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Perspectives • Analysis • Visionary Ideas INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS NORTH AMERICA www.dlapiper.com/ip_global | Issue 35, Q3 2017 Attorney Advertising IoT, SPYWARE AND PRIVACY RISKS SUPREME COURT CORNER REVERSE CONFUSION ACTIONS TRADE SECRET LITIGATION 7 QUESTIONS TO ASK YOURSELF

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  • Perspectives • Analysis • Visionary Ideas

    INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS

    NORTH AMERICA

    www.dlapiper.com/ip_global | Issue 35, Q3 2017 Attorney Advertising

    IoT, SPYWARE AND PRIVACY RISKS

    SUPREME COURT CORNER

    REVERSE CONFUSION ACTIONS

    TRADE SECRET LITIGATION7 QUESTIONS TO ASK YOURSELF

    http://www.dlapiper.com/ip_global

  • As we slip into the waning days of a long summer, we think it appropriate to renew our focus on risk and strategy in the face of a changing legal, political, and economic climate. In this issue, we look to core risk and strategic touchpoints with immediate and actionable relevance to our clients. Winter, as the saying goes, is surely coming, and we hope through our content to provide some additional measure of legal and strategic support for the season ahead.

    In our centerfold article, Paul Steadman and Ferlillia Roberson discuss seven crucial issues relating to trade secret protection and litigation, addressing key considerations and laying out a clear basis for assessing existing trade secret policies and enforcement strategy.

    The market for the Internet of Things (IoT) continues to grow exponentially, working its way into every facet of the market from global supply chains to our homes and vehicles. IoT enriches our lives, but at the same time brings key privacy risks, and corporate board members need to ensure they understand these risks. Rena Mears and Sydney White answer the call, providing a comprehensive primer on key risks and core issues in the space.

    Trademark and patent cases return to the fore this quarter, with our Supreme Court Corner examining two issues: a holding on the tension between the Lanham Act’s disparagement clause and the constitutional right of individuals to free speech, and a case addressing a challenge to inter partes review before the PTAB on constitutional grounds.

    Finally, DLA Piper litigators Tamar Duvdevani and Matt Ganas take a deep dive into the waters of reverse confusion analysis, addressing conflicting court standards and potential outcomes, and considering possible litigation strategies for those embroiled in a reverse confusion case.

    We believe this quarter’s coverage provides diverse, timely and efficient guidance and analysis, and we hope you agree.

    [email protected]

    Intellectual Property and Technology News is published in the North America, Asia Pacific and EMEA regions. Find all current and past editions of the IPT News here: www.dlapiper.com/ipt_news/. To subscribe to this complimentary publication, please email your contact information to [email protected].

    You are receiving this communication because you are a valued client, former client or friend of DLA Piper and you have requested to receive this information. The information contained in this newsletter is for informational purposes only and should not be construed as legal advice on any matter and does not create any attorney-client relationship between you and DLA Piper. Fur ther, any description of past successes or comparisons does not guarantee future results. To unsubscribe from this mailing list, send an email to [email protected] or send your written request to: DLA Piper, Attention: Marketing Depar tment, 401 B Street, Suite 1700, San Diego, CA 92101-4297, USA. Copyright © 2017 DLA Piper LLP (US), DLA Piper UK LLP and other affiliated entities. For questions, comments and suggestions, email us at [email protected] or contact Ambika Kuckreja, Senior Marketing Manager, T +1 202 799 4156, [email protected]. US Chair – Intellectual Proper ty and Technology, Frank W. Ryan, T +1 212 335 4850, [email protected]. Editor in Chief, Richard Flaggert , T +1 617 406 6026, [email protected]. Director, Intellectual Proper ty and Technology, Licia Vaughn, T +1 619 699 2997, [email protected]. DLA Piper LLP (US), 401 B Street, Suite 1700, San Diego, California 92101-4297, USA. | MRS000087782

    Ric FlaggertPartner and Solicitor Intellectual Property and Technology

    EDITOR’S COLUMN

    Q3 IPT NEWS IS NOW DIGITAL

    We are proud to say that BTI Consulting Group has recognized DLA Piper as one of the seven best law firms for cybersecurity-related work.

