TRADEMARK LAWFALL 2010

1. DISTINCTIVENESS OF MARKS

a. Four categories of terms with respect to trademark protection

I. GENERIC: A term that refers, or has come to be understood as referring to the genus of which the particular product is a species.

1. Cannot become valid trademark at common law OR under the Lanham Act.

2. Lanham Act calls for cancellation of trademark if at anytime registered mark becomes generic name for goods/services

II. DESCRIPTIVE: Conveys an immediate idea of the ingredients, qualities or characteristics of the goods

1. At common law, not valid trademark2. Lanham Act: May be registered if the term has acquired a

secondary meaning distinctive to applicant

III. SUGGESTIVE: Requires imagination, thought, perception to reach conclusion about the nature of the goods.

1. Entitled to registration w/o proof of secondary meaning

IV. ARBITRARY OR FANCIFUL: “Fanciful” = words invented solely for their use in commerce; “arbitrary” = common word used in unfamiliar way for use in commerce

1. May be registered w/o proof of secondary meaning

a. Suggestive and arbitrary/fanciful marks = “technical trademarks.” Called this because they get immediate trademark status. Why: Nature of the term indicates public will perceive as trademark; appropriation of nondescriptive term doesn’t disable competitors; offers certainty regarding term status

b. Achieving secondary meaning (acquired distinctiveness)

i. Must demonstrate that public in fact recognizes terms or symbols as indications of the source of the goods or services — Most consumers have come thing of the word not as descriptive but as name of product.

ii. Factors: Amount and manner of advertising, sales volume, length and manner of use, direct consumer testimony, consumer surveys

iii. Designation must be consistently and repetitively used as an indicator of source of origin or sponsorship

1. Rock & Roll Hall of Fame: Picture of museum might be more readily perceived as ornamentation; museum did not use drawings or pictures of its buildings with consistency, thus building design not valid trademark.

2. PERMISSIBLE TRADEMARK SUBJECT MATTER

a. Word marksI. SLOGANS: A combination of words capable of distinguishing

goods or services can be registered as a trademark1. Descriptive slogan can acquire secondary meaning through

extensive, continuous and substantially exclusive use

II. PERSONAL NAMES: No protection unless and until it acquires secondary meaning. Three CL concerns:

a. Reluctance to forbid someone from using his own name on his business

b. Some names so common that consumers are unlikely to confuse source

c. Preventing a person from using his name to denote business may deprive consumers of useful info

2. No personal-name “rule” in Lanham Act – all it says is that a mark that is primarily a surname can’t be registered in absence of secondary meaning

3. Peaceable Planet: Rule inapplicable when CL concerns don’t apply (name “Niles” for toy camel is suggestive).

b. Service marksi. Any word, name, symbol, or device, or any combination thereof…

used to identify and distinguish the services of one personii. Use in the advertising of services, as well as in their sales or

offering.

c. Collective and certification marksI. COLLECTIVE MARK: Service or trademark used by members of

collective group/organization. Two types:1. Collective trademarks and service marks : Used by members

of an organization to identify and distinguish their services2. Collective membership marks: Used by individual members

to indicate that they are members of a group. May be owned by orgs that never use their symbols in commercial manner (e.g., fraternity)

II. CERTIFICATION MARK: Guarantees/certifies that goods/services meet certain criteria or conditions.

1. Owner can’t arbitrarily choose whom it will permit to use the mark – subject to cancellation under LA if a potential user who meets certifier’s criteria is excluded.

III. GEOGRAPHIC INDICATIONS: US obliged to protect “geographical indications” under the 1994 World Trade Organization Agreement on Trade Related Aspects of Intellectual Property (TRIPs)

1. Geographic term protectable if goods originate in a particular place and the goods would be (or would be perceived to be) be qualitatively different if they came from some other place

d. Trade dressI. COLOR: Can sometimes meet basic legal requirements for use as a

trademark, if it acts as a symbol to distinguish goods/ identify source, and doesn’t serve any other significant function

e. Other identifying indicia I. SENSORY INDICIA: Trademark protection extends to any word,

name, symbol or device used to indicate source of goods 1. Scents : Trademark board has recognized scented fragrance

as trademark for thread and embroidery yarn. Excludes scents or fragrances of products which are noted for those features, e.g., perfumes or scented household products.

2. Taste : Board has expressed doubt flavor could ever serve as trademark

3. Touch : Velvet texture of wine bottle registered as trademark4. Sound : Companies such as AT&T, Intel have registered

sound marks

3. ESTABLISHING TRADEMARK RIGHTS & OWNERSHIP

A. OWNERSHIP: Established by priority of appropriation.i. Priority established by bona fide usage

1. Use of the mark must be deliberate and continuous, not sporadic, casual or transitory

ii. Generally, in disputes: look at first interstate use

B. USE: Lanham Act requires “use in commerce”i. Six months after registration, party has to demonstrate use

(although extensions can be requested). To renew trademark registration, every 10 years, a company must submit a sworn statement that it is using the mark

ii. Sufficient use = bona fide use in commerce 1. Vague, remote, abstract intention to use doesn’t meet bona

fide standard. 2. Company must have trade in the goods sold under the mark

or at least an active and public attempt to establish tradea. Goods must be sold, services must be rendered.

iii. LA placement requirements 1. On goods : Place mark on the goods (or their containers or

displays or tags or labels, or if that’s not practicable because of the nature of the goods, on documents associated with the goods or their sale)

2. On services : Use or display mark in the sale or advertising of services

iv. Commerce: All commerce which may lawfully be regulated by Congress (interstate commerce). Sufficient if:

1. Services rendered to customers traveling across state boundaries (not required that services be rendered in more than one state); or

2. Promotion and advertising in interstate commerce

C. ANALOGOUS USE

i. Advertising and promotion is sufficient to obtain rights in a mark so long as:

1. A&P occur within a commercially reasonable time prior to the actual rendition of service AND

2. The totality of acts creates association between the goods or services and the mark.

ii. Becker: By the time t-shirt vendors started selling shirts with name of baseball stadium, stadium name was already associated with baseball because of promotional efforts, so the mark was protected.

D. EXTRATERRITORIAL USE

i. Commerce Clause reaches to foreign trade. Commerce = trade between subjects of the US and subjects of a foreign nation.

