The lawsuit between Ozzy Osbourne and Tony Iommi over the Black Sabbath trademark has been “amicably resolved” (source).  Ozzy filed a lawsuit in May of 2009 after finding out that Iommi filed a trademark application for “Black Sabbath” with the U.S. Patent and Trademark Office.  The lawsuit claimed that Iommi illegally took sole ownership of the trademark when he filed the application with the USPTO.  The relief sought in the complaint for a 50 percent interest in the trademark, along with a portion of the profits that Iommi may have realized from use of the trademark.  Ozzy claimed that it was his vocals that gave the band it’s extraordinary success.  I’d bet that’s the same case for “The Osbournes,”  the MTV reality show.

Black Sabbath is an English band formed by Ozzy, Iommi, Geezer Butler and Bill Ward in 1968.  The band went through many iterations, but the one constant throughout the years was Iommi.  Ozzy left the band in 1979.  The original lineup reunited in 1997 and released one album. 

Don't we all own the trademark???

This case was kind of interesting to me because it seemed to be a trademark dispute between two guys (Iommi and Ozzy) over a trademark that many people could probably claim an ownership interest in.  From what I can see, there were more than 20 members of Black Sabbath over the years.  It seems to me that many of those members, or their estates, could be entitled to some of the profits that are derived from the “Black Sabbath” trademark.  Without question, Iommi and Ozzy are the most popular members of that band, and probably did lead to most of its success, but this case had every potential to get ugly quick.  I am sure that this came up in the settlement discussions, i.e., some attorneys probably sat around a table and advised the two that if the case got dragged out, they should not be surprised if several other members of the Band came out of the woodwork to claim their piece of the pie.

Iommi is welcome to join our family anytime!

Appraently, the possiblity of yet another reunion has not been ruled out.  It is a crying shame that “The Osbournes” reality show is not still around.  Theycould have had entire episodes based solely on this lawsuit.  The ratings would have been through the roof.  Wishful thinking!

If you read this blog at all, you have figured out that I am a sports fan of sorts.  I think we all know that I have a slight interest in intellectual property (I had better for the sake of my clients).  You could only imagine my excitement when the riveting intellectual property news that I normally follow crossed over into my sports news.  Many of you may have heard of the trademark dispute between David Ortiz of the Boston Red Sox and music sensation Jay-Z.  I’m not particularly a fan of either one of them, but I certainly found the story to be interesting.  Jay-Z and Juan Perez own the 40/40 Club, with locations in New York, Atlantic City, Las Vegas, Chicago, Tokyo and Macau.

Apparently, Ortiz thought it would be a great idea to open a club in his home country of the Dominican Republic called the 40/40 club.  It would be nice to attempt to say that he did it without knowing about Jay-Z’s club, but that does not seem to be the case.  40/40 is a term used in baseball to refer to achieving the milestone of hitting 40 home runs and stealing 40 bases.  Reports indicate that Ortiz had frequented Jay-Z’s club in the past.  It probably doesn’t help that Jay-Z is a Yankee fan and Ortiz plays for the Red Sox…not that there’s any bad blood between those two teams…

Jay-Z filed his lawsuit for trademark infringement in April, demanding $5 Million in damages.  Unfortunately, Ortiz apparently decided not to answer the complaint.  (Source.)  When a judge threatened to enter a default judgment against Ortiz, an attorney representing him informed the judge of Ortiz’s intention to settle the dispute by changing the name of his Dominican Republic club.

Although none of this was ground breaking IP news, it peaked my interest nonetheless.

In parts I and II of this series, we discussed the importance of setting up an IP holding company where all of your IP is held.  We also provided some pretty good examples of the kinds of things that could happen if your IP is not properly titled in your IP holding company, or if you comingle your IP holding company with other assets.  That leads us to this post – a brief overview of the requirements that MUST be followed in order to properly protect your IP and shield it from other liabilities.

