TRADEMARK

• A trademark is a symbol used by a person in commerce to indicate the source of the goods and to distinguish them from the goods sold or made by others.
• Lanham Act: federal trademark statute
• Two ways to get a legally recognized trademark:
  • through common law
  • through federal statute registration scheme

SUBJECT MATTER

Names, symbols, logos, slogans, phrases, "trade dress," certifications, collective marks, product configuration/design that distinguish goods from those manufactured or sold by others.

• Source Identifying Function
  • To be a trademark, the mark must be used as a source identifier; it must distinguish the goods of the mark's owner from the goods of others
  • The mark need not identify the mark owner
    • Ex. "Huggies" can be a mark for diapers without consumers knowing that the Kimberly-Clark Corp. makes them
  • TEST for whether mark acts as a source identifier:
    • The symbol must create a separate and distinct commercial impression that identifies the source of the merchandise to customers; it must differentiate the product from others in the market
• Trade Dress
  • The design and appearance of the product together with the elements making up the overall image that serves to identify the product presented to the consumer
    • includes the design of the packaging of the product
  • Two Pesos v. Taco Cabana: P sought trade dress protection for colorful Mexican restaurants. Ct. holds this protectable trade dress b/c it is inherently distinctive
    • if trade dress is inherently distinctive, trade dress will be protected
      • can include size, shape, color, color combinations, texture, graphics, etc.
    • if trade dress is descriptive, must look for secondary meaning for the protection
  • Color, Fragrance, Sounds
    • Qualitex Co. v. Jacobson Products Co.: Dry-cleaning press pads w/ distinctive green-gold color. Ct. held this was protectable, but only upon a showing of secondary meaning. Color, over time, could signify a brand.
    • Functionality prevents odor and taste from being trademark
      • unless it's for something that doesn't require odor for functionality, like bubblegum scent for industrial lubricant.
  • Walmart Stores v. Samara Bros: Product design (i.e. children's clothes) can only be protected if it has secondary meaning
• Collective Marks
  • A trademark or service mark used by members of a group or organization
  • Includes marks indicating membership in a union, an association, or other organization
  • Used to distinguish the goods and services of members of the group from nonmembers
• Certification Marks
  • Symbol used by a person other than its owner to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person's goods or services
    • Used to certify to potential purchasers that their goods or services meet the standards set by the mark's owner
  • Ex. The Underwriter's Laboratory (UL) mark indicates that products bearing the UL mark have been tested and approved by UL
  • Owners of certification marks must maintain control over its use or risk losing its certification mark status

DISTINCTIVENESS

To qualify as a mark, a symbol must be distinctive -- it must identify and distinguish the goods or services (if a symbol is not distinctive, its use by others would not cause confusion as to source, so protecting it would not serve the purposes of trademark law!)

Claimed marks fall into three categories of distinctiveness:

1. INHERENTLY DISTINCTIVE MARKS

• A mark is inherently distinctive if it "inherently signals to the potential buyer that it designates the source of the product rather than some other type of information."
• Because the mark is inherently distinctive, it is protectable without showing that it has acquired distinctiveness in the public mind.
• Three categories:
  • Arbitrary
    • an arbitrary mark is an existing symbol chosen to serve as a mark that has no logical relation to the goods
    • Ex. Apple for computers
  • Fanciful
    • A fanciful mark is one devised to serve as a mark that does not name or describe the product
    • Ex. Kodak for film (made up name)
  • Suggestive
    • Suggestive marks suggest, but do not describe, the nature or characteristics of the product
    • Ex. Base Camp for refrigerators and Noah for zoological garden
    • Labrador Software v. Lycos: A picture of a Labrador retriever was held descriptive for Internet search engine services. Ct. said the image of the dog does not literally describe using a database to help users find relevant web pages, but the retriever is a common industry metaphor for such information retrieval services.