    The recently published BTI Law Firms Best at Cybersecurity 2017 report recognizes firms that are “proactively taking a ground-up approach” to cybersecurity and data privacy by demonstrating the best understanding of client needs and serving those needs in a client-specific way.

    The annual publication draws on more than 4,800 interviews with corporate counsel and other leading legal decision makers conducted over the past 17 years.

    DLA PIPER NAMED ONE OF 7 BEST AT CYBERSECURITY

    mailto:richard.flaggert%40dlapiper.com?subject=mailto:IPTnews%40dlapiper.com?subject=mailto:communications%40dlapiper.com?subject=mailto:IPTnews%40dlapiper.com?subject=mailto:IPTnews%40dlapiper.com?subject=mailto:richard.flaggert%40dlapiper.com?subject=mailto:licia.vaughn%40dlapiper.com?subject=

  • WWW.DLAPIPER.COM/IP_GLOBAL | 3

    One of the biggest challenges facing clients today is digital transformation. That doesn’t mean just using more IT, putting up a website or having a Twitter feed. It’s actually arriving at the understanding that, to compete in today’s global marketplace, clients may have to break up the way that they’ve done business in the past and re-engineer it for the e-commerce world.

    This transformation means using data and technology in fundamentally different ways and protecting your organization in new ways to address changing laws. Our lead story, on trade secret litigation, and our ar ticle on spyware aim to help you address your data and security issues. As you expand your business into global markets, we hope you will try our new GDPR app, created to help you understand the requirements of the important new EU data privacy law.

    And, while we work to help you remain at the fore of the new digital economy, we know that you still have traditional business legal needs. Our report on significant developments in the US Supreme Court, and our ar ticle on reverse confusion, address those continuous concerns.

    As you can see on the facing page, DLA Piper was named by BTI Consulting as one of the 7 best firms at Cybersecurity. As this publication shows elsewhere, Chambers and Legal 500 have named our IPT practices as leading not only in the US but also globally.

    We actively work together with clients to help them evolve their business models as they strategize to operate in the new century. Please let us know how we can assist you in preparing and protecting your organization.

    [email protected]

    Frank RyanPartner US Chair, Intellectual Property and Technology

    AT THE FORE

    Beginning with this issue, we have converted to digital delivery. IPT News will be delivered to our subscribers via

    email only. If your colleagues would like to receive IPT News directly, kindly have them provide email addresses here:

    www.dlapiper.com/newslettersubscription

    We hope you enjoy our publication online.

    IPT NEWS IS NOW DIGITAL

    http://www.dlapiper.com/ip_globalmailto:john.allcock%40dlapiper.com?subject=

  • 4 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS

    The Internet of Things (IoT) enables everyday objects – printers, thermostats, pacemakers, cars – to collect and exchange data over the Internet. Like other online data, IoT data can be mined, transformed and monetized. Estimates suggest that by 2019, such data will be worth over $1.7 billion.

    However, with the exponential growth of IoT comes higher risk and greater scrutiny of data privacy and security.

    In the United States, the Federal Trade Commission, the nation’s top privacy enforcer, has issued guidance and standards on privacy and has been an active enforcer of privacy and cybersecurity issues.

    In its report, Protecting Consumer Privacy in an Era of Rapid Change, the FTC set out its privacy framework for the collection, use and disclosure of device and personally identifiable information. Key privacy principles under the framework are notice and transparency, as well as consumer choice (in particular related to sensitive data and “unexpected” collection, use and sharing). However, finding ways to provide clear notice and obtain consent can be challenging in the context of IoT and connected devices. Even so, the FTC has made clear that its privacy framework applies in the IoT space. In 2015, the Commission issued guidance on how

    its privacy framework applies to IoT in Internet of Things: Privacy and Security in a Connected World. In a recent enforcement action, the FTC went so far as to require a company to delete the consumer information that it had collected unfairly, in violation of notice and choice principles.

    Is it spyware?

    One risk not directly addressed in the FTC’s privacy reports is that of spyware, which the FTC has previously defined as “software that aids in gathering information about a person or organization without their knowledge and which may send such information to another entity without the consumer’s consent, or asserts control over a computer without the consumer’s knowledge.” Connected devices often leverage some type of software-based functionality to track information, but companies should be mindful that they do not deploy their connected devices in a way that could bring them within the spyware category.

