FAQ: Questions and Answers

[back to notice text] Question: What do these registration numbers mean? or Why don?t I have any registration numbers in my C&D? Answer: Do not be led astray by the registration numbers: trademark rights in the United States arise from use of the mark in commerce, not from registering. However, both state and federal law can provide relief from trademark infringement. If your opponent has registered its mark on the Patent & Trademark Office?s register, then you know that litigation about the mark could occur in federal court. If your opponent has not included any registration numbers, you still could be sued in federal court, but your opponent might simply be relying on state law (or just trying to scare you). If the C&D does not reveal any registration numbers, you should ask if the marks are registered. If the opponent has included registration numbers, look them up on the Patent & Trademark Office's Trademark Electronic Search System (TESS). You can check the status of a trademark by entering the registration number into TESS's search engine. If your opponent's trademark is labeled "LIVE," then it is likely to be protected by federal law; if TESS labels the mark "ABANDONED," then you have reason to believe that federal law will not protect it (although even abandoned marks can garner protection in some instances). Pending trademark applications are also marked "LIVE", but they do not get a "Reg. Number" unless/until the registration issues. A Community Trade Mark (CTM) offers regional trademark protection throughout the European Union. The CTM database of registered marks is OAMI-Online. [back to notice text] Question: What exactly are the rights a trademark owner has? Answer: In the US, trademark rights come from actual use of the mark to label one's services or products or they come from filing an application with the Patent and Trademark Office (PTO) that states an intention to use the mark in future commerce. In most foreign countries, trademarks are valid only upon registration. There are two trademark rights: the right to use (or authorize use) and the right to register. The person who establishes priority rights in a mark gains the exclusive right to use it to label or identify their goods or services, and to authorize others to do so. According to the Lanham Act, determining who has priority rights in a mark involves establishing who was the first to use it to identify his/her goods. The PTO determines who has the right to register the mark. Someone who registers a trademark with the intent to use it gains "constructive use" when he/she begins using it, which entitles him/her to nationwide priority in the mark. However, if two users claim ownership of the same mark (or similar marks) at the same time, and neither has registered it, a court must decide who has the right to the mark. The court can issue an injunction (a ruling that requires other people to stop using the mark) or award damages if people other than the owner use the trademark (infringement). Trademark owners do not acquire the exclusive ownership of words. They only obtain the right to use the mark in commerce and to prevent competitors in the same line of goods or services from using a confusingly similar mark. The same word can therefore be trademarked by different producers to label different kinds of goods. Examples are Delta Airlines and Delta Faucets. Owners of famous marks have broader rights to use their marks than do owners of less-well-known marks. They can prevent uses of their marks by others on goods that do not even compete with the famous product. [back to notice text] Question: What is the bare minimum of trademark law that I have to understand to decipher this C&D? Answer: Your opponent should say that your mark is causing consumer confusion or is likely to cause consumer confusion. Or it should mention it's famousness and complain of dilution or tarnishment. (If the C&D does not say this, then no trademark claim may actually exist, and you can rest assured that your opponent is engaging in scare tactics or has hired a highly incompetent attorney). A mark protects more than identical copying, it extends to anything that is confusingly similar, even if it isn't exactly the same. Functioning in a quasi-magical talisman-like capacity, trademarks designate the source or quality of goods or services. For this reason, the law protects against confusion in the market place by ensuring that marks on the same or similar products or services are sufficiently different. The law also protects famous marks against dilution of value and tarnishment of the reputation of the goods or services on which it appears or the source of those products, regardless of any confusion. You can roughly assess the validity of your opponent?s claim of confusion by classifying the marks involved. A trademark can fall into one of 5 categories. It can be: (1) fanciful; (2) arbitrary; (3) suggestive; (4) descriptive; or (5) generic. Not all of these varieties of marks are entitled to the same level, or indeed any level, of trademark protection. A fanciful mark is a mark someone made up; examples include KODAK or H?AGEN-DAZS. An arbitrary mark is a known term applied to a completely unrelated product or service; for instance, AMAZON.com for an online book-store cum one-stop shopping site or APPLE for computers. Fanciful and arbitrary marks are considered strong marks and garner substantial trademark protection. A suggestive mark is one that hints at the product, but which requires an act of imagination to make the connection: COPPERTONE for sun