As we recommended in our previous post, you should set up an LLC that has the purpose of holding your IP and licensing the IP for use by others.  This can actually be a rather simple process here in Florida.  The website for the Florida Department of State Division of Corporations is sunbiz.org.  The filing forms for setting up your LLC are available for printing or, if you have an account set up already, you can simply electronically file the forms.  As noted, this can be a simple process, but one that is somewhat easy to do improperly as well. When all else fails, seek the advice of an attorney.

It is especially important to seek some advice of an attorney when starting an LLC that has multiple members.  For example, suppose you have an investor and part of the “deal” is that you will give the investor some percentage of the IP.  The best way to accomplish that is to form an LLC in which both you and the investor are members.  The “deal” will be outlined by the operating agreement that you will enter into when the LLC is formed.  Operating agreements can be somewhat simple, but if they do not address many of the issues that you may encounter in the future, then you can almost always guarantee one certainty – you will be paying a great deal of money to an attorney at a later time in order to sort out ownership, for example, of your IP.  Translation – you will likely be litigating a contractual issue if some dispute arises as to the “deal” and the operating agreement of the LLC doesn’t address how that dispute should be resolved.

After the LLC is set up, it is essential that you open a bank account in the name of the LLC, and be sure that all of the liabilities of the LLC are paid from that bank account… and only from that bank account.  A common mistake of some individuals is to set up the LLC, but still pay for the IP with personal funds, or with the funds of another company.  That leaves the door open to an argument that the corporate veil should be pierced.  In other words, if the corporate requirements are not properly followed, then all your work can be for naught, i.e., a court could find that your IP is not solely held by the company and that your personal liability is co-mingled with any liability created by your IP (see examples in previous post – IP Holding Companies, Part II).

It is also important to hold annual meetings, take minutes, and keep up with the mandatory annual reports necessary to maintain your LLC.  It is not uncommon for us to hear that people did not hold an annual meeting because they are a single member LLC – “what am I going to do, meet with myself?”  YES!  The meeting minutes will read something like “a meeting of the officers was held and no action was taken.”  Simple enough, right.  A good reference of the corporate requirements can be found Chapter 600 of the Florida Statutes.  When all else fails, call an attorney and make sure you are going down the right path.  A consultation fee on the front end can often times save you litigation fees on the back end.

In a previous post, we discussed the importance of forming an intellectual property holding company to own your IP.  That previous post established that starting an IP holding company is necessary.  This post will focus on the details.

Talk to any lawyer, and one of their primary goals for their clients is managing their liabilities.  This generally includes separating assets so that liabilities do not cross over.  For example, suppose you own your IP personally, i.e., it is titled in your name personally.  Now imagine that a thief breaks into your house, slips on your floor, sues you for having a slippery floor, and somehow gets a judgment against you (here is a story about a burglar that sued the homeowner that shot him).  What happens if your homeowner’s insurance does not cover the judgment?  The crazy thief is going to look somewhere for the deficiency and will probably engage in some post-judgment discovery to find out what you own.  During the discovery, the crazy thief may find a bank account or two, but eventually, the thief’s attorney is going to uncover a patent that you own.  Turns out that you started a company last year that manufactures products covered by the patents, but the company does not pay you a royalty, and there is no agreement in place between you and the company.  Guess what — You can bet that the crazy thief’s attorney is now going to seek ownership of that patent to satisfy the judgment.  There is a strong chance that the crazy thief’s attorney will be able to get your patent transferred to his client.

Any guesses on the first thing that the crazy thief does once he has ownership in the patent?  That’s right; he will now demand that you pay royalties for manufacturing the product that is covered by the patent.  If you do not agree to the royalty, the next step is filing a patent infringement suit in Federal Court.  Do you see how this is spiraling downward now?

