understanding tm law outline

Understanding Trademark Law – Outline with Casebook Cases

ContentsCh. 1: Nature and Purpose of TM Protection.......................................................................................2

PART I: Historical Overview of TM Law............................................................................................2

Ch. 2: Subject Matter of TM Protection.................................................................................................3

PART I: Nature of Trademarks..........................................................................................................3

PART II: Establishing Trademark Rights..........................................................................................4

PART III: TYPES OF TRADEMARKS...............................................................................................9

PART IV: FEDERAL TRADEMARK REGISTRATION..................................................................15

PART V: State Trademark Registration..........................................................................................29

Ch. 3: Trademark Infringement and Unfair Competition...................................................................31

PART I: TRADEMARK INFRINGEMENT.......................................................................................31

PART II: REVERSE PASSING OFF...............................................................................................38

PART III: FEDERAL LAW OF FALSE ADVERTISING.................................................................39

PART IV: DILUTION..........................................................................................................................41

PARTY V: CYBERSQUATTING......................................................................................................49

PART VI: SECONDARY LIABILITY................................................................................................52

PART VII: DEFENSES......................................................................................................................54

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Ch. 1: Nature and Purpose of TM Protection

PART I: Historical Overview of TM Law

1.01: Introduction

- Two purposes of trademark lawo Protecting consumers from being confused or deceived about source of

goods/services Stork Restaurant v. Sahati (explains source confusion)

Confusion of source → misleading the public by imitation of “an attractive, reputable TM for the purpose of securing for the imitator some of the goodwill, advertising, and sales stimulation of the owner’s TM. The fact that the businesses don’t compete doesn’t matter. P only needs to show likelihood of confusion to prevail.

Hanover Star Milling v. Metcalf (explains the principles of TM law) The primary function of TM law is to identify the origin or

ownership of a good or service. TM rights grow out of use.

o Encouraging merchants to stand behind their goods/services by protecting

goodwill

- Rights conferred by TM lawo NOT property rights in gross

o Arise only through actual use of mark

Public must actually recognize the mark as a source indicator in order for it to be protected.

If mark ceases to be source indicator, it will cease to be protected as TM

1.05: The Lanham Act

A: Overview

- The three most fundamental sections of LAo § 2 → standards for registering a TM or SM on register PTO

o § 32 → protects federally registered marks against unauthorized uses likely to

cause confusion as to origin

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o § 43(a) → provides federal unfair competition cause of action for a party that

suffers a competitive injury as a result of false statements made by others in connection with offering of goods/services

B: Recent Amendments

- Dilution Doctrineo § 43(c) → creates cause of action for dilution of the selling power of famous

marks Purely for purpose of protecting goodwill, NOT consumer confusion

- Anticybersquatting Provisionso § 43(d) → to protect mark owners against web addresses which were

confusing/misleading to consumers and made unauthorized use of their TM

Ch. 2: Subject Matter of TM Protection

2.01: Introduction

- Federal registrationo significantly enhance the legal protections available to the TM owner

o not essential to TM protection in the US

PART I: Nature of Trademarks

2.02: Trademark As Origin Identifiers

- Function of TM → inform consumers about origin of g/so Consumers typically care about the qualities and characteristics that they

associate with g/s emanating from that source.o Hold merchants accountable for disappointing g/s

- Goodwill → Reputation that attaches to TM

2.03: The Requirement of Nonfunctionality

A: Public Policy

- Functionality baro denies TM protection to any aspects of an article that contributes to the utility of

an article.

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- Functional if …o Essential to the use or purpose of article or if it affects cost/quality of article

o Exclusive use of feature would put competitors at significant non-reputational

disadvantage.

- Purposes of functionality doctrineo Fosters competition

o Prevents TM law from encroaching on patent law for useful product features

B: Evolving Definition of Functionality

- Inwood Laboratories v. Ives Laboratories (functional color → no TM protection)o Physicians putting things in wrong bottles. Product feature is functional if it

essential to use or purpose of article or if affects cost/quality of article. Pills were functional.

- Qualitex v. Jacobson (color can be TM if secondary meaning)o By themselves, colors cannot be trademarks. But if acquire secondary meaning,

can be TM. Cannot be TM if functional.

- Traffix Devices v. Marketing Displays (hierarchy of functionality analysis)o Inwood test is primary

o Qualitex expansion is relevant only when primary test is not satisfied

o Utility patent → strong evidence that feature is functional, puts HEAVY BURDEN

on party seeing to refute this aspect of functionality

C: Aesthetic Functionality

- Restatement 3d Unfair Comp o Design = functional because of its aesthetic value ONLY IF it confers a significant

benefit that cannot be practically duplicated by use of alternative designso NOTE: This doctrine is applied differently by different courts and is an

inconsistent standard

- Qualitex → SCOTUS interpretation of aesthetic functionality doctrineo Forbids the use of a product’s feature as a trade mark were doing so will put a

competitor at a significant disadvantage because the feature is ESSENTIAL TO THE USE OR PURPOSE or AFFECTS COST/QUALITY

o Ultimate test → does it significantly hinder competition?

- Automotive Gold v. Volkswagon (no aesthetic functionality)o Car logo case. There is no such thing as “aesthetic functionality.” This would

blow TM law away. But, a TM which identifies the source of goods and

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incidentally services another function may still be entitled to protection. Ask: would protection impose a significant nonreputational competitive advantage?

PART II: Establishing Trademark Rights2.04: Use In Trade

- Rights grow out of useo Under CL and state statutes, TM rights established only through actual use of

mark in connection with offering of goods or services to public – not mere adoption. See United Drug Co. v. Theodore Rectanus Drug co.

o use must be bona-fide, not just nominal or token use.

o Person’s v. Christman (foreign mark has no effect on Sr. user in USA)

D used a mark in the US that P was using only in Japan. Since D was the first to register in the US, he was senior user. P’s mark had no effect on US commerce. Senior user cannot be charged with bad faith use.

- Difference between CL and Fed lawo Federal registration of a TM gives rise to “constructive use” of mark even in

markets where registrant has not actually used the mark. Exclusive right to use (priority) belongs to first user (senior user).

