Secondary Education: Sometimes it Isn't Enough to Be First

Annoying Party Vehicles Drop More Trademark Wisdom

Down here in Nashville, we have “pedal taverns,” which are bicycle-powered, street-legal moving bars, favored by bachelorette parties. Only they’re not generically “pedal taverns,” even though that’s what everyone calls them, because Nashville Pedal Tavern has a registration for PEDAL TAVERNS as a trademark for “alcohol-related annoying the locals and related services.” When Nashville Pedal Tavern sued to enforce PEDAL TAVERNS against a local competitor, we learned a lot about trademark law!
One thing we learned was that we’re reluctant to let descriptive terms like “pedal tavern” become trademarks, because of what it does to our ability to use regular words to describe things. But we also learned that we will sometimes allow descriptive terms to become trademarks if you can the term really has become associated in consumers’ minds with your goods and services. In the absence of asking a bunch of consumers whether they now associate the term with your goods and services—also known as a properly conducted consumer survey—courts will look at proxies for consumer recognition, like amount of money you spent advertising using the term. This sort of evidence for consumer recognition—both direct and proxy—is called “secondary meaning”¹I.e., a meaning beyond the ordinary meaning that relates to your goods and services or “acquired distinctiveness”²I.e., your mark distinguishes your goods and services from others’ not through anything inherent in the mark but by how and how much you used it..
Up in Minneapolis/St. Paul, they apparently have “party buses.” We have them here, too, of course. ³But they seem so benign compared to pedal taverns that we don’t notice them (unless they’re open air). And I’m fairly certain you can find them in any major city. This is a story about a bitter trademark dispute between two proprietors of “party buses” up in the Twin Cities.

Interior of a party bus. The major advantages of party buses over pedal taverns are (1) they don’t slow up traffic, and (2) locals don’t have to listen drunken revelry as they go about their business. Photo by barrydadon under Creative Commons Attribution-Share Alike 3.0 license.

Discount Party Buses and Discounted Trademarks

Discount Party Bus was first to market in the Twin Cities. It advertised with the slogan, “Rent My Party Bus.” And it maybe had the telephone number (952) LIMO BUS, which is also used in advertising.
Soon, however, a competitor came on the scene, Safeway Transit. Safeway immediately started using “Rent My Party Bus” in advertising. At some point, Discount Party Bus abandoned its (952) LIMO BUS phone number, and Safeway picked it up and started using it in advertising.
Discount Party Bus also stopped using “Rent My Party Bus,” having used it for just a few years. It must have concluded that Safeway was getting more traction with the slogan, and it would just as soon go with a new slogan. If so, this isn’t necessarily a bad strategy: if two competitor are using the same (potential) mark, you might end up with no winners. Neither party ends up with the (eventual) mark’s goodwill, and consumers just end up confused about who is who. Better, sometimes, just to move on from the (potential) mark to something you can better control.
After some lawsuits between the two companies, Discount Party Bus hired an online advertising consultant, which recommended using “Rent My Party Bus” and (952) LIMO BUS on Discount Party Bus’ website to improve organic search engine results. Perhaps Discount Party Bus figured that the terms were descriptive and could be used by anyone. It might also have thought: we were the first to use the terms, so if they belong to anyone, they belong to us, not Safeway.
Safeway sued anyway, and Discount Party Bus’ main defense is that it was the first to use “Rent My Party Bus” and (952) LIMO BUS and, therefore, it is the true owners of those “trademarks.”

First to Use Wins, Except When it Doesn’t

Discount Party Bus was about 90% right, but the missing 10% was crucial. The first to use a trademark has “priority” and can stop infringing uses of the trademark by later users. But Discount Party Bus hadn’t proven that it was the first to use “Rent My Party Bus” and (952) LIMO BUS as trademarks, only that they were the first to use those terms. The distinction is crucial. Until a term becomes a trademark, it doesn’t matter who was first to use it. Terms are just words. Trademarks have legal significance.
As the court correctly understood, the real question was who was the first to achieve secondary meaning with the terms “Rent My Party Bus” and (952) LIMO BUS. Alas, the answer was: “Not Discount Party Bus.” Sure, it used the terms first, but it only used them for a few years and couldn’t present any other “proxy” evidence, like advertising expenditures and sales. It hadn’t commissioned any consumer surveys because those things are expensive (and don’t always work out)⁴These are not cheap! You have to hire an expert in the field, who must not only conduct the surveys but must frame the questions correctly. Consumer surveys are routinely thrown out for being improperly conducted. They’re really easy to screw up. And experts who consistently conduct consumer surveys correctly are pretty rare and can charge a lot..

