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 What is Trademark Infringement?
Infringement is typically defined as someone attempting to achieve a
financial gain by using someone else's trademark. That someone
else's trademark must be used in commerce on goods or services of the
owner for infringement to occur.
Trademark infringement is commonly understood to include the concept of
unfair competition. Thus, trademark infringement usually occurs when
there is a false designation of origin, false description of a product or
service, trade dress copying, or trademark dilution of famous marks. When
any of these actions occur, the consumer is likely to be confused and
consumer confusion is an important component of trademark infringement.
What Marks Can Be Protected from Infringement?
Registered trademarks can be protected from infringement (15 USC
1114(1)) and registered and unregistered marks can be protected from
unfair competition (15 USC
1125(a)).
By What Authority? Marks can be protected
from infringement under the Federal Trademark law, known as the Lanham Act
(Trademark Act of 1946 and Chapter
22 of Title 15 of the United States Code). State laws involving
unfair competition, consumer fraud and state registered trademarks may
also apply. The basic goal of the Lanham Act, stated in its
legislative history, is "the protection of trademarks, securing to
the owner the good will of his business and protecting the public against
spurious and falsely marked goods."
How Do I Stop Infringement? Federal
registration of a mark under 15 USC
1052 enables the owner to sue an infringer in Federal Court and
provides the ability to block importation of confusingly similar goods (15 USC
1124), provides constructive notice of ownership (15 USC
1072), provides incontestable status after five years (15 USC
1065), and provides evidence of validity and ownership (15 USC
1057(b)). These are substantial benefits of registration.
However, federal registration is not needed for Federal Court jurisdiction
for trade dress violations, which can proceed absent these aforementioned
benefits.
When Does Infringement Occur? Generally
speaking, to be liable for trademark infringement, one must be using
another's trademark without permission to sell a product or service, or
otherwise gain financially. This might include using the exact
trademark of another or one easily confused with the other's
trademark. The use doesn't have to be exactly the same, but the
similarity has to be such that consumers may be confused as to the origin
of goods or services.
Four examples of when trademark infringement is likely to be found are
when ---
-
a person is Using
a Competitor's Trademark to sell his goods or services;
-
someone is using "Trademark.com" web site address to
directly or indirectly sell something not connected with the owner of
trademark;
-
one copies the non-functional aspects of
the packaging or product design of a competitor's goods or services
("Trade Dress"); and,
- one uses a famous mark of another, or a mark similar to the famous
mark, on competing or noncompeting goods or services (Trademark Dilution).
1. Using a Competitor's Trademark.
Generally, infringement will occur when one uses a competitor's
trademark on his goods or services to make it look as though his goods
or services are derived from the owner of the trademark. This type
of infringement is generally clear cut and remedies discussed below can
be obtained in court. Infringing goods can often be seized by
court order if they are labeled with a counterfeit mark, which is
generally defined as an imitation of a mark that is federally registered
on the principal register for trademarks.
2. Trademark.com.
Generally, there are three types of infringement involving domain names.
- The first type of trademark.com infringement occurs when a person
engaged in commerce uses their competitor's trademark in a domain
name to attract Internet traffic and acquire sales intended for the
competitor. This type of infringement is generally clear cut
and remedies discussed below can be obtained in court.
- The second type of trademark.com infringement occurs when someone
tries to acquire the trademark.com domain name and then profit by
selling it. This type of infringement, often called "cyberpiracy"
is generally clear cut and remedies discussed below can be obtained
in court or the domain name can be transferred to the trademark
owner in an administrative action.
For resolution in a Federal Court, the federal Anti-cybersquatting
Consumer Protection Act (15 USC 1125(d))
enables an owner of a trademark to sue the holder of a confusingly
similar domain name. A court may order forfeiture or
cancellation of the domain name or transfer it to the owner of the
mark, but only if certain proofs are made. Monetary awards for damages
under section 1117
may be awarded in the form of defendant's profits, plaintiff's damages
and, in exceptional circumstances, reasonable attorney fees.
According to the American Intellectual Property Law Association's
2009 Report of the Economic Survey, typical costs in 2008 for a
trademark Infringement suit range from $300,000 when less than $1
million was at risk to $1.40 million when more than $25 million was at
risk.
The proofs required are that the Internet site owner registered the
domain name in bad faith in order to profit from the mark, taking
unfair advantage of your trademark reputation. You must show
that your mark is distinctive and his domain name is confusingly
similar.
