-SHIRT proprietor of the Mork & Mindy television series.”69 The Board also found that licensing television character names as trademarks was commonplace, so that consumers recognized that collateral goods trademark use indicates origin.

And the Federal Circuit applied the secondary source rationale to register a jewelry design identical to the original trademark. While such designs are generally ineligible for registration, the court noted a “special fact of record,” that the applicant was simply trying to register its original trademark as a jewelry design.70 It said that the “capacity of a mark to indicate origin is not destroyed because the mark appears as a charm on a bracelet, instead of as a symbol on the box which contains the bracelet.”

The Board has emphatically embraced secondary source, holding that T-shirt ornamentation “can be of a special nature which inherently tells the purchasing public the source of the T-shirt, not the source of manufacture but the secondary source.”71 Because the applicant had already registered its symbol for skis, it could register it for T-shirts as well “as an indication of a secondary source of origin”:

69 In re Paramount Pictures Corp., 213 U.S.P.Q. 1111 (T.T.A.B. 1982). 70 In re Penthouse Int’l, Ltd., 565 F.2d 679, 682 (Fed. Cir. 1997). 71 In re Olin Corp., 181 U.S.P.Q. 182 (T.T.A.B. 1973) (“It is not imaginable that Columbia University will be the source of an N.Y.U. T-shirt. Where the shirt is distributed by other than the university the university's name on the shirt will indicate the sponsorship or authorization by the university.”).

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The Board also upheld registration of an auto-racing symbol for patches and clothing items despite it being an “an attractive ornamental design.” The mark served as “an indication of origin” for such items because it was used primarily for “organizing and conducting vehicular racing contests in a stadium”:

Despite its ornamentation, the Board concluded that it “may nevertheless be registered as a trademark for such goods if it also serves a source-identifying function.”72

72 In re Watkins Glen Int’l, Inc., 227 U.S.P.Q. 727 (T.T.A.B. 1985).

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Still, for secondary source, the original mark cannot be dissimilar. For example, the registrant of the upper mark argued that it supported registration of the lower version:

But the Board rejected the argument and found the lower did not create the same commercial impression for sweatshirts, jackets and coats.73

A trademark may occasionally be protected under secondary source even if not previously seen as an original trademark. In a case reminiscent of the early movie era, the Board allowed registration of ANOTHER FINE MESS for T-shirts over an initial refusal based on ornamentation.74 The owner of rights for old-time comedians Stan Laurel and Oliver Hardy nevertheless proved that

73 In re Lululemon Athletica Can., 105 U.S.P.Q.2d 1684 n.4. 74 In re Larry Harmon Pictures Corp., 2001 TTAB LEXIS 879 (T.T.A.B. 2001) (not citable as precedent).

PROMOTIONAL GOODS IN TRADEMARK LAW this was their “signature phrase.” While it was not previously known as a trademark, the Board still found that it “uniquely” and “distinctively” pointed to Laurel and Hardy.

Secondary source works to block registrations as well as garner them. An individual unrelated to the television show GILLIGAN'S ISLAND applied to register the show’s name for sunblock, lip balm, shampoo and soap, but the Board turned him down.75 Opposer Turner Entertainment had extensively licensed it for clothes, mugs, umbrellas, beach towels, pinball machines and video games, and the Board found for Turner, noting that it was “common knowledge” that such a variety of goods is typically used as promotional items.

ii. Informational Material

Just as material on a shirt or mug may be ornamental, it may also inform consumers about the product and thus be considered not a trademark but “informational.”76 For instance, the Board found that AOP (a wine certification process) simply provided information about wine.77 And PROUDLY MADE IN USA on electric razors simply informed consumers of their manufacturing location,78 just as DESIGNED FOR WOMEN indicated the intended consumers for dietary supplements.79 In sum, “[u]se of a designation or slogan to convey advertising or promotional information, rather than to

75 Turner Entertainment Co., 38 U.S.P.Q.2d 1942. 76 TMEP § 1202.04. 77 In re AOP LLC, 107 U.S.P.Q.2d 1644 (T.T.A.B. 2013). 78 In re Remington Prods., Inc., 3 U.S.P.Q.2d 1714 (T.T.A.B. 1987). 79 In re Wellnx Life Sciences, Inc., 2013 TTAB LEXIS 329 (T.T.A.B. 2013) (not citable as precedent).

PUT THAT ON A T-SHIRT identify and indicate the source of the services, is not service mark use.”80

Certain universal symbols are also not valid marks when they convey information, such as the following that designate recycling, radiation, and biohazard, in that order:81

Similarly, information such as “net weight, contents, or business addresses” is not considered part of a trademark.82

The USPTO categorizes “common laudatory phrases” and statements in ordinary use as informational. Thus, some applications have been rejected even though they do not really give specific information. Thus, the Board rejected an application for ONCE A MARINE, ALWAYS A MARINE for hats, shirts and other clothing

80 In re Belnick, Inc., 2015 TTAB LEXIS 167 (T.T.A.B. 2015) (not citable as precedent) (refusing registration to SCHOOLFURNITURE4LESS, CHURCHCHAIRS4LESS, STACKCHAIRS4LESS and FOLDINGCHAIRS4LESS for “on-line retail store services featuring furniture”). 81 TMEP § 1202.17. 82 TMEP § 807.02.

PROMOTIONAL GOODS IN TRADEMARK LAW items as “informational,”83 finding that the slogan conveyed information that the wearer supported the Marines. The Board also rejected DRIVE SAFELY for automobiles as informational because it was a “familiar safety admonition.”84

B. Aesthetic Functionality

In addition to the obstacle of distinctiveness, there is another, less widely-accepted barrier to protection of trademarks in the context of promotional products. Some claim that anyone may use desirable marks on them in order to compete freely in the marketplace. But this assertion has the inevitable effect of fundamentally denigrating trademark rights simply in order for marks to appear on T-shirts, key chains, and mugs.

The culprit here is the frustrating doctrine of aesthetic functionality.85 More appropriately called the doctrine of competitive necessity,86 this concept has confused courts for years. Some go too far and find even words and logos not protected because they are “aesthetically functional.” They reason that,

83 In re Eagle Crest, Inc., 96 U.S.P.Q.2d 1227 (T.T.A.B. 2010) (not citable as precedent) (“Slogans and other terms that are considered to be merely informational in nature, or to be common laudatory phrases or statements that would ordinarily be used in business or in the particular trade or industry, are not registrable.”). 84 In re Volvo Cars of N. Am., Inc., 46 U.S.P.Q.2d 1455 (T.T.A.B. 1998). 85 See generally 1 Gilson on Trademarks § 2A.04[5]. For a circuit-by-circuit discussion of the application of the doctrine, see id. at § 2A.04[5][d]. Writing about aesthetic functionality, Judge Posner has insightfully noted that “the critics who argue that in application the concept is mischievously vague certainly have a point.” Publications Int’l, Ltd. v. Landoll, Inc., 164 F.3d 337, 339 (7th Cir. 1998). 86 The Restatement calls the “ultimate test” of aesthetic functionality “whether the recognition of trademark rights would significantly hinder competition.” Restatement (Third) of Unfair Competition § 17, cmt. c.

PUT THAT ON A T-SHIRT because consumers want certain trademarked goods, there must be a need for competitors to use the marks.

