Foundations & Purposes of Trademark & Unfair Competition LawTuesday, January 19, 20102:13 PM  Introduction to Trademark and Unfair Competition Law

o Overview of Intellectual Property Trade Secret

Protection against misuse of confidential information Protection is lost if secret is disclosed (Does not protect against

independent discovery of reverse engineering) Combination of Tort & Contract Law

Patent Copyright

o Introduction to Trademarks Trademark law - Aims to protect the integrity of the marketplace by prohibiting

the use of marks associated with particular manufacturers in ways that would cause confusion to the source of the goods--reduces consumer confusion and raises incentives for firms to invest in activities to improve brand reputations

Federal power comes from Commerce Clause (and Lanham Act 15 U.S.C. §§ 1051-1141)

Background - Reduce information and transaction costs, allowing consumers to estimate the nature and quality of the goods before purchase

Different than copyright and patent because does not depend on novelty, invention, discovery, or any work of the brain

Trademark/Trade Dress (Lanham Act §32 for federally registered marks, §43(a) for non-registered marks

Trademark - Any word, name, symbol, or device, or any combination thereof, used by a person (or intended to be used in commerce) to identify and distinguish his goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown

Service Mark - Mark used to distinguish the services of a person (rather than goods)

Certification Mark - Generally used by trade associations to identify a particular type of goods

Must be open to anyone who meets the standards Collective Mark - Used by an entity (unions, association, etc.) for use by

members who use the mark to identify their goods or services and distinguish them from non-members

Trade Names - Identify the company themselves (Must actually function to identify the source of a particular good or service rather than merely identifying a company

Trade Dress - The design and packaing of materials, and even the design and shape of a product itself, if the packaging or the product configuration serves the same source-identifying function as trademarks

Trade dress and product design can be registered, however most are protected without registration under §43(a)

What can be protected? (Subject Matter) Lanham Act §45 - Exclusive right to any "word, name, symbol, device or

combination thereof" that is used (intent not req'd) or intended to be used to: Identify and distinguish goods and services, and Indicate the source of the goods (whether source is known to

consumer or not) Basic Rule - Nearly anything is capable of carrying meaning and meeting

requirements of Lanham Act Note - It is the source distinguishing ability of a mark that meets

LA requirements, not ontological characteristics such as shape, color, fragrance, word, or sign

Proper inquiry - Whether mark is identifying or distinguishing

  

Creation of Trademark RightsFriday, April 23, 20104:24 PMBasic Requirements of Valid Trademark

1. Proper Subject Matter2. Distinctive3. Non-Functional

Distinctivenesso To be protected/registered, a trademark must be distinctive (§2) and non-functional (§14)

If a mark is not inherently distinctive, then to be registered it must have acquired secondary meaning

Inherently distinctive - TM that is immediately capable of identifying a unique product source; rights determined solely on priority of use

Secondary meaning - The primary significance of the term in the minds of the consuming public is not the product, but the producer

When the buyers associate a descriptive term with a single source of the products

o Spectrum of Distinctiveness Abercrombie & Fitch v. Hunting World (1976) - Suggestive, fanciful, and arbitrary

marks/dresses always inherently distincitve 2d Circuit will apply these classifications to packaging, but not configurations

Inherently Distinctive Fanciful - Words that didn't exist until the mark is created

Ex. Kodak, Exxon, Clorox, Xerox Arbitrary - Everyday words that have no association with the products for

which they are names Ex. Apple Computers, Ivory Soap

Suggestive - Indirect describes product/service; Requires some degree of imagination, thought, perception by consumer to reach conclusion as to nature of goods/services

Rebuttable presumption - Allowed to register without further proof Ex. Eskimo Pie Ice cream ("eskimo" refers to cold), Coppertone,

Chicken of the Sea

Less protection than arbitrary or fanciful, but huge benefit over descriptive

Acquired Distinctiveness (can become distinctive with secondary meaning) or (Merely descriptive and not distinctive)

Descriptive - Mark describes characteristics, qualities, ingredients , purpose, nature, use, user of a product

+Secondary Meaning - A recognition (cognitive shift) by the relevant consuming public that a marks primary significance is identifying a particular good/service/producer and not merely describing the product/region/surname

Incontestability - Can file petition after mark has spent 5 years in market (prima facie evidence of secondary meaning)

Requires indicia of advertising, promotion, market exposure Secondary meaning required for proper names and

geographic identifiers Incorrect spelling does not make a mark inherently distinctive (i.e.

Fish-Fri) Justifications - Competitors likely need to use mark in their product Ex. EverSharp Knife (describing that the knife doesn't get dull) Ex. QuikPrint (describing the characteristic speed of service)

Surnames/Personal Names Ex. O'Malley's Beer

Colors Product Design Geographic

Inherently Unsuitable Merely Descriptive - No secondary meaning acquired (yet) Generic - To the relevant public, the word describes/has come to describe a

class of products (genus) rather than distinguishing between competing products/producers in the class (species)

Test - Who is relevant public? What is genus? Would relevant public understand good to be primarily referring to genus rather than one producer/product

Relevant Public - Ordinary users/potential users (may be split--i.e. Aspirin is generic to ordinary public but inherently distinctive to pharmacists)

Cancellation - TM's that become generic may be cancelled Justifications - No risk of confusion; would allow a monopoly on term;

Cannot deprive right of competitors to call a good by its name Ex. Aspirin, Spoon, Trampoline, escalator, zipper

Functional Featureso Descriptiveness and Secondary Meaning

Zatarain's Inc. v. Oak Grove Smokehouse, Inc. (1983) - Oak Grove (D) had fair use defense to asserted infringement of "Fish-Fri", even though "Fish-Fri" was a descriptive mark that had acquired secondary meaning, and the registration of "Chick-Fri" should be cancelled because it was a descriptive mark that had not acquired secondary meaning

The Fair use defense is available for descriptive marks without secondary meaning as long as there is no consumer confusion

Fair Use Defense - When an allegedly infringing TM is used fairly and in good faith only to describe to users the goods or services or their geographic origin

Others can use the mark in a descriptive sense as long as it does not confuse customers

Test for classifying mark as distinctive

Dictionary - Dictionary definitions indicate ordinary significance and meaning in the mind of the public

Imagination - Measures relationship between mark and product to which it is applied (suggestive or descriptive?)

Does it require imagination? Or does it convey characteristics of product standing alone?

Necessity of Use by Competitor - Whether term relates so closely and directly to a product or service that other merchants marketing similar goods would find them useful in identifying their own goods

Not determinative that a name is the only or most common name No legal foundation that product can be described only one way

Competitor use - Extent to which the term has actually been used in the market Evidence of Secondary Meaning (P has burden) - Words with an ordinary and primary

meaning of their own "may by long use with a particular product, come to be known by the public as specifically designating that specific product."

Direct evidence (survey results--strongest) Circumstantial Evidence

Amount/Manner of advertising--degree of consumer exposure Length/Extent of holder's Use of mark--volume of sales Media Use--Suggestion that media (communicated w/ consumers)

believes consumers make assocation Competitors are copying/free-riding

o Generic Terms - The primary significance of the registered mark to the relevant public rather than purchaser motivation shall be the test for determining whether the registered mark has become generic

Burdens of Proof (in infringement suit) With Federal Registration --> D because presumption of validity Without registration --> P (after D has asserted defense of generic-ness)

Anti-dissection Rule - The validity and distinctiveness of a TM is determined by viewing TM is determined by viewing TM as a whole as it appears in the market place (Filipino Yellow Pages v. Asian Journal Pubs, Inc. ) (1999)

Order of words - Combo of two generic words is typically generic, but can potentially be more distinctive if consumers make a significant cognitive leap (combo deviates from natural usage or unusual unitary combo (Mil-Mar Show Co., Inc. v. Shonac Corp.)--Court found "Warehouse Shoes" and "Show warehouse" were generic in retail context

Dictionary Test - If use consistent with dictionary then increased chance of being generic

Multiple meanings of word - Words can have multiple meanings and not just first meaning can be generic (public can understand multiple meanings)

Placement of nouns and adjectives make a difference (Nouns--often generic, Adjectives--often descriptive)

Translating to another language - Split as to whether can be TM Majority - If well known foreign word + General public can translate,

then no Genericide - A mark loses its TM significance because the public appropriates the mark

and it becomes a generic name What makes a mark go generic? When a product with a strong mark does not

have a well-known generic name P usually has burden to prove that its mark is valid and that its unregistered

mark is not generic However, where the public appropriates a mark and makes it generic,

burden is on D to prove generic-ness

De facto secondary meaning - Interest of the public in protection from confusion outweighs rights to mark by competion

Some restriction may still be placed on competitors in use of mark to prevent confusion of consumers that still associate mark with original producer/product

Companies should register mark and seek to use a generic name in conjunction with mark w/ mark to prevent genericide (photocopy and Xerox)

Murphy Door Bed Co. v. Interior Sleep Systems, Inc. (1989) - Genericide occurs when the public appropriates the mark as evidence here by PTO rejection of application for the mark, use of the mark in dictionaries as a general term, use of the term in newspapers and magazine articles in a generally descriptive sense

Passing Off - Common Law unfair competition tort used to enforce unregistered trademark rights and protect goodwill from misrepresentation

Can't prevent use of mark, except in ways that constitute passing off Appropriate where:

De facto secondary meaning - Association between a generic term and particular source arises from source's long monopoly use

Evidence shows competitor is capitalizing on good will through use of similar terms/marks

Likely effect is consumer will think D's product is P's (Blinded Veterans Assn. v. Blinded Ameican Veterans Found.) (1989)

Mere confusion is not enough, must show more (intent?) Court may require competitor to take necessary steps to distinguish goods

from first organization or product Reverse Passing Off - Taking someone else's goods and putting your label on it

(Lanham Act Protection) What Are you/Who Are You Test - Determines if mark is generic

If you can answer "what are you" then it is generic and unsuitable If you can answer "Who are you" then less so Top level test, not for close cases (E.T. Brown Drug Co. v. Cococare Prods., Inc.)

