[00:00:00] Speaker 01: Okay, so number 18, 1208, Versatop Support Systems against Georgia Expo Incorporated. [00:00:07] Speaker 04: Mr. Cooper. [00:01:07] Speaker 02: If you bring paper, you don't have that problem. [00:01:10] Speaker 02: If you bring paper, you don't have that problem. [00:01:49] Speaker 01: Is it not cooperating? [00:01:51] Speaker 01: Do we need? [00:01:52] Speaker 01: Should we call our experts? [00:01:58] Speaker 01: OK. [00:02:02] Speaker 04: Your Honor, may it please the Court. [00:02:05] Speaker 04: With respect to Versatop's appeal today, we're asking you to recognize that the test for infringement under section 1125 of the trademark statute is different than the test for [00:02:18] Speaker 04: establishing trademark rights under 1127. [00:02:21] Speaker 03: We're deciding that question under Ninth Circuit law, correct? [00:02:27] Speaker 04: Correct. [00:02:29] Speaker 04: And I believe there's no disagreement among parties as to Ninth Circuit. [00:02:33] Speaker 04: What case are you relying on to support your position? [00:02:38] Speaker 04: The Playboy case and the network automation cases are both cases where court ruled that infringing activity [00:02:48] Speaker 04: concerning a internet link in Playboy and software network automation were infringement under 1125 when there was only advertising, advertising alone. [00:03:01] Speaker 03: What about the statements in parlstores and free cycle that seem to rely on the definition in 1127? [00:03:08] Speaker 04: Neither of those cases involve situations where both of them are not [00:03:16] Speaker 04: are not the same facts in our case, and both of them concern situations where the accused trademark, there wasn't a competitor who copied and or took a trademark owner's trademark, and the question was how they used that trademark in connection with goods or services. [00:03:37] Speaker 03: I recognize the difference in the facts, but the point I'm trying to make is that it seems in the Ninth Circuit there are [00:03:44] Speaker 03: There are some conflicting statements as to what definition governs use in commerce, whether it's the one in 1125 or the one in 1127. [00:03:55] Speaker 04: I think the focus in Karl Storrs' and in Freecycle was on a different character of the use because, first of all, in Freecycle, the service is not goods, so it wouldn't even be considering this issue. [00:04:08] Speaker 04: So I don't see how Freecycle actually applies to this case at all. [00:04:12] Speaker 04: And then the Charles Storrs case was a situation where it was a refurbishment case. [00:04:18] Speaker 04: So you had a trademark used on authentic goods. [00:04:23] Speaker 04: And the question was simply whether or not there was a problem because those goods were refurbished. [00:04:28] Speaker 02: So it didn't make any difference what the test was. [00:04:30] Speaker 02: I'm sorry? [00:04:32] Speaker 02: It didn't make any difference which test you used. [00:04:36] Speaker 03: Yeah. [00:04:37] Speaker 03: The focus there was basically commerce, and there was no question about the [00:04:42] Speaker 03: the manner of use. [00:04:43] Speaker 04: So it wasn't a situation like this one. [00:04:46] Speaker 04: And, and, uh, like the ones in playboy and network automation, where it was a, um, a defendant, uh, looking at the character of a defendant's use, a remark, uh, with respect to their good. [00:05:03] Speaker 03: It looked like you didn't raise this argument until after the magistrate judges opinion. [00:05:10] Speaker 03: Correct. [00:05:12] Speaker 03: You first asserted the definition from 1127. [00:05:16] Speaker 03: Am I correct? [00:05:20] Speaker 03: And then after the magistrate judge's decision, you argued that 1125 is the correct definition. [00:05:30] Speaker 04: uh... that's not my recollection of that i think that we had argument as to both eleven twenty seven twenty five at the uh... magistrate level well i think i may have missed that i think it's been our position throughout the uh... advertising alone and this concept in eleven twenty five that it's uses in commerce on or in connection important language difference in eleven twenty five then eleven twenty seven which is [00:05:59] Speaker 04: those uses on or in connection with goods or services. [00:06:02] Speaker 04: If you don't find them, it's been more than 27. [00:06:05] Speaker 03: If we send this back, what happens? [00:06:11] Speaker 03: My understanding is there was the original brochure, the original material distributed at the trade show way back, and has anything happened since? [00:06:26] Speaker 04: So first, the