Commercial Law

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XryylJAO

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1. Neo operates a winery in Walla Walla and finds out that another winery, Patit Creek Cellars, is selling off some of its barrels and equipment. Search Washington state UCC filings to determine if there are any security interests on the barrels and equipment. https://fortress.wa.gov/dol/ucc/

(a). Can Patit sell the equipment to Neo?

(b). What if Neo discovers the equipment was subject to a PMSI? Could the secured party repossess the equipment after it was sold to Neo? Explain. (relate to this video)

2. Suppose you and your friends want to open a business selling beer, wine and liquor. (Attached is the textbook materials)

(a). The proposed name is “Trifecta Brews and more”. Is that name available?

(b). What effect, if any, would it have on your use of the name if someone else in the area already uses the name Trifecta for a restaurant? Explain.

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572 UNIT FIVE Property and Its Protection and can include either all or part of the total image or overall impression created by a product or its packaging. I EXAMPLE 29.7 The distinctive decor, menu, lay- out, and style of service of a particular restaurant may be regarded as trade dress. Trade dress can also include the layout and appearance of a catalogue, the use of a light- house as part of the design of a golf hole, the fish shape of a cracker, or the G-shaped design of a Gucci watch. I Basically, trade dress is subject to the same protection as trademarks. In cases involving trade dress infringe- ment, as in trademark infringement cases, a major con- sideration is whether consumers are likely to be confused by the allegedly infringing use. used in the commission of the crime. The defendant must also pay restitution to the trademark holder or victim in an amount equal to the victim's actual loss. I CASE IN POINT 29.8 Charles Anthony Jones pleaded guilty to trafficking of counterfeit prescription erectile dysfunction drugs. The court sentenced Jones to thirty-seven months in prison and ordered him to pay $633,019 in restitution. Jones appealed, arguing that the amount awarded was more than the pharmaceutical companies' actual losses. The court agreed. The pharma- ceutical companies were entitled only to their lost net profits rather than the retail price of the genuine drugs.12 29-1g Counterfeit Goods Counterfeit goods copy or otherwise imitate trade- marked goods, but they are not the genuine trademarked goods. The importation of goods that bear counterfeit (fake) trademarks poses a growing problem for U.S. businesses, consumers, and law enforcement. In addi- tion to the negative financial effects on legitimate busi- nesses, certain counterfeit goods, such as pharmaceuticals and nutritional supplements, can present serious public health risks. Combating Foreign counterfeiters Although Congress has enacted statutes against counterfeit goods, the United States cannot prosecute foreign counterfeit- ers because our national laws do not apply to them. One effective tool that U.S. officials have used to combat online sales of counterfeit goods is to obtain a court order to close down the domain names of Web sites that sell such goods. For instance, U.S. agents have shut down hundreds of domain names on the Monday after Thanks- giving ("Cyber Monday"). Shutting down the Web sites, particularly on key shopping days, prevents some coun- terfeit goods from entering the United States. Europol, an international organization, has also used this tactic. The Stop Counterfeiting in Manufactured Goods Act The Stop Counterfeiting in Manufactured Goods Act" (SCMGA) was enacted to combat counter- feit goods. The act makes it a crime to traffic intentionally in or attempt to traffic in counterfeit goods or services, or to knowingly use a counterfeit mark on or in connection with goods or services. Before this act, the law did not prohibit the creation or shipment of counterfeit labels that were not attached to any product. Therefore, counterfeiters would make labels and packaging bearing another's trademark, ship the labels to another location, and then affix them to an inferior product to deceive buyers. The SCMGA closed this loophole by making it a crime to knowingly traf- fic in counterfeit labels, stickers, packaging, and the like, regardless of whether the items are attached to any goods. 