Yankees Recognized as EVIL EMPIRE … The Board is With Them

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By Tara Vold

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In a ruling earlier this month, the Trademark Trial and Appeal Board officially recognized the New York Yankees as the exclusive “EVIL EMPIRE” of baseball.

In an entertaining decision, the Board sustained an opposition lodged by the baseball club against a trademark application for “BASEBALLS EVIL EMPIRE” (no possessive) for various clothing items filed in the name of Evil Enterprises, Inc. See TTAB Opinion (Feb. 8, 2013).


The phrase “EVIL EMPIRE” became part of our popular lexicon back in the 1970s and early 1980s in connection with the STAR WARS trilogy and was famously used by Ronald Reagan in a 1983 speech before the British House of Commons to refer to the Soviet Union.

 In 2002, Red Sox CEO Larry Lucchino bestowed the title on the Yankees after the club signed a highly acclaimed Cuban pitcher, commenting “the evil empire extends its tentacles even into Latin America.” While not exactly intended to be complimentary, the phrase stuck among sports journalists, fans and detractors.

As a result of this public association, the Yankees organization, which has never itself used the EVIL EMPIRE moniker, was able to establish rights in the mark in connection with products and services associated with baseball. Specifically, the organization submitted numerous third party uses of the name referring to the Yankees in news stories, internet blogs, message boards and Wikipedia references.

Further, the Yankees identified similar associations in Applicant Evil Enterprises’discovery responses and web materials. In light of such evidence, the Board found that Evil Enterprise’s registration and use of BASEBALLS EVIL EMPIRE mark would create both a likelihood of confusion and a false association of connection with the New York Yankees.

The USPTO regulations clearly recognize an entity/individual’s right to nicknames developed through the media, but one wonders whether we would have seen the same result if Evil Enterprises had either filed an application for “EVIL EMPIRE” (without the BASEBALL modifier) (a 2003 application filed for EVIL EMPIRE (App. No. 78/285,579) by a third party for hats, shirt and jackets went unopposed) and/or had the foresight to file its application back in 2002.

While the USPTO has recognized nickname association in circumstances involving only a short time period of use, those instances appear most common where the nickname is, on its face, uniquely and unmistakably associated with the referenced individual (e.g. LINSANITY). The USPTO may likely require more significant evidence where the association requires a mental leap.

Finally, it is interesting that the Board did not find the BASEBALLS EVIL EMPIRE mark disparaging, noting the offensiveness of the term “evil” is not obvious in matters of public opinion. The New York Yankee’s own evidence showed that a number of fans adopted the moniker as a “badge of honor” and that the Yankees “implicitly embraced” the designation by playing John William’s ominous “The Imperial March” (a/k/a “Darth Vader’s Theme”) during home games.

In the Board’s words “having succumbed to the lure of the dark side” the New York Yankees “will not now be heard to complain about the judgment of those who prefer the comfort of the light.”  See TTAB Opinion.

Sources: New York Yankees Partnership v. Evil Enterprises, Inc., Opposition No. 91192764. (February 8, 2013).

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This article was prepared by Tara Vold (tvold@fulbright.com / 202 662 4657) of Fulbright’s Intellectual Property and Technology Practice.

Every Inch Counts: Subway Sued Over “Short” Footlong Sandwiches

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By Brandon Crisp

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In a series of recent lawsuits, plaintiffs have sued Subway Sandwich Shops, Inc., (“Subway”) under various consumer protection laws claiming that the world’s biggest fast-food chain has been serving customers “footlong” sandwiches that are not, in fact, 12 inches. What started with customers posting pictures of their sandwiches next to rulers on Facebook, has resulted in class actions against the sandwich giant.

On January 22, 2013, plaintiff Nguyen Buren filed the first lawsuit in a federal court in Chicago, alleging a “pattern of fraudulent, deceptive, and otherwise improper advertising, sales and marketing practices.” Buren v. Doctor’s Assocs., Inc., No. 13-498 (U.S. Dist. Ct., N.D. Ill.). Mr. Buren made claims under the consumer protection laws of all 50 states, as well as a claim for unjust enrichment, and seeks over $5 million in damages.

