Every winter for the last sixty years or so, Tawas, Michigan has become the home of the “Perchville” festival, replete with a polar bear swim and a fishing contest. The Tawas Area Chamber of Commerce organizes the annual February event and has registered the name Perchville as a trademark. A local company – the AuSable River Trading Post – wants to make Perchville-branded tee-shirts, and sued the Chamber to invalidate its mark.
Tawas rests on the shores of Lake Huron, about an hour south (by car) from Alpena. Like many towns, it has a chamber of commerce. The Tawas Area Chamber of Commerce has organized the Perchville festival for many decades. In 2002, the organization decided to register “Perchville” as a trademark for apparel and other goods. It has kept the registration ever since, with one exception. The registration accidentally expired in 2013, after which the Chamber reapplied and obtained a new registration in February 2015. While dues-paying members of the Chamber of Commerce may use the Perchville mark, non-members must pay a licensing fee to use it.
The Trading Post operates a two-part business. It prints words or images onto goods that it sells wholesale to retailers, and it sells some merchandise in its own retail store. In October 2015, the Trading Post’s owner asked about using the Perchville mark. After learning that the Trading Post would have to pay a $750 fee to use the mark, the owner decided to produce Perchville-branded tee-shirts without the Chamber’s permission.
When the Chamber learned what was going on, it obtained a state court injunction against one of the Trading Post’s employees. The Trading Post in response filed this separate action in state court against the Chamber and its third-party management company, Dovetail Solutions, seeking a declaratory judgment invalidating the Perchville mark under federal law. The Chamber removed the action to federal court.
The district court granted the Chamber’s motion for summary judgment and concluded that the prior state court injunction against the Trading Post employee prevented his employer from relitigating the dispute. On appeal, the court reversed, holding that the injunction against the employee did not apply to the Trading Post.
On remand, the district court granted summary judgment to the Chamber of Commerce, holding that “Perchville” is an inherently distinctive mark suitable for trademark protection. The court declined to exercise supplemental jurisdiction over the Trading Post’s remaining state law claims and remanded them to state court. The Trading Post appealed.
A festival might feature just the name of the area that hosts it, say a concert in Woodstock, New York in 1969, making it more difficult to trademark. But a festival also can bear an arbitrary, fanciful, or suggestive name. Think of the “Sundance Film Festival.” When that happens, the festival’s name earns trademark protection as an inherently distinctive mark.
An entity may register a mark with the U.S. Patent and Trademark Office. Once registered, a mark becomes presumptively valid, placing the burden of proof and production on anyone challenging the mark. The Trading Post has not rebutted that presumption. The term “Perchville” is inherently distinctive. The name does not refer to a place. It serves only “to identify a particular” event, namely the annual winter festival in Tawas. The word almost certainly counts as fanciful, and at the very least is sufficiently suggestive to qualify as an inherently distinctive trademark.
“Perchville” bears a classic feature of a fanciful mark. The word bears no independent meaning. You cannot find “Perchville” in a dictionary or use it outside of Tawas in everyday conversation. Even the Trading Post admits that “Perchville” refers only to “the annual winter festival in Tawas.” Unlike a typical fanciful word, Perchville is not nonsense and so also qualifies as a suggestive mark. The name “Perchville” consists of a mash-up of two otherwise real expressions: the fish “perch” plus the suffix “-ville,” used to signify “the names of fictitious places or concepts denoting a particular quality.”
First, the Trading Post urged the Court to treat “Perchville” as a generic word because the public does not associate the name with the Chamber of Commerce but instead with the festival itself. By law, courts cannot deem a mark generic “solely because such mark is also used as a name of or to identify a unique product or service.” That “Perchville” refers to a unique festival does not downgrade an inherently distinctive mark to generic status. It matters not that some Tawas residents have no idea that the Chamber organizes Perchville. Congress has instructed courts to ignore whether consumers can identify the parent company that owns a trademark or produces a product.
Second, the Trading Post argues that “Perchville,” like “trampoline” or “thermos,” long ago entered the general lexicon among Tawas-area residents and became a generic term. Perchville in local parlance refers to a single event, “the annual winter festival in Tawas,” that has one source. Third, the Trading Post claims that “Perchville” is not fanciful because “its two root words” each can be “readily found in any dictionary, thus suggesting a city with a certain species of fish.” But by acknowledging that the festival “suggests” an imaginative city, the Trading Post cedes too much ground. That concession shows that the festival’s name amounts to (at least) a suggestive mark, one of the three categories of inherently distinctive marks.
Fourth, the Trading Post argues that the Chamber abandoned the trademark or that laches prevents the Chamber from enforcing the mark against the Trading Post. That the Chamber’s registration lapsed does not prove abandonment because the Chamber quickly applied for renewal, confirming its continuing desire to maintain the trademark. That the Chamber “allowed” others “to use the name ‘Perchville’” does not prove abandonment either. For one, mere use by others does not show that the Chamber “discontinued” its own use of the mark or that the name somehow became generic. For another, the Chamber allows others to use the mark by licensing it for a fee and by selling Perchville buttons, which is the opposite of abandonment.
Therefore, taking into account all circumstances of the case, the court affirmed the district’s court decision.