Source: https://practiceguides.chambers.com/practice-guides/comparison/393/2357/4571-4601-4611-4616-4630-4638-4646-4651-4655-4659-4665-4669-4671
Timestamp: 2019-08-20 17:07:43
Document Index: 544450325

Matched Legal Cases: ['§ 1114', '§ 1115', '§ 1337', '§ 1063', '§ 1119', '§ 1068', '§ 1117']

Contributed By Dunlap Bennet & Ludwig
Dunlap Bennet & Ludwig is a leader in litigation and trade mark trial and appeal board disputes, with over 70 attorneys and offices in Washington, DC, New York, Los Angeles, Dallas, London and Beijing. Dunlap Bennett & Ludwig manages more than 8,000 US and foreign trade marks and patents for businesses around the world. The primary areas of expertise in relation to the trade marks sector are registrations, infringements, rejections, US Patent and Trademark Office actions, and trial and appeals board cases. The firm has a 100% Federal Circuit win rate from six cases (2016-18). Aside from IP, the firm’s key practice areas are business formation, M&A and corporate transactions; employment compensation and benefits; government and cyber contracts; immigration; insurance and reinsurance; litigation, arbitration and mediation (commercial); real estate construction, development, lending and leasing; tax and wealth planning; and white-collar defence.
The Trademark Act of 1946, also known as the “Lanham Act”, is the U.S. federal statute governing trademark law and defines trademarks and service marks (separately) as “…any word, name, symbol, or device, or any combination thereof…”
The statute also defines certification marks and collective marks. Collective marks are marks used by members of a co-operative, association or other collective group or organisation in order to signify their belonging to that group or association. Certification marks are also marks used by a person or entity other than its owner which signify that the product or service to which it applies has been “certified” as following certain standards of manufacture, being performed in a specified manner or originating from a particular region.
Case law has broadly interpreted this definition of a mark to include virtually any unique identifier that can be applied to a product or service to identify the source of that product or service, including sounds, smells, motion marks (ie, moving images) and all sorts of unique visual identifiers. Such visual identifiers include product shapes, packaging shapes and designs, the decor of a restaurant or store and other “non-traditional” or ‘trade dress” marks, as they are commonly called. The rights for all of these types of marks are established in the same manner – through use of the mark on a product or in the advertising of a service in a public manner in ordinary commerce that is recognised by the public as signifying the source of that product or service. Rights in collective marks and certification marks are established through their use by the third parties who are the intended users.
In registration practice before the U.S. Patent and Trademark Office (“USPTO”), two separate mark formats are recognised: “standard character” marks and “special form” marks. Standard character marks are marks without a design in which the applicant is applying to protect the wording of the mark regardless of how it may appear on a product or service – ie, regardless of font, capitalisation, stylisation, layout, and the like. Special form marks are any type of design mark including “composite marks” (a wordmark with a design element like a logo); trade dress (a particular colour scheme, packaging or shape); product or packaging configurations; and other non-traditional marks. In short, “standard character” marks protect the words themselves, while “special form” marks protect aesthetic elements (which can include words being written in a certain way).
U.S. trademark rights are based primarily on the use of the mark in “U.S. Commerce” (a term of art to be defined later), and individual states afford trademark rights based upon the use of a mark within those states. Registration is not necessary to acquire trademark rights, and while it enhances or expands use-based trademark rights, it is not necessary to retain trademark rights either. A state or federal trademark registration can lapse, and the owner will still retain trademark rights if the mark continues to be used. Likewise, a mark that is used but never registered still carries enforceable rights.
Each state has its own standards for registration, but this answer will focus on the standards for federal registration in the USPTO. The standards are generally the same for all marks, namely that the mark is available (not registered by a third party for the same or similar goods/services), that the mark is distinctive, that the mark is or will be used in U.S. Commerce, and that the mark does not fall into one of the exceptions to federal registration enumerated in Section 2 of the Lanham Act. Some of the standards, such as the nature of use of the mark, vary depending upon the type of mark sought to be registered (for instance a collective, certification or service mark) and some lesser standards are established for less qualifying marks, namely less distinctive marks. These standards are discussed in more detail below.
Each state and the USPTO have their own theoretical “register”, which has always been publicly available. Today, these registers are available in online databases that may be available publicly for free, such as the registers of the USPTO on www.uspto.gov. There are also private, commercial databases offered by some computerised trademark searching services, typically for a fee.
The USPTO maintains two different types of registers: a Principal Register and a Supplemental Register. The Supplemental Register offers a registration for marks that cannot meet all the qualifications for a Principal Register registration, principally that the mark is not inherently distinctive and does not yet have a “secondary meaning” (ie, the public has not yet come to associate the mark with the specific product or service in question) but is capable of acquiring distinctiveness by acquiring a secondary meaning. Correspondingly, the Supplemental Register offers fewer rights than the Principal Register.
It is a normal and highly recommended practice to search for marks that were either previously registered in the USPTO or with a U.S. state, or previously used in U.S. Commerce, especially if the mark is new and not yet used, or used for any significant period. The most commonly used and easily accessible (at no cost) source is the USPTO’s search engine on its website, known as Trademark Electronic Search System (“TESS”). However, TESS identifies only marks that were or are registered or applying for registration in the USPTO, and does not identify any marks in use in U.S. Commerce or that are unregistered or registered only with a state. Since these unregistered “common law” marks establish trademark rights, it is recommended that any database or listing which could advertise or list these marks be searched, such as state trademark registers, phone books, commercial directories and other industry-specific lists of businesses. Today, since virtually all business is conducted or at least advertised on the internet, it is usually sufficient to search for unregistered marks by searching the internet and perhaps social media, online e-tailers and other industry-specific internet marketplaces like the Apple “App Store” for software apps.
The Trademark Manual of Examining Procedure (“TMEP”), available on the USPTO website at https://tmep.uspto.gov/RDMS/TMEP/current#/current/d1e2.html, is the USPTO’s agency manual describing all of the requirements to obtain a federal trademark registration. Section 818 of the TMEP outlines the following seven basic requirements and numerous subrequirements, which are contained in an electronic application completed and submitted using the USPTO website (some items are consolidated for brevity):
a clear drawing of the mark and whether the mark is in standard characters or a special form;
a verified statement (under oath) signed by a person properly authorised to sign on behalf of the applicant averring that the contents of the application are accurate and true, and the mark is available, in use or intended to be in use, etc;
a written application that specifies details about the applicant and its entity type and domicile, a list of the goods or services to be used with the mark, the dates when the mark was first used anywhere and in U.S. Commerce, the basis for registration in the U.S., and certain informational statements about the mark for certain marks and situations;
the required filing fee of USD225 or USD275 per class of goods/services; and
a specimen or sample of actual use of the mark evidencing the mark’s use in U.S. Commerce or a true copy of the applicant’s home country certificate of registration if based upon a foreign registration of a non-U.S. applicant.