(2008) (Cocoa Butter) Peaceable Planet, Inc. v. Ty, Inc. (2004) - Niles is suggestive when referring to a camel

o Non-Verbal Identifiers: Logos, Packages, Product Design, and Colors Ordinary shapes or letters cannot be inherently distinctive , but stylized versions can be

Star Industries, Inc. v. Bacardi & Co., Ltd. (2005) - Elongated orange "O" with gold border on Georgi vodka label inherently distinctive, but only marginally distinctive, so protection weak

Rationale - Protecting a basic shape or letter will hamper competition, but protecting a stylized version will not because competitors are still free to use the basic version

The Georgi O was stylized with respect to "shading, border, and thickness" and each of those distinguished it from the basic letter shape--Stylization provides weak protection

Expanding the Types of Nonverbal Marks (Trade Dress) Two Pesos, Inc. v. Taco Cabana, Inc. (1992) - Trade Dress (the exterior of the

restaurant) can be inherently distinctive and thus may be protected under §43(a) without having to prove secondary meaning

Requiring secondary meaning could have adverse effects on small businesses--no protection for when they start up; would have to advertise nationally to get national protection

43(a) does not impose higher standards for trade dress than it does for other marks

P was claiming protection for overall design of it's stores (lots of bright colors and quirky Mexican themed stuff)

Rule - TM protection afforded to trade dress if inherently distinctive or acquired secondary meaning and non-functional (Two Pesos received TM for overall package)

Policy Rationale - Secondary meaning not required for inherently distinctive trade dress b/c waiting period could allow competitors to copy trade dress, appropriate good will, confuse customers, etc.

Test --> Inherent Distinctiveness (arbitrary or unique) (When is trade dress inherently distinctive)

Seabrook - unique, unusual or unexpected in marketplace that it will automatically identify source to customers; Ask whether:

Packaging feature is a common basic shape or design Packaging feature is unique/unusual in its field Packaging feature is a mere refinement of a well-

known ornamentation Packaging feature is capable of creating commercial

impression distinct from the accompanying words Additional Factor - Whether primary designator or

source Exception--> Color

Qualitex v. Jacobson Products (1995) - A color may meet the legal trademark requirements (distinctive and non-functional) and thus can be registered

Qualitex can register the green-gold color of its dry-cleaning pads if they have acquired secondary meaning and are not a necessary component

If a shape, sound, fragrance or color has developed secondary meaning and indicates the source of the goods, nothing in the Lanham Act keeps them from being TM'd

Importance is the ability to distinguish the source that serves the TM purpose, not the status as a symbol or word

If there are a limited number of colors suitable for that type of good, then functionality doctrine comes into play (can't be functional, i.e. orange pay phones are highly visible to motorists even in bad weather)

The Design/Packaging Distinction Wal-Mart Stores, Inc. v. Samara Brothers, Inc. (2000) - Product design cannot

be inherently distinctive, and thus must always have acquired secondary meaning to be protectable under §43(a) (potentially, but not inherently distinctive)

Product design serves a variety of functions while trade dress just ID's the source. Customers don't buy trade dress they buy products. They don't care about trade dress once they've selected the product. Design on the other hand, can perform a function of the product.

Line between the two isn't always clear, so err on the side of calling something product design

Ambiguity Rule - Courts should classify ambiguous trade dress as product design and require secondary meaning

Trade dress that is product configuration must acquire distinctiveness (Secondary meaning), but product packaging is automatically registerable

Rationale: Consumers are likely to understand product design not as an indication of source, but as a part of the product

Trade Dress Protection After Wal-Mart In Re Slokevage - Reaffirms SCOTUS decision that trade dress that is product

design can not be inherently distinctive Cut-out in jeans is design (FLASH DARE!)

Yankee Candle Company, Inc. v. Bridgewater Candle Company, LLC (2001) - Common elements on candle labels were product packaging, but overall elements of catalog used to market candles was more akin to product design or configuration

Question is whether trade dress is so "unique, unusual, or unexpected in the market that it will automatically be perceived by consumers as an indicator of origin."

Yankee Candle did not prove inherent distinctiveness because labels were basically "a combination of functional and common elements."

Trade dress could still be distinctive with secondary meaning but court rejects two arguments:

Long use coupled with success of product (could be due to quality product rather than consumer recognition of source)

Advertising evidence insufficient (did not refer to packaging in a way that conditions consumers to recognize label as source indicator)

o The Edge of Trademark Protection: Subject-Matter Exclusions? Exotic Source-Identifiers

In Re Clarke (1990) - A scent is capable of being a source identifier and distinguishing goods as long as:

Arbitrary scent (not inherent attribute of good) Distinctive (secondary meaning)

Consumers actually distinguish source among array of scents Did they purchase because scent indicates source or

consumers like smell? (functionality) Look for whether particular scent is promoted/advertised

Not functional - No utilitarian advantage Subject Matter Protected by Copyright - Basic Rule: Nearly anything can be a trademark

under LA if it meets the normal criteria General - Courts protect borders between copyright and TM; weary to grant

TM protection where copyright and TM overlap and especially where they conflict Works in the public domain - giving TM rights to works originally

copyrighted would undermine the copyright policy goal of exclusive rights for limited durations (because TM's last indefinitely)(Comedy III v. New Line)

Comedy III doesn't own material, "we all own it" Commercial appropriation of Persona Distinguished - use of

likeness or persona to sell products may be offered TM protection (Vanna White, Tom Waits, etc.)

Clip included elements that in other context would be TM (if likeness was used on t-shirts it was selling, but clip of public domain film is not TM)

Note - Just because elements that are TM'able are present, doesn't mean there is infringement

Oliveira v. Frito-Lay, Inc. (2001) - Rejects §43(a) infringement claim by P who asserted trademark rights in "the Girl From Ipanema" as her signature song

Sounds can be symbols under LA, and they can identify or distinguish source, but only if they refer to something other than the song itself, or the performer (i.e. NBC chimes, Intel ditty)

Must identify goods/services and indicate source (Must refer to something other than song itself or performer)

Court sees this as a claim that the song refers to itself, concerns:

Disruption of settled business expectations in who has rights in a song

Anti-commons problem: The more rights holders in a song, the harder it is for a licensee to get license from everyone

Author Names - Generally considered part of the copyrightable material and not protectable as TM

However, when author's name is used on a series of works, and author shows quality control over works or promotion of author's name so that consumer "knows what they're getting"--TM status is possible

In Re First Draft Inc. (2005) - TTAB recognizes the series exception to the author name rule, but says author of series of romance novels failed to meet the quality control/promotional prong of the test

Rule--Author name can be TM where it is used on series of works and serves as indicator of source or quality

This can be shown by way it is marketed or that author controls quality of the works and use of their name

Board recognizes possible conflict with copyright, but it's permissible when name serves real TM function

"Origin" of Goods - "origin" within LA refers to origin of physical goods (i.e. the video cassettes) not the origin of the intellectual/authorial content of the goods (Dastar Corp. v. Twentieth Century Fox Film Corp.)(2003)

Dastar (D) cut down P's video and sold as it's own Right to Attribution - TM law does not create a right to attribution, so

failure to attribute proper content source does not violate TM

Functionalityo Rule - No TM protection is available if the feature sought to be protected is functional

Under §43(a), the burden of proving non-functionality is on the party asserting trade dress protection

The rule only applies to de jure functionality (functional by law) De facto functionality (serves utilitarian purpose, functional by fact) is TM'able Supreme Court Test for Functionality

Product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article (Inwood Laboratories)

Rule - Registered trademarks are presumed to be non-functionalo Introduction to Concept of Functionality (§2(e)(5); §14(3); §43(a)(3))

2(e)(5) - Deny registration because generic 14(3) - Cancelled at any time becomes functional 43(a)(3) - party seeking trade dress protection has burden to prove that it's not

functional Utilitarian Functionality

In Re Morton-Norwich Products, Inc. (1982) - Successful appeal of PTO finding of functionality of spray bottle because it wasn't de jure functional

Legal functionality isn't a question of whether there exists a function for the design (that's de facto) (It's a question of the degree to which the function is crucial to the utility of the good)

Shape is de facto functional b/c it holds water, but not de jure functional b/c there's no evidence that it's essential

Two ways something can be legally (de jure) functional: It's essential to the use of the product It's essential to making it as well or as cheaply

Four types of evidence relevant to functionality inquiry (could be more)

Existence of utilitarian patent disclosing utilitarian advantages of the design

There was utilitarian patent here, but for spraying mechanism, not what M-N was claiming protection for (the shape)

