A few years ago, Re/Max, the real estate brokerage company, sued a competitor in the real estate market. The conflict focused on the alleged similarity of M.L. Jones & Associates’ yard signs and Re/Max’s famous red, white, and blue logo. Re/Max has been using the logo in at least one format since 1974, and has several longstanding US trademark registrations.
Assuming the marks are similar, this is an open-and-shut case for Re/Max, right? A U.S. District Court judge in North Carolina came to a different, possibly logical but certainly vexillogical, conclusion.
Re/Max has three trademark registrations for the marks in question. One is black and white:
The other two have a red, white, and blue color scheme:
In 2012, a Re/Max agent spotted a yard sign for Jones’ DBA company, FavoriteAgent.com, that allegedly resembled the Re/Max logo:
The parties were in touch and Jones agreed to change the logo if Re/Max paid $50,000. Re/Max filed suit instead, claiming trademark infringement. Jones counterclaimed, in part, requesting the court to declare that the first two Re/Max logos shown above are invalid due to their similarity to the flag of the Netherlands, and to order the cancellation of Re/Max’ trademark registrations on those grounds. Here’s the Dutch flag:
The court rejected Jones’ claim with respect to the black and white mark. The opinion states that “…it bears no resemblance to the Netherlands’s flag other than its use of three horizontal bands.”
As for the color version of Re/Max’ mark – the one without the image of the hot air balloon – the court stated that it isn’t just similar to the Dutch flag; the mark simply “consists of the Netherlands’s flag.” Here the court cited 15 U.S. Code § 1052(b):
No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless it— Consists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof.
They went on to quote from McCarthy on Trademarks and Unfair Competition:
Section 2(b)’s absolute bar is apparently founded upon the thinking that these kinds of governmental insignia, such as a national flag or seal should not be registered as symbols of origin for commercial goods and services. That is, these kinds of governmental insignia ought to be kept solely to signify the government and not be sullied or debased by use as symbols of business and trade.
The court then ordered Re/Max’ trademark registration cancelled on the grounds that it was improperly registered in violation with § 1052(b). Note that the registration dates back to 1992, showing that even longstanding USPTO registrations are subject to cancellation under certain circumstances.
While this is quite a victory for Jones, it might not be worth all that much. Jones is still subject to ongoing trademark litigation regarding his alleged infringement of the black and white and color (balloon) version of Re/Max’ trademarks. And, given the value of these marks to Re/Max, it’s likely that they’ll appeal the cancellation of the plain color registration.
This case goes to show that there are a lot of factors to consider when you’re developing a trademark – and even if a mark has been in use (and even registered) for a long time, those issues can come back to haunt you.
Here’s the takeaway, folks: don’t use a flag as a trademark.