The Ninth Circuit categorically – and correctly – rejected this application of aesthetic functionality in Au-Tomotive Gold.87 There, a manufacturer of automobile accessories affixed exact copies of the Volkswagen and Audi logos. In the inevitable trademark action, it boldly argued that the logos were “the actual benefit that the consumer wishes to purchase,” and thus were unprotectable. The court came down hard. This position, it said, would be “the death knell for trademark protection” and it strongly emphasized the “limited application” of aesthetic functionality.88 Another court also rejected functionality claims for word and design marks on T-shirts because “there is no evidence that [the] marks are essential to the quality of [the] T-shirts, or affect how the T-shirts work.”89

The Supreme Court framed aesthetic functionality as applying when exclusive use of a trademark would put competitors at “a

87 Au-Tomotive Gold, Inc. v. Volkswagen of Am., Inc., 457 F.3d 1062 (9th Cir. 2006). See also Boston Prof’l Hockey Ass’n v. Dall. Cap & Emblem Mfg., 510 F.2d 1004, 1013 (5th Cir. 1975) (“The principles involved in [the aesthetic functionality] cases are not applicable to a trademark symbol case where the design or symbol has no demonstrated value other than its significance as the trademark of a hockey team.”); University Book Store v. University of Wisconsin Board of Regents, 33 U.S.P.Q.2d 1385 (T.T.A.B. 1994) (rejecting aesthetic functionality application even though purchasers may find particular logo “cute” and do not care about whether they are officially endorsed by the mark owner) (“Taken to its logical conclusion, opposers' argument would eliminate trademark protection and registrability for any popular and commercially successful design which is imprinted on clothing, irrespective of whether the design additionally is source-indicative to at least some consumers.”). 88 Au-Tomotive Gold, 457 F.3d at 1073 (“In practice, aesthetic functionality has been limited to product features that serve an aesthetic purpose wholly independent of any source-identifying function.”). 89 Univ. of Kan. v. Sinks, 565 F. Supp. 2d 1216, 1261 (D. Kan. 2008).

PROMOTIONAL GOODS IN TRADEMARK LAW significant non-reputation-related disadvantage.”90 But a third party’s use of another’s logo or word mark in particular would surely affect the mark owner’s reputation, and probably cause confusion as well. Any disadvantage a third party might incur from being unable to use others’ marks is simply not “non-reputation-related.” Thus, the doctrine should not apply in such cases.

We discuss further the fundamental tensions underlying the use of others’ marks on promotional goods near the conclusion of the article.91

C. “Goods in Trade”

The USPTO can also reject a registration for promotional goods on the ground that they are simply extensions of the applicant’s primary business that are not clearly independent products.92 For example, a business cannot register its trademark for its annual reports simply because they feature the mark. Annual reports are simply informational and are not separately sold, so they are not considered a “good in trade.” The same is true for product manuals and other “incidental” items “such as letterhead, invoices, and business forms.”93

90 TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 32 (2001), quoting Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995). See 1 Gilson on Trademarks § 2A.04[5][b]. 91 See § VII infra. 92 TMEP § 1202.06. 93 E.g., In re Apple, Inc., 2015 TTAB LEXIS 463 (T.T.A.B. 2015) (not citable as precedent) (refusing registration of IPOD for brochures, pamphlets and leaflets relating to computer software and hardware where specimen was user’s manual for mobile device); In re Thomas White Int’l, Ltd., 106 U.S.P.Q.2d 1158 (T.T.A.B. 2013) (annual report for investment funds not a good in trade).

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Whether a trademarked product qualifies depends on “[w]hat is being offered for sale.”94 The USPTO considers whether the product “(1) is simply the conduit or necessary tool useful only to obtain applicant's services; (2) is so inextricably tied to and associated with the services as to have no viable existence apart therefrom; and (3) is neither sold separately from nor has any independent value apart from the services.”95

Collateral products that “serve the purpose of promoting a party's primary goods and which have more than a mere incidental function in relation to the primary goods” may constitute goods in trade.96 For example, the Board found SNAP-ON registrable for pencils and ballpoint pens even though the applicant’s original product was tools97 and CON-TACT registrable for promotional calendars where the applicant primarily sold plastic film.98 The items had independent “utilitarian function and purpose” and had been sold separately in commerce, and the applicants had used their marks on the original goods for many years.

94 Id. 95 Id. 96 E.g., In re MGA Entm’t, Inc., 84 U.S.P.Q.2d 1743 (T.T.A.B. 2007); Girl Scouts of the United States v. Girlsports Brand, Inc., 2004 TTAB LEXIS 105 (T.T.A.B. 2004) (not citable as precedent) (“[T]he Board has held that the mere fact that a collateral product serves the purpose of promoting a party's primary goods or services does not necessarily mean that the collateral product is not a good in trade, where it is readily recognizable as a product of its type (as would be the case with T-shirts, for example), and is sold or transported in commerce.”). 97 In re Snap-On Tools Corp., 159 U.S.P.Q. 254 (T.T.A.B. 1968). See Reg. No. 0871795 (registered 1969, still a live registration). 98 In re United Merchants & Manufacturers, Inc., 154 U.S.P.Q. 625 (T.T.A.B. 1967). See Reg. No. 0840016 (registered 1967, expired).

PROMOTIONAL GOODS IN TRADEMARK LAW

The Board also found that a paving contractor who affixed his registered service mark to hats, T-shirts and other promotional items publicizing his paving services, did, in fact, use his mark for clothing items as goods in trade. It broadly explained that “the mere fact that a collateral product serves the purpose of promoting a party's primary goods or services does not mean that the collateral product is not a good in trade, where it is readily recognizable as a product of its type (as tee shirts and hats would be) and is sold or transported in commerce.”99

However, many applicants have been refused registration for products deemed not goods in trade. One was denied registration for bank passbooks, checks and related forms used in everyday banking services where the applicant did not market them separately.100 Another failed with pamphlets, booklets and brochures that only touted its “high strength, light weight structural material.”101 Yet another met the same fate with “trapezoidal cardboard boxes” for a wide variety of toys, games, dolls and sports equipment:102

99 Born Again Clothing, Inc. v. Reilly, 2004 TTAB LEXIS 498 (T.T.A.B. 2004) (not citable as precedent). See also Girl Scouts of the United States, 2004 TTAB LEXIS 105 (not citable as precedent) (Even though GIRLSPORTS’ use of its mark on shirts, bags and water bottles was not an attempt to “establish a brand identity for . . . products . . . that have vitality apart from” the program, the logo is a distinctive indicator of GIRLSPORTS as the source of those collateral items.). 100 Ex parte Bank of America National Trust and Savings Association, 118 U.S.P.Q. 165 (Comm'r Pats. 1958). 101 In re Douglas Aircraft Co., Inc., 123 U.S.P.Q. 272 (T.T.A.B. 1959). See also Paramount Pictures Corp. v. White, 31 U.S.P.Q.2d 1768 (T.T.A.B. 1994) (purported game that served only to promote applicant’s musical group was not in fact a game but was merely an advertising flier; applicant could not obtain a registration for that game). 102 In re MGA Entm’t, Inc., 84 U.S.P.Q.2d 1743. See also philosophy, inc. v. Wilson, 2012 TTAB LEXIS 73 (T.T.A.B. 2012) (not citable as precedent) (hang tag included with gifts sent to business contacts was not a trademark).

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The applicant had not made or sold boxes “as commodities in trade,” and the Board found that consumers would see them only as point of sale containers. The boxes were only “incidental” to the primary business of toys and games.

Similarly, advertising and promoting one’s own goods are not separate services for registration purposes.103 Promotional activities incidental to the sale of goods or services cannot support registration for, for example, conducting contests.104 Dr. Pepper ran a contest awarding prizes to those who had a certain amount of Dr. Pepper soft drinks or a certain number of game cards. Its attempt to register PEPPER MAN as a service mark for contest activities failed because, as the Federal Circuit held, conducting a contest to promote the sale of one’s own products is not a separate service under the Lanham Act.105

103 TMEP § 1301.01(b)(i). 104 See, e.g., In re Loew's Theatres, Inc., 179 U.S.P.Q. 126 (T.T.A.B. 1973) (affirming refusal to register SKI-STAKES as service mark for lottery); In re Johnson Publishing Co., Inc., 130 U.S.P.Q. 185 (T.T.A.B. 1961) (affirming refusal to register mark for puzzle contest by magazine publisher). 105 In re Dr. Pepper Co., 1 U.S.P.Q.2d 1421 (T.T.A.B. 1986), aff’d, 836 F.2d 508 (Fed. Cir. 1987) (“While the statute does not make any distinction between services on the basis of whether they are primary, incidental, or ancillary so long as they are services, nevertheless where, as here, an activity claimed to be a service is incidental to the sale of

PROMOTIONAL GOODS IN TRADEMARK LAW

VI. Likelihood of Confusion from Use of Mark on Promotional Goods

The Macy’s case presented an unusual situation: an infringement case comparing one promotional product directly to another. Faced with T-shirts bearing identical trademarks, the district court found as a matter of law not only a likelihood of confusion but that it was indeed “high.”106 According to the court, Strategic Marks had undertaken “the deliberate sale of the same product sold by Macy's (t-shirts), bearing the same exact mark, and sold at a relatively inexpensive price which likely results in limited consumer care . . . .”

But promotional mark confusion can in general be likely in two situations: (1) on a source basis, where the public believes that the infringing product is made by the trademark owner or (2) on an associational or sponsorship basis, where the public believes that the infringing product is affiliated with or approved by the trademark owner.107 Promotional mark likelihood of confusion tends to be

goods, the activity cannot be separately recognizable as a service unless it is shown that the activity constitutes something clearly different from, or over and above, any activity normally involved in promoting the sale of such goods.”). 106 Macy’s, Inc., 2016 U.S. Dist. LEXIS 11676. 107 15 U.S.C. § 1125(a)(1)(A) (“Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which . . . is likely to cause confusion, or to cause mistake, or to deceive . . . as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person . . . shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.”). See 2 Gilson on Trademarks §§ 5.01[3], 7.02[5][c].

PUT THAT ON A T-SHIRT associational or sponsorship rather than confusion as to the “literal source of manufacture.”108

In fact, likelihood of confusion as to whether a party “produces, licenses or otherwise endorses” another’s goods has been called the “promotional goods” doctrine.109 The typical likelihood of confusion factor test is expansive enough to include such confusion.110 We look at relatedness of the goods, channels of trade and advertising, similarity of the marks and trademark fame.

A. Relatedness of the Goods

Though courts often begin with the trademark similarity factor in a confusion determination, the overarching question is when promotional goods are related to other goods and services. In general, products are related if consumers expect them to come from the same source or are commonly sold or purchased together.111 In the context of promotional goods, however, they may be sufficiently

108 See, e.g., LaFrance, 102 TMR at 1115 (“Under the more liberal approach to passing off embraced in the United States, unauthorized merchandising activity is typically actionable under a false endorsement theory even if consumers would be unlikely to believe that the trademark owner (or celebrity) is the actual source of the defendant's goods.”); Folsom, 99 TMR at 1206 n.166 (“If there is any likelihood of confusion, it cannot be in relation to the source or origin of the promotional goods, but only in relation to sponsorship of them by the proprietor of the mark in question.”) (citation omitted). 109 Churchill Downs, Inc. v. Commemorative Derby Promotions, Inc., 2013 U.S. Dist. LEXIS 135350 (N.D. Ga. 2013). 110 See, e.g., Folsom, 99 TMR at 1199 (“The ordinary principles, rules, or nonexclusive multifactor tests for likelihood of confusion . . . do not limit themselves to confusion of the source of goods or services (or products) sold or offered for sale, but cover confusion as to sponsorship of products as well as their source (embracing so-called promotional items).”) (footnote omitted). 111 See generally 2 Gilson on Trademarks § 5.05.

PROMOTIONAL GOODS IN TRADEMARK LAW related where a consumer is likely to associate the trademark on those goods with the other party’s original business.112

T-shirts, pens and mugs may be far afield from the primary business being promoted, be it legal services, computer software or soft drinks. Nevertheless, there may be likely consumer confusion between marks as used for one party’s primary business and marks used on another party’s promotional goods.

For example, Torsten Hallman Racing applied to register the following mark for “Wearing Apparel for [automobile] Racing - Namely, Pants, and Gloves”:

Opposer Hurst Performance objected, citing its registered mark “H” for gear shift mechanisms and the fact that, at auto races, it had given away and sold various promotional items such as hats, T- shirts, patches and jackets bearing its mark. The Board found for

112 See Checkpoint Sys., Inc. v. Check Point Software Techs., Inc., 269 F.3d 270, 286 (3d Cir. 2001) (holding that courts may consider "whether buyers and users of each parties' goods are likely to encounter the goods of the other, creating an assumption of common source[,] affiliation or sponsorship."); In re 1st USA Realty Professionals, Inc., 84 U.S.P.Q.2d 1581 (T.T.A.B. 2007) ("[I]t is not necessary that the goods or services of applicant and the registrant be similar or competitive, or even that they move in the same channels of trade to support a holding of likelihood of confusion. It is sufficient that the respective goods or services are such that they would or could be encountered by the same persons under circumstances that could, because of the similarity of the marks, give rise to the mistaken belief that they originate from the same producer.").

PUT THAT ON A T-SHIRT opposer Hurst, stressing that registration of Torsten Hallman’s mark would violate opposer’s trademark rights “acquired as a result of its use over the years in the sale and promotion of its various products.”113 The applicant's argument that Hurst’s goods were promotional items rather than its primary business product failed to win the day.

Similarly, the trademark SUN AIRWAYS for promotional goods including T-shirts, ties, mugs, cigarette lighters and matches ran afoul of the following mark, registered for "airplane and helicopter charter services":114

The Board concluded that purchasers familiar with the registrant’s primary business of air transportation services would be likely to be confused by applicant’s mark for goods “collateral or ancillary to” air transportation services. Evidence of third-party registrations

113 Hurst Performance, Inc. v. Torsten Hallman Racing, Inc., 207 U.S.P.Q. 671 (T.T.A.B. 1980) (holding that “the conditions and circumstances surrounding the activities of opposer in relation to the sale and promotion of its automotive products and those normally expected of a party selling, as in applicant's case, racing apparel, are such as to be conducive to creating situations from which confusion or mistake as to the source of those products could arise if the marks of the parties are sufficiently similar so as to foster a misleading association or connection”). 114 In re Trafalgar Holdings, Inc., 2004 TTAB LEXIS 220 (T.T.A.B. 2004) (not citable as precedent).

PROMOTIONAL GOODS IN TRADEMARK LAW helped the registrant by demonstrating that other airlines had registered their marks for a variety of promotional goods.

Consumer conditioning due to promotional licensing can also affect whether purchasers are likely to be confused by a use unrelated to the primary business. The Board refused to register BRIDGESTONE for shoes because it conflicted with opposer’s identical mark, used primarily for tires but also for golf and tennis balls, bicycles and conveyor belts.115 The opposer had distributed a nearly-unbelievable variety of BRIDGESTONE promotional items to its tire dealers, including “sweaters, jumpsuits, jackets, golf shirts, work shirts, tote bags, vests, western hats, wallets, stocking caps, picnic hampers, beverage holders, seat cushions, various desks and office supplies including letter openers, pens, pencils, clocks, address books, cigarette lighters, etc.” Opposer had prior rights in BRIDGESTONE not only for tires, golf and tennis balls, bicycles, conveyor belts but also for all of the listed promotional items. The Board gave considerable weight to those in holding that consumers would believe that BRIDGESTONE on shoes meant opposer had produced or sponsored or was somehow associated with them: “Opposer's collateral product uses give credence to opposer's argument that the public has been ‘conditioned’ to expect a variety of products to come from opposer and establish . . . that the public is likely to believe, when it encounters shoes bearing the mark BRIDGESTONE, that opposer has expanded its use of the mark, directly or perhaps under license, to shoes.”116

115 Bridgestone Tire Co. v. Bridgestone Trading Co., 221 U.S.P.Q. 1012 (T.T.A.B. 1984). 116 Id. (citation omitted). The dissent found opposer’s case far more tenuous, emphasizing that none of opposer’s goods was sufficiently related to those of the applicant for there to be likely confusion. Opposer’s tires and its promotional items, the dissent went on, “are not in the same field. . . . [E]ven those tire customers who are

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In another case, Harley-Davidson licensed the trademarks HARLEY and HOG on many goods, including Christmas ornaments, underwear, piggy banks, beer, wine coolers and chocolate bars. The Board concluded that a third party’s use of HARLEY-HOG on pork would be damaging even if Harley- Davidson neither butchered pigs nor licensed its name to a pork seller.117 It found “no question” but that, despite its primary significance of motorcycles, consumers would think Harley- Davidson had expanded its “long used and extensively promoted” mark to pork.

