Trademark Law and Practice

Trademark

Trademarks are source indicators that protect words, phrases, and symbols by preventing others from using marks that could confuse consumers and result in unfair competition.

Trademarks must be:

  1. Used in commerce continuously based on the standards in that industry
  2. Priority (Used before someone else did)
  3. Distinctive (Associated with the brand)
  4. Used as a mark (Source indicator; not a functional aspect of the product)

Trademarks can be protected three ways:

  1. Common law
  2. State registry
    • Gives:
      • Constructive notice in-state
      • Prima facie evidence of a valid trademark
  3. Federal registry
    • Commerce must be interstate or international
    1. Principal register
      • Gives:
        • Constructive notice federally
        • Prima facie evidence of a valid trademark
        • Incontestability
        • Attorney's fees
        • Treble damages
        • Power to prevent importation
    2. Supplemental register
      • Allows descriptive marks without distinctiveness to be registered.
      • Does not give actual enforcement rights
      • Helps to establish evidence of the mark's age and exclusive use federally for proving that it acquired distinctiveness—allowing registration on the Principal Register. Five years of substantially exclusive and continuous use in commerce can be accepted as prima facie evidence of acquired distinctiveness.

Trademarks last indefinitely as long as they remain used.

There are five classes of terms in regards to trademark protection. In order of ascending protection, they are:

  1. Generic
    • This means that it is the "common descriptive name" of the product type, like "computer" or "book".
    • Generic marks cannot be trademarked. Trademarks that become generic cannot be enforced, like Kleenex, Thermos, or Band-Aid.
  2. Descriptive
    • This means that it is "merely descriptive" and has no inherent distinctive character.
    • Descriptive marks can acquire a distinctiveness by acquiring a secondary meaning associating the mark with the product.
      • Five years of substantially exclusive and continuous use in commerce is evidence that can establish acquired distinctiveness and can be accepted as prima facie evidence of such.
    • Related names, geography, etc. are always descriptive.
    • Examples include Reese's, Nike, Arizona Iced Tea, Shredded Wheat, and Zatarain's Fish-Fri.
  3. Suggestive
    • This means that it "requires imagination, thought, and perception to reach a conclusion as to the nature of goods" and is entitled to registration without proof of secondary meaning.
    • Examples include Coca-Cola, Logitech, and Dupli-Color.
  4. Arbitrary
    • This means that it is a known word but with no association to the product, like Apple or Amazon.
  5. Fanciful
    • This means that it is a made-up word, like Kodak or Clorox.

Fanciful, arbitrary, and suggestive are inherently distinctive.

Marks can shift between classes as language changes. If they become the generic name of an article or substance, the trademark can be cancelled.

Incontestability

A trademark becomes incontestable after five years of continuous use.

Incontestability precludes cancellation on the grounds of descriptiveness.

Trademarks generally have to be on the product they are associated with.

Causes of Action
Trademark Infringement

Trademark infringement is the violation of another's trademark rights by using the mark without authorization.

The basic test for infringement is "likelihood of confusion."

An infringing use of a trademark must be a "use in commerce."

Likelihood of Confusion

Each circuit has its own test to determine the likelihood of confusion.

There are some factors that are common to most of these tests however:

  • Similarity of the marks
  • Proximity of the goods or services
    • Whether the products are sufficiently related in the mind of the consumer
  • Strength of the plaintiff's mark
  • Actual confusion
  • Defendant's intent
Contributory Infringement

Contributory infringement occurs when one induces another to infringe yet another's trademark or continues to supply his product to one that he knows or should have known is infringing upon another's trademark.

Dilution

Trademark dilution is making a famous mark weaker.

Trademark dilution can occur "by blurring" or "by tarnishment."

A dilution action only applies to purely commercial speech.

  1. Trademark
  2. Famous mark
  3. Similarity to mark
Dilution by Blurring

Trademark dilution by blurring is when a "famous mark" loses some of its distinctiveness because of the use of a similar mark, regardless of what for.

There are six factors used to determine dilution by blurring:

  1. Degree of similarity
  2. Degree of distinctiveness
  3. Exclusive use/Policing
  4. Recognition
  5. Intent
  6. Actual association
Dilution by Tarnishment

Trademark dilution by tarnishment is when a "famous mark" has its reputation hurt because of a similarly named product of poor quality or unwholesome context.

Famous Mark

There is no hard line for what a famous mark is, but it has to be really famous. Usually around 70% recognition among the general consuming public is required.

To determine whether a mark is famous, four factors are used:

  1. The extent of duration and geographic reach
  2. The volume and geographic extent of sales
  3. The extent of actual recognition
  4. If it was registered before the creation of the principal register
False Advertising

Under the Lanham Act, false advertising requires:

  1. A false or misleading statement of fact about a product;
  2. Such statement either deceived, or had the capacity to deceive a substantial segment of potential consumers;
  3. The deception is material, in that it is likely to influence the consumer’s purchasing decision;
  4. The product is in interstate commerce; and
  5. The plaintiff has been or is likely to be injured as a result of the statement at issue.
Cybersquatting

Cybersquatting is when one registers the domain name of another's distinctive mark with the bad faith intention to profit from it.

It requires that the person:

  1. has a bad faith intention to profit from the mark and
  2. registers or uses a domain name that is identical, confusingly similar, or dilutive of a distinctive mark.
Factors for bad faith intention to profit

Whether or not a person has a bad faith intention to profit is determined by balancing nine factors:

  1. His IP rights in the domain name
  2. The extent to which the domain name consists of his legal name or other common name
  3. His prior use of the domain name in connection with the bona fide offering of goods or services
  4. His bona fide noncommercial or fair use of the mark in a site at the domain name
  5. His intent to diver consumer from from the mark owner's site, either for commercial gain or to tarnish the mark by creating a likelihood of confusion
  6. His offer to transfer or sell the domain name for financial gain without using it in the bona fide offering of any goods or services, or a history or doing this
  7. His provision of false contact information which registering the domain name, failure to update it, or history of doing this
  8. His acquisition of multiple domain names identical or confusingly similar to marks of others
  9. The extent to which the mark is distinctive and famous
Defenses
  • Fair Use
    Classic Fair Use

    Classic fair use requires that the mark be used:

    1. other than as a mark,
    2. in a descriptive sense, and
    3. in good faith.

    E.g., referring to a product made by someone else which you sell.

    Nominative Fair Use

    When a defendant uses a trademark to describe the plaintiff's product, even if his end goal is to describe his own product, he is entitled to a nominative fair use defense provided he meets the following three requirements:

    1. the product or service in question must be one not readily identifiable without use of the trademark;
    2. only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and
    3. the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.

    This includes comparative advertising, but that is not the only scenario.

  • First Amendment
    1. Comparative advertising
    2. Parody (commentary/criticism) – not just a joke
  • Licensing
  • Abandonment
  • Failure to Police
  • Incontestability
  • Genericide
  • Fraud on the office
Licensing

Licensing should have:

  1. Consideration or stating it is a gift
  2. Right to control

Licenses are often restricted by:

  1. Goods and services with mark
  2. Duration
  3. Geography
Selling

Selling a trademark should have:

  1. Consideration or stating it is a gift
  2. Right to control
  3. A clause that transfers all goodwill