“The extent of Jack Daniel’s remains to be seen, especially since a defendant continues to have the ability to assert a parody defense.”
This year was an eventful one for trademark law—from reiterating the importance of “association” under the Lanham Act, to dispelling the notion that foreign conduct can create liability, to re-working the protection of expressive works after Jack Daniel’s. Below outlines a few of the important trademark decisions from 2024 and cases we are watching in 2025.
Nominative Fair Use Defense Fails Where Party Does Not Actively Dispel Association
The Southern District of Florida drew guidance from the Ninth Circuit when it found a band using the name “Earth, Wind & Fire” did not meet the standard for a nominative fair use defense in the face of trademark infringement claims brought by the owner of the EARTH, WIND & FIRE trademarks. See Earth, Wind & Fire IP, LLC v. Substantial Music Grp., No. 23- 20884-CIV, 2024 WL 1025265 (S.D. Fla. Mar. 4, 2024). A former Earth, Wind & Fire guitarist (whose time spent with the band is in dispute) joined another band that operated under the names “Earth Wind & Fire Legacy Reunion,” “The Legacy Reunion of Earth, Wind & Fire,” and “Legacy Reunion of Earth Wind & Fire Alumni” and used a similar Phoenix logo as the original band’s logo. In considering the nominative fair use defense in dueling summary judgment motions, the district court used the Ninth Circuit’s New Kids on the Block test, which finds nominative fair use if (1) the product or service in question is not readily identifiable without use of the trademark; (2) only so much of the mark is used as is reasonably necessary to identify the product or service; and (3) the user does nothing that would suggest sponsorship or endorsement by the trademark holder. See New Kids on the Block v. News Am. Publ’g, Inc., 971 F.2d 302, 308 (9th Cir. 1992).
The defendants did not meet the third prong of the test because their advertising did not include a distinct disclaimer or limiting language about who the actual performers were in the “Legacy Reunion of Earth Wind & Fire Alumni” band. Instead, Defendants’ advertising highlighted Earth, Wind & Fire’s legacy, with the website discussing the original band’s accolades as well as descriptions about the band’s original members. Under these circumstances, the district court found that “the advertisement and marketing were still deceptive and misleading as to whether the main (or most prominently known) members of the band would be performing. The use of the word ‘alumni’ is not enough to dispel the notion that Defendants’ band is not sponsored [by Plaintiff]”, noting that the “advertisements are overstating the originality of the group.” Earth, Wind & Fire IP, LLC, 2024 WL 1025265 at *4.
The Takeaway: There is often a fine line between infringement and fair use. New Kids on the Block remains the operable test – the junior user is not immune from an infringement claim if it uses the senior user’s trademark more than is necessary.
Pennsylvania Jury Confirms ‘Association’ Is Covered Protection Under Lanham Act
A Pennsylvania jury found that Defendant Vintage Brands, LLC infringed Plaintiff The Pennsylvania State University (“Penn State”) trademarks by selling unlicensed goods with designs associated with, but not owned by, Penn State. Vintage Brands, an online retailer, makes its business selling “vintage” merchandise by using old designs and designs it claims are in the public domain and not subject to trademark rights owned by any colleges or sports teams. In the case at issue, Vintage dedicated a page on its website showcasing merchandise using designs that were similar to Penn State’s registered design marks as well as using the PENN STATE and PENNSYLVANIA STATE UNIVERSITY marks. Vintage argued: (1) its use of “PENN STATE” and “PENNSYLVANIA STATE UNIVERSITY” is merely ornamental and does not serve a source identifying function; and (2) fans purchased its goods because they were proclaiming their affection for the school, not because they believed Penn State was the source of the goods.
In denying Penn State’s earlier motion for summary judgment, Judge Matthew Brann stated that the case turned on whether “[u]nder the Lanham Act, does a symbol identify the source of the goods if it merely creates an association between it and the trademark holder?” As applied to the case at hand, the jury was tasked with deciding whether the designs used by Vintage, even if not registered trademarks owned by Penn State, so closely resembled Penn State’s designs and created such an association with Penn State that Vintage’s sale of goods bearing the marks constituted trademark infringement. In the end, the jury found that it did.
The Takeaway: Even if a design is no longer registered to or used by the original trademark owner, an infringement claim may lie if consumers continue to associate that design with the original trademark owner.
The Lanham Act Does Not Extend Extraterritorially Without Sufficient Domestic Anchor
On remand from the Supreme Court, the Tenth Circuit determined a previously licensed distributor using its former licensor’s marks abroad lacked a “domestic anchor” to be held liable under the Lanham Act for overseas infringing activities, bringing to a conclusion a decades-long trademark dispute. See Hetronic Int’l, Inc. v. Hetronic Germany GmbH, 99 F.4th 1150 (10th Cir. 2024). In 2014, Hetronic Int’l, Inc. sued, among other defendants, Abitron Austria GmbH, for trademark infringement and unfair competition based on Abitron’s use of Hetronic’s marks on products sold both in and outside of the United States. A jury had awarded Hetronic $90 million in damages and the district court entered a worldwide injunction restraining Abitron from using Hetronic’s marks. See Hetronic Int’l, Inc. v. Hetronic Germany GmbH, et. al., Case No. CIV-14-650-F, 2020 WL 1941309 (W.D. Okla. Apr. 22, 2020). Abitron appealed, arguing that the Lanham Act did not extend to sales made outside of the United States. Id., 10 F.4th 1016 (10th Cir. 2021). The case eventually made its way up to the Supreme Court which applied the “presumption against extraterritoriality framework” and found that the Lanham Act does not have the express intent to apply extraterritorially. Id., 600 U.S. 412 (2023). SCOTUS remanded the case back to the Tenth Circuit to evaluate if Abitron had the requisite domestic conduct to which liability through the Lanham Act would apply. Id.