A: Establishing Priority of Use

- Common lawo rights are established by person first to make BF use of mark

May be established by pre-sales publicity or sales solicitation COMBINED with intent to use

Blue Bell v. Farah Manufacturing Co (first to make bona fide use of mark has priority)

P and D both engaged in shady tactics to try to get use of the “Time Out” mark. P sold shipments of pants to store managers. D slapped new labels on old goods. Court eventually decided D used mark in good faith first.

- Resolution of Priority Issueso Where similar marks are used in geographic areas that are remote from one

another, each user will enjoy exclusive rights within its area United Drug Co. v. Theodore Rectanus (common law

concurrent use OK if in different locales)o When two unregistered marks in different localities

concurrently, it is fine. The senior user can’t come in and demand the junior user leave its own locality if the senior user wants to expand.

When areas overlap, rights belong to senior user

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Thrifty Rent A Car System v. Thrift Cars (the “limited area exception”)

o D, a junior user, was allowed to keep using its mark even

though P had federally registered the mark. To qualify for the limited area exception, a mark owner must (1) adopt its mark before P’s registration under the

o Geographic area determined by CL principles based on actual use, business

presence, reputation, zone of expansion Actual Use

Use in ordinary course of business Insignificant/sporadic use/token sales = insufficient. See Blue Bell

v. Farah. Sales in territory → important indicator of use

Reputation/business presence May acquire trademark priority in territory where already

established reputation for mark, even though not offer product service in that area

o Advertising may have carried the reputation of the mark

Factors → nature and extent of advertising + promo activities, geographic distribution of catalogs/flyers, geographic origins of orders/customer inquiries.

Zone of expansion Courts that recognize this doctrine tend to define zone narrowly Factors → previous biz activity, previous expansion/lack thereof,

dominance of contiguous areas, presently planned expansion, possible market penetration

o Market penetration → volume of sales of TM product,

growth trends in area, number of people purchasing, amount of advertising in area.

B: Lanham Act

1. Use In Commerce

- Commerce is …o All commerce which may be lawfully regulated by congress

Larry Harmon Pictures v. Williams (single restaurant location OK for interstate commerce)

Bozo’s restaurant case. The lanham act extends to all commerce that congress can regulate. Since customers from different states visted William’s restaurant, it was conducting commerce under the LA.

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o Commerce → the BF use of a mark in the ordinary course of trade, not made

merely to reserve a right in a mark. Token/de minimis use will not qualify

Proctor and Gamble v. Johnson and Johnson (use must be actual use in commerce)

o Assure deodorant case. PG made minor and sporadic

nominal use of their mark in the minor brands program to keep it alive. This use was not enough to establish priority in the mark. There must be intent to use the product again in the future.

o Use of mark in advertising without more will not qualify as a use in commerce for

purposes of federal registration Maryland Stadium Authority v. Becker (advertising can satisfy the use

requirement) Camden yards case. Advertising can be sufficient use of a mark

so long as services/goods are available within a commercially reasonable time and the totality of the acts create association of the goods and services and the mark. [E asks:Was this just a fuzzy attempt to favor the team? Can this geographic term even be protected?]

- § 45 LA → use in commerce between TM and SMo Goods

Mark must be affixed on goods, containers, associated, displays, tags or labels, documents (if placement impractical), MUST BE SOLD or TRANSPORTED in commerce

Transportation alone can qualify, but not purely intrastate oneso Public awareness is necessary

o Secret shipments do not qualify. See Blue Bell v. Farah.

o Services

Used in commerce when … Used in sale or advertising + services rendered in commerce

o More than one state OR US and foreign land

- Related companieso Substantial relationship between the parties is required

Any person whose mark is controlled by owner of the mark wrt nature and quality of the goods or services on or in conjunction with which mark is used.

Licensee subject to quality control → use inures the benefit of registraint/applicant

- Tacking

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o Users may only tack TM rights if the marks are so similar that the relevant

consumers consider them to be the same mark. See Brookfield Communications v. West Coast Entertainment

2. Foreign Use

- Territoriality Principleo Use of a mark exclusively outside the US is not a use in commerce and will not

establish ownership rights in the US.o Where a mark is used exclusively for services offered outside of the US, use in

commerce cannot be established solely through advertising to US consumers. But see International Bankcorp v. Societe des Bains … (BAD LAW:

advertising OK to uphold foreign mark with no US service) BAD LAW! Court muffs this one, says that even though casino

only has services in monte carlo, advertising in US is ok because foreign gambling is foreign trade, which congress can regulate. Foreign trade = WHO you trade with, not WHERE the trade occurs.

3. The Famous Marks Doctrine (controversial exception to territoriality principal)

- Use of mark exclusively overseas may give mark owner priority in US if mark is sufficiently well known to US consumers, even if goods/services not offered in US.

o But see ITC v. Punchgini (famous marks doctrine rejected by Fed Court)

P was denied relief under FMD for the mark Bukkhara restaurant. Court said while there is persuasive argument for P, if not in a statute, not gonna invent a remedy.

4. ITU Applications

- Benefito Possible to get on the principal register before the date on which the mark is first

used in trade.o If ITU application eventually ripens into a valid TM registration, the effective date

of that registration will take place when ITU was filed. WarnerVision Entertainment v. Empire of Carolina (priority of an ITU

registrant) An ITU registrant has priority over someone who actually uses the

mark in the interim between the ITU registrants filing and later subsequent use.

o More lenient standard for registration?

Eastman Kodak v. Bell & Howell (ITU OK for product numbers) Since the LA allows for another evaluation after the ITU period,

registering numbers, which are typically describtive, isn’t such a big deal. It’s ok. If they are found to have no secondary meaning, the registration will be cancelled.

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5. Constructive Use

- Nationwide constructive useo gives the registrant priority against later adopters even in areas were registrant

has not actually used mark.

2.05: Distinctiveness

- Distinctiveness in TM contexto tendency to identify the goods sold as emanating from particular source

o Two ways of being distinctive.

Inherent distinctiveness Arbitrary Fanciful suggestive

Distinctiveness through use (secondary meaning) See Wal-Mart v. Samara Bros.