1. MARKS THAT ARE CAPABLE OF ACQUIRED DISTINCTIVENESS

• These marks can obtain protection only after they acquire "secondary meaning"
• A mark acquires secondary meaning when, "in the minds of the public, the primary significance of the mark is to identify the source of the product rather than the product itself."
• Ex. Coca-Cola (term is descriptive because it describes a cola drink derived from the coca plant. But name has become so well known as a mark that the primary significance of Coca-Cola is not as an identifier of source--to distinguish Coca-Cola beverages from others such as Pepsi)
  • Merely Descriptive Marks
    • identifies a characteristic or quality of the goods or services
    • Whether a mark is descriptive is judged by its meaning to the likely purchaser of the relevant goods or services
    • Ex. of marks held to be descriptive: Beer Nuts for nuts with salt, Tender Vittles for cat food, Trim for nail clipper, Vision Center for optician services, World Book for encyclopedia
  • Primarily Geographical Descriptive Marks
    • Not every geographic term is primarily geographically descriptive. Question is whether the consuming public is likely to assume that the named location is where the product originated.
    • Ex. "Alaskan" used as a designation for water (consumers are likely to interpret the water comes from Alaska) BUT, "Planet Jupiter" for same water is NOT geographically descriptive because public would not think the water came from Jupiter.
  • Primarily a Surname
    • Has to acquire secondary meaning before its protectable
    • Ex. of Surnames that have acquired secondary meaning: McDonald's and Sears
  • Deceptively Misdescriptive Marks
    • Under the Lanham Act, "deceptive" marks are not protectable, but "deceptively misdescriptive" marks are if they acquire secondary meaning.
    • Ex. Farmer's Crimson Apples (when the apples are not red). It would be deceptive, and thus not protectable, if the description affects whether a buyer would decide to buy the apples. But, if the misdescription is not material to potential buyers, the mark is protectable if it acquires secondary meaning. So here, if buyers come to regard Crimson primarily as a source indicator rather than a description of the apples.
  • Color
    • A color may be protected as a trademark, but has to acquire secondary meaning--if color is used consistently over time, the consuming public might come to associate that color with one source
    • Ex. Greenish Goldish iron board covers
    • Careful--color can be functional! You're not going to be able to trademark orange for construction cones.
  • Product Design
    • Think trade dress
    • Wal-Mart Stores v. Samara Brothers: P claimed trade dress protection in the design of a line of children's clothing arguing the design was inherently distinctive, and therefore protectable, without showing secondary meaning. Ct. differentiated between trade dress that is the design of the product itself and trade dress that is product packaging. Because consumers are likely to view distinctive product packaging as an indication of source and are not as likely to regard a distinctive design as an indicator of source, a product design can be protected as trade dress only on a showing of secondary meaning.

1. GENERIC TERMS

• If potential buyers understand a term to refer to a category of goods or services, as opposed to the source of the product, the term is generic and NOT protectable as a mark.
• Can be a mark that is already generic (like "bar" for a bar or "restaurant" for a restaurant), or can become generic through widespread use (like "Frisbee)

Professor Johnson's Scale of Distinctiveness:

• Fanciful -- you're golden
• Arbitrary -- you're silver
• Suggestive -- you're bronze
• Merely Descriptive -- you're going to have to fight for protection by showing acquired secondary meaning
• Generic -- you're dead

