“HOW” does matter – ethics company sues yoghurt

Imagine this: you’re a best-selling author and CEO. You’ve spent years building your brand, working hard to distil it down to one word, “HOW”, which you’ve registered as a trade mark. You host a meeting with a prospective client, an advertising agency, during which you discuss “HOW” and its meaning. A few months go by, and a certain yoghurt company (not that you particularly like yoghurt) tweets you, saying

“Thanks for inspiring the world to care about “how.” Can you help inspire the food industry, too?”

You don’t think anything of it until, days later, you’re watching the Super Bowl – arguably one of the world’s largest sporting events – and you see it. Your trade mark, your entire philosophy, the one you spent 10 years crafting. Except it’s not advertising you or your company… it’s on the side of a yoghurt.

For Dov Seidman, this is reality (or so he says). Seidman is the founder and CEO of LRN Corporation (LRN), a company providing corporate ethical and behavioural management solutions. The NY Times has reported that Seidman and LRN are suing Chobani, America’s number one Greek yoghurt brand, and their advertising agency Droga5, over their use of the phrase “How Matters”. You can read the complaint here.

Seidman says using “HOW” as a noun rather than a verb has been the theme of his consultancy, and that Chobani’s “How Matters” mark appropriates the foundation of his corporate philosophy since Chobani’s use of the mark focuses on Chobani’s socially and environmentally responsible practices. Apparently, Chobani and Droga5 had never heard of Seidman and any similarities between the marks are purely coincidental (an interesting claim given the alleged meeting between Seidman and Droga5, and the fact that Seidman registered “HOW” over a year before Chobani’s use of “How Matters”). Chobani and Droga5 have also claimed that in any case, “How Matters” does not infringe Seidman’s trade mark since neither he nor LRN owns or use “How Matters” as a trade mark. Things might be about to get worse for Seidman – Droga5 is asking the court to cancel LRN’s trademark for “HOW” on the grounds that it’s too broad.

In essence, the argument can be broken down into whether:

Chobani logo

       infringes

 LRN How Logo

 

Making “HOW” happen

It’s not clear at this stage whether Seidman and LRN will be successful in the US, or whether this case will ever get to trial. However, we thought it would be interesting to think about “HOW” as a trade mark, and what the Courts might make of the matter, from an Australian perspective.

In Australia, a trade mark registration will be rejected if it is not capable of distinguishing the applicant’s goods or services from the goods or services of other persons. The law in Australia is itself under the microscope in the Cantarella High Court case (discussed here). It seems to us that an application to register HOW as a trade mark in relation to business management and consulting services would most likely face an objection in Australia on the basis that HOW is a word needed for legitimate descriptive use by other traders in respect of those services, and on the basis that HOW would not be perceived as a brand by consumer (it would be a case of distinctiveness by nurture, not by nature).

The word “how” in the English language is most commonly used as a pronoun, and would likely be used similarly by other companies providing services in a corporate context (for example, “We show you how to make money fast”). Seidman and LRN might be able to rely on section 41(3) (or possibly (4) of the Trade Marks Act to register “HOW” if they could prove that it had been used to such an extent that it did, in fact, distinguish their services. Given how common “how” is in in the English language versus both Seidman and LRN’s presence in the market, we think the Trade Marks Office would be unlikely to accept the registration.

The case in fact reminds us of the recent UK decision of Arnold J in Starbucks (HK) Ltd & Ors v British Sky Broadcasting Group Plc & Ors [2012] EWHC 3074 (Ch) (discussed here) in which a registration for the stylised mark NOW was invalidated on the basis that it lacked distinctive character (among other things). It was noted there that NOW is the 73rd most common word in the English language. HOW is 85th on that list (according to Wikipedia!).

now logo

So does “HOW” matter

Let’s assume that “HOW” was successfully registered as a trade mark in Australia. Would Chobani’s use of “How Matters” be likely to infringe it? In order to establish infringement in Australia, Seidman and LRN would have to establish that “How Matters” was substantially identical with, or deceptively similar to, “HOW” and was used:

(a)           in relation to goods or services in respect of which “HOW” is registered;

(b)          in relation to goods or services of the same description; or

(c)           if LRN could establish that “HOW” was “well known” in Australia, in a way that would be likely to be taken as indicating a connection between the unrelated goods or service and Seidman or LRN.

We think that on all counts, Seidman and LRN would face real difficulty in establishing infringement under Australian law. Firstly, there is the argument that “HOW” and “How Matters” are not substantially identical or deceptively similar. Second, the marks appear to be used in respect of unrelated goods and services (unless Chobani are thinking about branching out into yoghurt-inspired ethics…). Further, the HOW mark would not be so well-known here that a connection could reasonably be drawn between Chobani’s goods and Seidman or LRN.

On that basis, we think that even if LRN were able to register “HOW” as a trade mark in Australia, they would be unlikely to establish a breach due to the very different goods or services involved.

We’re very interested to see how this plays out in the US, as it has the potential to be a landmark case. What do you think? Should a common word like “HOW” be registrable as a trade mark? Do you think that “How Matters” toes the infringement line? Is the irony of a lawsuit brought by an ethics management company all too much?

 

Written by Peixin Truong.