Monday, February 9, 2015

What is a trademark?

A trademark is any word, name, symbol, or device that identifies goods or services of one company so as to distinguish them from goods or services of others. Trademarks may also consist of the shape of a company’s goods or package, slogans, colors or any combination thereof.

A trademark is a proper adjective that modifies a generic name of a product. As a proper adjective it should always be capitalized. For Example, "Budweiser" is a trademark; "beer" is a generic name. A trademark should never be used as a noun or a verb. The Xerox Corporation fights to preserve its trademark by discouraging the use of the name of their company's trademark products as nouns or verbs. It is inappropriate to say "make a Xerox," or "Xerox the document," and the company uses advertising and actively pursues those who misuse its trademarks to prevent their mark from becoming an unprotectable generic name for photocopies. Some examples of words that were once trademarks but became generic names through usage, as nouns, are "aspirin", "shredded wheat", and "escalator".

A trademark is not a trademark until it has been used to identify goods or services. Using the mark in advertising, on business cards or the like is not enough. The mark must be affixed to the goods or the packaging in order to be entitled to the legal status of a trademark.

The Federal Trademark Act of 1946, called the Lanham Act, defines a trademark as any word, name, symbol or device or any combination of those used by a person, or which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this Act, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to show the source of the goods, even if that source is unknown.

How Do You Choose a Trademark?

A good trademark is one that the public will easily remember and associate with goods of a given company, as contrasted to other goods of the same generic kind. A trademark should be readily distinguishable from the generic or common name of the goods. Cute variations of generic names usually do not make good trademarks. Trademarks should also be different from the marks of competitors and should not sound the same or look the same. The strongest trademarks are those which have no dictionary meaning, and are considered “fanciful” marks, such as Adobe or TIVO.

When a tentative trademark has been selected, a search should be done to find out whether anyone else is using a similar trademark for similar goods. Often the process of selecting tentative trademarks and searching for conflicting uses must be repeated several times before a suitable trademark is found.

A "trade name" is the name of a business. It may or may not be the same as a trademark that identifies a product of that business. For example, "Cadillac" is a trademark for automobiles made by a company whose trade name is "General Motors Corporation"; "Ford" is a trademark for automobiles made by a company whose trade name is "Ford Motor Company." Corporate names are the most widely used form of trade name. A trade name may or may not be the legal name under which a business is registered in its state of incorporation. A trade name does not have the same legal status as a trademark.

What is a Service Mark?

A service mark is any word; symbol, phrase or device which identifies services rendered by a company and distinguishes them from services rendered by others. For example, "Fly the Friendly Skies" is a service mark for air transportation services provided by United Air Lines.
A service mark must be used in connection with the rendering of a service in order to be entitled to the legal status of a service mark. However, one cannot very well affix a service mark to a service, and hence use of the mark in advertising, on business cards or the like can sometimes be sufficient to entitle a service mark to legal protection.

What Is Trademark Registration?

The law protects trademarks based on bona fide commercial use in commerce subject to Congressional regulation. Registration does not create a trademark. Nonetheless, several very significant advantages are available to a trademark owner who registers a mark under federal law.

If a mark is inherently distinctive (arbitrary, fanciful or suggestive), or has become distinctive, it can be registered on the Principal Register. Benefits to registration on the Principal Register include prima facie evidence of the validity of the mark, registrant's exclusive right to use the registered mark, and registrant's ownership of the mark. If a registration becomes "incontestable" after five years on the Principal Register, it becomes conclusive evidence of validity and ownership and may only be canceled on certain specified grounds.

These benefits are not afforded to marks entered on the Supplemental Register, which is reserved for descriptive marks without secondary meaning. However, registering the mark on the Supplemental Register provides notice to interested parties of the owner's claim to rights, may deter others from adopting and using the mark, and provides a basis for registering the mark in many foreign countries.

