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The Strategic Use of Legal Margins: How to Introduce an Extension of Someone Else’s Brand

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Legal Strategies

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Abstract

This chapter examines the legal issues associated with offering what might appear to consumers as a brand extension of a brand owned by someone else. It identifies four possible strategies for associating with a famous brand: brand resale, compatible products, imitative substitutes and parody products. It also examines how various judicial trademark decisions in the United States of America and the European Union have addressed these tactics. The chapter concludes with strategy recommendations for marketers.

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Notes

  1. 1.

    For example see D. Aaker, Building Strong Brands (The Free Press, 1996); D. Lock and N. Farrow eds., The Gower Handbook of Management, 4th ed (Gower Publishing, 1998) 437–460; See also D. Wengrow, “Prehistories of Commodity Branding” (2008) 49(1) Current Anthropology 7–34; See also P. F. Anderson, and P. D. Bennett, Dictionary of Marketing Terms (American Marketing Association, 1988); also see K. L Keller, Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 3rd ed. (Prentice-Hall, 2003).

  2. 2.

    M. Landler, Z. Schiller, and L. Therrien, “What’s in a Name? Less and Less” (8 July 1991) Business Week 66.

  3. 3.

    M. C. Campbell, and K. Lane Keller, “Brand Familiarity and Advertising Repetition Effects” (2003) 30(Sept) Journal of Consumer Research, Inc. 292–304.

  4. 4.

    D. A. Aaker, and K. Lane Keller, “Consumer Evaluations of Brand Extensions” (1990) 54 Journal of Marketing 27–41 [Aaker and Keller].

  5. 5.

    P. Kotler, and K. Lane Keller, Marketing Management 12th ed. (Prentice Hall, 2005) 19.

  6. 6.

    Aaker and Keller (n 4).

  7. 7.

    F. Volckner, and H. Sattler, “Drivers of Brand Extension Success” (2006) 70 Journal of Marketing 18–34.

  8. 8.

    See for example DC Comics v. Kryptonite Corp. (2004), 336 F. Supp.2d 324 (S.D.N.Y.); T. Agins, and R. Quick, “Calvin Klein, Warnaco Settle Their Bitter Feud,” Wall Street Journal, (21 Jan. 2001) B1.

  9. 9.

    See D. Shilling, Essentials of Trademarks and Unfair Competition, (John Wiley & Sons, 2002) Chap. 1.

  10. 10.

    Ibid. See also discussion in New Kids on the Block v. News America Publishing, Inc. (1992), 971 F.2d 302-8. (9th Cir.) [New Kids on the Block].

  11. 11.

    Ibid.

  12. 12.

    Ibid.

  13. 13.

    For further discussion on trademark dilution in the USA generally, please see D. S. Welkowitz, Trademark Dilution: Federal, State and International Law (BNA Books, 2002) [Welkowitz]; See also Trademark Dilution Revision Act of 2006, Pub. L. No. 109-312, 120 Stat, 1729 (2006) [TDRA].

  14. 14.

    In-N-Out Burgers v. Chadders Restaurant (2007), Case No. 2:07-CV-394 TS, 2007 U.S. Dist. LEXIS 47732 (D. Utah).

  15. 15.

    D. B. Yoffie, and M. Kwak, Judo Strategy: Turning Your Competitors’ Strength To Your Advantage, (Harvard Business School Press, 2001).

  16. 16.

    Ibid.

  17. 17.

    Ibid 68.

  18. 18.

    See New Kids on the Block (n 10).

  19. 19.

    See for example, Merck & Co. Inc. v. Mediplan Health Consulting, Inc., 425 F. Supp. 2d 402 (S.D.N.Y. 2006), para. 32, where court held that the purchase of trademarked keywords for search engine placement did not amount to a “use in commerce” because it was an “internal utilization of a trademark in a way that does not communicate it to the public.”

  20. 20.

    Scott Fetzer Co. v. House of Vacuums, Inc. (2004), 381 F.3d 477 (5th Cir.).

  21. 21.

    European Trade Mark Directive, Council Directive 89/104/EEC of 21 December 1988.

    [EU Trade Mark Directive].

  22. 22.

    Ibid Art. 6.

  23. 23.

    Parfums Christian Dior SA v. Evora BV (1997), Case C-337/95, 1997 EMTR 937.

  24. 24.

