INTABulletinThe Voice of the International Trademark Association

AssociationNews AssociationNews

January 15, 2013 Vol. 68 No. 2

In This Issue

AssociationNewsWelcome New Members 2In Memoriam: Maria Bachman 5Volunteer Spotlight Patsy Lau 6 Raffi V. Zerounian 6Committee Spotlight: Saul Lefkowitz Moot Court Committee 7 Roundtables 8In-House Idea Exchange: Corporate Legal,

Marketing and Communications 9

FeaturesAvoiding an “Accidental” Franchise in

U.S. Trademark Licensing 12

Trademarks and the Trans-Pacific Partnership

Law&Practice Saudi Arabia 15United States 15

AssociationNews2012 Leadership Academy Helps Build ConfidencePage 4

Continued on page 5

Already v. Nike “Air Force 1” Dispute GroundedLast November, the INTA Bulletin reported that INTA had filed an amicus brief in the U.S. Supreme Court in support of trademark owners’ right to obtain dismissal of coun-terclaims for trademark cancellation if they had permanently withdrawn their claims for infringement. In its amicus brief, INTA urged the Supreme Court to affirm the judgment of the Court of Appeals for the Second Circuit recognizing this right in Already, LLC dba Yums v. Nike, Inc. On January 9, 2013, the Supreme Court issued a unanimous ruling in which it held, consistent with INTA’s position, that Already’s counterclaims for cancellation were moot because Nike had rendered Already a broad unconditional and irrevocable covenant not to sue. Case No. 11-982.

The appeal arose out of a suit Nike filed in federal court in New York against Already, LLC (“Already”), which does business under the trade name Yums, for infringement of Nike’s federally registered trade dress for its Air Force 1 shoe. Already responded with counterclaims asking the court to declare that Already did not infringe and that the

Nike trade dress was invalid, and for cancel-lation of Nike’s registration.

Nike stated that it later determined from discovery that Already’s conduct was not harmful enough to warrant further litigation. Thus, to put an end to the litigation, Nike dismissed its claims and provided Already with a broad covenant not to sue. In the covenant, Nike promised that it would not file any claim for infringement, dilution or unfair competition “based on the appearance of any of Already’s current and/or previous footwear product designs, and any colorable imitations thereof, regardless of whether that footwear [was] produced, distributed, of-fered for sale, advertised, sold, or otherwise used in commerce before or after the Effec-

Representatives from the eleven countries negotiating the Trans-Pacific Partnership (TPP) Agreement met in Auckland, New Zealand, in early December 2012 to continue formal talks on a new free trade agreement for the Asia-Pacific region that commenced in March 2010.

INTA, with approximately 2,500 member organi-zations based in the TPP negotiating countries, was represented by Barbara Sullivan (Henry Hughes Patent & Trademark Attorneys, New Zealand). Ms. Sullivan made a key presentation during the stakeholder session to emphasize the importance of including in the TPP Agree-ment provisions that adequately provide for the registration and protection of trademarks.

What Is the TPP?The current TPP negoatiating countries are Australia, Brunei Darussalam, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singa-pore, the United States and Vietnam. Each participant is linked to one or more of the other participants by various bilateral and multilateral trade agreements, in what has been termed a “spaghetti bowl” of arrangements. The par-ticipants are committed to “a comprehensive, next-generation regional arrangement that liber-alizes and promotes trade and investment, and addresses new and traditional trade issues and 21st century challenges.” (Trans-Pacific Partner-ship Leaders’ Statement, Sept. 9, 2012.)

A draft agreement has yet to be published, since the negotiations—as with most trade negotiations—are confidential. Because they involve a wide range of complex and sensitive issues, negotiators believe that to release a proposal or negotiating text would be to provide a “snapshot” or “slice” of negotiations at a par-ticular time and would not necessarily indicate acceptance of a particular proposal.

Stakeholders (businesses, NGOs, academics and members of the public) have been con-sulted on a range of issues. At the stakeholder

Continued on page 3

Nike Trademark Reg.No. 3,451,905

Already’s YUMS “Sugar”Model Shoe

January 15, 2013 Vol. 68 No. 22

AssociationNewsWelcome New Members

INTA Bulletin CommitteeTo contact a member of the INTA Bul-letin Committee, send an email to the managing editor at bulletin@inta.org.

ChairWalter Palmer, Pinheiro Palmer AdvogadosVice ChairBarbara Sullivan, Henry Hughes

Association NewsRosemary Brkopac, BrandProtectFrank Hiscox, Lewis and Roca LLPFeaturesJan Gerd Mietzel, Pellon & Associados Europe LLPLiisa Thomas, Winston & Strawn LLP

Law & Practice: Asia–PacificJohn Hackett, A J ParkLaw & Practice: EuropeJaap Bremer, BarentsKrans N.V.Peter McAleese, Barzano & ZanardoLaw & Practice: Latin America & CaribbeanJamal Smith, Thornton SmithLaw & Practice: Middle East & AfricaCharles Shaban, Abu-Ghazaleh Intel-lectual PropertyLaw & Practice: United States & CanadaLisa Iverson, Neal & McDevitt, LLC

INTA Bulletin StaffExecutive DirectorAlan C. DrewsenDirector, Publishing & Online ResourcesJames F. BushAssociate Editor, INTA BulletinJoel L. BrombergManager, Marketing and Brand StrategyDevin Matthew ToporekDesignerEric Mehlenbeck

INTA Officers & CounselPresidentToe Su Aung, BATMark Ltd.President ElectBret Parker, Elizabeth Arden, Inc.Vice PresidentMei-lan Stark, Fox Entertainment GroupVice PresidentGabrielle Olsson Skalin, InterIKEA Holding Services S.A.TreasurerJ. Scott Evans, Yahoo! Inc.SecretaryRussell Pangborn, Microsoft Corp.CounselMichael Metteauer, Fulbright & Jaworski LLP

Although every effort has been made to verify the accuracy of items in this newsletter, readers are urged to check independently on matters of specific interest. The INTA Bulletin relies on members of the INTA Bulletin Committee and INTA staff for content but also accepts submissions from others. The INTA Bulletin Editorial Board reserves the right to make, in its sole discretion, editorial changes to any item offered to it for publication. For permission to reproduce INTA Bulletin articles, send a brief message with the article’s name, volume and issue number, proposed use and estimated number of copies or viewers to bulletin@inta.org. INTA Bulletin sponsorships in no way connote INTA’s endorsement of the products, services or messages depicted therein.© 2013 International Trademark Association

ABBYY USA Software House, Inc.,

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ACTIP IP Limited, Phnom Penh, Cambodia

