Trademarks are vitally important to business. The names of a business, product or service are the first things the public encounters. US trademark law protects the rights of the first party to use a mark against use of the same or similar mark by others for the same or similar goods and services. Among the rights a first user of a trademark has against others is the ability to seek injunctive relief, requesting a second user to stop all use of a trademark. This could stop a product launch dead in its tracks or result in significant re-branding costs if a product or service is already in the market. Because of this, businesses should carefully consider trademarks before adopting or using them. A very recent lawsuit highlights the importance making sure a trademark is available for use.
HOUSE OF CARDS
HOUSE OF CARDS is a wildly popular series on Netflix that is all the more poignant in this election year. The popularity of HOUSE OF CARDS has spilled over into collateral branding, with the name appearing on, among other things, shirts, coffee mugs and slot machines. A Massachusetts company called D2 Holdings (D2) registered the mark HOUSE OF CARDS in 2009 for various entertainment services, including “comedy action and adventure” programs distributed by various platforms. In 2012, MRC II Distribution Company (MRC II), the producers of the Netflix HOUSE OF CARDS series, tried to register HOUSE OF CARDS for its own television entertainment. That trademark application was rejected because D2 had first registered HOUSE OF CARDS for similar services. The refusal to register the HOUSE OF CARDS trademark did not deter MRC II and it has proceeded to use the name, to great success. Indeed, to such success that the name has been licensed to a producer of gaming machines who now uses that mark on slot machines.
On March 3, 2016, D2 filed suit against MRC II and IGT, the manufacturer of the slot machines at issue. D2’s complaint raises claims for trademark infringement for use of HOUSE OF CARDS on both the television series and the slot machines. The complaint seeks an injunction ordering MRC II and IGT to cease all use of the HOUSE OF CARDS name. While this suit was filed only a week ago, given the commercial success of the program, MRC II (and Netflix) do not want to lose the right to use HOUSE OF CARDS. Therefore, the case will invariably settle with a significant windfall to D2 via a license agreement allowing use of HOUSE OF CARDS by defendants.
The HOUSE OF CARDS situation illustrates two important points. First, the trademark laws provide the initial user of a trademark with two significant rights and remedies, namely, the right to preclude others from using a mark and the ability to seek a court order requiring a party to cease use of a trademark. Second, the risk of drawing a challenge to use of a mark can be lowered through thorough pre-adoption trademark searching. Through comprehensive searching significant risks – such as another party already using an identical mark for identical services – can be uncovered, understood and potentially averted. It is crucial that all businesses engage in trademark searching before use of a mark.
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