Simply transferring your IP into an IP holding company, however, is not enough.  It is essential to keep everything separated.  Here’s the next example of how the crazy thief’s attorney will try to get a hold of your IP.  Suppose you did place the patent in a holding company.  Also suppose, however, that you have paid for every expense associated with that company out of your personal bank account or, even worse, with funds from the company that manufactures the product that is protected by the company.  Now you have comingled all your funds, and a court will likely find that you have used your IP holding company as your “alter-ego” thereby allowing the crazy thief’s attorney to “pierce the corporate veil” and start collection efforts against your IP holding company.

The moral of the story is that not only is it important to keep all of your IP separated from anything else that you may own, but it is also important to make sure it is done properly.  This will include taking the steps of forming a corporate entity (in FL, we recommend an LLC), starting a bank account for that company, paying for your IP expenses out of that bank account only, holding annual meetings (yes, even if you are the only member of the LLC, you need to hold an annual meeting, which will be discussed in another post), and generally ensuring that you never comingle the property of the IP holding company with any other property.

If you’re running your own small business, and you don’t have a holding company for your intellectual property, you should make an appointment to have your head examined.  Creating a separate entity, solely for the purpose of owning your IP, is the quickest, easiest, and cheapest way to insure the goodwill associated with your business.

I realize that the subject matter of this post is a bit drier than what you may have grown to expect from Tactical IP, but I’m hoping that at least a few of our readers are here for free tips on how to make their intellectual property work for them.  With that in mind, I’ll try to keep this light and painless.

Liability protection is the name of the game when it comes to creating business entities.  Think of it like an insurance policy.  If you do it right, assets can be protected from creditors, including judgment creditors who may have prevailed in a lawsuit.  As far as the law is concerned, a properly created and maintained business entity is a separate “person” from its owners and employees.  The benefit of that treatment is that, if the property created and maintained business entity incurs debts or gets sued, its assets are the only things that may be taken — not the assets of its owners.  Let’s look at an example to really hammer this point home.

In our example, you own and run your own courier service.  You have a couple of employees and a corresponding number of pickup/delivery vans.  You’ve been extremely successful, turning a good profit, and you’ve been able to afford all of the toys and accoutrement that success should provide.  In our first variation, let’s say that you are operating as a sole proprietor, using a DBA (“doing business as”) name — “Black Hat Couriers.”  You own everything in your own name, or using your DBA name — the vans, all of your office equipment, etc.  Now suppose one day, while making a delivery run, one of your employees is driving a little carelessly and, as a result, is involved in a collision where several people are injured.  You are insured, so you’re not too worried — that is until you get sued and the jury comes back with an award that goes well beyond your policy limits.  Guess what happens now.  All of those toys and accoutrement, your summer house with the pool, your boat, your Porsche — kiss ‘em goodbye.

Now let’s look at an alternative scenario.  You listened to your buddy, who happens to be an attorney, and you formed your business as a Limited Liability Company (LLC).  This time, you’re calling the business “Black Hat Couriers, LLC.”  Now, you are a Managing Member of the LLC, and the business has its own assets that do not belong to you.  The vans are titled in the name of the business.  You used the LLC’s credit card to purchase that office equipment, and you pay the bill out of the LLC’s checking account.  You do everything possible to treat the LLC as if it was a separate entity from you.  The boat, the summer house, the Porsche — all of these things you purchased with your own money, which was paid out to you as income from the LLC.  Now, when the LLC’s insurance policy is insufficient to cover the jury award in that vehicular negligence suit, you get to keep your stuff.  The LLC is the only party responsible for paying the judgment.  Now that we understand a little bit about how a business entity provides a liability shield for assets, let’s take it a step further.

Say you’ve developed a really strong brand in running your courier service.  You have a website, which is reachable through a domain name that incorporates your business name.  You’ve registered for a state trademark, and you’ve started doing pickups and deliveries across the closest state line, so you have registered the federal trademark too.  You’ve learned your lesson about listening to your attorney friend, so you have even registered copyrights in the colorful fliers and advertisements that you have developed.  Life is good.  All of that branding, however, comprises intellectual property assets that may be in danger when that driver starts texting his girlfriend about after-work dinner plans doing 60mph on the highway.  How do we protect them?  Here’s a hint — check the title of this post.

