Surf City Index
.

-

From the Santa Cruz Sentinel.com
Opinion


October 1, 2006
Tyler Ochoa: Stop dubious claims to intellectual property made by trademark bullies

If there is one thing about intellectual property law that drives me crazy, it is IP bullies -- people who use weak or dubious claims to intellectual property rights to try to intimidate other people into stopping conduct that is perfectly lawful.

A good example of an IP bully is the Huntington Beach Conference and Visitors Bureau. The HBCVB claims to own the exclusive right to use the phrase "Surf City USA" as a trademark in connection with the sale of various goods and services, including T-shirts. Since 2004, the HBCVB has filed 11 separate applications to try to register its asserted trademark in the phrase "Surf City USA," and it has succeeded in obtaining four such registrations. Armed with those registrations, it is now sending cease-and-desist letters to various shops that promote the city of Santa Cruz as the real "Surf City USA."

Off hand, I can think of at least five reasons why Huntington Beach's claim to own an exclusive right to use the term "Surf City USA" is weak, dubious and probably unenforceable. But first, a little background on trademark law is in order.

Trademark rights arise from the use of a trademark to identify and distinguish the goods and services of one person from the goods and services of others. Use of a trademark does not give the owner an exclusive right to use the mark in all contexts; instead, the owner obtains only an exclusive right to use the mark in connection with the specific goods and services on which it is actually being used, and on closely related goods and services. For example, Delta Airlines cannot prevent the word "Delta" from being used to identify different goods or services, such as Delta Dental or Delta Faucets.

Moreover, without a federal registration, use of a trademark only gives the owner an exclusive right to use the trademark in the geographic area in which it is actually being used. If someone else starts to use the same mark on the same goods in a very different geographic area, they may obtain the exclusive right to use the trademark in that area, so long as they were not aware of the first party's use when they began using the mark.

If someone owns a valid trademark, they may register it with the United States Patent and Trademark Office PTO on what is known as the principal register. Federal registration on the principal register gives the registrant the exclusive right to use the trademark on or in connection with the specified goods and services anywhere in the United States, subject only to any preexisting rights of others. Moreover, once a trademark is registered on the principal register, it is presumed to be valid, meaning that anyone who wants to challenge the validity of the mark has the burden of proving that the mark is invalid.
.

So why is Huntington Beach's claim to a nationwide exclusive right to the name "Surf City USA" dubious? First of all, the four registrations that the HBCVB has obtained are not registered on the principal register. Instead, they are registered only on a lesser list known as the supplemental register. Registration on the supplemental register does not give the registrant an exclusive right to do anything; it is simply a registration of a claim of trademark rights. In other words, the HBCVB does not have a nationwide right to use the phrase "Surf City USA" on any goods or services, and the PTO has not recognized that the HBCVB has any such right; it has simply recognized that the HBCVB is claiming that it has such a right. In such a case, the HBCVB's rights arise only from actual use of the trademark, and extend only to the geographic area in which it is actually using the mark. Thus, if the HBCVB is using the mark only in Southern California, it does not have any exclusive rights in Northern California.

Second, even if a trademark is registered on the principal register, the mark can still be challenged as invalid. In this case, if a merchant in Santa Cruz can demonstrate that it has been using the phrase "Surf City" longer than the city of Huntington Beach has, then it has priority over the HBCVB and the HBCVB's registration should be declared invalid. In addition, because the name "Surf City USA' is allegedly descriptive, it is a valid trademark only if those words have acquired a "secondary meaning," that is, only if the public has come to view the words "Surf City USA" as a brand name for particular goods or services, rather than as a description of a particular location or multiple locations. If the trademark is registered on the principal register, secondary meaning will be presumed to exist; but if the mark is registered only on the supplemental register, the HBCVB would have to prove that such a secondary meaning exists, which is doubtful.