    Determining when software crosses the line into illegal spyware can be challenging. Significant legal and technical analyses may be necessary to ensure the spyware line is not crossed. Recent FTC enforcement actions in the IoT context do not explicitly mention spyware, yet

    they do provide indications as to what the FTC considers unreasonable tracking of consumer activities. In a 2017 action against Vizio, the FTC established rules for connected devices and unexpected information collection. Through its smart televisions, Vizio was automatically tracking consumers’ TV viewing, without consent or adequate notice, and was also selling the data to third parties.

    Vizio settled charges with the FTC and the New Jersey Attorney General for $2.2 million. It also was required to delete most consumer data collected through the tracking software and to establish a data privacy program that is subject to a 20-year biennial third-party audit requirement.

    Is it an unfair trade practice?

    The criteria established by the FTC in the Vizio case applies to any company collecting sensitive or unexpected data from connected devices. Potentially, this could even apply to a company that has acquired unfairly collected data. If that company, for example, hasn’t obtained reasonable assurances from the data collector that consumer privacy rights have been respected in the collection and sharing of consumer data, it may be at risk of claims that it has acted unfairly.

    What Boards Should KnowIoT, SPYWARE AND PRIVACY RISKS

    by Rena Mears and Sydney M. White

  • WWW.DLAPIPER.COM/IP_GLOBAL | 5

    In addition to federal enforcement risks, more than 20 state attorneys general are able to obtain monetary penalties for deceptive practices. While fines average around $100,000 per state, for large-scale or egregious consumer privacy violations, fines can rise to the tens of millions of dollars. Reputational and class action risks are also high in this context, as underscored by the Vizio example, which was widely reported and has been the subject of class action litigation.

    Going forward, the scrutiny of data privacy and security issues related to IoT will only grow, and the regulatory landscape will be in flux for some time. Prudent boards will keep this in mind.

    Rena Mears is a principal and consultant in the Intellectual Property and Technology practice. Based in San Francisco, she has more than 25 years of experience advising global companies on data risk, privacy, cybersecurity and information security matters. Reach her at [email protected].

    Sydney M. White, Of Counsel in the Cybersecurity group and based in Washington, DC, provides strategic advice in data privacy and security matters, including Internet intermediary liability and access to customer data. Reach her at [email protected].

    The Legal 500 United States 2017 lists many of DLA Piper’s IPT practice areas among the elite market leaders in the US, earning tier one rankings in Cyber Law and Data Protection and Privacy. Among its highlights:

    ■ DLA Piper’s Data Protection and Privacy practice has “an intelligent and practical cyber team” in which “the lawyers provide not only expert advice but deliver findings and analysis in a comprehensible and actionable way.”

    ■ DLA Piper’s Outsourcing “is experienced in large-scale global implementation projects and BPOs involving human resources, accounting, financials and technology.”

    ■ DLA Piper’s Patent Litigation team provides “high-quality legal services in an effective and efficient way” and “fully understands the management and decision-making processes in large corporations.” Commenters note that the team has talent that is “bright, responsive and well versed in patent litigation” and “evaluates the merits of a case at the very beginning, developing a strategy based on its strengths and weaknesses.”

    ■ DLA Piper’s ITC practice “stands out for its expertise in public interest and domestic industry issues, and its impressive client list includes a number of consumer electronics and engineering sector clients.”

    ■ DLA Piper’s Licensing practice is “always up to date on the latest case law and state of the law.”

    ■ DLA Piper’s Technology Transactions group takes “the highest level of care at all stages of their growth.”

    ■ DLA Piper’s Telecoms and Broadcast Regulatory group is “extremely helpful, invaluable and incredibly knowledgeable” and “excellent at seeing the big picture in terms of regulatory compliance and has a great understanding of the inner workings of the FCC.”

    ■ DLA Piper’s Trademark group has an “excellent” team that has “a strong understanding of worldwide trademark prosecution.”

    http://www.dlapiper.com/ip_global

  • TRADE SECRETS ARE MORE IMPORTANT AND

    TRADE SECRET LITIGATION MORE COMMON

    7QUESTIONS

    TO ASK YOURSELF

    By Paul Steadman and Ferlillia V. Roberson

    In today’s business environment, trade secrets have become much more important, and trade secret litigation is much more common. The trade secret environment we are living in is different from that of ten years ago, or even five years ago.