According to the Chicago Tribune, Buren’s lawyer, Tom Zimmerman, claimed in reference to the suit: “This is no different than if you bought a dozen eggs and they gave you 11 or you bought a dozen doughnuts and they gave you 11.”

A short time later, New Jersey residents John Farley and Charles Pendrak also brought one of the first class actions in state court where they allege, “Despite the repeated use of uniform language by Subway stating that this sandwich is a ‘footlong,’ the product in question is not, in fact, a foot long. Rather this product consistently measures significantly less than 12 inches in length.” Pendrak et al v. Subway Sandwich Shops, Inc. et al, Case No. 3:13-cv-00918-FLW-DEA (U.S. Dist. Ct., D. N.J.) (removal from N.J. Super. Ct. filed February 13, 2013).

Stephen DeNittis, the lawyer representing Farley and Pendrak said, “Subway is profiting hundred[s] of thousands and potentially millions of dollars at consumers’ expense through mass uniform widespread misrepresentation about the size of its ‘Footlong.’ It is important that large companies like Subway promote and advertise their products accurately and deliver what they promise to consumers.” See Stephen DeNittis’ Statement.

Subway quickly responded to the allegations by issuing a company statement to the Chicago Tribune, saying it would work harder to achieve sandwich-length uniformity. “We have redoubled our efforts to ensure consistency and correct length in every sandwich we serve,” the statement said. “Our commitment remains steadfast to ensure that every Subway Footlong sandwich is 12 inches at each location worldwide.” See Chicago Tribune story.

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This article was prepared by Brandon Crisp (bcrisp@fulbright.com and +1 512 536 2422) of Fulbright’s Litigation Practice.

Sterling Jewelers Fails to Enjoin Zale Advertising

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By Bob Rouder and Saul Perloff

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As we recently reported, Sterling Jewelers, owner of the Kay Jewelry and Jared Galleria brands, sued Zale, owner of the Zale and Gordon Jeweler brands, for false advertising under the Lanham Act. See Jan. 16, 2013 BPB Post, "The Brilliance of a Girl's Best Friend is Challenged." 

Sterling claimed that the Zale’s promotion of its Celebration Fire diamonds as “the most brilliant diamonds in the world” is false.

In addition, Sterling alleges that Zale’s representation that independent testing demonstrated that the Celebration Fire diamond was the world’s most brilliant diamond is an establishment claim that cannot be shown to be truthful.

In addition to damages and a permanent injunction, Sterling also petitioned the court for a preliminary injunction. Preliminary injunctions are considered extraordinary remedies.

Generally, to preliminarily enjoin the actions of the defendant, the plaintiff must show:

1. there is a strong likelihood that it will prevail on the merits at trial; 
2. it will suffer irreparable harm if the injunction does not issue; 
3. that the injunction would not cause substantial harm to others; and 
4. the public interest will not be disserved by the issuance of an injunction.

A hearing was held in late December and the Court ruled on January 24th, 2013 that Sterling was not entitled to a preliminary injunction because it had not demonstrated irreparable harm.

 Specifically, the Court found that if Zale continues its current promotion, the harm to Sterling “at most would be lost sales and possibly lost customers.”

The Court concluded that both items “could be remedied through an award of monetary damages.” Read the Sterling Decision.

Source: Sterling Jewelers, Inc. v. Zale Corporation, Case No. 5:12-cv-02823 (N.D. Oh.).

ITC Denies K-V Pharmaceutical’s Complaint

In October 2012, KV-Pharmaceuticals filed a 337 petition with the International Trade Commission asking the ITC to block importation of the active ingredient 17-HPC.