Advertising proclaiming utilitarian advantages of design Existence of alternative designs Comparative cheapness of particular design compared to the

alternatives PTO didn't prove functionality b/c there was no evidence that bottle

shape was superior to alternatives Post-Traffix there is no such thing as de jure

o The Scope of the Functionality Doctrine Aesthetic Functionality - Certain aesthetic aspects of a product design or package

contribute to consumer appeal in ways unrelated to source identification Wallace Int'l Silversmiths, Inc. v. Godinger Silver Art Co., Inc. (1991) - Grande

Baroque design on silverware functional b/c use was required to compete in the market for Baroque silverware

Test --> Competitive Necessity - exclusive use of an ornamental feature by one user would put competitors at a significant non-reputation disadvantage and/or grant user a monopoly on feature

Extends to decorative elements which contribute to consumer appeal (not source identification)

Court accepts aesthetic functionality, but only applies it where there is finding that designs comparably attractive to consumers are unavailable

Baroque designs not TM'able, but can get trade dress protection on precise pattern if they show secondary meaning

Note-Court's definition of relevant market; Design would not be essential to compete in general silverware market

Brunswick Corp. v. British Seagull Ltd. (1994) - Upheld finding of functionality of black color for outboard motors b/c of evidence consumers preferred outboard motors to be black

Rule - An element of trade dress is functional when consumers prefer products including the element for reasons that are not trademark related (nature of the product, not reputation of the producer)

The color here is functional not in a utilitarian sense (does not make boat function better), but b/c of:

Black matches more boat colors (consumers want color compatibility)

Black engines appear smaller o The Modern Supreme Court Approach to Functionality

Qualitex Co. v. Jacobson Prods. Co., Inc. (1995) - A feature is functional if exclusive use of the feature would put competitors at a significant non-reputation related disadvantage

Generally, a product feature is functional (and cannot be TM) if it is essential to the use or purpose of the article or if it affects the cost or quality of the article. (Inwood Test)

3d Restatement of Unfair Competition §17 - A design is functional if the design of the article affords benefits in the manufacturing, marketing, or use of the goods or services with which the design is used, apart from any benefits attributable to the design's significance as an indication of source, that are important to effective

competition by others and that are not practically available through the use of alternative designs

Utility Patents create rebuttable presumption of functionality (Vornado v. Duracraft)(1996)

The existence of an expired patent does not conclusively preclude trade dress protection for features claimed in the patent, but it strengthens the statutory presumption of functionality and creates a high burden for the plaintiff to rebut.

Must leave "sufficient alternative arrangement" to permit competition Product configuration with a significant inventive

component/invention covered by a utility patent can't get trade dress protection after the patent expires

But configurations can be patentably useful and non-functional trade dress

If conflict between patent and TM law: balance relative importance of the principles to be infringed and disregard the weaker principle

No trade dress to a product feature if that same feature is a significant inventive element of a patented device

Traffix Devices, Inc. v. Marketing Displays, Inc. (2001) - P did not overcome the presumption of functionality of its dual-spring design for wind-resistant road signs in light of its expired patent in the technology

Two ways P can overcome burden imposed by expired patent Show that claimed trade dress was not actually central to

patent, just something referenced in application Show that tech has advanced so much since time of

application that feature is no longer functional In this case, patent was extremely strong evidence of functionality b/c:

Patent claim was based on product being better than previous tech at withstanding wind and dual-spring tech was central feature in that advance

Patent application said two springs was best because one spring allowed sign to twist and three springs added unnecessary expense

Two Tests for Determining Functionality Traditional Test - Product is functional and cannot be TM if:

It is essential to the use or purpose of the device It affects the cost of quality of the device It is the reason why the device works

Competitive Necessity - Product feature is functional if: Its exclusive use would put competitors at a

significant non-reputational related disadvantage Not a comprehensive defintion

o Post-Traffix Applications of the Functionality Doctrine

Utilitarian Features For PTO, if a design is functional in at least one competitively significant

application, that's enough to deny TM protection across the board Valu Engineering, Inc. v. Rexnord Corp (Fed. Cir. 2002) - PTO finding of

functionality for conveyor belt rails in wet areas of factory was sufficient to deny registration without any evidence of functionality in other application

Does availability of alternatives matter? The test implicitly considers the availability of alternatives in

determining whether something is essential or affects quality of cost

Eppendorf-Netheler-Hinz GMBH v. Ritter GMBH (5th Cir. 2002) - Fin configuration was functional because fins were required to make syringe tip work, regardless of whether an alternative fin arrangement would work as well

This reading of Traffix seems to say that availability of alternatives is irrelevant to Inwood test

Court probably wrong b/c alternatives seem inherent to question of whether something is essential; Essential implies superiority

Rule-Traffix does not dictate a finding of functionality where a patent was issued; It just prohibits affording trade dress protection of the central advance of an existing patent

Aesthetic Features Availability of alternatives is a key factual inquiry Abercrombie & Fitch Stores, Inc. v. American Eagle Outfitters (6th Cir. 2002) -

Clothing designs and store configurations were functional and therefore not TM protectable; There was a genuine issue of fact as to whether catalog format was functional due to possibility of alternatives

Court adopts 7th Cir Test: "Whether the feature is something that other producers of the product in question would have to have in order to compete effectively in the market, or whether it is the kind of merely incidental feature which gives the brand some individual distinction but which producers of competing brands can really do without.”

Au-tomotive Gold, Inc. v. Volkswagen of America, Inc. (9th Cir. 2006) - Replicas of TM of two famous car companies are not functional in regards to accessories such as key chains and license plate covers and are protected under LA

"Essential to the use" test failed because Auto Gold could still make accessories without TM and cost or quality would not be affected

Aesthetic function is construed narrowly and does not extend to logos Colors can be functional in meaning, culpability, visibility, utility, and

manufacturing advantage Meaning - Blue-->Nitrogen to scientists; Red & Green mean Christmas Culpability - Brunswick boat motor case Visibility - Whit handle on professional knife handles function b/c it

makes dirty easier to see Utility - Black color on chemical bottle functional b/c it keeps light out Manufacturing Advantage - Color is the result of the manufacturing

process and replacing that element would cost more Qualitex/Owens-Corning - No reason for colors except to identify goods, no

competitive need from competitors to have same color

Useo "Use" as a Jurisdictional Prerequisite

As a jurisdictional matter, federal trademark law reaches only marks that are used in interstate commerce

Applies to both registered and unregistered TM's in all commerce that Congress may regulate

o "Use" as a Prerequisite for Establishing Rights Exclusive right to use as TM founded on priority of appropriation

Common law rights - actual use remains precondition Federal Register rights - show either actual or constructive (bona fide) use - LA

§45 Actual Use - Bona fide use in commerce, not mere "token use" to reserve a right

(Posner: use must seize the attention of the relevant market)

Service Marks - Applicant must demonstrate a direct association between mark and services

Planetary Motion, Inc. v. Techsplosion, Inc. (11th Cir. 2001) - Distribution of software over the internet satisfies the "in commerce" jurisdictional predicate

Two Part Test for "Use" Adoption - Mark has been adopted by the party Public Recognition - Use sufficiently public to ID or distinguish

goods in appropriate segment of public as those of adopter of mark Actual sales or lack thereof does not by itself

determine whether user has established rights Look to the "totality of the circumstances" which

might include distribution, public association source ID, notice to potential mark users, range of sales

Lucent Info. Mgmt. Inc. v. Lucent Techns., Inc. (3d Cir. 1999) - Market Penetration Test for Actual Use

Determinative Factors to warrant protection for market penetration of TM:

Volume of Sales Growth trends (both + and -) in area Number of persons actually purchasing item vs. potential

number Amount of advertising in area

Compare Allard Enterprises v. Advanced Programming Resources - word of mouth marketing plan sufficiently public to establish actual use

Aycock Engineering, Inc. v. Airflite, Inc. (Fed. Cir. 2009) - The use in comemerce requirement is not met when P uses a service mark in the preparatory stages of a service's development but never offers the service to the public

Test for Service Mark Use the mark in the sale or advertising of a service Show that the service was either rendered in more than one

state or in this and a foreign country by a person engaged in commerce Brookfield Communications, Inc. v. West Coast Entertainment Corp. (9th Cir.

1999) - No tacking allowed for company seeking priority in MOVIEBUFF when it had earlier used the slogan “The movie buff’s video store.”