Descriptive

- Abercrombie and Fitch v. Hunting World (the levels of distinction)o Marks can be generic (non distinctive), descriptive (sometimes distinctive),

suggestive (always distinctive), or arbitrary and fanciful (always distinctive)

2.06: Maintaining TM Rights

- Once TM rights have been established, they must be maintained or will be lost.o Can be lost via

Non use → abandonment Non distinctiveness →genericized. No longer is used as a source

indicator. Assignment in gross → assignment/license to be separated from

underlying goodwill so that consumer expectations are frustrated Naked licensing → TM owner fails to exercise QC Losing Fed TM protection → Not filing periodic renewals/statements of

use

PART III: TYPES OF TRADEMARKS2.07: Protectable Marks

- § 1 of the LA defines trademark as …

“any word, name, symbol, or device, or any combination thereof

(1) Used by a person, or

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(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 the source is unknown.

- Service mark definitiono Same as above, substitutes “service” for goods, and adds “titles, character

names, and other distinctive features of radio or TV programs may be registered as SM notwithstanding that they, or the programs, may advertise the goods of the sponsor.

A. Spectrum of Distinctiveness

- Marks in descending order of strength → categorization of mark is a matter of fact.o Arbitrary/fanciful (inherently distinctive)

o Suggestive (inherently distinctive)

o Descriptive (must acquire distinctiveness through 2ndary meaning)

o Generic (never protectable)

Alternate spelling does not make generic terms proctectable. (lite beer, beany)

- Composite marks (consist of several components)o Distinctivenesss must be determined by considering the mark as a whole.

1. Arbitrary/Fanciful (the strongest marks)

- Fancifulo Coined terms that have no commonplace or dictionary meaning – completely

fabricated by their owners (Xerox, Kodak, aunt jemima)

- Arbitraryo Words in common usage with dictionary meanings, but that do not in any respect

describe the goods or services to which they are attachedo Only distinctive within its product market and entitled to little or no protection

outside of that areao The distinctiveness of an arbitrary mark arises from the fact that it is mismatched

to a particular product or service.

2. Suggestive

- Considered inherently distinctive, eligible for TM protection without a showing of 2ndary meaning

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- Very strong marks, but less so than arbitrary and fanciful marks

- Only indirectly conveys an impression of the goods or services to which it is attachedo Requires the observer or listener to use imagination and perception to determine

the nature of the goods

3. Descriptive

- Specifically describes a quality, function, characteristic, or ingredient of a product or service.

o Takes no imagination to understand what characteristic of a product or service is

being conveyed

- Each part of word matterso In the Matter of the Application of Quik-Print Copy Shops (no TM for

descriptive mark without secondary meaning) Each part of the name (Quik, Print) was broken down, and the TM office

decided the name was descriptive. Secondary meaning was necessary in order for protection.

o Lahoti v. Vericheck (breaking up word to examine distinctiveness)

Court upheld a TM examiner’s decision not to grant a TM to Vericheck because it was descriptive of what the service did. ("In considering a mark as a whole, the [Trademark Trial and Appeal] Board may weigh the individual components of the mark to determine the overall impression or the descriptiveness of the mark and its various components.").

a. Common Law Proscription

- descriptive marks can be protected as TM under state and federal TM and unfair competition laws once they have achieved distinctiveness (2ndary meaning) in the minds of consumers

b. 2ndary Meaning

- Arises when public comes to recognize the mark as an indication of source.o This is a question of fact.

- sufficient if the public is aware that the product comes from a single, though anonymous source.

o Essential that the primary significance of the term in the minds of the consuming

public is not the product but the producer.

- Concurrent use

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o same descriptive mark in the same geographic area → priority depends on which

party’s mark was first to acquire 2ndary meaning.

4. Generic Terms(per se ineligible for protection)

- Commonly used as the name or description of a kind of goods.o A generic term that describes the genus of which a particular merchant’s product

is a species. Test for genericness → does the public perceive the term is the article?

Bayer v. United Drug Co. (marks can become generic if become a noun)

o People started using “Aspirin” as a noun, and it got

generified. Bayer marketed the drug in a way that consumers associated the brand with the product and not the source.

King –Seeley v. Aladdin Industries (surveys show lack of consumer understanding that mark is brand and not product)

o Thermos had become largely genericized, and consumer

survey evidence showed this. The court had mercy on P, and put a limited injunction on D (limiting the ways it could use the mark) instead of ruling the mark was totally generic and unprotectable.

o A term may be generic if it has a distinctive characteristic of the genus to which

the product belongs (Matchbox – matchbox cars) In re Chippendales (common basic shape or design not distinctive)

Cuffs and collar were common in porno industry, lots of other businesses used them in the field of adult entertainment for women.

o Term may be generic for one class of goods, but not another. See [the hog case]

- Marks at risk for genericideo associated with unique or patented products/services

Kellog v. Nabisco (generic descriptions = no TM) Shredded wheat had become a generic term, so no TM protection.

Trade dress was functional, so no protection for “pillow shape” either. Expired patent is evidence of generification.

o marks that have been featured in strong ad campaign

o Whether a mark has become generic is a question of fact.

B. Personal Names

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- Individual’s name can serve as trademarko Not considered inherently distinctive

o Generally treated as a descriptive mark that can be protected only upon a

showing of a secondary meaning Peaceable Planet v. Ty (Personal name needs secondary meaning for

TM) Since Ty was not using “Niles” as a source indicator, it did not

acquire secondary meaning, and Peaceable Planet was able to use the name on its camel. Posner also noted the rule must be applied to people!

- For a personal name to serve as a mark, it must o be associated with the offering of goods/services to the public and NOT just

perceived as the identity of an individual.o Have 2ndary meaning

The public must have the impression that this product or service comes from the same source whenever it is offered under that name.

C. Trade Dress

- Refers to the distinctive features of a product’s packaging or the distinctive features of the product configuration itself

o Total image of product – may include size, shape, color or color combinations,

texture, graphics, or even particular sales techniques.o Services can have TD too (UPS brown)

o Munsingwear v. Jockey Int’l (pre or post sale packaging examination?)