Still, comparing promotional goods with an entirely different business can present an obstacle to proving likelihood of confusion. In one instance, for example, the Board found that a bookstore’s use of its mark on tote bags was not related to clothing because the bags were “mere promotional items for the retail bookstore services.”118

And in another case, the Board found that just because it is common for trademarks to be used on collateral goods like clothes “does not mean that clothing is related to every other conceivable product and service as a matter of law.”119 There, the opposer had argued that its educational and real estate information services was

recipients of opposer's promotional clothing . . . would not, upon seeing applicant's shoes sold in a shoe store, sporting goods store, department store or the like, be likely to ascribe a common source or origin to the respective goods.” 117 Harley-Davidson Motor Co. v. Pierce Foods Corp., 231 U.S.P.Q. 857 (T.T.A.B. 1986). 118 Walden Book Co. v. Brenntano Co., 1997 TTAB LEXIS 401 (T.T.A.B. 1997) (not citable as precedent). 119 Collegetown Relocation, LLC v. Garan Services Corp., 2004 TTAB LEXIS 747 (T.T.A.B. 2004) (not citable as precedent).

PROMOTIONAL GOODS IN TRADEMARK LAW related to wearing apparel, the goods of the applicant. The Board found them to be “vastly different goods and services,” rejecting as irrelevant evidence that “collateral products such as clothing are used to promote a diverse range of primary goods and services.”

The Board also found restaurant services not sufficiently related to clothing in another case, in part because the mark, PELAGIA, was not well-known. The opposer failed to show that “purchasers generally expect restaurant services and shirts to emanate from a single source.”120

A claim that promotional goods for automobiles were related to sexual enhancement products, cosmetics and personal care products barely survived a motion to dismiss. The court found relatedness, though not particularly close proximity, between Toyota’s use of the LEXUS mark for various promotional items (e.g., key rings, sunglasses, clocks, pens, umbrellas, clothing) and another company’s use of LEXXUS for sexual enhancement products, cosmetics, personal care products, beverages and “nutriceuticals.”121 The court could not say “under the expansive modern test that no reasonable consumer would think that Defendants' personal care products came from the same source as Toyota's ballpoint pens.” If Toyota had used its mark only for automobiles, or “if this case had been filed twenty years ago,” the court noted that the result could have been different. However, it noted the “increasingly common practice . . . for trademark owners to license famous marks to sell a wide range of collateral products.

120 CNL Tampa Int’l Hotel P’ship, LP v. Palazzolo, 2007 TTAB LEXIS 100 (T.T.A.B. 2007) (not citable as precedent). 121 Toyota Jidosha Kabushiki Kaisha v. Natural Health Trends Corp., 74 U.S.P.Q.2d 1475 (C.D. Cal. 2005).

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Considering modern marketing tactics, the Court finds that personal care products are not so wholly unrelated from Toyota's promotional items that a reasonable consumer could never think they were somehow affiliated with Toyota.”

However, another court found Toyota’s claim “strained at best” when it argued that promotional use of LEXUS on thermos bottles and glassware was similar to use of the LEXXNS mark for a nightclub: “Lexus is not known to the public for its thermoses and glasses; it is known for its cars. It is unclear to me how ‘source’ or ‘approval’ confusion could result from the sale of collateral products such as drinking glasses.”122

In a 1983 case, the Federal Circuit found that opposer SquirtCo had “overreached [by] seeking a holding that would bring within the ambit of protection of its mark SQUIRT for soft drinks virtually any goods which might be used as promotional items for that product.”123 SquirtCo sold soft drinks under the name SQUIRT and also owned the following incontestable registration for “toy balloons”:

122 Toyota Motor Sales, U.S.A., Inc. v. Profile Cocktail Lounge, Inc., 2001 U.S. Dist. LEXIS 1393 (N.D. Ill. 2001). 123 SquirtCo v. Tomy Corp., 697 F.2d 1038, 1042 (Fed. Cir. 1983).

PROMOTIONAL GOODS IN TRADEMARK LAW

While the Federal Circuit sustained SquirtCo’s opposition to toy manufacturer Tomy’s application for SQUIRT SQUAD for floating water toys, it refused to rely on SquirtCo’s evidence that it promoted its drinks by selling or giving away items “such as T-shirts, pens, dart boards, tennis balls, clocks and beach balls” bearing the mark.124

B. Similarity of the Marks

The promotional goods trademark need not be identical to the mark of the adversary in its main business. In one case, the Board sustained an opposition by the Chicago Bears against an application for 12TH BEAR for jewelry, bumper stickers, beverage containers, towels, novelty buttons and clothing.125 It found that the opposer’s BEARS and CHICAGO BEARS marks had “acquired significant fame and public recognition” not only for football, but also for promotional merchandise, and found the marks sufficiently similar.

C. Trademark Fame

If the mark on the promotional goods is famous, the public is more likely to make an association when the trademark appears on additional goods and services.126 The Board has noted that cases in which the senior user’s rights have gone beyond its core business to include “collateral materials” are those in which its mark “is well- known, if not famous, as a result of extensive advertising and

124 Id. (“[T]he evidence was too imprecise to show the quantum of use of SQUIRT on individual items, that it was continuous rather than isolated usage, or that the public has come to associate the mark SQUIRT with a particular item or a line of toys.”). 125 Chicago Bears Football Club, Inc. v. Twelfth Man/Tennessee LLC, 83 U.S.P.Q.2d 1073 (T.T.A.B. 2007). 126 E.g., Collegetown Relocation, 2004 TTAB LEXIS 747. For more on trademark fame, see 2 Gilson on Trademarks § 5.11.

PUT THAT ON A T-SHIRT promotion and that the senior user has made use of its mark on ‘collateral materials.’”127

In one case involving a famous mark, NASDAQ, the Board found use of a mark on the applicant’s non-promotional items likely to confuse consumers with use of a similar mark on the opposer’s promotional items.128 In that case, an Italian company had applied to register the following mark for various products, including “sport clothing,” safety helmets, sports goggles, snowboards, skis and treadmills:

The applicant stated that its mark was an acronym of “Nuovi Articoli Sportivi Di Alta Qualita,” meaning in Italian “new high quality sporting goods.” The NASDAQ stock market opposed registration, alleging in part that “its promotional activities include the distribution and sale, by it or its licensees, of t-shirts, hats, jackets, golf balls, footballs, basketballs and baseballs bearing the ‘NASDAQ’ mark.” The stock market claimed that its use of the mark on these “collateral promotional items” gave it priority of use on goods similar to those in the application at issue. While it failed to meet its burden of proof to show that it had made prior use of NASDAQ for those particular collateral products, it still demonstrated its long-standing practice of using “NASDAQ-branded

127 CNL Tampa Int’l Hotel P’ship, 2007 TTAB LEXIS 100. 128 NASDAQ Stock Market, 69 U.S.P.Q.2d 1718.

PROMOTIONAL GOODS IN TRADEMARK LAW promotional items or premiums to promote its business.” In addition, the fame of its mark extended beyond its stock market services, also contributing to the Board’s ultimate finding of likely confusion.

In a dispute in federal court involving family members of late rock icon Jimi Hendrix, defendants sold vodka under the marks HENDRIX ELECTRIC, JIMI HENDRIX ELECTIC and JIMI HENDRIX ELECTRIC VODKA.129 They also distributed promotional items including glassware, T-shirts and posters. Plaintiffs licensed and sold products like key chains, T-shirts and memorabilia under the Jimi Hendrix name, and sued defendants for infringement. Defendants argued that the parties should be allowed to co-exist where the items were “merely promotional,” but the court concluded that, “while items like caps and shirts may be promotional for Defendants, they are the actual products for Plaintiffs.” In addition, the court found that purchasers would be “primarily motivated” to buy such goods due to Hendrix’s famous name, and fans seeking out Hendrix-related goods would find them to be in “close proximity.” The court found infringement and issued a permanent injunction against defendants.

VII. Looking the Elephant in the Room Straight in the Eyes

The status of promotional goods in trademark law is doubtful on two levels. First, use of a trademark on such goods is unlikely to establish trademark rights for the goods or services they promote. The material will not even attain trademark status for the

129 Experience Hendrix, LLC v. Elec. Hendrix, LLC, 90 U.S.P.Q.2d 1883 (W.D. Wash. 2008).

PUT THAT ON A T-SHIRT promotional goods themselves if consumers do not perceive the mark to be distinctive. But distinctiveness will be more likely if the mark has been used beforehand in another context.