Tacking - Citing first use date of an earlier mark onto a subsequent mark; Tacking should be allowed if two marks are so similar that consumers would generally regard them as essentially the same

Without tacking, TM owner's priority in mark would be reduced each time slightest alteration was made

Tacking allows companies to adjust TM based on changing customers prferences

Standard for Tacking (considerably higher than standard for likelihood of confusion)

Marks must contain same continuing commercial impression Latter mark: (a) Should not materially differ from or alter

character of mark attempted to be tacked, (b) must be the equivalent of the earlier mark, (c) and should be considered the same mark as the earlier mark in the mind of the consumer

Contrary to TM to allow tacking of mark with narrow commercial impression to one with broad commercial impression

TM use is not conveyed through mere intent to use, nor through mere preparation to term as TM

Same as Analogous Use

Analogous use implies that use as TM not necessary, whereas, tacking requires previous TM use

Test: (1) Open and Notorious public use, (2) Directed to intended public segment, (3) Carried out in manner sufficient to inform prospective purchasers of availability (presently or future) of adopter's service under the mark

1988 Constructive Use Amendment nullified this theory Constructive Use

Domestic Marks (Lanham Act) §1 Intent to Use (ITU) - A person who has a bona fide intent to use a

mark can apply for a registration on the principle register (statement of good faith + evidence of intent)(mark goes on supplemental register for potential marks);

Established in 1989 to: Level the playing field between US and foreign

owners (who could get protection without actual use) Actual use created great risk for companies who

might spend a lot of $ developing new product only to find mark is invalid ("testing of the legal waters")

Small businesses, unable to afford actual use, still able to compete with larger re: TM registration

LA does not define "bona fide intention" or "good faith" Verified statement required within 6 months of ITU verifying:

(1) mark was used in commerce, (2) specifying date of first use, (3) specifying goods mark was used on

Extensions are available every 6 months up to 24 months with showing of good cause and continued intent (warehousing ITU's is bad faith)

§7 Constructive Use - filing of ITU application shall constitute constructive use of the mark, conferring a nationwide right of priority on the goods/services specified as against any other user

Unless, prior to filing, another user, filed an ITU and registered the mark

Warnervision Entertainment Inc. v. Empire of Carolina, Inc. (2d Cir. 1996) - Company whose predecessor had made constructive use should not have been enjoined from making actual use b/c the injunction would defeat purpose of constructive use

Rule-Court may not grant preliminary injunction against ITU applicant as long as applicant's privilege has not expired

This would prevent applicant from achieving actual use thereby preventing full registration and priority

Concern of pirates scouring ITU apps and making actual use with mark and suing applicant's for settlement

Foreign Marks LA §44 implements the Paris Convention:

Allows registration in the US without actual use if mark is registered in foreign country and they have bona fide interest in use in U.S.( §44(e)

Tacks the date of US registration back to the date of registration in the foreign country for purposes of priority (as long as US application is done within 6 months of original registration) (§44(d))

In Re Rath (Fed. Cir. 2005) - Paris Convention is not self-executing treaty and has no direct effect under Congressional implementation; §44 affects US priority rules, but does not require registration for marks that fail to meet US requirements for eligibility (here, TM is primarily merely a surname)

o "Surrogate" Uses

US TM law grants TM rights to the user, even to the exclusion of the creator; Rule-Under surrogate agreement, TM use by someone other than TM owner

may inure to the TM owner's benefit Uses by Affiliates - The Doctrine of Related Companies (parent-sub; franchisor-

franchisee; licensor-licensee) - Use by an entity related to controlling entity inures to the benefit of controlling entity (LA §45 definition of "related company")

The Bookie Kings v. Guillory (1966) - Former band leader had no rights in the band name after he left to start a new band

Priority of appropriation of trade name determines who is the entitled user

However, trade name was mutually adopted by an unincorporated association, so it did not vest in any individual member of the associaton

Therefore, no member has the right or authority to transfer the exclusive rights to use that name

Robi v. Reed (9th Cir. 1999) - A person who remains continuously involved with the group and is in a position to control the quality of its services can gain individual rights in the mark

If you leave the band, you leave your interests in the band Brief Notes on Statutory Construction and weighing whether to adopt various provisions

Questions to ask: (1) What, if any, change is the amendment making to the LA? (2) If it is making a change, is it an appropriate change that we should support?

Avoid amendments that are: complicated, superfluous, merely descriptive Public as "Surrogate" User

Coca-Cola Co. v. Busch (1942) - Coca-Cola owned rights in "Coke" such that it could enjoin creator of "Koke-Up Kola" despite the fact that Coca-Cola had never used Coke at that time

Rule-It is commonplace for public to abbreviate and shorten anything capable of such, therefore, abbreviation of TM which public has used and adopted as designating the source of the product is to be as equally protected as the TM itself

Evidence that most of the public referred to Coca-Cola as coke was enough

This is the flip-side of genericide; Instead of public adopting the mark as the name for the product, they create a new source-identifying word for the product

TM owner's initial resistance to abbreviation or unwanted association does not prevent owner from later registering the abbreviation

An entity may have a protectable property right in a term even if no use has ever been made so long as public associates the term with entity

o Loss of Rights Through Non-Use or Uncontrolled Uses Abandonment Through Non-Use (LA §45) 2 ways:

Use is discontinued and no intent to resume use Non-use for 3 years

This triggers a mandatory presumption of abandonment which the owner can rebut with evidence of an intent to use

Emergency One, Inc. v. American Fireeagle, Ltd. (4th Cir. 2000) - Reversed summary judgment of abandonment of rights in fire engine logo b/c while token continued use was not sufficient to avoid the presumption of abandonment, evidence of an intent to use created a triable issue of fact

Using TM on nominal goods other than the actual good does not constitute a bona fide use of the mark in the ordinary course of trade and interpreted as an attempt to reserve right in mark

Relevant intent is intent not to resume. Court doesn't care if you intend to give up rights

Court notes that intent to resume is in foreseeable future (defined by circumstances of industry); Burden of proof on holder

To overcome abandonment claim, D must show bona fide and timely actual use or prove intent to resume use within foreseeable future

When a mark is abandoned it returns to the public domain; Because subsequent user of abandoned mark may evoke continuing association with prior, subsequent user may be required to take reasonable precautions to prevent confusion due to residual goodwill

Registration based systems don't require actual use to acquire TM rights, but use is required to enforce and maintain rights

Abandonment Through Failure to Control Use ("Naked Licensing") Naked Licensing - Where a licensor has allowed licensee to use mark without

retaining any control over the quality of the goods/services, he loses the right to the mark Mark is no longer serving TM function of identifying and distinguishing Considered inherently deceptive b/c consuming public expects mark to

refer to goods controlled by the owner, but licensee has been left free to attach any quality of goods to mark

Stanfield v. Osborne Industries, Inc. (1995) - Inventor of heating pad for newborn hogs lost TM rights in his name b/c he didn't exercise control over goods produced by the group he licensed to

Court here puts emphasis on the fact that the licensing agreement did not include an express contractual right for P to exercise control, but the question is whether he actually exercised control, regardless of the K (unformalistic approach)

Special relationship must exist for licensor to completely depend on licensee for quality control (such as family members)

Without quality control requirement, TM owner's ability to license mark separately from connected business would create an array of products in varying degrees of quality which would ruin public benefit of TM

Challenges bear a "heavy burden" to prove abandonment through failure to control; Owner's retention of TM requires only minimal control

Assignments in Gross are invalid Purport to transfer rights in mark without transferring the good will of

mark Invalid transfer so assignor retains rights in mark (but assignor will

typically discontinue use of mark with no intent to resume use, so assignee may get rights to mark because of actual use)

University Book Store v. University of Wisconsin Board of Regents (TTAB 1994) - Maintenance of exclusivity of rights is not required to avoid a finding of abandonment; So long as some members of the purchasing public identify applicant with each of the marks at issue, applicant's conduct has not caused any of the marks to lose significance as mark

Owner is not required to act immediately against infringing user Third party producers of University paraphernalia are implied

licensees acting within legal scope so long as quality remains at a certain level Unique to University Book Store is that they are not using TM to ID

itself, but to ID UW-Madison. Stansfield was commercial transaction that allowed someone to use his TM to ID their product; In this case, the TM identifies the University, not where the product comes from

Registrationo The Registration Process

Overview of Relevant Provisions The Process

Application and Examination Bases for application

Actual Use of Mark in Commerce Bona Fide Intent to use mark in Commerce Use or registration in Paris Convention country

(Claim of priority based on earlier filed foreign application) Madrid Protocol (filings in home country can be

forward to US along with home priority date) PTO Examination

Requirements: Subject matter, use in commerce, use in connection with goods/services, distinctiveness, non-functionality, not confusingly similar to previously used mark, not immoral, scandalous, or disparaging, not deceptive

Publication Parties opposed to registration have 30 days to challenge In order to have standing to oppose, must show harm by

registration Mark is descriptive and you'd like to continue using it

that way Confusingly similar to your own

Either party can appeal decision Appeals go to either TTAB, district court, or straight

to Fed Cir. Notable Advantages of Principal Register

Provides notice to the public of the existence and nature of claim of rights (§33(a) and §7(b) lay out major benefits)

Registration provides prima facie evidence of: Validity of the registered mark and validity of registration Registrant's ownership of the mark Registrant's exclusive right to use the registered mark in

commerce or in connection with the goods or services specified in registration

Owners of registered trade dress do not bear the burden of establishing non-functionality, whereas §43(a) imposes burden on owners of unregistered marks

Appealing registration denials Under TM law, appeals go to PTO and Circuit courts (Implies that TM

right may vary from region to region) Some Circuits hold a heavy burden to reverse PTO (clear error), while

others believe that although there's a rebuttable presumption of validity of PTO's ruling, the burden of overruling isn't that high (latter burden recognizes practical difficulties for PTO)

Supplemental Registration When certain marks do not meet LA §2 requirements but are still

capable of distinguishing applicant's goods/services from competitors they may use Supplemental Register (§23-28)

Primarily used as means for US registrants to show home registration for Paris Convention purposes, though has been rendered less useful by Madrid Protocol

Can be viewed as preliminary alternative to Primary Registration until Secondary Meaning proven

Post-Registration Actions Notice (§ 22) – Registration is constructive notice of registrant’s claim of

ownership Registrants who fail to display mark cannot collect profits or damages

from infringement unless defendant had actual notice of registration Unless registrant prevails on a parallel claims for damages

Maintenance (§8(a) and (b)) – must file affidavits of continuing use every 5 years. §8 prevents deadwood on the register

Cancellation (§14) petitioners may file for cancellation if believes that damage will occur

otherwise petition to cancel may be filed at anytime if based on one of following:

genericness, functionality, abandonment, fraud in registration, Violation §4, Violation of §2(a)-(c)

petition for any other grounds must be filed within 5 years of registration, including likelihood of confusion.

o Exclusions from Registration Overview

LA §2(a-e) lists a wide variety of substantive bars to registration, but §2(f) states that some may be overcome by secondary meaning

Initial burden is on PTO to show unregisterability (until it has made a prime facie case)

§(2(a)) states that no registration given for scandalous, disparaging or deceptive marks, but no guidance what that means

Scandalous, Disparaging, and Deceptive Marks Immoral or Scandalous Marks

Test-Does the mark offend the conscience and moral feelings of a substantial composite of the general public? (or is it shocking to the sense of truth, decency or propriety)(Harjo)

Figure out what the mark means in context of the markets and the goods to which it refers

Can be tricky in certain cases (like FCUK) or where there are multiple definitions and only some scandalous

Where there are two possible meanings, and there's no clear evidence that public would perceive one or the other, can't assume public would perceive the vulgarity

Basically, if there is ambiguity about message, party is in the clear

Would a substantial composite of the public understand the meaning as scandalous?