It is important to note, as specified above, that a U.S. registration can only be issued once the mark is in use in U.S. Commerce or if it is based upon a registration issued to a non-U.S. applicant in its home country.
Anyone can register a mark as long as they are the owner of that mark. The “owner of a mark is the person who applies the mark to goods that he or she produces or uses the mark in the sale or advertising of services that he or she performs” (TMEP Sec. 803.01), and that may be a natural or a juristic person, foreign or domestic. “Juristic persons” are legally created entities like corporations, partnerships, joint ventures, unions, associations, and other organisations capable of suing and being sued in a court of law. Governmental entities may also be applicants.
Entities that do not own the mark, such as operating divisions of a company, licensees, distributors, single partners of a partnership and the like, cannot apply to register a mark, and any application filed by such a nonowner is considered void upon filing and subject to opposition or cancellation once that fact has been proven, usually at the Trademark Trial and Appeal Board by a third party challenger.
As stated in 1.1 Types of Trade Marks above, words, images, sounds, shapes, colours, scents, and virtually any single, specific identifier that is unique, non-functional and non-descriptive in relation to the goods/services can be registered as a mark, provided that it functions as a mark and signifies to consumers who makes the product or offers the service, not what the product or service is and not some feature or quality of the product or service.
Company names, trade names, domain names and other names that may or may not be a mark are only recognised as a mark and enforceable as a trademark or service mark if they are functioning as a mark. For instance, merely registering ABC with a state division of corporations without also using ABC on the products or services offered would not be using ABC as a mark and therefore ABC would likely not be allowed to be protected as a mark. These other types of names or source-identifiers may be protectable under unfair competition and false advertising laws, however, if one uses these names or identifiers in a manner that could confuse or mislead the public or cause the public to falsely associate these names with the wrong entity.
The registration procedure begins with the application, as described in 1.7 Registration Requirements above, and can contain as many International Classes of goods/services as the applicant is willing to pay for since each class costs the same filing fee, provided that the applicant can eventually show the use of the mark on at least one item in that class or that a corresponding foreign registration contains that class. The application will be examined quite thoroughly by an “Attorney Adviser” (commonly known as an “examining attorney”) at the USPTO both substantively and procedurally, including a search of the USPTO database for any similar marks. If the examiner identifies an existing live application or registration for a similar mark covering similar goods/services or any other ground for not registering the mark which is enumerated in Section 2 of the Lanham Act, or if the examiner identifies any procedural requirements that have not been satisfied, the examiner will issue an “office action” or letter outlining the reason for refusing registration or the requirements needed to be satisfied before the application can be approved for registration. That office action provides a six-month statutorily prescribed deadline to respond. An applicant can respond by satisfying the stated requirements or arguing against the refusal.
Once the examiner determines that the application is eligible for registration, either upon initial review of the application or because the applicant’s responses to any office actions were satisfactory, the examiner approves the application for the next phase of the examination, known as the publication phase. In this phase, the application contents are “published” in a publication called the “Official Gazette”, which used to be a paper publication but is now an electronic database. During this period of publication, which lasts 30 calendar days, any third party can oppose the application or extend the deadline to do so if it believes it has grounds to do so.
If the application is not opposed after its approval by the examiner, it will either proceed to registration if the use of the mark was demonstrated to the examiner in the initial application, or it will be “allowed” and will register once the applicant can demonstrate the requisite use of the mark in U.S. Commerce.
As noted above, all applications filed by a U.S. applicant will need to show use of the mark in U.S. Commerce before it can register, but this use no longer needs to be shown at the time of filing of the initial application. Consequently, “intent to use” applications are allowed, provided that the applicant has a “bona fide intent to use” the mark in U.S. Commerce. If the application is filed based upon intent to use, the applicant will have three years from the date the application is allowed to demonstrate use of the mark to the USPTO. However, every six months during this three-year period, the applicant will be required to file a pro-forma extension request, which is routinely granted as long as the applicant re-states its continued intention to use the mark in U.S. Commerce.
Once a registration is issued, it must be maintained by filing a Declaration of Continuing Use of the mark (Trademark Act Section 8) by or before its sixth anniversary of registration and by or before each tenth anniversary. This “Section 8” declaration requires another specimen of use of the mark and a USPTO fee of USD125 per class. At each tenth anniversary of the registration date, a renewal application under Section 9 of the Trademark Act must also be filed with the Section 8 declaration, and presently costs USD300 per class.
Each application can contain only one specifically defined mark to register, which can comprise multiple elements or a single separable element of a mark. For instance, an application could apply for a composite logo consisting of a design element, a word mark on top or inside the design element and a slogan below the design and word element. However, the mark must always be used in this exact manner to register. Alternatively, the application could be for only the slogan below the logo, provided that this slogan can be separated from the logo visually and in its commercial impression.
An application cannot apply for what is known as a “phantom mark”, meaning a mark that has some changeable component from one product to another. For instance, if a series of lipsticks is identified by the mark ABCX with X being a flavour or colour identifier that changes depending upon the flavour or colour of the lipstick, the application can probably apply for the ABC mark but not the ABCX mark unless a separate application is used to apply for each ABC flavour mark used with the lipstick.
Presently, trademark applications filed in the USPTO will take three to four months to reach an examiner for examination but then could move fairly steadily, depending upon how quickly the applicant responds to any office actions and shows use of the mark if the application is filed based upon intent to use. A use-based application with no issues during examination and no opposition could probably register in about seven months. The USPTO does not require attorney representation, but there are some procedural nuances that can be difficult for applicants to navigate without the guidance of an experienced trademark attorney. The USPTO filing fee is presently USD275 per class for an electronically filed application that grants permission to the USPTO to communicate solely via email. Attorney fees vary significantly in both fees and structure, although most U.S. attorneys are willing to prosecute applications for fixed and capped fees, provided that the application is not refused on substantive legal grounds or opposed.