1. Generally foreign mark is not protected if someone else uses it first in the US.

2. But some courts will find priority in a foreign trade usage a. Buti: Prior use and advertising of a mark in

connection w/goods or services marketed in a foreign country creates no priority rights in the mark in the US

b. Intl Bancorp: Mark used in commerce where mark used on gambling site because US citizens purchased casino services sold by a subject of a foreign nation (even though the foreign mark holder had never used or registered its Monte Carlo Casino

mark in the US) 3. There may be an exception for foreign “famous marks,” but

the exception is contesteda. Majority view: ITC Limited - Refused to recognize

doctrine on basis of policy, in light of the fact that doctrine not recognized in the comprehensive and frequently modified federal statutory scheme for trademark protection in Lanham Act. Any policy arguments should be made to Congress.

b. Minority view: Ninth Circuit only -- recognizes famous marks under federal law as a matter of policy (holds that not recognizing would promote customer confusion and fraud)

ii. But when filing US registration, foreign company may refer back to the original foreign filing date (up to six months before US filing). So in a dispute, the foreign party would win over company that started using a mark in commerce after the foreign filing date.

E. PRIORITY: At common law, the person who first uses trademark in connection with specified goods has the exclusive right to a trademark.

i. Use does not have to have gained wide public recognition – even a single use in trade may sustain trademark rights if followed by continuous commercial utilization

ii. Use must be sufficiently public to identify or distinguish marked goods in an appropriate segment of the public mind

1. Secret, undisclosed internal shipments generally inadequate, because primary purpose of trademark is to provide means for consumers to distinguish goods, not company personnel

2. Evidence of sales highly persuasive3. Must be bona find use in trade – not attempt to reserve mark

for the futurea. Blue Bell: Attaching label with name of planned

new clothing line to older line of clothing was a bad faith attempt to reserve a mark

F. CONCURRENT USE: 2 parties independently employ same mark upon goods of the same class but in separate markets wholly remote from one another.

I. Prior appropriation is not relevant : Newcomer to market enters it subject to whatever rights were previously acquired there in good faith (even if newcomer had mark first)

1. United Drug: Senior “Rex” user estopped from using mark in junior user’s territory because during a long period of

years the senior user had confined use to a limited territory, thus taking the risk that some innocent party elsewhere might use same mark and build up trade in it.

ii. Lanham Act limited area exception: A junior user has right to continued use of an otherwise infringing mark in a remote geographical area if that use was established prior to the other party’s federal registration.

1. Junior user must have used the mark continuously in that location and initially in good faith

a. Thrifty: Thrift Cars allowed to keep using mark in limited area where it had established a market presence by time Thrifty federally registered

4. FEDERAL REGISTRATION OF TRADEMARKS A. REGISTRATION PROCESS

i. Application 1. Minimum requirements

a. Applicant’s name b. Name and address for correspondencec. Drawing (clear drawing of the mark suitable for

printing on the certificate of registration)i. If not used in stylized form, may be

registered in block-letter form, otherwise it may have to be prepared by a draftsman

ii. Sound mark- use written descriptioniii. 3D mark (e.g. sculpture) – must be

presented in a line drawing not a photograph

d. Identification of goods and servicese. Filing fee of $375 per class

2. Additional requirements that can be satisfied later: a. Dates of useb. Specimens of usec. Color features of markd. Declaration

ii. Examination by PTO1. About six months after filing, trademark atty on PTO staff

will review the application for form, completeness and bars to registration.

iii. Publication for opposition1. If application approved, it’s published in weekly PTO

publication. This enables anyone who believes he/she will be damaged by mark to oppose its registration

2. Opposition must be filed w/in 30 days from date of publication

B. BENEFITS OF REGISTERING MARK ON THE PRINCIPAL REGISTER

i. Nationwide protection from the date of the application 1. Once a mark is federally registered, the registrant’s

trademark rights relate back to the date of the trademark application and give the registrant nationwide priority against a party adopting the same or similar mark after the date of the registrant’s application

2. If the mark is left unregistered, common law protection may be limited to those areas in which the mark had actually been in use or become known

ii. Incontestability 1. If the registered mark is used continuously for five years, it

may become incontestableiii. Warning to others

1. Registered mark will easily be found in trademark searches, so 3rd parties shouldn’t blunder into using similar mark for similar goods and services.

2. If mark is registered, its constructive date of first use will be the date the application for registration was filed

3. Also PTO will protect the mark by refusing the register any other mark that the Trademark Examiner thinks likely to cause consumer confusion

iv. May bar imports 1. Imports w/infringing marks may be blocked at customs, so

long as the registrant is a US citizen and is not related in certain ways to the producer of the goods

v. Provides protection against counterfeiting 1. Enhanced remedies against counterfeiters of trademarks

registered on the Principal Register vi. Evidentiary advantages

vii. Permits use of the “R” symbol 1. parties on the supplemental register can use it too. 2. Anybody adopting a mark in commerce can use “TM” but

“R” means product is registered and indicates greater protection

viii. Confirms ownership and validity ix. Basis of foreign filings x. Preemption of state regulation

1. In effect, the Lanham Act preempts state truth-in-labeling laws when they would compel the registrant to change the trademark’s presentation

C. THE SUPPLEMENTAL REGISTER

i. Distinctiveness not required1. Mark eligible for SR so long as capable of distinguishing

applicant’s goods or services. 2. Does not to distinguish goods or services from others, so

terms that are descriptive/geographic/surnames OK 3. But Lanham Act specifically states that registration of a

mark on SR does not constitute an admission that the mark has not acquired distinctiveness

4. Usually after five years of use trademark registered on SR will be eligible for register on PR, because by then it has acquired secondary meaning

ii. No intent-to-use for SR1. But PR intent-to-use application can be amended to the SR

upon application alleging use. Also, foreign registration doesn’t need to allege use for SR – foreign applicants just need to show bona fide intention to use

D. NOTICE OF REGISTRATION

i. Notice = displaying with the mark the words:1. “Registered in US Patent and Trademark Office”; or2. “Reg. U.S. Pat & Tm. Off.”; or3. letter R w/in circle

ii. Notice required to get profits or damages in an infringement suit – unless the court finds that the D had actual notice of registration

E. MAINTENANCE AND RENEWAL OF REGISTRATION

i. Between the fifth and sixth year after registration date (or within six-month grace period after for add’l fee):

1. Registrants must file an affidavit that the mark is in use for at least some of the goods or services covered in the registration.