The Act lists 9 factors to consider in helping determine bad faith:
the owner's rights, whether it is a person's name, prior use, fair
use, intent to divert, offers to sell, false content, multiple
registrations, and no distinctiveness.
If your mark is famous at the time of registration of the domain
name, then in addition to bad faith, you would have to show that the
domain name is identical to or confusingly similar to your distinctive
or famous trademark, or dilutes your famous trademark.
For resolution in an administration action, the Uniform Domain
Name Dispute Resolution Policy" ("UDRP") is an
online procedure for resolving complaints made by trademark owners
about domain names. The registrars who are accredited by the
Internet Corporation For Assigned Names and Numbers (namely, those
issuing domain names with .aero, .biz, .com, .coop, .info, .museum,
.name, .net, .org, .pro) have the power to order the deletion or
transfer of domain names. A UDRP complainant must prove three
elements: that it has rights in a trade mark which is identical or
confusingly similar to the domain name; that the owner of the domain
name has no rights or legitimate interests in it; and that the domain
name has been registered, and is being used, in bad faith.
Generally, a UDRP complaint must be directed to cybersquatting.
Attorney
Louis Ventre, Jr. can help you prepare and file a complaint that
might resolve the issue for you. Filing fees range from $1,500 to
$2,500 for a single-panelist proceeding and from $3,000 to $5,500 for
a three panelist proceeding. Attorney fees typically range from
$1,500 to $5,500.
- The third type of trademark.com infringement occurs when a
consumer is aggrieved and creates what is called a "gripe
site," usually by acquiring a domain name with some variation
of trademark.com. This type of infringement is a gray
area. When such use involves no commercial gain and it
clearly conveys the nature of the site and that it is not affiliated
with the trademark owner, then it is probably not infringement,
although the West Coast, 9th Circuit has found such uses on occasion
to be actionable based on the "initial interest confusion"
of consumers. These rulings, however, have First Amendment,
freedom of speech issues, and are further legally suspect on grounds
of lack of commercial activity or fair competition.
3. Trade Dress.
Generally, trade dress refers to nonfunctional design, or perhaps the
esthetic appeal, of something used in commerce. As examples, trade
dress might refer to the decor of a restaurant (which is akin to product
packaging design), or product design.
One cannot protect under trade dress the functional aspects of a
design of something used in commerce. Functional aspects of a
design generally serve to the utilitarian purposes of the item in
commerce. On occasion, even an esthetic design can serve a
functional requirement. One example cited by the Supreme Court is
the green color of John Deere farm equipment, which had a green color
because farmers want their equipment to match. Thus, the reason
for the color wasn't arbitrary, but rather had a function serving a
competitive need. As a result, competitors were allowed to paint
their equipment green despite John Deere's trademark. If it were
otherwise and protection were allowed for functional aspects, then such
protection would inhibit legitimate competition by allowing a producer
to control a useful product feature, which is the function of patents,
not trademarks.
For trade dress infringement to apply, the trade dress must be
distinctive. For restaurant decor, intrinsic distinctiveness
is enough. However, if the trade dress embodies the design of a
product, the product design must also have acquired secondary meaning
distinctiveness, regardless of whether or not the mark is intrinsically
distinctive.
Intrinsic distinctiveness is present when the intrinsic nature of the
mark identifies a particular source. Intrinsically distinctive
trade dress is almost always a unique design or fanciful words that are
not descriptive of the product or the geographic location where the
product is made. The Supreme Court has said that a mark is
intrinsically distinctive when “in the minds of the public, the
primary significance of a [mark] is to identify the source of the
product rather than the product itself." Consumers become
predisposed to regard intrinsically distinctive marks as indication of
the producer or reference to a brand.
The Trademark
Dilution Revision Act of 2006 was signed into law on October 6,
2006. It changes the Supreme Court's intrinsically distinctive
requirement and provides for the availability of injunctive relief for
uses of a famous mark or trade name in commerce “that is likely
to cause dilution by blurring or dilution by tarnishment, regardless of
the presence or absence of actual or likely confusion, of
competition, or of actual economic injury.”
Secondary meaning distinctiveness is present if consumer recognition
and demand for the goods or services is driven by the presence of the
trade dress, more than a competitors goods and services not similarly
dressed: In other words, when the primary significance of a
product feature is to identify the source of the product.