answer to the first question, what happens? [00:06:28] Speaker 04: What our goal or what we would hope and we've asked you to do is either order under the correct definition that there was trademark infringement or remand and at least let the district court know that they should follow that. [00:06:44] Speaker 04: The damage to our client today exists from those brochures, those knockoff brochures and emails that were sent September and October 2015. [00:06:55] Speaker 04: because they're still present in the industry. [00:06:57] Speaker 04: And there's an association that people in the industry make with the Apple lead and those products. [00:07:06] Speaker 04: And we're a small company. [00:07:09] Speaker 04: We're a one-man operation right now against a large company that has quite a bit of recognition in the industry. [00:07:17] Speaker 04: It went about, if a rule like what Appellee is talking about today stands, that means Walmart could [00:07:25] Speaker 04: see a small company that's selling a product, take a photograph of their product and their trademark, put it in an advertisement, run some flyers. [00:07:35] Speaker 04: And as long as they never put that trademark on goods and then sold some of the Walmart goods, there would be no liability. [00:07:45] Speaker 03: It just seems wrong. [00:07:45] Speaker 03: Did they distribute those flyers after that initial trade show? [00:07:50] Speaker 04: The distribution that we're aware of, and we had some issues with discovery, but I think you're aware from that record, but we only know what they did the fall of 2015. [00:08:00] Speaker 04: What we do know is that those brochures, as it occurs in the industry, don't disappear. [00:08:06] Speaker 04: They stay on somebody's desk. [00:08:08] Speaker 04: So whatever they distributed, it's our understanding that those brochures are still in existence today, the ones from the fall of 2015. [00:08:19] Speaker 01: There was no discovery at that stage, is that right? [00:08:23] Speaker 04: We began discovery, but then then had some some issues because they they stopped activity and and how Magistrate Judge Jellbrooks chose to view whether we could take additional discovery. [00:08:41] Speaker 04: Would it be helpful just briefly to talk a little bit of facts to understand what the products are that were [00:08:47] Speaker 04: we're talking about here, just in a nutshell, aluminum poles that you arrange vertically and horizontally to provide a framework for tracial booths. [00:08:58] Speaker 04: And the appellee sells those aluminum poles and has for many years, is a major supplier of those. [00:09:06] Speaker 04: And there's an old way to connect those two poles together, to couple the horizontal and the vertical together. [00:09:12] Speaker 04: What our client did was invented a new special way to do that. [00:09:16] Speaker 04: Those brochures took a photograph of a prototype of poles that our client doesn't manufacture, but the coupler. [00:09:25] Speaker 04: And then the appellee was able to, and those brochures also talked about sales right away, was able to communicate to the industry that they're selling that product, when in fact they weren't. [00:09:40] Speaker 04: And that it was a knockoff, you know, with photographs of our product. [00:09:46] Speaker 04: But just at least I want to do to have some background on the nature of products and sellers. [00:09:53] Speaker 04: And noting specifically for you in the record, this is Judge Delder's noting that Versatop's original complaint was precipitated by Georgia Expo's use of photos in Versatop's prototype and trademarks in Georgia Expo emails and flyers. [00:10:12] Speaker 04: That's at Appendix 783. [00:10:22] Speaker 03: Mr. Cooper, you mentioned a minute ago when I suggested that you had only raised the definition in 1127 initially and that you only raised 1125 after the magistrate judge's decision. [00:10:38] Speaker 03: You said no, you raised them both. [00:10:41] Speaker 04: It's my recollection that we were raising both of them. [00:10:44] Speaker 03: I have your opposition to the summary judgment motion in front of me in page, appendix page 373. [00:10:52] Speaker 03: You specifically reference 1127. [00:10:56] Speaker 03: I don't see any reference whatsoever to 1125. [00:10:58] Speaker 04: I just can't tell you anything more than right now in response to that, I recognize that you're referring to that, but maybe on reply I can just make a point on that. [00:11:18] Speaker 02: But there's meant no suggestion that you waived the issue, right? [00:11:24] Speaker 04: Yeah, I don't believe there's