Source: https://www.digitalbusinesslawgroup.com/trademark.html
Timestamp: 2019-04-19 01:17:11+00:00

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Trademarks are yet another form of intellectual property (IP) and in the U.S. protection is provided both by Federal statute (i.e. the Lanham Act) and state statutory and common law (see What Law Controls?). Under the Lanham Act, a seller of goods and services must register with the U.S. Patent and Trademark Office (USPTO) in order to get the desired protection. The registration with the USPTO can be done completely electronically and the agency's website provides many useful tools for conducting trademark searches, as well as providing other helpful information that guides the registration process. That said, the casual user should be forewarned that there is a "hierarchy of complexity" with respect to various Federal IP registrations, with copyright residing at the low end of the complexity hierarchy and patents at the high end. Trademark registration falls somewhere in between.
Trademarks are generally distinctive symbols that sellers use to identify their goods or services. The initial purpose was to provide "clarity in the marketplace" (see History) by allowing consumers to readily recognize (via the mark) the source of the goods. While trademarks continue to serve this purpose, today they also constitute an important part of a "business/corporate identity strategy" as well as playing a significant role in marketing campaigns and brand building initiatives. The explosive growth of the Internet has unfortunately had the side of effect of providing incentives for the unscrupulous to "hijack" and otherwise abuse the exclusive rights of trademark holders through insidious, and often difficult to detect, schemes. Where appropriate this tutorial will illustrate the pitfalls that the unsuspecting and unwary may encounter.
Unlike copyright, which attaches when the expression is captured in a fixed and tangible medium (see Copyright Tutorial), a trademark must be "used in commerce" in order for the "bundle of rights" to attach. In general, the holder gets an exclusive right to use to mark for the type of good and services under which it is registered, and the right to bring a cause of action against sellers that use marks that are "substantially similar." This latter point gives rise to complexities when attempting to select a mark. It is not sufficient that the mark be unique, it must also not be "substantially similar" to an existing mark in its class. As discussed in other sections of this tutorial, one way to mitigate this problem is to use a completely arbitrary and "made up" mark (e.g. analogous to the naming conventions, and trademark selections, of many so called "Web 2.0" companies). While this does not eliminate the legal issue (i.e. a search is still required) it does go a long ways towards reducing the risk.
As mentioned briefly in the Introduction trademarks are controlled by both a Federal statute and by state statutory and common law. The law of unfair competition is the mechanism by which states' provide common law protection of trademarks. State statutes obviously differ by jurisdiction but many states have adopted a version of the Model Trademark Bill (MTB) or the Uniform Deceptive Trade Practices Act (UDTPA). The MTB provides for registration of trademarks while the UDTPA does not.
The answer to the question posed above (regarding what law controls) is that it depends under what theory an action is brought. Under a theory of unfair competition state law would control. Under an infringement theory based on the Lanham Act federal law would control. Keep in mind that the Lanham Act was enacted under the powers vested in Congress by the U.S. Constitution's "commerce clause" (see History). Therefore, protection under the Lanham Act only applies when there is some interstate commerce involved. Many (but not all) businesses on the Internet do business nationally, and therefore this requirement is presumably readily met. But, merely having a website wherein goods or services are only sold within a single jurisdiction is probably not sufficient.
Also, keep in mind that a plaintiff must get jurisdiction in order to bring an action. If the plaintiff is in Florida and the prospective defendant is in California then either the "minimum contacts" requirements of International Shoe must be met (see Jurisdiction) or jurisdiction must be obtained, in the alternative, under the federal statute, if applicable (see below). While this is not an insurmountable hurdle, it is always important to consider jurisdictional issues with respect to actions that originate on the Internet. Worst case, in the hypothetical above, the plaintiff could get jurisdiction in California, but this has its own set of problems principally related to various transaction costs. However, under the ACPA (see Internet Implications), which amended the Lanham Act, there are several plaintiff "jurisdiction friendly" provisions that substantially ease this burden.
By and large the two systems of law (i.e. state and federal) are complementary and readily coexist under the historical framework of American intellectual property jurisprudence. However, the complexity goes up significantly when contemplating causes of action that have international implications; most of these are simply out of reach for all but the largest corporations.
There are a number of defenses that might be available to a defendant, obviously depending on the factual context within which the plaintiff brings the action. These defenses include: genericide, abandonment, non-trademark use, functionality, parody and fair use. Each defense is covered below. Some of these were briefly mentioned in the Infringement section.