Color can never be found to be inherently distinctive for a mark, but
it can acquire a secondary meaning, which then makes it available for
registration on the Trademark Office principle register. However,
if the color has a function, including an esthetic function, then it
cannot be registered.
4. Trademark Dilution.
When a mark becomes famous, such as Coke, Kodak, or Rolls-Royce, they
identify a particular source of goods or services, not just the product
they are on. If anyone were to be able to use these marks on
different kinds of products, the marks would gradually lose their unique
distinctiveness to identify the source. For example, one couldn't
be sure if a product labeled Coke was actually from the Coca-Cola
company or was provided by some other maker. Thus, if one could
freely use a famous mark on an unrelated product, such use would
diminish or dilute the mark's value in identifying a single source.
The Trademark Dilution Revision Act of 2006 clarifies that the trade
name or mark, doesn't have to exactly match the famous mark.
Trademark dilution will be prohibited when a mark or trade name is used
that is similar to a famous trademark, thus, harming the reputation of
the famous mark. The legal principle is defined in the legislation
as "dilution by tarnishment," which harms the reputation of
the famous mark by creating an association in the mind of the consumer
that arises because of the similarity between a mark or trade name and a
famous mark. To protect distinctiveness of a mark, this
legislation also defines "dilution by blurring," which is an
association arising from the similarity between the marks that impairs
the distinctiveness of the famous mark.
For federal trademark dilution to occur, the mark must be famous,
which generally means that it must be known by the most of the consuming
public; the mark must be unique, which typically means the mark must be
a coined or fanciful word, graphic or design; and the infringing mark
must be the same or substantially similar to the famous mark, which
generally means that there is potential for consumer confusion between
the two marks. State trademark dilution statutes vary as to these
requirements.
Remedies for Infringement. If one is improperly
using a trademark of another, then the trademark owner may sue for an
injunction to stop the infringement. Also, the owner might seek the
infringer's profits and costs of the action even if the infringer was not
a willful infringer. For trademark dilution claims, which involve
unauthorized commercial uses of famous marks, willfulness must be proved
before profits and costs can be awarded. When importation of falsely
marked goods is involved, a remedy is stopping the importation.
Treble damages, attorney's fees and seizure of goods and counterfeit marks
can be awarded when an unauthorized person knowingly traffics in goods
having a counterfeit trademark registered with the Trademark Office on the
principal register. Damages are governed by section 35 of the Lanham
Act (15
USC 1117(a)). Some Federal Circuit Courts have limited damages
under section 1117(a) to situations involving actual consumer confusion
for willful infringement.
Is Someone Else's Use of My Trademark Always an
Infringement? No. Unless a famous mark is involved, trademark
infringement may not be present if someone is simply using someone else's
trademark for an unrelated good or service in a manner that does not cause
consumer confusion, or in a manner that is not likely to cause consumer
confusion.
There is no infringement if there is a fair use of a mark, such as in
comparative advertising, news reporting or in uses not intended for
financial gain. For example, there would be a fair use of a famous
mark by another person in comparative commercial advertising or promotion
to identify the competing goods or services of the owner of the famous
mark.
It is important to remember that infringement involves the use of a
trademark in connection with the sale, offering for sale, distribution or
advertising of goods and services. If commerce is not involved,
there is very likely no infringement, although in some areas of the
country, liability has been found for "initial interest
confusion" of tradename.com uses (see paragraph no. 2, above).
Also, generic marks, e.g. Pawn Shop, are very likely unenforceable as a
trademark for a pawn shop, and anyone may use it for a pawn shop without
infringement. However, if someone were to use Pawn Shop as a brand name
for a sneaker, it is very likely that infringement would lie for any such
use on a competing sneaker.
Using a Competitor's Trademark. If you would
like an opinion as to whether or not you can or should use a competitor’s
trademark in your company’s advertising, give Attorney Louis Ventre, Jr.
a call. You may be surprised to learn that you can use a
competitor's mark, under certain circumstances. Attorney Louis
Ventre, Jr. wants to help your business compete effectively, while
minimizing liability for Trademark infringement. If you have received a
"cease and desist" letter from someone demanding that you stop
using their mark and account to them for all profits you may have made in
using their mark, contact Attorney Louis Ventre, Jr. as soon as possible
and, certainly, before you reply. Contact
Attorney Louis Ventre, Jr. for any and all your legal requirements
under trademark law.
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