any suggestion that we raise the issue. [00:11:29] Speaker 04: And again, the central points here on the plain language of these two sections is uses in commerce on or in connection with goods or services should not be governed by a use in commerce definition that for public policy reasons is set up for a completely different [00:11:52] Speaker 04: Determination which is whether or not you've established treatment rates and the long-term affixation requirement Professor McCarthy has long advocated this we note this in our for the reasons that I'm describing And I just would go back to having to reflect on what would be the absurd results with my Walmart example or others if [00:12:22] Speaker 04: the court decides that uses in commerce for infringement purposes have to meet the more stringent requirement of use in commerce for purposes of establishing rights. [00:12:36] Speaker 04: Any other questions? [00:12:38] Speaker 01: Okay. [00:12:39] Speaker 01: Thank you. [00:12:39] Speaker 01: Let's hear from the other side. [00:12:48] Speaker 01: Mr. North. [00:12:49] Speaker 00: Thank you, Your Honor. [00:12:57] Speaker 02: We believe that the district court corrected... Don't we have to follow the most recent Ninth Circuit authority on this question? [00:13:06] Speaker 02: I believe the Ninth Circuit has, in Carl Storrs, has resolved this... That's not the most recent decision, the Playboy decision and the network decision coming after Carl Storrs. [00:13:17] Speaker 00: The Playboy decision, Judge Dyke, is in footnote 11 and is dicta on its face. [00:13:26] Speaker 03: Why is it dictated? [00:13:28] Speaker 00: Because the input note 11, the question was whether there was threshold commerce to even get into the trademark laws. [00:13:38] Speaker 00: And the court said, yes, there is. [00:13:41] Speaker 00: And then it made a passing comment about whether the definitional section of 1127 [00:13:49] Speaker 00: which sets forth the definitions that would cover the 1125, which is infringement for a non-registered mark, which is what we have here, or 1114, which is for a registered mark, whether the definition of use in commerce should be applicable to 1125 or 1114. [00:14:10] Speaker 00: And in footnote 11, the Ninth Circuit said, [00:14:17] Speaker 00: Well, we have passed this threshold requirement, but by the way, we read the definitional section in a way where it would only be applicable to whether you can get that trademark right in the first place. [00:14:31] Speaker 00: And why that came up was, as this court may know, that there was an additional sentence added to that definition in 1127 in 1988. [00:14:44] Speaker 00: really where you need to go. [00:14:45] Speaker 00: And as I was trying to unpack this, so to speak, for today's argument, that in the second case upon which they rely, network automation, what the Ninth Circuit did was it adopted the Second Circuit position on whether these keyword searches could, in fact, constitute trademark infringement. [00:15:09] Speaker 00: It's a one-paragraph discussion which doesn't even talk about whether 1127, as amended, that definition should apply or not. [00:15:19] Speaker 00: The Ninth Circuit instead said, let's see what the Second Circuit did in RescueComm. [00:15:24] Speaker 00: And so I'd submit to this Court that actually you need to go to RescueComm, and then you can see what the Second Circuit did there. [00:15:33] Speaker 00: And what the Second Circuit did there was [00:15:36] Speaker 00: for the first time in the second circuit and said, yes, these keyword searches. [00:15:40] Speaker 00: And that's when you can go to Google and say, well, I will sell you the rights to this word. [00:15:45] Speaker 00: And then if anybody clicks on this word, then you can post your material and have it attached. [00:15:50] Speaker 00: And so in rescue com, the second circuit said, yes, that is a trademark violation. [00:15:57] Speaker 00: But in the opinion, what did it say? [00:16:00] Speaker 00: It said, we are looking to the definition of use in commerce under 1127 as it applies to the claims there under 1125 and 1114. [00:16:13] Speaker 00: And there, they said, we're going to look. [00:16:16] Speaker 00: There are two prongs under 1127. [00:16:18] Speaker 00: It said, we're going to do the services prong, which is different than the product prong here. [00:16:26] Speaker 00: And what I'd like to point out particularly is really the point that my friends over here are arguing is the appendix. [00:16:35] Speaker 00: And in the appendix it's dicta, but the majority opinion said we're going to apply 1127's definition