2. If the registrant doesn’t file, the PTO will automatically cancel the registration

ii. Renewals 1. Registrant must file an affidavit of use in each 10th year after

registration (or w/in 6mo grace period)

F. REGISTRATION OF MARKS OWNED BY FOREIGN APPLICANTS

i. US is member of Paris Convention for Protection of Industrial Property – main treaty covering patents and trademarks

1. Originally ratified in 1884, 171 members as of 20072. Based on principle of national treament.

a. Non-discrimination principle: member nations must treat nationals or domicilaries of other members as they would their own citizens

ii. Ways in which foreign applicant from a Paris Convention or WTO country may register trademark in the US:

1. File application in same way as American applicant: Allege use OR intent to use in interstate OR foreign commerce with the US

2. Obtain registration on basis of prior registration in the applicant’s country of origin

a. CO = either country in which applicant has biz est. (or if none, country in which applicant lives/is a national).

b. Mark can be registered on the PR if eligible —otherwise on SR

3. Apply to register based on an application to register the mark in the country of origin.

a. US application must be filed w/in six months of the date on which app was first filed abroad

b. US app will receive the same force and effect as if it had been filed in the US on the date on which it was first filed abroad

iii. Madrid Protocol 1. MP is a trademark filing treaty among over 70 countries2. Allows foreign applicants to extend their int’l registrations

to the US 3. Allows domestic mark owners to obtain intl registrations

exnteding to member countries based upon the owner’s US applications or registrations

4. Intl registration system admin by World Intellectual Property Organization (WIPO) based in Geneva

G. PRIORITY: INTENT TO USE i. All applicants have a choice: Apply to register mark based on pre-

application use OR on the basis of a bona fide intention to use the mark in commerce.

ii. Lanham Act was amended to allow application based on intent to use for policy reasons. Problems w/ the old policy:

1. Legal uncertainty had a chilling effect on biz investment, — business had no assurance that after selecting and adopting mark, and investing in packaging, advertising and marketing, it would not learn that its use of the mark infringed another acquired through earlier use.

2. Gave foreign applicants an advantage, because US was the only developed country that required use before registration.

iii. Zirco: Ct rejected opposition to mark Datacel, because AT&T had had filed intent to use application prior to other company’s actual

use of the mark Datacell1. Filing of intent-to-use application constitutes constructive

use of mark since filing date of the application for registration of mark on the principal register = right of priority w/legal effect of first use at common law

iv. Kodak: Board dismissed Kodak opposition to competitor’s intent-to-use application because mark had not acquired secondary meaning. Too early to file such a claim.

1. Question of mere descriptiveness cannot be answered until after use has begun

2. Mark can still be opposed at cancellation proceeding after use begins and mark is registered

H. BARS TO REGISTRATION

i. Section 2(a) of the Lanham Act: Consists of or comprises immoral, deceptive or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute. No amount of secondary meaning can overcome this bar to registration. These are the types of marks that we don’t want to afford protection to as a matter of policy.

1. Immoral or scandalousa. A substantial composite of the general public would

regard it as offensive.2. Disparaging to a particular group

a. A substantial composite of that group would regard it as offensive.

3. Deceptive. Three elements of deceptive trademark:a. Mark misdescribes the goodsb. Misdescription is such that consumers are likely to

think that the misdescription is accuratec. Misdescription is either likely to materially affect

purchasing decision or likely to cause consumers to initially seek out the good or service.

i. Mark which has first two only = deceptively misdescriptive mark. Secondary meaning can help.

ii. Mark which has all three elements - No amount of secondary meaning will help.

ii. Section 2(b): consists of or comprises the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation, or any simulation thereof

1. Absolute bar to registration. No requirement to show add’l element such as disparagement or false association.

2. Simulation seems to be interpreted to require fairly exact

copying. Many registered marks have a flag design.

iii. Section 2(c): A name, portrait or signature identifying a particular living individual except by his written consent

1. Absolute bar, purpose to protect rights of living persons’ rights of privacy and publicity

2. Name, portrait or signature (of a particular living individual or dead president during widow’s lifetime)

a. Does not have to be person’s full name, and the name can be long to more than one person, so long as relevant public would associate goods w/person opposing the mark

iv. Section 2(d): A mark which so resembles a mark registered in the PTO or a mark previously used in the US by another & not abandoned, so as likely to cause consumer confusion

1. Broad scope of protection for famous marks, but less protection if the other mark is also famous.

2. Mark less likely to be confusing if it uses a common surname - purchasers are accustomed to distinguishing between such common surnames by slight differences in the mark as a whole

3. Not bad faith to see foreign mark and copy it in the US.4. Multifactor “Likelihood for confusion test.” First two are

most important. a. How similar are the marks (looks, pronunciation,

meaning of the terms marks use)b. How similar are the goods or services c. How similar the trade channels are (how parties

sell the goods/services)d. How much care buyer uses in selecting the goods

(confusion more likely in impulse purchase)e. How sophisticated is the group of consumersf. How distinctive is the trademark (is the term

arbitrary/suggestive/descriptive/generic?). Famous marks tend to be more distinctive. Last names tend to be less distinctive.

g. How many other similar marks are out there (Confusion less likely in crowded field because consumers used to distinguishing among many similar marks)

h. Applicant’s motive in selecting mark (bad faith shows intent to confuse)

i. Consent agreement between similar mark holders? Not dispositive, but it weighs against confusion if parties most vested in it think there is

no confusion.

v. Section 2(e): Merely descriptive, or deceptively descriptive; geographic (mark that primarily describes where the goods come from, or deceptively misdescribes where they come from); surnames; functional

1. Geographic termsa. Lanham Act addresses geographical marks in three

categories – 2(a), 2(e)(2), 2(e)(3). i. For 2(a) must meet elements for deception –

same legal standards for 2(e), except that (e)(3) specifically involves deception involving geographic marks.

b. Test for 2(e) – geographically descriptivei. Whether the term in the mark sought to be

registered is the name of a place generally known to the public; and

ii. The public would make a goods/place association – believe that the goods or services for which the mark is sought to be registered originate in that place. G/P association presumed if the goods do in fact come from place named.