Section 2 of the Lanham Act prescribes the specific legal grounds upon which a mark can be refused registration. The absolute grounds specified are:
marks consisting of deceptive matter or matter that falsely suggests a connection with living or dead persons, institutions, beliefs or national symbols, or that treats these contemptuously, or suggests geographic origins which are not the true origin of the goods for wine and spirits and other geographically known goods;
marks that consist of or comprise a non-stylised representation of a flag, coat of arms or other insignia of the U.S., a U.S. state or a foreign nation;
marks consisting of or comprising a name, portrait, signature or other likeness of a particular living individual, or of a deceased U.S. President whose spouse is living, unless the living individual or living spouse of the deceased U.S. President consents to the mark;
any mark which is merely descriptive or deceptively misdescriptive of the goods/services, that is primarily geographically descriptive or deceptively misdescriptive of the goods/services, that is primarily merely a surname, or that comprises matter that is functional; and
any mark for which use cannot be shown or which cannot function as a mark.
It should be noted that a) above used to contain a refusal for marks that disparage or consist of “scandalous or immoral” matter. The disparaging marks ground was recently declared unconstitutional and stricken from the statute in 2018, and scandalous and immoral marks are presently undergoing the same scrutiny by the U.S. Supreme Court probably in later 2019.
The process for overcoming refusals outlined in 1.15 Refusal of the Registration of a Trade Mark varies depending upon the nature of the refusal. An applicant can overcome a distinctiveness-based refusal in e) by claiming acquired distinctiveness of the mark (ie, that even though the mark merely describes the product, consumers have come to associate it with the applicant’s specific product) or by amending the application to seek registration on the Supplemental Register if distinctiveness has not yet been acquired but could be. The refusal in b) may be overcome by amending the drawing of the mark and deleting the objectionable insignia if doing so does not materially alter the mark. The USPTO usually permits removal of the offending insignia if it is only a minor component of the design mark. The refusals in c) can be overcome by submitting a proper consent from the individual identified in the mark (or the deceased spouse of a deceased U.S. President).
An applicant can also argue that the facts do not support the refusal. For instance, geographic descriptiveness refusals require the mark to identify a known geographical location. If the geographical location is “obscure” or not that well known, this criteria might not be satisfied, and the refusal could be overturned on appeal or withdrawn by the examiner. Similarly, if an alleged surname can be shown to have alternate meanings, that refusal may be overcome. A descriptiveness refusal may be overcome with evidence that what may seem descriptive is actually merely suggestive of the product because the meaning of the mark in relation to the covered goods/services is ambiguous or incongruent.
As noted above, the USPTO searches only its own records in every application examination which is to consider prior registration or application rights that could be considered likely to cause confusion with the mark being examined. However, these rights are limited to only applied-for or registered rights that are presently pending in the USPTO at the time the application is being examined. On the other hand, in a proceeding in the Trademark Trial and Appeal Board at the USPTO – after the application has been examined – prior unregistered rights may be considered if their owner asserts them.
A third party has two opportunities to express its opinion or allege grounds for not registering a particular application:
Prior to approval of the application, a third party can file a "Letter of Protest" with the Commissioner of Trademarks. This letter is supposed to be filed anonymously and merely submit evidence that would support a ground for refusing registration of the application. The Commissioner exercises discretion in forwarding this evidence to the examiner, and the examiner can exercise discretion as to whether the evidence will be used or overlooked.
Upon approval of the application, a third party can oppose the application on any ground for which the examiner could have refused registration as well as grounds not examined by the examiner but which are requirements to register, such as the application being filed by the owner of the mark; the applicant maintaining a bona fide intent to use the mark or the applicant failed to use the mark before filing a use-based application; abandonment; “genericide” (ie, a trademarked term being commonly used as a generic term, as happened to the once-trademarked term “zipper”); fraud before the USPTO; or various other issues.
Both the applicant and the USPTO can amend the application and change certain decisions on an application to a limited extent. The applicant’s amendments are limited to only narrowing, limiting or decreasing the goods/services in an application, and to altering the mark provided that the alteration is not material (meaning that the mark’s meaning is not changed – ie, a new search is not required). The applicant listed in the application can only be changed if a clerical error caused the wrong applicant to be listed or if an ownership change in the application is recorded in the USPTO.
The USPTO can revoke or change its examination decisions, adding a refusal or requirement, at any time before the publication of the application. After the application is published, the USPTO may add a refusal or requirement only if it would be “clear error” not to do so. After a registration, the USPTO examination corp can no longer revoke the registration.
Applications may be assigned, and the marks within them licensed, during the application pendency in addition to after issuance of the registration. However, in the case of an application based upon intent to use in which use has not yet been alleged, an assignment could be viewed as an “assignment in gross” or a trafficking of the mark, which would render the application void and registration unavailable. An exception would be if the assignment of the intent to use application is to a succeeding owner of the intent to use application.
If an applicant cannot persuade the USPTO to approve the application for registration when arguing a refusal in a response to the first office action, the USPTO will issue a “final refusal”. This final refusal can be appealed to the Trademark Trial and Appeal Board ("TTAB") within six months of its issuance. If the TTAB sustains the refusal, the applicants’ final appeal as a matter of right is the U.S. Court of Appeals for the Federal Circuit or to any U.S. District Court, which will also entertain new evidence. However, an applicant should be aware that a recent court decision (which is controversial, conflicts with another U.S. Court of Appeals decision and is being challenged) has held that the applicant may be required to pay the USPTO’s “costs” for any appeal to a U.S. District Court rather than the Court of Appeals for the Federal Circuit.
For U.S. applicants and non-U.S. applicants that cannot rely on a registration from their home country, use of the mark in U.S. Commerce is required in order to be granted a registration. The outside deadline for showing this use is three years from the allowance of the application if the applicant has filed five extension requests since that allowance date (one for each six-month due date from the initial allowance date).
The requirements for establishing genuine use can be quite strict. For one, the products covered by the mark must have been actually sold and delivered in U.S. Commerce, and the services used with the mark must have been performed or rendered in U.S. Commerce. The mark must have been placed on the goods or advertised the services that are the same goods/services listed in the application. Also, the mark that was used to label the goods or advertise the services must be substantially identical to the mark applied for in the application. The USPTO has started scrutinising the quality and context of the specimens more stringently since it discovered a number of applications filed with allegedly fraudulent specimens.