An application for registration must be based on either use of or a bona fide intent to use the mark in commerce. To prove use in commerce, the applicant must show that it has placed the mark on the goods or on labels or tags affixed to the goods, packaging, or point of sale displays, and that the goods are sold or transported in interstate or foreign commerce. The "use in commerce" standard is liberal, but does not encompass token shipments made merely for purposes of obtaining or maintaining registration. In other words, the use must be "bona fide" commercial use. If an applicant has not used the mark in commerce, but has bona fide intent to do so, it can file an intent to use ("ITU" application). A registration will not be granted, however, until the applicant files a verified statement that it has used the mark in commerce.

Trademark Applications are examined by the Patent and Trademark Office ("PTO"). The application is assigned to an Examining Attorney, who ensures that all statutory requirements are met and that the mark is registerable. Two of the most important determinations made of the Examining Attorney are whether the mark is distinctive as applied to the goods or services for which registration is sought, and whether the mark is confusingly similar to a mark that has priority. If the mark appears to be registerable, the PTO will publish it for opposition in the Official Gazette during the thirty-day opposition period, which can be extended for up to an additional 90 days without the applicant's consent, interested parties can oppose registration. If no one successfully opposes, the PTO will issue the registration if the application is use-based, or issue a Notice of Allowance for an ITU application.

After a Notice of Allowance is issued with respect to an ITU Application, the applicant has six months, extendable to 36 months in six-month increments, to file a statement of use supported by evidence of use. Assuming all requirements are met, the PTO issues the Certificate of Registration.

Trademarks may be registered in every state, the District of Columbia and Commonwealth of Puerto Rico. In general, state registration provides few of the advantages of federal registration. However, issuance of a state registration may be evidence of ownership, and even validity of the mark in that jurisdiction. Most importantly, entering the mark on a state register provides notice of the owner's claim or rights to any parties who undertake a comprehensive trademark search.

How to Use a Trademark

A trademark or service mark can be identified by placing the designation TM or SM next to it. These designations do not show that the mark is federally registered. Rather, they say that trademark rights are claimed. Alternately, an asterisk may be used, instead of the TM designation, with an explanation that the mark is a trademark of a particular entity.
The statutory ® notice says that a mark is federally registered. Other forms of statutory notice include the words "Registered in U.S. Patent Office" or "reg. U.S. Pat. Off." Using the statutory notice is constructive notice of registration.

When it appears in print or other textual media, the trademark should be distinguished from the surrounding text by use of a different type size or style (e.g., all capital) and the appropriate notice (TM or ®). The trademark should be used together with a generic term or descriptive word for the goods or services to emphasize the "brand" aspect of the mark. The mark should never be used as a noun. In fact, the word "brand" is often used with the mark to emphasize that the mark is a trademark, not the common name of a product. An example of this usage is "Post-it TM Notes" for adhesive-backed paper pads sold by the 3M Company.

What Is Trademark Infringement?

If a party owns the rights to a particular trademark, that party can sue subsequent parties for trademark infringement. 15 U.S.C. §§ 1114, 1125. The standard is "likelihood of confusion." To be more specific, the use of a trademark in connection with the sale of a good constitutes infringement if it is likely to cause consumer confusion as to the source of those goods or as to the sponsorship or approval of such goods. In deciding whether consumers are likely to be confused, the courts will typically look to a number of factors, including: (1) the strength of the mark; (2) the proximity of the goods; (3) the similarity of the marks; (4) evidence of actual confusion; (5) the similarity of marketing channels used; (6) the degree of caution exercised by the typical purchaser; (7) the defendant's intent. Polaroid Corp. v. Polarad Elect. Corp., 287 F.2d 492 (2d Cir.), cert. denied, 368 U.S. 820 (1961).

So, for example, the use of an identical mark on the same product would clearly constitute infringement. If I manufacture and sell computers using the mark "Apple," my use of that mark will likely cause confusion among consumers, since they may be misled into thinking that the computers are made by Apple Computer, Inc. Using a very similar mark on the same product may also give rise to a claim of infringement, if the marks are close enough in sound, appearance, or meaning so as to cause confusion. So, for example, "Applet" computers may be off-limits; perhaps also "Apricot." On the other end of the spectrum, using the same term on a completely unrelated product will not likely give rise to an infringement claim. Thus, Apple Computer and Apple Records can peacefully co-exist, since consumers are not likely to think that the computers are being made by the record company, or vice versa.

Between the two ends of the spectrum lie many close cases, in which the courts will apply the factors listed above. So, for example, where the marks are similar and the products are also similar, it will be difficult to determine whether consumer confusion is likely. In one case, the owners of the mark "Slickcraft" used the mark in connection with the sale of boats used for general family recreation. They brought an infringement action against a company that used the mark "Sleekcraft" in connection with the sale of high-speed performance boats. Because the two types of boats served substantially different markets, the court concluded that the products were related but not identical. However, after examining many of the factors listed above, the court concluded that the use of Sleekcraft was likely to cause confusion among consumers. AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979).

What constitutes Trademark Dilution?

In addition to bringing an action for infringement, owners of trademarks can also bring an action for trademark dilution under either federal or state law. Under federal law, a dilution claim can be brought only if the mark is "famous." In deciding whether a mark is famous, the courts will look to the following factors: (1) the degree of inherent or acquired distinctiveness; (2) the duration and extent of use; (3) the amount of advertising and publicity; (4) the geographic extent of the market; (5) the channels of trade; (6) the degree of recognition in trading areas; (7) any use of similar marks by third parties; (8) whether the mark is registered. 15 U.S.C. § 1125(c). Kodak, Exxon, and Xerox are all examples of famous marks. Under state law, a mark need not be famous in order to give rise to a dilution claim. Instead, dilution is available if: (1) the mark has "selling power" or, in other words, a distinctive quality; and (2) the two marks are substantially similar. Mead Data Central, Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026 (2d Cir. 1989).

Once the prerequisites for a dilution claim are satisfied, the owner of a mark can bring an action against any use of that mark that dilutes the distinctive quality of that mark, either through "blurring" or "tarnishment" of that mark; unlike an infringement claim, likelihood of confusion is not necessary. Blurring occurs when the power of the mark is weakened through its identification with dissimilar goods. For example, Kodak brand bicycles or Xerox brand cigarettes. Although neither example is likely to cause confusion among consumers, each dilutes the distinctive quality of the mark. Tarnishment occurs when the mark is cast in an unflattering light, typically through its association with inferior or unseemly products or services. So, for example, in a recent case, ToysRUs successfully brought a tarnishment claim against, a pornographic web-site. Toys "R" Us v. Akkaoui, 40 U.S.P.Q.2d (BNA) 1836 (N.D. Cal. Oct. 29, 1996).

lthough likelihood of confusion and dilution are the two main trademark-related causes of action, there exist a number of additional state-law causes of action under state unfair competition law: passing off, contributory passing off, reverse passing off, and misappropriation. Passing off occurs when the defendant tries to pass off its product as the plaintiff's product. So, for example, manufacturing computers and claiming that they are made by Apple Computer, Inc. Contributory passing off occurs when the defendant assists or induces another (typically a retailer) to pass of its product as the plaintiff's product. So, for example, inducing a computer store to represent that the computers are made by Apple, when in fact they are not. Reverse passing off occurs when the defendant tries to pass off the plaintiff's product as its own. So, for example, taking a computer made by Apple, removing the label, and putting on a different label. Finally, misappropriation is a highly unstable, but potentially fruitful source of additional trademark-related claims.

What defenses are there to trademark infringement or dilution?

What defenses are there to trademark infringement or dilution?
Defendants in a trademark infringement or dilution claim can assert basically two types of affirmative defense: fair use or parody. Fair use occurs when a descriptive mark is used in good faith for its primary, rather than secondary, meaning, and no consumer confusion is likely to result. So, for example, a cereal manufacturer may be able to describe its cereal as consisting of "all bran," without infringing upon Kelloggs' rights in the mark "All Bran." Such a use is purely descriptive, and does not invoke the secondary meaning of the mark. Similarly, in one case, a court held that the defendant's use of "fish fry" to describe a batter coating for fish was fair use and did not infringe upon the plaintiff's mark "Fish-Fri." Zatarain's, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786 (5th Cir. 1983). Such uses are privileged because they use the terms only in their purely descriptive sense. Some courts have recognized a somewhat different, but closely-related, fair-use defense, called nominative use. Nominative use occurs when use of a term is necessary for purposes of identifying another producer's product, not the user's own product. For example, in a recent case, the newspaper USA Today ran a telephone poll, asking its readers to vote for their favorite member of the music group New Kids on the Block. The New Kids on the Block sued USA Today for trademark infringement. The court held that the use of the trademark "New Kids on the Block" was a privileged nominative use because: (1) the group was not readily identifiable without using the mark; (2) USA Today used only so much of the mark as reasonably necessary to identify it; and (3) there was no suggestion of endorsement or sponsorship by the group. The basic idea is that use of a trademark is sometimes necessary to identify and talk about another party's products and services. When the above conditions are met, such a use will be privileged. New Kids on the Block v. News America Publishing, Inc., 971 F.2d 302 (9th Cir. 1992).

Finally, certain parodies of trademarks may be permissible if they are not too directly tied to commercial use. The basic idea here is that artistic and editorial parodies of trademarks serve a valuable critical function, and that this critical function is entitled to some degree of First Amendment protection. The courts have adopted different ways of incorporating such First Amendment interests into the analysis. For example, some courts have applied the general "likelihood of confusion" analysis, using the First Amendment as a factor in the analysis. Other courts have expressly balanced First Amendment considerations against the degree of likely confusion. Still other courts have held that the First Amendment effectively trumps trademark law, under certain circumstances. In general, however, the courts appear to be more sympathetic to the extent that parodies are less commercial, and less sympathetic to the extent that parodies involve commercial use of the mark.

So, for example, a risqué parody of an L.L. Bean magazine advertisement was found not to constitute infringement. L.L. Bean, Inc. v. Drake Publishers, Inc., 811 F.2d 26, 28 (1st Cir. 1987). Similarly, the use of a pig-like character named "Spa'am" in a Muppet movie was found not to violate Hormel's rights in the trademark "Spam." Hormel Foods Corp. v. Jim Henson Prods., 73 F.3d 497 (2d Cir. 1996). On the other hand, "Gucchie Goo" diaper bags were found not to be protected under the parody defense. Gucci Shops, Inc. v. R.H. Macy & Co., 446 F. Supp. 838 (S.D.N.Y. 1977). Similarly, posters bearing the logo "Enjoy Cocaine" were found to violate the rights of Coca-Cola in the slogan "Enjoy Coca-Cola." Coca-Cola Co. v. Gemini Rising, Inc., 346 F. Supp. 1183 (E.D.N.Y. 1972). Thus, although the courts recognize a parody defense, the precise contours of such a defense are difficult to outline with any precision.

What remedies are there for trademark infringement and/or dilution?

Successful plaintiffs are entitled to a wide range of remedies under federal law. Such plaintiffs are routinely awarded injunctions against further infringing or diluting use of the trademark. 15 U.S.C. § 1116(a). In trademark infringement suits, monetary relief may also be available, including: (1) defendant's profits, (2) damages sustained by the plaintiff, and (3) the costs of the action. 15 U.S.C. § 1117(a). Damages may be trebled upon showing of bad faith. In trademark dilution suits, however, damages are available only if the defendant willfully traded on the plaintiff's goodwill in using the mark. Otherwise, plaintiffs in a dilution action are limited to injunctive relief. 15 U.S.C. § 1125(c).