More than a polite poke: Shagbook courts trouble in date with Facebook

This Kat has been a user of Facebook since it was cool to use at Oxford -- when it was considered impolite not to respond to a 'poke' within 8 hours. She has never ever heard of Shagbook until writing this post. However, as this Kat quickly discovered, Shagbook is an adult 'dating' website. On the UK homepage of the its website it states:

"Hook up with hot UK singles looking for hot Casual Dating on Shagbook! Search millions of UK singles looking to date for fun, and meet local members near you. Get a date now! Share pics, swap stories, and meet up tonight!"

And when this Kat investigated further, by trying to join the site (the things she does for the IP community!), she was greet with this text:

"We've got thousands of sexy playmates all waiting to be contacted for naughty chat, filthy fun and erotic encounters. To kick start the action we suggest you complete your profile with as much information as possible and add a recent sexy photo. You can then search to see which hot members get your heart racing. And don't forget to send out some cheeky winks or naughty messages to get things going!"

But what could it possibly be that would lead any modest Kat into such unsavoury investigations? Let us explain. On 24 May 2010, SNRG Ventures LLC (a company incorporated in Wyoming USA) applied to register the mark SHAGBOOK in the US in class 45 for computer dating services. The mark was accepted an advertised on 25 January 2011. A representative for SNRG Ventures told Mashable that the name shagbook.com was conceived 'all perfectly innocently': when SNRG's American owner was living in the UK, he 'referred to his little black book as his little "Shagbook" ... He was amused with the word ‘shag’".

Given the nature of the Shagbook website, it is not surprising that acceptance of the mark would be of concern to Facebook. Facebook filed a notice of opposition on 25 May 2011 based on two grounds: likelihood of confusion and dilution of a famous mark.

As to the likelihood of confusion, Facebook (at [12]) alleged that the SHAGBOOK mark was similar to its own registered FACEBOOK marks in respect of 'appearance, sound, meaning and commercial impression'. Facebook (at [15]) also alleged that SNRG adopted the SHAGBOOK mark 'with knowledge of and the intent to call to mind and create a likelihood of confusion with regard to, and/or trade off the fame of Facebook and the registered FACEBOOK marks'. Accordingly, Facebook (at [19]) alleged that the SHAGBOOK mark is likely to 'cause confusion, or to cause mistake or to deceive'.

As for dilution of a famous mark, Facebook (at [25]) argued that, as a result of the enormous publicity afforded to the FACEBOOK marks, they enjoyed 'a high degree of consumer recognition, are widely recognised by the general consuming public of the United States as a designation of Facebook's services, and are famous'. For Facebook (at [34]), 'SNRG's use of the SHAGBOOK mark for online adult dating and social networking services that provides a platform for users to connect with other users for casual sexual encounters tarnishes the famous FACEBOOK marks and harms the reputation of the FACEBOOK marks to Facebook's severe detriment'.

SNRG lodged its response to Facebook's opposition on 25 July 2011 and argued eight distinct defences. First, (at [35]) Facebook did not 'have the exclusive right to use the term “facebook” as the term was in common use in the English language well before Facebook began using the term in connection with its services. Second, Facebook's opposition should 'be denied under the equitable doctrine of unclean hands. This was because, according to SNRG, Facebook had 'engaged in trademark misuse and trademark bullying by abusively usingoppositions, litigation, and threats of the same to maintain a competitive market advantage'. Third, in the alternative (at [37]), if Facebook does have rights to use the term FACEBOOK, there was no tarnishment or dilution because consumers would have understood it to be a reference to a parody and as such authorised by the First Amendment. Fourth (at [38]), the FACEBOOK marks were 'highly diluted already by others using identical or very similar marks, including numerous uses of the term "book" in connection with online networking'. Fifth (at [39]), Facebook should be estopped from arguing that the two websites provide similar service on the basis that Facebook has made 'public statements that its website at facebook.com is not a dating site and in fact has removed individuals from the siteupon discovering that said individuals had been using the site as a “dating site” to meet newpeople for sexual encounters'. Sixth (at [40]), there is no likelihood of confusion between the services provided by both websites. Seventh (at [41]), the registered FACEBOOK should be cancelled or the specification restricted to the goods and services which Facebook actually provides, namely online social networking. Eighth (at [42]), as Facebook has used the term "facebook" in a generic sense, it is estopped from now claiming that it is not generic.