That ingredient is used in compounding preparations that compete with KV’s Makena brand, an FDA-approved orphan drug indicated for the prevention of premature deliveries in women with at-risk pregnancies. See The Brand Protection Blog Post, "K-V Pharmaceuticals Calls Upon the ITC To Defend Its Makena® Brand,"

Late last year, the ITC declined to investigate the matter and dismissed KV’s complaint. In a December 21, 2012, letter to KV’s counsel the ITC wrote “KV’s complaint does not allege an unfair method of competition or an unfair act congnizable under 19 U.S.C. § 1337(a)(1)(A), as required by the statute and the Commission’s rules.” Read the International Trade Commission’s Letter.

Typically, 337 petitions allege that the importation of goods violate the intellectual property rights of domestic holders of patent, copyright and trademark rights. KV’s complaint did not allege that the importation of 17-HPC infringed any Makena patent, trademark or copyright.

Rather, KV asserted that the U.S. Food and Drug Administration (FDA) had granted the company market exclusivity—akin to the exclusivity enjoyed by patent holders—when it approved Makena under the Orphan Drug Act. KV had previously filed suit to compel the FDA to enforce this grant of exclusivity but a federal court refused to do so. See The Brand Protection Blog post, "Can a Drug Company Require the FDA to Protect the Market Exclusivity of its Brand Drug?"

This history was apparently important to the ITC which cited the federal court decision dismissing the suit and noted that the FDA “is charged with the administration of the Food, Drug and Cosmetic Act.”

Source: International Trade Commission

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These updates were prepared by Bob Rouder (rrouder@fulbright.com / 512 536 2491) and Saul Perloff (sperloff@fulbright.com / 210 270 7166) of Fulbright’s False Advertising Practice.

Mobile Apps, Children, and an $800,000 Settlement

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By Erika Brown Lee and Sue Ross

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Many brand owners would like to build brand awareness and loyalty among young people, even if these minors are not yet able to purchase the branded good or service. One way companies seek to engage the younger generation is by offering brand specific applications (“apps”) for smartphones and other mobile devices.

On February 8, 2013, the Federal Trade Commission (FTC) approved a consent decree filed in the U.S. District Court for the Northern District of California to resolve a complaint charging Path, Inc., a mobile application developer, with making deceptive statements and violating the Children’s Online Privacy Protection Act (COPPA).^[1] See FTC Feb. 1, 2013 Release; see also 16 CFR Part 312.

The Consent Decree orders Path to pay $800,000 in civil penalties, and subjects the company to a permanent injunction, as well as other equitable remedies. See Feb. 8, 2013 Consent Decree.

According to the Complaint, Path operates, through a mobile app, a social networking service that allow users to share journals, photos and other information with the users’ network of friends.

The federal complaint charged that Path’s privacy policy was deceptive under Section 5 of the FTC Act because, contrary to its privacy policy, the company’s mobile app automatically collected personal information such as first and last names, addresses, phone numbers, birth dates, and email addresses from the user’s mobile device address book each time the user logged in to the app, whether or not the user had authorized the collection. See Complaint.

The Complaint also alleged that the Path app collected birth date information during user registration. As a result, the FTC claimed that the company was aware it was collecting personal information from approximately 3,000 children under the age of 13.

The Complaint asserted that Path violated COPPA by failing to notify parents and obtain verifiable parental consent prior to collecting personal information from children.

The FTC announced the Path Consent Decree a week after the Commission issued a Staff Report relating to mobile apps and consumer privacy. The FTC Staff Report, issued on February 1, 2013, contained privacy recommendations for various participants in the mobile app ecosystem: From platforms to developers to advertising networks to trade associations.