UNPROTECTABLE SYMBOLS

• Classes of symbols that are unprotected as marks
• Likely to cause confusion with existing marks
• "The very purpose of a mark is to distinguish the source of goods and services. A mark is not protectable if it is likely to cause confusion with a prior mark."
• Likelihood of confusion is determined by factors such as:
• • Strength of marks
  • Degree of similarity
  • proximity of the products in the marketplace
  • actual confusion
  • defendant's good faith in adopting its mark
  • the care and sophistication of the relevant consumers
• Functional matter
• • Trademarks DO NOT protect functional matter
  • 3 ways a feature can be deemed functional:
  • • It is essential to the use or purpose of the device; or
    • It affects the cost or quality of the device; or
    • Its exclusive use by one seller would put competition at a significant nonreputation-related disadvantage.
• Deceptive Matter
• • Deceptive matter is NOT protectable
  • To qualify as deceptive, the matter must be material to a potential buyer's decision (i.e. if the misrepresentation makes no difference to consumer, protection of the mark does not harm them)
• Primarily Geographically Deceptive/Misdescriptive Marks
• • A "geographically deceptively misdescriptive mark" is NOT protected, even if it does not rise to the level of deceptive
  • Ex. Cheese from Illinois labeled "Wisconsin Cheese"
• Marks Suggesting False Connection
• • Marks that "falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols" are NOT protected
  • True even if the consumers do not deem the connection material in their decision to buy
• Immoral or Scandalous Matter
• • is NOT protected as a mark
  • Matter is scandalous if it is shocking to the sense of decency and offensive to moral feelings--to be judged by a substantial composite of the general public in the context of contemporary attitudes.
  • There is little case law determining what is immoral
• Disparaging Marks
• • Matter that may disparage "persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute" are NOT protected
  • When the term references a group, its meaning is to be judged not from the standpoint of the public at large, but rather, from the view of the group referenced (from Redskins name case)
• Government Symbols
• • Matter that consists of or compromises the flag or coat of arms or other insignia of the U.S. or any State or Municipality, or foreign nation is NOT protected.
  • Does not bar portraying the Capitol Building, Statute of Liberty, or incidental use of the flag within a mark.
• Names or Likenesses of Individuals
• • Cannot use name, portrait, or signature of a living person except by written consent.

OBTAINING PROTECTION

• Trademark rights begin when the mark is used and last as long as the owner keeps using the mark
• Trademark rights are keyed to the purpose of trademark law--use of the mark to distinguish the seller from others
• The symbol becomes a mark upon bona fide use of the symbol as a mark in commerce in connection with the relevant goods or services --does not depend on registration
• Trademark Searching
• • A putative mark is not protectable if it is likely to cause confusion with a mark that was already in use
  • If someone is already using a similar mark for similar goods or services (or if the mark dilutes a famous mark) the existing mark has priority
  • The most common problems for would-be trademark owners are:
  • • choosing a descriptive term; and
    • choosing a symbol that is not likely to cause confusion with an exiting mark
  • Similarity alone does not bar protection, rather, it requires similarity that is likely to confuse
• Acquisition of Trademark Rights
• • A trademark must be on the goods when they are sold or transported
  • • Can be on the goods themselves, containers, associated displays, tags, or labels
  • Service marks must be used in displays or advertising, and the services covered must be rendered in commerce
  • If goods or services are sold before the use of the mark--subsequent ownership of the mark is not forfeited, rather it simply delays the time of the ownership
  • Sales without the mark do not forfeit the mark--but they could count against the owner in an infringement analysis
  • The use must be a "bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in the mark."
  • Courts look to the totality of the circumstances--including continuing efforts to establish the mark as a source identifier.

PRIORITY & OWNERSHIP

Ownership

• Owner is person who controls first use of mark for relevant goods or services
  • Employer generally controls (even though employees or independent contractors use the mark)
  • Parties may specify right to trademark in contract
  • Ownership questionable when used in venture without clarifying respective rights
• Authorship irrelevant
• Only one owner per trademark (SOURCE)
• To establish rights: must use in commerce!