A trademark application may be divided either between classes or between certain goods within a class if some of the goods or classes cannot be used with the mark as soon as the other goods or classes, or if certain classes are being refused registration or opposed.
The only requirement is payment of a USD100 fee for each new, divided-out application, as well as the filing and payment of the necessary extension request(s) for each divided out class/goods of an allowed application for which the statement of use cannot be filed. The USPTO provides an electronic form to request the division of the application.
A registration is granted for a ten-year period running from the initial date of registration. The registration is renewable every tenth anniversary of the registration date, provided that the registered mark continues to be used in U.S. Commerce. The renewal can be filed as early as one year before the expiration date and as late as a six-month grace period after the expiration date, with an additional filing fee.
Each renewal application must be accompanied by a Section 8 Declaration of Continuing Use and a specimen of use, just like what is required by the sixth anniversary of the registration date.
If the registrant is not able to renew the registration before the grace period expires six months after the renewal deadline, the registration will expire and cannot be revived; a new application re-registering the mark would have to be filed.
Generally speaking, the exhaustion of trademarks rights doctrine in the U.S., also known as the “First Sale” doctrine, protects against any resale of branded goods, provided that there has been no change to the branded goods in any material manner – ie, their quality, contents, etc. This includes the reseller not misrepresenting that it is an authorised reseller of the mark owner.
The U.S. is a member of the Madrid Protocol and therefore International Registration applications can be filed based upon a U.S. application or registration, and the U.S. can be designated in an International Registration application. However, applications designating the U.S. for an extension of protection from a non-U.S. based International Registration cannot be registered on the Supplemental Register. Also, while International Registrations designating the U.S. may be renewed through the World Intellectual Property Organization, the owner of the International Registration must still file its Declaration of Continuing Use in the USPTO under Trademark Act Section 71 (equivalent to Trademark Act Section 8).
Generally speaking, incorrect information in a trademark application can be corrected if correcting the goods/services would not expand, broaden or add to the listed goods/services, if correcting the mark would not materially alter the mark, if correcting the owner/applicant is merely correcting a clerical error and not naming a completely different, existing entity, and if the incorrect information was an honest, good faith error not intended to deceive the USPTO. However, these examples and others illustrate that it is possible that certain errors in an application are not correctable and will require re-filing a completely new application.
If the incorrect information in an application is determined to have been provided to the USPTO in bad faith during the examination of the application to induce the USPTO to issue the registration, the USPTO could cancel the resulting registration based upon “fraud before the USPTO”. This is almost exclusively determined by the Trademark Trial and Appeal Board in proceedings brought by third-party challengers who could have or discover the evidence of this falsehood. However, proving this “fraud before the USPTO” is extraordinarily difficult because it requires showing that the applicant or registrant had the specific intent to deceive the USPTO, which is virtually impossible without a clear admission.
As noted above, a design mark can be amended only if the alteration is not considered material. This means that the meaning or commercial impression of the new, amended mark is essentially unchanged.
One way to determine if the alteration would be allowed is to file a registration amendment under Trademark Act Section 7 and see if Post-Registration will allow the amendment. If it does not, then the alternative is to file a new application.
In the U.S., the ® symbol is used to indicate that a mark is federally registered and should only be used once the federal registration has issued – ie, the mark has been designated a seven-digit registration number. Without an issued registration, the mark owner should use a  to designate the mark as being claimed as a mark though not registered as a mark. The unregistered status of the claimed mark can be as an application for registration pending but not yet examined or approved, or never applied for but with common law use rights to claim.
A trademark or service mark is freely assignable, provided that the assignment is in writing and duly executed by the assignor, and that the assignment assigns the mark along with the goodwill of the business associated with that mark. Any assignment of only the mark without its associated goodwill and underlying business is an “assignment en gross”, which is illegal and can void the registration. Consequently, any mark not yet in use cannot be assigned unless it is to a successor to the business intending to use the mark which intent will be continued by the successor.
Approval of the assignment by the USPTO is not necessary but recordation of the assignment in the Assignments Division of the USPTO is required to convey proper notice to any subsequent purchasers of the mark from the assignee. Also, failing to record an assignment of a mark in the USPTO could result in a Declaration of Continuing Use or Renewal to be rejected because the registrant named in that declaration might not properly appear in the chain of title for that registered mark.
While there are consequences for not recording an assignment of a registration in the USPTO, including not having the owner of the registration be correct in the USPTO database, an assignment is nonetheless not required to be recorded in the USPTO.
As noted above, a mark is assigned by a written assignment form, which usually consists of standard boilerplate language identifying the parties and specifying who is the assignor and who is the assignee, enumerating the particular marks and USPTO applications or registrations for such that are being assigned, and stating that the assignee is acquiring all right, title and interest in the mark and the underlying goodwill of the business associated with that mark. The assignment is usually simply signed by the assignor, though both parties may sign the assignment and notarisation can be employed if desired. The person signing the assignment would naturally have to be someone designated with the authority to bind the assignor.
An assignment is not required to be recorded in the USPTO, although there are consequences for not recording an assignment of a registration in the USPTO Assignments Division, including not having the owner of the registration be correct in the USPTO database. The greatest risk of an assignment not being timely recorded in the USPTO (ie, within three months of the date of assignment) is if the assignee proceeds to assign the registration for valuable consideration (payment) to a subsequent purchaser without notice. Such an assignment is considered void and unenforceable.
A trademark is a form of property and an asset of the business that owns the trademark and, as such, can be used as a security interest, subject to rights in rem, assigned by way of security, and be levied in execution. All of these transactions should be recorded in the Assignments Division of the USPTO and may need to have the trademark registration assigned in lieu of payment on the debt or mortgage.
The only restriction for licensing a mark is that it should not be a “naked licence”, meaning licensed to a licensee or too many licensees without quality controls – ie, controls over the use of the mark ensuring that the mark is being used precisely as the mark owner designates it. While unwritten licences may be implied from particular facts, a written licence is strongly recommended. A licence does not need to be recorded in the USPTO and rarely is. Any type of licence can be granted by a mark owner, provided that the mark owner exercises control over the total number of licensees and their use of the licensed mark.
Similar to an assignment, a licence is an agreement between the mark owner licensor and the licensee with standard boilerplate language outlining the terms of the licence. The licence agreement is usually more involved than an assignment because it must specify the terms of the licence – ie, the duration, grounds for termination, how the licensor is controlling the quality of the goods, that the licensee recognises the licensor as the owner of the mark, and that the licensee will not challenge the validity or ownership of the mark. Typically, the licensor and licensee execute the licence agreement.