    Champion Spark Plug Co. v. Sanders (1947), 331 U.S. 125.

  25. 25.

    NitroLeisure Prods. LLC v. Acushnet Co. (2003), 341 F.3d 1356 (Fed. Cir.).

  26. 26.

    Prestonettes, Inc. v. Coty (1924), 264 U.S. 359.

  27. 27.

    See generally discussion in C. Schumacher, “Use of Trade-Marks on Repackaged and Relabelled Pharmaceutical Goods” J. Phillips ed., Trademarks at the Limit, (Edward Elgar Publishing, 2006).

  28. 28.

    See discussion in, N. Saqib, and R. V. Manchanda, “Consumers’ evaluations of co-branded products: the licensing effect” (2008) 17(2) Journal of Product & Brand Management 73; See also A. Bass, “Licensed extensions – Stretching to communicate” 12(1) 2004, Journal of Brand Management 31.

  29. 29.

    Bumble Bee Seafoods, LLC v. UFS Indus. (2004), 71 U.S.P.Q.2d 1684 (S.D.N.Y).

  30. 30.

    Under this principle, trademark rights become exhausted throughout the EU territory once a product has been put on the market in any Member State. See EU Trade Mark Directive (n 21) Art. 7(1).

  31. 31.

    Ibid.

  32. 32.

    Hoffman-La Roche (1978), Case C-102/77, 1978 ECR 1139.

  33. 33.

    Playboy Enterprises, Inc. v. Welles” (1998), 7 F. Supp. 2d 1098 (S.D. Ca. 1998), aff’d mem., 162 F.3d 1169 (9th Cir.).

  34. 34.

    See generally, Volkswagenwerk A.G. v. Church (1969), 411 F.2d 350 (9th Cir.) and Bayerische Motorenwerke AG (BMW) v. Deenik (1999), ECJ Case C63-97, 1999 ETMR 339.

  35. 35.

    EU Trade Mark Directive (n 21) Art. 6.

  36. 36.

    Gillette Co. v. LA Labs. Ltd. Oy (2005), ECJ Case C-228/03, 2005 ETMR 67.

  37. 37.

    See for example, Polyglycoat Corp. v. Environmental Chems. Co. (1980), 509 F. Supp. 36 (S.D.N.Y).

  38. 38.

    See Siemens AG v. CIPA Gesellschaft fur Visualisierung und Prozessautomatisierrung mbH (2006), (EJJ 1st Chamber – unreported) (C59/05); and see Toshiba Europe GmbH v. Katun Germany GmbH (2002), 3 C.M.L.R. 7 (ECJ 5th Chamber) (C112/99).

  39. 39.

    See Weight Watchers Int’l, Inc. v. Stouffer Corp., 744 F. Supp. 1259 (S.D.N.Y. 1990); See also, L. Stansky, “A Brand Everyone Knows” (2003) 25(31) National Law Journal A9.

  40. 40.

    See discussion in Ross D. Petty, “Of Tartans and Trademarks” 9(2004) 4 Trademark Rep. 875–876 [Petty].

  41. 41.

    Ford Motor Company. v. Lapertosa (2000), 126 F. Supp. 2d 463–467. (E.D. Michigan).

  42. 42.

    Plasticolor Molded Prods. v. Ford Motor Co. (1989), 713 F. Supp. 1329, 1335 (C.D. Cal.), vacated by consent judgment, 767 F. Supp. 1036 (C.D. Cal. 1991).

  43. 43.

    National Football League Properties, Inc. v. Wichita Falls Sportswear (1982), 532 F. Supp. 651 (W.D. Wash.).

  44. 44.

    University of Georgia Athletic Ass’n v. Laite (1985), 756 F.2d 1535 (11th Cir.).

  45. 45.

    Compare Boston Professional Hockey Ass’n, Inc. v. Dallas Cap & Emblem Mfg., Inc, (1975), 510 F.2d 1004 (5th Cir.), cert. denied, 423 U.S. 868 and University of Pittsburgh v. Champion Prods., Inc. (1983), 566 F. Supp. 711 (W.D. Pa ).

  46. 46.

    Petty (n 40) 875.

  47. 47.

    Arsenal Football Club plc v. Reed (2002), ECJ Case C-206/01, 2002 ECR I-10273, 2003 ETMR 19.

  48. 48.

    GMC v. Lanard Toys, Inc. (2007), 468 F.3d 405 (6th Cir.).

