Articles Posted in Trademarks

“Once You Know, You Newegg.” That is the slogan and registered trademark of Newegg, a popular online retailer of consumer electronics and high-tech products. Department-store chain Kohl’s recently began using a similar tagline: “The More You Know, the More You Kohl’s.” On May 14th, Newegg filed a trademark-infringement lawsuit in California seeking to enjoin further use of the similar slogan.

A combination of words used in commerce as a slogan is protectable as a trademark if used to identify and distinguish the source of products or services. Use of a registered slogan by others can be prohibited if there is a likelihood of confusion among the consuming public. Newegg’s action essentially claims that Newegg has a property interest in the “Once You Know, You Newegg” slogan, which it built up at great expense, and that the slogan has become associated in the minds of consumers with “an unsurpassed shopping experience, rapid delivery, and stellar customer service.” According to the lawsuit, Kohl’s, having full knowledge of Newegg’s trademarks and intending to siphon off some of the goodwill associated therewith, began using a deceptively similar slogan in a manner likely to cause direct financial harm to Newegg.

As with most trademark and unfair competition cases, the big question is going to be whether Newegg can prove a likelihood of confusion. Among the more questionable allegations of the lawsuit are those claiming that Kohl’s “attempted to increase traffic to their website by diverting users looking for Newegg’s website” and that confused Newegg customers “visit Kohl’s website believing it to be Newegg’s website.” As suggested by the trademarked slogan itself, Newegg believes its customers are intelligent and savvy — that is why they shop at Newegg. Are these the same people who are going to wind up at Kohl’s website when looking for Newegg, and who are going believe, once they have landed at Kohl’s site, that they have indeed found Newegg? What kind of customer wouldn’t include the term “Newegg” in an online search for Newegg?

Back in 1992, a group of Native American activists challenged the validity of the Washington Redskins trademarks on the ground the trademarks were impermissibly disparaging towards their ethnic group.  After scoring early victories before the Patent and Trademark Office and the Trademark Trial and Appeal Board (TTAB), resulting in a temporary cancellation of the marks (which deprived Pro Football of the ability to go after infringers), the U.S. District Court for the District of Columbia sided with the Washington Redskins about six years ago.  The rationale had nothing to do with whether the term “Redskins” is disparaging to Native Americans, but with the equitable defense of “laches.”  The Court of Appeals reversed that ruling due to a faulty application of that defense, but the District Court again ruled in favor of Pro Football (the owner of the Redskins trademarks) last year.  The matter was again appealed.  This time, however, the Court of Appeals affirmed the District Court, solidifying the Redskins’ victory and the validity of the marks.   

“Laches” is a doctrine which, like a statute of limitations, serves as a defense to legal proceedings when the plaintiff has waited too long before bringing the claim.  It applies where there is (1) lack of diligence by the party against whom the defense is asserted; and (2) prejudice (i.e., harm) to the party asserting the defense.  

The first time the question was presented to the District Court, it applied the laches defense because the TTAB proceeding was not brought until 25 years after the marks were first registered.  The Court of Appeals reversed that ruling because the defense is intended to apply where there has been unjustified delay by a particular person.  One of the plaintiffs was only a year old when the Redskins trademark was first registered.  So on remand, the District Court focused only on whether that particular individual, Mateo Romero, delayed in asserting his rights, beginning the analysis with the date of his eighteenth birthday (the legal age of majority).  From that perspective, the alleged delay was not 25 years but less than 8.