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!

 

Trademarks: A Primer for Colorado Business Owners

A “trademark” is any word, name, slogan, symbol, or combination thereof, including packaging, configuration of goods or other trade dress, which is adopted and used to identify goods or services, and to distinguish them from goods or services offered by others.

The primary goal of trademark law is not to establish an exclusive property right in the mark, but rather, to protect consumers from confusion in the marketplace.  Thus, your trademark rights are violated if someone else is using your mark (or a mark confusingly similar to yours) in a way that is likely to cause confusion to existing or potential customers.

Technically, “trademark” is the term to use for tangible goods and products and “service mark” or “servicemark” is for non-tangible services, but nearly everyone, even trademark attorneys, use “trademark” for both categories.

“Common Law” Trademark Rights

Many people believe you can only have a trademark if you file for a registration, but this is not true!

Trademark rights can be established under common law simply by being the first use a mark for a business endeavor.  Your common law trademark rights extend as far as the geographic area in which you use your mark.

For example, if Roger started a plumbing business called Roger’s Parts & Plumbing in 2002 and has continuously used the name “Roger’s Parts & Plumbing” in the Denver metro area ever since, he will have likely established a legal right to “Roger’s Parts & Plumbing” under common law in the Front Range.

If, in 2017, Judy tries to start a plumbing business in Denver called “Roger’s Parts & Plumbing”, Roger could use his trademark rights to legally stop Judy from doing so.  Consumers would be confused about which “Roger’s” business is which.  Plus, the new “Roger’s Parts & Plumbing” could unfairly take advantage of the goodwill and reputation Roger has established over more than 10 years of business.  These are the very problems trademark law was designed to address.

However, if Judy starts a plumbing business called “Roger’s Parts & Plumbing” in Durango, Colorado instead of Denver, nearly 350 miles away from where Roger operates, Roger might have trouble proving that his common law rights extend that far.  Similarly, if someone starts a punk band in Denver called “Rogerzz Plumbing”, Roger would have to prove his trademark rights extend beyond the plumbing industry in order to stop the punk band from using that name to promote music and live shows.

Federal Trademark Registration

Registering your trademark, even if you have established strong common law rights to the mark, is always advised.  This allows you to provide notice to the world that you are using the mark, and affords you certain statutory rights and protections as well.

The U.S. has a two-tiered system of trademark protection:  federal and state.  A federal registration issued by the U.S. Patent & Trademark Office (USPTO) give the registrant rights through the entire United States.  A state registration will grant rights within that state’s boundaries only.

Generally, in order to file for a registration with the USTPO, the trademark’s owner first must use or plan to use the mark in “interstate commerce.”  This means the mark is used on a product or service that crosses state lines or that affects commerce crossing such lines (for example, an Internet business that caters to interstate or international customers).

At first glance, registering a mark with the USPTO appears to be a relatively simple process. It requires a completed application, a specimen, and a statutory filing fee.

However, doing some research before spending the cash on the filing fee, which can range from $250 to $375 or more depending on the type of application submitted and how many class of goods or services you want to list for your mark, is strongly recommended.  This is because all applications will be examined by a USTPO Trademark Examiner for registrability under the Lanham Act (15 U.S.C. § 1051 et seq.).

Some things CANNOT be trademarked under the Lanham Act.  You are not allowed to claim the generic name of a product or a service itself as your trademark.  Roger cannot trademark “Plumbing” or “Plumber” for his plumbing business.

You cannot register “clearly descriptive” marks, which are those made of dictionary words which describe some important characteristic of your product or service (e.g., “Delicious Apples” if you have an apple orchard business).  You also cannot register “deceptively misdescriptive” marks (e.g., “Leather Shoes” for shoes that aren’t actually made of leather).

However, “suggestive” marks only give some vague idea about the products and services covered by the trademark, and are registrable.  Sometimes the boundary between unregistrable clearly descriptive marks and registrable suggestive marks isn’t very clear. This can result in long disputes between applicants and the USPTO.

There are many other rules for what is allowed for registration under this Act, and if your application is rejected, you do not get a refund of your application fees.  As such, consulting with a trademark attorney is advised before you begin the federal registration process.

If the Trademark Examiner determines your mark can be registered, it is then published in the USPTO Gazette, and if it is not challenged within 30 days of publishing, it will be registered. The total process can take 1 year at a minimum.  After registration, you can use the symbol ® after your mark to show it has been federally registered.

Colorado Trademark Registration

Trademark registration under Colorado law[1] is easier, faster and cheaper than federal trademark registration.  It is used to protect a trademark within the state.

A Colorado trademark registration allows for a standard character mark (expressed in ordinary English letters, Roman and Arabic numbers, or punctuation, without any stylization) and a special form trademark (logos, pictures, design elements, color or style of lettering).[2]

To file a Colorado trademark registration, you submit a Statement of Registration of Trademark electronically at the Colorado Secretary of State’s website with an attachment of your mark and the goods/services category your mark will be used in.  The current filing fee is $30.

Unlike the USPTO, there is no examiner who is going to look at your application to make sure you have completed it correctly and that the mark is appropriate for registration under state law.  Instead, when you file your application, you certify that in your good faith belief, you have the right to use the trademark in connection with the goods or services listed your application, and

your use does not infringe the rights of any other person in that trademark.

Colorado trademark registrations are effective for 5 years and may be renewed before expiration in successive 5-year terms.[3]  (Prior to May 29, 2007 however, Colorado trademarks were effective and renewed for 10 years.[4])

Obtaining a Colorado trademark registration does not authorize the use of the federal registration symbol ®.[5]  However you can use “TM” or “SM” (for a service mark) after your mark.

If you are interested in speaking with one of our attorneys about registering your trademark or stopping someone else from using your mark, give us a call.

[1] Section 7-70-101, et seq., C.R.S.

[2] Section 7-70-102(2)(f), (g), C.R.S.

[3] Sections 7-70-104(1)-(2), C.R.S.

[4] Section 7-70-109, C.R.S.

[5] Section 7-70-103(4), C.R.S.