In the U.S., a licence does not need to be recorded in the USPTO, and the USPTO is essentially not involved in the licensing of a mark since licensing deals with the use of a mark, not its ownership or registration. By law, licensed use inures to the benefit of the owner/licensor. Therefore, an applicant or registrant can claim licensee use of the mark as its own use for purposes of supporting the ongoing validity of the registration as a used, registered mark.
The U.S. generally recognises that property owners should be able to use or transact their property as they desire which, in the case of a mark, can be a licence of any term and duration. While a perpetual licence can be granted, it is probably not recommended for a variety of reasons that are both contractual and intellectual property related. Concerning trademark rights, will a perpetual licence retain its quality controls perpetually? If not, the mark may be deemed abandoned. Also, there are certain situations and jurisdictions in which a licensee that goes bankrupt may be able to void a trademark licence.
As with all contracts under U.S. law, the licence and assignment must contain a valid consideration term and be formed with a proper offer and acceptance.
The legal grounds for filing an opposition are any of the grounds for which a registration may be refused by the USPTO, as well as requirements for registration not met by the applicant which the USPTO might not have the resources or capacity to examine, such as the applicant’s ownership, truthfulness before the USPTO, the actual use of the mark by the applicant and other facts not apparent in the application record before the USPTO. Most commonly, the grounds are the likelihood of confusion, descriptiveness or genericness, and non-use or no bona fide intent to use.
An opposer has the original 30-day period from publication within which to oppose, which can be extended for a total of 150 more calendar days, or 180 days from the initial publication date overall. However, the final 60 days to extend must usually be obtained with the consent of the applicant.
An opposer can be any party with “standing”– ie, some stake in the outcome of the grant of registration. Usually, this is a competitor or any applicant being denied registration because of the existence of the opposed application. The standing requirement is usually easy to satisfy; about the only instance in which standing cannot be satisfied is when the opposer is an “innocent bystander”.
An opposition follows the Federal Rules of Civil Procedure (the same rules followed by the U.S. federal court system), although because an opposition can only decide the registration of a mark and not its use or any money damages, and as an administrative tribunal proceeding, the whole proceeding tends to be a microcosm or mere fraction of a federal court trial.
There are initial disclosure requirements, a mandatory discovery conference and a period of discovery which has become much more limited in some recent rule-making. Most of the discovery is written – ie, interrogatories, requests for admissions and requests for production of documents, all of which are now limited to 75 each. The TTAB has become cognisant of the strategy of parties to use discovery to oppress an adversary rather than to truly discover the facts and issues of a proceeding, and therefore disfavours any party which requests discovery that is disproportionate to the relatively limited issues and relief offered by an opposition. Depositions may be taken, but depositions also comprise the testimony of the proceeding.
While motion practice is available in opposition proceedings, the only motions likely to resolve an opposition are a motion for summary judgment and, in some rare cases, a motion to dismiss. The motion for summary judgment, which requires that no material facts be in dispute, is not commonly granted because oppositions are usually very fact-intensive.
The legal remedies or recourse from an adverse opposition decision of the TTAB are the same as for an appeal from the TTAB – ie, an appeal to either the U.S. Court of Appeals for the Federal Circuit or a district court, the latter of which provides an opportunity to present new evidence and have a trial based upon the new evidence presented. The appeal from the USPTO must be filed within 60 days of the TTAB decision. The timeline for the appeal depends upon the court in which the appeal is filed. Since U.S. federal courts tend to be fairly backed up, it may take one to two years to hear an appeal from the TTAB.
A trademark owner whose mark has been infringed may bring suit in state or federal court. Federal courts possess original jurisdiction over trademark disputes under the Lanham Act, but do not possess exclusive jurisdiction – such matters may be heard by state courts as well. Other options to address infringement include negotiation with the adverse party, communication with third-party platforms that host infringing content, and proceedings before the Trademark Trial and Appeal Board (“TTAB”). Many states also have independent statutory or common law causes of action related to trademark infringement, unfair competition, and false advertising. Each of these options applies both to common law and to federally registered trademarks (see15 U.S.C. §§ 1114, 1125(a)).
A trademark owner can initiate infringement proceedings in state or federal court, or, depending on the circumstances and whether an applied-for or registered mark is at issue, before the TTAB.
There are advantages to seeking registration before initiating a lawsuit, as a registered trademark is presumptively valid (see 15 U.S. Code § 1115). Additionally, courts are required to give preclusive effect to the decisions of the TTAB on issues of likelihood of confusion if (i) the identical issue was raised in the TTAB proceeding; (ii) the issue was actually litigated and decided in the TTAB proceeding; (iii) the parties had a full and fair opportunity to litigate the issue; and (iv) the resolution of the issue was necessary for a valid and final judgment on the merits (see B&B Hardware v Hargis Industries, 135 S. Ct. 1293 (2015)).
An alleged infringer who pleads an injury that is concrete, actual or imminently threatened, and redressable by a court, may seek a declaratory judgment. The trigger for a declaratory judgment proceeding will often be a cease-and-desist letter or a dispute in which the parties cannot reach an agreement.
In the federal court system, a district court typically has jurisdiction to hear trademark matters first. The district court’s decision may be appealed as of right to the court of appeals in the circuit in which the case was decided. In turn, the decision of the court of appeals may be appealed to the United States Supreme Court, which may or may not elect to review the circuit court decision.
In a state court system, a trademark case will typically be heard by trial courts in the first instance, with appeals to courts of appeals and then to the highest or supreme court of a state.
There are no procedures that are a prerequisite to filing a lawsuit – the issuance of a formal demand letter or registration of a trademark are not required, for example. However, some remedies are only available to registered marks, such as obtaining the assistance of customs officials in halting the import or export of counterfeit goods.
Parties in trademark litigation matters do not necessarily need to be represented by a lawyer and, if they are individuals, can elect to appear either pro se or through representation. However, U.S. laws generally require that corporations and entities obtain legal representation in litigation matters.
Preliminary injunctions are available, and may be in the form of either temporary restraining orders (“TRO”s) or preliminary injunctions. Notice to an adverse party is not strictly necessary for a TRO, though a party seeking a TRO must certify that it has made an effort to give notice or specify why no notice is required. TROs are typically limited in time to 14 days from the date of issuance, barring any extension entered by a court. Preliminary injunctions require notice to the adverse party and are typically much longer in duration than TROs, often lasting until the litigation is finished.