Both parties have indicated that they will vigorously defend their respective marks.

The IPKat will be watching developments with keen interest -- though he trusts that all the action will be in court, not under the covers.

Someone who finds the word 'shag' hilariously funny here
The shag: a poetical observation by Christopher Isherwood here
Popular shag on the floor here
Why shag is for dogs here and here

Merpel,ever modest, would like to make clear that she is not that kind of Kat!

Dilution is in decline, suggests empirical study

The IPKat's effervescent friend Paul J. Heald (University of Georgia Law School) just informed him that his latest piece of research, co-authored with Robert Brauneis (George Washington University Law School), is now available for consumption on SSRN: you can download it at no cost to your pocket, if not your preconceptions, here. The title of this 56-page piece rather gives the game away: it's "Trademark Infringement, Trademark Dilution, and the Decline in Sharing of Famous Brand Names: An Introduction and Empirical Study".

According to the abstract,

"this article ... presents results from an empirical study of sharing rates among 131 famous brand names from 1940 through 2010, conducted through an examination of business names in the white pages telephone directories of Chicago, Philadelphia, and Manhattan. Perhaps the most dramatic finding of the study is that independent uses of the 131 brand names – that is, uses of those names by businesses other than those that made the names famous – have declined from 3,000 to 1,380 between 1960 and 2010, a 54% drop. The article then assesses potential causes for that decline. We evaluate five potential non-legal factors, including economic changes, family migration, decreased attractiveness of particular famous brands, changes in the popularity of business name types, and changes in cultural naming patterns. It then considers evidence that changes in trademark infringement and dilution law underlie some part of the decline. The article concludes that both legal and non-legal factors have likely played a role".

The IPKat thinks this is a jolly good start -- though as the authors themselves acknowledge, the limited nature of this empirical study means that this subject has by no means been exhausted. He very much hopes that, since the authors have gone to some lengths to explain their methodology for the selection of famous names (many of which will be unknown to the younger or non-US reader) and their means of assessing the extent of shared use, similar empirical studies in jurisdictions outside the United States will reveal whether the trend identified by Paul and Robert is unique to that country or can be seen also in countries with less cultural diversity, fewer overt legal checks on dilution, less consumer-driven economies and where civil law principles operate instead of those of the common law.

Things you may not want to dilute here and here

Louisville Slugger here; another Louisville slugger here

What Clabber really means here

Letter from AmeriKat - New York Times v Wall Street Journal

Yesterday morning while the rest of London was awakening to a beautiful summer morning, the AmeriKat was feverishly writing about money laundering and conflict of interests in the first of her final LPC exams. Battling the oncoming pilgrimage of English sun worshippers streaming their way to Hyde Park three hours later, she exhaustedly pawed her way back home to face another stack of revision that was eagerly awaiting her return. This particular stack is for a three-hour slog next Sunday which unfortunately means she will be unable to post her weekly Letter next week. (picture, left - the AmeriKat studying away for the final exams) The final death throws of her two year LPC slog will finish in 11 days, when the AmeriKat will return to her regularly scheduled programming. In the meantime, the AmeriKat has a little IP fodder for you to digest until then.

New York Times v Wall Street Journal

Last Thursday, The New York Times sent a cease and desist letter written by their attorney Richard Samson to the VP of Marketing of Dow Jones & Co,Jennifer Jehn, demanding that the WSJ stop using the slogan "Not Just Wall Street. Every Street". For readers who, unlike the AmeriKat, can not geekily name the legal entity that publishes a newspaper, Dow Jones & Co publishes the WSJ. They are in turn both owned by News Corporation and Rupert Murdoch (see an interview with Murdoch regarding the iPad).