  49. 49.

    Adam Opel AG v. Autec AG (2007), ECJ Case C-48-05.

  50. 50.

    Gateway Inc. v. Companion Products Inc. (2004), 384 F.3d 503 (8th Cir.), paras 80 and 85.

  51. 51.

    See ibid paras 70–71 and fn 8.

  52. 52.

    Saxlehner v. Wagner (1910), 216 U.S. 375, 380.

  53. 53.

    Anti-Monopoly Inc. v. General Mills Fun Group 611 F.2d 296, 301. n.2 (9th Cir. 1979); But see Christian Science Bd. Of Directors of First Church of Christ, Scientist v. Evans, 520 A.2d 1347, 1355–1356 (N.J. 1987). See also discussion in Chanel, Inc. v. Smith (1973), 178 U.S.P.Q. 630 (N.D. Cal.).

  54. 54.

    See Parfums de Coeur, online: http://www.parfumsdecoeur.com/DesignerImpostersHome.asp.

  55. 55.

    Sykes Laboratory, Inc. v. Kalvin (1985), 610 F. Supp. 849 (C.D. Cal.).

  56. 56.

    Ibid.

  57. 57.

    See also Ty, Inc. v. Perryman, (2002), 306 F3d 509 (7th Cir.).

  58. 58.

    R. L. Underwood, “The Communicative Power of Product Packaging: Creating Brand Identity via Lived and Mediated Experience” (2003) 11(1) Journal of Marketing Theory and Practice 62–76.

  59. 59.

    M. Harvey, J. T. Rothe, and L. A. Lucas “The ‘Trade Dress’ Controversy: A Case of Strategic Cross-Brand Cannibalization” (1998) 6(2) Journal of Marketing Theory and Practice 1–15.

  60. 60.

    Lanham (Trademark) Act codified at 15 USC § 1125(a) (1994).

  61. 61.

    Two Pesos, Inc. v. Taco Cabana, Inc. (1992), 505 U.S. 763–773.

  62. 62.

    McNeil-PPC v. Guardian Drug Company (1997), 984 F. Supp 1066–1074. (E.D. Mich.).

  63. 63.

    Yankee Candle Company, Inc. v. Bridgewater Candle Company, LLC, (2001), 259 F.3d 25 (1st Cir.).

  64. 64.

    Nora Beverages, Inc. v. The Perrier Group of America, Inc. (2001), 269 F.3d 114. (2d Cir.).

  65. 65.

    Conopco, Inc. v. May Department Stores Company (1994), 46 F.3d 1556 (Fed. Cir), rehearing denied, 1994 U.S. App. LEXIS 34513 (1994), cert. denied, 514 U.S. 1078 (1995).

  66. 66.

    Bristol-Myers Squibb Company v. McNeil-P.P.C., Inc. (1994), 973 F.2d 1556–1559 (Fed. Cir.); but see Philip Morris Inc. v. Star Tobacco Corp. (1995), 879 F. Supp. 379 (S.D.N.Y.).

  67. 67.

    McNeil Nutritionals, LLC v. Heartland Sweeteners LLC (2007), 511 F.3d 350 (3d Cir.).

  68. 68.

    Hershey Foods Corp. v. Mars, Inc. (1998), 998 F. Supp. 500 (M.D. Pa.).

  69. 69.

    Keebler Company v. Nabisco Brands, Inc. (1992), 1992 U.S. Dist. LEXIS 6826 (N.D. Ill.).

  70. 70.

    Clinique Lab. v. Dep Corp., 945 F. Supp. 547 (S.D.N.Y. 1996).

  71. 71.

    Wal-Mart Stores, Inc. v. Samara Brothers, Inc. (2000), 529 U.S. 205, 215.

  72. 72.

    See Nabisco, Inc. v. PF Brands, Inc. (1999), 191 F.3d 208 (2d Cir.).

  73. 73.

    Council Directive 84/450/EEC of 10 September 1984 relating to the approximation of the laws, regulations and administrative provisions of the Member States concerning misleading advertising (OJ 1984 L 250, p. 17), as amended by Directive 97/55/EC of the European Parliament and of the Council of 6 October 1997 (OJ 1997 L 290, p. 18) and EU Trade Mark Directive (n 21) respectively.

  74. 74.

    Council Regulation (EC) No 40/94 of 20 December 1993 on the Community Trade Mark.