Priority

• Same mark cannot be used on same type of goods/services in same market because no longer identifies source
• • ACTUAL USE required to support an application for registration
    • Priority date = date of use, not filing of application
    • Registration is not required to establish priority
  • CONSTRUCTIVE USE established by date of intent-to-use application if it results in subsequent registration upon filing of statement of actual use (see "Registration" below)
    • Applicant must attest that no one else had right to use same/similar mark on similar goods/services
  • ANALOGOUS USE is judicial doctrine which deems the mark sufficient to establish the mark as indicator of goods/services to the public
  • • Required showing is higher than for actual use
  • Descriptive marks protectable only after acquiring secondary meaning!
• Geographic Limitations
• • Common Law = use of mark establishes trademark rights/priority to the owner only in geographic area in which mark is actually used
  • Lanham Act = establishes nationwide priority for registered marks
  • • unregistered marks retain priority in geographic area
• Priority: First to use in commerce wins
• Questions to ask in a priority dispute:
• • Use: Did he make use of the TM in commerce (or register w/intent to use in commerce)?
  • Where did he use the mark?
  • • Priority is measured with respect to a given geographical market
    • If mark is registered, you get nationwide protection except where people are already using the mark (i.e. UND logo and Notre Dame Logo)
  • In what products and/or in what goods?
  • • TMs do not extend to the universe of all goods, but rather to goods you are going to sell
    • NO confusion if the marks are in different categories
    • Zazu Hair Designs v. L'Oreal: L'Oreal was sued for using a mark for its hair products that was already used by a hair salon. L'Oreal won on the grounds that the mark was not in extensive use. Today, with an intent to sue standard, L'Oreal would have lost.
  • How similar are the marks?
  • Is there inherent or acquired distinctiveness?

Assignment

• If trademark is sold, must be sold with goodwill of business
• • Courts look to whether transferee will deliver substantially the same product as to not mislead consumers
  • If trademark is sold for use on completely different goods/services, consumers may be misled
• If trademark is licensed to numerous sellers with different standards for goods/services, trademark fails for function
• If invalid assignment/license, court may hold assignment invalid or cause abandonment of the mark

Abandonment and Loss of Rights

• Discontinued use with intent not to resume
• • Intent governs (state of mind) - courts look to relevant facts and circumstances
  • Failure to use alone is not abandonment
  • Nonuse for 3 consecutive years is prima facie evidence of abandonment
  • • Use of in promotional activity is insufficient to constitute use
    • Rebutable with evidence of continuing intent to use
    • • Must have specific plan to use in reasonably foreseeable future
      • May have contingencies to plan, such as financing, market research, etc.
• Mark becomes generic
• • Public interprets the trademark not as source identifier, but name for category of goods/services
  • • Ex. Frisbee
• Lost significance (as indication of source)
• • Trademark assigned without associated goodwill
  • Uncontrolled/"Naked" licensing
  • • Need to retain contractual power or control over quality of products
  • Permit widespread infringement (used by legitimate sellers and bootleggers)

Prosecution & Registration

• Trademark rights do not depend on registration--but there are a number of advantages to registering
• Cannot register immoral, deceptive, scandalous, or marks which will cause confusion with existing marks
• Applications require fee, application, verified statement, and requisite specimens of mark as used
• Two types of registration:
• • Use applications (mark already in use);
  • • verifies ownership of mark
    • the mark is in use in commerce
    • no other person has right to such mark in identical form or near resemblance
    • Note: a similar mark may be used on similar goods or service by sellers in different geographic registrations
  • Intent-to-use applications (must have bona fide intent to use in commerce, not simply reserving option to use)
  • • Intent to use filing date may be used as priority date against competing trademarks
    • Applicant verifies entitlement to use; before use no enforceable mark
    • Must file statement of actual use upon trademark in commerce
• Advantages to registering:
• • Filing application is constructive use (nationwide effect) for priority against similar marks (ex. Notre Dame vs.. UND use of "ND" symbol)
  • Certificate of registration is prima facie evidence of validity of registered mark/registration of mark
  • Infringement remedies are greater
  • Validity of registered marks "incontestable" after five years of continuous use
  • Registration is constructive notice of claim of ownership
  • Broader protection that unregistered marks for unauthorized importation
  • Can use R with a circle around it symbol ration than just TM with unregistered marks
  • Mark will show up in trademark searches
• Mark is published in the Official Gazette of the Patent and Trademark Office
• • Within 30 days of publication, anyone who believes he would be damaged by registration may file an opposition in the USPTO
  • • Opposer must have "real interest" in outcome, not just "mere intermeddler"
  • If mark is registered, damaged party may bring cancellation proceedings
  • If more than 5 years after registration, grounds for cancellation are limited
• Incontestability--after registered mark is in continuous use for 5 consecutive years after registration, mark owner may file affidavit of incontestability with USPTO
• • Other parties in litigation may not challenge validity, registration, or ownership of the mark (or merely claim descriptive or that mark is confusingly similar)
  • Can still make claims based on generic, functional, abandonment, fraudulent registration, immoral, deceptive, scandalous, disparaging, or equitable principles such as estoppel, laches, or acquiescence
  • Park n Fly v. Dollar Park n Fly
  • • RULE: all an incontestable status gives a TM holder is the right to be protected from challenges on the grounds that the mark lacks secondary meaning
• Registrations remain effective for 10 years
• • unlimited renewals every 10 years
• Appeals:
• • Application refusal, and results to interferences, oppositions, applications for concurrent use, and cancellation proceedings may be appealed to Trademark Trial and Appeal Board (TTAB)
  • May appeal adverse decision of TTAB to federal district court (reviews de novo) or the federal appellate court (decision on the record)