    Disclosing confidential technology generally prevents its future protection as a trade secret, but for many decades the tradeoff − describe your secret and, in exchange, obtain a patent − was seen as worthwhile. Since the mid-2000s, however, the pendulum has swung back.

    Three long-term trends have come into play. First, some companies are seeking fewer patents, keeping ever more technical information as trade secret.

    Second, trade secret theft is on the rise – indeed, in 2014, the Center for Responsible Enterprise and Trade estimated losses from trade secret theft across advanced industrial economies could be as much as 1 to 3 percent of GDP, implying a loss of $200-600 billion per year in the US alone. Third, we are seeing more thorough and flexible US enforcement of trade secret rights against thieves and infringers.

    These trends make the identification, protection, and enforcement of trade secret rights more critical than ever.

    What do you need to be considering to protect your company in this environment? Here are seven questions to ask.

  • WWW.DLAPIPER.COM/IP_GLOBAL 7

    1 Do you know what your trade secrets are, who has them, where they are kept and what they are worth? Your company gets breached by a departing employee or an industrial hacker. You want to sue. The first question you may have to ask: what is the trade secret you are suing on? Many companies may not even be certain. Some company secrets may exist only at the subsidiary or even factory level: the specific machine setting that just happens to make production more efficient; the specific shape of an internal component that just happens to maximize output and lower cost. If management and the legal department do not know what these secrets are, or how much they are worth, how can they know what’s subject to theft?

    2 How are your trade secrets protected? The second question in any trade secret case is: was the secret subject to “reasonable measures to keep such information secret?” Many companies have some protections in place: password access to company networks, non-disclosure agreements. In determining how your secrets are protected, you should ask such questions as: are these measures reasonable? Are they always applied? Do third parties have access? Effective protections may well keep your trade secrets from being stolen in the first place.

    3 Are your secrets really yours, or do they belong to your business partners? Some of the most complex disputes arise when joint ventures and similar business partnerships are being dissolved. 4 Are your employees putting your trade secrets at risk? What happens when an employee betrays your confidential information? Even the most respectable company must take steps to protect

    itself from trade secret entanglements its own employees may draw it into.

    5 You experience a trade secret breach. What are the first things you should be thinking about? Ideally, the first thing we hope you will think is: what does my response plan say? Should a breach occur, you will need to consider whether you can resolve the situation through negotiation, and, if not, whether preliminary relief will be required; whether you will need to conduct an internal investigation; and whether enforcement agencies should be involved. Your trade secrets litigator should be regarded as an integral part of your first-response team because such secrets, once gone, have a very limited window for recovery.

    6 Do you have a go-to legal relationship you can count on in a pinch? When a trade secret breach is discovered, to whom do you turn? If possible, well before running into trouble, the company should look into establishing a relationship with an experienced IP trial lawyer who is familiar with trade secret litigation.

    7 What can you expect in trade secret litigation? The specifics of trade secret litigation vary widely by venue. Your case may involve anything from US federal court to the state courts, the International Trade Commission, foreign and domestic arbitration or even foreign courts. Moreover, trade secret litigation tends to be highly intrusive, and trade secret cases tend to be hard fought and to come with deep tradeoffs between the company’s business operations and the litigation strategy itself.

    To find out more about trade secret litigation, see our full-length article about these seven key questions here: www.dlapiper.com/7-questions-protecting-trade-secrets

    Paul Steadman is a partner in the IPT group and based in Chicago. With a degree in materials science engineering and a strong background in the materials, mechanical and electrical arts, he is a first-chair trial lawyer who represents global companies in patent, trade secret, trademark, copyright and other IP-related litigation. Reach him at [email protected].

    Ferlillia V. Roberson, Of Counsel in the IPT group and based in Chicago, is a trial attorney who focuses on patent, trade secret, trademark and other IP-related litigation covering a broad range of technologies in district courts, the US International Trade Commission and proceedings before the USPTO. Reach her at [email protected].

