• IP BLAWG

    If You See Something

    Beverly A. Berneman
    8/28/18

    Don’t wait too long to protect your trademark. Since the 1990s, Cosmetic Warriors Ltd. sells “Lush” brand personal products like soap, lotions and makeup. For a brief period, Cosmetic Warriors sold a small number of t-shirts. But for the most part, Cosmetic Warriors does not sell clothing. Pinkette Clothing, Inc. started selling clothing using the brand name “Lush” in 2003. In 2009, Pinkette applied to register the trademark and it was registered in 2010. Cosmetic Warriors didn’t contest the registration. Almost 5 years after the registration of Pinkette’s trademark, Cosmetic Warriors sued Pinkette for trademark infringement. Cosmetic Warriors said that it didn’t know about the registration to explain why it waited so long to bring suit. Cosmetic Warriors won the battle but not the war. A jury sided with Cosmetic Warriors on the infringement issue. But then the jury sided with Pinkette on Pinkette’s argument that Cosmetic Warriors was barred by laches because it waited too long to bring suit. The jury’s verdict was upheld on appeal.

    WHY YOU SHOULD KNOW THIS. There are 3 important points to unpack here. First, Trademark Law allows the registrant of a trademark to have the mark deemed uncontestable 5 years after registration. Once it’s declared uncontestable, the registration can only be challenged on the limited grounds of a fraud in the application or abandonment. That brings us to the second important point. The court in this case held that this five year benchmark is not a statute of limitations. So a registrant who is defending a challenge can claim the laches defense; even if the challenge comes before the 5 year benchmark. That’s important because the U.S. Supreme Court has held in patent and copyright cases, that the laches defense is not available before the statute of limitations runs. Third, registration of a trademark is notice of the use of the trademark. So, Cosmetic Warrior couldn’t rely on its argument that it didn’t know about Pinkette’s trademark until it brought suit almost 5 years after Pinkette’s registration.

  • Property Tax Insights

    Leveling the playing field at board of review hearings

    James W. Chipman
    8/24/18

    By James W. Chipman

    While the appeal process now includes more transparency, understanding the best way to proceed and succeed often requires the assistance of a trusted property tax attorney.

    Each county in Illinois has a three-member panel called the board of review, which acts as an intermediary between township assessors and taxpayers. Boards hear and decide assessment complaints after giving taxpayers an opportunity to be heard. They also make rules so that the appeal process is orderly and fair.

    In the past, however, the process might have seemed anything but fair to property owners or attorneys who showed up for a board hearing only to learn that a taxing district had intervened or that the assessor had evidence supporting his value in the appeal. It’s no wonder this practice became widely known as “hearing by ambush.” Fortunately, things have changed.

    FAIR IS FAIR

    Public Act 99-0098, which took effect on January 1, 2016, allows taxpayers to take some comfort in knowing that everyone is now playing by the same set of rules. PA 99-0098 requires taxing districts to file a notice to intervene at least five days prior to a hearing. In addition, if the board of review requires the taxpayer to submit evidence in advance, any evidence supporting the assessor’s or intervenor’s value must be submitted at least five days before the hearing to the board and the property owner or their attorney.

    PA 99-0098 also applies the mailbox rule to boards of review. This is a rule of contract law that says an offer is considered accepted at the time the acceptance is mailed. Under PA 99-0098, documents sent by US mail or another delivery service are considered filed as of the postmark date or the shipper’s tracking label or in the case of email, the date the correspondence is sent. This law, however, does not apply in Cook County.

    FURTHER ROOM FOR IMPROVEMENT

    While PA 99-0098 makes the process more fair and balanced, taxpayers still face additional challenges. Boards of review aren’t obligated to correct an assessment even if the complaining taxpayer has proven their case. All they are required to do is review an assessment and change it “as appears to be just.”* Taxpayers that are denied relief must go one step further and either file a lawsuit in court or appeal to the state Property Tax Appeal Board (PTAB)—but you can’t do both.