The second area of doubt is enforcement, and in particular enforcement of one party’s mark against another’s use on promotional goods. As discussed in the previous section, it is possible for a trademark owner to show likelihood of confusion in such a situation, but courts have been very much at odds on this point.130 And as we shall see, the academic literature on the topic is also discordant. The issues underlying third party use of others’ marks on promotional goods are complex and divisive, with little certainty in practice.

130 See, e.g., Board of Supervisors for La. State Univ. Agric. & Mech. College v. Smack Apparel Co., 550 F.3d 465, 485-88 (5th Cir. 2008) (holding that school color schemes had no purpose or significance other than to identify the universities and were therefore nonfunctional); Au-Tomotive Gold, 457 F.3d 1062 (reversing district court's finding that VW and Audi logos were aesthetically functional on key chains and license-plate holders); Vuitton et Fils S.A. v. J. Young Enters., Inc., 644 F.2d 769 (9th Cir. 1981) (reversing district court's determination that the Louis Vuitton logo and purse design were functional), rev'd on other grounds, 481 U.S. 787 (1987); Boston Prof. Hockey Ass'n, 510 F.2d 1004 (holding that reproductions of professional hockey franchise's logo are not "functional" and can be protected); Ford Motor Co. v. Lloyd Design Corp., 184 F. Supp. 2d 665 (E.D. Mich. 2002) (holding that a car maker's trademarks are not functional aspects of defendant's car accessories). Compare, e.g., International Order of Job's Daughters v. Lindeburg & Co., 633 F.2d 912, 917 (9th Cir. 1980) (“Our jewelry, clothing, and cars are emblazoned with inscriptions showing the organizations we belong to, the schools we attend, the landmarks we have visited, the sports teams we support, the beverages we imbibe. Although these inscriptions frequently include names and emblems that are also used as collective marks or trademarks, it would be naive to conclude that the name or emblem is desired because consumers believe that the product somehow originated with or was sponsored by the organization the name or emblem signifies.”); Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 104 U.S.P.Q.2d 1750 (C.D. Cal. 2012) (holding that BETTY BOOP word mark and images are aesthetically functional because defendant's inability to use them would make their products less marketable).

PROMOTIONAL GOODS IN TRADEMARK LAW

This latter set of issues is the elephant in the room, looming in the corner but often not directly confronted. As one commentator notes, “the scope of the protection of trademark merchandising is not explicitly defined under the rule of trademark law but instead constitutes one of the most controversial issues in the trademark debate.”131

Failure to understand the boundaries of allowable third-party use on promotional goods has resulted in overreaching by competitors, unnecessary licensing agreements, aggressive enforcement by mark owners and costly litigation.132 One article describes an unfortunate cycle that creates excessive licensing requirements for those using another's trademark: Consumers believe that a given use of a mark requires the owner's permission, a belief that pushes trademark users to seek unnecessary licenses, which itself increases the likelihood that consumers will believe licensing is the norm.133 For example, the blurring of a logo in a

131 Irene Calboli, “The Case for a Limited Protection of Trademark Merchandising,” 11 U. Ill. L. Rev. 865, 868 (2011) (available online at http://ssrn.com/abstract=1580251). 132 Id. at 897-99. 133 James Gibson, “Risk Aversion and Rights Accretion in Intellectual Property Law,” 116 Yale L.J. 882 (2007) (available online at http://www.yalelawjournal.org/article/risk- aversion-and-rights-accretion-in-intellectual-property-law) (“[R]isk aversion and promotional opportunities combine to create markets for trademark licenses when no license is needed.”). See also Michael S. Mireles, Jr., “Aesthetic Functionality,” 21 Tex. Intell. Prop. L.J. 155, 162 (2013) (“As consumers begin to believe that licensing is necessary before someone can use another's trademark, there is more likely to be source or sponsorship and association confusion.”); Mark P. McKenna, “The Normative Foundations of Trademark Law,” 97 TMR 1126, 1182 (2007) (“As courts in the early twentieth century broadened trademark owners' rights, consumers grew to expect that trademark owners had increasingly broad control over their marks. Those changed consumer expectations

PUT THAT ON A T-SHIRT reality television show – a common practice – will “send[] a strong signal to viewers that trademarks have some special legal status – i.e., that filmmakers are not free to use them as they please.”134

A. Tension Between Trademark Owners and Competitors

A basic tension underlies trademark law generally and promotional goods in particular.135 One interest at stake is the trademark owner’s interest in controlling the use of material that identifies its goods and services. Another important interest is the ability of those not associated with the trademark owner to compete in the marketplace. And the third vital interest is that of consumers, in lower costs and more product information. These three interests are not easily harmonized, especially in the promotional goods context.

then became the basis for even broader trademark rights, which then in turn created even greater expectations.”). 134 Gibson, 116 Yale L.J. at 918 & 920 (“Such conservative licensing practices, prudent as they may be, push trademark’s entitlement even further into previously unregulated territory.”). 135 Calboli, 11 U. Ill. L. Rev. at 867 (“Trademark theorists have argued that trademark law should exclusively protect consumers and market competition, whereas practitioners and trademark owners have supported the position that the law should primarily protect the value of trademarks.”); Allison Midei, “Getting to Functional: Limiting the Applicability of the Trademark Aesthetic Functionality Doctrine,” 41 AIPLA Q.J. 467, 479-80 (2013) (describing the “fundamental tension between producers and competitors in trademark law”); Peter E. Mims, Note, “Promotional Goods and the Functionality Doctrine: An Economic Model of Trademarks,” 63 Tex. L. Rev. 639, 668 (1984) (“Promotional goods cases involve some of the most interesting issues of trademark law. They bring into collision all three of the major economic interests protected by trademarks: lower consumer search costs, decreased risk of monopoly, and protection of investments in trademarks.”).

PROMOTIONAL GOODS IN TRADEMARK LAW

Some characterize a trademark owner’s interest in controlling its mark on promotional goods as a desire to monopolize use of the mark and assert what is known as a “right in gross.”136 Several academic commentators decry the possibility of widespread monopolies if companies’ trademark rights extend to block others from distributing promotional goods bearing their trademarks.137

136 E.g., Robert C. Denicola, “Institutional Publicity Rights: An Analysis of the Merchandising of Famous Trade Symbols,” 62 N.C. L. Rev. 603, 605 (1984) (describing “the central question” as whether it is “sensible to recognize a monopoly in the merchandising value of famous trade names and symbols”); “Interpretation of the Lanham Act in Inter Partes Proceedings Before the Patent and Trademark Office Tribunals: Resolution of the Issue of Likelihood of Confusion,” 74 TMR 523, 537-38 (1984) (Regarding the scope of rights on collateral products, one question is “whether the owner of a mark which has achieved considerable renown, indeed fame, in connection with particular products or services should be granted rights in the mark for virtually any other product or service -- tantamount to a right in gross -- on the assumption that the mark is so well known that the public would naturally assume single source for all uses of the mark.”). 137 See, e.g., Stacey L. Dogan & Mark A. Lemley, “The Merchandising Right: Fragile Theory or Fait Accompli?” 54 Emory L.J. 461 (2005) (“If only one company controls the sale of Seattle Seahawks T-shirts, those shirts will cost more and be of worse quality than if the market competes to provide those shirts. Consumers lose something tangible – they pay more for the shirt, or they are unable to express their support for the Seahawks because they can’t afford the shirt, or they get a lower quality shirt. There must be some reason for the law to compel that loss.”); Paul J. Heald, “Filling Two Gaps in the Restatement (Third) of Unfair Competition: Mixed-Use Trademarks and the Problem With Vanna,” 47 S.C. L. Rev. 783, 787-88 (1996) (“If Ford, the Atlanta Braves, or any other entity whose marks are likely to be attractive on promotional goods, is granted the exclusive right to exploit its marks on such goods, then consumers will pay higher prices than they would in the presence of open competition. . . . Without competition, a potential monopoly problem emerges because promotional goods are not fungible in the eyes of consumers. . . . Granting exclusive rights in the promotional goods context permits monopoly pricing and, therefore, entails a transfer of wealth from consumers to trademark owners.”).