Court decided that pre-sale TD was the way to analyze two horizontal-fly underpants competing in the same store – that is how consumers deal with them. The TD of the underpants might be the same, but the box is what counts.

- protectable if it is capable of distinguishing one business from another

- Federal law requirementso Must be TD must be nonfunctional and distinctive

o §43(a) requirements

Trade dress of products is confusingly similar Features of TD is primarily nonfunctional

Tie Tech v. Kinedyne (no TM protection for function)o Features which constitute the actual benefit the consumer

wants to purchase are not protected via TM. Product’s manufacturer does not have rights under TD law to compel

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its competitors to resort to alternative designs which have a different set of advantages and disadvantages.

TD is inherently distinctive OR has acquired 2ndary meaning. Two Pesos v. Taco Cabana (TD can be protected if inherently

distinctive)o Inherently distinctive TD can be protected under § 43(a)

without showing it has acquired secondary meaning.o Even if individual elements of TD are not themselves

inherenently distinctive, inherent distinctiveness may exist in the particular combination of those elements.

Product configuration There is a distinction between product PACKAGING and

CONFIGURATION.o Wal-Mart v. Samara Bros (product configuration

protectable if secondary meaning) Design, like color, is not inherently distinctive.

Under §43(a), product’s design is distinctive only upon secondary meaning. Contrast Two Pesos → TD of a restaurant is more like packaging. Equated with source. Scalia did not want to protect any kind of functionality.

Party asserting protection has additional burden of establishing that the TD is nonfunctional

D. Color, Sound, Scent

- These things can serve as TM.o Although by themselves not inherently distinctive, they can acquire secondary

meaning. See Qualitex v. Jacobson → color

- In re Vertex Group (sound as TM)o A sound must be distinctive to be TM. Distinction must be found between

unique, different, or commonplace sounds or those which listeners have been exposed under different circumstances.

E. Artistic, Musical, Other Expressive Works

- May qualify for CL and federal protection if they acquire distinctiveness.o Ex → artistic designs, jingles, design of a building

- Problem of TM concepts when work functions as both product and source indicator.

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o Rock and Roll Hall of Fame v. Gentile Productions (unique → not necessarily

fanciful) Even though the building of the RRHOF was unique, it was not used as a

mark in a constant and consistent way and thus it was not source-designating.

H. Numbers and Alphanumeric Combinations

- Can serve as TM under CL and fed law if they have inherent or acquired distinctiveness.

I. Foreign Words

- In some cases the English translation will determine whether the word or phrase qualifies for TM protection.

o Doctrine of foreign equivalents

If a word is from a relatively common language, English translation will be used to determine genericness, as well as similarity of connotation in order to assess whether it is confusingly similar to English-language word marks already in use

PART IV: FEDERAL TRADEMARK REGISTRATION

2.08: Benefits of Federal Registration

- Fed registration is not prerequisite to protecting a TM under § 43 of LA or state law, but it does give benefits.

o § 7(b) and 33(a)

Registration on principal register is prima facie evidence that the mark in question is valid and owned by the registrant, and registrant has exclusive right to use.

Wolf Appliance v. Viking Range (registration = presumption of secondary meaning + the 7-factor test for secondary meaning)

o Since registration for red knobs as TM was granted,

secondary meaning is presumed. See list of seven factors to establish secondary meaning if not presumed.

Places burden on D to showing the mark … Should have never been registered in the first place Has lost its validity

o § 7(c)

Subject to several exceptions, in mark on principal register, filing of application constitutes constructive use conferring nationwide priority as of the date the application was filed.

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Exceptions that apply when another party has _____ prior to the applicant’s filing date

o Used the mark

o Filed an application to use the mark which is pending or

resulted in registrationo Filed a foreign application to register the mark and timely

files under 15 USC § 1126(d)o § 22

Gives constructive notice of registrant’s ownership, gives registrant priority over junior users even in markets where registrant has not used the mark.

Precludes subsequent user from arguing that it adopted a mark in good faith and without knowledge of registration.

o Incontestability

Once on PR for 5 years, mark can become incontestable

o § 42

Can help TM owner block importation of infringing goods

o Access to broader array of remedies under §§ 34(d), 35(b), and 35(c) than

unregistered owner has.

2.09: Marks Eligible for Federal Registration

A. General Standard - § 2 of LA → general substantive standards for registering a mark on the PR.

o Basically, anything can make it

Unless it falls under a statutory bar under 2(a)-(e)o Only one mark can be registered in a single application

- NOTE: § 2 is for federally registerd marks, § 43(a) is for CL marks

B. Marks Ineligible for Registration on the Principal Register

- If a mark is capable of distinguishing goods or services, it can be registered on PR unless it fails § 2(a)-(e).

o § 2(a)-(d) → complete prohibition

o § 2(e) → can overcome presumption of unregisterability if acquired secondary

meaning. See § 2(f).

- Composite markso Applicant may disclaim parts of marks that are unregisterable

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But might seek protection at a later time once secondary meaning has been established.

1. Immoral, Deceptive, Scandalous, or Disparaging Matter; False Geographic Indications for Wines and Spirits

- § 2(a) bars registration of a mark that is …o Immoral, deceptive, or scandalous

Immoral/scandalous Offense to the conscience or moral feelings of a substantial

composite of general publico But see In re Lebanese Arak Corp (disparaging remarks)

Court found that Khoran wine would be disparaging to Muslims. BUT isn’t the proper scope all American wine purchasers? Not just the Muslim ones?

o Vulgarity is sufficient to establish immorality/scandal

Boston Red Sox Baseball Club v. Sherman (scandalous, immoral, disparaging remarks)

Sex Rod case. Vulgar → scandalous. Court also found mark would be disparaging to Sox.

