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:t>REGULATION FOCUS 1IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIli

Ii
The regulation does not refer to "like-

FDA Overturns 750 lihood of confusion." Perhaps this is a


loophole in the regulations. In the

Years of Trademark Law "Baileys" case the court disregarded the


fact the name of the liqueur does not have
an apostrophe and the name of the ciga-
Tobacco manufacturers can now add a new threat to their business rettes does, so maybe for FDA purposes
challenges: the loss of their brand trademarks. > BY IAN D. TITLEY small distinctions such as adding an "e"
I or an "s" to a word would distinguish it
from a non-tobacco use.
"New" trademarks for tobacco prod-

I O
n March 19, 2010, the Food and
Drug Administration issued final
regulations imposing significant
North America et al v. S & M Brands, Inc.,
26 F. Supp 2d 815 (EDVA 1998.) Since
1979, IDV was the exclusive North
ucts (those introduced after January 1,
1995,or whatever other date the FDA set-
tles on) will be virtually worthless under

I restrictions on tobacco product marketing


and labeling. The regulations (21 CFR
American distributor of Baileys Irish
Cream liqueurs, which it marketed as a
this regulation because it prohibits a
tobacco product name unless it is com-
1140.16(a)) will outlaw tobacco brand premium product. In 1994 S&M Brands pletely unique in the universe of brand
names introduced since January 1, 1995if introduced Bailey's cigarettes as an inex- names and trade names. Even if there is
they are the same as any other trade name pensive "generic" cigarette. Mac and zero chance of confusion, if the same
or brand name, for any product at all. Steven Bailey own S&M Brands, hence brand name is subsequently used for any-
For perspective, if the FAA made this the name of their product. IDV sued S&M thing at all, that subsequent use will pre-
rule, Delta Airlines would have to change Brands claiming trademark infringement. empt the tobacco use. For example, if a
its name because of Delta Dental and The court listed factors to consider in tobacco product manufacturer creates the
Delta Faucets. The FDA states it is "aware determining whether the public was like- brand name G-Liquid for cigarettes, and
of concerns regarding this provision and ly to be confused "as to the source or someone later starts selling G-Liquid hair
is considering what changes, if any,would sponsorship of the goods" including: 1) brushes or opens a G-Liquid lemonade
I stand, the tobacco company's brand name
becomes illegal and it has no way to chal-
>How will the FDA compensate trademark owners lenge the subsequent use because there is
I whose property is deprived because their existing no likelihood of confusion.
, Trademarks constitute a property
marks are made illegal under this regulation? right that can be bought and sold. How
will the FDAcompensate trademark own-
be appropriate," but there is no assurance the distinctiveness of the mark used first, ers whose property is deprived because
that any changes will in fact be made. 2) the similarity of the marks, 3) the simi- their existing marks are made illegal
This rule contradicts fundamental larity of the goods/services, 4) whether under this regulation? What about "new"
trademark law under which companies the goods are sold in similar channels, 5) unique marks that fall victim to a future
obtain trademark rights just from using a the intent of the second user, and 6) use by an unrelated party? What are the
trademark-registration is not required. whether there was actual confusion. First Amendment implications? What
These rights are called "common law" The court reviewed the factorsand held company would qualify a new brand with
trademark rights. The concept dates back IDV did not meet "its burden of showing the various states if the name can be taken
at least to the 1200'swhen England enact- that [S&M's]us~ of the Bailey'smark for its away anytime someone opens a lemon-
ed the first trademark law, although there cigarettes is likely to cause confusion ade stand under the same name?
is evidence that the Romans used trade- among customers." Today, S&M Brands The benefit to grandfathered trade-
marks too. continues to market Bailey'scigarettes. mark owners carmot be overstated. The
A fundamental principle of trade- The foundation for trademark analy- regulation builds a fence around their
mark law is that infringement occurs sis is completely missing from the FDA's brands and any newcomers risk their
I I only when two marks are confusingly new regulation: "A manufacturer shall not product name to the uncontrollable
similar. The same word can be used for use a trade or brand name of a non tobacco actions of unrelated parties. It seems
many uses if it is not likely to cause con- product as the trade or brand name for a ciga- unlikely there will be any newcomers as
fusion, which is why Delta Airlines and rette or smokeless tobacco product, except for a long as this regulation is in effect. r:i
Delta Faucets co-exist. tobacco product whose trade or brand name
The trademark case between the mak- was on both a tobacco product and a noniobac- Ian Titley is a partner with Schroder
ers of BaileysIrish Cream and Bailey's cig- co product that were sold in the United 5tates Fidlow Titley & Davis PLC, specializing in
arettes is an excellent case study (IDV on January 1,1995." intellectual property issues.

30 SMOKESHOP April 2010