If you create a new business entity — lets call it “Black Hat Intellectual Holdings, LLC” — and let the new entity own all of those intellectual property assets, when that plaintiff’s attorney starts selling off the assets of “Black Hat Couriers, LLC” to collect his contingency fee, you can rest assured that you won’t lose the benefit of your branding efforts.  Since “Black Hat Couriers, LLC” was only licensing the IP from “Black Hat Intellectual Holdings, LLC,” you can always create a new LLC and license the same IP to the new company, if “Black Hat Couriers, LLC” becomes bankrupt after paying the judgment.

Wanna franchise?  No problem.  “Black Hat Intellectual Holdings, LLC” can license the trademarks and copyrights to your brother-in-law who wants to open up shop two states away.

Decided to sell the business?  No problem.  You may even decide that you want to keep “Black Hat Intellectual Holdings, LLC” for ongoing licensing revenue paid by the guy who bought “Black Hat Couriers, LLC.”  Otherwise, if you decide to transfer the IP as well, there’s no break in the continuity of ownership for your domain registry.  Your trademarks all maintain a consistent priority, and the new owner enjoys all the benefits of your prior use.

Given the relatively low cost and effort in creating a business entity, it’s hard to understand why more small business owners don’t take advantage of the powerful asset protections that can be had therefrom.  I guess most people look at it as an expense they can skip, but it’s pretty clear that those are the corners you really can’t afford to cut — penny wise and pound foolish, as they say.

We here at TacticalIP like to monitor intellectual property news and try to report it to you.  You may have noticed that we pride ourselves on pointing out improper enforcement actions taken by trademark owners.  For example, we have previously posted a feature called IP Bully Of The Month.  (see here and here).

As I was reading through some intellectual property news that I normally watch, I came across a story that I thought I would share.  While this doesn’t top my list of overzealous trademark owners trying to enforce rights that they don’t really have, I felt it deserved a mention.  Turns out that The Lego Group (yes – the same company that makes the toys we all played with as kids and the toys that I step on in the middle of the night in my house now) has decided to sue Project LEGOS, a community outreach program started by two University of Minnesota alums.  The “LEGOS” in Project LEGOS stands for “Leadership, Empowerment, Growth, Opportunity, Sustainability.”

The Lego Group toy company, however, sued Project LEGOS and alleged trademark infringement, trademark dilution and cybersquatting.  More particularly, The Lego Group claims that “the consuming public is likely to be confused, deceived and misled into believing that Project LEGOS’ services are provided, authorized, endorsed or sponsored by The Lego Group.”  Seriously?  If that is the case, then anyone who could possibly confuse a community outreach program with the toys probably needs some help from the community outreach program.

Again, we see a big IP Bully flexing their IP muscle for no good reason.  I know that some of you are going to comment that they have a point, but so what if they do?  From a purely legal perspective, I agree.  In fact, if Project LEGOS is made up of a bunch of wackos that would give The Lego Group a bad name, then by all means, shut it down.  That’s not the case here though.  I am analyzing this one from a business perspective.  At what point did some Attorney think it was a good idea to bring this action?  Without filing the trademark infringement suit, there is no way that nearly anyone outside of a 10 mile radius of where Project LEGOS is located would have ever heard of them.  In a way, Project LEGOS should be thanking The Lego Group for all the publicity.  Maybe TacticalIP can be sued by some ridiculously overzealous trademark owner so that we can get a bunch of free publicity . . . .

For a company that has blissfully innovated technology in our world that we hold so dear to our hearts, Apple sure does lack innovation in naming of their products. Good thing that Apple is popular and has some deep pockets – we’re talking the kind of deep pockets that compare to Ed Harris’s decent in The Abyss (1989). Using those deep pockets, Apple has managed to attain the trademark “iPad” from Fujitsu, and move to a 3-0 record in name bouts (their battles over the “Apple Inc.” and “iPhone” names coming before).