Disparaging Marks Test-Does the mark dishonor by comparison with what is inferior,

slight, deprecate, degrade, affect, or injure by unjust comparison1. What does the mark mean? 2. Does a substantial component of the referenced group

understand it as disparaging? Looking at perceptions of group, not general public

Intent to disparage is not dispositive but it might be referenced

Harjo v. Pro-Football Inc. (2003) - TTAB ordered cancellation of Washington Redskins mark on grounds that it was disparaging to Native Americans (district court reversed on ground of Laches)

Differences between Scandalous matters and matters that may disparage Scandalous matters focus on reaction of American society as a whole

or a composite of the general public, whereas, matters that may disparage have an identifiable object

§2(a) precludes registration of scandalous marks, but not disparaging marks

Precludes marks that may be perceived as disparaging Deceptive Marks - May never be registered

Test-(1) Is the mark misdescriptive? (2) Are prospective buyers likely to buy the misdescription? (3) Is the misdescription material to consumer's purchasing decision? (Budge)

It does not matter if there is any intent to deceive, or whether the labeling on the product packaging clears up the misdescription. A mark, standing on its own, that meets the above test is legally deceptive

In Re Budge Manufacturing Co., Inc. (Fed. Cir. 1988) - No registration of LOVEE LAMB for maker of synthetic seat covers because of deceptiveness

Application of the test The mark is misdescriptive b/c it implies it's

made from lambskin Prospective buyers can believe this b/c

there are lambskin seat covers on market This is material b/c natural seat covers are

generally of a better quality and demand a higher price A finding of misdescription only bars registration, it does not bar use

Congressional intent to bar registration from deceptive marks Marks that meet the first 2 prongs of the Deceptive marks test, but not the 3rd

(materiality) are labeled deceptively misdescriptive (§2(e)) They are eligible for registration if they show secondary meaning

Geographic Marks - LA §2(e)(2) Where it is determiend that the mark, as perceived by potential purchasers,

describes or can be logically connected to the geographic origin of the goods, the mark is geographically descriptive

Examine whether the geographic term is "minor, obscure, remote, or unconnected" with the goods

Note-§43(a) provides a cause of action for private parties likely to be damaged by another trader's use of a false geographical destination of origin that is likely to confuse customers

Where there is no genuine issue that the geographic significance of a term is its primary significance and where the geographic place is neither obscure or remote, a public association is presumed

Marks that are primarily geographically descriptive may obtain protection if they acquire secondary meaning

Test-PTO Three Element Test for §2(e)(2) (Geographic Marks) The Primary Significance of the mark is geographic

This generally means it has to be a well-known place, so obscure or remote places are fine

Excludes famous names like Hollywood

The public makes an association between the goods/services and the place name

This is generally the case where the place is famous for the goods, but the connection is also presumed when the goods actually come from the place

Where the public would not make this association, it is an arbitrary mark, and inherently distinctive (Amazon for bookstore)

Can go other way too (Havana for cigars, Swiss for cheese)

3. The mark identifies the geographic origin of the goods Burke-Parsons-Bowlby Corp. v. Appalachian Log Homes, Inc. (6th Cir. 1989) -

Registration denied because no secondary meaning Exceptions to Test

Secondary meaning §4 provides that "indications of regional origin" may be registerable as

certification marks International Agreements

Proving Place Association Goods/place - Requires little more than a showing that consumers

identify a place as the known source of the product Services/Place - Requires an additional or heightened association

Restaurant services, especially, require more such as: menu being the same, chefs received special training, etc.

Name Marks Primarily Merely a Surname - §2(e)(4) A mark is primarily merely a surname if,

when applied to a particular product its primary significance to the purchasing public is that of a surname

"primarily" added in recognition that someone in the world might have term as a surname

Test-Whether a term is primarily merely a surname (Hackler) Whether the surname is rare Whether anyone connected with applicant has the term as a

surname Whether the term has any other recognized meaning Whether the term has the "look and feel" of a surname

Any doubts should be resolved in the applicant's favor Even if primarily a surname, can still be registered with

secondary meaning In Re United Distillers, PLC (TTAB 2000) - Denial of registration of

Hackler for Scotch Whiskey reversed on four part test The surname was rare (only one in NY phone book) No applicant had surname Evidence of non-name meanings

Dictionary meaning Title of Poem Applicant's promotional materials say it was based

on real person ("The Hackler of Grouse Hall") Difference between public perceiving as

merely a surname and after a particular person Unclear whether it has the "look and feel" of a surname

(Looks like a job description, but can still double as surname (Weaver)) False Suggestion of a Connection - §2(a) - with persons living or dead

Test-whether there is a false connection (Sauer)

Mark is the same or a close approximation of the person's previously used name or identity

The mark (or a portion of it) would be recognized as such The person is not connected with the applicant's product Person's name or identity is famous enough that the

purchaser is likely to make a connection between the person and product Fame is to be assessed at time of registration (Unlike

dilution, fame based on person, not the mark) In Re Sauer (TTAB 1993) - Registration refused for "Bo Ball" (Half

baseball, half football) under §2(a) and 2(c) "Bo" widely recognized as Bo Jackson's nickname Jackson had no connection to the product People were likely to infer a connection b/c Jackson endorsed

a lot of products Once false suggestions of connection are shown, the mark is not

registerable, regardless of secondary meaning Living Individual Without Consent - §2(c)

A person cannot control use of his name, under §2(c), he may preclude unauthorized registration of that name

Question of one's freedom to use a name in connection with goods or services is an issue for "fair use" defense

o Incontestability (§15 and §33(b)) Aside from §33(a) benefits, incontestability makes presumption of registrant's right to

exclusive use conclusive (after 5 years of continuous use after registration) §15 sets out prerequisites for obtaining incontestability

Mark registered for 5 years and file affidavit that you have used mark for more than 5 years on type of goods

Cannot be a claim contesting the mark; and mark cannot have become generic Value - §33(b) sets out the rules concerning the scope and evidentiary significance of

incontestability Now you’re registration is more than just prima facie evidence of validity,

ownership and exclusive right to use. It is conclusive evidence of those things. Status does not make a weak mark strong; Owner must still prove likelihood of

confusion Park 'N Fly, Inc. v. Dollar Park And Fly, Inc. (1985) - Incontestability of P's mark meant

that the trial court should not have considered evidence that "Park and Fly" had become merely descriptive of off-airport parking services

Incontestability can be used not only defensively, but offensively in infringement suit (it takes away key defense of "merely descriptive")

Registration, in and of itself, means that a mark is not merely descriptive. Accordingly a "merely descriptive" challenge to a mark's incontestability status fails on its face

A "mere descriptive" challenge is not recognized in either §15 or §33(b)

Cancellation of registered mark allowed if challenge made within 5 years of registration

However, a mark may be challenged any time if it becomes generic Incontestability goes only to the validity of the mark, not to infringement. P

must still prove likelihood of confusion

  

Scope and Enforcement of Trademark RightsSunday, April 25, 20107:41 PM  Geographic Limits on Trademark Rights

o Geographic Limits on Common Law Rights: Tea Rose Doctrine The Tea Rose Rule - A senior user generally prevails over all junior users, EXCEPT that a

Jr. user who adopts a mark (1) in good faith and in a (2) remote market is treated as the senior user (with exclusive rights) in that remote market

Adopting a mark first does not protect the owner beyond the territory in which they do business against a remote, good-faith Jr. user

Who qualifies as good-faith Jr. user? Some courts apply rule that knowledge of sr. user makes good faith

impossible (but Restatement and others say knowledge is only one factor) If senior user advertised in remote market, then market might be non-

remote b/c reputation would have reached there United Drug Co. v. Theodore Rectanus (1918) - Rights in "Rex" for a patent medicines in

Louisville area given to local user who adopted six years after national user b/c the national user was the 2nd to use in Louisville market and the jr. user was in good faith

Jr. user does not act in good faith if it intends or expects to use immediately or later creates a likelihood of confusion with the Sr. user

Geographic scope of priority extends beyond the area in which prior user has actually used the mark if user’s association with the mark is known to prospective purchasers in other areas

Rights in a mark may be abandoned in certain areas but retained in others Rationales:

In the minds of consumers in the remote market, the mark is identified with the local jr. user, not the national senior user