By way of background, when Murdoch bought the WSJ in 2007, there was much comment over the purchase (see in particular this Wall Street Journal article here) which changed the power structure of the US newspaper industry, skewing ownership towards big business and therefore potentially their interests. For non-US readers, Murdoch's American media empire tends to include the more conservative media organizations like Fox News. Following the purchase of the WSJ, and particularly in the past few weeks, Murdoch has had The New York Times in his eye-line with a view, some say, of knocking them off their "perch". The streets of New York are now the PR battleground for the two newspapers, with the Times' letter being just the latest.

According to the Times' letter the WSJ used the slogan in a 26 May advertisement that ran in their print edition and also occasionally on their website as part of the promotion of their new Greater New York section. [To compare the two ads click here] The Times' CEO Janet Robinson stated yesterday that the Greater New York section had not had an impact on the Times' circulation. The Times' letter stated that the slogan is subject to a "trademark application pending with the U.S. Patent and Trademark Office." The letter went on to state:

“While we are flattered by your admiration of our marketing efforts, please note that The Times owns the trademark rights in the slogan and your brazen appropriation of our intellectual property rights constitutes a willful infringement and dilution of The Times' rights under the Lanham Act."

On Friday, the WSJ sent a letter to the Times stating that it had "never intended to run the ad for long" and that "our lawyers tell us that we were within our rights to use the tag line to compare our two offerings." According to the WSJ, the letter also stated that the WSJ believed the Times' slogan was itself referring to the WSJ. The AmeriKat can see what they were trying to get at, but before the Wall Street Journal there was a street called Wall Street, which was what the slogan was referring to (although there probably is a bit of a wink behind slogan as well). Further, the phrase has entered a new parlance in the US after the financial crisis with politicians demanding Washington protect "Main Street interests, not just Wall Street's".

Jehn's letter also stated that the WSJ did not think that New Yorkers would be confused by the its use of the slogan. Unlike in the UK, under section 1114 of the Lanham Act US trade mark owners have to prove that the defendant's use of their mark confused consumers. In the Second Circuit, which includes New York, the test for confusion is that as laid down in the Polaroid Corp v Polarad Elecs. Corp (1961) case. If this case goes any further and the slogan is indeed valid and registered, the Times' would have to provide evidence for the following factors under this test:

1. The strength of their logo - [the AmeriKat is sceptical to the level of the logo's distinctiveness]
2. The degree of similarity between the two - [identical!]
3. The proximity of the products and services - [identical!]
4. The likelihood that the senior user will "bridge the gap" into the junior user's product service line - [if there even is a 'gap' it is very likely because they are competitors]
5. Evidence of actual confusion between the marks
6. Whether the WSJ adopted the mark in good faith - [well, if the Jehn letter is anything to go on...]
7. The quality of the WSJ's products - [The AmeriKat must state she is a faithful WSJ reader, so obviously cannot comment impartially]
8. The sophistication of the parties customers -[obviously incredibly sophisticated, see 7 above]

The Wall Street Journal's letter concluded with the following taunt which seems to show what was behind their use of the identical slogan:

"We think we've made our point. And to get a rise out of you is just a special bonus."

In this industry no one has the last word, so on Friday a Times spokesperson stated plainly:

"We don't think theft of intellectual property is a joke."

Of interest, a month ago, the Wall Street Journal ran another ad (seen here) which stated "Introducing Greater New York. Ahead of the times." Ahhh... competitors hiding behind the veil of trade mark generality!

The AmeriKat will keep her ears and whiskers apprised of any further developments in the newspaper battle heating up the already muggy New York summer (photo, right)!