PTO must consider the mark in context of marketplace as applied to the goods in the described application for registration

Deceptiveness Mark must …

o Falsely describe goods or services

o OR misdiscription must be one that the prospective

purchaser is likely to believe is true AND that mistaken belief is likely to materially affect the consumer’s purchasing decision.

o Matter that may disparage or falsely suggest a connection with persons (living or

dead) institutions, beliefs, national symbols, or bring them into contempt/disrepute

TTAB must find that Applicant’s mark is the same as or closely approximate’s

another’s previously used name/identity Mark would be recognized as such Other party is not connected with the activities performed by the

applicant under the mark

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Name or identity of the other party is of sufficient fame or reputation that when mark is used, a connection would be presumed

o Geographical indication that is not the place where the goods originated if the

use started after 1/1/1995

2. National, State, Municipal Insignia

- § 2(b) bars the registration of a mark that comprises or simulates the flag, coat of arms, or insignia of US, state, or foreign nation.

3. Name, Portrait, or Signature

- § 2(c) bars registration of any mark that compriseso Living person’s name, portrait, or signature (w/o consent)

o President during lifetime

4. Marks Likely to Cause Confusion with Existing Marks

- §2(d) incorporates the CL “likelihood of confusion” testo bars registration of any TM that comprises a mark which so resembles a mark

already registered at the PTO or in use in the US which is not abandoned and is likely to cause confusion by mistake or deception.

- Establishing priority under § 2(d)o Party must show it was first to establish proprietary rights in the mark

May arise from prior registration or use.

a. Priority of use

- applicant may be denied under § 2(d) if another party has used a confusingly similar mark on similar goods or services anywhere in the US

o even if that was not a use in commerce because it was purely intrastate.

o Priority in §2(d) depends on which party was the first to use the mark in

connection with the goods/services in question, whether or not that use involved interstate commerce

b. Priority through Analogous Use

- A use that would not itself be a TM use may nonetheless be sufficient under § 2(d) to establish who is the senior user of a mark

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o If the use was of such nature and extent as to create an association by

purchasing public- Third party can inure benefit to someone else (commercial saying “Mickey D’s)

- Analogous use may be tacked to actual useo Even with reasonable delay.

c. Factors Indicating a Likelihood of Confusion

- In determining whether confusion exists under § 2(d), the PTO will focus on the DuPont factors. There are 13 of them – see § 2(d) for the deets. This test is the Polaroid factor test!

- The weight accorded to each factor will vary, depending on the particular circumstances of each case

o Typically the similarity of the marks and the similarity of goods/services =

important

d. Concurrent Use

- Concurrent registrations can be served, but subject to limitation to avoid confusiono Mode or place of use of each mark

o Goods in connection with which mark can be used

- Concurrent registrations will issue only to applicants that became entitled to use the marks as a result of their concurrent lawful use in commerce prior to the earliest of …

o Filing dates of pending applications

o Any registration actually used for the mark

5. Descriptive, Misdiscriptive, or Functional Marks

a. Merely Descriptive

- §2(e)(1)o Determination based specifically on goods or services for which registration of

the mark is sought.o Any mark that is denied registration on (e)(1) grounds is still eligible for

registration when gets 2ndary meaning to satisfy § 2(f) Generic marks

No amount of 2ndary meaning will make it registerable

b. Deceptively misdescriptive

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- §(2)(e)(1)o Deceptively misdescriptive → misdescribes goods/services and if public is likely

to believe the misdescription to be true

o DIFFERENCE between deceptively misdescriptive under §2(e)(1) and deceptive

under §2(a)? DM → consumer’s mistaken belief material to purchase

o Mark can be misdescriptive without being deceptively misdescriptive

EX → “solid gold” candy bar

o DM marks can be registered on PR if acquired 2ndary meaning , but deceptive

marks under § 2(a) never can. Coca Cola v. Koke (Deceptively misdescriptive = OK if secondary

meaning) The fact that there was no cocaine in Coca Cola did not invalidate

their TM. The Coca Cola mark had become a source indicator through use and had acquired secondary meaning.

c. Primarily Geographically Descriptive

- §2(e)(2)o The prohibition applies only when the term is “primarily” geographically

descriptive wrt the goods in question In re Baik (no TM protection for geographically descriptive marks)

“Baik” mark was rejected under §2(e)(2) because it was primarily geographically descriptive. It was not a remote or obscure place. Here, the court found that the vodka buying public was the target market to consider.

Does not apply when the geographic term is obscure, remote, or when mark has popular significance with geographic meaning

American Waltham Watch v. US Watch (descriptive geographic term → TM if secondary meaning)

o Since “Waltham” had acquired secondary meaning with

consumers, the Plaintiff could enjoin Defendant from using it as a source designator on watches even though it was a descriptive geographic term.

d. Primarily Geographically Deceptively Misdescriptive

- §2(e)(3)o Marks in this category may not be registered even if they have become

distinctiveo Test for PGDM?

Identical to the test for deceptive marks under §2(a)

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Mark must …o Falsely describe goods or services

o OR misdiscription must be one that the prospective

purchaser is likely to believe is true AND that mistaken belief is likely to materially affect the consumer’s purchasing decision

o In re California Innovations (new test for geographically misdescriptive marks)

The court decided that the test for deceptively misdescriptive and geographically misdescriptive marks is the same. In this case, there was no goods/place association, so no need to apply step three.

e. Primarily Merely a Surname

- Such marks can still be registered if they acquire sufficient secondary meaning to satisfy §2(f)

-- Names with several meanings

o Test under §2(e)(4)

Is name primarily a surname, or are the other meanings significant? See the five factors in §2(e)(4) for the deets.

f. Functional Marks

- §2(e)(5)o Bars registration of functional mark

o Manufacturer cannot compel competitors to resort to alternative designs with

different advantages/disadvantages via TD lawo Functionality is usually the issue.

De jure functionality → BARRED (§2(f) does not apply) Superior design essential for competition

o See TrafFix case

De facto functionality → OK Merely performs some function or utility but is not significantly

better than other possible configurations

6. Overcoming Bars to Registration Under Section 2(f)

- In order to demonstrate distinctiveness, applicant may … o submit evidence

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Amount and manner of advertising, sales volume, length and manner of use of mark, surveys, consumer testimony.

Applicant must establish acquired distinctiveness by preponderance of evidence.

o Show proof of substantially exclusive and continuous use of a mark for 5 years

immediately preceeding the date on which the claim of distinctiveness is asserted BUT PTO director is not required to accept this

- Marks that that have been denied for the PR can still go on the SR until they meet the §2(f) requirements.