The iPad, Apple’s newly anticipated product, which seems to fall between their iPhone and iMac products, will allow the user to surf the web, listen to music, browse photos, and access iBooks, just to name a few functions. The name “iPad” was formerly held by the Japan-based company, Fujitsu, for a similar product used in retail stores. However, Fujitsu and Apple recently negotiated the assignment of Fujitsu’s interest in the “iPad” trademark to Apple for undisclosed terms, coming just before the release of Apple’s iPad on April 3, 2010. For the uninitiated, undisclosed terms roughly translates to big, giant settlement dollars!

Fujitsu filed the trademark application for the “iPad” trademark (serial no. 76497338) on March 7, 2003, but never received a registration for the mark from the United States Patent and Trademark Office, and actually were under a Notice of Abandonment for the mark since April 21, 2009. If Fujitsu would have failed to file the proper paperwork to cure the Notice of Abandonment, Apple would likely have been able to use the “iPad” trademark without any fear of litigation from Fujitsu. What likely played out in a Fujitsu board meeting, however, was a plan to keep the “iPad” trademark application alive just long enough for Apple to make a business decision to buy the trademark rights, or be forced into litigation.

In any case, Apple now has the iPad trademark, Fujitsu’s pockets are speculatively fat and happy, and the American people will be able to touch the iPad tablet until they’ve worn off their fingerprints. Congratulations Apple and keep the “iAnythings” coming. Hey, I might just have to go and file a trademark application on that.

Honda can probably be considered one of the leaders in making more fuel efficient vehicles.  They have always put out some pretty good vehicles, and now, with hybrid technologies, they have been manufacturing some vehicles that get between 40 and 45 miles per gallon.  If I were Honda, I would want to boast about that too.  Apparently, Honda started an ad campaign that offended Save the Earth Enterprises, an environmental group based here in the U.S.  Save The Earth Enterprises sued Honda for trademark infringement over their recent ad campaign.

At first, I could not wrap my brain around this issue.  I could not figure out who in their right mind would possibly confuse an environmental group with an automobile manufacturer.  We have all heard about the (alleged) global warming issues, and if global warming was not enough of a reason to want to buy a more fuel efficient vehicle, then the price of fuel sure should have been.  I also could not figure out what attorney in their right mind would possibly encourage their client, an environmental group, to sue a giant like Honda, who could only possibly be found at fault for manufacturing cars that may be too reliable (if you have had a bad experience with a Honda, please disregard that last comment).

I looked up the trademark registrations by Save The Earth Enterprises and then became thoroughly confused about the issue.  U.S. Trademark Serial No. 75779486 for the “Save The Earth” trademark is used in connection with clothing in international class 25.  U.S. Trademark Serial No. 75779427 for the “Save The Earth” trademark is used in connection with spring water, mineral water, etc. in international class 32.  U.S. Trademark Serial No. 73760229 for the “Save The Earth” trademark is used in connection with posters and bumper stickers in international class 16.  So where is the confusion?  Save The Earth Enterprises are not selling small fuel efficient cars, and Honda (last time I checked) was not selling shirts, mineral water and bumper stickers.  Seems pretty straight forward to me.

I did some searching and figured out what advertisement so offended Save The Earth (see below).  I have seen this commercial several times and I still could not figure out what upset these folks.  I finally noticed the t-shirt that the actor in the commercial was wearing.  The commercial is directed to showing Honda’s commitment over the years to keep designing Civics that changed with the times.  The actor gets out of a very old Civic dressed in clothes that are likely from that era, i.e., 1970’s.  As the actor is walking down the street, his clothes, hair style and facial hair change to represent that which was popular as times changed.  I have seen this commercial not less than 100 times.  It seems to be aired whenever I am trying to watch sports.  I have never noticed the actor’s t-shirt until this dispute arose.  As the t-shirt changes with the time, the writing “Save The Earth” stays constant.  It is displayed along with different art themes on the shirts, but the words are always the same.

