Protecting your interests

Trademarks and the Landham Act- Business Law Basics Series

July 19th, 2011 by Jacob

Introduction
Trademarks evolved from efforts of craftsman to identify their works in the marketplace by using some kind of identifying mark on their products. There is no express trademark right in the Constitution as there are for copyrights and patents, however. In fact early federal trademark legislation were deemed unconstitutional. (United States v. Steffens (1879)). Congress eventually passed express legislation authorizing trademark regulation as part of interstate commerce. The most recent major trademark legislation was the Landham Act passed in 1946, although there have been many changes since. It is important to note, that there are state trademark laws and relevant caselaw, although the focus here will be on the Landham Act.

The Landham Act created a system of nationwide trademark registration, although trademark rights are granted based on the first to use in commerce. However, there are several important incentives for registration. You can file a ‘intent to use’ trademark registration, first of all. More significantly, however, registration gives constructive notice of the trademark nationwide. 15 usca 1072. Therefore even for a trademark used solely within one state federal registration would give notice- a significant benefit itself. This notice prevents others from claiming they had no knowledge of the trademark. The registration is ‘prima facie’ evidence that the owner has a valid trademark and has the exclusive right to use it nationwide. 15 USC 1115. Another advantage is a lawsuit can be filed in federal court solely on the basis of the registration. Federal court is often better than a state court, although you must obtain federal jurisdiction. The Landham Act also introduces service marks and other marks not found in state law. 15 USC 1053. The registration enables the owner to register with the Customs Service which will stop the infringing imports. 15 USC 1124. The registration can also be used to file trademark applications in other countries.

A trademark can be a word, slogan or a graphic logo. It can include a sound, colors or even a smell if it is used to identify the manufacturer. The Landham Act 15 USC 1127 defines a trademarks and service marks as follows:
The term “trademark” includes any word, name, symbol, or device, or any combination thereof—
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.

The term “service mark” means any word, name, symbol, or device, or any combination thereof—
(1) used by a person, or
(2) which a person has a bona fide intention to use in commerce and applies to register on the principal register established by this chapter, to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown. Titles, character names, and other distinctive features of radio or television programs may be registered as service marks notwithstanding that they, or the programs, may advertise the goods of the sponsor.

There are also other protected marks called certification marks and collective marks. Certification marks are owned be the certifying organization and permit the use of the certification mark by others to show the product has a certain quality or standard. A collective mark is reflects membership in a given membership group.

Trademarks can include almost anything, even elements of packaging other presentation know as ‘trade dress’ that one might not consider a ‘mark’ in the everyday sense of the word. Note that the Landham acts starts out by saying anything can be registered unless it falls into an exception-
No trademark by which the goods of the applicant may be distinguished from the goods of others shall be refused registration on the principal register on account of its nature unless- 15 USC 1052

Trade dress is a little harder to identify than a trademark but the key factor is that the trade dress must not be functional. The concept of trade dress comes from the Landham Act’s wording for civil actions when there is “any … symbo[l] or device … likely to cause confusion … as to the origin … of his or her goods.” A court explained that this means it must be something used to distinguish a company from its competition. Trade dress can include the product design or the product packaging but there must be a secondary meaning to the trade dress that consumers identify with the company apart from its competitors. Consider the packaging and colors of Tide detergent, or the look of certain restaurant chains, for example.

How to select a trademark
A trademark must be distinct to distinguish goods or services from the competition. Invented words and symbols are the strongest because there is no other meaning that attributed to the word. The mark also cannot be likely to cause confusion in the market for the goods. If marks are used in different markets it is possible that they both may be used because there is no confusion in the target market for each product.

In trademark terms the opposite of distinct is descriptive. A mark that merely describes a product does not distinguish it from the competition. However, if a descriptive term becomes identified with a particular producer it may be a valid trademark. This is called secondary meaning. Sometimes a trademark will be rejected at first for lack of secondary meaning. However, the PTO will assume there is secondary meaning and register the mark after five years of use . 15 USC 1052(f) This can be challenged by a competitor, however. Also, this determination is based upon the market for the product. A mark in one market may be descriptive but arbitrary in another market.

Ironically, a trademark may be so strong that over time it becomes descriptive or a generic term. Classic examples of this are aspirin and Xerox. Both of these words were arbitrary words chose for a trademark that over time became identified with the product in general rather than distinguish a particular producer.

Certain terms are prohibited from trademark use under 15 USC 1052. These are
(a) immoral, deceptive or scandalous,
(b) the flag or coat of arms or other insignia of the United States, or of any State or municipality, or of any foreign nation,
(c) a name, portrait, or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the United States during the life of his widow, if any, except by the written consent of the widow and
(d) a mark which so resembles a mark registered in the Patent and Trademark Office, or a mark or trade name previously used in the United States by another and not abandoned, as to be likely, when used on or in connection with the goods of the applicant, to cause confusion
(e) Consists of a mark which is primarily geographically descriptive of them or is primarily merely a surname

This list is not without some flexibility. Certainly anything deceptive or immoral will not be permitted. On the other hand, geographic names and symbols can sometimes be used to identify the source of a product. Surnames can also be used if they acquire secondary meaning by becoming associated with a product or service. For surnames the market must identify the name with the product or service rather than someone’s name. This issue has surfaced recently with by the Sarah Palin trademark application but it is not very unusual, actually, even Elvis Presly did it.