Third, even if a trademark is valid and is registered on the principal register, there is a defense for anyone who began using the mark in good faith that is, without knowledge of the prior use and has continued to use the mark in a particular geographic area from before the time that the application for registration was filed. The HBCVB filed its first application for registration on November 18, 2004. If a merchant in Santa Cruz has been using the words "Surf City" as a trademark since before that date, it has a right to continue using those words as a trademark on the same goods in the same geographic area indefinitely, so long as it continues to use the mark. But if the merchant stops using the mark for a period of time, then a court may not allow the merchant to resume using the mark unless the Huntington Beach mark is deemed to be invalid or is registered only on the supplemental register. In other words, the HBCVB is hoping that if it can intimidate people in Santa Cruz into stooping the use of the mark now, doing so will strengthen its claim to having the exclusive right to use the mark in the future.

Fourth, even if a trademark is valid, there is no infringement unless the use of the mark creates a likelihood of confusion in the minds of the public as to sponsorship or endorsement by the mark owner. In this case, there is a well-known rivalry between the cities of Huntington Beach and Santa Cruz over the use of the phrase "Surf City USA." So long as the merchants of Santa Cruz make it clear that they are referring to Santa Cruz and not to Huntington Beach when they use the phrase "Surf City," I think it is extremely unlikely that anyone would be confused as to whether the goods or services were sponsored or endorsed by the Huntington Beach Conference and Visitors Bureau.

Fifth, even if a trademark is valid, there is a "descriptive fair use" defense for using the words in a descriptive manner but not as a trademark. Arguably, if someone is simply using the words "Surf City" to describe the city of Santa Cruz, and they are not using those words to identify and distinguish the source of their goods or services from those of others, then they are not infringing on the alleged trademark.

Put it all together and the situation becomes clear. The Huntington Beach Conference and Visitors Bureau wants a nationwide exclusive right to sell merchandise with the phrase "Surf City USA" on it, but it has not been able to persuade the PTO to grant it such a right by registering the trademark on the principal register. The HBCVB, however, has loudly trumpeted that it has obtained four federal registrations, no doubt counting on the fact that most people will not be aware of the difference between the principal register and the supplemental register. The HBCVB is now sending cease-and-desist letters to merchants in Santa Cruz, hoping that those merchants will not be aware of their own rights and will not want to spend the time and money to defend against the HBCVB's claim. The result may be a self-fulfilling prophecy: if the HBCVB succeeds in intimidating the merchants of Santa Cruz, and if it can maintain "substantially exclusive use" of the phrase "Surf City USA" for several years, then it may acquire the "secondary meaning" needed to upgrade its existing registrations to the principal register, which will then give it the nationwide exclusive right that it now lacks.

So, my message to the merchants of Santa Cruz is simple: Don't be intimidated. If you have been using the phrase "Surf City" or "Surf City USA" for a considerable period of time, it is extremely likely that you have a legal right to continue using the phrase. Yes, it may be expensive to defend your legal rights in court, but it will also be expensive for the HBCVB to bring lawsuits to enforce its alleged rights; and if you are successful in persuading the court that the HBCVB os overreaching, it could be possible to recover all or part of your attorney fees at the end of the day. Moreover, it only takes one judicial decision to render a trademark invalid and unenforceable. If all the merchants in Santa Cruz who are currently using the phrase "Surf City" were to band together and contribute to a common legal defense fund, they could fund a vigorous defense for the first one of them to be sued by the HBCVB and stop this trademark bully in its tracks.

Tyler T. Ochoa is a professor at Santa Clara University School of Law.

This article was originally listed on the Santa Cruz Sentinel website at
http://www.santacruzsentinel.com/archive/
2006/October/01/edit/stories/06edit.htm
but was removed.

300 - 450

140




DISCLAIMER
All reported errors will be corrected, after verification.

Thank you very much for your time.

top of page


Tags: trademark bullies santa cruz



Vaughn Aubuchon Author Bio

Vaughn's Summaries
©2014, 2017 Vaughn Aubuchon
www.vaughns-1-pagers.com
All Rights Reserved

Site Map

This Vaughns Trademark Bullies page
was last updated on 2017-09-29.