The one thing I cannot seem to figure out is whether or not the t-shirts worn by the actor are actual t-shirts manufactured and sold by Save The Earth Enterprises.  If they are, then there may be an issue there, but I do not think it is one that Save The Earth has really thought through.  The big gripe that Save The Earth has is that the use of the t-shirts in the ad campaign implies a false endorsement of Honda.  Really?  Is that so bad?  In the worst case scenario, you are concerned that someone out there who still watches commercials (I do not know many people that do since the advent of TiVo and other DVRs) noticed the t-shirt that the actor was wearing and now believes that Save The Earth somehow endorses the company that makes the most fuel efficient cars on the road today?  How terrible!  It’s not as though it is a commercial showing one guy driving around in a Hummer that gets 12 miles to the gallon.  This is a commercial about promoting the continued efforts of Honda to manufacture vehicles that are fuel efficient and environmentally friendly.

I’m calling you out Save The Earth!  What are your damages here?  Please explain to me how your reputation has been damaged due to the 7 people who noticed that the actor in the Honda commercial was wearing a t-shirt that said “Save The Earth” on it.  Don’t use the court system like this and put out press releases that say you are upset over the possibility over there being a false endorsement of Honda.  Just tell us what this is all about – MONEY!  You think that Honda should have paid you to put that t-shirt on their actor.

To tell you the truth, this is just another example of a trademark owner getting a little too big for his britches.  To tell you the truth, I had never heard of Save The Earth Enterprises until this issue.  I’ll bet that lots of people have heard about Honda.  Which entity is benefiting more from this?  Oh, wait – could this be a publicity stunt to get more attention on your organization?  Never mind…  I think I just figured it out!

Normally, most people out there know that the NFL gets their panties in a knot if you were to use any of their trademarks.  For example, the NFL owns all the names and logos associated with each of the teams, as well as the name for that season ending football game that occurs on a Sunday – I didn’t want to write “Super Bowl” for fear of being sued by the NFL!  Everyone who’s anyone knows that “The Big Game” is going to happen in a couple of weeks from now and that it is going to be between the New Orleans Saints and the team that beat my beloved Jets (just out of spite, I’m not going to mention the name).

We all know what New Orleans went through in 2005.  Katrina was a terrible tragedy and the one thing that kept that city going was The Saints.  I never really followed The Saints, but since they did so great this year, I watched a couple of games.  I always saw people in the stands with signs on it that read “WHO DAT” and I would hear the likes of Drew Brees rally his team by chanting WHO DAT!  I had no idea what it meant.  I did some digging and asked some folks about it.  I used to work with someone that I consider to be the biggest Saints fan ever.  Apparently, there is a little war chant that they have in New Orleans – “Who Dat Say They Gonna Beat Dem Saints.”  That’s a great chant and very original.  In my opinion, it belongs to the people of New Orleans… not the NFL.  I’m glad that The Saints have made it to the Super Bowl.  New Orleans and its great citizens need this.

Let me tell you what they don’t need.  The people and fans of New Orleans do not need the NFL coming in and claiming ownership to “WHO DAT.”  They don’t need the all powerful NFL coming in and trying to make a few more dollars more than their multi-billion (yes, that was billion with a B) dollar television contract.  That is why I was shocked to hear that the NFL was sending out some nasty grams to people who were making t-shirts with the “WHO DAT” slogan on it to celebrate The Saints’ success.  To be specific, folks were putting “WHO DAT” on T-shirts, in combination with the fleur-de-lis logo, which the NFL claims ownership in.