Lack of notice/good-faith Competitive concerns

Depletion Worry about creating property rights in gross in trademarks

o Geographic Limits and Registered Rights Rule-Under the LA, there can be no such thing as good faith remote junior user b/c of

constructive notice and constructive use provisions Constructive notice provision conclusively establishes that Jr. users were not

acting in good faith (they could have looked in Federal Register) Remember--constructive notice takes effect at the date of registration (not of

application), but as of the 1990's, LA gives national constructive use retroactive to the date of application once registration is approved

Today, during that period, there is no such thing as a remote market for registered marks b/c of the legal fiction that all owners of registered marks are national users as of their application date

This is one of the key benefits of registration for non-ITU applicants Owner of a registered mark may not be sued for infringement by Jr. user should it

decide to enter remote market (Like United Drug was) Rule--It does not give the registered owner the right to enjoin the Jr. Remote user unless

the mark owner is actually in the market or is likely to enter the market If registered mark owner is not in the market or likely to enter, there is no

chance of likelihood of confusion, thus no infringement

Dawn Donut Co., Inc. v. Hart's Food Stores, Inc. (2d Cir. 1959) - Registered owner of "Dawn" for donut mix had valid rights in Rochester market, but it could not enjoin local retailer from using it b/c P had never made any donut sales in Rochester nor likely to enter

Dawn had some wholesale sales of donut mix in Rochester area, but that was not enough to enjoin retailer

Court found P unlikely to expand into Rochester b/c they hadn't done so in 30 years and their recent trend was geographic contraction

Court said that normally wholesale activity would lead to retail sales, but they hadn't done so in 30 years so they probably weren't going to

Test-If use of the mark by registrant and unauthorized user are (1) two sufficiently distinct and separate geographical markets, (2) with no likelihood that registrant will expand use into D's market, such that (3) no public confusion is possible, then the registrant is not entitled to enjoin the Jr. user's use of the mark

"Sword of Damacles" - The registrant need only move into the area to make an infringement claim

What-A-Burger, Va. v. Whataburger, Corpus Christie, Tx (4th Cir. 2004) - Texas WAB does not have to confront VA W-A-B unless and until they do business in VA

No statute of limitations under LA; Must rely on laches, Consider three question:

Whether owner knew of infringing use Whether owner's delay in challenging infringement was inexcusable or

unreasonable Whether infringing user was unduly prejudiced by owner's delay

Laches assumes the existence of infringement for an extended period of time prior to litigation

Just because you have a right, doesn't mean you have a right to a remedy

Clock does not begin ticking on mere violation of that right, but when infringement actually occurs (likelihood of confusion and owner has knowledge)

Mere knowledge that there might be an infringement claim sometime in the future is not sufficient to trigger period of unreasonable delay under estoppel by laches

National Ass'n for Healthcare Communications, Inc. v. Central Arkansas Area Agency on Aging, Inc. (8th Cir. 2001) - LA common law rights were limited to six counties because there was no evidence that CA would expand

Tea Rose Doctrine - Sr. user of a common law TM may not oust a Jr. user's good faith use of an infringing mark in a market where Sr. user's goods are not sold

Applies even if Sr. user has federally registered mark Exception to incontestability ITU applications constitute constructive use of mark, conferring right

or priority nationwide, but ALI believes Tea Rose still exists Market penetration must be significant enough to pose real likelihood of

confusion among area consumers; De Minimis market penetration irrelevant, Factors to consider:

$ value of Sr. user sales when Jr. User entered market Number of customers compared to state population Relative and potential growth of sales Length and time since significant sales

State registration confers statewide right to use mark in connection with registered services , subject to defenses such as good faith prior use in particular local markets

However, statewide rights do not confer statewide remedies Concurrent Registrations -

Common Law users who in good faith make concurrent use of TM in remote locations may continue to use in their respective locations

PTO will issue concurrent registrations granting federal registration of that mark to each concurrent user in their territory, but no single producer will get nationwide rights

State Registrations TX statute explicitly allows for statewide, but courts have been disinclined to

grant statewide rights, given the national effect of federal registration Burger King of Fl v. Hoots (1968) - State registration was nothing more than CL

rights for a specific location and did not confer statewide rights; Chain was allowed into Chicago

o The Territorial Nature of U.S. Trademark Rights\ Rule-TM rights in any particular country are governed by the law of that country's

soveirgn Rights in the U.S. are governed by U.S. Law, even if holder is a foreign citizen or

corporation Acquiring Rights (The Territoriality Principle) - If you want to acquire rights by use in the

U.S., you have to actually use in U.S. Person's Co., Ltd. v. Christman (Fed. Cir. 1990) - Japanese clothier had no

remedy against man who copied their mark for use in the U.S. because they had not made use of their mark in the U.S.

Court rejects argument that D acted in bad faith, because while his actions were shady, he did check on whether P had U.S. rights

Mere knowledge of foreign rights does not establish bad faith (bad faith has never been applied to Sr. user)

Cannot be premised on more existence of mark similarity or problematic intent to use similar mark in future

Bad faith has been found where foreign mark was famous or domestic use was primarily to block foreign user's expansion into U.S.

TM is not property (except in connection with business association) Absent some use of its mark in the U.S., a foreign mark holder

generally may not assert priority rights under federal law, even if a U.S. competitor has knowingly appropriated that mark for his own use

Note-Seems harsh, but balanced by the fact that foreign users have greater TM rights than U.S. users

Grupo Gigante v. Dallo & Co., Inc. (9th Cir. 2004) - Recognized the existence of an exception where a substantial number of users in a relevant area know of the foreign mark

When foreign use of a mark achieves a certain level of fame within the US, an absolute territorial rule might create confusion and fraud

Test-Determine whether famous mark exception applies Whether mark as acquired secondary meaning

Distinctive enough to warrant protection Defines the geographic area in which user has

priority, regardless of who uses mark first Court must be satisfied, by a preponderance of the evidence,

that a substantial percentage of consumers in the relevant American market are familiar with foreign mark

Other factors Whether D intentionally copied mark Whether customers of the American firm think

they're patronizing the foreign firm Famous Marks Doctrine

Article 6bis of Paris Convention designed to remedy hazards of "first to file" registration system

"Moral Hazard" - Somebody files before the person rightfully entitled to

Problems in international trade: Chinese nationals registering U.S. TM's then selling back

Intent of Famous Marks Doctrine ITC Limited v. Punchgini, Inc. (2d Cir. 2007) - Court does not find

famous marks doctrine in federal case law or any TM board rulings Opposite of 9th Cir. Decision in Gigante; Will have to be

settled by Congress or Supreme Court LA §44(b) & (h) effectively incorporate PC Articles 10bis and 6bis

Even if §44(b) does not extend to TM's, §44(h) does extend to unfair competition to create a federal right to famous mark protection coextensive with 6bis and 16(2) of TRIPS

International Bancorp LLC v. Casino de Monte Carlo (4th Cir. 2003) - Unregistered foreign mark protected without use in U.S. on a showing of TEST-(a) advertisement in U.S. and (b) provision of services to U.S. citizens

Because a mark is used in commerce only if it accompanies services rendered "in commerce," mere advertising of that mark does not establish mark's protectability, even though advertising is commerce Congress may regulate

Commerce clause can extend to foreign commercial transactions, not just exchange of goods

Promotions within the US alone do not established use in commerce; mark is used in commerce b/c US citizens purchase services sold by subject of foreign nation

Case is largely ignored by TTABo The Extraterritorial Enforcement of U.S. Trademark Rights

Statutory Basis for Infringement LA §32(1) holds liable in a civil action by a TM registrant "any person who shall,

in commerce, infringe a registered TM in a manner…" §45 defines commerce as all commerce that may be regulated by Congress

Court has often stated Congressional legislation will not extend beyond boundaries (without Congressional intent), but U.S. is not barred by any international law from governing the conduct of its own citizens in foreign nations as long as rights of their nationals are not infringed

Steele v. Bulova Watch Co. (1952) - Federal court had subject matter jurisdiction to give Bulova LA relief against American selling knockoffs in Mexico

Court cites 3 things that make jurisdiction appropriate: His activity had substantial effect in the U.S. (people were brining the

knockoffs for repairs in Texas) He was a U.S. Citizen He had no registration in Mexico

The court did not say whether all 3 of these things were necessary Even where there is subject matter jurisdiction, court still must have Personal

jurisdiction over user Vanity Fair Mills, Inc. v. T. Eaton Co., Ltd. (1956) - No fed jur under LA where activity in

Canada had substantial effect in the U.S., but the activity was by a Canadian citizen and done under a claim of valid Canadian rights

Cannot enforce TM against foreign nationals in foreign nation Conflict of Laws principle - the rights and liabilities of US citizens competing

with foreign nationals in their home countries are ordinarily to be determined by the appropriate foreign law

In TM infringement and unfair competition, the wrong takes place not where labels are affixed or goods are packaged, but where passing off occurs

Sterling Drug, Inc. v. Bayer AG (2d Cir. 1994) - Jurisdiction proper for district court to enjoin German owner of Bayer mark from foreign uses that would leak into the U.S. and create confusion with U.S. owner of the mark

Vanity Fair too demanding where only limited injunction sought; Court should balance the equities to reach an appropriate result protective of the interests of both parties

Limited injunctions with only those extraterritorial provisions reasonably necessary to protect against significant TM impairing effects on US commerce allowed

McBee v. Delica Co. (1st Cir. 2005) - Japanese clothing line not liable for infringement to Jazz musician for using his name only in Japan where no effect on US commerce resulted

Test-Substantial Effects Test - Requires evidence of impact within US, and impact must be of sufficient character and magnitude to give US reasonably strong interest in litigation

Protect the ability of American Consumers to avoid confusion Help assure a TM's owner that it will reap the financial and

reputational awards associated with having a desirable name or product Comity (reciprocity) considerations - Not questions of whether there is subject

matter jurisdiction, but prudential questions of whether jx should be exercised If D is foreign national, then comity not considered Vanity Fair considered analysis of whether D acted under color of

protection of foreign TM laws as part of basic jx question; This court does not see how scope of Congressional power

and intent to create jx turns on federal law Internet is accessible everywhere; Allowing personal jx b/c a website in a

foreign language is visible in the US is senseless Eviscerates limits on state's jx over out-of-state or foreign D's Something more needed, such as interactive features Slippery slope: Jx now would open up floodgates to all false

endorsement or TM cases involving a U.S. P and allegedly infringing sales abroad No inference of dilution or other harm can be made where U.S. citizens are not

exposed at all to an infringing product Confusion-Based Trademark Liability Theories

o Basic Rule-In order to succeed in Infringement suit P must prove: D engaged in unauthorized commercial use of P's mark

Did D use mark? Was use commercial?

