Virginia Business Litigation Lawyer Blog

If a blog is successful and gains name recognition among the public, with whom is the brand associated in the minds of readers, the publisher or the primary author of the blog? Apparently not a lot of thought has gone into this interesting question, as the New York Times did not apply for a trademark for its popular "Motherlode" parenting blog until its primary author, Lisa Belkin, left the Times to create "Parentlode" at The Huffington Post. Now it will be up to the courts to determine whether the Times has exclusive trademark rights to the "Motherlode" name and similar-sounding derivatives.

The New York Times Co. sued the Huffington Post and AOL, its parent company, on November 4, 2011, in U.S. District Court in Manhattan, seeking both injunctive relief and damages. NYT's trademark lawyers argue in the complaint that the mark "Parentlode" is "clearly derived" from the Times' established "Motherlode" trademark and that it was "intended to create an association with Ms. Belkin's prior work" at the Times. According to the complaint, there is evidence that confusion already exists in readers' minds between the "Motherlode" blog, which the Times is continuing to publish, and the new "Parentlode" blog at the Huffington Post. On Twitter, for example, someone wrote (incorrectly, the Times argues) that "The NYT's Motherlode becomes HuffPo's Parentlode."

In her first "Parentlode" blog entry, Belkin referred to "Parentlode" as a "new name" that in a nonsexist manner includes fathers as well as mothers. The Times seized upon this statement and wrote that Belkin "clearly intended to create an association in the minds of readers between the two competing blogs, and further, [Belkin's] reference to the 'new name' was a deliberate attempt to mislead readers into mistakenly believing it was the same blog, albeit with a slightly different name and location."

Clearly, the Times has a strong argument that "motherlode" is a real word that has come to be associated with the widely read parenting blog published on its website. "Parentlode" does not exist in the English language and certainly seems to have been selected as a play on the Motherlode name. But if there is a trademark in the Motherlode name, who owns it? Trademark law is designed to permit consumers to identify the source of goods or services. The source of most of the articles on Motherlode was Ms. Belkin, and consumers may associate the name more with Ms. Belkin than the NYT. Still, the blog was published on the NYT's website and NYT alleges it came up with the Motherlode name and paid Ms. Belkin to write the content. From where I'm sitting, it appears the Times has a legitimate complaint.

Oleg Cassini was a French-born American fashion designer who created a wardrobe for Jacqueline Kennedy. Now, the company that he founded, Oleg Cassini Inc., finds itself embroiled in trademark litigation with Serta, Inc., over Serta's decision to name a particular mattress model the "Cassini."

The dispute arose when Serta unveiled a line of mattresses, to be sold exclusively at J.C. Penney stores, with names that were related to outer space. Among them were Gemini, Eclipse, Taurus, Moonscape, Nebula - and Cassini. Serta claimed that the name was inspired by Giovanni Domenico Cassini (1625-1712), an Italian-French astronomer and mathematician who was the first person to observe four of Saturn's moons. When the Oleg Cassini company found out about the existence of products such as the "Serta Perfect Day Cassini Firm Twin Mattress Set," it sent a cease-and-desist letter to the Serta company, declaring that it was "amazed" to see the Cassini name on the J.C. Penney website and stating that the mattress company does not have the right to use the "Cassini or Oleg Cassini" trademarks.

Serta responded by discontinuing the model immediately, but this was not enough for Cassini, the complaint contends. Cassini proceeded to demand that J.C. Penney ensure that no floor models (including close-outs) be sold under the Cassini name. In addition, Cassini threatened to sue for infringement if it did not receive "a reasonable offer of damages and a detailed plan for correcting the improper usage of the Cassini mark." Instead of offering to pay damages, Serta filed a declaratory judgment complaint in the Northern District of Illinois seeking a judicial ruling of non-infringement.

Serta's attorneys argue that Cassini "has no federal or common law trademark rights in the name "Cassini" in connection with mattress and/or bedding products" and that "there simply is no evidence that consumers were or would be confused as to the source, origin, affiliation or sponsorship of the Serta PERFECT DAY Cassini mattress model or that consumers would believe there was some connection with Oleg Cassini or his clothing or perfume line."