    WWW.DLAPIPER.COM/IP_GLOBAL 7

    http://www.dlapiper.com/ip_globalhttp://www.dlapiper.com/ip_global

  • DLA PIPER HOSTS CLIENTS AT INTA ANNUAL MEETING IN BARCELONA

    8 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS

    Chambers Global 2017 ranks many DLA Piper IPT global groups among the top practices in the world, including Data Protection; Intellectual Property; Outsourcing; Commercial Contracts and Technology; and Media and Telecoms (TMT). Our Franchising practice is the sole Band One Global Franchising practice once again.

    Chambers USA 2017 ranks DLA Piper’s work in numerous IPT areas among the leading practices in the US. Here are just a few samples of comments the publisher chose to highlight from third-party feedback on our nationwide Intellectual Property practice: Clients praise our “depth of resources, billing flexibility and cross-border capabilities.” In addition, we have a “high-quality ITC team, integrated into a patent litigation practice with global reach” that “enjoys a fine track record acting for market leaders in the consumer electronics and automotive fields.”

    DLA Piper again was the sole firm earning the top tier nationwide ranking in the US for its Franchising practice. We are also ranked by Chambers in nationwide Intellectual Property; Outsourcing; Privacy and Data Security; and International Trade: IP (Section 337), as well as in numerous other statewide practice categories and sectors. Additionally, 32 US IPT lawyers are ranked by Chambers and Partners as leading individuals.

    Fashion Seminar panelists Horace Lam (Beijing) , Sangeetha Punniyamoorthy (Toronto), Karine Disdier-Mikus (Paris), John Wilks (London) and Gina Durham (San Francisco)

    Ann Ford (Washington, DC) hosted our annual women’s breakfast for DLA Piper lawyers from around the world.

    DLA Piper lawyers hosted a dinner celebrating clients during INTA.

    DLA Piper lawyers were among more than 10,000 trademark professional and brand owners from around the world attending the 139th International Trademark Association (INTA) Annual Meeting in Barcelona from May 20 to May 24. Our lawyers from Asia, Australia, the Middle East, Europe, Canada and the US enjoyed connecting with clients from around the globe throughout the week.

    During the conference, DLA Piper hosted a series of client events, including multiple client dinners, a Fashion Seminar on Parallel Trade and our popular VIP client reception, held at the W Barcelona’s spectacular rooftop pool and terrace.

  • MATAL V. TAM

    TRADEMARK – Decided: June 19, 2017

    Holding: The Lanham Act’s disparagement clause violates the free speech clause of the First Amendment.

    Simon Shiao Tam leads a dance-rock band and sought to trademark the band’s name: The Slants. The Trademark Trial and Appeal Board (TTAB) upheld the PTO’s decision not to register the mark under § 2(a), holding it disparages a substantial composite of an identifiable group of people − persons of Asian ancestry. A Federal Circuit panel affirmed, finding the PTO’s decision did not abridge Tam’s First Amendment right to free speech. An en banc Federal Circuit, however, held § 2(a) unconstitutional and vacated the TTAB’s decision, finding, under strict scrutiny, the disparagement clause invalid as a viewpoint-based restriction on speech.

    The Supreme Court unanimously affirmed, holding the Lanham Act’s disparagement clause violates the First Amendment. Trademarks, it said, are private speech, not government speech; and the government cannot “abridge[e] the freedom of speech.” The Court split on the basis for the decision. Without deciding which level of scrutiny to apply, Justice Samuel Alito, joined by three others, found the disparagement clause unconstitutionally vague even under relaxed scrutiny. The clause is not “narrowly drawn” to protect only invidious discrimination − it more broadly prohibits marks that disparage any person, group or institution. The First Amendment would be endangered, the opinion reasons, if government could cleanse commercial speech

    “of any expression likely to cause offense.”

    Justice Anthony Kennedy, also joined by three others,* concurred, but reasoned the First Amendment’s test for viewpoint discrimination controls. Because an applicant can register a positive trademark but not a derogatory one, the disparagement clause impermissibly “reflects the Government’s disapproval of a subset of messages it finds offensive.”

