INDUSTRY NEWS

By Robert Hausman

Bushmaster has won summary judgment in the case originally brought by Colt against Bushmaster in which Colt claimed Bushmaster had infringed its ‘M4 trademark and the ‘M4’ trade dress. The court found that commercial purchasers of firearms costing $1,000 or more (such as the rifle products of Colt and Bushmaster) conduct research before purchase and are generally sophisticated about the products they buy and know the differences between the various firearms manufacturers and their products. Additionally, it was noted that government agencies additionally conduct a review process before issuing a contract and thus “it would be impossible for that agency to be confused as to the source of the product it is purchasing,” the court said.

Use of the Term ‘M4’

The U.S. government coined the term ‘M4’, the court noted. The term is a U.S. government designation for a specific type of firearm. The term ‘M’ is an abbreviation for ‘Model’ that is used not only with carbines but also with other small arms and military equipment. As examples, the Sherman tank is known as the ‘M4’, and the U.S. military has designated an ‘M4’ bayonet.

Bushmaster actually started using the term ‘M4’ in commerce before Colt. Bushmaster first began using the term in its advertising at least as early as 1991, and since that year, has continuously used the term ‘M4’ in its advertising in connection with the sale of its XM15 E2S firearms. Colt’s admitted that it did not use the term ‘M4’ in commerce until May 28, 1993.

It was also found that at least fifteen other manufacturers use or have used the term ‘M4’ in their advertising in reference to military-style carbines. Firearms manufacturers have also used the term ‘M4’ to designate firearms that are very different from the M4 carbine produced by Colt. Examples included Army Benelli of Italy’s use of the term to designate the commercial version of its military M1014 semi-auto shotgun and Beretta’s former marketing of a .22-caliber pistol known as the ‘Minx M4’.

Basis for Judgment

In its decision, the court found that Bushmaster was entitled to summary judgment based on the following points in its argument:

1. The term M4 is a generic designation for a type of firearm.
2. There is no likelihood of confusion among a commercially relevant group of consumers as to the source of Bushmaster’s products.
3. The product design of Colt’s M4 carbine has not acquired secondary meaning, every element of its design is functional, and there is no likelihood of confusion, entitling Bushmaster to summary judgment with respect to Colt’s claim of trade-dress infringement.

It was noted that the presumption of validity that attaches to a registered mark may be overcome if a challenger proves, by a preponderance of the evidence, that a mark has become generic. The way a manufacturer describes its products containing a trademark is particularly important as to its ability to maintain the mark’s status as protected.

Bushmaster pointed out that Colt used the term ‘M4’ as a noun to describe its products – examples were a Commando M4, a Match Target M4 and an LE M4. Bushmaster was thus successful in arguing that “If the proponent of trademark status itself uses the term as a generic name, this is strong evidence of genericness.”

Bushmaster convinced the court that Colt’s trade dress is similar to that issue in Leatherman Tool Group, Inc. v. Cooper Indus., Inc., 199 F.3d 1009 (9th Cir. 1999), in which the court rejected the plaintiff’s claim of trade-dress protection for the overall appearance of a multi-function pocket tool. Leatherman had argued its trade dress protection included the “combination of multiple features, including the tool size; the shape of the handles; the shape of the gripping jaws…; the brushed stainless steel finish on the handles; the selection, arrangement, and shape of all of the various tool blades.” However, the court in that case concluded that the whole was nothing more than the assemblage of functional parts and said “it is semantic trickery to say that there is still some sort of ‘overall appearance’ which is non-functional. Colt had argued that the overall appearance of its M4 product was protectable.

Colt’s attempts to recover financial damages from Bushmaster were denied.

Bushmaster failed to demonstrate its entitlement to summary judgment with respect to one of Colt’s claims of false advertising which was left remaining for trial. This involved an allegation that Bushmaster falsely advertised that its products were purchased by the U.S. military. But, the court recommended that Bushmaster’s motion to bar the recovery of damages be granted. Excluded from the false advertising claim are the marks M4, COLT AR-15, and COLT AR-15 and design.

Bushmaster’s counterclaim seeking cancellation of Colt’s federal registration for the trademark ‘M4’ (registration No. 2,734,001) was granted, thus allowing free use of the mark by any member of the industry.

ATF’s NFA Registration System Under Review

Concerns have long been raised by individuals owning registered machine guns and other National Firearms Act-controlled firearms in regard to the accuracy and completeness of ATF’s National Firearms Registration and Transfer Record (NFRTR), but ATF says it has made improvements in these records.