Although the Staff Report contained no binding regulations, it offered insight into the FTC staff’s views on how to improve privacy disclosures in the dynamic world of the very small screen.^[2]

Specifically, the FTC Staff recommended that app developers:

• Have a privacy policy and make it available through the platform’s app store. Id. at 22.
• Provide just-in-time disclosures to consumers and to obtain “affirmative express consent when collecting sensitive information outside the platform’s API, such as financial, health, or children’s data, or sharing sensitive data with third parties.” Id. at 23 (footnote omitted). The Report stressed that “it is important that these app-level disclosures not repeat the platform-level disclosures.”
• “Improve coordination with ad networks and other third parties that provide services for apps so that the apps can provide truthful disclosures.” Id. at 24.
• Consider participating in self-regulatory programs and app trade associations for their guidance on “uniform, short-form privacy disclosures.” Id.

The Staff Report noted that the National Telecommunications and Information Agency (part of the U.S. Department of Commerce) has initiated a multi-stakeholder process to develop a “code of conduct” for mobile apps. “To the extent that strong privacy codes are developed, the FTC will view adherence to such codes favorably in connection with its law enforcement work.” Id. at iii.

Recently, the FTC has emphasized the applicability of the COPPA rule to sites not targeted at children. In a blog statement describing the Path settlement, Senior FTC Attorney Lesley Fair stated: “COPPA isn’t just for kids’ sites. Yes, the rules apply when sites and online services are specifically designed for the under-13 set, but don’t be too quick to assume you’re not covered. The Rule also imposes legal responsibilities on operators who have actual knowledge they’re collecting person info from kids.” See Fair’s Statement.

The FTC is also reportedly moving enforcement of the Children’s Online Privacy Protection Act from its Division of Advertising Practices to its Division of Privacy and Identity Protection (DPIP). See Broadcasting & Cable Report.

Any company that collects information from visitors to its website may consider incorporating COPPA compliance into its planning process and may wish to consider joining the process to develop a code of conduct for mobile apps.

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This article was prepared by Erika Brown Lee (ebrownlee@fulbright.com / 202 662 0398) and Sue Ross (sross@fulbright.com / 212 318 3280) of Fulbright’s Privacy, Competition and Data Protection Practice.



Sources: United States v. Path Inc., No. 3:13-cv-00448-JCS (N.D. Cal.); Federal Trade Commission: Path Social Networking App Settles FTC Charges it Deceived Consumers and Improperly Collected Personal Information from Users' Mobile Address Books (Feb. 1, 2013); 16 CFR Part 312, Children’s Online Privacy Protection Rule (Final Rule) (Jan. 17, 2013); Federal Trade Commission: Staff Report Recommends Ways to Improve Mobile Privacy Disclosures (Feb. 1, 2013); John Eggerton, FTC Moving COPPA Under Privacy Division, Broadcasting & Cable (Feb. 15, 2013).




[1] Note that this complaint and proposed consent order relate to the current COPPA requirements. New COPPA regulations go into effect on July 1, 2013. The new regulations can be found at 78 FR 3972, Jan. 17, 2013.


[2] “Here, however, staff is not imposing rules on any members of the mobile ecosystem. Rather, it is identifying areas where ecosystem participants, including mobile platforms, should consider improving mobile privacy disclosure practices.” Staff Report at 15 n.70.

Can a Lanham Act Case Generate a Lanham Act Claim?

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By Bob Rouder and Saul Perloff

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That is the issue raised by a fight between two laboratories that perform sophisticated analyses of urine for the presence of drugs in order that physiacists (pain doctors) might manage patient compliance with opioid dosing.

Millennium Laboratories Inc. sued Ameritox, Ltd. alleging false advertising under the Lanham Act and advancing a number of theories. See Millennium Complaint.

Ameritox counter-claimed that Millennium falsely represents their services as having the fastest turnaround time and as being the only company to use a certain technology. See Ameritox Counterclaim.

The Pre-Trial Motions Practice

After many pre-trial motions, the court dismissed each of Ameritox’s counterclaims because there was no factual evidence presented that Millennium’s advertising was false. Further, Millennium produced evidence showing their ads were literally true.

The court also dismissed several of Millennium’s false advertising claims.

