Trademark Law & Champagne Powder

If you love to ski or snowboard, you may have heard of “champagne powder”, the dry, light and fluffy snow we love best.  But, from a meteorological standpoint, what is it?

Well, champagne powder does not actually describe a particular kind of snow crystal or water-density level, nor is it a term much used by meteorologists or snow scientists.

Instead, “champagne powder” owes its fame to ski industry marketing, with one resort in particular, Steamboat Ski and Resort Corporation (Steamboat), leading the charge.

According to Steamboat legend, back in the 1950s, a rancher named Joe McElroy was skiing with friends near the town of Steamboat Springs, Colorado (before the resort was created) and got sprayed in the face with snow.  He told his friends it tickled his nose like champagne – “champagne powder!” The phrase began to spread across the Yampa Valley, and starting in the 1960s, Steamboat the new ski resort started using it in its marketing.

Five decades later, Steamboat took legal steps to claim exclusive rights to “champagne powder.”  It filed a federal trademark application with the U.S. Patent and Trademark Office (USPTO) in 2008.  It also started sending cease and desist (C&D) letters to anyone publishing the phrase, stating Steamboat had obtained common law trademark rights.  In June 2010, the USPTO issued an official registration certificate to Steamboat for CHAMPAGNE POWDER related to “resort lodging services”.

With its C&D letters, Steamboat pursued an aggressive trademark protection strategy aimed at preventing anyone else, including journalists, bloggers and weather professionals, from using “champagne powder” to describe snow or ski conditions at all.

Then in 2014, Steamboat successfully prevented a gaming software company from using “Champagne Powder” for a casino video game.

It is fair to say Steamboat’s early round of C&D letters infuriated the ski community.  Recipients from California to Utah to Montana shared their letters, as well as the name and contact information for Steamboat’s attorney, all over the Internet.  Online forums and message boards pointed out that “champagne powder” had been widely used in the global ski community for decades, not to describe a particular ski resort or mountain, but a certain kind of snow conditions.  In fact, at that time Champagne Powder even had its own Wikipedia page.  This page made no mention of Steamboat.  The introduction only stated:

“Champagne powder is a very smooth and dry snow, which is great for skiing. The term originates from the ski resorts in the Rocky Mountains, which often have these snow conditions. The name derives from the sparkling wine champagne . . . .”

then went on to describe the weather conditions that created the snow.

Meanwhile, at least one business, Unofficial Networks, a “ski bum’s guide to outdoor news and entertainment”, thumbed their noses after receiving their Steamboat C&D letter and revised a certain offending headline to “Sparkling Wine Powder.

Steamboat’s response to the flurry of bad PR around the country was to explain that, under trademark law, they were required to issue a C&D letter whenever they saw a use of “champagne powder” that infringed its trademark rights.

Steamboat was correct.  Trademark law says that if a trademark owner doesn’t adequately monitor its mark and allows others to use (and infringe on) it, the trademark rights can be invalidated.  Enforcement is a required part of trademark ownership.  If you don’t enforce, you potentially give up your rights.

However, it is important to realize that a federal trademark registration does not give you absolute rights to prevent anyone else from using the word or phrase in any context whatsoever.  Trademark law is designed to protect consumers from confusion about the source of products and services.  It is not designed to give trademark owners an exclusive property right to those words, phrases or designs.  That is, it doesn’t let you claim that any use of your trademark by a third party violates the law.

Thus, arguably, Steamboat’s enforcement efforts are appropriate only if it prevents uses of “champagne powder” that are confusing consumers, with the big assumption being that most of us know “champagne powder” as something related to the Steamboat brand.

Is Steamboat’s champagne powder enforcement strategy actually in line with trademark law? The appropriateness of the legal claims Steamboat makes in its C&D letters and its other aggressive trademark protection efforts cannot be determined unless Steamboat finds itself in court.  Then, a judge or jury will be tasked to decide whether its positions are valid under current trademark and unfair competition law.  So far, no one has formally challenged Steamboat to determine how strong its “champagne powder” trademark actually is.

If you have received a C&D letter from Steamboat or anyone else, or have questions about registering your trademark or protecting your brand, contact our Intellectual Property team today!

 

Internal Investigators: 7 Key Traits

Sometimes, things just go sideways.

Despite the best intentions of your organization’s Board, Officers, staff, and key volunteers, one misstep can threaten the entire mission. Whether there are allegations of financial malfeasance, inappropriate conduct, insufficient entity formalities, or some other variant, the Board of Directors must take quick action to decide if an internal investigation is warranted.

Once you know you need independent inquiry, who should you call to help you?

At the very least, your internal investigator must be unbiased. Ideally, an investigation is conducted by outside counsel or a special committee. And, your choice of investigators is an important as what they uncover.

