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 —

1. a person is Using a Competitor’s Trademark to sell his goods or services;
2. someone is using “Trademark.com” web site address to directly or indirectly sell something not connected with the owner of trademark;
3. one copies the non-functional aspects of the packaging or product design of a competitor’s goods or services (“Trade Dress”); and,
4. 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 Report of the Economic Survey of 2013, typical costs in 2012 for a
        trademark Infringement suit range from $350,000 when less than $1 million was at risk to $3.40 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.