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!

 

Your Website: Tips to Stay Out of Legal Trouble – Part 2 (Domain Name/Trademark)

An Internet domain name can be vital to branding and marketing, so it’s important for business owners to be familiar with some of the legal rules related to domain names, including the intersection of domain name rights with trademark rights.  This post also reviews actions you can take to dispute domain names that may infringe upon your trademark rights.

A domain name is the primary “address” of a web site, and nearly all website owners want to have a domain name that is identifiable and easy to remember.

If my company is called “Betty’s Plumbing, Inc.” and I have a trademark for “Betty’s Plumbing”, it would be most logical for my website to also be “www.bettysplumbing.com”.  This would be the best way for current and potential customers to find me online.

Domain Names vs. Trademarks

A trademark is a word, name or symbol used in commerce to indicate the source of the goods or services and to distinguish them from the goods or services of others.

Trademarks and domain names are not synonymous, but the two concepts often meet when there is an issue of whether use of the domain name is a trademark violation.

The United States Patent and Trademark Office (USPTO) has made clear: “Registration of a domain name with a domain name registrar does not give you any trademark rights.”  The USPTO also states that simply using a trademark as part of a domain name does not necessary serve the function of “indicating the source” of goods or services.  In other words, using someone else trademark in your domain name is not automatically infringement.  However, additional uses of the trademark by your business beyond your domain name could lead to trouble!

The biggest takeaway is that the issue is not black and white.  Generally, we recommend that before you spend money on acquiring a certain domain name, you do some research to make sure your desired domain name does not contain a trademark belonging to someone else who has not given you permission to use it.  Trademark violations occur when there is “confusion in the marketplace” – when a consumer could confuse the business represented by the domain name with another business represented by a trademark contained in the domain name.

Further domain name registrars such as GoDaddy and Google Domains do not perform any trademark ownership verification before registering a new domain name for you so it is your responsibility to consider intellectual property matters!  If you need any assistance with this, please contact our Intellectual Property team.

Domain Name Disputes

Domain name disputes often involve companies battling over the ownership of domain names from “cybersquatters.” Some cybersquatters register domain names with the intention of selling them at high prices to the companies who own the trademarks. Others exploit domain names by taking advantage of the online traffic that popular brands attract and misdirecting consumers to the cybersquatters’ own websites for such business as selling counterfeit goods, or at worst, websites loaded with viruses, malware, and other malicious content.

The Anti-Cybersquatting Consumer Protection Act (ACPA)

You can file a federal lawsuit to challenge a domain name under the ACPA, a law enacted in 1999.  ACPA allows you to challenge domain names that are similar to your business name and other trademarks.  ACPA makes it “illegal to register, “traffic in” or use a domain name that is identical or confusingly similar to a distinctive or famous.  If a trademark owner successfully wins a claim under the ACPA, the Court will grant an order that requires the domain be transferred back to the trademark owner.  In certain cases, the Court can also award monetary damages.

Uniform Domain-Name Dispute-Resolution Policy (UDRP)

Another (and likely cheaper) way to challenge a domain name is through the Uniform Domain-Name Dispute-Resolution Policy (UDRP), a process created by the Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit corporation that manages and controls domain name registrations. UDRP provides a relatively quick legal mechanism to resolve a domain name dispute by providing a streamlined procedure to transfer or cancel ownership of domain names.

Beyond offering a quicker dispute resolution process beyond federal court litigation, UDRP proceeds are also nice because it does not matter whether the trademark owner and domain name holder live in different countries.  Filing a lawsuit in U.S. federal court generally comes with jurisdictional issues that are tricky if the domain name holder lives in another country.

If your business needs help with a trademark or domain name issue, please contact us today!

 

“Open Studios” Trademark Dispute in Boulder, Colorado

Our guest contributor today, photographer John Uhr, posted this great analysis on Facebook of a current, local and much-publicized trademark dispute regarding the name “Open Studios.”

A quick background:  Open Studios, established in 1995,  is an arts-awareness and -appreciation organization based in Boulder, Colorado.  Recently, the organization has been quite aggressive in its legal efforts to protect the name “Open Studios” in the Boulder area by asserting its trademark rights.  This has impacted many artists in the area, including the Boulder Metalsmithing Association.   Recently, Open Studios and the Boulder Metalsmithing Association are parties to a trademark lawsuit in federal district court here in Colorado.  You can read Open Studio’s complaint, filed in August 2016, here.