INFRINGEMENT

Elements of an action for infringement of registered trademark

(1) Ownership of valid registered mark

(2) The alleged infringer used

(3) In commerce

(4) The mark or a similar symbol

v Likelihood of Confusion

Ø Use must be “likely” to cause confusion, mistake or deceive, but not “ actually” confuse.

Ø B/c the “property” the owner has is the right to exclude others from using symbols that are likely to cause confusion as to source of goods/services.

v Necessary Showing of Confusion

Ø Courts require probability of confusion, not just slight possibility – judged from point of view of reasonably prudent purchaser.

§ Question whether 2 products in same or related markets have similar marks.

§ Also check to see if there is implicit sponsorship (reverse confusion).

Ø Implied Endorsement

§ The confusion may not be that the mark owner actually made, sold, distributed the goods, but that the mark owner simply endorsed them.

§ Note that a lot of marks don’t require authorization for use, even if it is famous – only infringement where it is likely to cause confusion.

Ø Initial interest confusion

§ Doctrine finding liability when defendant’s use of the mark may attract the attention of potential consumers looking for the products associated w/mark, even though confusion is dispelled before a sale is completed.

· Kodak is advertised as on sale, arrive at store and there are no Kodak cameras available. Consumers will likely buy the “other” cameras b/c they were mislead by the use of the Kodak mark in the advertising and spent time and money coming to the store.

Ø Post-Sale Confusion

§ Applied when the likely confusion occurs after the sale and the party confused is not the buyer.

· Sell fake Rolex for cheap – buyer knows it isn’t Rolex, but third party person mistakenly believes it is.

Ø Reverse Confusion – is confusing.

§ Miraclesuit was name brand but small company in swimwear. Miracle Bra was big in the lingerie market – but much bigger company. When they expanded into swimwear and used the same mark, Miraclesuit can now be perceived as just a knock off of the Miracle Bra swim line. As first users in the swimsuit market, Miraclesuit has first priority to there is liability for reverse confusion.

v Factors For Determining Confusion (guide, not exhaustive list)

Ø Strength of Plaintiff’s mark

§ Refers to its distinctiveness (along spectrum of generic, descriptive, suggestive, arbitrary) and to its commercial strength (how strong it is in relevant market)

Ø Degree of similarity between the marks

§ Infringement doesn’t require use of Plaintiff’s mark; use of a similar mark may suffice. Courts look to the sight, sound and meaning of the 2 marks in assessing similarity. Other factors: which entered the market first, use of additional marks, how they are displayed.

Ø Proximity of the products in the marketplace

§ The more similar the goods and services (and their marketing) more likely the confusion.

