FAQ: Questions and Answers

[back to notice text] Question: What is a famous mark? Answer: A famous mark is a mark that has become so well known, that it has become almost universally recognized. An example of such a mark would be "McDonald's" or "Coca-Cola." Famous marks become important where an owner of a trademark is claiming trademark dilution against a defendant. The Federal Anti-Dilution Act of 1996 provides that an owner of a famous mark is entitled to an injunction where a defendant's use of the mark causes dilution of the distinctive quality of the owner's famous mark. In determining whether a mark is famous, a court will consider a list of eight factors, found in the 1996 Federal Anti-Dilution Act. [back to notice text] Question: What is "intellectual property"? Answer: Intellectual property refers to the rights one has in the product of one's intellect. This includes copyright (rights in creative expression)and patents (rights in inventions, discoveries, methods, compositions of matter, etc.) which are granted by article I, section 8 clause 8 of the US Constitution which gives Congress the power to "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Related rights include trademark (rights in the names one uses to identify one's goods and services), trade secret (confidential business practices), unfair trade practice, passing off, trade libel, false advertising, misappropriation. Laws protecting most of these rights exist at both the state and federal level. "Proprietary rights" is just a general term meaning "one's own rights." [back to notice text] Question: What is a trademark and why does it get special protection? Answer: A trademark includes any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name. Consumers reap the benefit when trademarks are protected. By preventing anyone but the actual mark owner from labeling goods with the mark, it helps prevent consumers getting cheated by shoddy knock-off imitators. It encourages mark owners to maintain quality goods so that customers will reward them by looking for their label as an indication of excellence. Consumers as well as mark owners benefit from trademark laws. Trademark owners spend a lot of time, money, and effort to protect the distinctiveness of their trademark. Once trademarks have become diluted to the point where the general public no longer recognizes them as distinctly applying to a particular manufacturer, they lose their value to the trademark owner because they no longer attract customers to his particular goods. For example, ?aspirin? used to be the trademark of one particular manufacturer of synthesized acetylsalicylic acid, but is now used to generically describe that product regardless of who produces it. Trademarks owners must be vigilant to make sure that their trademarks rights are not being infringed and that their trademarks are not becoming diluted or generic. The birth of the Internet and the use of character strings (domain names) to represent Internet addresses has presented trademark owners with a whole new set of problems. It is often too expensive to register every variation of a trademark in every top level domain. Therefore, trademark owners must make sure that the people who register domain names that are either the same as or confusingly similar to a trademark are not using the domain name in a way that infringes on the trademark. One way to ensure that the trademark owner will not lose its rights in the mark is to file a UDRP complaint so that the Panel can decide whether the domain was registered in order to take unfair advantage of the mark owner. The Panel may decide that the trademark owner was wrong and had nothing to worry about, but unless the trademark owner is vigilant and files the complaint, it may never know for sure whether its rights were being abused. [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: I registered the domain first. Why can't I keep it? Answer: Maybe you can. The ACPA only protects trademark owners against cybersquatters. If your registration or use doesn't violate the Act, you should be able to keep the domain. However, being the first to register a name doesn't give you special rights or protections if you violate the law. Just as in physical space, you cannot use another's trademark to your own commercial advantage if the result is to "steal" the value of the trademark's goodwill and turn it to your own advantage. Read the remaining FAQs that explain what the ACPA actually forbids. [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: 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.

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