iii. Exception to presumption: If a genuine issue exists as to whether the place named is so obscure or remote that purchasers wouldn’t recognize it as indicating geographical source of the goods. In that case, examining PTO attorney must submit evidence sufficient to establish public association w/that place. Look at what would be recognizable by purchasers of the goods/services – not public as a whole.

c. Geographically deceptive - (2)(e)(3) – No amount of secondary meaning can overcome.

i. The primary significance of the mark is a generally known geographic location;

ii. The consuming public is likely to believe that the place identified by the mark indicates the origin of the goods bearing the mark, when in fact the goods do not come from that place (where they are made);

iii. The misrepresentation was a material factor in the consumer’s decision

2. Surnames – 2(e)(4)a. Test for whether a mark is primarily merely a

surname: Consider primary significance of the mark to the purchasing public. Benthin factors:

i. Degree of surname rareness;ii. Whether anyone connected w/applicant has

the surname;iii. Whether the term has any recognized

meaning other than a surname; andiv. The structure and pronunciation or “look

and sound” of the surname.b. If user of a surname demonstrates it has become

distinctive w/in meaning of 2(f) it may be registered

3. Numerals, letters and initials used as grade or style designations

a. General rule: A word, phrase, symbol, numeral or letter which merely differentiates btwn various grades, styles, colors or types of products and does not designate their source is not a protectable trademark.

b. Grade or style designation is protectable IF in addition to specifying quality, style or type of product also and primarily designates the source of goods (analyze based on manner of use, intent of user, and meaning understood by consumer)

4. 2(e)(5) – Functionalitya. Functional mark is not eligible for trademark

protection even if it has have acquired secondary meaning (purpose is to draw distinct line between patent law, which protects functional things, and trademark, which does not)

b. A product feature is functional if it is essential to the use or purpose of the product or if it affects the cost or quality of the product

c. Morton-Norwich factors weighing in favor of functionality:

i. Existence of a patent disclosing utilitarian advantages of the design;

ii. Advertising materials in which originator of design touts utilitarian advantages;

iii. Availability to competitors of functionally equivalent designs (can’t use trademark to prevent competition in non-reputation way)

iv. Facts indicating that the design results in a

comparatively simple or cheap method of manufacturing the product (don’t want to deprive competitors of the cheapest, most efficient method of making something)

d. Aesthetic functionality: appearance of mark such as color etc provides some specific competitive advantage (in a practical way)

e. If non-functional, a product configuration may only be registered upon a showing of acquired distinctiveness under 2(f)

5. Section 2(f): Exception for marks that have established that otherwise would not be registerable under 2(e) but have acquired secondary meaning

6. In order to oppose mark, you must have standinga. Must have a real and personal stake in the outcome

of the opposition b. Basis for opposition must be reasonable

7. “Dilution” of mark: Not a bar to registration under Sec. 2, but interested third parties may initiate an opposition or cancellation action on the basis of dilution under Sec. 43(c)

5. LOSS OF TRADEMARK RIGHTS

a. Genericism: Trademark holder may lose trademark rights if the term ceases to indicate source of goods/services and instead becomes synonymous with the goods/services

i. Key issue: What members of the general consuming public understand word to mean

ii. Owner must protect mark : Failure to use terms in trademark fashion or to adequately police use of the term by others can result in loss of trademark significance

1. Bayer: Bayer’s own labeling showed that aspirin had become generic term for drug, because it changed label from “Aspirin” to “Bayer – Tablets of Aspirin”

iii. Ways to help protect trademark rights 1. Trademark education – advertisements aimed at public,

brochures aimed at company personnel/businesspeople2. Use product’s generic name along with the trademark

b. Standards for assessing genericismi. Public perception of the mark is key to trademark status

ii. Consumer surveys: If properly conducted, can demonstrate whether consumer views trademark as the brand/source of the

product or the good itself1. Motivation survey: Asks participants why they buy a

product – because they like the product or the producer. The 9th circuit gave weight to them in DuPont, but Congress has since amended Lanham Act to say that motivation surveys won’t be considered in the analysis.

c. Genericism and confusioni. “De facto” secondary meaning : Public identifies a term w/ a single

source of origin but NO trademark protection. Two types: 1. The public does not recognize the term as a brand name,

but nonetheless knows that there is a single source for the goods. Happens because:

a. Producer has a patent monopolyb. Others unwilling/unable to competec. Producer has not been using the term applied to the

goods in proper trademark fashion2. Producer selects as a trademark that is the generic name for

the goods, but through substantial advertising, proper trademark use, and market dominance, succeeds in establishing public trademark recognition for generic name

ii. Certificate of registration = prima facie evidence that mark is not generic nor merely descriptive

iii. Practice tips: 1. Don’t use trademark as a verb2. Always follow trademark with generic term for product3. Be consistent (don’t make trademark plural, don’t make

it possessive)

d. Abandonment: A mark shall be deemed to be abandoned when either of the following occurs: 1) its use has been discontinued w/intent not to resume… OR 2) when any course of conduct of the owner causes the mark to become generic name for the goods... or otherwise to lose its significance of the mark. 15 USC §1125

i. Intentional abandonment : Non-use1. Nonuse for three consecutive years is prima facie

evidence of abandonment a. Defendant may rebut presumption by offering

reasonable explanation for non-use2. “Intent not to resume” = intent not to resume use w/in the

reasonably foreseeable future (not intent never to resume)a. Simply stating that you intend to resume use in

future is not enough to establish intent to resume

b. There must be concrete plans for future use in the United States (foreign use doesn’t count)

c. Challenging infringing uses of trademark is not use3. Trademarks with artistic merit: When trademark has artistic

merit, public’s interest in free speech is weighed into analysis, and court less likely to protect mark in close case

ii. Non-intentional abandonment : Assignments in gross, naked licensing and failure to police

1. Assignment in gross: Invalid assignment. Occurs when mark is transferred w/o accompanying goodwill.

a. Any rights the new owner has are simply based on its own use – earlier priority date is lost.

b. For goodwill to transfer, the assignees must produce a product “substantially similar” (same quality and nature) to the assignor such that consumers will not be deceived or harmed.

c. Generally an assignment of a trademark and its accompanying goodwill entitles the assignee to step into the shoes of the assignor, gaining whatever priority the assignor had in the mark.