PUT THAT ON A T-SHIRT

In fact, some conceive of trademarks as public benefits that should be available for all to use to decorate their products, if that is what consumers want to buy. One commentator declared that trademarks have a “public good” aspect when they are used to “adorn a product” rather than “identify the product’s source of manufacture.”138

Trademark owners can undeniably overreach when they try to stop others’ use on promotional goods. Trademark rights are not monopolies, but can be protected only insofar as they represent the goodwill of a business or, for famous marks, as they signify distinctiveness.139 Owners should not be able to control or prevent the use of their marks in parodies, commentary or non-trademark fair use. They may only prevent uses that confuse consumers, blur or tarnish the mark’s distinctiveness or harm business goodwill.

On the flip side, a third party’s interest in using the trademark owner’s mark on promotional goods may be characterized as an attempt to trade off of the mark owner’s goodwill unfairly. Or, more charitably, the third party may be simply entrepreneurial or a fan him- or herself. In some cases, the material on the goods may just evoke the mark rather than actually copying a logo or slogan.

Can these interests be reconciled with each other and with the interests of consumers?

138 Id. at 791. 139 See 1 Gilson on Trademarks § 1.03[9] (“The trademark owner has no legal right to exclude all others from using its trademark regardless of the owner's use or nonuse or of the products or services involved. In this sense there is no legal monopoly in a trademark, which is only an identifying symbol representing the goodwill of a business. Its exclusionary attributes are given legal recognition to protect that goodwill, no more and no less.”) (footnotes omitted).

PROMOTIONAL GOODS IN TRADEMARK LAW

B. Consumers, Confusion and Promotional Goods

The crux of the problem is the junction of confusion and consumer perception. Consumers want T-shirts, caps, stickers and mugs with certain trademarks on them in order to express themselves. They advertise their fandoms, demonstrate their affiliation for sports teams or universities, and make public their connection with favorite products and services. If that is what consumers want, then anyone should be able to make and sell the trademarked products, the theory goes. One commentator noted: “Those wanting to sell car mats to Ford owners or baseball caps to Bulldog fans have no real alternatives in choosing the ornamentation necessary to satisfy buyers.”140

Let us start with two examples, the first harkening back to the Macy’s case. The court granted partial summary judgment, finding a “high” likelihood of confusion as to eight trademarks, including MARSHALL FIELD’S and STRAWBRIDGE’S.141 Macy’s T-shirts are on the left and Strategic Marks’ T-shirts are on the right:

140 Heald, 47 S.C. L. Rev. at 797. 141 Macy’s, Inc., 2016 U.S. Dist. LEXIS 11676.

PUT THAT ON A T-SHIRT

Setting aside the question of priority, the Macy's case presented the use of the identical trademark on the same goods to promote the same or quite similar services. Nevertheless, not everyone would agree that consumers would be confused in this situation or that it entails unfair competition.

PROMOTIONAL GOODS IN TRADEMARK LAW

Just five years ago, the Ninth Circuit Court of Appeals initially found that consumers bought goods bearing the Betty Boop name and image because they liked the character and not because they thought the trademark indicated source.142

Thus, the court concluded, the words and images were aesthetically functional and available for general use. The court soon withdrew this much-criticized opinion and, without comment, substituted a new one that did not mention aesthetic functionality.143 As one of many critics of the original opinion stated, the court’s preliminary

142 Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 636 F.3d 1115, 1124 (9th Cir.), vacated, 654 F.3d 958 (9th Cir. 2011). The image is U.S. Reg. No. 2361245, registered on June 27, 2000 for goods including air fresheners, toilet seats, clocks, tote bags, snow globes, lunch boxes and several more. 143 The case became even stranger when the district court, on remand, relied upon the Ninth Circuit's withdrawn opinion to find images of Betty Boop, as well as the word mark, aesthetically functional. This opinion erroneously found that the word mark BETTY BOOP was "a decorative component" of the defendant's goods that was not source-identifying. Fleischer Studios, Inc. v. A.V.E.L.A., Inc., 104 U.S.P.Q.2d 1750 (C.D. Cal. 2012).

PUT THAT ON A T-SHIRT conclusion “raises the alarming specter that a valid registered trademark, which necessarily is deemed to be perceived by consumers as a source indicator, may be subject to unauthorized use by third parties if the trademarked name or image has some intrinsic value to consumers separate and apart from its source-identifying function.”144

Consumers may desire goods that advertise their affinity with the nostalgia of BETTY BOOP or MARSHALL FIELD’S. T-shirts bearing popular trademarks are certainly more marketable than blank ones. But consumers may neither know nor care whether the owners of the BETTY BOOP mark or the MARSHALL FIELD’S mark have licensed or approved the use of those T-shirts.145 Therefore, some say they cannot be confused as to source or even sponsorship or approval, and no harm is done by unlicensed use.146

As a factual matter, do consumers always, sometimes or never believe that promotional products require the approval of the trademark owner? Does the appearance of a logo on a T-shirt, mug or ballpoint pen signal to consumers that the good must be made under license?

144 Cohn, 101 TMR at 1218. See also id. at 1221 (“The Betty Boop decision . . . [enables] a defendant to excuse its unauthorized use of a valid mark simply because the subject matter is appealing or desired by consumers.”); Denicola, 62 N.C. L. Rev. at 611 (“That a recognized mark prominently displayed on an article of manufacture may increase its aesthetic appeal and desirability does not preclude the possibility that it will simultaneously be perceived as an indication of origin or sponsorship.”). 145 E.g., id. at 609 (“If the public desires items decorated with well-known names and trademarks regardless of their origin, the copier may profit without inducing confusion.”). 146 E.g., McKenna, 97 TMR at 1182 (“[R]ights are bounded only by consumer understanding: If consumers believe a Yankees logo on a hat suggests the Yankees endorsed the maker of the hat, then the Yankees have the right to control that use.”).

PROMOTIONAL GOODS IN TRADEMARK LAW

This point has been debated over and over in the scholarly literature. Some say consumers always believe that promotional goods are made or licensed by the mark owner.147 Some say consumers do not believe that at all.148 Some say consumers simply do not care whether the goods are official or licensed by the mark owner; they just want something bearing the trademark so they can show their loyalty or affection.149 The quality and source of the goods is apparently unimportant to those consumers, so long as they can demonstrate their affiliation.150 Still others say that consumers

147 See, e.g., Sarah Hopkins, “Aesthetic Functionality: A Monster the Court Created but Could Not Destroy,” 102 TMR 1126, 1159 (2012) (“[C]onsumers now believe if they purchase a good bearing a familiar mark that the trademark owner either made the good or else licensed the mark's use. Therefore, if the merchandise is not of good quality, consumers blame the owner of the mark.”) (footnote omitted). 148 Denicola, 62 N.C. L. Rev. at 608-09 (claiming that it would take an extraordinarily long search “to identify a flesh and blood consumer who actually . . . assumes that a coffee mug proclaiming ‘I Love E.T.’ is necessarily connected with Universal City Studios, Incorporated”). 149 See, e.g., Austin, 69 Brooklyn L. Rev. at 899 (“Some consumers simply want to wear something with the logo of their favorite sports team: They don't necessarily care whether the item is officially sponsored.”) (footnote omitted); Johnston, 85 TMR 19 (“A flurry of commercial activity has developed in which the consumer is much more interested in purchasing an item bearing the trademark owner's symbol than in the quality of the product bearing that mark.”); Mireles, 21 Tex. Intell. Prop. L.J. at 189 (“In close cases, the court should presume that the primary motivation is not related to a trademark function or reputation related reason, but that some other independent reason exists such as allegiance or loyalty to an organization.”). See also Malla Pollack, “Patriotism for Profit and Persuasion: Trademark, Free Speech, and Governance Problems with Protection of Governmental Marks in the United States,” 100 TMR 1181, 1205 (2010) (The fact that consumers associate promotional goods with the mark owner “is not synonymous with . . . saying that they believe that the source of the shirt is the [the mark owner] or is authorized thereby, providing assurance of the quality thereof.”). 150 Austin, 69 Brooklyn L. Rev. at 901 (“[T]he ordinarily prudent consumer gets constructed as somebody who is concerned with whether goods are officially sponsored, and not as somebody who values the brand for its affiliative symbolism alone. It is not prudent, apparently, for consumers to want promotional goods simply for their own sake,

PUT THAT ON A T-SHIRT may simply like attractive designs and do not care about the trademark whatsoever.151

Courts have shared this dilemma. One district court in 1989 refused to grant summary judgment for either party where an unrelated entity had used a university’s indicia on T-shirts.152 It noted that the sale of items bearing its trademarks in the school bookstore “is not the primary business of the university.” The court would not decide, on the evidence provided, whether consumers would see the indicia as identifying a secondary source of sponsorship, beyond the T-shirt manufacturer and distributor. It summed up its decision thus: “In essence, the court is skeptical that those individuals who purchase unlicensed tee-shirts bearing [plaintiff’s] marks care one way or the other whether the University sponsors or endorses such products or whether the products are officially licensed. Instead, as Defendants contend, it is equally likely that individuals buy the shirts to show their support for the University.”