ADminister, Puteaux, France

Al Soaib Law firm, Riyadh, Saudi Arabia

Arent Fox LLP, Los Angeles, California, USA

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CASAS ASIN, Sevilla, Spain

Cedar White Bradley Consulting, Washington, DC, USA

Cedar White Bradley Consulting Limited Liability,

Cairo, Egypt

Columbia Law Library, New York, New York, USA

E. M. Hwang & Partners, Seoul, South Korea

George Washington University Law Library,

Washington, DC, USA

Georgetown University Law Library, Washington, DC, USA

Global Intellectual Property Asset Management, PLLC,

Knoxville, Tennessee, USA

Hollander and Company LLC, New York, New York, USA

Inaga Asesores & Consultores, Caracas, Venezuela

Jacobacci & Partners S.p.A., Torino, Italy

Karanovic I Nikolic d.o.o., Zagreb, Croatia

LJ Vernus Pte. Ltd., Aljunied, Singapore

LOYER & ABELLO, Paris, France

Mincov Law Corporation, Vancouver, BC, Canada

Mok Poon IP & Law Firm, Beijing, China

Montague Law PLLC, Lexington, Kentucky, USA

NJQ & Associates, Djibouti, Djibouti

Noel Law, Providence, Rhode Island, USA

O’Conor Power & Co., Buenos Aires, Argentina

PatentKEY Prior Art, Lorton, Virginia, USA

Patton Hoyt LLP, Dallas, Texas, USA

Pietragallo Gordon Alfano Bosick & Raspanti, LLP,

Pittsburgh, Pennsylvania, USA

Reza Badamchi & Associates, Tehran, Iran

Shenzhen Zhongyi Patent & Trademark Office,

Shenzhen, China

Timberlake Law, Carrboro, North Carolina, USA

Valideus Ltd, London, UK

Learn more at www.inta.org/MentorProgram

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3

AssociationNewsAlready v. Nike “Air Force 1” Dispute Grounded Continued from page 1tive Date” of the covenant. The covenant also covered Already’s distributors and customers.

In light of the covenant, the court dismissed Nike’s infringement claims against Already. Thereafter, Nike sought dismissal of Already’s counterclaims for cancellation. Already re-sisted, arguing that it had the right to continue to seek cancellation of Nike’s trademark regis-tration notwithstanding the dismissal of Nike’s infringement claims.

The district court granted Nike’s motion to dismiss. It held that Nike’s broad covenant not to sue removed any “case or controversy” between the parties, such that the court no longer had subject matter jurisdiction over the matter. The court noted that if Already wanted to pursue cancellation of Nike’s registration, it could still do so in the Patent & Trademark Office. The Second Circuit upheld the dismissal on appeal.

On further appeal, the Supreme Court held that, in order to obtain dismissal of

Already’s counterclaims, Nike had to meet the formidable burden under the doctrine of voluntary cessation. This doctrine required Nike to show that it “could not reasonably be expected” to resume its enforcement efforts against Already. The Supreme Court agreed with the position stated in INTA’s amicus brief that the breadth and scope of Nike’s unconditional and irrevocable covenant not to sue, which extended to the Air Force 1 trademark at issue and any “colorable imitations thereof,” satisfied the voluntary cessation doctrine and rendered Already’s counterclaims moot.

One cautionary note was sounded in a con-curring opinion by Justice Kennedy, joined by three other Justices. Trademark owners were warned that covenants not to sue should not routinely be used in an effort to moot litigation that a rights holder initiated. Not only might such covenants undermine the trademark at issue, but furthermore, the potential harm to a competitor caused by such litigation might make it difficult for

the trademark owner to meet the formidable showing required under the voluntary cessa-tion doctrine. Nevertheless, Justice Kennedy recognized, the covenant in this case was sufficiently broad, and any potential harm to Already sufficiently speculative, that it did meet the requirements of the voluntary ces-sation doctrine. ■INTA thanks David H. Bernstein (Debevoise & Plimpton LLP), Marc Lieberstein (Kilpat-rick Townsend LLP), Claudia Ray (Kirkland & Ellis LLP) and Vijay K. Toke (Hiaring + Smith LLP), along with all the members of the U.S. Subcommittee of the International Amicus Committee, for drafting INTA’s amicus brief (available at www.inta.org).

For a detailed analysis of covenants not to sue (published in The Trademark Reporter be-fore the Supreme Court’s decision), see Tal S. Benschar, David Kalow & Milton Springut, Covenant Not to Sue: A Super Sack or Just A Wet Paper Bag?, 102 TMR 1213 (2012).

Visit www.inta.org/e-learning

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Archived webcasts now available!

U.S. Trademark BasicsTips for Mastering the Art of Effective PresentationEthics for the Trademark Practitioner A Global PerspectiveOverview of New gTLDs: The Application PeriodTrademark Rights and the Launch of the .XXX Top Level DomainOverview of New gTLDs: The Objection PeriodCan They Be Stopped? Parallel Imports and Gray Market Goods Under U.S. LawAdvocate Effectively: Understanding INTA’s StructureHow to Prepare for Mediation

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January 15, 2013 Vol. 68 No. 24

AssociationNews

“Reaching out to help one another is our very basic goal. Leadership means getting along with people and building confidence in each other,” says Susan Brady Blasco (Birch, Stewart, Kolasch & Birch LLP, USA), Chair of INTA’s Leadership Development Committee. During the 2012 Leadership Meeting, INTA committee volunteers learned skills to help achieve that goal at the Leadership Academy.

The Leadership Academy, planned and implemented by Mike Maoz (General Electric Company, USA) and team, sparked the interest of more than 250 attendees and received rave reviews from those in atten-dance. Committee Vice Chair Rudy Gaines (Marksmen, USA) kicked off the Academy with

a game show to test committee members’ knowledge of INTA. All attendees were partici-pants in the game show and were grouped in teams with others sitting at their table. Pooling their collective knowledge, members of each team worked together to produce a group answer to the sometimes not so easy questions relating to INTA. The winning teams were awarded INTA souvenirs, but all partici-pants were winners in having the opportunity to meet new people and share experiences. The game show segued into a keynote presen-tation led by Robert Scott, Director of the Center for Engineering Diversity & Outreach at the University of Michigan College of Engineering and retired Vice President of Information Tech-

nology & Global Business Services at Procter & Gamble. The presentation, entitled “Working Globally: Enhancing Remote Team Effective-ness,” included role play of an INTA committee conference call (which evoked much laughter as all recognized typical stereotype situations we all encounter in such calls), small group discus-sions, audience participation, and a lecture. Through his collaborative and engaging lecture, Mr. Scott provided attendees with practical tools for becoming successful leaders on intercultural global teams.

Mr. Scott called on his corporate experiences to teach audience members how to work through the cultural barriers that we face in today’s corporate culture. Attendees walked away from the Leadership Academy with real-world skills that can be applied anywhere from INTA committee work to daily business operations.

The Leadership Academy is open to everyone who attends the Leadership Meeting. The Leadership Development Committee encour-ages all to attend to share in the networking, confidence building and just plain fun. We hope to see you in Miami!

Kay RickelmanSpoor & Fisher, Pretoria, South AfricaMari-Elise TaubeStites & Harbison, PLLC, Alexandria, Virginia, USA

Both are members of the Leadership Development Committee.

2012 Leadership Academy Helps Build Confidence

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AssociationNewsTrans-Pacific Partnership Continued from page 1

In Memoriam: Maria BachmanOn December 25, 2012, INTA lost a dear friend and colleague, Maria Bachman. Maria had been INTA’s Director of Human Resources and Association Governance since 2001. During her 11 years of service to INTA, Maria was

responsible for administering the organiza-tion’s human resources program, corporate governance policies, Board of Directors

operations and Board committees, and volunteer recognition programs. She was a close friend and confidante to many Associa-tion staff members and others.