As directed, the Tenth Circuit determined that “[b]ecause the [Supreme] Court now requires infringing conduct in domestic commerce to anchor any Lanham Act claim, none of Abitron’s purely foreign conduct—that is, foreign sales to foreign customers—can premise liability for Hetronic’s Lanham Act claims.” Hetronic Int’l, Inc., 99 F.4th at 1167. Guided by the Supreme Court’s interpretation, none of Abitron’s foreign sales—over €1.5 million—that ended up in the United States could be used to determine liability under the Lanham Act because what matters is the location of the conduct, not the ultimate destination of the infringing goods. As such, the Tenth Circuit was unpersuaded by Hetronic’s argument that downstream sales into the United States triggered liability under the Lanham Act, stating that only “activities that Abitron engaged in through its U.S. distributor to sell, market, advertise, or distribute infringing goods to U.S. consumers [] violate the Lanham Act.” Id. at 1171.
In the end, the Tenth Circuit concluded that any permanent injunction against Abitron could not exceed its “qualifying domestic conduct” and remanded to the Western District Court of Oklahoma to properly measure Hetronic’s damages in view of Abitron’s domestic conduct only. Id.
The Takeaway: Confirmation that the Lanham Act is territorial and foreign sales are likely unrecoverable in a U.S. litigation.
Ninth Circuit Urges Protection of Artistic Expression Absent Application of Rogers
One of the biggest trademark cases in 2023 was Jack Daniel’s Properties v. VIP Products LLC, 599 U.S. 140 (2023), where the U.S. Supreme Court held that Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989)’s test for assessing trademark infringement involving expressive works does not apply where the senior user’s mark is used to identify an actual product and not just used in connection with expressive work. Many district and appellate courts applied the Jack Daniel’s ruling in 2024.
For example, the Ninth Circuit reconsidered its decision in Punchbowl, Inc. v. AJ Press, LLC, 90 F.4th 1022 (9th Cir. 2024), which had previously applied the Rogers v. Grimaldi test. In 2021, Punchbowl, Inc., an online invitation and greeting card technology company, asserted a trademark infringement claim against AJ Press, LLC, which operates a publication called “Punchbowl News,” providing newsletters, podcasts, and videos in the fields of government and current events. The district court applied the Rogers test and granted AJ Press’s motion for summary judgment, concluding the name “PUNCHBOWL” constituted protected expression and was not explicitly misleading as to its source. See Punchbowl, Inc. v. AJ Press LLC, 549 F. Supp. 3d 1061 (C.D. Cal. 2021). In November 2022, the Ninth Circuit affirmed. Id., 52 F.4th 1091 (9th Cir. 2022), opinion withdrawn, 78 F.4th 1158 (9th Cir. 2023).
After Jack Daniel’s, the Ninth Circuit reconsidered its earlier decision and reversed and remanded, holding that Rogers did not apply because AJ Press used the PUNCHBOWL mark to designate the source of its own goods. Punchbowl, Inc., 90 F.4th at 1031. In remanding to the district court to review the claims using the likelihood of confusion analysis, the Ninth Circuit strongly suggested that the district court come to the same conclusion of no infringement, noting that “the expressive nature of AJ Press’s use of the Punchbowl Mark and the fact that ‘punchbowl’ is a common word will certainly be relevant in the likelihood-of-confusion analysis. . . . When companies operating in different spaces use the same common words as trademarks with different expressive connotations, it reduces the likelihood of confusion.” Id. at 1032 (citations omitted).
The Takeaway: The extent of Jack Daniel’s remains to be seen, especially since a defendant continues to have the ability to assert a parody defense.
What to Watch:
- Dewberry Group v. Dewberry Engineers: On December 11, 2024, the Supreme Court heard argument concerning the use of the “Dewberry” name. Dewberry Engineers began as a civil engineering and survey firm but later expanded to render real estate development services on a national basis. Dewberry Group offers real estate development services in Georgia through affiliates owned by John Dewberry. The parties sought judicial intervention in 2006 and then resolved the dispute in 2007. In 2020, the détente ended, and Dewberry Engineers sued for breach of contract and trademark infringement. The district court found in favor of Dewberry Engineers and ordered a disgorgement of profits of Dewberry Group and its affiliates under common ownership. The court considered Dewberry Group and its affiliates a unified corporate entity for calculating profits derived from the use of the infringing mark. The Fourth Circuit upheld the decision. The Supreme Court granted cert on whether an award of the “defendant’s profits” under the Lanham Act can include an order for the defendant to disgorge the distinct profits of legally separate non-party corporate affiliates. During oral argument, the Justices’ questioning focused on whether the $43 million profits award affirmed by the Fourth Circuit was authorized under the just sum provision of 15 U.S.C. § 1117(a) given the circuit court’s scant consideration of equitable considerations and the unique facts of the case. This case is one to watch because of the potential implications – a decision as to whether an affiliate’s profits can be included in a damages award may have an impact beyond trademark disputes.
- Hermès Int’l et al. v. Rothschild Appeal: The Second Circuit is poised to decide the Hermès Int’l et al. v. Rothschild appeal, Case No. 23-1081, where a jury found defendant Rothschild liable for trademark infringement for selling “Metabirkins” NFTs using Hermès’ trademarks and trade dress. During oral arguments in October of this year, the Second Circuit weighed Rothschild’s apparent intent to mislead consumers (as opposed to creating the NFTs for purely artistic reasons) against whether affirming a verdict for Hermès had the ability to chill future artistic expression.