ECJ dilution ruling splits well-informed blog readership

The IPKat's poll on L'Oréal v Bellure closed earlier this week. Its results, bearing in mind that voters were entitled to tick more than one box if they thought that more than one proposition most accurately reflected the true position, are as follows.

*36% of respondents -- that's 64 readers out of the 175 who cast their votes -- considered the ruling to be a "harsh restriction on the freedom of commercial speech;

* 30% (53 voters) felt that the decision was an "affirmation of the need for honesty in business practices;

* 25% (44 voters) considered the ECJ to have accorded "timely recognition of the importance of anti-dilution protection;

* 21% (37 voters) wrote the case off as "a policy ruling intended to protect the French perfume industry;

* 19% (33 voters) deemed the ruling "an inconvenience that competitors will soon work round".

The IPKat's not too sure what conclusions can safely be drawn from these figures, other than that the ruling has split opinion among the presumably well-informed readers of intellectual property weblogs authored by fictional cats. Merpel says the figures are both interesting and significant, but can't quite put her paws on the reason why. Can you help her?

On the same subject, last week the IPKat published a lively opinion piece by Swedish Advokat Mats Björkenfeldt (Hjalmar Petris Advokatbyrå HB) which suggested that the ruling of the Court of Justice of the European Communities in Case C-487/07 L'Oréal v Bellure might be contrary to Community law. Well, emboldened by his brush with media celebrity, Mats has come forward with another piece. He writes tells the IPKat, "Your poll on L'Oréal v Bellure gave me reason to think a bit, though the tropical heat in Stockholm". And this is what he thinks:

"Commercial Speech, ECHR and EU

Judge Tizzano, one of the judges in L'Oréal v Bellure, writes in Continuity and Change in EU Law, Essays in Honour of Sir Francis Jacobs, Oxford, 2008, p. 137, that the EU system of protection can be considered to be equivalent to that of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR). Article 10 in ECHR provides as follows:

“1. Everyone has the right to freedom of expression. This right shall include freedom to hold opinions and to receive and impart information and ideas without interference by public authority and regardless of frontiers. This Article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprises.

2. The exercise of these freedoms, since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, territorial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary.”

Until recently, cases concerning commercial speech had been found not to violate Article 10. But in Krone Verlag GMBH & Co v Austria (No 3), (2004) 39 EHRR 42, the European Court concluded that the Austria´s restrictions on comparative advertising did breach Article 10. In this case Krone Verlag complained that its right to freedom of expression under Article 10 had been infringed by the Austrian courts' injunction in so far as it prohibited the comparison of sales prices of the Neue Kronenzeitung and the Salzburger Nachrichten. The Austrain court had considered, like the Austrian Government, that the interference served a legitimate aim, namely “the protection of the reputation or rights of others” within the meaning of Article 10 § 2 ECHR.

The European Court gave these reasons:

“31. For the public, advertising is a means of discovering the characteristics of services and goods offered to them. Nevertheless, it may sometimes be restricted, especially to prevent unfair competition and untruthful or misleading advertising. In some contexts, even the publication of objective, truthful advertisements might be restricted in order to ensure respect for the rights of others or owing to the special circumstances of particular business activities and professions. Any such restrictions must, however, be closely scrutinised by the Court, which must weigh the requirements of those particular features against the advertising in question; to this end, the Court must look at the impugned penalty in the light of the case as a whole…

32. Turning to the circumstances of the present case, the Court considers that the domestic courts based their decision first and foremost on the assumption that the two newspapers were not of comparable quality and that a comparison of their prices would therefore be misleading On the other hand, the courts also stated that the two newspapers were competitors in the same market and for the same circle of readers. The Court finds these two statements rather inconsistent.

