In recent weeks a series of unrelated trademarks cases have come to the forefront in the news that should give small businesses (i.e., non-corporate behemoths) a reason to smile. In each of these cases, a small business David has protected its trademark against a corporate Goliath. The moral of the story: a proactive legal strategy can help the little guys go toe to toe against the big boys.
The “Dunkin’ Cronut”: A Trademark that was not Meant to Be
When Dunkin’ Donuts announced that it was launching its own version of the Dominique Ansel Bakery’s phenomenon the “Cronut” and calling it the shockingly generic “croissant doughnut,” it must have been done with a sigh of resignation by its marketing team that they were beaten to the punch by an upstart. The fact that they didn’t even attempt to steamroll over the NY bakery’s brand is likely due to the existence of five registered trademarks related to the term “Cronut” (the term “Cronut” itself is registered in seven international classes including IC003, which includes coverage for “Aromatic body care products”). In an effort to deflect the obvious comparison (“Cronut? What Cronut?”), Dunkin’s president for global marketing and innovation asked, “Are we copying a specific bakery in New York? The answer is no.”
In this case, the little guy was proactive ahead of time and made the necessary investment in protecting its brand.
Small Business Owner Bites the Hand that Feeds Her Business with Fair Use Attack (and Wins!)
Luxury retailer Saks Fifth Avenue sought to stamp out a New Jersey small business owner selling organic dog treats called “Snaks 5th Avenchew.” Freakin’ awesome, right? However, an obviously well-written response to Saks’ cease & desist letter did its job: they backed off, acknowledged precedent for fair use in the trademark arena and allowed high-end pooches to “snak” in peace. A response to a cease & desist letter should not be taken lightly as this episode clearly shows.
First-in-Time Trademark User Fights to Salvage Brand in Reverse Confusion Suit
In our final David vs. Goliath tale, an Oregon-based jewelry and accessories store named Gilt is asserting its prior use common law trademark rights against online flash-sale retailer Gilt Groupe, Inc., a $500 million company based in New York. Gilt’s common law trademark use began in 1994 and went online in 1999, but the store was refused registration for its mark in 2012 due to the fact that Gilt Groupe beat them to the USPTO. However, of the eight Sleekcraft factors that will be used in this federal case to determine likelihood of confusion, Gilt has a lot of actual confusion to point to, including:
- Receiving complaints meant for the flash-sale site
- Individuals seeking to return products bought from the online retailer to the Oregon store
- Potential customers complaining to the Gilt about the daily 'spam' e-mails, presumably referring to emails Gilt Groupe sends each weekday, alerting them to daily sales.
The complaint was just filed last week, so it’s too early to tell how it will turn out. Hopefully, the actual confusion will be so strong that Gilt can rightfully prevail. However, it is also a cautionary tale that small businesses, while legally capable of asserting common law rights, would be better served by protecting their brands as early as possible. Also noteworthy is the appearance that Gilt Groupe either did a shoddy clearance job or underestimated the wherewithal of a smaller competitor to assert its common law trademark rights.