of use in commerce to this issue and the Ninth Circuit incorporated. [00:16:52] Speaker 03: How can the definition in 1127 [00:16:56] Speaker 03: apply to an infringement context, as outlined in 1125, when the definition itself in 1127 begins by saying the term use in commerce means the bona fide use of a mark in the ordinary course of trade. [00:17:16] Speaker 03: How can an infringing use be a bona fide use? [00:17:21] Speaker 00: And that's a good question, and let me explain the answer to you. [00:17:24] Speaker 00: The appendix misinterpreted bonafide in that context. [00:17:29] Speaker 00: Bonafide can have different meanings in different contexts. [00:17:33] Speaker 00: And in this context... Is bonafide an infringing use? [00:17:37] Speaker 00: You can, bona fide sometimes means good faith, and I agree that would be contradictory to an infringing use. [00:17:43] Speaker 00: But also here, bona fide, when they added that sentence in 1988, had nothing to do with good faith. [00:17:52] Speaker 00: It had to do whether this was a substantive use in commerce, in which case you would go to the old-time application process or whether you could go to the new intent-to-use provision. [00:18:05] Speaker 00: And so it wasn't talking about good or bad faith. [00:18:07] Speaker 00: It's something that's talking. [00:18:08] Speaker 03: Kennedy But these are all, these are all definitions in, in discussions in 1127 that relate to the requirements to, to obtain registration, the right to a mark. [00:18:23] Speaker 03: I disagree with that, Your Honor. [00:18:24] Speaker 03: Not an infringement. [00:18:25] Speaker 03: An infringement is defined in 1125. [00:18:28] Speaker 00: I respectfully disagree with that, Your Honor, because... Tell me where I'm wrong. [00:18:33] Speaker 00: Yes, if I can grab my binder so I can read the exact words. [00:18:45] Speaker 01: You're saying that if there is, in fact, clear infringement that doesn't cross state lines, [00:18:53] Speaker 01: that ends it. [00:18:55] Speaker 01: This distinction which has been drawn is fundamental to trademark registration. [00:19:02] Speaker 00: What I'm saying is that that definition, that sentence which was added in 1988, [00:19:09] Speaker 00: does talk about which path of registration you can go, but it's not talking about bad faith. [00:19:16] Speaker 00: And to get back to your point, Judge Lynn, if you read through 1127, it says in the introduction, in the construction of this chapter, which includes 1125 and 1114, this chapter, these definitions shall apply unless the contrary is plainly apparent from the context. [00:19:37] Speaker 02: Isn't it plainly apparent from the context here that a different standard should apply to infringement? [00:19:46] Speaker 00: I would disagree with that because here the bona fide was not meant to talk about good faith. [00:19:55] Speaker 02: It makes no sense to say that if you use somebody's trademark in advertising that that's not infringement. [00:20:01] Speaker 02: How can that make sense? [00:20:03] Speaker 00: Well, it makes sense, because there was no dispute prior to 1988 that under both 1125 and 1114, which are the operational infringement ones, that if you had a product, you had to prove that that trademark was on the product or on a container. [00:20:23] Speaker 02: That's not true. [00:20:25] Speaker 02: I mean, you had decisions on the Second Circuit and the Ninth Circuit, well, at least maybe the Second Circuit that seemed to say that. [00:20:33] Speaker 02: There wasn't a consensus about that. [00:20:35] Speaker 02: It wasn't an issue which was much addressed. [00:20:38] Speaker 02: And I think that you may make a good argument that the decision of the Second Circuit and the appendix is kind of convoluted. [00:20:52] Speaker 02: But why should you just construe the statute at the outset? [00:20:56] Speaker 02: is not using that definition from 1127 for infringement purposes, because infringement sits clearly in a different context. [00:21:06] Speaker 00: Because, again, 1125 and 1114 are within that specific subchapter. [00:21:12] Speaker 00: And so it applies unless expressly there is a reason not to. [00:21:17] Speaker 00: And arguably, Congress was not artful in making that change. [00:21:20] Speaker 03: It doesn't say unless expressly, Sef was. [00:21:24] Speaker 03: It says unless it's plainly apparent from the context [00:21:27] Speaker 03: And the context is crystal clear. [00:21:31] Speaker 03: I mean, 1125 is directly relating to infringement, and 1127 is talking about what you need to do in order to register your mark in commerce, whether