On October 21, 2005, Paul K. Martin, Deputy Inspector General in the Office of the Inspector General (OIG) within the U.S. Dept. of Justice wrote to Senator Jon Kyl (R-AZ) to apprise Kyl of federal efforts to improve the NFRTR after Kyl had forwarded the OIG a letter of concern from a constituent.

Martin acknowledged that the OIG was aware of extensive correspondence, beginning in 1998 and continuing through the present, regarding allegations about the NFRTR between concerned individuals and the ATF, United States Attorneys’ Office, as well as several members of Congress. In response, the OIG conducted two reviews in 1998, neither of which, Martin said, “substantiated the claims.”

The reviews did, however, “identify weaknesses in the administration of the NFRTR”, Martin wrote, and the OIG made recommendations to the ATF to correct the weaknesses. These recommendations, Martin wrote, were accepted and implemented by ATF prior to the agency’s transfer to the Dept. of Justice in February 2003.

The OIG subsequently asked ATF for details on the actions it took to implement the recommendations. On June 15, 2005, ATF informed the OIG that it had implemented all of the OIG’s recommendations or had implemented alternatives that it had proposed to the OIG and that the OIG had found acceptable. According to the ATF, the OIG monitored the implementation of the corrective actions, as well as the ATF’s use of $500,000 appropriated by Congress to improve the accuracy and completeness of the NFRTR.

ATF also provided information on two measures it implemented. First, the ATF optically imaged and indexed all NFRTR records to create a database that it now uses to retrieve registration documents. New registrations are imaged and indexed as they are processed, and an ongoing ATF project, known as Firearms Integrated Technology, is to incorporate the firearms registration database into a standardized and integrated firearms information system. Second, ATF expanded the dissemination of the procedures to be followed to properly register firearms in estates. ATF included this information in various publications and posted it on its web site, Martin’s letter detailed.

Martin’s letter closed by noting that the OIG, in response to correspondence it has received from individuals who still express concerns about the accuracy of the NFRTR, that it (OIG) planned to initiate a review of ATF’s management of the NFRTR. The review (planned to begin in late 2005), was to examine ATF’s efforts to implement the recommendations made by the OIG and review ATF’s process for registering, transferring, and updating records on arms contained within the NFRTR.

Michigan Residents May Now Own Machine Guns

Based upon a state attorney general’s opinion, ATF has said it will now process applications to own machine guns by Michigan residents.

Michigan law (MCL 750.224) states machine guns shall not be sold, manufactured or possessed except by those manufacturers holding a contract with a government agency or a person licensed by the Secretary of the Treasury of the United States or the Secretary’s delegate to manufacture, sell, or possess a machine gun, or a device, weapon, cartridge, container, or contrivance.

ATF states that a person licensed by the United States can be a holder of an approved ATF application for transfer and registration of a machine gun for purposes of MCL 750.224. Thus, a Michigan resident with an approved ATF application to transfer and register a machine gun may legally possess a machine gun under the “license” exception set forth in Michigan law.

The ATF National Firearms Act Branch is now willing to process applications for transfer and registration of pre-1986 ban machine guns by Michigan residents. However, Michigan law also proscribes possession of other items; such as firearm silencers. ATF has requested clarification of the state’s laws regarding these items from the AG’s office. Applications received by ATF from Michigan residents for items other than machine guns are being held by ATF until the requested clarification is received.

Bill Would Make ATF More Accountable

The U.S. Senate is poised to vote on a bill that would make the Bureau of Alcohol, Tobacco, Firearms & Explosives more accountable to Congress.

The Senate was scheduled to vote to clear a reauthorization of the 2001 anti-terrorism law (PL 107-56). Deep within the conference report on the reauthorization bill (HR 3199) is a 38-word provision that would make the ATF director subject to Senate confirmation, thus giving senators a new bargaining chip in negotiations with the White House. Confirmations could then be held hostage to satisfy individual senators’ demands. The provision was inserted by House Judiciary Chairman F. James Sensenbrenner, Jr., (R-WI).

The author publishes two of the small arms industry’s most widely read trade newsletters. The International Firearms Trade covers the world firearms scene, and The New Firearms Business covers the domestic market. He also offers FFL-mailing lists to firms interested in direct marketing efforts to the industry. He may be reached at: FirearmsB@aol.com.