7. Dilutive Marks

- §2 permits PTO to refuse registration of mark which would likely cause dilution by blurring or tarnishment under §43(c).

o Such refusal can only be pursuant to an opposition under §13 – PTO cannot do it

on its own. For opposition to succeed on dilution grounds ITU application, opposer’s

mark must have become famous before filing date of application Considerations

See §43(c) for the six non-exclusive factors

E. Service Marks

- May be subject to all of the same rules and protections that apply to trademarks for goods

- Mark used for goods and services → 2 different marks

- For mark to be used as SMo Must be used in provision of services, not just advertising for services.

2. 10: Registration Process

- Two types of registrationo Use

o Intent to use (ITU)

E. Use

- Application based on use must contain all information in §1(a) in LAo If evidence of distinctiveness under §2(f) is necessary to show, stick that in there

too

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- If PTO says mark entitled to registration, mark is published in official gazette.o If no opposition filed for 30 days → protection granted

- If PTO rejects application, applicant can appeal to TTAB.

F. Intent to Use

- Governed by §1(b)

- ITU applicant must state bona fide intent to use mark in commerce

- Once ITU application is filed, PTO conducts initial examinationo If acceptable, mark goes on PR and gazette. Applicant gets notice of allowance

Within 6 months, applicant must file statement of use . Extensions are possible for up to 24 total months.

Any goods or services listed in NOA not listed in SOU are excluded from extension and ultimately in TM registration

Date of effective registration → date of ITU application

G. Who May Register a Mark

- Entitledo The owner of a mark is entitled to register

Joint owners OKo Person entitled to use mark for ITU application

- NOT entitledo Licensees (even exclusive)

H. Opposition

- Opposition period beings on the date the mark is published in official gazetteo Limited to 30 days unless otherwise extended

- May be field by any person who anticipates being damagedo Opposer must have “real interest” in proceeding

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- Opposition for confusingly similar mark under §2(d) may be brought by either …o Owner

o Exclusive licensee

o Nutrasweet v. K&S Foods (likely confusion based on name)

Nutrasalt was not allowed to use the name as a TM. Too likely to be confused with Nutrasweet. Plaintiff had already spent millions building the brand.

o Marshall Field v. Mrs. Fields Cookies (marks not confusing)

Even though Fields was in both marks, there was no confusion. Both were famous companies, little LOC. TD would not cause a problem. Secondary meaning of P’s mark was limited to the store, and did not extend to banking services.

H. Maintaining and Renewing Registrations

- To maintain a federal TM registration, the owner of the registration must periodically file …

o Affidavit of use

Between 5th and 6th years after initial registration, another between 9 and 10 years after initial registration, and another in the year preceding every 10th year thereafter

o Renewal application

Under § 9 of LA, federal TM registration may be renewed for a 10 year period beginning 10 years after the intitial registration, and continuing at successive 10 yeare intervals thereafter.

Failure to file = cancellation of registration

o … the renewal timeframes for both of these coincide, so they can be a single

document.

2.11: Judicial Review

- Under § 21 of LA, there are two routes to appeal from the decisions of the TTAB or PTO Director.

o Federal Circuit Appeal

Questions of Law reviewed de novo

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o US District Court Appeal

Questions of law = de novo, facts = substantial evidence standard

2.12: Cancellation

A. Grounds for Cancellation

- Once TM has been registered on PR, presumed valid under § 7(b)o But still subject to cancellation under § 14

§§14(4),(5) → mark may be cancelled even after incontestability if … Generic Functional Abandoned Fraudulent registration

- If mark on PR for less than 5 years, can be cancelled for any bar in § 2

- §§2, 14, and 24 permit cancellation of a registered mark likely to cause dilution by blurring or tarnishment under § 43(c)

B. Procedure

- Petition for cancellation may be filed by any person who believes he or she has been or will be damaged by the registration of a mark on the PR

- TTAB conducts an inter partes proceeding subject to judicial review by fed circuito Federal circuit requires petitioner in cancellation proceeding to

- In court action involving registered mark, court may order full or partial cancellation of registration if it determines registration is wholly or partly invalid

2.13: Incontestability

A. Effect of Incontestable Status

- § 15 of LA permits certain registered marks to become incontestable

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o Conclusively establishes the validity of a registered mark and registrant’s

ownership and right to use mark in commerce wrt goods/services for which it has become incontestable

- Exceptionso Conclusive presumptions don’t apply …

for grounds of cancelling a mark under §§ 14(3) or (5) To the extent that the use of the registered mark infringes any CL right

established by another’s continuous use of a mark from a date prior to the registration date

- Incontestable mark CANNOT be cancelled on ground that it violated §2(d) (confusing similarity)

- Serves as quiet title to marks which have acquired distinctiveness under §2(f)

- Limits defenses that are available to infringers.o Under §33(b), infringer’s defenses are limited to:

Registration/incontestable status was obtained fraudulently Abandonment Registrant using mark to misrepresent source of goods/services Fair use D’s use of mark was adopted without knowledge of registrant’s prior use,

and used before P’s registration D was using the mark first Mark is used for antitrust Functionality Equitable principles (laches, estoppel, acquiesance)

- Descriptiveness is NOT grounds for cancellation.

- Park N Fly v. Dollar Park & Fly (incontestability → offense AND defensive maneuver)o Incontestability can be used offensively to enjoin others from using the mark.

Nothing in the LA says otherwise!

- For likelihood of confusion analysis, the fact that a mark is incontestable does not necessarily establish that it is strong.

B. Establishing Incontestability

- Conditions set forth in §15

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o Continuous use for 5 consecutive years from date of registration on principle

registero No adverse or pending decisions in court or PTO

o Registrant must file affidavit with director within one year at end of any such five

year period

- Obviously, does not work for generic marks

2.14: The Supplemental Register

- Offers benefits for certain marks that lack the distinctiveness required for PR, but can acquire distinctiveness through use.

- Useful purposeso Searchable database to prevent registration of confusingly similar marks

A. Eligible Marks

- Marks that are ineligible for registration on PR may be registered on SR unless barred by §§ 2(a),(b),(c),(d), or (e)(3).