it's on a product or whether it's used on a service. [00:21:49] Speaker 03: The context is we couldn't be more clear. [00:21:55] Speaker 03: And in fact, I think it would make no sense to interpret this otherwise, because you could have a situation like, for example, let's suppose I decide I'm going to sell chocolate bars, so I'm going to advertise Hershey's chocolate bars, and I'm going to show a picture of a Hershey's chocolate bar in my ad. [00:22:21] Speaker 03: And then when those orders are filled, I'm going to send generic chocolate bars. [00:22:27] Speaker 03: It doesn't say anything about Hershey. [00:22:28] Speaker 03: It's just a generic chocolate bar. [00:22:32] Speaker 03: No infringement, right? [00:22:34] Speaker 03: Because I'm not putting the Hershey's mark on any product sold in commerce. [00:22:39] Speaker 03: I'm not using that mark in commerce pursuant to 1127. [00:22:45] Speaker 03: But I'm certainly writing on Hershey's coattails. [00:22:50] Speaker 00: Well, I think there are false advertising and other remedies for that, but I think the Second Circuit even recognized. [00:22:57] Speaker 00: Well, the question is in interpreting 1125, whether you, when it says uses in commerce in 1125 or use in commerce in 1114, whether you need to look back to the definitions of 1127, which cover a variety of different things, including what commerce means. [00:23:17] Speaker 00: then apply that or not. [00:23:19] Speaker 00: And before 1988, it was clear that under 1125, if it was a product, you did need that label. [00:23:25] Speaker 00: And the question is, when they added... It was clear. [00:23:27] Speaker 02: Clear from what? [00:23:29] Speaker 00: From the words, definition, use in commerce, and those same words being used in 1125 and 1114, which are within the same sub-chapter. [00:23:41] Speaker 00: And so [00:23:42] Speaker 00: Before then, in the Second Circuit, in its discussion, the appendix said, before that sentence was added when we were changing the rules regarding the registration, it was clear that you had to mark in order to have... I don't see that the Ninth Circuit has necessarily agreed with that. [00:24:00] Speaker 00: I think the... I would agree with you, Judge Dyke, that the Ninth Circuit has not dealt with that question head on at this point. [00:24:12] Speaker 00: I think this Court in South Co., when it looked at the same language, came up with the same conclusion that, in fact, 1127, use in commerce should apply. [00:24:24] Speaker 00: And in that case, there was a catalog, Internet catalog, and some basic pricing in this Court, and it was applying from the District Court of the Eastern District of Virginia. [00:24:38] Speaker 00: So I don't mean to be misleading that it's Ninth Circuit. [00:24:40] Speaker 00: But this Court, just looking at the statute and not even applying the circuit law, said, yes, that is use in commerce in the definition, and it should be used in the context of 1125. [00:24:53] Speaker 00: And because it is not, there's nothing to the contrary, it applied it and said, here, there is no labeling or attaching just simply from having that [00:25:05] Speaker 00: advertising out there. [00:25:07] Speaker 00: And we cited that at page 23, note 4 of our brief on that. [00:25:13] Speaker 00: The other thing I'd like to say about that, Your Honors, and Judge Lynn, to distinguish this from the hypothetical that you put out there, in this case, there wasn't an advertisement even. [00:25:28] Speaker 00: What it was, we had two flyers at a trade show in October of 2000. [00:25:33] Speaker 01: What was a flyer, not an advertisement? [00:25:36] Speaker 00: Well, the difference, and I think here, is that the flyer said, for instance, in development, expected in 2016. [00:25:43] Speaker 00: The second one said, stay tuned for more information. [00:25:47] Speaker 00: And so it was clear from the face of these that there wasn't even a product at that point. [00:25:52] Speaker 00: There was no pricing. [00:25:53] Speaker 00: There was no offering. [00:25:54] Speaker 00: There was no nothing. [00:25:55] Speaker 01: The flyer says, call us for prices. [00:25:59] Speaker 00: It doesn't say that. [00:26:00] Speaker 01: It says, contact us if you're interested. [00:26:02] Speaker 01: It says something or other. [00:26:04] Speaker 01: I don't know the exact words. [00:26:06] Speaker 01: If you're interested... For more information, contact us. [00:26:10] Speaker 00: That is correct, but there was, on the face of it, it was very clear that there was no... Is that an advertisement? [00:26:17] Speaker 00: I think to