For both, it is necessary to show that irreparable harm is likely if the injunction is not entered. Preliminary injunctions further require a demonstration that the party requesting the relief is likely to succeed on the merits, that the balance of equities tips in favour of the injunction, and that the injunction will serve the public interest.
In litigation proceedings, a defendant has the opportunity to file counterclaims and affirmative defences to a lawsuit. This gives a defendant an opportunity to provide its own claims regarding the scenario, to challenge the validity of the plaintiff’s mark, and to rebut the plaintiff’s claims. It is also possible to affirmatively attack the pleadings of a plaintiff, either through a motion to dismiss if the pleadings are insufficient as pled, or through a motion for summary judgment if the plaintiff’s claims are unsupported by evidence obtained in discovery.
Once litigation has commenced, the parties are typically able to obtain discovery from one another and from third parties. Such discovery includes requiring responses to written questions (interrogatories), requests for admissions of relevant facts, depositions under oath, expert opinions, and the production of documents and information. The schedule for such discovery is typically set by the court presiding over a matter.
Initial pleadings are required to contain “a short and plain” statement of claims brought. They must be plausibly pled so that the party against whom the claims are brought is put on notice of the nature of the claims. Additional arguments may be added to pleadings either within 21 days of service of a pleading, within 21 days of service of a responsive pleading, at the court’s discretion or with the opposing party’s consent.
Such actions are possible but are highly unlikely, due to the nature of trademark ownership. In the United States, the goodwill accrued by a mark must be attributable to a clear and consistent source to create a trademark right. The very nature of a class action – where numerous plaintiffs share a right that has been equally infringed – runs contrary to the exclusivity typically needed for trademark disputes to proceed before a court.
Theoretically, use of a trademark registration to prosecute unfounded lawsuits is considered trademark misuse. To date, however, few courts in the United States have articulated the standards for whether and when a trademark is misused in such a fashion. More typically, trademark infringement actions are subject to dismissal and to sanctions if they are pursued without a good faith basis. Time limits may also apply to trademark actions – as the Lanham Act has no statute of limitations, courts calculate the time a plaintiff has to bring a trademark claim by looking at applicable state statutes. Claims brought beyond the time specified in a state statute or brought with undue delay are subject to dismissal.
Both registered and unregistered marks may be the subject of infringement actions. Such actions may be brought by either the owner of a mark, its successors or its assignees. A trademark licensee therefore may be able to bring an infringement claim, but its ability to do so would depend heavily upon the terms of its licence and the nature of its claim to the trademark at issue. Similarly, Section 43(a) of the Lanham Act permits trademark actions to be brought by “any person who believes that he or she is or is likely to be damaged” by a violation of that section, including non-owners of a trademark. However, any party bringing a trademark claim before a court must comply with standing requirements and, therefore, must have more than a speculative interest in the mark.
To prevail on a claim of trademark infringement, a plaintiff must show that (a) it owns a valid mark, (b) it has priority in the rights in that mark, and (c) the mark has been used by the defendant in commerce in a manner likely to confuse consumers as to the source of the defendant’s goods or services in connection with the mark.
The exact factors used to assess the likelihood of confusion vary from jurisdiction to jurisdiction but typically include:
the similarity in the sight, sound, meaning and commercial impressions of the marks;
whether the marks are used with similar goods or services;
whether the marks are used in the same streams of commerce;
whether the consumers of the marks are sophisticated enough to know the difference between the marks;
any history of coexistence between the marks; and
the intention of the defendant in adopting the mark.
Purely nominative or descriptive use of a mark is considered fair use and is not ordinarily actionable. However, the test for infringement is simply whether consumers are likely to be confused between a plaintiff’s mark and a defendant’s use of that mark or a closely related mark. For this reason, all that a plaintiff needs to establish, at the outset, is that the defendant made a use of its mark or a highly related mark in commerce, and that such use is likely to confuse consumers as to the source, sponsorship or affiliation of the defendant’s goods or services.
Many of the common procedural defences to a lawsuit apply to infringement cases. Therefore, a defendant may be able to assert defences such as that a claim was brought past the statute of limitations, that a claim is barred by the “unclean hands” doctrine due to the plaintiff's own misconduct, or that the plaintiff acquiesced to the defendant’s use of the mark.
Additionally, the defendant may be able to challenge the validity of the plaintiff’s mark. Such challenges can include a claim that the mark was fraudulently obtained, a claim that the mark was not the first such mark used or a claim that the mark is generic and unenforceable.
Other defences vary by jurisdiction – in some jurisdictions, a defendant may be able to allege that the First Amendment protects its use of the mark or that its use was protected as parody or fair use.
Experts and surveys are usually necessary to establish how consumers perceive two marks in relation to one another or the likelihood that the defendant’s use of a mark would harm the market for the plaintiff’s mark. Fame, genericness or acquired distinctiveness can all also be shown through expert testimony or surveys in a trademark case. Such surveys and testimony are widely used in trademark litigation, and courts are generally favourable to such evidence, provided it comports with federal evidentiary standards.
Counterfeiting is a federal offence for which criminal charges apply. Counterfeiting involves providing goods or services under a counterfeit mark. Counterfeiting activities can carry a fine of up to USD2 million and imprisonment for up to ten years. Repeat offences carry steeper penalties. Charges for counterfeiting are usually brought by a prosecutor, often in connection with investigations into criminal activity. It is also possible for trademark holders to seek the assistance of the U.S. International Trade Commission (“ITC”) in addressing counterfeiting by filing a complaint with the ITC under 19 U.S.C. § 1337.
The United States Customs and Border Protection (“CBP”) agency has authority to seize and destroy goods that infringe federally registered trademarks. Trademark owners can seek the protection of the CBP’s enforcement authority by recording their federally registered marks with the CBP, along with additional information (such as a list of authorised distributors of goods, or a list of typically infringing companies) to assist the CBP in patrolling imports or exports for infringing goods.
A registered trademark may be subject to cancellation at any time, though the basis for such cancellation differs before and after the mark has been registered for five years. Before the mark has been registered for five years, it may be challenged on a number of grounds, with the most common being that:
the mark is likely to confuse;
the mark is merely descriptive, merely geographically descriptive, or merely a surname;
the mark was abandoned for at least three years;
the mark was fraudulently obtained; or
the mark dilutes a famous mark.