- SR primarily benefits marks that lack sufficient 2ndary meaning to satisfy §2(f)o Once mark acquires distinctiveness, owner then can pursue PR registration

- Requirementso use

Mark must be in lawful use in commerce in connection with goods or services for which it is registered

o ITU

Eligible for SR after amendment to allege use or statement of use has been filed

o FOREIGN registrations → NOT eligible

B. Registration Procedure

- Mark may be registered on SR after examined for elibigility and upon compliance with §1(a) and (e) of the LA.

- Marks are not subject to opposition, but are subject to cancellation

- If applicant is refused registration on SR, can use same procedures as if rejected from PR.

C. Effect of Supplemental Registration

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- §26 → benefits of being on SR. not as good as being on PR.o No prima facie evidence of validity, right to use, ownership

o No constrictive notice

o Mark may not become incontestable

o No barring of counterfeit good importation

- Can block confusingly similar or dilutive mark from going on the PR

D. Cancellation

- Mark on SR is not published for opposition, but will be published in official gazette upon registration.

o Anyone who thinks they will be damaged by registration of mark on SR can

petition to cancel the mark under § 24.o If cancellation sought on ground that the registered mark is likely to dilute a

famous mark by blurring/tarnishment, cancellation only allowed only if petitioner’s mark became famous BEFORE the effective filing date of the registration on SR.

2.15: Domestic Priority Based on Foreign Trademark Registrations

A. International Trademarks

- 1883 Paris Conventiono Members must give national treatment to each other

Afford TM rights at least equal to those provided to the member’s own nationals

National of any signatory country who applies to register a TM in one member nation may use that filing to establish an effective filing date in any other member nation where that applicant applies for a registration within the first 6 months of filing.

o Does not provide multinational filing mechanism

B. National Treatment

- Implemented in §44(b)o Gives nationals in treaty with the US the rights to which any owner of a mark is

entitled under the LA.

- § 44(g) provides that trade names or commercial names of such parties are protected even without registration

o Even if not trade names, § 44(h) entitles them to effective protection against

unfair competition.

C. Domestic Priority Based on Foreign Registration

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- §44(d) → nationals of trademark treaty partners or countries providing reciprocity may take advantage of an exception to the general rule that a mark can be federally registered only after use in commerce has commenced.

o Implements Art 4 of Paris Convention

Gives foreign nationals a right of priority for 6 months after filing a foreign application even if applicant has not used mark anywhere in the world

Need to qualify under §44(b) Need a statement of intent

Filing date of foreign application becomes effective date of applicant’s constructive use of a similar mark in the US

o Foreign applicant may not file an infringement action based on any acts

commited prior to the date on which the mark becomes registered unless registration is based off use in commerce.

D. Madrid Agreement and the Madrid Protocol

- Effective 11/2/2003

- A US national that applies for, or has applied for US registration may also file a single application filing any countries that are protocol signatories

o Registration date is the date it is filed at PTO, then filed to WIPO

WIPO has 18 months to examine

- Party that obtains an international TM registration from country other than US may request an extension for US protection

o Under § 66, also need bona fide intent to use mark in commerce

o Will be examined to see if it meets requirements in § 2

if mark meets requirements, mark will be published in official gazette and subject to opposition

- all international extensions last for 10 yearso but can be cancelled in first 5 if home country application is

rejected withdrawn lapses cancelled or otherwise terminates

o any lapse/termination applies only to the category of goods/service for which the

mark lost protectiono when mark loses protection in home country, applicant has 3 month grace period

to file country by country applications in Protocol nations without losing the priority date that was based on international registration.

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PART V: State Trademark Registration2.16: State Registration Statutes

A. General

[nothing good in this section]

B. Federal Preemption

- Generallyo State common law and legislation wrt TM and unfair competition are not

preempted by LA CL trademarks typically protected by § 43(a)

- If enforcement of state TM law will interfere with rights conferred under LA, federal law will preempt

o See Sears, Compco, Bonito …

- Although LA makes clear that a federal registrant has nationwide priority, some courts will not enjoin (or award damages for) the use of the mark by a junior user unless and until the registrant shows likelihood of entry into the junior user’s trading territory.

o See Dawn Donut Case.

o Junior user’s right to use mark would cease when senior user expanded into the

area.

2.18: Assignments and Licenses

A. Assignments

- Under both CL and LA, any assignment of a mark must include a transfer of the accompanying goodwill of the line of business in which the mark is used.

o Any attempted to transfer rights in mark without goodwill → assignment in gross

→ abandonment of marko Need to file ITU when switching mark to new owner. §1(b).

B. Licensing

- Naked licensingo To avoid, TM owner must exercise adequate quality control of licensee’s use of

the mark.o Barcamerica International v. Tyfield Importers (naked licensing kills a mark)

Because P did not monitor or supervisee its TM licensees, there was naked licensing and the court stopped from asserting its rights in the mark.

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Ch. 3: Trademark Infringement and Unfair Competition

3.01: Introduction

- Cause of action for infringement may arise under CL, state statutes, or LAo All 3 sources require senior user to establish that junior user’s mark create a

likelihood of confusion → likely to cause a competitive injury to the senior user

- Under the broadly interpreted unfair competition provisions of the LA, false or misleading representations of source, affiliation of goods/services, or commercial activities are actionalable even where no trademark misuse occurs, provided that representations are likely to cause confusion.

PART I: TRADEMARK INFRINGEMENT3.02 Elements of TM Infringement

- A federal cause of action for infringement arises under § 32 of LA.