  75. 75.

    De Landtsheer Emmanuel SA v. Comité Interprofessionnel du Vin de Champagne and Veuve Clicquot Ponsardin SA (2007) ECJ C-381/05. See also Haagen-Daz, Inc. v. Frusen Gladje, Ltd. (1980), 493 F. Supp. 73 (S.D.N.Y.).

  76. 76.

    Gucci Shops, Inc. v. R.H. Macy & Co. (1977), 446 F. Supp. 838 (S.D.N.Y.).

  77. 77.

    Nike Corp. v. Just Did It Enterprises (1993), 6 F.3d 1225 (7th Cir.). See also M. S. Lans, “Parody as a Marketing Strategy” (1994) 28(1) Marketing News.

  78. 78.

    Jordache Enterprises, Inc. v. Hogg Wyld, Ltd. (1987), 828 F.2d 1482 (10th Cir.).

  79. 79.

    Ibid 1490.

  80. 80.

    Starbucks Corp. v. Wolf Borough Coffee, Inc. (2007), 477 F.3d 765 (2d Cir.), case dismissed, 559 F. Supp. 2d 472 (S.D.N.Y. 2008).

  81. 81.

    Ibid para 13.

  82. 82.

    Federal Express Corp. v. Federal Espresso Inc. (2000), 201 F.3d 168 (2d. Cir.).

  83. 83.

    Ibid paras 4 and 5.

  84. 84.

    Anheuser-Busch, Inc v. L &L Wings, Inc., (1992), 962 F.2d 316 (4th Cir.), cert. denied, 506 U.S. 872.

  85. 85.

    American Express Co v. CFK, Inc. (1996), 947 F. Supp. 310 (S.D. Mich.).

  86. 86.

    See for example, WCVB-TV v. Boston Athletic Association (1991), 926 F. 2d 42 (1st Cir.) paras 9–11; See also Wonder Labs, Inc. v. Proctor & Gamble Co. (1990), 728 F. Supp. 1058 (S.D.N.Y.).

  87. 87.

    Trademark tarnishment is a form of dilution where the non-owner uses the mark in connection with obscene or illegal activities or other negative associations. See for example discussion in Welkowitz (n 13) 159–162.

  88. 88.

    American Express Company. v. Vibra Approved Laboratories Corporation (1989), 10 U.S.P.Q. 2d 2006. (S.D.N.Y.) 2012–2013.

  89. 89.

    Ibid paras 20 and 21.

  90. 90.

    Anheuser-Busch, Inc. v. Andy’s Sportswear, Inc. (1996), 40 U.S.P.Q.2d 1542 (N.D. Cal.), 1543. (N.D. Cal. 1996).

  91. 91.

    Louis Vuitton Malletier, S.A. v. Haute Diggity Dog, LLC (2007), 507 F.3d 252 (4th Cir.) [Louis Vuitton].

  92. 92.

    Ibid para 32.

  93. 93.

    TDRA (n 13).

  94. 94.

    Louis Vuitton (n 91), para 34.

  95. 95.

    Ibid paras 36 and 37; See also, World Wrestling Federation. Entertainment, Inc. v. Big Dog Holdings, Inc. (2003), 280 F. Supp. 2d 413 (W.D. Pa.) and Tommy Hilfiger Licensing, Inc. v. Nature Labs. LLC (2002), 221 F. Supp. 2d 410 (S.D.N.Y.), where lower courts allowed pet-related parody T-shirts (Bone Cold Steve Pawstin) and perfumes (Timmy Holedigger) respectively; For further discussion on balancing trademark protection with parodists’ free speech claims see, R. J. Shaughnessy, “Trademark Parody: A Fair Use and First Amendment Analysis” (1986) 72(Sept.) Virginia Law Review 1079–1117.

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  1. Babson College, Babson Park, MA, USA

    Ross D. Petty

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  1. de l¿Union Européenne, Tribunal de la Fonction Publique, Luxembourg, 2925, Luxembourg

    Antoine Masson

  2. Faculty of Law, University of Manitoba, Winnipeg, R3T 2N2, Canada

    Mary J. Shariff

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Petty, R.D. (2009). The Strategic Use of Legal Margins: How to Introduce an Extension of Someone Else’s Brand. In: Masson, A., Shariff, M. (eds) Legal Strategies. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-02135-0_15

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