Tag: cease and desist

What’s in a Name Anyway? Trademark Basics for Community Associations

This article explores the essentials of trademark rights, their relevance for community associations, and the balance between protecting these trademarks versus respecting the free speech of homeowners.

I. What is a Trademark?

A trademark is a word, phrase, symbol, design, or any combination thereof that identifies and distinguishes the source of the goods or services of one party from the goods or services of another.

  1. Common Law Trademark Rights

    Common law trademarks arise from the exclusive, continuous use of a mark in commerce. It is not necessary to have a registration to use or protect these designations. However, rights in a common law (or unregistered) trademark are generally limited to the geographic area where the mark has been used. Trademark ownership is perpetual if the owner continues to use the trademark to identify its goods or services.

  2. Registered Trademark Rights

    Registered trademarks provide broader protection. There are two levels of trademark registration: state and federal.

    State registration provides protection within the boundaries of the state where the trademark is registered. This is a simpler and less costly process compared to federal registration, making it suitable for businesses that operate primarily within one state. For North Carolina, state trademark registration is done through the North Carolina Secretary of State.

    Federal registration, managed by the United States Patent and Trademark Office (USPTO), offers nationwide protection and several advantages, such as a legal presumption of ownership and the exclusive right to use the mark on or in connection with the goods/services listed in the registration.

II. Can a Community Association Have a Federally Registered Trademark?

Yes, a community association can register a trademark to protect its name, logo, or other identifying symbols for use in connection with the community association services offered.

  1. What is the Process?

    The process of registering a trademark involves several steps:

  2. Search: Conduct a trademark search to assess if the mark is available for registration.
  3. Application: File an application with USPTO, including a description of the mark, the goods/services it will cover, the dates of first use, and examples of such use.
  4. Examination: The office examines the application to ensure it complies with all legal requirements. If there are any issues, the applicant will receive an initial refusal (called an “Office Action”). There is a three-month window to respond or file a three-month extension to respond. If a Final Office Action is issued, the applicant has the option to request reconsideration and/or file to appeal the Examiner’s decision.
  5. Publication: If approved, the mark is published in the Official Gazette, allowing others to oppose the registration.
  6. Registration: If no opposition is filed, the mark is registered, and the owner receives a certificate of registration.
  7. How Time-Consuming is it?

The federal registration process typically takes about a year from filing, but the process can be longer if there are complications or opposition. State registrations are usually quicker, often taking a few months, but the resulting protection is limited to the state.

  1. What are the Benefits?

Trademarks offer several benefits to community associations. For example, the owner of a registered trademark has the exclusive right to use the mark in commerce. Therefore, the community association can prevent other community associations from using a confusingly similar mark and misleading prospective residents as to source, affiliation, or endorsement as a result. For further example, registered trademarks are listed in the USPTO database. A subsequent application for a similar mark for the same or related services will be blocked by the community association’s registration. Finally, the use of the registration symbol (“®”) acts as increased deterrence against other associations from using similar trademarks.

  1. What Does it Protect?

A registered trademark protects the association’s name, logo, and other branding elements from being used by others in a way that could cause confusion. It helps maintain the association’s reputation and ensures that its identity remains distinct.

  1. What Does it Not Protect?

Trademarks do not protect against every type of use. Notably, they do not protect against non-commercial commentary or criticism, which falls under fair use and is safeguarded by the First Amendment. This means that while trademarks prevent individuals or entities from misusing the trademark, they cannot stop individuals from expressing opinions or criticisms.

III. How does a Community Association Enforce its Trademark?

Enforcing a trademark involves monitoring its use and taking action against unauthorized usage.

  1. Monitoring: Keep an eye on how the trademark is used in the marketplace.
  2. Cease and Desist Letters: If unauthorized use is detected, a cease and desist letter can be sent to the infringing party to resolve the matter without litigation.
  3. Litigation: If the cease-and-desist letter is ignored, litigation may be necessary to

When it comes to property owners using the trademark of a community association, the line between trademark infringement and nominative fair use can be tangled. Property owners using the trademark to offer competitive services or confuse residents into thinking that their use is sponsored by the community association are examples of infringement. Only the community association can use its trademark to offer community association services. Only the community association can market the community to prospective residents. Finally, the community association must monitor and enforce against any uses of the trademark that could tarnish its valuable reputation.