October 10, 2016 at 11:17am ·

A funny thing happened this evening.  Completely by coincidence, I made the acquaintance of Open Studios board-member and attorney, Howard Bernstein.  He was discussing with Chris Brown (respected photographer and O.S. artist) a certain controversy surrounding Open Studios suing a small arts organization.  Since I have a passing interest in the matter, I asked Mr. Bernstein a number of questions I had been wondering about and listened carefully to the answers. We spoke for around 45 minutes and at the end I inquired whether Open Studios would abide by the results of the upcoming mediation if it should go against them. His answer (after assuring me that Open Studios would most certainly win) was an emphatic “why would we?” ……more on our conversation as I have time.

Ok, It’s later …

This article reports on an unexpected conversation I had with Open Studios lawyer and board-member, Howard Bernstein. The conversation took place at about 6 PM Oct. 10th at Chris Brown’s photography studio and in the presence of Chris and Mr. Bernstein’s wife, who listened with interest and occasional interjections. If Mr. Bernstein disagrees with my characterization of his position, I would welcome his input. These are his words and position to the best of my memory. I would also like to add that I hold no enmity toward Mr. Bernstein and believe he has the best interest of Open Studios at heart.

1) Mr. Bernstein believes that due to the their many years of use of the term, good works, etc. that Open Studios owns the right to the phrase “open studios(s)” for promotion of events in all of Boulder County. I asked if an individual artist (such as Chris Brown) would be allowed to post a sign saying “open studio” and he indicated that he would. I took this to mean that they only wished to control usage by organizations, but didn’t pursue the point.

2) While Mr. Bernstein seemed very anxious to make this issue about Boulder Metalsmithing Association and its director/founder Beth Merkel, it was apparent that he believes that any organization in Boulder County using the term “open studios” is violating OS’s rights and that allowing them to continue would be irresponsible. He would very much prefer that other organizations voluntarily stop using the term and that litigation is a last resort if they refuse to stop using it.

3) Mr. Bernstein believes that Boulder Metalsmithing’s attempt to trademark the term “open studios” was clearly an attempt to get exclusive rights to it’s use (keeping OS from being able to use it). I suggested that it was simply an attempt to ensure that the phrase could continue to be used by anyone, in the face of Open Studio’s demands. I said that I and everyone I had spoken to would be equally against anyone else claiming exclusive rights to the term.

4) I pointed out that literally thousands of organizations use the term “open studios”, many of them for far longer than Boulder’s OS and that I could find no instances of any of them suing to keep exclusive rights, but Mr. Bernstein insisted many times that they were “forced” to take legal action. It was clear to me during the course of our discussion that OS is pursuing exclusive rights to the term and will oppose any use of it, using legal means if voluntary compliance is not forthcoming in the misguided belief that they are protecting OS and their artists.

The Solution:

A search for “open studios” reveals that virtually all other of the thousands of open studio organizations attach their open studios name to their location. “Open studio” is a common generic phrase, while “open studios Cornwall” provides the uniqueness commonly valued in a trade name. For the same reason, common descriptive phrases like “farmer’s market”, “art fair”, “film festival” are attached to a location like Boulder County, Pearl St, or CU International when used as an organization’s name. I suggested that a simple solution for OS would be to attach their name to “Boulder” or “Boulder County”.  Mr. Bernstein emphatically rejected this idea seemingly because “open studios” had always been “open studios” and always would be. Tradition! The response is ironic because one of the main reasons Mr. Bernstein gave for preventing the use of the term by others is the potential for “confusion”.

Mr. Bernstein also seems to be overlooking a much greater potential source for confusion. If OS doesn’t claim “Boulder Open Studios” as a trade name, what prevents another organization from doing so, for instance, as a public forum for discussion of open studios issues and controversies? Talk about confusion!

It seems to me that Open Studios simply made an easily fixed mistake in not using the more appropriate, specific and descriptive name of Boulder Open Studios. Fixing this would do much more to avoid confusion than using a generic descriptive phrase and then being “forced” to prevent other organizations to stop using it.

To make things much easier for Open Studios to adopt this solution, I have purchased the tradename “Boulder Open Studios” and the domain name “boulderopenstudios.org”. I am offering these names to Open Studios free of charge if they will acknowledge that the term “open studios” is simply a common generic phrase which should be available for anyone to use.

What do you think of John’s solution?  Do you agree with Open Studio’s attorney or is this a case of trademark bullying?  This is certainly a case our intellectual property team will be watching!