tan lotion or PENGUIN for coolers or refrigerators are examples. Suggestive marks are also strong marks and receive protection. A descriptive mark, predictably, describes the product: HOLIDAY INN describes a vacation hotel and FISH-FRI describes batter for frying fish. Descriptive marks do not receive any trademark protection unless their user has used them in commerce and has built up secondary meaning. "Secondary meaning" occurs when consumers identify the goods or services on which the descriptive term appears with a single source. In other words, if consumers know that HOLIDAY INN hotels are all affiliated with a single source, then the mark has secondary meaning and receives trademark protection. Finally, generic marks simply designate the variety of goods involved: for example, "cola" used on soft drinks and "perfume" on perfume are both generic terms. Generic marks never receive any trademark protection; they are free for everybody to use. (Keep in mind, though, that "Cola" on a nightclub is arbitrary, and therefore receives protection). If your opponent is complaining that you have used the word "bakery" for a bake shop or "car" for a car repair shop, then you can safely guess that the c & d is baseless. On the other hand, if your opponent is concerned about the fact that both of you use of the term "Sweet Pickles" on alpaca sweaters, then the c & d may have some merit. There are a few more wrinkles as well. Some marks are word marks (text only) and others are design marks (images which may or may not include text). Design marks do not provide independent protectin for the text incorporated in the design. So if the mark is only a design mark, it doesn't prevent others from using the text so long as they don't copy the design elements. [back to notice text] Question: Where can I find federal trademark law? Answer: To be protected by federal trademark law, the marked goods and services must be used in interstate commerce. Federal trademark law is known as the Lanham Act. It protects marks that are registered with the United States Patent & Trademark Office as well as those that are in use but never registered. Court opinions and United States Patent & Trademark Office (USPTO) regulations also interpret trademark rights and remedies. See the links to court sites provided by the Legal Information Insitute. [back to notice text] Question: What is unfair competition? Answer: "Unfair competition" covers a wide range of kinds of unjust business behavior---so many kinds, in fact, that it is impossible to give one simple general definition. In essence, unfair competition means trademark infringement or false advertising to confuse the public. In most states, only commercial competitors can be engaged in "unfair competition." [back to notice text] Question: What civil and criminal liabilities may be imposed for trademark infringement? Answer: Under federal law (Lanham Act Section 32), an infringer shall be liable in a civil action by the registrant for certain remedies provided in the Act. One such remedy is an injunction, where a court orders a person who was found to violate the Act to stop its infringing activities. A trademark owner/registrant may also be able to obtain lost profits or damages against a defendant in a civil action only if the acts were committed with knowledge that such imitation was intended to be used to cause confusion, mistake, or to deceive. The trademark owner can recover (1) the domain holder's profits from use of the mark, (2) the trademark owner's damages resulting from harm to the value of mark, and (3) court costs as "actual damages." In determining the award to be paid, the court can choose to award up to three times the amount of actual damages. Instead of having to prove the amount of "actual" damages suffered as above, the mark owner can instead request payment of "statutory damages" from $1000 and $100,000 per domain name. Attorney fees may be awarded in exceptional circumstances, such as when there was a willful and malicious violation. The court can order the cancellation or transfer of a domain registration. In the case of a willful violation of Lanham Act section 43, a court may order that all labels, signs, prints, packages, wrappers, receptacles, and advertisements in the possession of a defendant bearing the registered trademark shall be delivered up and destroyed. [back to notice text] Question: What are the limits of trademark rights? Answer: There are many limits, including: Fair Use There are two situations where the doctrine of fair use prevents infringement: The term is a way to describe another good or service, using its descriptive term and not its secondary meaning. The idea behind this fair use is that a trademark holder does not have the exclusive right to use a word that is merely descriptive, since this decreases the words available to describe. If the term is not used to label any particular goods or services at all, but is perhaps used in a literary fashion as part of a narrative, then this is a non-commercial use even if the narrative is commercially sold. Nominative fair use This is when a potential infringer (or defendant) uses the registered trademark to identify the registrant?s product or service in conjunction with his or her own. To invoke this defense, the defendant must prove the following elements: his/her product or service cannot be readily identified without pointing to the registrant?s mark he/she only uses as much of the mark as is necessary to identify the goods or services he/she does nothing with the mark to suggest that the registrant has given his