If a mark has been registered for five years, it cannot be challenged on the grounds of likelihood of confusion. Typical bases for cancellation of a mark registered for five or more years are that:
the mark is generic;
Both the TTAB and civil courts may hear proceedings regarding the cancellation of a federally registered trademark.
There are no limits to the time within which to file a cancellation proceeding under the Lanham Act. However, trademark registrations do grow in strength and incontestability the longer they are registered. After five years, a registered trademark can typically only be cancelled if it has become generic, was obtained fraudulently, or was abandoned due to non-use.
A cancellation proceeding may be brought by any person or entity “who believes that he is or will be damaged” by a mark’s registration (15 U.S.C. § 1063; see also15 U.S.C. § 1119). Nonetheless, standing requirements apply to such proceedings: the party bringing a proceeding must have a “real interest” in the proceeding and a reasonable basis for believing it would be harmed if the proceeding were not heard.
Partial cancellation is possible and typically occurs when a challenge is brought regarding a registered trademark and a portion of the goods or services with which that mark is registered. Cancellation may occur “in whole or in part”, and registration may be “modified” by “limiting the goods or services specified”, or otherwise modified to “rectify” the federal register (15 U.S.C. § 1068).
A registration undergoing a cancellation proceeding – at least, before the TTAB – cannot be amended unless (a) both the opposing party and the TTAB consent to and approve of the amendment, or (b) the registrant moves the TTAB to amend the registration and the TTAB grants this motion.
Actions involving the likelihood of confusion and cancellation may be heard together at the TTAB if a mark has not yet been registered for five years, but such actions – and the broader array of behaviour that can constitute infringement – are more typically heard together in proceedings before a court.
There are no special procedural provisions for trademark proceedings in the United States; the proceedings follow standard civil litigation procedures.
Issues can be decided either by a judge or before a jury. Parties generally have a right to have a jury preside over a trial, but they often waive that right and elect to have a judge decide the case. Also, in a situation where there are no disputed material facts, a judge can decide the case at the summary judgment stage before a trial is commenced. If a jury is requested, the trial begins with a process called voir dire,during which the parties can ask questions of potential jurors and have an opportunity to dismiss some of them based on their responses.
Trials before a judge are called “bench trials”, and generally occur only if all parties agree to waive their rights to a jury trial. During a jury trial, each party presents its case with statements, evidence, witnesses and expert witnesses. Each party has the opportunity to cross-examine the opposing party’s witnesses and expert witnesses. After both parties present their case, the jury receives instructions on the law from a judge and then begins its deliberation. The parties wait until the jury returns with a verdict (or states that a decision could not be reached, in which case a new trial will have to be held).
During the life of a lawsuit, there are numerous opportunities for resolution before trial. The parties will often discuss potential settlement terms throughout the entire litigation process. Also, courts will often require that the parties submit to a mandatory mediation or settlement conference, but such policies vary from court to court, as do the details of which mechanism is used and when it is to take place.
Trademark registrations can be challenged through a cancellation proceeding filed before the Trademark Trial and Appeals Board (“TTAB”). However, the TTAB will typically stay such proceedings if there is a related court proceeding involving issues of the validity of the same trademark.
A prevailing trademark owner is entitled to recover actual damages, statutory damages in certain cases and potentially injunctive relief. Actual damages include the defendant’s profits related to the infringement, any lost sales or other direct harm to the plaintiff, and the costs of the suit. In seeking the defendant’s profits, the plaintiff need only offer evidence of the value of the defendant’s sales, and then the burden is placed on the defendant to establish what portion of those sales is attributable to production costs and overhead (15 U.S.C. § 1117(a)).
Also, in cases involving counterfeiting (the use of a trademark mark that is identical to another party’s federally registered mark), a plaintiff can elect to recover statutory damages of between USD1,000 and USD200,000 for each infringed mark and each type of infringing product or service. If the counterfeiting is found to be willful or intentional, the statutory damages can be increased to a maximum of USD2 million, or a plaintiff’s actual damages can be increased by up to three times.
A prevailing trademark owner can also seek a preliminary and a permanent injunction barring the defendant from any future infringing uses of the trademark.
In the United States, the general rule is that the parties are each responsible for paying their own legal fees. However, the federal trademark statute allows courts to award a prevailing party its reasonable attorney’s fees in an “exceptional case”. Generally, this is where the infringement was willful or egregious, if there has been misconduct in the litigation or where there is little dispute about the liability of the defendant. In addition, attorney’s fees may be awarded to a prevailing plaintiff in cases involving intentional counterfeiting.
A prevailing defendant is only entitled to recover its legal fees in “exceptional cases”, which would generally be cases in which there is little dispute about the merits of the defendant’s case or where the plaintiff has litigated the case in an unreasonable manner.
The remedies are the same for all types of trademarks.
As with any other federal case, trademark cases may be appealed to the federal appellate circuit court for the jurisdiction of the trial court. Unlike patent cases, there is no special process of court for these appeals. Likewise, a preliminary injunction ruling may be appealed immediately. Generally, in the absence of a final ruling, or a mandamus filing by one party in an extraordinary case, any other issue before the court may not be the subject of an appeal until there is a final judgment.
A trademark appeal in the United States may involve both legal and factual issues; the standards under which each of these are reviewed are slightly different. Factual findings are reviewed under the very high standard of “clear error”, while legal conclusions are reviewed independently and anew, called a de novoreview, without any deference to the trial court’s legal rulings. Mixed issues of both law and fact are generally reviewed under a de novo standard, but the appellate court may decide to review some factual parts of a mixed issue case under the “clear error” standard, again, giving deference to the trial court.
The time the appellate process takes depends on the complexity of the issues and the appellate court’s docket. This means that appeals can take anywhere from a few months, more usually in the case of preliminary injunctions, to years, typically in the case of an appeal of a final order.
United States federal courts recognise dilution, as codified in the Federal Trademark Dilution Act (“FTDA”), and as revised under the Trademark Dilution Revision Act of 2006 (H.R. 683), for “famous” marks. There is no requirement to show a likelihood of confusion or even competition between competing marks for a trademark dilution claim. Dilution can be the basis for either opposing a trademark registration or obtaining injunctive relief to enjoin the use of a mark upon a showing that (i) the plaintiff’s mark is well known to the consuming public as the source of particular goods or services, such that the mark is “famous”, (ii) the defendant began using its mark in commerce after the plaintiff’s mark became famous and distinctive, and (iii) there is a likelihood of dilution by “blurring” or “tarnishment”.
Dilution by blurring is defined as a third party using an identical or nearly identical mark in connection with what may be different and completely unrelated goods or services from those of the plaintiff, thereby weakening the distinctiveness of the mark. Dilution by tarnishment involves a third party using a nearly identical mark to the plaintiff’s famous trademark inappropriately, such as in association with lewd or offensive content, or in association with subject matter that criticises the plaintiff, or its good, services or beliefs. There is a tension between the First Amendment right to free speech and tarnishment that provides some freedom in certain cases to use famous brands in parody.
Some United States courts recognise the “famous marks” doctrine. Presently there is a split among the circuits, with the Ninth and First Circuits explicitly recognising the doctrine and the Second Circuit explicitly rejecting the doctrine. Essentially, the doctrine states that if a mark used in connection with goods or services sold exclusively outside of the United States is so famous its reputation is known in the United States, then that mark should be recognised by the U.S. legal system. Regardless of the split, the USPTO has published guidance that, in any event, the analysis is the same analysis courts use in determining the likelihood of confusion between two marks, and specifically that the Lanham Act provides that a mark will be refused registration if it is likely to be confused with a prior registered mark or a prior mark in use in commerce and not abandoned.
Geographical indicators identify a good as originating in a territory, a region or a locality, where a particular quality, reputation or other characteristic is attributable to the geographic origin of the good. The United States generally recognises and allows registration of geographical indications of origin through the registration of a trademark as a certification mark or a collective mark. There is no protection for generic geographic terms that consumers would view as designating a category of goods or services of the same type.
Certification marks may be registered under the Trademark Act. While a certification mark is otherwise similar to a trademark, there are two important differences: first, a certification mark is not used by its owner but instead by authorised users and, second, a certification is not an indication of the source of goods or services, and instead indicates that certain authorised users are certified as to a particular aspect of goods or services. Certification marks may certify (i) geographic origin, (ii) quality, mode of manufacture or materials, or (iii) that work performed by an authorised user meets a certain standard.
A trademark that is “primarily merely a surname” may not be protected unless the mark has an “acquired distinctiveness”. Acquired distinctiveness requires that the proposed surname has become well known and associated with specific goods or services such that the consuming public recognises the surname as a trademark and not “merely” a surname. Some of the other factors that the USPTO considers as to whether or not a surname is “merely” a surname include whether an applicant is registering their own surname, whether the “look and feel” of the mark is that of a surname, whether the surname has a meaning other than as a surname, and whether the surname is “rare”.
The costs of handling a trademark matter depend on the circumstances of the case, the complexity of the issues and the relative business standing of the parties involved. Typically, a mark owner will send a “cease-and-desist” letter before a claim is filed. The preparation of such a letter involves research into the validity of the alleged infringer’s use and rights vis-a-vis the mark owner’s rights. The follow-up negotiations involved in trademark infringement claims range from virtually nothing, where there is a non-responsive infringer, to extensive discussions about co-existence or licensing resulting in a settlement. If the infringing party is non-responsive, there is often little choice but to file an infringement suit in Federal Court.
Before filing suit, the owner of a trademark may choose to engage in a trademark confusion survey, where an expert will poll the relevant marketplace to determine if there is actual confusion or a likelihood of confusion. Because these kinds of surveys are expensive, with costs ranging from thousands of dollars to tens of thousands of dollars depending on the design and scope of the survey, many mark owners will wait to conduct such a survey until after a suit is filed.
Trademarks are unique as a type of federally registered intellectual property where a lawsuit can be filed in either the state court system or the federal court system. Generally, the cost of filing in the state court system is less; however, the timeline to resolution may be longer and the outcome less certain. In either case, filing a trademark lawsuit involves filing the claim, motions practice, discovery, and trial. In the federal system, filing involves the cost of preparation of the complaint, the filing fee (presently USD400), and the services fees.
The costs of motions practice, discovery and trial vary greatly, depending on the parties disputing the mark and the value of the mark at issue. Exclusive of legal fees, the costs for expert testimony, deposition fees for court reporters and related non-legal costs alone can range from USD20,000 to USD100,000. Legal fees in a typical trademark case range from USD100,000 in a simple case that arrives at a non-trial resolution to more than USD1 million for a valuable mark that goes to a full jury trial in a federal court.
Attorneys’ fee awards in trademark litigation in federal courts are left to the discretion of the trial court. Because there is not only concurrent state and federal jurisdiction for trademark claims, but also state-based trademark claims, it is possible in many cases for a state statute to mandate an award of fees. However, in federal courts, outside of “unreasonable and vexatious” litigation behaviour, “exceptional cases” as defined in the Lanham Act, and in the case of counterfeiting, trademark fees are rarely awarded if each party has a reasonable good faith basis for its claims or defences.
As with any lawsuit, the parties to a trademark case may use alternative dispute resolution (ADR) to resolve the matter, either by agreement of the parties, or in certain cases and jurisdictions the court may order the parties to attend mediation. The benefits of ADR include a possible agreement on privacy with respect to the proceedings, something the federal courts in the United States do not generally allow, and the ability to craft the ADR schedule, rather than relying on a court’s availability. Mediation is generally a non-binding form of ADR that involves a mediator, who is often a retired judge, working as a neutral disinterested go-between for the parties. Arbitration is generally “binding”, meaning that the arbitrator has the ability to make a final decision on the merits of the case, which the prevailing party may then take to a court and file as a judgment in its favour.
Trademark claims often overlap with other forms of intellectual property in the United States. Most frequently, trademark claims are part of a claim of unfair competition, which in turn is also part of the Lanham Act, under which federal trademark claims are brought. Likewise, trademarks may protect a logo or design, which can also be part of copyright-protected art. The trademark protects the owner’s rights in the mark from confusion with another mark, whereas the copyright would protect the creator of the logo or design’s creative expression. Copyright expires but trademarks can last in perpetuity, provided they are in use consistently. Additionally, a United States design patent holder that holds the rights to what essentially amounts to the appearance of its product (“any new, original and ornamental design for a useful article of manufacture”) can also acquire trademark rights in its packaging or product shape over time, called “acquired distinctiveness”, so long as, like every other trademark, the design is an indicator of the source of the goods.
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