MID-TERM EXAMINATION
Gasaway
Fall, 1998
In 1980 the Xan Candy Corporation
(X) registered the mark DIAMOND LOLLIPOP for candy. It also obtained a
design patent on the DIAMOND LOLLIPOP consisting of a candy portion in
the shape of a solitaire jewel and a plastic base in the form of a play
ring. The DIAMOND LOLLIPOP is sold in individual clear plastic "ring boxes,"
through which the candy jewel in the shape of a round-cut diamond or stone
is plainly visible. The "jewel" portion is colored to match the flavor
of the lollipop: red is cherry flavored, yellow is lemon flavored, purple
is grape flavored, etc.
The consumer of the candy uses the ring portion as the handle of the lollipop. All children love these unique candies, especially little girls. In fact, despite their sticky sugariness, children wear the DIAMOND LOLLIPOPS as a fashion item and exchange them with one another. Some children even collect DIAMOND LOLLIPOP. (X) advertises DIAMOND LOLLIPOPS as "Candy you can wear!" Despite the fact that the design patent expired in 1987, the packaging continues to contain references to the design patent by number. In 1989 (X) received a trademark registration for "a candy portion in the configuration of a jewel mounted on a stylized ring."
Yummy Chewing Gum Company (Y) began to produce a similar product under the name RING POPS in late1997. The shape of the "jewel" was different, a marquis-cut stone, plus it came only in two colors, clear and pink. (Y's) RING POPS are distributed in similar packaging.
(X) recently became
aware of (Y's) product when some former customers complained that (X's)
candy no longer came in many colors/flavors and that the lollipops no longer
had the same intense flavors. (Y's) packaging contains the slogan, "The
original and best lollipop jewelry."
Poor (X's) concerns
continue to escalate when it learns that Zorba Novelties (Z), a long-term
manufacturer of novelty candy containers and tiny candy pellets, sought
to register a trade dress mark in California for:
(Z's) product is a small
round box shaped like a square-cut jewel affixed to an elastic band so
a child can wear it as a ring or a bracelet, depending on the size of the
child. The top of the jewel-shaped box opens to hold the tiny fruit-flavored
candy pellets.
One of (X's) customers also reported the following. He and his spouse were in Las Vegas where she went to LOLLIE DIAMOND'S (L), a beauty salon for women. Lollie Diamond is a retired Las Vegas Showgirl who had adopted that name for her very famous act which consisted of an amazing dance while she wore DIAMOND LOLLIPOPS placed on strategic parts of her nude body. Today LOLLIE DIAMOND'S is a small chain of salons in several western states that offer facial treatments, massage and handmade cosmetics under the mark LOLLIE DIAMOND. While (X's) customers were in Las Vegas they were privileged to see (L's) return to the stage for a one-time recreation of her act where she made fun of DIAMOND LOLLIPOPS while wearing them.
Advise (X) on legal
problems with (Y), (Z) and (L). Accept the fact that the design patent
was valid but has now expired. Should (X) consider licensing (Z) to use
the mark? Include any remedies (X) might seek as well as any defenses that
the other parties might have.