2. Trademark license: Transfers right to use mark but not ownership (essentially promise not to sue).

a. A trademark owner may grant a license for limited or perpetual amount of time

b. Licensor only remains protected so long as it maintains quality control of the goods and services sold under the trademark

3. Uncontrolled / naked licensing: When the owner fails to exercise adequate quality of the mark. May result in involuntary forfeiture of mark.

a. “Quality control” does not necessarily mean that licensed goods must be of high quality – just that they are of equal quality. Customers are entitled to assume consistency of goods sold under mark.

b. There should be quality control language in the license agreement in order to protect the mark

c. Level of control and inspection required depends on the product/marketplace. Courts primarily look at process for ensuring quality, not actual quality.

i. Barcamaerica: Wine bottled by season, so at the very least Barca should have sampled licensee’s wine on an annual basis, in some organized way, to ensure that they were of sufficient quality to bear Barca’s mark.

6. TRADEMARK INFRINGEMENT

a. 15 U.S.C. §1114 §32 deals with registered marks (equivalent of §43 for unregistered marks): Prohibits use in commerce a mark that is an imitation of a registered mark which is likely to cause confusion or to cause mistake or to deceive.

b. Factors used in the Ninth Circuit for assessing likelihood of confusion (other circuits use similar factor tests)

i. Strength of the marks1. Factors establishing strength of mark

a. Amount of sales, length of use, amount of advertising, whether mark is registered, whether mark has achieved “incontestable status”

2. Other parties using the same mark won’t weaken it if the other goods are unrelated

3. Doesn’t matter if the mark is surname or descriptive if it is has already acquired secondary meaning

ii. Similarity of the marks (based on appearance, sound, meaning)1. Foreign meanings

a. If a term has a meaning in a foreign language, the foreign meaning will be applied in assessing whether the terms mean the same thing – but only if a sufficient percentage of the relevant consumers would understand the foreign term (e.g., Red Bull and Toro Rojo held to be the same).

b. Consider English and foreign pronunciation: If they’re not pronounced the same and don’t look the same, that could weigh against similarity even if they have the same meaning.

2. Comparison of appearance a. The standard is not a side-by-side comparison.

Rather: if consumer saw Trademark A in the morning at one store, and later in the day saw Trademark B at another store, would he think they were the same or associated? Therefore, requires fairly significant differences in appearance.

b. Packaging: If one product is packaged so differently that the commercial impression is sufficiently different that may suggest consumers won’t be confused despite trademark similarity. But this only applies if consumers are exposed to product packaging while they are making selection (e.g., not where consumer ordering wine at a restaurant)

3. House marks a. Including a “house mark” (name of the company

that makes product) in front of trademark won’t preclude a finding that the marks are sufficiently similar to confuse consumers -- but may help avoid confusion in trade dress claims

4. Descriptive, truthful use of another’s trademark is not grounds for trademark infringement

a. Bumblebee: Tuna salad maker stated on label that salad made with Bumble Bee tuna – not infringement because it was merely a descriptive, truthful use.

iii. Similarity of the goods1. It used to be that the goods had to be substantially identical

– Now P and D’s goods must merely be related. a. E.g. use of Aunt Jemima label by maker of pancake

batter and different maker of pancake syrup was sufficiently confusing because products related

iv. Similarity of the marketing channels used1. Looks at where the parties sell their products (retail

establishments, restaurants, Internet etc) and where/how they advertise the products

v. Degree of care exercised by purchasers1. Looks at the level of sophistication of the buyers, whether

the product is an inexpensive, impulse purchase or one that buyers research more carefully

vi. Evidence of actual confusion1. Look at consumer survey evidence 2. Lack of actual confusion won’t defeat otherwise successful

claim, because only need likelihood of confusion 3. But when there is evidence of actual confusion it tends to

weigh heavily in favor of party asserting infringement

vii. Defendant’s intent in adopting the mark1. Bad faith in adopting the mark weighs heavily in favor of

finding likelihood of confusion2. If the marks are similar and defendant actually knew of the

other mark at the time it was adopted, court can infer that defendant adopted the mark in bad faith

3. Helps to show good faith if alleged infringer brings suit to resolve issue

c. Initial interest confusion i. Trademark protection not limited to likelihood of confusion at

point of sale. Mark also infringes if it is likely that it would attract potential customers based on the reputation earned by the owner of the original mark, regardless of whether purchasers believe they’re buying product made by or associated with the owner of the original mark.

ii. Initial interest confusion in click-through Internet ads1. Advertisers pay search engine to appear as a sponsored

result or have their ad pop up someone enters a search term that advertiser wants associated with its product/business.

2. Theory of confusion: When users click on ad/like that appears after they search for trademark term, they think it will take them to a site sponsored by the trademark owner

3. Unresolved issue – courts struggle it. In Playboy found click-through ads tended to show evidence of initial confusion, but other cases come out differently

d. Defendant’s use in commercei. Internet uses

1. WhenU: considered whether the term was used in a “trademark way” – not one of the factors, but some courts will consider. If mark is used in a functional way use is not a trademark infringement.

ii. Extraterritorial use in commerce 1. Lanham Act can be applied extraterritorially

a. If the defendant is an American citizen, they are within jurisdiction of US trademark law

b. If the defendant is a foreign citizen, jurisdiction is proper only if the complained-of activities have a substantial effect on US commerce, viewed in light of the purposes of the Lanham Act. Plaintiff must show likelihood that American consumers would be confused.

e. Who has standing to sue for trademark infringement i. Typically only owner of the trademark has standing (not licensee)

1. Non-exclusive licensee can participate but can’t initiate suit2. Exclusive licensee has standing IF the exclusive license

looks and feels more like an assignment:a. license is for indefinite time, there’s no geographic

limits, there’s no quality control provisions

f. Reverse confusioni. Occurs when a larger, more powerful entity adopts the trademark

of a smaller, less powerful trademark and causes confusion as to the origin of the senior trademark user’s goods or services, making people think the senior user is using the junior user’s mark, just

because the junior user is so much more well known. ii. Apply all the usual likelihood of confusion factors. Primary

differences is in the analysis: 1. Focus shifts to how strong the junior user’s mark is, rather

than the senior user – the stronger the junior user’s mark, the more likely finding of reverse confusion.