“As good as Maria was in her job—and she was the most accomplished association professional I have worked with—it was her kindnesses to so many people for which she will be most remembered,” said INTA Executive Director Alan Drewsen. “Most moving to me was a young woman named Nereida Nance, who came to INTA as a high school intern a

number of years ago. After her internship with us, Nereida graduated from high school, continued her education and graduated from St. Bonaventure College and now has an excel-lent job with an adoption agency in Manhattan. Maria supported her each step of the way. Nereida took three subway trains and a bus to the funeral home in Queens to express her condolences to Maria’s family.”

Donations in Maria’s memory may be made to Memorial Sloan Kettering Cancer Center at www.mskcc.org/giving.

session held during the latest round of nego-tiations, stakeholders made presentations to the negotiators on a range of topics—including the chapters on Intellectual Property, Labor, Environment, Market Access and Investment.

The next round of negotiations will take place in Singapore March 4–13, 2013. A number of TPP leaders have said that they would like a deal to be concluded in 2013.

How Will the TPP Affect Trademarks?The Intellectual Property chapter covers copyright, patents, trademarks, traditional knowledge and geographical indications (GIs). Much to the consternation of the negotiators, this chapter was “leaked” in 2011, generating a great deal of discussion (and controversy) about possible copyright and patent law provisions. The most progress has been made on the trademark section—perhaps because trademark laws in most participating countries are harmonized to some extent. Some trade-mark issues remain to be resolved, however, including the interrelationship between trade-marks and GIs.

INTA’s Role in TPP NegotiationsINTA has a longstanding record of advising gov-ernments and trade negotiators on trademark matters. The Association developed a Model Free Trade Agreement (which was revised and expanded in 2011) to provide guidance for incorporating desirable trademark provisions in free trade agreements. From the beginning of the TPP negotiations, INTA has been urg-ing parties to refer to the Model Agreement.

See www.inta.org/advocacy/pages/Model-LawsandGuidelines.aspx.

In her December presentation, Ms. Sullivan reemphasized INTA’s position that the TPP Agreement should build on the World Trade Organization’s (WTO’s) Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) and subsequent free trade agree-ments. She also expressed INTA’s recom-mendations that the TPP provide flexibility for future issues that may arise and include mechanisms to expand cooperation and com-munication among stakeholders.

Three key trademark issues were addressed in the INTA presentation:

Trademark Registration and MaintenanceTPP participants should join the Singapore Treaty on the Law of Trademarks and the Madrid Protocol. The TPP Agreement should extract and emphasize the key components of these treaties, namely:• Setting the parameters for trademark

applications and encouraging electronic automation;

• Standardizing registration and renewal terms at ten years each;

• Eliminating mandatory license recordal;• Providing for registration of nontraditional

marks and retail service marks; and• Eliminating the need for notarization/legal-

ization of documents, except in connection with the surrender of a registration.

EnforcementThe TPP Agreement should address specific areas of enfrocement, such as:

• Providing statutory protection for well-known marks and dilution protection for famous marks;

• Enhancing protection against counterfeit-ing (tougher penalties; simplified damages calculation; landlord liability; online sales);

• Providing for seizure of goods in transit; and• Offering trademark owners greater access to

information about counterfeiters that is held by customs and other agencies.

Geographical IndicationsProvisions dealing with the relationship be-tween trademarks and GIs should be included in the TPP Agreement, particularly:• The priority principle (first in time, first in

right) should apply to conflicts between GIs and trademarks;

• The TPP provisions should apply to “applied-for” GIs as well;

• Any GI registration system should include opposition and cancellation procedures and be consistent with TRIPS and WTO dispute resolution decisions;

• Uses of common and generic terms should be regulated on a territorial basis (because a term may be generic in one country but not in another); and

• Voluntary international standards (such as the Codex Alimentarius) should not be used to establish norms for intellectual property and should not have an impact on territorial genericness.

If you have questions about INTA’s position on the trademark-related provisions of the TPP or would like to get involved, contact INTA Exter-nal Relations Manager Laura Cruz at lcruz@inta.org. ■

January 15, 2013 Vol. 68 No. 26

VolunteerSpotlight

Patsy Lau grew up in laid-back Hawaii, a little girl wearing flip-flops and muumuus. Following a path of hard work and tenacity, she now has an international IP practice as a partner at Deacons, Hong Kong’s oldest and largest independent law firm.

Patsy’s work runs the gamut, from advising on contentious to resolving noncontentious trademark matters; from strategizing for international and regional trademark portfolios to creating local script trademarks; from serving on the Hong Kong Institute of Trade Mark Practitioners in order to further statutory and procedural changes in IP law to teaching part-time at the local university.

“I live and work in a buzzing international city, and I frequently travel internationally and work with international businesses,” says Patsy, who speaks Cantonese and English. “But the friendly and down-to-earth spirit from my child-hood on the islands keeps me grounded.”

As an experienced IP lawyer, Patsy under-stands the importance of protecting all trademarks, not only in their home jurisdiction but also internationally. As a member of INTA’s Famous and Well-Known Marks Committee, she sees just how crucial cross-border protection is in today’s global and Web-based environment, particularly for the marketplace’s more dominant names.

“Similar to all brands, famous brands need to be afforded fair and predictable legal protection across country borders to ensure the continuing growth of the global economy,” Patsy says.

A frequent roundtable host speaker and panel member, Patsy applauds and supports INTA’s increasingly global focus and has witnessed the benefits firsthand. Together with Seth Hays (INTA External Relations Manager for

Asia), Peter Dernback (Taiwan) and Rahajeng Handayani (Indonesia), she gave a presenta-tion on recommended examination guidelines to the Indonesian Intellectual Property Depart-ment in Jakarta in March 2012. She reported that “the feedback was very positive, and I believe the event was productive and effec-tive. It can serve as a model for other such collaborations in the future.”

Lau’s favorite trademarks include KODAK—her parents owned a camera shop when she was young—and IKEA, which she calls punchy and simple. “Also, the Chinese equivalent is very intelligently created. It has a similar pronun-ciation and a favorable suggestive meaning: ‘comfy’ or ‘ideal’ home.”

When not working, Patsy spends time with her husband chasing after their active toddler, whose favorite pastimes are poking at lizards and ants, as well as feeding birds and stray animals!

Raffi V. Zerounian—if he had a job in real estate—would say the three most important factors in his business were location, location, location. But given that he is an attorney with an IP and commercial law practice, one could make a strong case that the most important factors are litigation, litigation, litigation.

Raffi’s bailiwick, as a partner in the Beverly Hills, California, USA office of the Taillieu Law Firm, is trademark enforcement and litigation in federal court and before the Trademark Trial and Appeal Board. Hardly a one-trick pony, Raffi also works on a broad variety of copyright and commercial litigation matters “to keep my litigation skills strong.” In addition, he has

an active domestic and international prosecu-tion and counseling practice. His trademark practice includes representing clients ranging from startups to those with famous marks; in particular, he has significant experience representing wineries.

Raffi says the power of trademarks and trade dress, especially those readily recognizable from a distance, always has fascinated him. “For example, my daughter was able to point out a Starbucks before she learned to read, simply by recognizing her favorite dessert maker’s logo and green color scheme while sitting in her child car seat.”