    By striking down the disparagement clause, the Supreme Court’s decision resolves the Slants dispute and may lead to reversal of the TTAB’s decision to cancel the Washington Redskins trademarks, a decision upheld by the Eastern District

    of Virginia in Pro-Football, Inc. v. Amanda Blackhorse.**

    Partner Stan Panikowski, based in San Diego, focuses on IP, antitrust, appeals and other areas of business litigation. Reach him at [email protected].

    Associate Brian Biggs, based in Wilmington, Delaware, represents clients across many technical fields in patent litigation. Reach him at [email protected].

    SUPREME COURT CORNERby Stan Panikowski and Brian Biggs

    OIL STATES ENERGY SERVS., LLC V. GREENE’S ENERGY GROUP, LLC

    PATENT – Cert. Granted

    Issue: Whether inter partes review before the Patent Trial and Appeal Board violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury trial.

    The America Invents Act created the inter partes review (IPR) process, whereby a third party may request review of any patent by the USPTO’s Patent Trial and Appeal Board (PTAB). If the USPTO determines “there is a reasonable likelihood that the petitioner would prevail with respect to at least 1 of the claims challenged,” review may be instituted, and a three-judge panel may issue a final written decision adjudicating validity of some or all of the claims. The IPR process, which does not permit a jury, is an alternative to challenging patent validity in federal courts.

    In 2012, Oil States filed a patent infringement suit against Greene’s Energy Group in the Eastern District of Texas; a year later, Greene’s Energy Group filed an IPR petition. After the IPR was instituted, Oil States moved to amend the claims. The PTAB denied that motion. Oil States appealed to the Federal Circuit on several grounds, including that the IPR process violates Article III and the Seventh Amendment. A Federal Circuit panel summarily affirmed the PTAB’s decision, and Oil States’ requests for panel rehearing and rehearing en banc were denied.

    The Supreme Court granted certiorari on the question of whether the IPR process is constitutional. Oil States argues the Seventh Amendment guarantees a patent owner the right to a jury trial for invalidity proceedings. Oil States also argues patent owners are entitled to an Article III forum for invalidity proceedings because patent invalidation is a cause of action that stems from the common law. Greene’s Energy Group responds that Article III permits Congress to designate “public rights” for adjudication in non-Article III tribunals and because patents are a “quintessential” public right, Article III permits the PTAB to adjudicate validity. Greene’s Energy Group further argues the Seventh Amendment does not bar IPRs because it guarantees a right to a jury trial “only where Article III compels Congress to assign adjudication of particular claims to federal courts, or where Congress chooses to do so.” A decision is expected in this case by June 2018.

    * Justice Neil Gorsuch took no part in the decision.

    ** For more on Pro-Football, Inc. v. Amanda Blackhorse, see www.dlapiper.com/supreme-court-corner-q3-2015.

  • 10 | INTELLECTUAL PROPERTY AND TECHNOLOGY NEWS

    Online and social media marketing make it possible for small star tups to broaden their brand exposure, expanding their consumer base without bearing enormous advertising expenditures. For a small company – the first to use a par ticular trademark or service mark in connection with its goods or services (i.e., a “senior user”) – there is a risk in today’s commercial environment that a large company (the “ junior user”), even unwittingly, may subsequently flood the market with a confusingly similar mark, thereby destroying any value or momentum the senior user’s mark has acquired. In the world of trademark infringement, this is known as “reverse confusion” and it is actionable under the Lanham Act.

    In classic “forward confusion” cases, US district courts apply similar “likelihood of confusion” tests to evaluate whether the defendant’s allegedly infringing use of a mark is likely to cause confusion among relevant consumers. But a recent appellate decision confirms that when it comes to reverse confusion claims, US courts apply conflicting standards.

    Courts generally recognize that claims of forward and reverse confusion are factually distinct and present distinct potential harms. In reverse confusion cases, the junior user typically does not seek to profit from the senior user’s reputation. Rather, the senior user’s mark is often unknown to consumers; the more dominant junior user saturates the market with a similar trademark, arguably overwhelming the senior user. If consumers mistakenly believe that the junior user is the source of the senior user’s goods, the senior user can be harmed. As courts have recognized, this can harm the senior user’s commercial identity, cause it to lose control over its goodwill and reputation, and impair its ability to grow.

    Despite these clear differences, US courts are divided on whether a traditional, unadulterated likelihood-of-confusion analysis should apply. The debate can center around one particular factor that courts treat as critical to the likelihood of confusion analysis: “strength of the mark.”