33. In looking closer at the impact of the impugned injunction on the applicant company, the Court observes that no penalty was imposed. However, the measure at issue has quite far-reaching consequences as regards future advertising involving price comparison: the applicant company will also need to provide information on how its reporting style differs on matters of foreign or domestic politics, economy, culture, science, health, environmental issues and law. The Court considers the injunction to be far too broad, impairing the very essence of price comparison. Moreover, its practical implementation – although not impossible – in general appears to be highly difficult for the applicant company. Furthermore, the applicant company risks the imposition of fines for non-compliance with the injunction.

34. The Court notes that, in the instant case, the domestic courts gave priority to the protection of the reputation of the other competitor and the rights of readers against misleading advertising. However, when balancing the conflicting interests involved and taking account of the impact of the injunction on the applicant company's possibilities in future for advertising involving price comparison, the Court considers that the Austrian courts overstepped their margin of appreciation in the present case, and that the measure at issue was disproportionate and therefore not “necessary in a democratic society” within the meaning of Article 10 § 2 of the Convention.”

The ECJ´s decision in L'Oréal v Bellure has quite far-reaching consequences as regards Bellure´s et al future advertising. As Guy Tritton put it: it is very difficult to describe smell without using references e.g. “it smells like Chanel No. 5.”

Against this you may wish to ask Judge Tizzano, and the chairman in the case, the Austrian Judge Jann, if the EU system of protection really can be considered to be equivalent to that of the ECHR.”

The IPKat thanks Mats for again giving us the benefit of his thought. He's particularly keen to hear from other readers too. Do they think Mats has a point, or is this merely wishful thinking?

Is the ruling in L'Oréal v Bellure against the law?

Swedish Advokat Mats Björkenfeldt (Hjalmar Petris Advokatbyrå HB) is one of the IPKat's favourite correspondents because he likes to use his brain in order to exercise the brains of others. He is very concerned about the recent ruling of the Court of Justice of the European Communities in Case C-487/07 L'Oréal v Bellure (discussed here by the IPKat and here, on the same blog, by another of the IPKat's favourite correspondents, Professor Dirk Visser). Writes Mats:

"I wonder if you can help me in this matter?

Concerning ECJ´s ruling in L'Oréal v Bellure I wonder if this decision is consistent with EC´s Directive 2005/29 on Unfair Commercial Practices (UCPD)?

In Wetherill and Bernitz, The Regulation of Unfair Commercial Practices under EC Directive 2005/29, New Rules and New Techniques, Hart, 2007, p. 42, you can read the following:

“The standard of assessment is touched upon in one of the Recitals (14), which declares that it is not the intention of the Directive to reduce consumer choice by prohibiting the promotion of products which look similar to other products unless this similarity confuses consumers as to the commercial origin of the product and is therefore misleading. This recital can be read as a pronouncement in favour of a rather restrictive view of the scope of protection offered… This would be more in line with the rather restrictive view on passing-off prevailing in English law than with the elaborate German case law”.

Professor Ulf Bernitz -- you may call him Mr IP in the north -- confirms in his chapter "Misleading Packaging, Copycats and Look-alikes: an Unfair Commercial Practices", in Ezrachi et al, Private Labels, Brands, and Competition Policy, Oxford 2009, p. 218:

“From a legal point of view, trade mark law constitutes the basis. However, trade mark protection is often not broad enough to catch the use of copycats and look-alikes. They often avoid being so confusingly similar that they would constitute trade mark infringement. In this regard, it is of fundamental importance to which extent there exist principles of unfair competition law suitable to the problems. On this point, the law is far from uniform. The possibility of taking successful legal action against the practice seems to be particularly restricted in the UK; English law on passing off tends to require proof of actual misleading. In other countries, e.g. Germany and the Nordic countries, unfair competition or marketing law offers wider possibilities for successful legal action in this kind of cases. However, the recent EC Directive 2005/29 on Unfair Commercial Practices has changes the basic legal perspective substantially”. And at p. 229: “This recital (14) can be read as a pronouncement in favour of a rather restrictive view on the scope of protection offered, indicating the priority of consumer perception and thus possibly reducing the application of the Directive to instances of clear deception of consumers looking for a particular brand or the like. This would be more in line with the rather restrictive view on passing-off prevailing in English law…”

The ECJ´s ruling in L'Oréal v Bellure is based, as I believe, on the notion of protection of investments, cf AG´s opinion in Case C-206/01 Arsenal v Reed. But is it consistent with the law?