Aside from his personal interest in trademarks, Raffi credits INTA as a significant contributor to the breadth and depth of his practice. “The educational and volunteer opportunities offered by INTA are great, but the ability to establish relationships with wonderful people around the world has been particularly invaluable,” Raffi says. “Each time I get back to the ‘real world’ following an Annual Meeting or Leadership Meeting, I feel reconnected with the worldwide trademark bar.” In particular, he lauds the

organization’s new “Unreal” campaign, which is designed to educate teenagers about the harms associated with counterfeit products.

Raffi, an editor for the Berkeley Technology Law Journal in law school, is serving his third term on INTA’s The Trademark Reporter Committee and editorial board, and his first term as senior editor. “The challenges and responsibilities of the editorial process are especially worthwhile because The Trademark Reporter is a wonderful resource for trademark practitioners,” he says.

While the bulk of the California native’s time is spent working or with his wife and two young daughters, occasionally Raffi still is able to pursue his longtime aquatic avocation: hitting the waves on his surfboard. “We moved back to Los Angeles after almost ten years in and around San Francisco,” he says, “and I now live less than ten minutes from the break that I grew up surfing.”

Barbara Barron KellyCorsearch – Wolters Kluwer Corporate Legal Services, New York, New York, USA

INTA Bulletin Association News Subcommittee

Barbara Barron KellyCorsearch – Wolters Kluwer Corporate Legal Services, New York, New York, USA

INTA Bulletin Association News Subcommittee

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AssociationNewsExploring the limits of parody and bad taste; bringing alive a racecar driver’s icon; arguing trademark infringement and free speech. These are just a few of the issues that have been explored over the past 21 years during INTA’s annual Saul Lefkowitz Moot Court Competition, the only moot court competition exclusively devoted to trademark law and related rights.

In the competition, law students from across the United States both submit written appellate briefs and argue a case on appeal from the fictitious district court of Utopia to the Twelfth Circuit Court of Appeals. A gallery on the INTA website records the graphic history of trademark disputes in Utopia (www.inta.org/Academics/Pages/SaulLefkowitzExhibits.aspx).

Regional oral arguments are held each year in February in New York, San Francisco, Chicago and Atlanta. The two winning teams from each region advance to the National Finals, held each year in March at the Court of Appeals for the Federal Circuit in Washington, D.C., and often argued before the judges of the U.S.

Patent and Trademark Office’s Trademark Trial and Appeal Board (TTAB). Such a panel of arbiters is particularly appropriate since the competition is named after the late Saul Lefkowitz, former Chief Judge of the TTAB.

Behind each year’s moot court problem is an entire committee’s collaboration and hard work—and a lot of fun and great interaction. Volunteers say serving on the Lefkowitz Committee is exceptionally rewarding—from creating each year’s problem, to running the actual competition, to watching the students successfully compete. Because of the type of work the Committee does and the ability to be on the Committee for multiple terms, many members have formed lasting friendships while simultaneously immersing themselves in cutting-edge legal issues.

The Committee is divided into two subcommit-tees. The Problem and Bench Memo Subcom-mittee creates the problem and drafts a comprehensive Bench Memorandum (typically around 80 pages), which is provided to the competition’s judges.

The Competition Coordinating Subcommittee works behind the scenes to ensure that the regional and national oral arguments are well organized and fully operational. This is no easy task, as it involves nearly 80 competing teams and over 200 trademark attorneys, members of the USPTO, and federal and state court judges, who volunteer to be brief-reading and oral argument judges, bailiffs and other staff; secure courthouses; and attend to many details to ensure a successful, fair competition.

This year, the Saul Lefkowitz Moot Court Competition Committee is led by National Chair Katy Basile, partner at Novak Druce + Quigg LLP in Silicon Valley, and Vice Chair Jeff Kobulnick, partner at Ezra Brutzkus Gubner LLP in Los Angeles.

Committee Spotlight: Saul Lefkowitz Moot Court Committee

Jennifer K. ZieglerHarley-Davidson Michigan, LLC, Ann Arbor, Michigan, USA

INTA Bulletin Association News Subcommittee

These members-only INTA resources provide practical information on trademark opposition and cancellation in jurisdictions worldwide.

International Opposition Guide: Comparative Practice and ProceduresSearchable database of country profiles on the structure of trademark opposition practice and procedure, including general provisions, applicable grounds, alternatives to opposition, opponent issues, filing requirements, and post-filing stages and procedures.

Visit www.inta.org/oppositions

Trademark Cancellations: International Practice and ProceduresSearchable database of country profiles on practical information on trademark cancellation practice and procedure, including availability of cancellation proceedings, applicable grounds, venue for bringing such proceedings, representation, time frames, estimated costs and rights of appeal.

Visit www.inta.org/cancellations

Protect Your Trademark Portfolio

January 15, 2013 Vol. 68 No. 28

AssociationNewsInternational Roundtable Report

“Recent Changes in Trademark Law & Procedure in Korea” was the subject of a roundtable in Seoul sponsored by Hanol Law Offices. With the promulgation of the Korea-U.S. Free Trade Agreement, a number of nontraditional marks are now recognized, including sound, scent, and certification marks. Attendees discussed the practical aspects of applying for such marks.

OPAL IP Pte. Ltd. in Singapore sponsored a roundtable on Trade-mark Protection Beyond the Shores of Singapore. Attendees discussed how they would seek to protect the hypothetical mark WORLD MONEY in various countries and considered issues such as whether series marks were available in the different jurisdictions and whether versions of the mark should be registered in other languages.

Deacons hosted a roundtable on “Trademark Use in the Online En-vironment” in Hong Kong. IP practitioners and IPR owners engaged in an active discussion about when use of a trademark online would constitute genuine use in defense of non-use cancellation actions, and under what circumstances would online use be consid-ered to establish goodwill and reputation to support enforcement actions in Hong Kong.

“Online Counterfeiting and Enforcement Procedures” was the subject of a roundtable in Kuala Lumpur hosted by Shearn & Delamore. Attendees looked at various types of online counterfeit-ing as well as four different Malaysian laws that deal with counter-feiting. The attendees then divided into small groups for to analyze a hypothetical case but were each limited to using only one of the four pieces of legislation.

Attendees discussed trademarks and social media at a roundtable in Dubai sponsored by Taylor Wessing. Among the topics covered were the difficulty of keeping a digital social media campaign within a certain geographic areas and copyright issues with user-posted images, movies, pictures or other interactive material.

Asuncion, Paraguay was the site of a roundtable on “Geographi-cal Indications, Online Trademark Infringement and the Current Situation of Intellectual Property” hosted by Berkemeyer, Attorneys & Counselors. GIs were of particular interest, as a state Secretariat for Geographical Indications has been established and new legisla-tion covering GIs introduced.

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AssociationNews

In November 2012, INTA’s In-House Practi-tioners Committee hosted an Idea Exchange on the topic of the interaction between the legal, marketing and communications areas in a corporate environment; their inevitable interdependency; and the tendency for each of these areas to act independently instead of cooperatively.

Participants in these teleconferences came from a cross-section of INTA’s corporate membership in different countries and across a wide range of industries. This article is not meant to identify the views of any particular individual, company or industry but instead is a general aggregate of the issues raised and the views expressed in the idea exchange.

A new advertising or marketing campaign can raise many issues that merit review and pre-launch approval by a company’s Legal Depart-ment. Everything from trademark to likeness and image issues is likely to arise, many times with issues crossing these lines. If you are an in-house trademark professional, chances are, in your company these types of matters should first go through Legal, but that doesn’t always happen. You are not alone, as it seems this is a fairly common problem.