It is impossible to make accurate generalizations as to whether consumers believe or care that promotional goods have been and possibly to pay cheaper prices, with little concern with the actual origin of the goods.”) (footnote omitted); Johnston, 85 TMR 19 (“[P]romotional articles are seldom purchased primarily for their quality; rather, a consumer purchases an item bearing an organization's symbol in an effort to express loyalty or admiration for that organization. The institution's reputation is fostered by the prowess of its athletic team or the quality of its educational facilities, not by the quality of sweatshirts or glasses bearing its mark.”) (footnote omitted). 151 Mireles, 21 Tex. Intell. Prop. L.J. at 181 (“A person may wish to wear the trademark for purely aesthetic reasons because he or she may like the appearance of the trademark - the design of it - notwithstanding any reputation attached to the trademark itself.”). 152 Bd. of Governors of the Univ. of N.C. v. Helpingstine, 714 F. Supp. 167 (M.D.N.C. 1989).

PROMOTIONAL GOODS IN TRADEMARK LAW approved of or produced by the mark owner. As the First Circuit cogently stated:

[F]ew people, other than legal specialists, could venture an informed opinion on whether someone using the logo of the sponsor of a sporting event is required to have the permission of the event's sponsor. Lacking such knowledge, the question of approval is pure guesswork. To ask a factfinder to determine whether the public would think that defendants' shirts were "authorized" or "official" shirts is to ask it to resolve a confusing and, in many contexts, virtually meaningless question.153

The only appropriate conclusion is that there is no single reason consumers desire goods featuring trademarks.

Courts have been understandably inconsistent in dealing with likely consumer confusion in promotional goods cases.154 Some have gone beyond the “sponsorship” or “approval” language in the

153 Boston Athletic Ass’n v. Sullivan, 867 F.2d 22, 33 (1st Cir. 1989). 154 See, e.g., Restatement (Third) of Unfair Competition § 20, cmt. b (“Some decisions emphasize the requirement of a likelihood of confusion and thus demand proof that prospective purchasers are likely to believe that the trademark owner is the source or sponsor of the merchandise. Other cases, although employing the likelihood of confusion, emphasize the disparaging associations crated by the defendant’s use of the plaintiff’s mark. Still other cases emphasize an appropriation of the selling power of the mark.”); LaFrance, 102 TMR at 1116 (“While many courts are willing to infer some likelihood of confusion in these cases, others have held that no infringement exists when the consumer is likely to perceive the mark simply as ornamentation or as a badge of allegiance. Some courts have reached this result by applying an exception for the ‘functional’ use of a mark, or by finding that there is no likelihood of confusion as to source or sponsorship.”) (footnotes omitted).

PUT THAT ON A T-SHIRT statute to ask whether there is a perception of endorsement, affiliation, association, connection, permission or license.155 The First Circuit adopted a rebuttable presumption that purchasers would be confused where defendants intentionally referred to plaintiff’s primary business on their promotional items and consumers were likely to buy the shirts because of that reference.156 It reasoned that the intentional use of another’s mark to establish “a link in consumers’ minds with the other’s enterprise” and to “directly profit[] from that link” is likely to cause confusion.

On the other hand, some courts have found no confusion in this context, though these decisions are generally not recent ones.157 Or they have seen that there is likely confusion but discounted it, as one district court, though in a vacated opinion, held that “protecting functional copying of trademarks requires that we tolerate at least some confusion as to source or sponsorship after the point of sale.”158

155 Gibson, 116 Yale L.J. at 909 (citing cases). 156 Boston Athletic Ass’n, 867 F.2d at 34. 157 E.g., Supreme Assembly, Order of Rainbow for Girls v. J.H. Ray Jewelry Co., 676 F.2d 1079, 1083 (5th Cir. 1982) (no likelihood of confusion from use of fraternal emblem trademarks on jewelry); International Order of Job's Daughters, 633 F.2d at 920 (same); University of Pittsburgh v. Champion Prods., Inc., 566 F. Supp. 711, 713 (W.D. Pa. 1983) (no likelihood of confusion with college marks used on apparel); Porsche Cars N. Am., Inc. v. Lloyd Design Corp., 2002 U.S. Dist. LEXIS 9612 (N.D. Ga. 2002) (refusing to find confusion as a matter of law from use of Porsche model number designs on car floor mats). See also Denicola, 62 N.C. L. Rev. at 609 (“If the public desires items decorated with well-known names and trademarks regardless of their origin, the copier may profit without inducing confusion.”). 158 Plasticolor Molded Prods. v. Ford Motor Co., 713 F. Supp. 1329, 1334 (C.D. Cal. 1989) (Kozinski, J., sitting by designation), vacated by consent judgment, 767 F. Supp. 1036 (C.D. Cal. 1991).

PROMOTIONAL GOODS IN TRADEMARK LAW

C. Harm to Goodwill

A trademark owner’s lack of control over a third party’s promotional goods could indeed harm the mark’s reputation. A keychain with a prominent trademark snaps in half, a branded T-shirt frays after one wash, a mug with a logo never loses its coffee stain. Just as in a traditional trademark infringement case, the mark owner has lost control over its goodwill and the value of its mark.

Some have argued that making trademarks freely available to place on promotional goods will be free marketing, helping the trademark owner gain recognition and sales success. If unaffiliated companies cannot use others’ marks on their goods, one commentator says, “mark holders are themselves harmed because their marks may not receive the same level of promotion.”159

Courts have, surprisingly, bought into this reasoning as well. Judge Alex Kozinski, in an opinion vacated by the parties’ settlement, had no problem with floor mats that included “clear, legible and accurate depictions of various Ford trademarks and logos.” 160 Kozinski lauded the manufacturers for their copying because it would give “consumers the opportunity to express their

159 Mireles, 21 Tex. Intell. Prop. L.J. at 187. See also Mims, 63 Tex. L. Rev. at 665 (“Allowing numerous producers to produce similar jerseys displaying the equipment manufacturer's trademark actually increases the prevalence of the mark in the marketplace and thus benefits the manufacturer.”). 160 Plasticolor Molded Prods., 713 F. Supp. at 1334. See also Bi-Rite Enters. v. Button Master, 555 F. Supp. 1188, 1196 (S.D.N.Y. 1983) (case involving buttons with trademarks of musical groups) (“Rather than clouding the distinctive message of quality that plaintiffs' marks carry, defendants provide fans of the various Performers an opportunity to announce their allegiance to the groups, thereby publicizing the popularity of the groups.”).

PUT THAT ON A T-SHIRT allegiance to their Ford-manufactured automobiles. If anything, such use is likely to increase the distinctiveness of Ford's marks.”

While the impact of market saturation on the value of a trademark and its ability to indicate source cannot be known,161 the attitude that trademark owners should be grateful to unauthorized users is cheeky at best. Should they also be grateful to those who produce counterfeit goods?