Normally, I would get behind the NFL’s vigorous efforts to defend its intellectual property.  After all, that is where the NFL makes a good portion of its revenue.  There is a reason why uniform jerseys cost over $200.  There is a reason why there have not been too many successful counterfeiters selling products bearing NFL logos.  That is because the NFL has, in the past, done a great job of policing its intellectual property to protect its value.  At the same time, and you have heard me preach this over and over again, just because you can flex your intellectual property muscle doesn’t mean you should.

I’m calling you out Commissioner Goodell and the NFL.  There is a fine line between defending your rights as an intellectual property owner and being a bully, and the NFL just crossed it.  This goes out to every intellectual property owner out there who is thinking about being the bully.  Do not plan on bullying folks using your intellectual property and expect me not to rip you on this blog.  The NFL needs to back down off this position.

I commend U.S. Senator David Vitter for sending a letter to Commissioner Goodell regarding this incident.  The letter is published on Senator Vitter’s website and you can join Senator Vitter in the letter if you would like.

Let the Saints and their fans have this NFL.  I will close with a reference to my favorite sports show – I cannot “protect the shield” on this one.

Those of you who know me know that I am a sports junkie.  GO JETS – sorry, I had to find a way to subtly get that one in there.  If you are reading this and thinking that you are about to hear me rant and rave about coaching changes or NCAA violations at Southern Cal, you are in for a surprise.  This is a true intellectual property dispute between two schools with teams that I don’t particularly appreciate and with football coaches that are not on my top ten list (especially you Kiffin).

Anyway, the Trojans of Southern California have dealt a trademark blow to the South Carolina Gamecocks.  This dispute revolves around the logos for each school and, more specifically, the logos that each school prints on their apparel.  South Carolina appealed a decision from the Trademark Trial and Appeal Board refusing to register the school’s logo and also refusing to cancel a Southern California trademark.  The Federal Circuit upheld both decisions.

Southern California opposed registration of South Carolina’s trademark application and argued that registration of the South Carolina trademark application would cause confusion with two Southern California trademark registrations.  In response South Carolina counterclaimed for cancellation of the two Southern California trademarks.  The main argument, though, was that the Southern California trademarks falsely suggested an association with the State of South Carolina.

In short, after going through a detailed discussion regarding the factors that a court must analyze when determining whether a likelihood of confusion exists between two marks, the Federal Circuit upheld the decision of the TTAB and noted that registration of the South Carolina trademark would likely cause confusion with the two registered trademarks owned by Southern California.

With respect to the issue of whether or not the Southern California trademarks should be canceled because it created a false association with The State of South Carolina, the TTAB granted summary judgment against South Carolina, stating that the university lacked standing to even bring the suit.  Although the Federal Circuit disagreed with the TTAB’s conclusion on standing, it nevertheless agreed that summary judgment was proper.  In order to have standing in a trademark cancellation, a party must only demonstrate that it had a reasonable belief that it would be damaged by the registration in question.  The Federal Circuit ruled that South Carolina had demonstrated such reasonable belief, but had failed to raise an issue of material fact regarding the actual existence of any damage.

The court went on to note that “SC” refers to many entities aside from the State of South Carolina.  The Court pointed to the fact that South Carolina itself offered evidence showing that sixteen other universities and colleges represent themselves as “SC.”  Therefore, the Court found that South Carolina could not show that use of the initials “SC” uniquely pointed to the State of South Carolina.  On that basis, the Court affirmed the ruling of the Board.

At the end of the day, this came down to money.  These are two universities that generate a substantial portion of their budgets based on their sports teams.  They are both located in geographical markets that they dominate, i.e., no other real professional teams in the area that they truly compete with, e.g., football.  Of course, the consumer, i.e., the fans, are not confused over the origin of the goods of services because the symbols on the these caps are somewhat similar.  A fan of either of these teams would likely not mistakenly purchase merchandise of the wrong team.  Just ask Kevin Wimberly, over at Florida IP Trends, if he wants a McDonald’s themed Gamecocks hat.