2. Bad faith not based on intent to free-ride, but rather evidence that senior user is trying to push out the junior.

g. Secondary liability for trademark infringementi. Contributory trademark infringement

1. Induced infringement a. Look for evidence that shows defendant induced

third party to infringe 2. Knowingly supplied product w/which third party infringes

a. Know or should know that someone is going to use a product to commit trademark infringement – like if you know/should know that D is going to attach the same / similar trademark as one registered.

3. Knowingly supplied means of infringement

ii. Indirect trademark infringement 1. D supplies product to third party for 3rd party to sell to

consumers when the D knows that either the product itself is likely to be confused w/trademark owner’s product, or the product includes a trademark that is confusingly similar to the trademark owner’s mark

iii. Vicarious trademark infringement 1. D knows or should know that a third party is infringing

trademark owner’s trademark, and the D financially benefits from infringement and the D has the ability to control conduct of the third party.

h. If a plaintiff succeeds in making out a prima facie case for trademark infringement, including the element of likelihood of consumer confusion, D may offer rebutting evidence on any element, or raise an affirmative defense to bar relief.

7. DEFENSES TO INFRINGEMENT

a. Incontestabilityi. Mark achieves incontestable status after continuous use for five

consecutive years after registration date, so long as:1. No final decision adverse to registrant’s claim of ownership,

or registrant’s right to register name;2. No proceeding pending involving those rights;

3. An affidavit is filed w/the Commissioner w/in one year after the expiration of the five year period stating that the goods in services have been in continuous use for five years and are still in use in commerce;

4. The mark is not the generic name for goods/servicesii. Once a mark is incontestable, it can’t be challenged on the

ground that it is merely descriptive1. Courts split on whether descriptiveness of incontestable

mark can be considered under the distinctiveness factor in likelihood of confusion analysis

iii. Incontestable defenses: Section 33(b) lists nine exceptions to incontestable status. They are affirmative defenses – alleged infringer has burden of proof.

1. Fraudulent acquisitions of trademark registration or incontestable right to use mark

2. Abandonment 3. Use of the mark to misrepresent source

a. Including intentionally false and misleading designations of origin, nature, ingredients

4. Fair use: Use of mark in descriptive sense rather than as a trademark

5. Limited territory defensea. Applies to junior user who adopts mark innocently

before senior user registers it and has used the mark continuously ever since. Restricted to area of continuous use by junior user prior to senior’s users registration.

6. Prior registration by defendanta. Where alleged infringer registered and used the

mark prior to the registration of P and did not abandon it, senior registrant may continue to use its mark, but only within the area where it was used prior to P’s registration.

7. Use of mark to violate antitrust lawsa. Rarely successful defense

8. Functionality9. Equitable principles

a. Incl laches, estoppel and acquiescense

iv. Fraud on the trademark office defense 1. Must show material and knowing misrepresentation

a. What constitutes an intentional material misstatement is judged by objective manifestations of applicant’s intent, not applicant’s subjective intent. Intent exists if applicant knew or should have

known that its statement was materially incorrect. Honest mistake no defense if mistake unreasonable

v. Fair use defense 1. Applies when alleged infringer uses a term in good faith

primarily to describe product rather than to identify it with a particular source (trademark use)

a. US Shoe Corp: D’s use of the words “feels like a sneaker” protected by fair use defense because it was used in a descriptive sense to claim a virtue of the product – restates key selling point. D not using it to indicate source or origin – D prominently displayed its own logo, and the words were small.

b. Car-Freshner: D entitled to use tree shape for air freshener as a descriptor of the pine-tree scent and Christmas theme. Regardless of whether protected mark is descriptive, suggestive, arbitrary or fanciful, competitor has right to use mark in ordinary descriptive sense to describe its goods.

2. Affect of consumer confusiona. KP Permanent Makeup: Risk of confusion doesn’t

bar fair use defense. Chance of confusion is risk P takes in adopting descriptive phrase for its mark.

b. But in Ninth Circuit, degree of consumer confusion remains a factor in evaluating fair use.

vi. Nominative fair use 1. Not a statutory defense2. Where D uses a trademark to describe the P’s product,

rather than its own, a commercial user is entitled to a nominative fair use defense if he meets three requirements:

a. Product or service not readily identifiable w/o use of the trademark

b. Only so much of the mark is used as is reasonably necessary to identify the product/service

c. The user does nothing to suggest sponsorship or endorsement by the trademark holder.

vii. Laches 1. Equitable doctrine: Equity aids the vigilant, not those who

sleep on their rights. Applies to parties who have unjustifiably delayed in bringing suit.

a. Pro-Football: Laches runs only from the time a party reaches majority age. Therefore Native Americans suit against Redskins not barred because at the time of registration one of Ps was only 1yo

viii. Sovereign immunity 1. Bars suit against state entity (waiver of immunity must be

express) 2. Neither the right to be free from a business competitor’s

false advertising about its product or a general right to be secure in one’s business are property rights protected by DP clause

8. SECTION 43(A) REMEDIES FOR UNREGISTERED MARKS

a. Scope: Protection limited to geographic area in which the mark is used

b. Trade dress: Unregistered TD protectable if distinctive, either because it has secondary meaning or because it is inherently distinctive.

i. If trade dress is inherently distinctive, proof of secondary meaning is not required to prevail under 43(a).

ii. Two Tacos: Restaurant’s festive décor was a form of packaging, not design, and was inherently distinctive

iii. Product-design trade dress can’t be inherently distinctive. Wal-Mart: Clothing designs not inherently distinctive

a. When close call between packaging and design, courts should err on side of caution and classify ambiguous trade dress as product design requiring secondary meaning

c. Functionality i. Plaintiff in an action for infringement of an unregistered mark has

the burden of proving that the mark is not functional.1. If a feature is involved in a utility patent, it is highly likely

that it won’t be protectable under trademark lawii. Aesthetic functionality: When goods are bought primarily for

aesthetic value, features may be functional because they definitely contribute to that value and thus aid performance of an object for which the goods are intended. Rest of Torts §742)

d. Trade dress infringementi. To establish a claim of trade dress infringement under 43(a),

plaintiff must demonstrate:1. Trade dress is either inherently distinctive or it has acquired

distinctiveness through secondary meaning; AND2. There is a likelihood of confusion between defendant’s trade

dress and the plaintiff’s trade dress (apply factors)ii. If includes house mark less likely that it will be found to infringe

e. False designation of origini. Section 43(a) is one of the few provisions of the Lanham Act that

goes beyond trademark protection. “False designation” doesn’t have to technically be a trademark – something somehow used in connection with a trademark will suffice

ii. “Origin” refers to geographic origin, origin of source, or origin of manufacture

1. Does not refer to the person or entity that originated the ideas or communications that “goods” embody or contain, because that would conflict with copyright law.