This assertion is reminiscent of the claim that a trademark should be available to all for promotional goods because a large part of the value of trademarks comes not from the owner but from “the efforts, energy, and devotion of those who love a particular team, institution, or product. Those who create value should have some access to what they have wrought.”162 Without a trademark owner, however, a T-shirt with a design would be just a T-shirt with a design.163

161 Denicola, 62 N.C. L. Rev. at 637 (“[T]he sheer volume of ornamental use may affect the value of the symbol as the market becomes saturated with merchandise bearing the mark.”). 162 Heald, 47 S.C. L. Rev. at 802. 163 Diana Elzey Pinover, “Aesthetic Functionality: The Need for a Foreclosure of Competition,” 83 TMR 571, 586-87 (1993) (“When used collaterally on a tee shirt[, symbols like Mickey Mouse, the New York Yankees and NYU] . . . create demand for those tee shirts separate from the demand for unadorned tee shirts. They also serve an advertising function for the primary product, advertising Mickey Mouse, the New York Yankees or NYU. There would be no demand for the collateral product unless there were demand for the primary product. Without the New York Yankees no one would want a tee shirt with their logo. The tee shirt would have no meaning.”) (footnote omitted).

PROMOTIONAL GOODS IN TRADEMARK LAW

D. Proposal: Likely Confusion from Related Promotional Items

The following practical standard fits within current trademark law: When the trademark owner is using or licensing its mark on the same, similar or related promotional goods, that factor should tip the balance in favor of a finding of likely confusion.164 This standard could guide potential competitors in deciding when a license is necessary and when one is not.

It will of course be up to the courts and Board to determine in any given case which promotional items are sufficiently similar or related, either to official promotional items from the mark owner or to the mark owner’s primary business. For example, suppose a trademark owner uses its ABC mark on iron-on patches as its sole promotional product. An unrelated individual begins using ABC on T-shirts. If a court found the two products related, that would weigh in favor of a finding of likelihood of confusion. If a trademark owner does not put its XYZ mark on any promotional goods, and an unrelated entity uses XYZ on T-shirts, then the typical likelihood of confusion calculus would apply.

In the Chicago Bears case discussed earlier, the Board soundly rejected the applicant’s argument that it should be permitted to use the opposer’s marks to enable consumers to demonstrate their allegiance to the NFL team.165 The applicant claimed that the consumer seeks “the function of expression,” and “because of the

164 Calboli, 11 U. Ill. L. Rev. at 901 (“[C]onsumer confusion can be expected and implied, without any additional factor analysis, when identical or sufficiently similar marks are used on identical or directly competing goods.”). 165 Chicago Bears Football Club, 83 U.S.P.Q.2d 1073.

PUT THAT ON A T-SHIRT doctrine of functionality, the use of even exact replicas of a registered mark does not violate trademark law.” The Board found that this argument “apparently would allow others to register marks that are similar to registered marks in order to show support or hostility to a sports team, [and] American case law simply does not recognize such a right.” Simply because a trademark is “associated with a movie, television show, university, or sports team,” it does not follow that it is freely available for others to use to promote their goods, said the Board.

But it added a proviso: Such marks are considered not freely available “when the trademark owner is actively licensing the mark for related items.” The Chicago Bears had priority of use for those items, and the applicant did not have a right that trumped that priority just because it wants to sell goods to a fan who wants to communicate support of his team.

One commentator argued that competitors should be able to use trademark owner’s marks in areas outside the “primary market” of the mark owner.166 Thus, the article suggested, an automotive company could protect its distinctive trade dress for vehicles, but anyone would be able to copy it for toy replicas.167 However, consumers could definitely see toy vehicles as a product related to the business of the automotive company. One example from

166 Mireles, 21 Tex. Intell. Prop. L.J. at 186 (footnote omitted), citing Au-Tomotive Gold v. Volkswagen of Am., Inc., 457 F.3d 1062 (9th Cir. 2006). See also Cherniak, 69 Tul. L. Rev. at 1355-56 (“If courts properly employ the likelihood of confusion analysis in all trademark infringement cases, no such merchandising right will result. Instead, certain unauthorized, ornamental trademark uses, particularly those on products in a completely different market than the products of the trademark owner, will be permissible as noninfringing trademark use.”). 167 Mireles, 21 Tex. Intell. Prop. L.J. at 206.

PROMOTIONAL GOODS IN TRADEMARK LAW yesteryear was the indestructible cast-iron replicas unmistakably of International Harvester Company tractors. And in a perhaps unexpected decision, the Board denied registration of the two marks below for “air transportation of passengers and freight” based on similar marks registered for model airplanes, as shown on the airplane with dotted lines:

Evidence showed that at least some airlines sell model airplanes on the same websites on which they sell passenger tickets.168

E. Dilution

Owners of a few marks have blocked their use on promotional goods under dilution law.169 Dilution law removes the

168 In re TriStar History & Preservation, Inc., 2015 TTAB LEXIS 340 (T.T.A.B. 2015) (not citable as precedent). 169 Audi AG v. D’Amato, 469 F.3d 534, 547 (6th Cir. 2006) (use of identical trademarks on goods and services constituted dilution); Texas Tech Univ. v. Spiegelberg, 461 F.

PUT THAT ON A T-SHIRT issue of consumer confusion from the equation entirely,170 but it only applies to the most famous of trademarks.171 Perhaps it is those marks that third parties will typically choose to exploit on promotional goods because consumers desire them most of all. Dilution would also extend trademark rights to unrelated promotional and other products. But dilution law is not a solution for the majority of trademark owners.

VIII. Conclusion

“Let me get this straight, Ben. Once I start actually cat- proofing – a very strenuous business, I assure you, those cats are wily – I’ll have service mark rights in my fish head logo. But until then, using my logo on T-shirts may not get me anywhere, trademark-wise. I spent quite a bit of time on that logo, you know.”

“Yes, Ms. Mosey, I’m sure you did. It’s, um, charming. But I think people may just see it as a picture of a fish head on a T-shirt. A very nice picture, sure, but not a trademark yet. You know, you could make it more like a trademark if put Willadine’s Cautious Cat- Proofing on there too. But your best bet is to find some clients in

Supp. 2d 510, 524 (N.D. Tex. 2006) (“The circulation of unlicensed products bearing Texas Tech's marks will likely blur the uniqueness of officially licensed products. Undoubtedly, the sale of unlicensed products will result in diminished individuality of the officially licensed products.”). 170 Cf. Sara Stadler Nelson, “The Wages of Ubiquity in Trademark Law,” 88 Iowa L. Rev. 731, 774 n.266 (2003) (“Promotional products reinforce the linkage between a trademark and a core product, and as a result, they do not interfere with the ability of a mark to identify a ‘particular product’ in the minds of consumers. . . . Of course, to the extent a mark is not being used to promote a core product, but to extend a brand into product lines viewed as compatible with its ‘myth,’ . . . the touchstone of the dilution doctrine as Schechter conceived of it - is compromised.”). 171 See generally 2 Gilson on Trademarks Chapter 5A.

PROMOTIONAL GOODS IN TRADEMARK LAW need of cat-proofing and get to work. Put that logo on your invoices, your letterhead, your website when you make one.”

“All right, Ben. I’ll make a few calls to prospective clients. I have a friend with a very tenacious cat, Bubbles, who can break into any cat treat container ever invented. But what about my neighbor? Once I’ve started my business, can she use my logo on coffee mugs? Key chains? Beach towels?”

“Hard to say, Ms. Mosey. It’s not clear to me whether consumers would think your business sponsored those products. You might want to get in touch with Gina, though, to see if she wants to go into business with you and make some promotional goods to advertise the company.”

“Hmmm. Let me contemplate that, Ben.” Ms. Mosey stood and put her purse over her shoulder. “I’d better go get cracking on my sales calls. Get some service mark rights.”

“Give me a call when you’ve started actually cat proofing, Ms. Mosey.”

“I will, Ben. Thanks.” She jogged out the door.

I finished noting down the 1.25 hours I had spent with Ms. Mosey, then figured I had earned a half hour to browse through my favorite online T-shirt stores.

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IX. Coda

Few bright lines can be drawn when it comes to branded promotional goods, and each case is fact-dependent. To obtain rights on promotional goods, mark owners must make an effort to avoid using their marks “ornamentally” or “informationally.” And even though consumers want branded goods, trademarks are still not free to all comers who want to put them on a T-shirt.