29-1h Trade Names Trademarks apply to products . A trade name indicates part or all of a business's name, whether the business is a sole proprietorship, a partnership, or a corporation. Gen- erally, a trade name is directly related to a business and its goodwill. A trade name may be protected as a trademark if the trade name is also the name of the company's trade- marked product-for example, Coca-Cola. Unless it is also used as a trademark or service mark, a trade name cannot be registered with the federal government. Trade names are protected under the common law, but only if they are unusual or fancifully used. The word Safeway , for example, was sufficiently fanciful to obtain protection as a trade name for a grocery chain. Penalties for Counterfeiting Persons found guilty of violating the SCMGA may be fined up to $2 million or imprisoned for up to ten years (or more if they are repeat offenders). If a court finds that the statute was violated, it must order the defendant to forfeit the counterfeit prod- ucts (which are then destroyed), as well as any property 29-1i Licensing One way to avoid litigation and still make use of anoth- er's trademark or other form of intellectual property is to obtain a license to do so. A license in this context 11 PLIN109 181 2000 which mended 18 USC Si CHAPTER 29 Intellectual Property 571 Health System, began rebranding itself (changing its name and marketing) as Unity Point Health. When the company expanded into Wisconsin, where Unity Health already had an established presence, Unity Health filed a trademark infringement suit in federal court. The court found that Unity Health was a descriptive mark, and thus not inherently distinctive. But the court also held that the Unity Health mark had acquired a sec- ondary meaning, largely because it had been used for so long and so exclusively by one health insurer in Wiscon- sin. It made no difference to the court that only one part of the mark (Unity) was common to both trademarks. To allow lowa Health Systems to use the mark UnityPoint Health in Wisconsin would likely create confusion for consumers. Therefore, the court issued an injunction and blocked Iowa Health from using the trademark Unity- Point Health.7. Once a secondary meaning is attached to a term or name, a trademark is considered distinctive and is pro- tected. Even a color can qualify for trademark protection, did the color schemes used by some state university sports teams, including Ohio State University and Loui- siana State University. 1 CASE IN POINT 29.4 Federal Express Corporation (FedEx) provides transportation and delivery services worldwide using the logo FedEx in a specific color com- bination. FedEx sued a competitor, JetEx Management Services, Inc., for using the same color combination and a similar name and logo. JetEx also mimicked FedEx's trademarked slogan ("The World on Time" for FedEx, and “Keeping the World on Time" for JetEx). FedEx alleged trademark infringement and dilution, among other claims. A federal district court in New York granted a permanent injunction to block JetEx from using the infringing mark in FedEx colors.' A trademark does not become generic simply because it is commonly used, however. I CASE IN POINT 29.5 In 2014, David Elliot and Chris Gillespie sought to register numerous domain names, including "googledisney.com" and "googlenewstvs.com.” (A domain name is part of an Internet address, such as "cengage.com.") They were unable to register the names because all of them used the word google, a trademark of Google, Inc. Elliot and Gillespie brought an action in federal court to have the Google trademark cancelled because it had become a generic term. They argued that because most people now use google as a verb ("to google") when refer- ring to searching the Internet with any search engine (not just Google), the term should no longer be protected. The court held that even if people do use the word google as a verb, it is still a protected trademark if consumers associate the noun with one company. The court con- cluded that the primary significance of the word google to a majority of the public who utilize Internet search engines is a designation of the Google search engine." 29-1e Service, Certification, and Collective Marks A service mark is essentially a trademark that is used to distinguish the services (rather than the products) of one person or company from those of another. For instance, each airline has a particular mark or symbol associated with its name. Titles and character names used in radio and television are frequently registered as service marks. Other marks protected by law include certification marks and collective marks. A certification mark is used by one or more persons, other than the owner, to certify the region, materials, mode of manufacture, qual- ity, or other characteristic of specific goods or services. Certification marks include "Good Housekeeping Seal of Approval" and "UL Tested." When used by members of a cooperative, association, or other organization, a certification mark is referred to as a collective mark. I EXAMPLE 29.6 Collective marks appear at the ends of motion picture credits to indicate the various associations and organizations that partici- pated in the making of the films. The union marks found the tags of certain products are also collective marks. I Generic Terms Generic terms that refer to an entire class of products, such as bicycle and computer, receive no protection, even if they acquire secondary meanings. A particularly thorny problem arises when a trademark acquires generic use. For instance, aspirin and thermos were originally the names of trademarked products, but today the words are used generically. Other trademarks that have acquired generic use are escalator, trampoline, raisin bran, dry ice, lanolin, linoleum, nylon, and cornflakes. 7. Unity Health Plans Insurance Co u lowd Health System, 995 ESupp.2d 874 (W.D.Wis. 2014). 8. Board of Supervisors of Louisiana State University - Smack Apparel Co., 438 ESupp.2d 653 (E.D.La. 2006). See also Abraham v. Alpha Chi Omega, 781 ESupp.2d 396 (N.D.Tex. 2011). 9. Federal Express Corp. u. JetEx Management Services, Inc., 2014 WL 4628983 (E.D.N.Y. 2014). 29-1f Trade Dress The term trade dress refers to the image and overall appearance of a product. Trade dress is a broad concept 10. Elliot u Google, 45 ESupp.3d 1156 (D.Ariz. 2014). CHAPTER 29 Intellectual Property 569 the infringer acted intentionally or that the trademark received from the unauthorized use of the mark. A court was registered (although registration does provide proof can also order the destruction of any goods bearing the of the date of inception of the trademark's use). unauthorized trademark. In some situations, the trade- The most commonly granted remedy for trademark mark owner may also be able to recover attorneys' fees. infringement is an injunction to prevent further infringe- At the center of the following case was an injunction ment. Under the Lanham Act, a trademark owner that granted in an earlier dispute between two brothers pro- successfully proves infringement can recover actual hibiting one of them from using trademarks owned by the damages, plus the profits that the infringer wrongfully other, including a mark featuring their shared last name. 29-1d Distinctiveness of the Mark A trademark must be sufficiently distinctive to enable consumers to identify the manufacturer of the goods eas- ily and to distinguish between those goods and compet- ing products. “similar enough that a consumer might well confuse them.” Therefore, Quicksilver could continue its claim for trademark infringement." Strong Marks Fanciful, arbitrary, or suggestive trade- marks are generally considered to be the most distinctive (strongest) trademarks. These marks receive automatic protection because they serve to identify a particular prod- uct's source, as opposed to describing the product itself. Suggestive Trademarks. Suggestive trademarks indicate something about a product's nature, quality, or charac- teristics, without describing the product directly. These marks require imagination on the part of the consumer to identify the characteristic. “Dairy Queen,” for instance, suggests an association between its products and milk, but it does not directly describe ice cream. “Blu-ray” is a suggestive mark that is associated with the high-quality, high-definition video contained on a particular type of optical data storage disc. Although blue-violet lasers are used to read blu-ray discs, the term blu-ray does not directly describe the disc. Fanciful and Arbitrary Trademarks. Fanciful trade- marks use invented words, such as "Xerox” for one manufacturer's copiers and “Google” for a search engine. Arbitrary trademarks use common words in an uncom- mon way that is not descriptive of the product, such as “Dutch Boy" as a name for paint. Even a single letter used in a particular style can be an arbitrary trademark. I CASE IN POINT 29.2 Sports enter- tainment company ESPN sued Quiksilver, Inc., a maker of youth-oriented clothing, alleging trademark infringe- ment. ESPN claimed that Quiksilver's clothing used the stylized “X” mark that ESPN uses in connection with the "X Games” (“extreme” sports competitions). Quiksilver filed counterclaims for trademark infringe- ment and dilution, arguing that it had a long history of using the stylized X on its products. ESPN had created the X Games in the mid-1990s, and Quiksilver had been using the X mark since 1994. ESPN asked the court to dismiss Quiksilver's counterclaims, but the court refused, holding that the on Quiksilver's clothing is clearly an arbitrary mark. The court found that the two Xs are Secondary Meaning Descriptive terms, geographic terms, and personal names are not inherently distinctive and do not receive protection under the law until they acquire a secondary meaning. A secondary meaning may arise when customers begin to associate a specific term or phrase (such as London Fog) with specific trademarked items (coats with “London Fog” labels) made by a par- ticular company. Whether a secondary meaning becomes attached to a name usually depends on how extensively the product is advertised, the market for the product, the number of sales, and other factors. CASE IN POINT 29.3 Unity Health Plans Insurance Corporation has been a health maintenance organization (HMO) insurer in Wisconsin since 1955. In 2013, another health care provider, Iowa 6. ESPN, Inc. v. Quiksilver, Inc., 586 F.Supp.2d 219 (S.D.N.Y. 2008). 568 UNIT FIVE Property and Its Protection 29-1a Statutory Protection of Trademarks Statutory protection of trademarks and related property is provided at the federal level by the Lanham Act of 1946. The Lanham Act was enacted, in part, to protect manufacturers from losing business to rival companies that used confusingly similar trademarks. The act incor- porates the common law of trademarks and provides remedies for owners of trademarks who wish to enforce their claims in federal court. Many states also have trade- mark statutes. Corporation filed a dilution lawsuit, and a federal court ruled that use of the "Sambucks" mark constituted trademark dilution because it created confusion for consumers. Not only was there a "high degree of simi- larity between the marks, but also both companies pro- vided coffee-related services and marketed their services through "stand-alone" retail stores. Therefore, the use of the similar mark (Sambuck's) reduced the value of the famous mark (Starbucks). Trademark Dilution In 1995, Congress amended the Lanham Act by passing the Federal Trademark Dilution Act, which allowed trademark owners to bring suits in federal court for trademark dilution. In 2006, Congress further amended the law on trademark dilution by pass- ing the Trademark Dilution Revision Act (TDRA). Under the TDRA, to state a claim for trademark dilu- tion, a plaintiff must prove the following: 1. The plaintiff owns a famous mark that is distinctive. 2. The defendant has begun using a mark in commerce that allegedly is diluting the famous mark. 3. The similarity between the defendant's mark and the famous mark gives rise to an association between the marks. 4. The association is likely to impair the distinctiveness of the famous mark or harm its reputation. Trademark dilution laws protect "distinctive" or "famous” trademarks (such as Rolls Royce, McDonald's, Starbucks, and Apple) from certain unauthorized uses. Such a mark is protected even when the use is on non- competing goods or is unlikely to cause confusion. More than half of the states have also enacted trademark dilu- tion laws. 29-1b Trademark Registration Trademarks may be registered with the state or with the federal government. To register for protection under fed- eral trademark law, a person must file an application with the U.S. Patent and Trademark Office in Washington, D.C. Under current law, a mark can be registered (1) if it is currently in commerce or (2) if the applicant intends to put it into commerce within six months. In special circumstances, the six-month period can be extended by thirty months. Thus, the applicant would have a total of three years from the date of notice of trademark approval to make use of the mark and file the required use statement. Registration is postponed until the mark is actually used. During this waiting period, any applicant can legally protect his or her trademark against a third party who previously has neither used the mark nor filed an application for it. Registration is renewable between the fifth and sixth years after the initial registration and every ten years thereafter (every twenty years for those trademarks reg- istered before 1990). Marks Need Not Be Identical Note that a famous mark may be diluted by the use of an identical mark or by the use of a similar mark. A similar mark is more likely to lessen the value of a famous mark when the companies using the marks provide related goods or compete against each other in the same market. I CASE IN POINT 29.1 Samantha Lundberg opened a business called "Sambuck's Coffeehouse," in Astoria, Oregon, even though she knew that "Starbucks” was one of the largest coffee chains in the nation. Starbucks 29-1c Trademark Infringement Registration of a trademark with the U.S. Patent and Trademark Office gives notice on a nationwide basis that the trademark belongs exclusively to the registrant. The registrant is also allowed to use the symbol to indi- cate that the mark has been registered. Whenever that trademark is copied to a substantial degree or used in its entirety by another, intentionally or unintention- ally, the trademark has been infringed (used without authorization) When a trademark has been infringed, the owner of the mark has a cause of action against the infringer. To succeed in a trademark infringement action, the owner must show that the defendant's use of the mark created a likelihood of confusion about the origin of the defen- dant's goods or services. The owner need not prove that 1. 15 U.S.C. Sections 1051-1128. 2. 15 U.S.C. Section 1125. 3. Pub. L. No. 103-312, 120 Stat. 1730 (2006). 4. See Louis Vuitton Malletier S.A. u Haute Diggity Dog, LLC, 507 F.3d 252 (4th Cir. 2007); and Moseley V Secret Catalogue, Inc., 537 U.S. 418, 123 S.Ct. 1115, 155 L.Ed.2d 1 (2003). 5. Starbucks Corp. « Lundberg, 2005 WL 3183858 (D.Or. 2005).
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Running head: COMMERCIAL LAW
Commercial Law
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COMMERCIAL LAW
COMMERCIAL LAW
Question 1
After searching the Washington state UCC filings, there is evidence that there is a
security interest in the property and assets of Patit Creek Cellars that was granted to Banner bank
and Warden Hutterian Brethren.
Part (a)
If the secured party which is the Banner bank and Warden Hutterian Brethren did not
include the equi...


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