Bayer Co. v. United Drug Co. (S.D.N.Y. 1921)), "cellophane" (see DuPont Cellophane Co. v. Waxed Products Co.(2d Cir. 1936)) and "thermos" (see King-Seeley Thermos Co. v. Aladdin Industries (2d Cir. 1973)) have all been held to be generic.
"[E]ven when created words for new products have become strong marks, the public’s pervasive use of these marks sometimes creates a real risk that their distinctiveness will disappear, a process Professor [J. Thomas] McCarthy terms ‘genericide’ . . . ."
When a mark has become "generic" the primary rationale behind the defense is one of necessity. It simply becomes too difficult for a competitor to use a substitute. For example, the substitute for "cellophane" would be "regenerated cellulose in thin transparent sheets used especially for packaging.
Comments: The first paragraph above is a "use or lose it" standard. The rationale is likely based on the fact that a trademark is a type of "property" and, as in property law in general, there is bias in favor of use. The second paragraph speaks to the status of a mark that has fallen into genericide. The bottom line is that in order to preserve a mark there must be a consistent (albeit minor) use of the mark in commerce and the holder must not allow the mark to become generic.
Infringement is only triggered when a mark is used as a mark. An example of non-trademark use in the Internet context is the WhenU.com case discussed in the Infringement section. Another example is the use of a mark for journalistic purposes (see The New Kids On The Block v. News America Publishing, Inc.(9th Cir. 1992)). The latter use is sometimes referred to a "nominative." A mark used as a title for a song has been held to be non-trademark use (see Mattel v. MCA Records (9th Cir. 2002)). The non-trademark use of a mark is a kind of "fair use" (see below), but the trademark doctrine invokes this term in a much more limited sense than its counterpart in copyright doctrine. As is often the case, things are not what they seem in the esoteric fringes of intellectual property law.
The functionality doctrine is a judicially created rule that predates the Lanham Act. Under this rule, no trademark rights may be claimed in a product's functional shapes or features. See Epic Metals Corp. v. Souliere, 99 F.3d 1034, 1038 (11th Cir.1996)("A products features are protectible as trade dress if they are primarily non-functional."). This proscription serves two purposes. First, by ensuring that competitors remain free to copy useful product features, it prevents the trademark law from undermining its own pro-competitive objectives. Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 164 , 115 S.Ct. 1300, 1304, 131 L.Ed.2d 248 (1995). Second, the functionality doctrine prevents the trademark law from conflicting with the patent law by eliminating trademark monopolies of potentially unlimited duration on a product's utilitarian features.
The courts are adamant in maintaining the proper demarcations between the various IP doctrines and are sensitive to the strong monopoly rights conferred on patent holders. Thus, they do not allow "willy nilly" the circumvention of the rigorous process required of applicants in order to establish patent rights, and will not confer such rights through the "back door" of copyright or trademark.
For reasons similar to why parodies are allowed as a type of "fair use" under copyright doctrine, trademark doctrine likewise allows the use of marks in such expressions and commentary (note, however, that it is not "per se" given the "fair use" label under trademark doctrine as discussed below). It is clear (again analogous to copyright) that a commentator must be allowed to "evoke the mark" in order to poke fun at it. It is a defense rooted in the first amendment and the long established tradition of parody in American pop culture. Trademark rights confer a kind of monopoly on the use of symbols and there are limits that the law imposes in order to protect other preferential rights. An example of this is a case the the 9th Circuit called "Speech-Zilla meets Trademark Kong" (Mattel v. MCA Records (9th Cir. 2002)), proving that judges have also been infected by the "hipness" bug. The Mattel court upheld the use of "Barbie" in a song that apparently did not hold the "doll" in such high esteem as Mattel the corporation would have preferred. The court held that this was "nominative fair use."
Although Zatarain's term "Fish-Fri" has acquired secondary meaning in the New Orleans geographical area, Zatarain's does not now prevail automatically on its trademark infringement claim, for it cannot prevent the fair use of the term by Oak Grove and Visko's. The "fair use" defense applies only to descriptive terms and requires that the term be "used fairly and in good faith only to describe to users the goods or services of such party, or their geographic region." (quoting U.S.C. section 1115(b)(4)). The district court determined that Oak Grove and Visko's were entitled to fair use of the term "fish fry" to describe a characteristic of their goods; we affirm that conclusion.
Zatarain's term "Fish-Fri" is a descriptive term that has acquired secondary meaning in the New Orleans area. Although the trademark is valid by virtue of having acquired secondary meaning, only that prenumbra or fringe of secondary meaning is given legal protection. Zatarain's has no legal claim to an exclusive right in the original, descriptive sense of the term; therefore, Oak Grove and Visko's are still free to use the words "fish fry" in their ordinary, descriptive sense, so long as such use will not tend to confuse customers as to the source of the goods.