    In forward confusion cases, courts assess the conceptual and commercial strength of the senior user’s mark, without considering the junior user’s market strength or presence. In a traditional forward confusion analysis, the stronger a senior user’s mark, the broader the protection it will be afforded. Thus, a finding that the senior user’s mark is “strong” can significantly favor a likelihood-of-confusion finding.

    Some courts apply the same “strength of the mark” standard to reverse confusion cases. The Sixth Circuit Court of Appeals, in Progressive Distribution Services, Inc. v. United Parcel Services, Inc., recently confirmed this approach, stating: “while certain circuits have adopted a different test for claims of forward and reverse confusion, the Sixth Circuit is not one of them.”1

    Other courts, however, such as the Third Circuit and district courts within the Second, Fourth, Eighth, and Ninth Circuits, advocate a different approach to analyzing the “strength of the mark” factor in reverse confusion cases, which focuses on commercial strength of the junior user’s mark in comparison to the senior user. The justification for altering the “commercial strength” assessment is that, unlike forward confusion claims, a conclusion that the senior user’s mark is commercially weak actually supports a reverse confusion finding. Indeed, judges have characterized the relative commercial weakness of the senior user’s mark as “the very foundation of reverse confusion.”

    REVERSE CONFUSION ACTIONS HOW CONFLICTING COURT STANDARDS MAY AFFECT OUTCOMESBy Tamar Duvdevani and Matt Ganas

  • WWW.DLAPIPER.COM/IP_GLOBAL | 11

    For a trademark infringement claim based on reverse confusion, the outcome of the “strength of the mark” factor may depend heavily upon the circuit where the case is pending. Because the conceptual or commercial strength of a mark may dictate the scope of its protection, this factor may significantly influence the outcome of a likelihood-of-confusion analysis. This may particularly be the case when the junior user’s trademarked products are different from those of the senior user.

    Accordingly, when litigating reverse confusion trademark infringement claims in the US, parties and practitioners should understand whether governing authority requires a traditional likelihood-of-confusion test that focuses on commercial strength of the senior user’s mark, or a modified likelihood-of-confusion test that focuses on commercial strength of the junior user’s mark relative to the senior user.

    1. Progressive Distribution Servs., Inc. v. United Parcel Serv., Inc., 856 F.3d 416, 431 (6th Cir. 2017).

    Learn more about the variables around reverse confusion cases by contacting either of the authors.

    Tamar Duvdevani, chair of the firm’s New York IPT group and based in New York City, focuses on trademark and trade dress, copyright, false advertising and digital media issues. Reach her at [email protected].

    Matt Ganas, an associate and based in New York, has a wide range of IP litigation and counseling experience in the areas of patent, copyright, trademark, trade secret and right of publicity law. Reach him at [email protected].

    DLA Piper’s Global IPT Seminar, held in Toronto on June 19, aimed to help businesses protect and build the value of their intellectual property. Experienced individuals from across the globe, including in-house counsel, shared insights and strategies for better understanding how to protect their IP, leverage their rights and gain a competitive advantage in the global marketplace.

    Keynote speaker Terri DiPaolo shared her in-house experience overseeing IP protection for some of the world’s leading brands while she was COO and GC of Authentic Brands Group LLC and during her time overseeing the Estate of Bob Marley. She was joined by guest speakers Josh Death (Senior IP Counsel, TD Bank) and Dr. Armand Balboni (Director, Medical and Legal Due-Diligence Group, Bloom Burton).

    More than 75 guests attended, along with DLA Piper lawyers from Europe, Australia, Canada and the US.

    Panel on Capturing and Protecting Intellectual Property with Josh Death (TD Bank), Johan Renes (Amsterdam), Ann Ford (Washington, DC), Thomas Zutic (Washington, DC) and Chris Bennett (Vancouver)

    GLOBAL IPT SEMINAR IN TORONTO

    Keynote speaker Terri DiPaolo addressing the audience

    http://www.dlapiper.com/ip_global

  • www.dlapiper.com

    DLA Piper llp (us)401 B Street, Suite 1700San Diego, California 92101-4297

    Attorney Advertising

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