CommunicationSo…how to improve the problem? Communicate!

Communicating—really communicating—is harder than most people realize. And sometimes the so-called communications professionals aren’t really all that good at interpersonal communication. They may be able to develop pretty, shiny campaigns, but that doesn’t mean they’re good at talking about them, or bringing the right people into the loop at the right time, or knowing when to seek Legal’s input. So it becomes the in-house trademark professional’s job to try to educate them, encourage them and gain their trust. Not what law schools teach? It turns out that relationship building and communicating involve some of the most important “legal” skills needed for practice.

Short-Term Victory, Long-Term Problem“Hey! We got one past the lawyer!”

The Marketing and Communications profes-sionals in your company may just want to do things the way they want to do them and not consider the legal ramifications. So it’s up to in-house practitioners to try to change their mindset. Building relationships is still the best way to accomplish this.

Unfortunately, busy professionals don’t always have the time it takes to really build a relationship, given personnel turnover rates and deadline pressures. With the Internet and social media, deadlines are more immediate than ever. And finding a way to be seen as part of the team is also crucial. Otherwise, colleagues in other departments will just try to sneak around Legal.

More often than not, not working with Legal gains Marketing and Communications only a short-term victory but results in increased expense and bad relations down the road. When problems do happen, they’ll realize that sneaking around Legal may not have been the best idea, but by then the damage has been done. Once there’s a lawsuit, the lesson gets learned the hard way. It’s imperative to find a way to change the mindset so colleagues recognize when it’s best to run something by Legal before there’s a real problem.

Building Relationships, Gaining TrustMost participants on the Idea Exchange concurred that there is a natural conflict between the Legal and Marketing factions. The emphasis, therefore, needs to be how to improve these relationships.

It’s important for Legal not to be seen as the “no” department. The times when Legal categorically says “no” should be few and far between. Rather, Legal’s role should be to categorize risk as low, moderate or high, or whatever factors are developed and used in the company.

How can Legal be seen as a true business partner to speed up the process so the answer can be “yes” the first time? If Legal is brought in

early, the chances increase exponentially that, with Legal’s input and guidance, choices will be made that take into consideration the various risk factors, including trademark issues, leading to earlier and increased “yesses.”

It’s helpful for trademark professionals to try to be seen and thought of as part of the team. Participating in regular meetings, getting known at your company and keeping interactions posi-tive all help to improve the relationship. When working with brand development, try to get involved from the beginning, so you’ll be seen as part of the team from the start.

It was suggested that Legal participate in early brainstorming sessions where new trademark ideas are being suggested. As a noncreative business partner, the trademark practitioner could participate nonverbally by conducting knock-out searches during the meeting and then giving input. Based on these findings, branding colleagues could adjust their direction accordingly. In this way, you help to funnel the choices down the right channel from the beginning.

Another helpful suggestion was to give regular presentations and include trademark and copy-right issues as regular parts of those presenta-tions. For instance, Legal could conduct training on how to pick brands in general—providing information about generic names versus distinctive names.

These types of presentations will help Marketing staff develop familiarity with the concepts—and with their colleagues in Legal—so that they will be better able to spot issues that should include Legal. These presentations could include refresher classes periodically throughout the year to accommo-date new hires. It helps Marketing colleagues to see Legal as less of a roadblock if they understand why lawyers say “no” and learn how they can avoid negative responses.

More face time was also seen as helpful. Email is easier, but it’s also less personal and doesn’t convey tone. Sometimes, it’s better just to pick up the phone and call. It helps the lawyers be seen as human and not just on the other end of an email. It’s also helpful to acknowledge Marketing colleagues’ roles. Their job is hard, too, and it requires skills,

Corporate Legal, Marketing and Communications: Let’s All Play Together

Continued on page 10

Jomarie FredericksRotary International, Evanston, Illinois, USA

Vice Chair of the In-House Practitioners Committee

January 15, 2013 Vol. 68 No. 210

AssociationNewsLet’s All Play Together Continued from page 9training and experience in areas that likely are familiar to legal staff.

Training and EducationUnfortunately, while most companies have some type of orientation for their new employees, such training rarely includes adequate (or any) training on Legal’s function, and how and when to interact with that depart-ment. So, for the most part, this education is left up to Legal. In-house practitioners don’t always do a good job with such training. And when Legal provides its own training, employees may not perceive the lessons as they would if the lessons were a component of a comprehen-sive employee education program.

Thus, attorneys should consider making an introduction to Legal’s function a part of new employee training. Such a program can include information about trademark and copyright issues, along with more general legal concerns. Proper coordination with the Human Relations team will help the Legal group know when new Marketing people are being hired.

The presentation can be fun: bring in counter-feit examples; make the presentation upbeat; let trainees know whom to contact for specific issues. Above all, Marketing staff should learn that Legal wants to work with them to be problem solvers, not problem creators, and that feedback is welcome. This can help to change the corporate perspective of Legal, and aid in getting the business units to work with Legal instead of seeing Legal as a roadblock. Such a session can take as little as 15 minutes.

TimingSo…how and when to bring Legal into the loop? Earlier is always better, but it might take some convincing. Having in place processes that provide for disseminating information as often as possible can help. It takes the mystery out of the Legal review process and keeps everyone in the loop.

Have a PolicyIt’s always best for the in-house practitioner to sit down with the decision makers and let them know expectations. Explaining the consequences of waiting too long should help to underscore the importance of working together. Once the decision makers are on board, then everyone knows what he or she should be doing, and when. But that doesn’t mean it always happens.

Running something by Legal now can save time, expense and pain down the road. But in many companies there is no actual process requiring people to come to Legal first. That’s a problem. Unfortunately, even in companies where such a process has been put in place, getting non-Legal colleagues to adhere to that process can be a challenge.

In most cases, it’s ultimately up to the busi-ness unit to accept and manage the risk, but to properly advise of risk, Legal has to be fully informed. One suggestion for how to ensure Legal is in the loop for marketing and branding decisions is to require Legal to be part of the sign-off process before a campaign can move forward. This approach may not be the right fit for all companies, but it’s worth considering.

Analyzing RiskAnalyzing search results and risks is an essen-tial skill. But advising on risk involves more than just being a good lawyer. It’s also about being a good business partner and tailoring the risk analysis to the business client’s immediate and long-term needs, its risk tolerance and its flexibility in an individual situation. To be a true team player, a trademark professional should analyze risk not just as a financial threat posed by a third party but also from the perspective of a company’s own reputation.

Practitioners should also consider how much flexibility the client may have in the present situ-ation. For instance, is the campaign already up and running and was Legal brought in late? If so, something like an online banner ad could be pulled easily, while print ads are harder to pull. Because of this factor, and others, print ads may be more high risk, and risk analysis should take all this into account.

Other factors include legal costs; business costs involved in changing the branding on a product; image and reputation; marketing approach; impact on customers if there is a product change, name change or campaign shift; and other changes. The analysis could be delivered in a written memo to the lower-level Marketing people, but consider whether it may be more appropriate to deliver conclusions and recommendations to higher-level executives in a meeting, with written product as a backup.