approval to the defendant Parody Use Parodies of trademarked products have traditionally been permitted in print and other media publications. A parody must convey two simultaneous -- and contradictory -- messages: that it is the original, but also that it is not the original and is instead a parody. Non-commercial Use If no income is solicited or earned by using someone else's mark, this use is not normally infringement. Trademark rights protect consumers from purchasing inferior goods because of false labeling. If no goods or services are being offered, or the goods would not be confused with those of the mark owner, or if the term is being used in a literary sense, but not to label or otherwise identify the origin of other goods or services, then the term is not being used commercially. Product Comparison and News Reporting Even in a commercial use, you can refer to someone else?s goods by their trademarked name when comparing them to other products. News reporting is also exempt. Geographic Limitations A trademark is protected only within the geographic area where the mark is used and its reputation is established. For federally registered marks, protection is nationwide. For other marks, geographical use must be considered. For example, if John Doe owns the mark Timothy?s Bakery in Boston, there is not likely to be any infringement if Jane Roe uses Timothy?s Bakery to describe a bakery in Los Angeles. They don't sell to the same customers, so those customers aren't confused. Non-competing or Non-confusing Use Trademark rights only protect the particular type of goods and services that the mark owner is selling under the trademark. Some rights to expansion into related product lines have been recognized, but generally, if you are selling goods or services that do not remotely compete with those of the mark owner, this is generally strong evidence that consumers would not be confused and that no infringement exists. This defense may not exist if the mark is a famous one, however. In dilution cases, confusion is not the standard, so use on any type of good or service might cause infringement by dilution of a famous mark. [back to notice text] Question: Does the product or service on which I am using the mark matter? Do dates matter? Answer: It matters if the mark is not famous. The C&D should disclose your opponent?s products and/or services and the date on which it commenced use of the allegedly infringed mark. This will help you guesstimate whether a likelihood of confusion between the marks exists. For instance, if your opponent uses ?opera? on truffles and you use "opera" on silk gloves, consumers are not likely to confuse the products. If the mark is determined by a court to be famous, however, confusion is irrelevant and [non-fair] use on any type of goods may be an infringement. The date on which your opponent began using the mark is significant because a junior (later) user cannot displace a senior (first) user in the senior user?s geographic region. In other words, if you have owned a chain of donut shops called "Lucky Donuts," with locations in New Jersey, New York, and Connecticut since 1943, a national chain called "Lucky Donuts" founded in 1979 has no trademark infringement claim against you in the NJ-NY-CT tri-state area. If your opponent has begun using its allegedly infringed mark after your use, you have another reason to question the merit of the C&D. [back to notice text] Question: What does it mean to take all reasonable steps to protect a trademark? Answer: If a trademark owner fails to police his or her mark, the owner may be deemed to have abandoned the mark or acquiesced in its misuse. A trademark is only protected while it serves to identify the source of goods or services. If a trademark owner believes someone is infringing his or her trademark, the first thing the owner is likely to do is to write a "cease-and-desist" letter which asks the accused infringer to stop using the trademark. If the accused infringer refuses to comply, the owner may file a lawsuit in Federal or state court. The court may grant the plaintiff a preliminary injunction on use of the mark -- tell the infringer to stop using the trademark pending trial. If the owner successfully proves trademark infringement in court, the court has the power to: order a permanent injunction; order monetary payment for profit the plaintiff can prove it would have made but for defendant's use of the mark; possibly increase this payment; possibly award a monetary payment of profits the defendant made while using the mark; and possibly order the defendant to pay the plaintiff's attorney fees in egregious cases of infringement. Of course, the determination of infringement is actually one that will be made by the court, so a trademark owner is simply using a best guess about whether or not infringement actually has occurred. That best guess may be a good one, based on experience and expertise, or it may be a bad one that doesn't reflect any of the legitimate defenses that might exist. The law doesn't require the mark owner to sue everyone; it just requires the owner to keep his mark distinctive. [back to notice text] Question: What does the "reservation of rights" language mean? What are they "waiving" at me? Answer: Many C&Ds will say something like, "This letter shall not be deemed to be a waiver of any rights or remedies, which are expressly reserved." This is just legalese for saying, "Even if you do what we ask in this letter, we can still sue you later." The language is standard; do not be alarmed. Litigation is extremely unpleasant, and unless your opponent is irrational (always a distinct possibility, of course), it will not bring litigation after it has obtained what it wants. [back to notice text] Question: What about noncommercial uses? Answer: According to the Fourth Circuit Court of Appeals, "the Federal Trademark Dilution Act of 1995 ("FTDA") and the Anticybersquatting Consumer Protection Act of 1999 ("ACPA"), Congress left little doubt that it did not intend for trademark laws to impinge the First Amendment rights of critics and commentators. The dilution statute applies to only a 'commercial use in commerce of a mark,' 15 U.S.C. ? 