There are a number of remedies available to a prevailing plaintiff. First and foremost a plaintiff is likely to seek injunctive relief in order to prevent any further harm to their brand (i.e. lost of reputation value and lost of profits).
Section 1116(a) provides for injunctive relief.
Comment: Notice that a plaintiff can file for injunctive relief in any federal district court and the defendant can be served anywhere in the nation. This is certainly a plaintiff/business friendly provision and makes sense since the statute provides national protection.
Injunctive relief is granted, where warranted, to prevent future harm, but the prevailing plaintiff is also entitled to money damages for past harm. Section 1117(a) (see below) allows the plaintiff to recover the following: (1) defendants profits; (2) any damages sustained by the plaintiff; and (3) cost of the action.
(3) the costs of the action.
The court shall assess such profits and damages or cause the same to be assessed under its direction. In assessing profits the plaintiff shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction claimed. In assessing damages the court may enter judgment, according to the circumstances of the case, for any sum above the amount found as actual damages, not exceeding three times such amount. If the court shall find that the amount of the recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for such sum as the court shall find to be just, according to the circumstances of the case. Such sum in either of the above circumstances shall constitute compensation and not a penalty. The court in exceptional cases may award reasonable attorney fees to the prevailing party.
Comments: Another plaintiff friendly provision is the respective burdens described in (3) above. The plaintiff need only prove gross sales (a number more readily attainable) and it is the defendant's burden to prove all deduction therefrom. Section 1117(b) allows for treble damages if a court finds the intentional use of a counterfeit mark. Section 1117(d) allows for statutory damages for domain name violations.
Trademarks, unlike copyright, must be used and maintained in order to retain the "bundle of rights" associated with them. This section discusses trademark "use" and the enforcement of trademark rights.
Comments: It should also be clear from the definitions above that there is a particular kind of use that the statute requires. In the case of products, the mark must be "affixed" on displays, or containers or on tags and labels. For services, the mark must be used in advertising or sale of said services. In other words, on artifacts delivered (e.g. work product) or in media used to "get the word out." In addition, sellers must take precautionary measures that the mark (i.e. in the case of a word mark) be used as an adjective that identifies a "source" as opposed to a noun (or verb) that is used to describe a product/service category in general (or an "action" that is disassociated from the seller). In short, there is a requirement of "specific acts" on the part of the seller in order to maintain the bundle of rights. This does not imply that every minor inappropriate use need be litigated, but rather, that there is evidence that the seller intends to enforce its rights to have the mark continue to represent the specific brand in question.
Comments: Section 1125(b) provides a trademark holder a theory under which an action can be brought to prevent the importation of goods that are in contravention of the statute. Section 1125(c) provides "remedies for the dilution of famous marks" and 1125(d) provides liability in the case of specified "cyberpiracy" (also see section 1129 "Cyberpiracy protections for individuals"). The Infringement section discusses the concept of "confusion" and the factors that pertain to its analysis.
Dilution is another theory of infringement (see Infringement) that is available and one which has nothing to do with confusion. The widely cited example is the case of Eastman Photographic Materials Co. v. Kodak Cycle (Eng. 1898). Eastman is obviously that brand recognized as "Kodak" and the other party sold bicycles. The court was well aware that there was no likelihood of confusion but nonetheless granted Eastman an injunction on the grounds that the use of "Kodak" on bicycles would harm Eastman, even if there was to possibility of confusion as to source.
Fair Use is also covered under Defenses and is best understood when read in the context of the other defenses. It is treated as a separate topic to make it easier to find for those that may want to compare and contrast the doctrine under trademark with its analog under copyright. They are not the same, although at times both commentators and courts talk in terms that would make you believe otherwise, the devil is always in the details and therefore let that serve as an introduction to the editorial rant that follows.
Section 1051(a) (see below) contains the basic requirements for the registration and verification of a mark. It is should be made clear however (see What constitutes a mark?) that the selection of an appropriate mark is a process that requires a significant amount of due diligence if problems are to be avoided going forward. In general, the selection of a "fanciful" mark will prove to be less problematic, but in any case a trademark search must be conducted in order to ensure that (to the degree possible) the mark selected is not "confusingly similar" to another in its designated class. In addition, many Internet sites are likely to be ambitious enough to want to do business both nationally and internationally (at least many will not want to rule out the latter). In this case a trademark search will need to be conducted not only with the USPTO (and other state and common law sources) but, in addition, an international search will be required as well.