The higher the risk, the higher the level of approval the business unit may be required to obtain. Most participants concurred

Looking for case summaries and images from trade dress infringement decisions in more than 60 countries?

Find it in the Trade Dress Image Library in INTA’s Global Trademark Research.

Library: http://www.inta.org/TradeDress

11

AssociationNews

In-House Practitioners Committee Idea Exchange TeamINTA’s In-House Practitioners Committee (IHPC) consists of in-house attorneys and non-attorneys that concentrate on bringing and enhancing benefits to corporate members. There are currently four areas of focus to the IHPC: (1) In-House Idea Exchange; (2) In-House Counsel Luncheon and Workshop (presented each year at the Annual Meeting); (3) Corporate Bene-fits; and (4) Corporate Recruitment.

The In-House Idea Exchange team develops topic outlines to facilitate conference calls that bring in-house practitioners together to share ideas, concerns and resources. Participa-tion is free but requires registration in order to keep participants to a manageable number. Idea exchanges generally occur quarterly, but if registration is high enough, an idea exchange may be repeated in order to keep exchanges to a manageable size. Only in-house practitioners are permitted on the calls, to encourage candid participation.

Past idea exchange topics include “Metrics—How to Show the Value of Your Trademark Group to Your Company”; “Brand vs. Budget: How to Lead Your Company’s Trademark Function in Today’s Economy”; “Social Networking and Your Brands”; “Trade-mark Clearance Issues—Subject Matter, Strategies, Resources”; “Managing Your In-House Trademark Department”; and “Internet Enforce-ment—Strategies and Tactics for Protecting IP Assets Online.” Detailed information from the calls is not disseminated to the general member-ship or to the public. Corporate members interested in joining the IHPC should apply to INTA during the committee selection process in June 2013.

that when the risk is categorized as high and higher-level sign-off may be required, the presenters may prefer instead to move forward with another option.

Ad Agency vs. In-House TeamIn most companies, not only will the Legal staff need to maintain and foster relationships with the in-house Marketing team but in addition they may need to establish a relationship with the company’s outside ad agency. At the very least, trademark professionals need to consider how their in-house Marketing team interacts with the outside agency. Unfortunately, turnover in both in-house Marketing groups and outside ad agencies can make building relationships challenging.

In some companies the in-house Marketing team will first run something by Legal before then taking it out to the ad agency for input and further work. But in many cases this isn’t how it works. Even when there’s a policy requiring Legal first to weigh in, sometimes the ad agency is consulted before Legal even knows what’s going on. In these cases, Legal might get asked for an approval directly by the ad agency, with a request for immediate turnaround!

And then there’s the issue of whether the ad agency performs any trademark search. Sometimes the ad agency does no searching; sometimes it might do an unreliable search.

Even if an agency does search the mark, most participants in the Idea Exchange concurred that they would not rely on an ad agency search but would redo the search themselves in order to feel confident with the advice they would be giving their client. There was concern that an ad agency’s search analysis might be based more on its client’s love of the mark than on a pure legal analysis. The intent is good, but an ad agency has a different stan-dard and its analysis could be (unintentionally) influenced by wanting to tell the business client what it wants to hear (even if the ad agency uses the same outside counsel). As a result, ad agency search opinions were seen as far less conservative than the opinion Legal might otherwise want to present.

Even if an ad agency’s (or its outside coun-sel’s) search is otherwise reliable, the in-house legal department’s view may be broader than that held by the rest of the in-house team.

For instance, an ad agency may screen a tag line or a particular word mark but may not screen the “theme” that runs throughout the materials or appears as a “super” on the screen. There are other considerations as well. These errors of omission can be avoided if the Marketing team brings the themes and concepts to the ad agency well in advance of an individual project.

Another challenge when an ad agency is involved is that sometimes the agency will present its materials simultaneously to Legal, licensors and Marketing teams to get their thoughts on the mark. The ad agency may have done some pre-screening or even searching, but Legal may not have seen those results yet. And now, when everyone sees the mark for the first time, the others fall in love with it. By the time Legal can give its advice, it’s unwelcome, and Legal is seen as an obstructionist.

Costs: Who Bears the Burden?Among Idea Exchange participants, there was no one specific way that costs for searches were handled. There was usually some division between Legal and Marketing or the specific business unit from where the product was being launched. In many cases, Legal absorbed all or most of the costs. In situations where a more extensive search or a broader geographic search area was desired by Marketing or the business unit than was initially recommended by Legal, the additional costs were borne by the requesting group. This sometimes required some internal negotiation.

Generally, good communication about expectations helped to ensure there were no unwelcome surprises. One of the best examples of communication and collaboration was a company that met with its Marketing unit at budget time and together determined projected searching costs for the upcoming year. These costs then were placed in Legal’s budget, but there was a shared responsibility if there were costs that exceeded budgeted amounts.

SummaryCommunicating, developing relationships and being sensitive to the challenges of each situa-tion will help in-house Marketing colleagues see that the Legal Department is not just for legal problems but in fact an essential part of the overall business team. ■

January 15, 2013 Vol. 68 No. 212

Features

Trademark owners frequently license their trademarks to expand the scope and geo-graphic reach of their brands and to maximize their revenue. Although it is crucial to have a fundamental understanding of trademark licensing to counsel clients and manage trademark portfolios effectively, it is equally important to understand the boundaries and potential overlap between trademark licensing and franchise law in the United States. The failure to do so may thrust an attorney’s client inadvertently into the highly regulated realm of franchising with unwanted, unexpected and costly consequences. This article provides general guidelines to help U.S. trademark at-torneys not only recognize a franchise but also avoid common mistakes that could lead to the unintentional creation of a franchise by the trademark owner—a situation often referred to as “the accidental franchisor.”

Franchising FundamentalsA unique feature of franchising is that franchise regulations apply regardless of whether the contracting parties actually meant to enter into a franchise relationship. Accordingly, it is essential for an attorney to understand the fundamentals of franchising when drafting a

traditional trademark license agreement—if an agreement meets all the definitional elements of a franchise, it will be treated as a franchise no matter what the client’s intent is or what the agreement calls the relationship.

There are two main types of franchise laws and regulations. One addresses the franchise sales process, while the other addresses problems in the franchise relationship, such as early fran-chise terminations, nonrenewals and franchise transfers, to name only a few.

Franchise sales regulation consists of regula-tion at both the federal and the state level. Depending on the applicable statute or regula-tion, failure to comply can result in fines of thousands of dollars per day, damages awards, injunctive relief and even criminal penalties.

The purpose of franchise disclosure law is to ensure fair dealing by franchisors; to prevent misrepresentation or nondisclosure of business information; and to enable potential franchisees to make informed decisions before entering into an often complex, long-term and intertwined business relationship with a franchisor.

Although there is no uniform definition of a franchise at the federal and state levels, the United States Federal Trade Commission (FTC) definition, found in 16 C.F.R. § 436.1(h), is the baseline upon which states are free to elaborate or adopt more specific requirements, as long as the state’s additional requirements increase the level of protection afforded to the franchisee. The FTC defines a franchise as any

continuing commercial relationship or arrange-ment that contains three separate elements:

1. Right to use a trademark. The franchisor must give the franchisee permission to identify or associate with the franchisor’s trademark, or to offer, sell or distribute goods or services using that trademark.

2. Payment. The agreement must require that the franchisee pay royalties or fees to the franchisor/trademark owner or an affiliate.

