FAQ: Questions and Answers

[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 "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 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: 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 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 implication does alleged confusion have on claims of trademark infringement? Answer: A mark that is confusingly similar so closely resembles a registered trademark that it is likely to confuse consumers as to the source of the product or service. Consumers could be likely to believe that the product with the confusingly similar mark is produced by the organization that holds the registered mark. Someone who holds a confusingly similar mark benefits from the good will associated with the registered mark and can lure customers to his/her product or service instead. Infringement is determined by whether your mark is confusingly similar to a registered mark. The factors that determine infringement include: proof of actual confusion strength of the established mark proximity of the goods in the marketplace similarity of the marks? sound appearance and meaning how the goods are marketed type of product and how discerning the customer is intent behind selecting the mark likelihood of expansion in the market of the goods [back to notice text] Question: What is trademark infringement? Answer: Although different courts have different tests, the central concept is confusion in the marketplace. The law protects against consumer confusion by ensuring that the marks on the same or similar products or services are sufficiently different. A plaintiff in a trademark infringement case generally must prove 1) it possesses a valid mark; 2) that the defendant used the mark; 3) that the defendant used the mark in commerce, "in connection with the sale, offering for sale, distribution or advertising "of goods and services; and 4) that the defendant used the mark in a manner likely to confuse consumers. [back to notice text] Question: I do not know what these cases or statutes cited in the C&D mean. Answer: If your opponent has cited cases and statutes in the C&D, do not freak out. The fact that your opponent can include some legal authority in the C&D does not mean that the law is on its side. If you can, go look up the cases and statutes to see what they say. You can go to the nearest law school's law library for help, or you can try a free legal resource web site like Findlaw. Many of them are accessible on the Internet by keyword search using the full case name or it's citation (the numbers and abbreviations that follow the names of the parties). If your opponent is relying on federal law, it will probably cite one or more of the following sections of the Lanham Act: (1) section 32 (also known as section 1114); (2) section 43(a) [a/k/a section 1125(a)]; or (3) section 43(c) [a/k/a section 1125(c)]. (The smaller numbers indicate how the statutory sections were numbered when the law was a bill in Congress; the larger numbers indicate how the statutory sections were re-numbered when the law was codified in the U.S. Code. Under either numbering system, the laws say the same thing). An additional statute, the Anti-cybersquatting Consumer Protection Act (ACPA) [a/k/a section 1125(d) relates specifically to domain names. Section 32 (codified as 15 U.S.C. 1114) is the basic statute governing trademark infringement of registered marks. If you use a mark in commerce that is confusingly similar to a registered trademark, you may be civilly liable under section 32. This section describes how to determine infringement, what the remedies are, and what defenses are available. Section 43(a) [codified as 15 U.S.C. 1125(a)] is the "false designation of origin" statute. If you use a mark in commerce that is likely to cause confusion or deception as to affiliation, association, origin, or sponsorship with another trademark, you may be civilly liable under section 43(a). Section 43(a) does not require that any of the marks be registered. Section 43(c)[codified as 15 U.S.C. 1125(c)] is the "anti-dilution" provision. This section allows the owner of a famous trademark to prevent use of the mark by junior users whose use ?dilutes? the distinctive quality of the famous trademark. In other words, if someone tries to sell "KODAK pianos," KODAK could stop the person -- even if consumers were not confused -- because KODAK is a famous mark, and its use on products other than film and film-printing accessories (or other products on which Eastman Kodak places the mark) dilutes its uniqueness. The ACPA [codified as 15 USC 1125(d) prohibits "cybersquatting" and lists the elements and defenses to a civil claim against a domain name holder. If you identify the statutory provisions on which your opponent relies, you can begin to get a feel for whether the C&D has merit. For instance, if your opponent relies on section 32, but does not disclose a registration number, your first question is: does your opponent have a registered mark? If not, it has no claim under section 32. [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 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: What is this laundry list of things the C&D says will happen if I don't obey? Answer: Your opponent may describe a parade of horribles to demonstrate with exquisite detail what it will do to you unless you capitulate. This list generally includes, but is not limited to: (1) ceasing use of the allegedly infringing mark or surrendering the domain name; (2) rendering an accounting; (3) posting corrective advertising; (4) obtaining an injunction; (5) recovering costs and fees. Though these things sound awful, they are not medieval tortures (although that may be a function of the fact that Torquemada never thought of them). Ceasing use of the mark is self-explanatory: your opponent wants you to stop using the mark. Your opponent might also ask you to surrender your domain name if they believe the domain name causes (or is likely to cause) confusion with their trademark. For example, under ICANN rules (the UDRP), you may have to surrender your domain name if the following three conditions are satisfied: (1) your domain name is identical or confusingly similar to your opponent?s; (2) you have no legitimate right or interest in the name (in other words, you are not using the name to conduct a bona fide business or for non-commercial fair use purposes); and (3) your name is registered and used in bad faith. An accounting basically means that you disclose the following information to your opponent: (1) the date you began using the allegedly infringing mark; (2) the names of individuals who knew of the use when it began; (3) the amount of traffic at your web site or business at your store; and (4) your profits and revenues during the time you used the allegedly infringing mark. Corrective advertising means you give notice to the public that you were using a mark confusingly similar to your opponent?s, and that you are not affiliated with your opponent. An injunction is a judicial order to do something. An injunction can prevent you from using the allegedly infringing trademark. Some provisions of the Lanham Act permit a trademark holder to recover attorney?s fees and court costs from an infringer. That your opponent has listed these various remedies does not mean that it is entitled to them; do not confuse the smorgasbord of legal options with your opponent?s right to inflict any of them on you. [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 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.

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