IP Law Daily, TRADEMARK—M.D. Pa.: Penn State must respond to counterclaim seeking cancellation of marks, (Jul 15, 2022)

By Brian Craig, J.D.

An online retailer can proceed with its counterclaim seeking cancellation of the university’s marks based on the argument that the marks are ornamental and fail to function as trademarks.

In a trademark infringement case brought by Pennsylvania State University against an online retailer of merchandise bearing vintage logos, the federal district court in Pennsylvania has held that the online retailer can proceed with its counterclaim seeking cancellation of the university’s marks. In denying Penn State’s motion to dismiss, the court permitted the counterclaim seeking cancellation based on the argument that the marks are ornamental and fail to function as trademarks to go forward. The court ruled that whether consumers believe the trademark indicates that the trademark holder is the source or sponsor of the good is largely a question of fact (Pennsylvania State University v.Vintage Brand, LLC, July 14, 2022, Brann, M.).

Penn State University sued Vintage Brand, LLC, an online retailer of goods bearing screen-printed, and often retro, logos, and images. The online retailer sells merchandise with the university’s logo and marks, such as apparel and drink-related goods, such as decanters, coasters, and ceramic mugs. The university alleges that the online retailer has infringed the university’s registered trademarks and violated unfair competition laws. The registered trademarks include the text PENN STATE, image of the so-called “Pozniak Lion,” which the university phased out in 1987, and the image of the Penn State seal. The online retailer asserted counterclaims attacking the validity of Penn State’s marks arguing that the images and logos are in the public domain and not subject to further protection under trademark law. Penn State filed a motion to dismiss the online retailer’s counterclaim that three of the university’s marks should be canceled because they are ornamental and fail to function as trademarks.

Trademark validity. The court concluded that the online retailer adequately alleged a counterclaim seeking cancellation of the university’s trademarks. A trademark registration fails when its overall commercial impression is solely as attractive ornamentation and not also as a symbol that identifies and distinguishes a single source. The analysis on trademark validity based on whether a trademark fails to function as a trademark turns not on whether consumers tie the symbol to the trademark holder, but on whether they tie the product to the trademark holder.

Here, the court rejected the university’s “per se” approach that, if adopted, would entitle the university to its motion to dismiss as there can be no doubt that Vintage Brand’s customers are buying the Penn State products because of the associations consumer create with the university. The court emphasized that in the failure to function analysis on whether consumers tie the product to the trademark holder requires a fact-intensive inquiry. This fact-intensive inquiry often involves data from consumer surveys on what percentage of consumers are confused about the source or sponsorship of the products. The court also stated that consumer beliefs may vary by logo or merchandise type. Therefore, the court denied Penn State’s motion to dismiss the counterclaim.

The Case is No. 4:21-cv-01091-MWB.

Attorneys: Allison L. Ebeck (McGuireWoods LLP) for Pennsylvania State University. Jodi S. Wilenzik (Post & Schell, PC) for Vintage Brand, LLC.

Companies: Vintage Brand, LLC

Cases: Trademark PennsylvaniaNews