Appreciable number of prospective purchasers are likely to be confused as to whether P produces or is affiliated with allegedly infringing goods/services

o Evolution of the Confusion Standard Gradual expansion of rights across product spectrum (from identical, to similar, to

almost anything with dilution); similar to geographic expansion from earlier Pre-LA rule was that companies had to be in direct competition for infringement

Borden Ice Cream Co. v. Borden's Condensed Milk Co. (7th Cir. 1912) - No relief for milk product co. against newer co. selling ice cream under same name

Where you don't sell a particular good, you haven't built up goodwill around it

TM law doesn't prevent confusion alone, it's designed to prevent diversion of sales

Depletion concerns: If injunction granted, no guarantee Sr. user will enter market

Slippery Slope: How far can this be stretched before de fact rights in gross are given for words?

Modern (LA) Rule - Use of a mark on related, but non-competing goods, is infringement if consumers are likely to be confused, mistaken or deceived (§32)

Fleischmann Distilling Corp. v. Maier Brewing Co. (1963) - User of "Black & White" on high end scotch had an infringement remedy against user of the mark on cheap beer

In this context, consumers take only a general impression from mark, and these products are closely related enough for association to be made

This would have failed under Borden even though there was evidence of intent to trade on other name

Two things we're worried about regarding customer confusion They might think whiskey maker has entered beer market They might think whiskey maker is affiliated with the beer

maker Rationales for recognizing infringement based on confusion without direct competition

Protecting the mark owner They don't control quality of product so if customers are confused it

could hurt reputation of products they actually make The rights holder may decide to enter secondary market at some point

Protecting customers Consumers rely on brand recognition when they make purchasing

decisions and they shouldn't be tricked A consumer who mistakenly buys what he thinks is a certain

producer's product has lost autonomy Punishing unjust enrichment

Even if consumers are getting high quality product, we don't like that infringer is profiting off name and reputation of mark owner

o The Actionable "Use" Prerequisite The unauthorized use has to be of the identical mark or something confusingly similar

Holiday Inns, Inc. v. 800 Reservations, Inc. (1997) - Summary judgment for plaintiff Holiday Inn reversed b/c D didn't "use" P's mark (1-800-HOLIDAY) when it sold hotel reservations at the phone number (1-800-H0LIDAY) which people frequently misdialed

We know from Dial-A-Mattress that 1-800 numbers fall w/in TM subject matter (D intentionally promoted his confusingly similar mark)

Court holds that D didn't use HI's mark (or a reproduction, copy, or colorable imitation) because they didn't advertise their number as 1-800-H0LIDAY, but as the actual number

Though intent is heavy if mark was adopted with intent to derive benefit from the reputation of P, and may alone be sufficient to justify confusing similarity, there still must be use of protected mark

1-800 Contacts, Inc. v. WhenU.com, Inc. (2d Cir. 2005) - P could not make TM infringement claim b/c they could not establish that D "used" their TM

Addition of "www & .com" and omission of spaces and hyphens transform TM into "public key" for websites

Company's internal use of a TM (like inaccessible web directory) is not actual use such that it would create likelihood of confusion in the public

"Pure machine linking functions" are not use of another's mark

There is no legal authority that pop-up ads appearing on computer screen must be authorized by mark owner

Allowing someone to profit from the goodwill and reputation of another via pop up ads does not violate the LA--Unjust enrichment and freeriding are not TM law

Rule-Use must be determined first, before reaching "in commerce" and confusion

Rescuecom Corp. v. Google Inc. (2d Cir. 2009) - Google's AdWords program and Keyword Suggestion Tool are considered "use" of P's trademark

Can't use P's TM to sell to P's competitors Different than 1-800 Contacts because not completely internal, public

could potentially be confused, but that's not decided here; 12(b)(6) overturned because there was use of P's TM

The unauthorized use must also be commercial Bosley Medical Institute, Inc. v. Kremer (9th Cir. 2005) - Use of P's mark as

website name where the website was devoted to criticism of P's services was not use that could subject D to liability for infringement

Unlike Holiday Inns, D is clearly using the mark, but he is not using it commercially

He has links to other website that carry advertisements, but that's insufficient

TM's only give right to prohibit use only so far as to protect owner's goodwill against the sale of another product against his. TM infringement protects only against mistaken purchasing decisions and not confusion generally

First Amendment protects non-commercial use if communicating ideas or point of view

Unlike PETA, this website was about TM, the one in PETA wasn't. Don't imply or suggest you're holding the domain name for

value Don't link to more than 30 commercial operation providing

goods or services (there was nothing for sale on D's site) Test-Does the Domain offer competing services?

o The Factors Analysis for Likelihood of Confusion Basic Test-Are an appreciable number of prospective purchasers likely to be confused?

Each circuit has it's own set of factors, all close to: How to handle factor list

Legal sufficiency of the evidence of meeting the burden for prima facie case

Used by the fact finder to determine persuasiveness Analysis in competing and non-competing goods

Competing goods and services--then it's a matter of confusion Sight, sound and meaning tests

Likelihood of confusion more confusing if non-competing Not identical marks; not identical markets

Virgin Enterprises Ltd. v. Nawab (2d. Cir 2003) - Virgin mark for electronics strong on both dimensions because the mark is arbitrary and advertising and consumer recognition were huge

In other cases, these factors can cut in opposite directions Famous but merely descriptive marks (KFC) Little known but fanciful marks (Zwibble)

Details of the Factors (Modern Confusion Anaylsis) Strength of the Mark -

Conceptual Strength - Where does it fall on Abercrombie spectrum? The closer it is to arbitrary, the broader protection it is shown

Broader protection to marks that serve exclusively as identifiers

Market Strength/Fame of the Mark - How strong of an association is there among consumers between mark and source in real world?

Relevant facts are similar to secondary meaning inquiry, but instead of looking whether threshold has been crossed, looking at extent of connection

Extent of advertising Consumer recognition Third-party uses Length of use Sales

Similarity of the Marks - If not identical, assess similarity of marks Three Aspects of Similarity

Sight Similarity in spelling or visual appearance

Sound Impression that hearing the mark makes Important w/ marks that become known through

word of mouth or radio advertising In Virgin, the courts disregard logo

differences b/c consumers were more likely to hear mark rather than see it

Meaning Example - "Cyclone" and "Tornado" for fencing are

similar marks This aspect can point away from similarity in cases

where marks are visually similar (CZ and EZ are different b/c EZ means "easy")

When dealing with foreign words, the doctrine of foreign equivalents tells us to translate words into English to assess meaning

Rule-Look at the uses in context that consumers will see them Sliding scale between similarity of mark and relatedness of the goods

(the more similar, the less related goods have to be) Side-by-side comparisons

May lead to reversible error May not ask whether there are discernible differences in

simultaneous viewing but whether differences are likely to be sufficiently memorable to dispel confusion on serial viewing

Sophistication of the Buyer Standard is confusion among reasonably prudent purchasers so we

need to know who we're dealing with and what level of prudence we expect from t hem

General standard is ordinary customers (includes unthinking, careless, and credulous)

There is a bottom limit to recognizable stupidity Important--We need to look who the customers are for the

particular products The more expensive the goods are, the more care

the ordinary consumer is expected to take Where relevant consumers are kids, courts expect

less care

Professional purchasers are expected to take more care

Relatedness, Likelihood of Bridging the Gap, Similarity of Methods of Trade Spectrum from Identical goods to Completely Foreign goods

The closer to identical, the stronger the likelihood of confusion

TRIPS calls for a presumption of confusion where identical mark is used on identical goods

Still must define what makes goods identical and go through multi factor approach

It's easier to make a relatedness argument when dealing with complementary goods (i.e. wine & cheese)

How likely is Sr. user to bridge the gap (and enter secondary market)? And how likely are consumers to think gap has been bridged?