So Safeway Owns Them, Right? Not So Fast.

Safeway hadn’t won yet, though. To the question, who owns “Rent My Party Bus” and (952) LIMO BUS, there are actually three possible answers: (A) Discount Party Bus, (B) Safeway, and (C) nobody because those terms aren’t (yet) trademarks.⁵There is no option “(D) both,” because a trademark must designate a single source. If Safeway wanted to enforce those (putative) trademarks against Discount Party Bus, it would still need to prove that those terms had acquired secondary meaning as a result of its own activities.⁶Had the roles been reversed—i.e., Discount Party Bus was trying enforce the terms against Safeway—then the court’s analysis would have been over, and there would been no finding about whether Safeway owns any trademark rights in the terms.
So Safeway still had to prove that it used the terms meaningfully enough to imbue them with secondary meaning. Safeway hadn’t commissioned a consumer survey either. So the court was left with just the proxy-type evidence. Safeway had been using “Rent My Party Bus since 2008 and (952) LIMO BUS since 2011, so that’s a fairly long time (but not that long). Safeway distributed ”thousands of printed fliers from 2009 onward“ and ”spent thousands of dollars on advertising with Google, Facebook, third-party wedding websites⁷Bachelorettes!!!![/ref] and print media from 2011 onward. The court was also very impressed with Safeway’s “uncontroverted testimony about growing consumer engagement on Facebook and Twitter, and the exponential growth of Safeway’s bus fleet.”
The court held that Safeway had, indeed, imbued “Rent My Party Bus” and (952) LIMO BUS with secondary meaning.

Why Does Anyone Need to Own Them?

Respectfully, however, I’m going to suggest that the court was perhaps a little too easily impressed. Even ten years isn’t that long a time, and Safeway’s advertising seemed pretty modest. After weighing this evidence, are you convinced that folks in the Twin Cities hear “Rent My Party Bus,” they think, “Oh, that party bus!”
In addition, the court didn’t consider how descriptive the terms are, especially “Rent My Party Bus.” Descriptive terms exist on a spectrum, from “almost generic” to “almost suggestive.” The more descriptive, the more secondary meaning is required for the term become a trademark. “Rent My Party Bus” is, I submit, on the “almost-generic” side of the spectrum. The term “party bus” is very common. It’s either generic or really, really, really descriptive. A company that rents party buses is likely to ask consumers to “rent my party bus,” sometimes adding “please.” It’s not much more descriptive than a seller of tomatoes trying to use “buy my tomatoes” as a trademark. It can be done, but there’d have to be a metric ton secondary meaning.
I’m a little more comfortable with trademark rights in (952) LIMO BUS because consumers understand phone numbers to be unique, and uniqueness supports the idea that a single company is the source of such party buses. Having said that, no one would have exclusive rights to the term “limo bus,” which is surely generic.
If you’re concerned about what would happen if some other party bus company asks Twin Cities consumers to “please rent my party bus,” you might take some comfort in knowing that the court’s ruling isn’t applicable to other party bus companies. This is because they didn’t get an opportunity to present their own challenge—legal arguments and evidence—about whether Safeway really has trademark rights in “Rent My Party Bus” and (952) LIMO BUS.
One final thing: the permanent injunction seems too squishy and broad. As Prof. Goldman points out, the inclusion of keywords wasn’t really explained. Not all uses of trademarks as AdSense keywords are infringing. Further, the defendants weren’t accused of using “Rent My Party Bus” and (952) LIMO BUS as keywords, but as content on their own website. On top of that, there’s nothing magical about domain names and hashtags that turns them in to trademark uses.
Read the court’s opinion here.
Thanks for reading!

Rick Sanders

Rick is currently General Counsel for Software Freedom Conservancy. Previously, he has been practicing law as an intellectual-property litigator since 2000.