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Monday, March 28th, 2011
Earlier this month, Virginia Tech lost a crucial opening battle in its suit to stop a Blacksburg real estate company from using “Hokie Real Estate” as its name. The case demonstrates limitations on a university’s ability to force every business to pay a license fee to use the school’s nicknames or colors.
Virginia Tech essentially made two claims against the company.
First, Virginia Tech claimed that the company’s name was an infringement of its “Hokies” trademark, which the school licenses for putting on all the usual items you find in a modern college bookstore. (Do they still sell books there?)
Second, Virginia Tech also claimed its Hokies trademark is famous and that this fame would be harmed (blurred in trademark-speak) by the company’s name.
Virginia Tech moved for a preliminary injunction to stop the company from using its name pending a full trial. In order to win such a preliminary injunction, you have to show you are likely to win the case. Virginia Tech failed to do so, so it didn’t get the injunction.
Typically, cases settle quickly after a preliminary injunction ruling and settle favorably to the party that won that ruling, so Virginia Tech might be done.
In its trademark infringement claim, Virginia Tech asserted that consumers are likely to be confused into believing that the company is associated with Virginia Tech. Virginia Tech especially pointed to its plans to launch a “Hokie Home” house architectural plan business.
The court expressed skepticism that any consumer would be confused into believing that the real estate company was associated with Virginia Tech. It noted that Virginia Tech was not yet in any business similar to real estate brokerage. Also, the real estate company has used a disclaimer indicating it is not affiliated with the school.
That result makes sense, because a trademark owner generally cannot stop someone from using the same mark or a similar mark on goods or services totally unrelated to what the mark owner sells. That’s why you can have separately owned trademarks for Delta Airlines and Delta Faucets.
Virginia Tech then argued that its Hokies mark is famous, so no one else should be permitted to use “Hokie” for any company, good or service name regardless of whether Virginia Tech is in that business.
The court expressed skepticism about the fame of the Hokie mark. While “Hokie” certainly is a household word, the court pointed out a problem: Over the years Virginia Tech has tolerated many businesses using “Hokie” without having any permission from Virginia Tech to do so.
Thus, it would be hard to find that the real estate company’s name would cause Virginia Tech to lose control of the image of the “Hokie” name when it already has lost control by letting other businesses slide.
The upshot is that universities may not be able to stop businesses from using that university’s nicknames or colors in all company, product or service names.
The universities should be able to stop uses for services the school sells, particularly educational services. Also, it should be able to stop uses on products sold in a typical university bookstore (such as athletic apparel, cups and chairs).
But a university may have a hard time stopping uses that obviously would not originate from the university – like “Cavalier Carwash.” That’s because, by the time the university has become sufficiently well known to have the legal standing to stop (in theory) any unauthorized use of its nicknames or colors for any purpose, a lot of uses will have already sprung up to capitalize on school spirit. Many trademark cattle are then out of the barn.
Modern universities are money-hungry places. They’d like to be able to extract a license fee from anyone who uses their nicknames or colors for any commercial venture no matter how unrelated to the university’s mission. While this case is just a preliminary result, it reminds universities that they don’t have such broad money-extraction powers.
Oh, and full disclosure – I’m a Wahoo.
By John Farmer
Published in the Richmond Times-Dispatch
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