3. Control. The franchisor must either impose significant controls over, or offer significant assistance in, the franchisee’s method of operating the business using the trade-mark.

State regulations may incorporate additional requirements and limitations for franchisors, including regulations on exclusive rights to operate in a given territory, requirements that the franchisee purchase or sell a specified quantity of the franchisor’s goods or services, or requirements that the franchisee use the franchisor’s trademark to identify the fran-chisee’s business. An attorney drafting a trademark license agreement must determine, among other things, which states’ regulations might apply to the agreement and tailor the agreement to avoid falling within each state’s definition of a franchise. Although federal and state laws and regulations have various excep-tions and exemptions from their definition of a franchise, generally there is no consistency between or among them.

Avoiding an “Accidental” Franchise in U.S. Trademark LicensingMichael W. Rafter, Lauren Sullins Ralls & Samantha L. HayesKilpatrick Townsend & Stockton LLP, Atlanta, Georgia, USA

Mr. Rafter is a member of the INTA Bulletin Fea-tures Subcommittee.

Renew your INTA Membership Why should you renew?

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Renew online or print an invoice at: www.inta.org /renewContact Lyonel Yu, Senior Retention Project Coordinator at lyu@inta.org with questions.

13

FeaturesDifferences Between Trademark Licenses and FranchisesThe best way to avoid unintentionally creating a franchise relationship is to draft a license agreement with these three foregoing ele-ments in mind. The difficulty, however, is that the essential elements of a franchise often closely coincide at least conceptually with non-franchise trademark license agreements. For example, in addition to the terms surrounding the trademark itself, trademark license agree-ments typically address some form of royalty or compensation and quality control. Each basic element is considered in turn below.

Trademark RequirementLike trademark licenses, franchise agree-ments must grant the franchisee the right to use the franchisor’s trademark. Proper use of a well-known and well-respected trademark in a franchise system encourages consumers to trust the quality of the product, service or brand regardless of the particular franchisee controlling that establishment. But unlike some trademark licenses, franchises often involve the franchisee using the franchisor’s trademark in the name of its business.

For example, collegiate institutions often license their trademarks to apparel manufac-turers for the production of licensed apparel bearing collegiate trademarks. In most cases, these agreements do not result in the creation of a franchise, partly because the manufac-turers do not use the collegiate trademarks to hold themselves out as the institutions. Consumers who purchase the licensed ap-parel generally understand that it was not the

collegiate institution itself that manufactured the product. Conversely, consumers tend to identify franchised chain restaurants by a fran-chisor’s trademarks and may not recognize that each location may be individually owned and operated.

Payment RequirementMost trademark licenses include some sort of compensation provision. With franchises, however, there must be a compensation ele-ment for the relationship to be classified as a franchise. There are various ways that a trade-mark licensor can be compensated for use of its mark that may qualify the license as a fran-chise, such as advertising fees, training fees, rent and purchases of mandatory equipment or of inventory. For example, in arrangements where the licensee purchases some inventory for resale or lease directly from the licensor, such as in some distribution agreements, requiring the licensee to purchase these products at more than a bona fide wholesale price will result in the fee requirement’s having been met and in the existence of a franchise arrangement if the other definitional require-ments are also met.

Control RequirementOne of the most pronounced differences between a traditional trademark license agree-ment and a franchise agreement is the level of control the licensor seeks to exercise over the licensee’s use of the trademark and other methods of business operations. A trademark owner who fails to exercise reasonable control over the use of the trademark may see it cease to function as a symbol of quality and a con-

trolled source, leading to the involuntary loss of trademark rights. Accordingly, well-drafted trademark license agreements include some quality control provisions, although the amount of control required will vary.

Importantly, in terms of franchises, the FTC has articulated that it will not deem as “signifi-cant” control or assistance trademark controls designed solely to protect the trademark owner’s goodwill in the mark. Thus, it is gener-ally acceptable to include clauses allowing the licensor to inspect the goods and services of-fered by the licensee under the mark; to be in-volved in the design process for the product; to approve packaging and advertising to ensure that the mark is used properly and conforms to the licensor’s guidelines; and to require access to the licensee’s facilities to monitor adherence to the licensor’s quality standards without the arrangement’s being classified as a franchise.

The problem occurs when licensors begin to exercise too much control over other aspects of the licensee’s business operations. Ex-amples of requirements that are the hallmarks of franchise agreements include requiring the licensee/franchisee to follow site design or appearance requirements; to adopt specific hours of operation, production techniques, accounting practices, personnel policies and practices; or to undertake specific promotional or marketing campaigns for those products using the licensed trademark. In addition, providing significant assistance, such as train-ing programs for personnel, sales or business

Continued on page 14

Trademarks and the Changing Internet LandscapeMarch 7–8 | Philadelphia, PA, USA2013

Visit www.inta.org/2013internet

Join INTA and leading experts who will help you protect your brand on the Internet.

Distinguished authorities throughout the world will provide practical information, insight

on complex issues and all you need to know to help you protect your brand on the Internet. Programming will focus on the changing Internet landscape and the next steps regarding new gTLDs.

January 15, 2013 Vol. 68 No. 214

Featuresmethods and procedures; selecting site loca-tions or sources for raw materials; and furnish-ing detailed operating manuals, all point to a franchise relationship.

Best Practices to Avoid Creating a Franchise AgreementArmed with an understanding of the main differences between basic trademark license agreements and franchise agreements, an attorney should keep in mind several best practices in drafting license agreements to avoid having them construed as franchise agreements.

•Keep the elements of a franchise close at hand. Because each element is essential to the definition of a franchise, negating one element is the most effective way to prevent the creation of an unintentional franchise agreement.

• State in the agreement the intent of the parties—though not dispositive, it is helpful for a reviewing court to understand whether the parties intended to create a franchise relationship.

• The agreement should clearly state the scope of permissible use of the licensor’s trademark. For example, what are the specific goods and services with which the licensee is permitted to use the trademark? Is the licensee permitted to advertise using the trademark? Will the licensee identify it-self exclusively using the trademark or use a separate name or mark that consumers will use to identify the licensee’s business?

• Any license agreements that are royalty-free should state this explicitly, as noted above, to eliminate the compensation element that is required for a franchise to exist, although other required payments may nevertheless make the arrangement a franchise.

• If the licensor intends to provide the licensee with inventory or supplies for resale or lease, the agreement should state that these items will be purchased only at bona fide wholesale prices and only in quantities that are reasonable for starting or ongoing inventory or supply.

• Be aware of the level of control given to the licensor over the licensee’s business opera-tions. Ask whether this control provision is strictly necessary to protect the trademark

owner’s rights in the mark or whether it goes further and seeks to control the licensee’s day-to-day business operations.

• If all factors point to the arrangement’s being a franchise, investigate whether there may be an applicable exemption or excep-tion. Keep in mind, however, that an exemp-tion from federal law may not be applicable in any state that regulates franchise sales, and vice versa.