Protecting your trademark
Registration:
A trademark right is first created by either its use in commerce or the filing of a intention to use registration with the PTO. 15 USC 1127. The registration process is fairly simple. However, law and regulations that form the basis of the process are exceeding complex. Simply completing a trademark application without understanding the law behind is a risky proposition.

The PTO now permits and encourages electronic registrations via www.uspto.gov. The current filing fees are $325 for electronic filings and $375 for traditional paper filings. A specimen of the mark must be submitted with the registration. There are two basic types of applications, the ‘use’ application and the ‘intent to use’ application. 15 USC 1051(a) and (b). A trademark is considered to be in “use in commerce” (15 USC 1127 definition). It doesn’t take too much to qualify but there must be efforts to use the trademark to sell a ready product in the U.S. market. Activities such as catalogs, websites, and promotional activities should suffice. This can work against infringers as well. A parody website using the target company’s trademark in the domain name was found infringing because the use in the domain name was “use in commerce”.

The PTO will then examine the registration according to the Landham Act. PTO will question whether the trademark distinguishes the product or is merely descriptive of the product (1052), and whether the trademark is “likely to cause confusion” in the market. Upon completion of the examination, PTO will then publish the trademark for 30 days in its Official Gazette. Objections to the trademark can be filed with PTO during the 30 days. Once it is approved the owner should be vigilant to maintain their rights. A notice of the registration should always be used with the trademark. This can be done on one of three ways: 1- “registered in the U.S. Patent and Trademark Office”, 2- abbreviated “Reg U.S. Pat & Tm Off”, or 3- the letter ‘R’ enclosed in a circle. If a notice is not used then the owner will be unable to recover profits or damages unless they can prove the infringer had actual knowledge of the registration. 15 USC 1111.

The registration lasts for 10 years but can be renewed by filing for renewal within one year prior to expiration. However, the registration will be canceled unless a Section 8 Affidavit is filed during the sixth year. A trademark owner can also file a Section 15 Affidavit for “incontestable” status (15 USC 1065) during this same period. The Section 15 affidavit require continuous use for five years since the date of registration. Obtaining ‘incontestable” status gives the owner conclusive evidence of ownership and exclusive right to use the mark and the trademark cannot be attacked as being descriptive. On the other hand, if the trademark is not used for two years it may be considered abandoned. (15 USC 1127)

Protecting against infringers
So you have your registration and proudly give notice to all your customers and everyone is happy. Of course, the next thing that happens is a competitor starts using a similar mark. If a court finds there is a ‘likelihood of confusion’ it will grant an injunction temporary stopping the competitor from using the trademark until the case is decided. If actual damages are later proven then damages will be awarded. The question considers the following factors:
- strength of the mark
- proximity of the goods
- similarity of the marks
- evidence of actual confusion
- marketing channels used by the products
- type of goods and the sophistication of the purchaser
- defendant’s intent when using the trademark
- likelihood of expanding the product line

In some cases a trademark will obtain broader protection because it is a ‘famous mark’ and receive protection from other marks that lessen its distinctive regardless of market competition, likelihood of confusion, mistake or deception. 15 USC 1125(c) and 1127. This is called dilution. A trademark must have national renown to pursue a dilution claim. A dilution claim requires a higher degree of similarity between the marks than a standard infringement claim.

Remedies
What can you get should you convince a court your trademark someone infringed your trademark? Usually the first step a trademark owner takes is to send a “cease and desist” letter to the other party. An invaluable resource for learning about “cease and desist” letters is the Chilling Effects website. You could also file a cancellation proceeding at the PTO to invalidate the competitors trademark, however will only address the right to have a registration for the mark. For internet related issues, ICANN has special procedures for trademark infringement claims. (ICANN will be addressed in a future post on trademarks and the internet.)

Litigation: Firstly, an injunction is available which in some cases is more important than money. 15 USC 1116(a). Secondly, statutory or actual damages are available as well as attorney fees in some cases and even treble damages are possible for bad faith infringement. 15 USC 1117(a)-(c). Litigation also has the flexibility of making other claims against the infringer such as unfair competition.

THE INTERNET AND TRADEMARKS
The internet presents special issue although the principles are the same. A future post will focus on this topic

Resources
http://www.uspto.gov/trademarks/index.jsp
http://topics.law.cornell.edu/wex/Trademark
http://www.citmedialaw.org/legal-guide/what-trademark-covers
http://blog.ericgoldman.org/
http://www.bitlaw.com/trademark/
http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm