A few months back, we covered New York State’s unfortunate decision to engage in base IP trolling. The state farmed out its rights to a property rights management firm, who then started bringing outrageous claims alleging violations of Albany’s trademark on “I ♥ NY.” Specifically, the firm in question not only pressured a coffeehouse into ending its “I [coffee cup] NY” campaign, but then asked for an accounting of the profits to calculate a damages claim.
Sadly, New York has not since exited the trolling world.
A couple weeks back, a new set of attorneys for the New York State Department of Economic Development — the agency holding the trademark — sent a threatening letter to a model train manufacturer.
And the manufacturer fired back in kind…
MTH Electric Trains builds, as the name might suggest, model trains. They also build a hard-nosed litigation posture, but that doesn’t fit on the letterhead as neatly. So when Heslin Rothenberg Farley & Mesiti P.C. sent MTH a trolling letter, they did not know they were about to get pushback.
For over 30 years the State of New York has invested substantial time, effort and resources in creating the respect and goodwill associated with its I ♥ NY marks. The State of New York cannot and will not permit use of its mark to promote and advertise MTH’s commercial products. Your misguided threats of bringing a proceeding to cancel one or more of the I ♥ NY marks provides further evidence of not only your bad faith misuse of our client’s mark, but a lack of understanding of trademark law as our client’s registrations have repeatedly been recognized and approved by the USPTO and others, and are considered among the most valuable in the world.
In light of the multiple federal trademark registrations for the I ♥ NY marks, the undisputed fame of the marks, the State of New York’s clear prohibition, any use of the I ♥ NY mark by MTH is considered a deliberate, willful and knowing act of infringement for which the State of New York will be entitled to seek all appropriate damages and relief, including treble damages and attorney’s fees under the Lanham Act. We require a full accounting of all uses, revenues and profits resulting from the unauthorized use of the I ♥ NY logo, so that proper damages can be assessed.
The problem is a model train that MTH built that looks like this:
The I ♥ NY logo is prominently displayed, which makes this slightly different that the coffee cup case. However, the reason the logo is displayed is one that is all but guaranteed to prevent any risk of confusion. As MTH noted in its reply:
We are no longer using the I LOVE NEW YORK phrase. We sold 99 units of the item in question (M.T.H. model number 30-73334) for total revenue of $2,916.33 two and a half years ago. Our train car’s deco was based on a real train that had been around since the 1970′s. If you make the mistake of suing MTH for this, we will defend ourselves and publicize this on all of the various web sites that take great interest in cases like this. I’m sure the people of New York will be thrilled to know that tens of thousands of dollars in taxpayer funds are being spent to chase a model railroad manufacturer for a couple hundred bucks in licensing fees, while the New York public school system continues to collapse based on a lack of resources.
Yes, the model train is simply a scale model of a train that actually existed in real life. Which is kind of the point of the model train industry. Specifically, this is livery that the Delaware and Hudson Railway used. The offending car does not reflect New York’s endorsement of the model train, but its real-life advertising relationship with Delaware and Hudson. Rather than stealing the goodwill of New York’s intellectual property, MTH merely provides an accurate replica of the relationship New York itself sought with Delaware and Hudson. Given the purpose of the copy is to create an artistic recreation of a real train, this is not dissimilar to suing a photographer publishing a picture of a train car with the logo on the side and getting harassed by these trolls.
But just like the coffeehouse case, the debate over substantive law is not really the point. Whether New York can technically extract a pound of flesh from Everyman Espresso or MTH trains should take a backseat to why New York should go after these people. If the purpose of the mark is to increase the visibility of New York then the enforcement strategy of the New York State Department of Economic Development should be on preventing tasteless uses of the mark through selected litigation and nominal licensing fees for everyone else rather than threatening to drop the hammer on inoffensive derivative works.
Because as MTH notes, the New York public school system is not going to be saved by paying lawyers to secure a couple hundred bucks from a train company.
On the next page, find the full letter from counsel for New York and the response from MTH Trains.