McDonalds is most likely not going into dental industry The more similar the channels of trade used by the parties, the higher

the likelihood of confusion How are goods sold to consumers? And who are the

customers? Ex. Dawn Donuts - Difference between retail and

wholesale Courts give less credit b/c channels of trade change often

Bad Faith/Intent Relevant as leading to an inference of likelihood of confusion

If known that D adopted mark to benefit from confusion, D's denial that consumers are likely to be confused given less weight

Infringement can be proven w/o ever proving intent to confuse Presumption of intent

Actual intent is hard to prove Evdience of mark similarity and Jr. User's knowledge of Sr.

User's mark may trigger presumption of bad intent Actual Confusion

Not a required element, but highly probative of likelihood of confusion

Some courts say actual confusion required for damages, but not injunctive relief

Potential evidence Testimony of confused customers Survey evidence Inquiries about one company to the other company

While highly probative, not conclusive of likelihood of confusion Doesn't establish whether an "appreciable number" of

consumers are confused Might not answer if confusion goes to source of goods or

something else Family Marks Doctrine

McDonald's Corp. v. Druck and Gerner D.D.S., P.C., d/b/a McDental (N.D.N.Y. 1993) - Use of McDental infringed on McDonald's family of marks despite non-relatedness of the goods largely because of the "Mc" family and evidence of intent to trade on it

Test-To prove that a mark family exists, mark owner must show that it owns a group of marks having a recognizable common feature, where:

Group of marks is used and promoted together in such a way that public associates the common feature with the mark owner

Common feature is distinctive Time frame - Because relief is prospective, illogical to determine

likelihood of confusion retroactively; assess from present standbpoint McManis-Court's approach is incentive for larger company to

overwhelm another; Question should turn on whether public was confused at start

Prefix of "Mc" to any generic word does not automatically warrant protection, each allegedly offending use must be tested for likelihood of confusion

Confusion in Consumer Memory Libman Company v. Vining Industries, Inc. (7th Cir. 1995) - Where public does

not encounter the parties TM's together, existence of minor differences that would clearly distinguish them in a side by side comparison does not refute an inference of likelihood of confusion

Must determine the purchasing public's state of mind when confronted by somewhat similar trade names when presented individually

To insist on evidence is to commit error that actual confusion is required in a TM infringement case, which it is not, unless damages are sought.

o Similarity of Marks Side by Side Comparisons

May lead to reversible error

o Applying the Multi-Factor Test

Internet Private Label Goods Promotional Goods Section 2(d) Confusion

o Confusion Away from the Point of Sale Initial Interest Confusion Post-Sale Confusion

o Reverse Confusiono Indirect and Vicarious Theories of Infringement Liability

Non-Confusion-Based Trademark Liability Theorieso Dilution Protection

Historical Foundations Dilution Under the Federal Trademark Dilution Act of 1995 (§43(c)) Dilution Under the Trademark Dilution Revision Act of 2006 The Forms of Dilution

Tarnishment Blurring

Dilution Under the Lanham Act Section 2(f)o Protection Against Cybersquatting

Protection Under the Dilution Statute Anticybersquatting Consumer Protection Act ICANN Uniform Domain Name Dispute Resolution Policy (UDRP) The Relationship Between the UDRP and the ACPA

o Protection Against Counterfeiting Civil Liability for Counterfeiting Criminal Liability for Counterfeiting Protecting Against Counterfeit Imports

Permissible Use of Another's Trademarks

o Fair Use of Another's Trademark Descriptive Fair Use Nominative Fair Use

o Use of Another's Trademark on Genuine Goods: "First Sale" Doctrineo Use of Another's Trademark in Parody or Speech

  

Factor Tests in Likelihood-of-Confusion Analysis

First CircuitBoston Athletic v. Sullivan (1989), Keds Corp. v. Renee (1989)

1. Similarity of the marks2. Similarity of the goods3. Relationship between the parties' channels of trade4. Relationship between the parties' advertising5. The classes of prospective purchasers6. Evidence of actual confusion7. D's intent in adopting the mark8. Strength of P's mark

Second Circuit "Polaroid" FactorsPolaroid Corp. v. Polarad Corp. (1961), Playtex v. Georgia-Pacific Corp. (2004)

1. Strength of Sr. User's mark2. Degree of Similarity between the two marks3. Proximity of the Products4. Likelihood that prior owner will bridge the gap5. Actual Confusion6. Junior User's good faith in adopting its own mark7. Quality of D's product8. Sophistication of buyers

Third Circuit "Lapp" FactorsInterface Corp. v. Lapp (1983); KOS Pharmaceuticals v. Andrx (2004)

1. Degree of similarity between owner's mark and alleged infringing mark2. Strength of the owner's mark3. Price of the goods and other factors indicative of the care and attention expected of consumers when making a purchase4. Length of time D has used the mark w/o evidence of actual confusion arising5. Intent of D in adopting the mark6. Evidence of actual confusion7. Whether the goods, though not competing, are marketed through the same channels of trade and advertised through same media8. Extent to which targets of the parties' sales efforts are the same9. Relationship of the goods in the minds of consumers b/c of the similarity of function10. Other facts suggesting that the consuming pubic might expect the prior owner to manufacture a product in D's market, or that he is likely to expand into that market

Fourth Circuit "Pizzeria Uno" FactorsPizzeria Uno Corp v. Temple (1984); CareFirst of Maryland v. First Care (2006);

1. Strength of distinctiveness of mark2. Similarity of the two marks3. Similarity of the goods/services the marks identify4. Similarity of the facilities the two parties use in their businesses5. Similarity of the advertising used by the two parties6. D's intent7. Actual Confusion

Fifth CircuitRoto-Rooter Corp. v. O'Neal (1975); Scott Fetzer v. House of Vacuums (2004)

1. Type of mark allegedly infringed2. Similarity between the two marks3. Similarity of the products or services4. Identify of the retail outlets and purchasers5. Identify of the advertising media used6. D's intent7. Any evidence of actual confusion

Sixth Circuit "Frisch's" FactorsFrisch's Restaurants v. Elby's Big Boy (1982); AutoZone v. Tandy Corp. (2004)

1. Strength of P's mark2. Relatedness of the goods or services offered by the parties3. Similarity of the marks4. Evidence of actual confusion5. Marketing channels used by the parties6. Probably degree of purchaser care and sophistication7. D's intent8. Likelihood of either party expanding its product line using the marks

Seventh CircuitHelene Curtis Industries v. Church & Dwight (1977); Sullivan v. CBS Corp. (2004)

1. Degree of similarity between the marks in appearance and suggestion2. Similarity of the products for which the name is used3. Area and manner of concurrent use4. Degree of care likely to be exercised by consumers5. Strength of the complainant's mark6. Actual confusion7. An intent on the part of the alleged infringer to palm off his products as those of another

Eight Circuit "SquirtCo" FactorsSquirtCo v. Seven-Up Co. (1980); Forsty Treats Inc. v. Sony Computer Entertainment America (2005)

1. The strength of the owner's mark2. Similarity between the owners' mark and alleged infringer's mark3. Degree to which the products compete with each other4. Alleged infringer's intent to "pass off" its goods as those of the trademark owner5. Incidents of actual confusion6. Type of product, its costs, and conditions of purchase

Ninth Circuit "Sleekcraft" FactorsAMF, Inc. v. Sleekcraft Boats (1979)

1. Strength of the mark2. Proximity of the goods3. Similarity of the marks4. Evidence of actual confusion5. Marketing channels used6. Type of goods and the degree of care likely to be exercised by the purchaser7. D's intent in selecting the mark8. Likelihood of expansion of the product lines

Tenth CircuitSally Beauty Co. v. Beautyco, Inc. (2002); Australian Gold v. Hatfield (2006)

1. Degree of similarity between the marks2. Intent of the alleged infringer in adopting its mark3. Evidence of actual confusion4. Relation in the use and the manner of marketing between the goods or services marketed by the competing parties5. Degree of care likely to be exercised by purchasers6. Strength or weakness of the marks

Eleventh CircuitAmBrit v. Kraft (1986); Dippin' Dots v. Frosty Bites Distributions (2004)

1. Strength of the marks2. Similarity of the marks3. Similarity of the products4. Similarity of retail outlets and purchasers5. Similarity of advertising media used6. D's intent7. Actual Confusion

D.C. CircuitPRD of DC, MD and VA v. PRD of Section MD and VA (2004)

1. Strength of senior user's mark2. Degree of similarity between the two marks3. Proximity of the products4. Likelihood that the prior owner will bridge the gap5. Actual confusion; the sophistication of buyers

6. Jr. user's good faith in adopting its own mark7. Quality of D's product

Federal Circuit "DuPont" FactorsIn Re I. Du Pont de Nemours (1973); Palm Bay Imports v. Veuve Clicquot Ponsardin Maison Fondee En 1772 (2005)

1. Similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression2. Similarity or dissimilarity and nature of the goods/services as described in an application or registration or in connection with which a prior mark is in use3. Similarity or dissimilarity of established, likely-to-continue trade channels4. Conditions under which and buyers to whom sales are made, (i.e. "impulse" vs. careful, sophisticated purchasing)5. Fame of the prior mark (sales, advertising, length of use)6. Number and nature of similar marks in use on similar goods7. Nature and extent of any actual confusion8. Length of time during and conditions under which there has been concurrent use without evidence of actual confusion9. Variety of goods on which a mark is or is not used (house mark, "family" mark, product mark)10. Market interface between applicant and the owner of a prior mark11. Extent to which applicant has a right to exclude others from use of its mark on its goods12. Extent of potential confusion, (i.e. whether de minimis or substantial)13. Any other established fact probative of the effect of use