I´m rather confused, and wonder if any IPKat friends, including Professor Visser, can bring order to all of this?"

Who would like to rise to this challenge, wonders the IPKat. Merpel reminds readers that there are still a couple of days in which to cast your vote on the poll (you can find it at the top of the side-bar) as to whether L'Oréal v Bellure is the best thing since sliced bread or an unmitigated evil, or something in between.

Intel v CPM: what the experts say ... so far

The European Court of Justice ruling last Thursday in Intel v CPM (noted here by the IPKat) has not just attracted a fully-fledged Rapid Response Seminar. It has also generated a batch of swift responses, some of which the Kat lists below.

Ben Evans (Lawdit): "It is therefore for the earlier trade mark to show that they have suffered economic loss, or a likelihood of the same. This is likely to be very difficult to show and it will be interesting to see how this decision is applied by the courts".

Andy Millmore (Harbottle & Lewis), whose quote was picked up by FT.com: "For the brand to be able to complain now there has to be a 'change in the economic behaviour of the average consumer of the goods or services for which the earlier mark was registered'. In other words, it is not enough that people may buy more of the second brand – they have to buy less of the first. The mere fact that it seems unfair or trading on an earlier brand's reputation seems not to be enough."

Lee Curtis (Out-law.com, Pinsent Masons): "It's unlikely that this ruling will provide a green light for traders to trade on the back of trade marks which are obviously very well known such as Coca-Cola. If someone used the Coca-Cola name for, say, roofing tiles, I'm certain that courts would find a way to stop them. The use would upset the drinks company's licensees, for instance – and that’s economic behaviour. If nothing else, judges would apply their common sense. Sometimes infringement will be blatantly obvious and they still have discretion to use that".

Sahira Khwaja (Lovells, quoted in Times Online): “In a case like Intel and Intelmark where the two companies operate in different sectors, it is going to be very difficult for the existing brand to prove it has lost out specifically because another company is using a similar brand”.

Joel Smith (Herbert Smith, quoted in Times Online): "“The big message is that superbrands are denied absolute protection and the ECJ has reined in their monopoly of famous names".

Paul McClenaghan (Stephenson Harwood, quoted in Times Online): "This ruling is likely to come as a blow to owners of well-known brands in Europe because the ECJ has refused to follow the American courts in giving brand owners a wide ability to protect against dilution. Instead the court has adopted a more pragmatic view where injury or likelihood of injury to the brand is required".

It's curious, the IPKat says, that some people consider this decision to be bad news for brands. Anyone might be forgiven for thinking that INTEL is a brand but INTELMARK is not.

"Rapid response" trade mark dilution seminar

On Thursday 27 November the Court of Justice of the European Communities is giving its keenly-awaited ruling in Case C-252/07 Intel Corp v CPM (UK) Ltd, the battle between the owner of the world-famous trade mark INTEL and the owner of INTELMARK for marketing and telemarketing services. This reference will provide answers to the questions posed of the ECJ by the Court of Appeal for England and Wales (see earlier IPKat posts here for the reference and here for the Advocate General's Opinion).

The Class 46 weblog team, together with Hardwicke Building, is running a Rapid Response Seminar, "Trade mark dilution: the ECJ ruling in Intel v CPM", chaired by IPKat team member Jeremy. The event will be held on Tuesday 2 December 2008, 11am to 3pm (with registration from 10.30am), which is just five days after the ruling is published, in Central London. The registration fee is only £50, inclusive of VAT, and the event carries 3 CPD points. If you'd like full details, or plan to attend, you can download further information plus the application form here.