· Are parties selling the same thing? Using the same types of media for marketing? Target the same buyers? In same geographical area?

Ø Likelihood prior owner will bridge the gap

§ Courts recognize right of natural expansion where P might be reasonably expected to expand

Ø Actual Confusion

§ Not required – but awesome evidence. Use a small group/segment of the public and show their confusion, then it is easier to believe that many people across nation might also be confused. Thus establishing “likely.”

Ø Defendant’q s good faith in adopting its own mark

§ Just note, this is not a defense, but where it can be shown it will be factored into decision.

Ø Quality of Defendant’s Product

§ It is no defense for defendant to show that her product was just as good, or better than the mark owner’s product

Ø Care and Sophistication of the relevant consumers

§ Smarter people and those who can read are likely to be less confused – so courts also consider how sophisticated the “target market buyers” are.

v DEFENSES

Ø Invalidity of Mark

§ Unregistered or registered but has not become incontestable, D may raise any of the grounds for protection. This can be raised if mark is immoral, deceptive, or scandalous.

§ All marks – incontestable or not – subject to the following:

· (1)fraudulent registration

· (2) abandonment

· (3) use of mark to misrepresent the source of the goods or services on or in connection with which the mark is used

· (4) fair use of mark by defendant as an individuals name or as descriptive term to describe the goods or services of such party, or their geographic origin.

· (5) rights of a junior user of a mark subsequently registered by a senior user as above

· (6) use of mark to violate antitrust laws

· (7) Mark is functional

· (8) equitable principles, including laches, estoppels, and acquiescence.

• 1-800 Contacts v. WhenU.com
• WhenU used proprietary software to create pop-ups advertising 1-800 Contacts’competitiors when people were visiting their website
• • 1-800 in alleging that this was infringing on their trademarks by including 1-800’s website address (which is similar to the trademark) in their software
  • Rule
  • • Including a website address that is nearly identical to a trademark in an unpublished director does not trigger trademark infringement
    • Neither does causing popup ads to appear
• Likelihood of Confusion (Test from Sect. 43 (a) of the Lanham Act)

o  Source Confusion: confusion as to the source of the product

o  Relationship/Affiliation Confusion: confusion about the relationship of D to P's goods

o  Post-Sale Confusion: people making a negative association with the product after the sale

o  Initial Interest Confusion: the TM makes consumers lured to a particular place/product

o  Reverse Confusion: small TM owners infringed upon by big companies. Is actionable if P can

o  show that D adopted the same TM in the same good.

• AMF Incorporated v. Sleekcraft Boats: Ct issed 8 factor test and concluded that, give that the marketsoverlap, there was likelihood of confusion even if there was no evidence of actual confusion. 8 FactorTest:

o  Strength of the mark: Where is the mark on the inherent distinctiveness scale? Is there secondarymeaning?

o  Similarity of the mark: Total commerical impression, evalutated w/ sight, sound, and meaning

o  Type of goods

§  If the marks are identical and the goods are very similar, then there is infrigement

§  If the marks are identical and the goods are unrelated, there is no infrigement

§  If it's in the middle, must do other elements of the test

o  Proximity of the goods

o  Marketing channels used: How are goods sold? Will the way they are sold make it more/less likely that consumers will be confused?

o  D's intent in selecting the mark: If there is an intent to deceive, this is a powerful factor in favor of finding infringement.

o  Likelihood of expansion of product lines: How likely are these marks to come into conflict w/ one another in the future?

o  Evidence of actual confusion

False Designation of Origin

 -§ 43 (a)(1) of the Lanham Act provides a cause of action for use of symbols or false designation that are likely to cause confusion about the  origin, sponsorship, or approval of goods, services, or commercial activities.

 -A common use of §43(a)(1) is to bring an actioon for infringement of an unregistered trademark. The basic standard is likelihood of  confusion, and an unregistered mark nevertheless can be a very strong trademark.

 -"The origin of goods and services" cannot be read too broadly.