Under the Lanham Act, a representation is either false on its face, in which case deception is presumed, or it is literally true or ambiguous but likely to mislead or confuse consumers. In the latter situation, absent “stark evidence” that the deception was willful, there must be extrinsic evidence that consumers were or would likely be deceived. In this case, the Court concluded Millennium’s consumer survey evidence purporting to demonstrate deception was flawed because it did not contain “any meaningful form of control.”

As a result, the Court dismissed Millennium’s allegations that Ameritox’s ads were misleading.

The only surviving claims were Millennium’s allegation that four Ameritox advertisements were literally false when they asserted that Ameritox’s tests could “tell a doctor whether the patient was compliant.”

Millennium claimed that the nature of these tests can determine the presence or absence of a drug and in what quantity at a given moment. What it cannot do is determine what dosage was originally consumed and at what rate it was metabolized.

Ameritox countered that, when read fairly, the ad meant that the test, with its sophisticated algorithm based upon a parametric treatment of metabolism, “afforded doctors another tool to ‘help’ or ‘assist’ them in monitoring their pain patients.” See Court Memorandum.

The Case Goes To Trial

The judge ordered a bifurcated trial. The first phase called for the jury to issue an advisory verdict as to the literal falsity of the Ameritox advertisements. If the jury made such a finding, the judge would independently decide “whether each of the four ads conveyed a message that was literally false.”

At the end of this phase, both jury and judge found the Ameritox ads literally and unambiguously false. The trial then moved onto the second phase which evaluated whether the ads caused Millennium injury and if so, what remedies would follow.

Here, the court determined that Millennium could only speculate, but not show, what damages it had suffered. The judge then ordered the parties to mediate the remaining issues surrounding equitable relief. The parties agreed to a Consent Order in which Ameritox would cease using the offending language and the CEO would communicate with customers disclosing the jury’s advisory verdict that its four ads were literally false. 

The New Lanham Act Claims

Within hours after the judge entered the Consent Order, both sides issued press releases and public statements concerning the litigation. Each side then filed a Lanham Act claim against the other based upon alleged falsities in the public pronouncements.

In this instance, the judge noted that there was a significant legal hurdle for each side insofar as he doubted that press releases constituted “commercial advertising or promotion” under the Lanham Act. In addition, the judge found that both sides would be unable to show monetary damages or loss of goodwill arising from the releases.

Thus, according the Court, “the characteristic relief” would be equitable and to convene a jury to examine the issues, facts and actions from the first trial in order to reach a proper result in the second, would be wasteful and unproductive.

Therefore, the judge decided that under his inherent authority to enforce the Consent Order, the Court would moot each side’s claims by issuing a Memorandum “that neutrally and objectively recounted the earlier litigation.” Find Court Memorandum here.

Sources: Millennium Laboratories, Inc. v. Ameritox, LTD., Civil Case L-10-03327 (D. Md.)

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This article was prepared by Bob Rouder (rrouder@fulbright.com / 512 536 2491) and Saul Perloff (sperloff@fulbright.com / 210 270 7166) of Fulbright’s Practice.

EDITORIAL: Is The New York Times Promoting Counterfeiting?

On Sunday, February 10, the New York Times devoted a full page in its Magazine to report on a shopping trip to Canal Street’s infamous “Knockoff Row.”

However, this was no piece of investigative journalism, blowing the lid off of widespread counterfeiting in the midst of New York City.

Instead, the article, enticingly titled “Canal Street Booty,” showcases a “sampling of counterfeit goods” available on Canal Street. In addition to photographs of copies of popular designer handbags, the article compares the price of the “real thing” and the [asked- and bargained-for] price of the fake. It even informs readers where they can buy the illegal knockoff.

Whatever reason the Times had for publishing the piece—To seem current? To highlight New York’s edgy sophistication?—the result is deplorable.

Trademark counterfeiting is a serious and widespread crime. If a branded product has some popularity, someone, somewhere is likely knocking it off.