Comments: Remember that a mark is not "acquired" via the registration process but is rather acquired via "use." Registration is a process (both nationally and internationally) that enhances the rights of the holder. The USPTO maintains two trademark registers, a "Principal Register" and a "Supplemental Register." Most of the advantages of registration are obtained via registering in the Principal Register. Some of these advantages include: (1) nationwide priority (protection in the entire U.S.); (2) incontestability (provides protection against certain kinds of attack after a set period of time); (3) right to sue in federal court; (4) recovery of money damages (possibly treble damages & attorney's fees); (5) protection from inappropriate importation and more.
Comments: It is also important to remember that the lack of due diligence with respect to an adequate trademark search could prove to be quite costly (see International Star Class Yacht Racing Association v. Tommy Hilfiger U.S.A., Inc., (2d Cir. 1996) and the related analysis here). That said, neither the USPTO or the Lanham Act require a trademark search, however, the courts (as in Hilfinger) may use lack of search as evidence relevant to "bad faith" infringement.
As is true with respect to other tutorials, this is just a "smattering" of representative cases. The idea is to provide a brief one or two sentence summary of the holding/rule and then to point to the full text of the opinion where available. The focus here will be on Internet cases of note and non-Internet cases, which provide "foundational" precedent. The warning sounded below is the same one issued in the section on Copyright Case Law and applies here perhaps to an even more significant degree.
Summary: A mark may be abandoned where there is non-use and no intent to resume use, even if the mark maintains some historical significance. Trademark doctrine does not allow for the "warehousing" of a mark.
While there are systems in place that facilitate the registration of a mark internationally with a single filing, there is no global trademark law. Trademarks are protected by the national laws of treaty signatories, although the TRIPS agreement (see below) does provide an attempt of at least minimalist harmonization. The two principal treaties regarding international trademarks are the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the Madrid Protocol. Both are discussed briefly below and links are provided for further reading.
TRIPS is administered by the World Trade Organization (WTO). The WTO maintains a significant amount of relevant information regarding this agreement on its website and the "gateway" to additional TRIPS information can be found here. TRIPS contains content that is much broader than trademarks, including copyright, patents, industrial design and trade secrets. The following excerpt from the WTO TRIPS website is informative.
The TRIPS agreement is arguably the most important international agreement dealing with intellectual property (IP) law among the largest nations (and many smaller ones) and is a cornerstone agreement that underpins the global economy. It will likely continue to maintain its prominence as IP represents more and more of the GDP of both the developed and the developing world. Trademark protection outside of the holder's national borders will an remain an important issue on the world economic stage as the Internet increasingly drives the creation of additional global brands.
This is an international treaty that allows a trademark holder to seek registration in any of the signatory countries by filing a single application. The "international registration" that results provides protection in member countries but each signatory determines how the mark will be protected (i.e. via its own national laws) within the jurisdiction. This treaty is administered by the World Intellectual Property Organization (WIPO). A current list of signatories can be found here.
To file an international application through the USPTO, an applicant must have a U.S. application, called a "basic application" or a U.S. registration, called a "basic registration." The mark and the owner of the international application must be the same as the mark and the owner of the basic application or registration. The international application may be based on more than one USPTO application or registration provided the mark and the owner are the same for each basic application and/or registration.
The international application must include a list of goods and services that is identical to or narrower than the list of goods or services in the basic application or registration. The international applicant must pay the U.S. certification fee(s) at the time of submission and identify at least one Contracting Party in which an extension of protection (that is, registration in a Contracting Party) is sought.
A list of the minimum requirements for obtaining a date of receipt of an international application in the USPTO is set forth in 37 C.F.R. §7.11(a). See notice of final rules published in the Federal Register, 68 FR 55748 (Sept. 26, 2003), and posted on the USPTO web site at: http://www.uspto.gov/web/offices/com/sol/notices/68fr55748.pdf.
The requirements for a complete international application are set forth in Article 3 of the Protocol and Rule 9 of the Common Regulations Under the Madrid Agreement Concerning the International Registration of Marks and the Protocol Relating to That Agreement (Common Regulations). The Common Regulations are currently available on the WIPO website at http://www.wipo.int/madrid/en/.
The entire USPTO FAQ regarding the Madrid Protocol can be found here. Prior to the systematic adoption of this protocol it simply was not possible to obtain an "international trademark" with a single filing. The increased pressure for a single filing system was apparently driven by international players insisting on a more uniform approach. In any case, the protocol is indicative of the fact that the world is indeed becoming "flat" and the trend toward globalization shows an increasing ability to overcome any friction that stands in its way.

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