    A property tax attorney who is skilled in the appeal process can explain the pros and cons of going either to court or the PTAB. They’ll also have valuable insight about the filing deadlines, burdens of proof, expected turnaround times and the types of evidence that are likely to succeed in each venue.

    * Source: 35 ILCS 200/16-55 (a)

  • IP BLAWG

    Color Me Bright Green

    Beverly A. Berneman
    8/21/18

    Trade dress protects non-functional attributes of a product like color. Moldex-Metric uses a bright green color for its foam earplugs. McKeon Products also uses bright green for foam earplugs. Moldex-Metric sued McKeon for infringement of unregistered trade dress, namely, the color of the earplugs. The trial court granted summary judgment for McKeon holding that the bright green color couldn’t be protected as trade dress because it served the function of making them easier to see during an inspection. The Ninth Circuit Court of Appeals reversed. The court held that the trial court failed to consider whether other colors would be just as visible. So the case is remanded back to the trial court to allow a jury to decide if the green color was not functional because of available alternatives.

    WHY YOU SHOULD KNOW THIS. A distinctive color can be registered as protectable trade dress. Some famous trade dress colors are the Tiffany Blue and the UPS Brown. In each of these cases, the color has nothing to do with the function of the product or service. It just creates a distinctive look. Separating functionality from the look of a product or service isn’t always easy. In the Moldex-Metric case, the Ninth Circuit Court of Appeals gives a helpful test to determine color functionality. The availability of alternative colors to serve the same function could mean that color choice is non-functional and therefore protectable.

  • IP BLAWG

    Fuel for the Game

    Beverly A. Berneman
    8/14/18

    Trademark fair use can win the race.  SportFuel, Inc. sued PepsiCo, Inc. for trademark infringement. SportFuel alleged that PepsiCo’s slogan “Gatorade The Sports Fuel Company” infringed on its trademark. The attached image shows SportFuel’s use of its trademark on the left and PepsiCo’s use of its slogan on the right. The court granted summary judgment to PepsiCo on the basis of trademark fair use. The court cited factors that weighed in favor of fair use. First, the Gatorade house mark appeared more prominently than the tag line which lessens the possibility that the tag line would be seen as an indicator of source. Second, the judge found that the words “sports fuel” were merely descriptive.

    WHY YOU SHOULD KNOW THIS. Descriptive marks have a hard time getting trademark protection. An unprotectable descriptive mark uses identifiers that others in the same industry will need to describe their products or services. Some descriptive marks can achieve trademark status when they are more suggestive than descriptive or they’ve been used long enough for the public to connect the descriptive mark with the goods or services. This case was a close call. The words “sports” and “fuel” do not appear together in any dictionary. Fuel is often used with vitamins and supplements but more often it’s used with either food consumption or energy sources for machinery. So the combination of the words may be more suggestive of vitamin supplements than merely descriptive. There’s no word on whether SportFuel intends to appeal the summary judgment.

  • IP BLAWG

    Percentages Can Sink Copyright Infringement

    Beverly A. Berneman
    8/7/18

    Copyright infringement needs more than ‘sort of’ similarity. Experian Information Solutions, Inc. registered the copyright for a database containing consumer names and addresses. Experian’s employees made some selections in adding data, reconciling discrepancies, and discarding useless information. Experian licenses access to its database to companies for use in marketing campaigns. Nationwide Marketing Services Incorporated is Experian’s competitor. Nationwide is relatively new to the market and much smaller than Experian. Experian got an offer to purchase a Nationwide’s database of names of addresses. Experian tested Nationwide’s database  against its own and came up with a 97% match rate.  Experian brought suit for copyright infringement and trade secret misappropriation against Nationwide. The Ninth Circuit Court of Appeals affirmed the district court’s order for summary judgment in Nationwide’s favor on the copyright claim. The court held that the selection and arrangement process was sufficient to create minimal protection in Experian’s database. But, Experian did not prove infringement. Neither side could produce the databases as they appeared at the time of the alleged infringement. Experian could only show an 80% match rate between the current versions of the two databases. That wasn’t enough for copyright infringement. Experian’s trade secret misappropriation claim was remanded back to the district court.

    WHY YOU SHOULD KNOW THIS. Facts are not copyrightable. However, the arrangement of facts or a compilation is copyrightable. A compilation of facts has only minimal copyright protection. That’s because no matter how you look at it, you can’t own the underlying facts. Copyright infringement occurs when the infringing work is substantially similar to the original work. Now we know that 80% similarity was not enough similarity for infringement. This case also points out that if you’re going to claim copyright infringement, be sure to preserve the copyrighted works as they appeared at the time of the alleged infringement. And be sure to tell your alleged infringer to preserve its version of the works.

  • Benefits Bulletin

    Is Illinois Secure Choice Your Best Option?

    Andrew S. Williams
    8/6/18

    Employers with 25 or more employees in Illinois will be subject to the Secure Choice Savings Program Act (the “Act”) if they do not already have an employer sponsored retirement arrangement like a 401(k) plan. For such employers with 500 or more Illinois employees that have been in business for at least two years, the compliance deadline is November 1, 2018. By that date, these employers must register at the Secure Choice website here and enroll their employees. Subject employers with fewer than 500 Illinois employees have compliance dates deferred until July 1, 2019 (100-499 employees) and November 1, 2019 (25-99 employees).

    Here are some of the details:

    • The required retirement arrangement includes a separate Roth IRA account for each employee that is set up by the employer. Employees are automatically enrolled at a five percent contribution rate but they can elect out of the plan at any time. There are no employer fees to participate in the program and no employer retirement contributions are required or permitted.

    • The program is administered through the Illinois State Treasurer’s Office by a private contractor that will act as the Roth IRA “trustee,” process contributions, manage account records and maintain the website. Program costs are funded through an annual administrative charge not to exceed .75 percent of employee account balances. The Treasurer’s Office also charges employees a fee of .05 percent to cover its costs.

    • Employees may choose between several diversified mutual funds for the investment of their accounts and, if they make no investment direction, their accounts will default into a target date fund. Employee accounts are portable and may be transferred to other Illinois employers.

    • The employer’s role as “facilitator” includes registering as a participating employer, establishing an online “employer portal,” setting up a payroll deduction process, and remitting employee contributions.

    • The program is established with the intent to avoid complication for employers under ERISA, the federal pension law, and it is anticipated that employers will be subject to none of the ERISA responsibilities that apply to sponsors of 401(k) plans.

    • Non-compliant employers are subject to a fine of $250.00 per employee per year.

    The Fine Print:

    Official guidance available at this time provides the following specifics:

    • For purposes of determining program applicability, employers need to count all employees 18 years of age or older who receive wages taxable in Illinois (this includes part-time employees, but some seasonal employees can be excluded).

    • Illinois employers, including not-for-profit organizations, are subject to the Act if: (1) at no time during the prior calendar year they employed fewer than 25 Illinois employees, (2) they have been in business at least two years, and (3) they have not offered an employer sponsored retirement plan in the preceding two years.

    • Employers are required to log on to the Treasurer’s website to create a payroll list and then to input the following information in the employer portal by the applicable deadline: each employee’s address, phone number, email address, legal name, date of birth and social security number or individual tax identification number (undocumented workers are not permitted to participate in the program).

    • For employers with 500 or more Illinois employees, the November 1, 2018 deadline is fast approaching. Employer electronic enrollment of each of its employees may take some time unless data is submitted in bulk form. More important, subject employers may want to give serious consideration to a private retirement plan alternative like a 401(k) plan that also can provide enhanced benefits for management-level employees.

    Takeaways:

    If your company is not among the eighty-eight percent (88%) or so of large Illinois employers that already sponsor a retirement plan under Sections 401(a), 403(b), 408(k), 408(p) or 457(b) of the Internal Revenue Code, then you need to take the steps outlined above to comply with the Illinois Secure Choice Act by November 1, 2018. Also consider the 401(k) and 403(b) options that may work better for you and your work force. Retirement professionals can analyze a census of your current employees to provide specific retirement plan options that might make more sense for you than a Secure Choice arrangement.