SummaryBeing aware of the basic elements of fran-chising often is the most important first step to avoid subjecting a client to the rules and regulations applied to franchising. Carefully thought-out agreements designed to eliminate at least one of the basic elements of franchise can help to minimize the risk of an “accidental franchise.” Where a reasonable argument can be made that all three elements are present in a license agreement, the drafting attorney would do well to seek the guidance of fellow attorneys experienced in the nuances of fran-chise law to help assess whether the franchise line has been crossed. ■

Avoiding an “Accidental” Franchise Continued from page 13

INTA’s 135th Annual Meeting takes place May 4–8, 2013 in Dallas, Texas, and we’re now recruiting hosts for Pre-Annual Meeting Receptions from January through March at a venue of your choice. When you volunteer to host, you’ll help attendees learn more about the INTA Annual Meeting while offering an opportunity to network and meet new professionals with a common interest in trademark and IP law. Don’t miss the opportunity to host this event and share valuable insight and success stories about the Annual Meeting. All hosts and attendees will be entered into a raffle to win a free Annual Meeting registration. Hosts will receive exposure in the Annual Meeting Daily News and on the INTA website.

Contact Laura Castle at lcastle@inta.org for more information.

Host a Pre-Annual Meeting Reception in your city in 2013!

15

Law&PracticePursuant to Ministerial Decision No. 1147 of the Minister of Commerce and Industry, dated October 16, 2012, the publication of accepted trademarks, including new filing, renewals, recordals and the like, has occurred on the website of the Ministry of Commerce and In-dustry, rather than in the Official Gazette (Um Al-Qura), from November 24, 2012.

This new procedure should reduce the time required for completing trademark matters at the Trademark Office and to end the publication backlog that had existed in the Official Gazette.

The information is published at http://eservices.mci.gov.sa/Eservices/Com-merce/Trademarks.aspx.

Contributor: Iman Salamehag-IP-news Agency, Amman, Jordan

Verifier: Ma’an Alkhen Abu-Ghazaleh Intellectual Property (AGIP), Riyadh, Saudi Arabia

SAUDI ARABIA Online Publication of Trademarks

After the applicant made a “strategic deci-sion” not to conduct discovery in an opposi-tion proceeding, the Trademark Trial and Appeal Board (TTAB) denied the applicant’s motion to reopen the discovery period. Luster Products, Inc. v. John M. Van Zandt d/b/a Vanza USA, Opposition No. 91202788 (T.T.A.B. Nov. 28, 2012) (precedential).

The discovery period closed on August 6, 2012. Although the applicant, John M. Van Zandt d/b/a Vanza USA, had timely served initial disclosures in March 2012, the op-poser, Luster Products, Inc., did not serve its initial disclosures until the closing date of the discovery period, when it mailed them along with its first set of interrogatories and first set of document requests.

Vanza USA then filed a motion asking the TTAB to “extend discovery,” which the Board treated as a motion to reopen discovery. Vanza USA claimed that because Luster had failed timely to serve its initial disclosures and had not responded to two letters from Vanza USA’s counsel inquiring about such failure, Vanza USA had “rightfully assumed” that Luster had lost interest in the case. Lus-ter claimed, however, that prior to the close of discovery the parties had a series of tele-phone conversations to discuss settlement and that Vanza USA had refused to agree to an extension of the discovery period.

In considering the motion the TTAB applied the multiple-factor test for “excusable ne-glect” set forth by the U.S. Supreme Court in Pioneer Investment Services Co. v. Brunswick Associates L.P., 507 U.S. 380 (1993). Those factors include (1) the danger of prejudice to the nonmovant; (2) the length of the delay and its potential impact on judicial proceed-ings; (3) the reason for the delay, including whether it was within the reasonable control of the movant; and (4) whether the movant acted in good faith. Citing its decision in Pumpkin, Ltd. v. Seed Corps, 43 U.S.P.Q.2d 1582 (T.T.A.B. 1997), the TTAB noted that the third factor “might be considered the most important in a particular case.”

That factor, the Board said, “weigh[ed] strongly against a finding of excusable ne-glect.” Vanza USA could have filed a motion to compel Luster to serve its initial disclo-sures, but it chose not to do so. Moreover, even though Luster did not respond to two of Vanza USA’s letters, Luster’s participation in settlement discussion should have been a sign that Luster had not lost interest in the case. In the TTAB’s view, Vanza USA’s failure to file a motion to compel, coupled with its refusal to agree to extend the discovery pe-riod, appeared “to have been the result of a strategic decision, which was entirely within [its] control.”

The TTAB found that the other Pioneer fac-tors did not support a finding of excusable neglect. Although there was no evidence of bad faith on Vanza USA’s part or of significant prejudice to Luster, Vanza USA’s delay and its motion to reopen discovery had forced the Board to expend its time and resources dealing with Vanza USA’s “strategic decision” and “subsequent change of position.” Thus, the TTAB found that, on balance, Vanza USA’s failure to act before the close of discovery did not constitute “excusable neglect.”

Although it denied Vanza USA’s motion, the TTAB found that Luster’s conduct had also caused unnecessary delay. Accordingly, the Board ordered the parties, unless they settled the case, to strictly comply with the pretrial disclosure, trial period and rebuttal period schedule set forth in its decision.

UNITED STATES TTAB Discovers Strategic Decision Not to Conduct Discovery

Contributor: Timothy J. Lockhart Willcox & Savage, P.C., Norfolk, Virginia

Verifier: Lisa IversonNeal & McDevitt, LLC, Northfield, Illinois

Ms. Iverson is chair of the INTA Bulletin Law & Practice—United States & Canada Subcommittee.

Contact the Managing Editor at tmr@inta.org or visit www.inta.org/tmr

The Trademark Reporter seeks contributions from trademark professionals and is particularly looking to expand its coverage of international issues by international writers.

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Policy & Advocacy: tmaffairs@inta.orgPublic Relations: publicrelations@inta.orgPublications: publications@inta.orgRoundtables: roundtables@inta.org

www.inta.orgVisit the INTA Bulletin on www.inta.org to download the current issue or to search issues from January 1, 2000 to the present.

Exhibitions and SponsorshipTo inquire about sponsorship or exhibition opportunities for INTA’s events, visit www.inta.org or email sponsorship@inta.org

January 22–February 1 U.S. Roundtables Various U.S. CitiesFebruary 8–9 Trademark Practice Trends in India Mumbai, IndiaFebruary 14 How to Prepare for Mediation E-LearningFebruary 22 Annual Meeting early registration ends! Register onlineFebruary 25–March 8 TMA Roundtables Various U.S. CitiesMarch 7–8 Trademarks and the Changing Internet Landscape Philadelphia, PA USAApril 8–19 U.S. Roundtables Various U.S. Cities May 4–8 135th Annual Meeting Dallas, TX USAJuly 8–19 U.S. Roundtables Various U.S. CitiesJuly 17–28 TMA Roundtables Various U.S. CitiesSeptember 23–October 4 U.S. Roundtable Various U.S. CitiesOctober 3–4 Branding and Social Media Conference Chicago, IL USAOctober 15–November 25 TMA Roundtables Various U.S. Cities November 12–16 Leadership Meeting Miami Beach, FL USADecember 9–10 Middle East Regional Conference Dubai, UAE

INTA 2013 Calendar of EventsPlan your calendar with these INTA events and stay up to date on issues that affect your trademarks–domestically, regionally and globally.

Learn more about INTA events, including international roundtables, networking receptions, E-Learning, academic competitions and more at www.inta.org/programs

Dates and topics subject to change. Contact meetings@inta.org for the latest information.