In order to be productive and get meaningful results, your investigator should:

  1. Understand the culture of your organization.
  2. Commit to interviewing the correct parties, including individuals who were involved with the organization at the time period under investigation.
  3. Be well versed in how to conduct an investigation and how to evaluate credibility.
    –(Remember, this is NOT a case of “he said/she said, so we’ll never know. Part of the investigator’s job is to make credibility assessments).
    –Your investigator should know how to rely on asking open ended questions.
    –Your investigator should have a delicate approach to asking questions that telegraph the subject or intention of the investigation, and should know when to ask them.
  4.  Be adept at conducting interviews with emotional witnesses.
  5. NEVER use the services of an investigator unless they are licensed or subject to a licensing exemption. In Colorado, employees, attorneys, and CPAs for the entity may conduct an investigation under an exemption. Other exemptions do exist. But, for the most part, your wise and level-headed HOA President is not an appropriate person to conduct the investigation without an independent relationship to the organization.
  6. Always work with an investigator who understands the importance of defining the scope and purpose of the investigation with the board at the outset. In particular, you should understand what standards of proof will apply to the findings and recommendations. Miscommunications on scope will not only waste time and energy, but may result in a contaminated investigation. Once interviews have been conducted, it is difficult to revisit witnesses and receive answers that are free from outside influence or revisionist reflection.
  7. Always work with an investigator who has the expertise to identify and recommend ways that your organization can strengthen its policies, procedures, and formal documentation. The most productive investigations will help you minimize risks in the future.

Once your investigator has completed the investigation, the Board of Directors should use the findings and recommendations to come to a good faith, well informed decision about how to respond. Only independent Directors, those who are not implicated in the underlying issue, should make the decision. As always, Directors have a duty to act in the best interests of the organization. Hiring a competent investigator will not only help the organization reach a reasoned decision, but will protect the Board from individual liability.

If your business or nonprofit organization needs assistance with an internal investigation, contact our offices at (303) 763-1600.

Your Website: Tips to Stay Out of Legal Trouble – Part 1 (Copyright)

A good website for your business can be an invaluable marketing tool.  However, if you’re not careful, you could get into trouble for using images, photos, videos and other content in violation of copyright law.

Rights Granted under Copyright

Under the U.S. Copyright Act, the owner of a creative work is granted certain rights, including the right to prevent others from reproducing or copying their work, publicly displaying their work, or distributing their work.

Posting copyrighted material, say, a photograph, on your website arguably violates all these rights!  Moreover, your Internet service provider (ISP) can also be found liable for copyright infringement, even if they played no part in designing or maintaining your website.

All small business owners must therefore be extremely careful about what goes on their website!

Even big companies with sophisticated marketing campaigns get into trouble.  In May 2017, world-renowned luxury brand Tiffany & Co. was sued by photojournalist Peter Gould for using his photograph in an ad campaign for a line of jewelry designed by Elsa Peretti.  The photo at issue was a shot of Ms. Peretti back in the day.  The case was quickly settled and dismissed in July 2017, presumably because Tiffany’s agreed to write a nice fat check to Gould.

Tiffany certainly had the deep pockets to quickly deal with the lawsuit and settle, but your small business may not have these kinds of resources.

Get Permission

As a general rule, we tell our clients to assume any content they may want to use for their website, brochure, promotional video or other project is protected by either copyright or trademark law unless they can confirm otherwise.  A work is not in the public domain simply because you found it up on the Internet already (a common misconception) or because it lacks a copyright notice (another misconception).  Just because you are a local small business with not a lot of revenue and not a great understanding of copyright law does not mean you can claim “fair use” for the content either.  There are no safe harbors in the Copyright Act if you just made a mistake or misunderstood.

Finally, be aware:  If you do see an image or video is affixed with a copyright notice (or “copyright management information“) and choose to remove the info and use it anyway, this makes you liable for additional statutory damages under copyright laws.

Statutory damages range from a few hundred dollars to $25,000 per violation, meaning a mistaken infringement on your website can cost you a lot.

Investigate Infringement Claims Promptly

If someone complains about an unauthorized use on your website, remove the offending material at once and begin to investigate the claim immediately.   If necessary, consult with an attorney on how to handle the investigation and how to respond to the claimant appropriately.

You may find after your research that your use is perfectly legal.  However, you should remove the material while you investigate in order to limit your possible damages should the claimant file a lawsuit.  Continuing to use the infringing material after receiving notice will increase the chances of you being found liable and increase the amount of damages you may have to pay.

Removal of infringing material is also an element of the Digital Millennium Copyright Act (DMCA), a 1998 law establishing that an ISP can avoid liability by following certain rules, including speedy removal of infringing material.  Thus, if you don’t stay on top of copyright infringement complaints about your website, your ISP may get dragged into your mess as well.