advertise something for sale, then there has to be more information. [00:26:22] Speaker 00: There actually has to be a product that you're selling. [00:26:25] Speaker 00: I can't say, well, I might be having a new chocolate bar in a year, and that might be of interest to you, and that that would somehow invoke a trademark problem. [00:26:36] Speaker 00: The record is undeveloped as to why that took place, because they never took our depositions on that point. [00:26:45] Speaker 00: But I think the bottom line is here, under SouthCo as applying the statutory language, just having advertising material untethered to a specific product [00:26:55] Speaker 00: this court applying from a district court elsewhere said, no, this language does not get you to a violation given those definitions. [00:27:04] Speaker 03: Yep. [00:27:04] Speaker 03: It's non-precedential opinion, correct? [00:27:15] Speaker 00: South Pole? [00:27:17] Speaker 00: Your honor is correct that it was not binding. [00:27:21] Speaker 00: I only point out that [00:27:23] Speaker 00: at least in one context this court has come out the same way and I'd also point out that not that we're arguing waiver but before the district court initially and if you look at [00:27:34] Speaker 00: Appendix 89 and 90, where Magistrate Judge Gelderks is addressing their arguments, they were going down 1127, applies to 1115, straightforward, but they were arguing the services prong, and they only flip-flopped on that when they lost before the Magistrate Judge. [00:27:55] Speaker 00: at Appendix 90 in his order or findings, Magistrate Judge Dirkseid even said, in its reply, Verzatop does not refute Georgia Expo's application of this definition and instead focuses on other things. [00:28:11] Speaker 00: So it was going full bore on 1127, applies to 1125, and then [00:28:18] Speaker 00: changed up when the magistrate didn't agree. [00:28:22] Speaker 00: So in candor, I agree. [00:28:25] Speaker 03: But there's no waiver issue here. [00:28:26] Speaker 03: That was not raised, correct? [00:28:28] Speaker 00: We are not arguing waiver, just that it is an acknowledgment that the argument that it is applicable is not something that's specious. [00:28:37] Speaker 01: OK. [00:28:38] Speaker 01: Thank you, Mr. North. [00:28:41] Speaker 01: Mr. Preaker, you have three minutes of rebuttal on this issue. [00:28:56] Speaker 04: You know, there's the, Mr. North is arguing non-controlling precedent, spent some time in the Second Circuit. [00:29:04] Speaker 04: And the SouthCo case, the key thing in the SouthCo case, also Eastern District of Pennsylvania, actually it was, a Third Circuit case, was about commerce, not the defendant's character of use of a mark, but a foreign defendant who'd never done anything in the U.S., and whether the commerce part of use is in commerce applied, and whether it was [00:29:25] Speaker 04: type of commerce that Congress could regulate. [00:29:27] Speaker 04: So it's a completely different case on that alone compared to, again, back to the point, the character of the use of a defendant who used somebody else's mark on their goods. [00:29:42] Speaker 04: Bonafide use under 1127, as Judge Lynn noted, is just another example of, I think, a concept of fitting [00:29:49] Speaker 04: round peg and a square hole here to apply the establishment based affixation requirement to the inferential use. [00:30:00] Speaker 04: The accused brochure does at the, one of the accused brochures with no date on it, notes at the end, for more information call the sales department. [00:30:09] Speaker 04: That's an advertisement of the two brochures we're talking about in the case. [00:30:15] Speaker 04: Versatop seeks validation in the industry. [00:30:18] Speaker 04: Judge Lund, when you ask, what does this case go if you chose to rule in our favor? [00:30:22] Speaker 04: And the way that that could happen, because of what's happened to Versatop and what's gone on, people are watching this and seeing how someone can use Versatop smart. [00:30:32] Speaker 04: it could validate by having an injunction that, at a minimum, Georgia Expo can't do it again. [00:30:40] Speaker 04: And the rule that the court would set in following what we're asking you to do would set a rule that would prevent the other, what I call absurd results, if I had my Walmart example or your Chocopo example. [00:30:57] Speaker 04: And we did rely on 1125 in our brief, as you noted. [00:31:01] Speaker 04: I just want to make clear. [00:31:02] Speaker 04: But again, we don't have a way of issuing it. [00:31:06] Speaker 01: Thank you. [00:31:10] Speaker 01: Thank you.