1125(c)(1), and explicitly states that the '[n]oncommercial use of a mark' is not actionable. Id. ? 1125(c)(4)....Congress directed that in determining whether an individual has engaged in cybersquatting, the courts may consider whether the person?s use of the mark is a 'bona fide noncommercial or fair use.' 15 U.S.C. ? 1125(d)(1)(B)(i)(IV)" One should be careful in this area, however. Sites that parody the mark holder or its website have been found not to be a good faith use by the Fourth Circuit Court of Appeals. The Fourth Circuit noted that despite the existence of a fairly obvious parody on the challenged website, confusion could arise because the domain name could appear separately from the website content or where the parody isn't clear on its face. Moreover, the meaning of "noncommercial" use can be interpreted in a fairly narrow manner by some courts. The 4th Circuit, for example, in Lamparello v. Falwell, leaves open the issue of whether merely using the name in the stream of commerce (whether or not it is being used to generate revenue) might be enough to qualify as commercial use. Other courts have held that an ability to use the site to access, directly or indirectly, a website that is selling something, has been held to constitute a commercial use. [back to notice text] Question: What is the Anti-Cybersquatting Consumer Protection Act (ACPA)? Answer: The ACPA [codified as 15 USC 1125(d)] is aimed at people who register a domain name with the intention of taking financial advantage of another's trademark. For instance, if BURGER KING did not have a web site, and you registered www.BURGERKING.com with the intent of selling the site to BURGER KING for a royal ransom, you could be liable under ACPA. ACPA applies to people who: (1) have a bad faith intent to profit from a domain name; and (2) register, use or traffic in a domain name; (3) that is identical, confusingly similar, or dilutive of certain trademarks. The trademark does not have to be registered. ACPA provides that cyberpirates can be fined between $1,000 and $100,000 per domain name for which they are found liable, as well as being forced to transfer the domain name. Somewhat more broadly, the Act is meant to reduce consumers' confusion about the source and sponsorship of Internet web pages. The idea is to provide customers with a measure of reliability, so that when they visit www.burgerking.com, they will be able to find actual Burger King products, not something entirely different. It also protects mark owners from loss of customer goodwill that might occur if others used the trademark to market disreputable goods or services. See the module on ACPA to find out more about bad faith and legitimate defenses. [back to notice text] Question: What constitutes "bad faith" use of a domain name? Answer: The ACPA instructs the courts to consider a number of factors to determine the presence of bad faith. These are enumerated in the paragraphs below, but many involve new concepts that are rather vaguely defined. It may take some time before courts decide exactly how these new terms should be interpreted. A court is likely to decide that a domain name registrant acquired or used the name in bad faith if s/he sought to divert customers from a trademark owner's website to another that, either for purposes of commercial gain or to tarnish the mark, could harm the goodwill represented by the mark. "Goodwill" is a legal term indicating the valuable relationship or familiarity that exists between businesses and their customers and is often embodied in their trademark symbols. It can be harmed if the domain name is likely to cause confusion about what organization created or sponsored a website. Bad faith from attempted commercial gain can arise if a domain name holder steals customers because the name is so similar to a trademark. For example, a shoe retailer might hold www.reabok.com, hoping to steal shoe buyers from customers looking for Reebok shoes. Bad faith from tarnishing can arise if a domain name similar to a trademark leads web surfers to a site, such as a pornographic website, that tends to harm the "good name" of the trademark owner. Or a pornographic website at www.reabok.com could create an unwholesome association that Reebok would like to avoid. (Although, Reebok may be considered a famous mark?see below for more). A court will almost certainly find bad faith if the domain name holder attempts to sell the domain name for financial gain to either the trademark owner or someone else, without having used it or without intending to use it. A court is likely to find bad faith if the name holder provides false or misleading identification information when applying for registration, or if the holder fails to accurately update this information. A court will also frown upon a prior history of such behavior. A court is likely to find bad faith if the person registers a number of names identical or similar to trademarks.

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