2. Dastar: Defendant took creative work in the public domain, copied it, made some minor changes and produced its own series of videotapes, without producer of the original video series. No false designation of origin, because origin refers only to the manufacturer/producer of the physical goods

iii. Creates federal remedy for traditional trademark infringement of unregistered marks – “passing off” and “reverse passing off”

1. “Passing off’ = Coke passes off its product as Pepsi2. “Reverse passing off’ = Coke passes off Pepsi as its product

a. Reverse passing off can violate the Lanham Act if a misdescription of origin causes commercial injury

b. Bretford: Commercial injury must be “trademark injury.” No injury under trademark law for copying trade dress that is a functional design, like v-shaped computer table.

9. FALSE ADVERTISING LIABILITY UNDER SECTION 43a. False advertising: Advertisements that are literally false or misleading

can give rise to liability under section 43(a) i. Includes making false statements about someone else’s products

and statements about your own product

b. Limits on liability i. Only applies to commercial speech

1. Speech made for a commercial purpose- to describe products, to sell products

ii. Only applies to statements of fact, not statements of opinioniii. Liability only attaches to parties making statement (not the person

publishing statements, e.g. magazine) iv. Only competitors have standing (even though statute says that

anyone who believes he has been damaged can bring suit, courts read “anyone” to mean any competitor, not general public)

c. Comparative advertising i. Advertiser can use a competitor’s trademark in order to compare

his product to the competitor so long as the comparison is truthful and doesn’t confuse consumer about the source of the goods

d. Literal falsehoodsi. Tropicana: Commercial false because it incorrectly represents that

Tropicana made w/unprocessed fresh squeezed juice, when really juice pasteurized and maybe frozen (Bruce Jenner pouring fresh squeezed juice into a Tropicana carton and saying “it’s pure, pasteurized juice as it comes from the orange”)

e. Misleading representationsi. Advertiser may be liable if it misrepresents the quality or nature of

a competitor’s product

f. Dilutioni. Only provides protection for famous trademark

1. Factors to determine “fame”a. geographic scope of salesb. geographic scope of advertisingc. how well consumers actually recognize mark (based

on survey evidence)ii. Two forms of dilution

1. Dilution by blurringa. Two different trademarks are similar enough that

consumers will begin to find the original trademark less distinctive than it was before the second trademark started being used

b. Factors to determine if blurring has occurredi. How similar are the two marks

ii. How distinctive is the famous mark is (more distinctive, more prone to blurring)

iii. How exclusive is the famous trademark owner’s use of the mark (if many parties are using the mark, that indicates that there is already an inherent amount of dilution, so less likely liability for another similar mark)

iv. How famous the mark is (the more famous, more likely it will be diluted)

v. Intent of the other mark owner’s use (bad faith counts against D)

vi. Has the D made any association between his mark and the famous mark (if the D has actually tried to associate his mark with famous mark that would dilute the value of the famous mark)

2. Dilution by tarnishmenta. Key difference from blurring: Looks at whether

someone else’s use damages the reputation of the owner of the famous mark (very likely to be found where similar mark used in adult industry product)

iii. Limits to dilution claim . 1. Section 43(c): Three key limitations

a. Fair use (descriptions, comparisons, parodies)b. News reporting & commentaryc. Non-commercial use

2. As in other areas, the dilution claim involves trade dress and the mark is not registered, then the owner of the trade dress has the burden of proving that the trade dress is not functional

3. Monetary damages a. Available w/in cts discretion if there is a likelihood

of dilution and others factors apply, such as elements of willfulness

4. Using a registered mark is a defense to a dilution claim

10. RIGHT OF PUBLICITY

a. Developing area of lawi. Derived primarily from state law – most developed in CA because

of Hollywood, so CA case law persuasive in most jurisdictionsii. No federal right of publicity statute - but sometimes parties may

weave in an unfair competition/unregistered trademark claim under 43 of Lanham Act that’s really getting at publicity type protection

1. Using identification/description to simply identify a person is not an issue – problems arise when the way the identification is used suggests that the celebrity either is endorsing the product or is the source of the product.

b. Four elements of right of publicityi. D used the plaintiff’s “identity” (term of art)

1. Identity = some famous person’s name, picture, some other likeness (eg caricature); can even extend to catch phrases, vocal style

2. When celebrity is a group –identity can be group name, picture of the group as a whole, some other likeness

ii. D used the P’s identity to attain some advantageiii. P did not consent to use of identityiv. P suffered some sort of injury as a result of the use

1. Injury can encompass lost sales revenue (e.g. if D sells David Letterman t-shirts, that’s revenue lost to DL)

2. Person must be famous for injury to occur: No commercial

value to someone’s identity unless person is famous

c. California civil code 3344i. Right of publicity violation occurs when: “Any person who

knowingly uses another's name, voice, signature, photograph, or likeness, in any manner, on or in products, merchandise, or goods, or for purposes of advertising or selling, or soliciting purchases of, products, merchandise, goods or services, without such person's prior consent”

d. Artistic expressions i. Not actionable unless explicitly misleading or has nothing to do

with the artistic work

11. INTERNET DOMAIN NAMES

a. Unlike trademark, where the same trademark can be used on different categories of goods, once a name is taken for domain name it’s no longer available – even if there’s someone else out there w/stronger trademark in the name. This led to speculation in presumably valuable domain names, which prevented registered owners from using their domain names.

i. “Cybersquatting” = when people take possession of domain names in which they have no legitimate interest

b. Anticybersquatting Consumer Protection Act (ACPA)i. Codified at Section 43(d) of the Lanham Act

ii. 43(d)(1): One can be liable for using a domain name that is similar or identical to someone else’s trademark whether or not that mark is registered or not if:

1. Bad faith intent to profit from2. Registers, traffics in, or uses a domain name that is identical

or confusingly similar to a distinctive or famous mark

iii. Determining bad faith – factors 1. Whether the person has trademark or intellectual property

rights in the domain name2. Whether it’s the person’s legal name (or name used to

commonly identify the person)3. The person’s prior, bona fide use of the domain name before

registering it4. Whether registered for fair use reason5. Any evidence that intent was to divert consumers away from

mark owner’s web site6. Offer to sell/transfer the domain name7. Whether the person provided false information in applying

to register the domain name8. Registration of multiple domain names

9. Distinctiveness

a. Bad faith won’t be found if the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful

b. No 3rd party liability- simply running a domain name auction site doesn’t qualify

iv. Remedies 1. Equitable: Court may cancel the domain name so no one can

use it, or order that bad faith user transfer ownership to the mark owner (all that’s available if an in rem action)

2. Monetary relief: Whether eligible depends in part on jurisdictional relief. May be statutory damages.

v. “Gripe” sites” 1. “Cybergripers” (consumers who post complaints about

company on web sites under company name to inform other consumers and have no commercial motivations) are generally not covered by the ACPA

2. Developing area of law – If a person has many gripe sites, could be indicative of bad faith

vi. In rem jurisdiction 1. Available where cybersquatter is unreachable/not in US2. Not limited to bad faith registration – also available for

federal infringement and dilution claims

vii. Uniform Trademark Domain Name Dispute Resolution Policy 1. Administrative alternative to 43(d) 2. Mandatory trademark dispute resolution policy that ICANN

imposes on all domain name registrants3. ICANN standards are basically the same as 43(d)

12. REMEDIES

a. Two major categories: injunctions and monetary damages. Injunctions encompasses a wide variety of things

b. Three types of injunctions (timing)i. Temporary restraining order: Apply at the very initial stages of a

dispute involving court actionii. Preliminary injunction: Follows TRO; will often extend during the

course of litigation. iii. Permanent injunction: Awarded after court decides liability.

c. Complete or partial relief may be awarded

i. Complete: stop all use of trademark ii. Partial: D might be allowed to keep using the trademark but in

some modified form (e.g., having to change font, color, size of elements, terms used in connection w/ the mark)

d. What is sufficient to warrant injunctioni. Plaintiff will suffer irreparable harm if injunction not awarded --

monetary damages won’t be enoughii. Likelihood of confusion: Once plaintiff has demonstrated

likelihood of confusion, presumed that P will suffer irreparable harm if not granted injunction

iii. Balance of hardships: Ninth Circuit alternative test --Injunctive relief warranted if the balance of hardships tips in plaintiff’s favor

iv. Public interest factor: may also weigh for / against injunctione. TROs- number of instance where might be needed

i. Very similar to preliminary – the standard the court is going to use to decide whether to grant is basically the same. But there are three main differences btwn TRO and prelim

1. Different procedural requirements – a TRO can be granted ex parte (w/o the other party participating in the proceeding).

a. Motion can be made and a decision can be rendered w/o notice or participation if certain requirements are met – the plaintiff must show that immediate and irreparable injury will occur if not granted; and that irreparable injury will occur before D could be brought in to participate

b. P seeking a TRO does have to demonstrate that it tried to give the other party notice but that other party couldn’t be located, more likely to grant if notice has been given

2. Different durationsa. TRO w/o notice to the other party it can only last

for 10 days (can be extended for another 10 days, but that’s it)

b. Preliminary injunction can last for entire duration of the trial

3. Different standards for appeal a. TRO can’t be appealed, prelim can

f. Disclaimersi. Where the likelihood of consumer confusion is less than

substantial court may grant disclaimer reliefii. Injunction is equitable remedy: Relief granted should be no

broader than necessaryiii. Courts have a wide range of discretion in framing an injunction in

terms it deems reasonable to prevent wrongful conduct

g. Monetary reliefi. In regards to all trademark infringement:

1. A prevailing party is entitled to recover defendant’s profits and its own damages and costs when a defendant has violated plaintiff’s rights regarding registered mark or rights under Sections 43(a) or 43(d); also when defendant has willfully violated plaintiff’s rights under 43(c)

2. To prove profits, plaintiff just has to show the number of sales, up to defendant to establish what its costs were

3. A court can decide to increase damages up to 3 times within its discretion – most often where there is willful violation, but not expressly required.

4. In an exceptional case court can order the prevailing party can be awarded its attorney fees

ii. Counterfeiting: courts are going to penalize that more. 43(b)1. A court must triple the damages and award reasonable

attorney fees if there is counterfeiting unless there are extenuating circs (only may with regular trademark infringement cases)

2. The P can elect to receive statutory damages between $5K-$100K per counterfeit trademark per category of goods

3. If there’s willful counterfeiting the court can award statutory damages of up to $1mil per mark per category of goods

4. Actual damages: have to be proveniii. Cybersquatting 43(d)

1. P can elect statutory damages similar to counterfeiting ($1000k $100,000 per domain name)

iv. Factors to consider in deciding whether to award damages based on Defendant’s net profits

1. Did D intend to deceive2. Has P actually lost sales 3. Would other measures of damages be adequate4. Did P delay in bringing suit (strategically?)5. Whether the public has an interest in making the infringing

conduct unprofitable6. Whether the D was palming off his goods as the plaintiff

v. Corrective advertising awards1. Plaintiff can recover corrective advertising expenses 2. But dollar-for-dollar corrective advertising may not be

necessary to dispel the effects of confusing and misleading advertising - depends whether necessary to dispel confusion and deception in the consuming public’s mind

a. Big O: Big O not entitled to the total amount

Goodyear spent on its nationwide campaign since Big O only has dealers in 14 states, so it is unnecessary for Big O to run a nationwide advertising campaign – shows how damage calculations can get complicated.

b. Plaintiff has stronger argument if it’s already invested in the corrective advertising, so that court knows how much it will cost

vi. Reimbursement for attorney fees1. Court may award to prevailing party in exceptional cases

a. To get it usually need some kind of malice/culpable/willful conduct by the other party – might be how the party conducts itself during litigation, or bringing suit in bad faith, or willful trademark infringement

vii. Counterfeiting1. Treated more severely by Congress and the courts because it

puts the economy and people’s safety at risk 2. Can involve and can be itself criminal activity