Seemingly everything—from the medicine we take, to the clothes we wear, to the movies we watch, to the toys our children play with—is counterfeited. People are hurt and die from counterfeit pharmaceuticals, airplane and automobile parts, electrical goods, and other items. Child labor makes counterfeits, organized crime and terrorists are among those who benefit from it, and governments lose billions of dollars in tax revenues because of it.

For these reasons, governments, brand owners and other interested groups, are engaged in a global effort to fight counterfeiting.

Organizations including the International AntiCounterfeiting Coalition, the International Trademark Association, a Global Congress and Interpol’s annual IP Crimes Conference, seek to strengthen laws and encourage cooperation aimed at stemming the problem. There have been numerous broadcasts, news articles and other publicity, to educate the public to the fact that counterfeiting and piracy is illegal and potentially dangerous.

It is remarkable the New York Times could be so tone deaf to the global efforts to stop counterfeiting, particularly when that effort is often centered right here in New York City. Fortunately, comments to the on-line version of the New York Times piece indicate its readers know better.

The media should uncover, and report on crime; certainly they have a responsibility not to encourage it with a cynical wink. The Times is no exception.

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This article was written by Mark Mutterperl (mmutterperl@fulbright.com / 212 318 3183) and Saul Perloff (sperloff@fulbright.com / 210 270 7166) of Fulbright’s Intellectual Property and Technology Practice. The views expressed in this article are those of the authors and do not necessarily represent the views of, and should not be attributed to, Fulbright & Jaworski L.L.P.

Big Score for NFL Brand Owners: U.S. Seizes Fake NFL Merchandise and Websites Before Super Bowl

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By Sue Ross

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“Operation Red Zone” may sound like something from an NFL team playbook, but on January 31, 2013, the results of this sting operation were announced by the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations, which teamed up with the NFL, the U.S. Customs and Border Protection, the U.S. Postal Inspection Service, PayPal, and state and local police departments around the country.

The goal of “Operation Red Zone” was not a touchdown but rather the seizure of fake NFL merchandise and tickets during the days, weeks, and months leading up to the Super Bowl. See ICE Jan. 31, 2013 News Release.

“Operation Red Zone” began in September and has so far resulted in 23 arrests, seizure of $13.6 million in fake merchandise (more than 160,000 items, including jerseys and hats), and seizure of 313 websites. Visitors attempting to reach the affected websites are now greeted with a banner that notifies the visitor of the government seizure and educates the visitor about the federal crime of copyright infringement.

The team of brand enforcers is benefiting from the previous two years’ experience: The seizures in the current “Operation Red Zone” represent approximately three times the amount from last year. Brandon Butler, Super Bowl Bust: US Takes Down 313 Websites, Snags $13.6 M in Counterfeit NFL Merchandise, NetworkWorld, Jan. 31, 2013.

ICE Director John Morton said, “The Super Bowl is one of the nation’s most exciting events. Organized criminals are preying on that excitement, ripping consumers off with counterfeit merchandise and stealing from the American businesses who have worked hard to build a trusted brand. The sale of counterfeit jerseys and other sports items undermines the legitimate economy, takes jobs away from Americans and fuels crime overseas.” News Release.

“Operation Red Zone” is already scheduled to go into overtime. The current sting operation will extend until February 6—the Wednesday after the Super Bowl.

Sources: News Release, “ICE, CBP, USPIS Seize More than $13.6 Million in Fake NFL Merchandise during ‘Operation Red Zone’ 313 Websites Seized and 23 Individuals Arrested Nationwide for Selling Counterfeit NFL Merchandise,” Jan. 31, 2013; and Brandon Butler, “Super Bowl Bust: US Takes Down 313 Websites, Snags $13.6 M in Counterfeit NFL Merchandise,” NetworkWorld, Jan. 31, 2013.

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This article was prepared by Sue Ross (sross@fulbright.com / 212 318 3280) of Fulbright’s Intellectual Property and Technology Practice.