The online coupon industry, led by companies such as Groupon Inc., is growing rapidly, and it's still not clear which company or companies will end up the winners. With so much money potentially at stake, it's not surprising that firms are going to court to battle over their trade secrets. On October 24, 2011, Groupon filed a lawsuit in Illinois state court in Chicago, accusing two former sales managers of taking confidential trade secrets with them when they left Groupon for Google Offers, a website that competes with Groupon. Google developed the competing website after Groupon rejected its $6 billion merger offer last year.

The two men, Michael Nolan and Brian Hanna, both left in September 2011 to join Google. "In their new positions with Google Offers and/or Google, Hanna and Nolan will provide the same or similar services as they provided at Groupon," the complaint said. The two would "employ confidential and proprietary information that they learned while employed at Groupon," according to the complaint.

Trade secrets generally consist of commercial information that (1) derives independent economic value from not being generally known to, and not being readily ascertainable by proper means by, other businesses which would benefit from its disclosure; and (2) is the subject of reasonable efforts by the business to be kept secret. As examples of the "confidential and proprietary information" that the two allegedly took with them to Google, the complaint cites Groupon's deal history with merchants, the way in which Groupon structured such deals, the way in which Groupon identified merchants to participate in the deals, and Groupon's in-house sales Wiki that provided information regarding Groupon's sales practices and strategies.

Nolan and Hanna are likely to downplay the value of the information they took with them to Google. They might argue, for example, that it is not difficult or complex to learn how to target specific merchants or types of merchants with coupon deals, or that Google already has sufficient knowledge of online markets to figure out on its own how to target merchants.

In Virginia, "non-compete" agreements are enforceable if they are narrowly drawn to protect the employer's legitimate business interests, are not unduly burdensome on the employee's ability to earn a living, and are not against public policy. While Virginia courts have recognized that from a public policy perspective, businesses should be able to protect their client base from ex-employees who may leave their employ but continue in the same line of business, what is less clear is exactly which post-employment activities can be restricted before a non-compete becomes overly broad and therefore unenforceable.

The Virginia Supreme Court shed a little more light on the answer to this question yesterday, when it disagreed with itself and overruled Paramount Termite Control Co. v. Rector, 238 Va. 171 (1989). Relying on the precedent set by that case, Home Paramount Pest Control Companies, Inc. (the successor-in-interest to Paramount Termite Control) sued a former employee for breaching the same non-compete provision that was upheld in the earlier case. This time, however, the court struck it down.

The provision at issue stated as follows:

"The Employee will not engage directly or indirectly or concern himself/herself in any manner whatsoever in the carrying on or conducting the business of exterminating, pest control, termite control and/or fumigation services as an owner, agent, servant, representative, or employee, and/or as a member of a partnership and/or as an officer, director or stockholder of any corporation, or in any manner whatsoever, in any city, cities, county or counties in the state(s) in which the Employee works and/or in which the Employee was assigned during the two (2) years next preceding the termination of the Employment Agreement and for a period of two (2) years from and after the date upon which he/she shall cease for any reason whatsoever to be an employee of [Home Paramount]."

The court's main objection to these terms was with respect to the breadth of the activities being restricted, and that fact that it extended to activities that had nothing to do with the activity actually engaged in by the former employer. While the geographic scope and duration of the restriction and were reasonable, the clear overbreadth of the function element outweighed those elements and rendered the entire clause unenforceable.

The non-compete barred the former employee from "engaging even indirectly, or concerning himself in any manner whatsoever, in the pest control business, even as a passive stockholder of a publicly traded international conglomerate with a pest control subsidiary," noted the Court. Home Paramount did not have a legitimate business interest in preventing its former employees from owning stock in such corporations, so the provision was deemed overly broad.

Non-compete law in Virginia has evolved over the years. Blanket prohibitions against working for a competitor will not be upheld automatically, and often will be found overly broad. When a former employer seeks to prohibit its former employees from working for its competitors in any capacity, it must prove a legitimate business interest for doing so. In most cases, an employer is not going to be able to restrict its former employee from finding new employment with a competitor if the new job duties are unrelated to the tasks performed in the previous job.