Yet, while enforcing trademark rights is important, it is crucial to consider the potential backlash from property owners and the broader community. Even if there is a legitimate claim, aggressive enforcement actions may jeopardize community trust and invite public criticism. Such efforts, especially against gripe sites, can lead to stronger reactions and widespread publication of enforcement efforts online, further damaging the reputation. Put another way, a community association attempting to protect its reputation must consider if its enforcement efforts do the opposite.

Sometimes, directing energy elsewhere and addressing concerns through dialogue and engagement can be more effective and less costly than legal battles.

IV. Value Proposition for Community Association

Trademark rights are crucial for protecting the identity and reputation of a community association. They help prevent confusion among property owners and prospective residents by ensuring that the association’s name and symbols remain distinct. However, while trademarks are valuable tools for community associations to deter unauthorized use, they cannot be used to silence opinions or criticisms. Understanding this balance is essential for effectively managing and enforcing trademark rights in a manner that respects both legal protections and fundamental freedoms of the property owners.

© 2024 Ward and Smith, P.A.. All Rights Reserved.
For more on Trademarks, visit the NLR Intellectual Property section

FTC/FDA Send Letters to THC Edibles Companies Warning of Risks to Children

Earlier this week, the Federal Trade Commission (FTC) and Food and Drug Administration (FDA) sent cease-and-desist letters to several companies warning them that their products, which were marketed to mimic popular children’s snacks, ran the risk of unintended consumption of the Delta-8 THC by children. In addition to the FDA’s concerns regarding marketing an unsafe food additive, the agencies warned that imitating non-THC-containing food products often consumed by children through the use of advertising or labeling is misleading under Section 5 of the FTC Act. The FTC noted that “preventing practices that present unwarranted health and safety risks, particularly to children, is one of the Commission’s highest priorities.”

The FTC’s focus on these particular companies and products shouldn’t come as a surprise. One such company advertises edible products labelled as “Stoney Ranchers Hard Candy,” mimicking the common Jolly Ranchers candy, and “Trips Ahoy” closely resembling the well-known “Chips Ahoy.” Another company advertises a product closely resembling a Nerds Rope candy, with similar background coloring, and copy-cats of the Nerds logo and mascot. This is not the first time the FTC has warned companies about the dangers of advertising products containing THC in a way that could mislead consumers, particularly minors. In July of 2023, the FTC sent cease-and-desist letters to six organizations for the same violations alleged this week – there companies copied popular snack brands such as Doritos and Cheetos, mimicking the brands’ color, mascot, font, bag style, and more.

This batch of warning letters orders the companies to stop marketing the edibles immediately, to review their products for compliance, and to inform the FTC within 15 days of the specific actions taken to address the FTC’s concerns. The companies also are required to report to the FDA on corrective actions taken.

Copyright © 2024, Hunton Andrews Kurth LLP. All Rights Reserved.
For more on Cannabis, visit the NLR Biotech Food Drug section

SEC Brings Fraud Charges Against Oil and Gas Company and Its CEO

Katten Muchin Law Firm

On August 4, the Securities and Exchange Commission instituted cease-and-desist proceedings against Houston American Energy Corp., an oil and gas exploration and production company, and John F. Terwilliger, its CEO, for making fraudulent claims about the company’s oil reserves. According to the SEC, during late 2009 and early 2010, Houston American raised approximately $13 million in a public offering and saw its stock price increase from less than $5 to more than $20 per share after fraudulently claiming that a Colombian exploration concession, in which Houston American owned a fractional interest, held between one billion and four billion barrels of oil reserves that would be worth the equivalent of $100 per share to investors. The SEC alleged that those estimates lacked any reasonable basis and were falsely attributed to the concession’s operator, who actually had much lower estimates. The SEC order charged Houston American and Mr. Terwilliger with violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act); Rule 10b-5, Section 20(b) of the Exchange Act; and Section 17(a) of the Securities Act of 1933. The SEC seeks a civil penalty and disgorgement from Houston American, and to prohibit Mr. Terwilliger from acting as an officer and director of the company.

Matter of Houston American Energy Corp. et al, Admin. Proceeding No. 3-16000 (Aug. 4, 2014).

ARTICLE BY

Michael S. Gordon
Ashley H. Jones
Of
Katten Muchin Rosenman LLP