ESSENTIALSof Trademarks andUnfair Competition

Dana Shilling

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ESSENTIALSof Trademarks andUnfair Competition

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ESSENTIALSof Trademarks andUnfair Competition

Dana Shilling

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Copyright 2002 by John Wiley & Sons, Inc., New York. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system ortransmitted in any form or by any means, electronic, mechanical, photocopying,recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior writtenpermission of the Publisher, or authorization through payment of the appropriateper-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers,MA 01923, (978) 750-8400, fax (978) 750-4744. Requests to the Publisher forpermission should be addressed to the Permissions Department, John Wiley &Sons, Inc., 605 Third Avenue, New York, NY 10158-0012, (212) 850-6011, fax(212) 850-6008, E-Mail: PERMREQ@WILEY.COM.

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DANA SHILLING, ESQ., is the author of more than 20 books,

including Lawyers Desk Book, 11th ed. (Prentice Hall, 1988), The

60-Minute Financial Planner (Prentice Hall, 1997), The Complete

Guide to Human Resources and the Law (Prentice Hall, 1998), and

Financial Planning for the Older Client, 5th ed. (National Underwriter,

2001). She has written many articles dealing with legal and financial

issues that have appeared in such magazines as Vogue, CFO, Working

Woman, Cosmopolitan, Aging Today, Estate Planning Studies, Brown

University Long-Term Care Letter, Elder Law Advisory, Journal of American

Society, CLU/ChFC, Senior Market Advisor, and others.

In addition, she has been a featured speaker at many conferences

and seminars, for the following organizations: the New York County

Lawyers Association; MANULIFE Insurance, United Methodist Church;

NEFE/CFP; NAHU (two programs), Health Underwriters, Conference

of Financial Trust Officers; American Society of CLU/ChFC, Estate

Planning Council of NJ, Prudential (two programs), Estate Planning

Councils of Pennsylvania and Ohio, Brokers Choice, and the Society

of Financial Services Professionals.

Shilling has also produced The Elements of Elder Law (3-1/2 hour

instructional tape on basic elder law issues (1993); Carry Me Back

(screenplay, 1993; unproduced); and Financial Planning for the Older

Client (Bisk/Totaltape video 1999). She is a National Merit Scholar;

and graduated magna cum laude, Phi Beta Kappa from Goucher College

(AB). She received her law degree from Harvard Law School. She was

admitted to the New York Bar in 1976.

v

About the Author

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1 Trademark BasicsOverview 1

2 Trademark Types 21

3 Establishing, Registering, and Defending a Trademark 49

4 Handling Trademark Disputes 99

5 Trade Dress 123

6 Threats to the Trademark 137

7 Other Issues in Trademark Law 153

8 Unfair Competition 191

Appendices 207

Forms 223

Bibliography 269

Index 271

vii

Contents

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1

After read ing th is chapter you wi l l be ab le to

Understand why the legal system protects trademarks Identify trademarks Understand the scope of state and federal trademark laws Know how to use trademarks in commerce Compare trademarks to utility patents, design patents, and

copyrights

Trademarks have been used for centuriesprobably as long as there has

been more than one person carrying out a particular trade, or selling mer-

chandise of a particular type, at the same market, or in the same town. An

important part of business is developing a reputation for selling unusual

merchandise, or for quality or variety of products, or for high value.

A business can succeed only if customers buy its products or use its

services. One of the most important functions of marketing and advertis-

ing is to create demand, not just for a particular type of product, but for

the advertisers or marketers own goods. Trademarks (words, pictures,

combinations of words and images, even sounds or fragrances) are impor-

tant tools in identifying the business that provides the goods or services.

A good trademark makes the product stand out.

CHAPTER 1

Trademark BasicsOverview

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Because trademarks are such a key part of doing business, federal

and state law protect a businesss right to identify its own merchandise

and to keep other people from counterfeiting merchandise or using

confusingly similar trademarks. However, the legal rules for trademarks

(and the related concept of trade dressthe appearance and packaging

of merchandise) are complicated and sometimes counterintuitive: they

are not necessarily what a person in business would assume, based on

experience in selling products. This book is designed to make confusing

rules easier to understand.

Focus of the BookThis book covers a spectrum of related topics. Following the introduction

of trademarks and trademark law in Chapters 1 and 2, the main con-

centration is on trademarks themselves. In addition, Chapter 2 touches

on a large and growing group of issues: the difficult relationship between

trademarks and the Internet, including but not limited to when trade-

marks can be used as URLs and when a cybersquatter can be punished

for misuse of domain name registration. Note: Trademarks will be

referred to in capital letter, such as COCA-COLA or NIKE.

In many ways, the concepts of brand and trademark are closely relat-

ed, although brand is a more modern and trademark a more traditional

idea. But even though they are similar, they are not identical. Both of

them involve product image and goodwill, but the concept of trademark

focuses on the source of the goods.

A consumer might have very high awareness of brandmight,

for instance, have a shopping list that contains JIF peanut butter,

ARRID EXTRA-DRY deodorant, DEL MONTE canned vegetables,

CAMPBELLs canned soups, CREST toothpaste, and so on. This con-

sumer might have a strong preference for these brands, based on a belief

in their superior quality and attractiveness, and might take a rain check

2

E S S E N T I A L S o f T r a d e m a r k s a n d U n f a i r C o m p e t i t i o n

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rather than purchase a competing brand, yet have no knowledge or

interest in who manufactured the preferred brands. In fact, in todays

business climate, where mergers and product divestitures are common,

a brand might have been owned by several companies. Thus, the brand

does not provide proof of source. In this book, we focus on the concepts

of trademark.

Chapter 3 covers how to search to see if a desired trademark is avail-

able, and how to register a trademark. Chapter 4 discusses what to do in

case of an allegation of trademark infringement or if the trademark

owner believes that the trademark has been infringed. The subjects of

service marks and trade dress are addressed in Chapter 5.

Chapter 6 covers threats to trademarks.