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When Dechert trademark partner Glenn Gundersen conducted the firm’s Annual Report on Trends in Trademarks last year, the practice area was a much different world. In 1999, a booming economy boosted the number of trademark applications to 265,341, a whopping 32 percent increase over the previous year. Trademark lawyers were dealing with an unparalleled “brand-name land rush,” this year’s just-released 10th annual report says, with dot-com companies investing millions into acquiring and promoting trademark names. Many dot-coms used generic names such as “Pets.com” or “Furniture.com,” while others applied for trademark names beginning with the prefix “e” that were eventually rejected by the U.S. Patent and Trademark Office for being descriptive and unprotectible. On the surface, one might look at this year’s report, which analyzes trademark developments from 2000, and view it merely as more of the same. Applications reached a record 287,689, representing an 8.5 percent increase over the previous year and capping a decade in which the number of applications filed rose ever year. But the increase can be attributed to applications reaching a crest in the first half of the year, since numbers took a swan dive from July through December, mirroring the steady decline of dot-coms and the stock market. In the trademark world, a dot-com name went from desirable to taboo faster than you could say, “You’ve got mail.” “We certainly expected to see an up-and-down trajectory with applications,” Gundersen said. “But it was startling to see the speed and volume in which these applications went up and down.” Gundersen, who, along with his Dechert colleagues, compiled statistics through the use of the Patent and Trademark Office’s online database, said the quick shift in dot-com popularity was clearly one of the big stories, along with legal issues surrounding generic dot-com names and certain prefixes used. The dot-com issue revolves around online retailers’ attempting to claim trademark rights in brand names combining the generic for their merchandise with the dot-com moniker. The law has traditionally held that a generic term cannot be any particular company’s trademark because it would be unfair to competitors. Hundreds of applicants have filed for such generic trademarks in the past few years, raising the question: Will the traditional rules accommodate the new Web branding, or have dot-com entrepreneurs been building on would-be trademarks that have no legal protection? The patent office responded by adopting a policy that a dot-com portion of an application would be treated as the equivalent of a corporate descriptor such as “Inc.” — meaning that it would essentially be ignored. Generic dot-coms would be ineligible for trademark registration. Gundersen said the expected court challenge to the patent office’s ruling never happened in 2000, partly because of the economic collapse of many prominent dot-coms that left their legal battles unfinished. But the generic dot-coms still in existence might want to conserve their money, happy enough with the exclusivity provided by a domain name. The real competitive question left, Gundersen said, is whether a generic domain/ trademark should have protection from others with similar domain names. For instance, if “trademark.com” and “trademarks.com” had different owners, could the first user of “trademark.com” for trademark services stop a newcomer from using “trademarks.com” for similar services? To do so, the first user would have to show that the “trademark.com” domain name was a trademark that could be protected. Gundersen said those seeking to claim trademark rights in “generic.com” applications could find a ray of hope in a recent decision in the U.S. Circuit Court of Appeals for the Federal Circuit earlier this year. In Dial-A-Mattress Operating Corp., 240 F.3d 1341, 57 USPQ2d 1857 (CAFC 2001), the court held that the service application 1-888-MATTRES was descriptive rather than generic and was eligible for registration on the basis of the acquired distinctiveness of the applicant’s previously registered applications. That ruling overturned the Trademark Trial and Appeal Board’s decision that the application could never be registered on the Principal Register because “mattress” was the generic for the product being sold and “1-888″ was a telephone exchange. Gundersen said the appeal board had analyzed the mark as a compound word that is generic if (1) each of its terms is generic and (2) the combined meaning is no more than the sum of its parts. The Federal Circuit, however, held that the board should have analyzed the proposed mark as a phrase, which requires investigating the meaning of the phrase as a whole. There was no dispute that the second part of the application name was legally equivalent to “mattress” and was generic. However, the court found that the “888″ part “is not a word” and that the application was outside the scope of the compound-word test. It further held that “888″ “is not itself a generic term for selling by telephone.” The court found that there was no evidence in the record that “the relevant public refers to the class of shop-at-home telephone mattress retailers as ’1-888-MATTRES.’” Instead, the application is merely descriptive, the court said, since “it immediately conveys the impression that a service relating to mattresses is available by calling the telephone number.” This decision would allow the next Furniture.com to argue that the relevant public does not refer to the class of online furniture retailers as “Furniture.com” and that the name is, therefore, not “literally a genus or class name.” Under that theory, Gundersen said, such phrases could acquire secondary meaning and become marks that can be protected. However, he added that the patent office might distinguish “dot-com” from “888″ on the grounds that “dot-com” most likely counts as a word and that the stringent compound-word test should be applied. “There were so many generic.com applications in 1999 and 2000, so now we just have to see whether there are enough survivors [from the economic downturn] to where one would challenge the issue,” Gundersen said. “The Trial and Appeal Board refused the 1-888-MATTRES case and it was reversed by the federal court. It will be interesting to see what will happen when another generic.com case comes before the board. Will they not want to run the risk of being overturned. Or will they view generic.coms and the 1-888-MATTRES as apples and oranges?” The patent office has taken the position that many applications that consist of “e” followed by a dictionary word are descriptive and has refused registration. Although the appeal board has not yet issued a “generic.com” opinion, it weighed in this spring on the mark “E Fashion” in Styleclick.com Inc., 57 U.S.P.Q. 2d (BNA) 1445 (TTAB 2000). The applicant sought to register the mark for computer software and electronic retailing services for fashion items. The board rejected the applicant’s argument that “E Fashion” was at most suggestive. Instead, the board found that “E Fashion” “immediately describes, without conjecture or speculation, a significant characteristic or feature of the goods and/or services, namely, that they involve retrieving fashion information and/or shopping for fashions electronically via software and retail Web site on the Internet.” The board reasoned that the letter “e” has the “generally recognized meaning of ‘electronic’ in terms of computers and the Internet. And when that non-source-identifying prefix is coupled with the descriptive word “fashion,” the mark “E Fashion,” as a whole, is “merely descriptive for the applicant’s goods and/or services.” Gundersen, though, said the E Fashion case should not doom similar applications in the future. “The ‘e’ prefix case is important because it’s a popular branding device,” Gundersen said. “One size does not fit all. Whether putting an ‘e’ or an ‘i’ in front of a word is deemed descriptive or protectible depends on what the word is or what the product or service is. But I think the ‘e’ prefix could become trite and people could move on to a different trend. In that case, it would be interesting to see what replaces it.” When asked to give a preview of what he might be writing about next year, Gundersen said a lot hinges on the direction of the economy. “By this time next year, we will be looking at where the economy went and how it correlates with new filings,” he said. “If it turns into a recession, will the number of filings go down significantly? And from a substantive law perspective, it will be interesting to see if someone appeals the generic.com issue in light of the success of the 1-888-MATTRES case.”

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