- When mark is not registered but qualifies as a mark under CL, the owner of the mark can bring a claim for unfair competition under §43(a) or state law.

o State courts usually use § 43(a) as measuring stick for infringement

- Under both federal and state law claims, TM infringement has a two step analysiso Is mark valid/enforceable? Plaintiff owner of mark with right of priority over

defendant wrt the mark? Depends on which law is used – state & federal laws must be considered

o Has D used the mark in a way that is likely to cause consumer confusion as to

the origin of the goods/services? Same for both state and federal laws

o Also must prove that D’s activities took place in commerce

Federal law → usually interstate State law → can be intrastate

A. Valid Ownership of a Mark

- §7(b)→ Effect of Certificate of Registration If mark is registered on PR, § 7(b) says …o prima facie evidence of …

Registrant’s ownership Exclusive right to use … wrt the goods/service in the certificate

o This shifts the burden to D, who must present evidence that mark is invalid

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Presumption does not apply to marks on SR

- Effect of incontestable Marko CONCLUSIVE evidence of …

Validity Registration Registrant’s ownership Registrant’s exclusive right to use mark in commerce

- Common Law Mark OR mark on SRo P has burden of establishing ownership of valid mark

Must prove Used mark in connection of offering goods/services Mark is …

o Inherently distinctive OR has acquired 2ndary meaning .

Date when began using mark to determine who is the senior user

- Tackingo OK if marks are slightly different

But the standard is high. Degree of similarity required is greater than the amount required for likelihood of confusion test

- Trade Dress under § 43(a)o P must also establish that TD is not functional

Might be different in state law; varies from state to state Might have to make PFC, or just rebut a functionality defense.

B. Likelihood of Confusion

1. Overview

- LOC is evaluated from “ordinary consumer” povo Has typical characteristics of buyers for particular good or service at issue

- Careless consumerso Some say that it favors LOC, but others disregard it.

- Confusion must be probable, not just possible .o It is enough that consumers would belief that P endorsed or was affiliated with

goods/services

- Infringement may also be based on “initital interest confusion” (discussed below)

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2. Factors

- The factors used differ in various circuits, but it’s basically variations on the Polaroid factors.

o These cases are fact specific, and virtually any facts and circumstances relevant

to potential for consumer confusion can be considered.

o E&J Gallo Winery v. Consorzio del Gallo Nero (Polaroid factors)

A slam dunk win for P with the Polaroid factors. Note that evidence of unrelated infringers is irrelevant to a TM infringement analysis. A strong mark is afforded the widest ambit of protection from infringing uses.

- Factors!o Strength of senior mark

The stronger P’s mark, the more likely there is that there will be confusion Strength measured by …

Degree to which it is inherently distinctive (arbitrary, fanciful, suggestive)

o For federally registered marks, §7(b) provides rebuttable

presumption that mark is either inherently distinctive or has acquired 2ndary meaning.

Incontestability makes this evidence conclusive subject to the defenses in §33(b)

Degree to which it is distinctive in the marketplaceo long and continuous use, extensive advertising, sales,

recognition in field of use, use on broad variety of products

strength can be undermined by showing that multiple people used the brand at once

o Degree of similarity between two marks

The marks have to be considered as a whole For domain names, top level (.com, .org … ) are disregarded

o Proximity of product/services

Compare content, geographic distribution, market position audience appeal, marketing channels

When goods are in direct competition, degree of similarity necessary to establish a LOC is lower than in case of dissimilar products

Banfi Products v. Kendall-Jackson Winery (Polaroid factors)

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Non LOC because goods were very dissimilar (high end wine v. box wine) and proximity of goods (marketed differently, labeled differently)

o Likelihood that prior owner will bridge the gap

If two markets are similar, favors senior user. If unlikely that senior user will use mark on other products in different

market, favors junior user. See Proctor & Gamble v. Johnson & Johnson

o Evidence of actual confusion

Some courts consider the effect of parodies in this factor. Often the best LOC evidence Impact

Isolated/little confusion → little impact Longtime concurrent use with another mark → negative impact Lots of confusion → big impact

o Surveys of 15-20% confusion usually persuasive

DuPont v. Yoshida (dueling surveys) After a round of dueling surveys, the court decided the real issue

to prove was “does a substantial majority of the public view Teflon as a brand name?”

o D’s good or bad faith adopting the mark in question

Did D adopt mark with intent on capitalizing on P’s reputation or goodwill? Identical marks

Rebuttable presumption of bad faith

o Quality of D’s product or service

Used in 2d Circuit; seems to have little importance in other jurisdictions Can cut both ways

Cheaply-made goods can reduce LOC But can also hurt P’s reputation because of association with cheap

goods

o Sophistication of buyers

More sophisticated consumers are presumed to be less easily confused than dumb consumers

Nature of goods relevant to question of sophistication High end goods → probably less confusion Cheap goods → might be more confusion bc consumers aren’t as

careful

C. Reverse Confusion

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- In reverse confusion, consumers are likely to be misled into believing that the senior user’s goods originate with junior user.

o Most commonly arises from junior user’s success with marketing

- Injury to senior usero Erosion of senior user’s goodwill

o Loss of control over senior user’s reputation

o See Dreamwerks Prod. v. SKG Studio

- Where evidence exists to support both forward and reverse confusion, senior user may utilize both theories

- Considerations for Courts Determining Reverse Confusiono Just consider the same facts as regular confusion

o Which user to focus on? Courts are split

Senior user → threshold for 2ndary meaning should be somewhat lower?

D. Confusion Before or After the Purchasing Decision

1. Initial Interest Confusion- Occurs when one party has used another’s mark in a manner calculated to capture initial

consumer attention, even though no actual sale is finally completed as a result of confusion.

o By time of purchase, there is no longer confusion

o Played a significant role in infringement claims arising from unauthorized use of

TM in domain names and metatags

- Harmo Even where a consumer is confused only briefly, the consumer may remain on

infringer’s site and spend money he originally would have given to another provider of goods/services

See Brookfield Communication v. West Coast Entertainment.

- Mobil Oil v. Pegasus Petroleum (initial interest confusion)o D was enjoined from using “Pegasus” as a mark because P had used a picture of

a flying horse for its oil biz for years. Court found there was likelihood that consumers would be inititally confused. D would get crucial credibility during the intitial phases of a deal.

- Playboy Enterprises v. Netscape Communications (initial interest confusion)o P won suit against D because D required adult-oriented companies to key-link

their ads to the term “playboy” and “playmate” – initial interest confusion. Court

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found actual confusion via expert survey, and this was probably enough right there.

2. Post Sale Confusion

- Typically, the consumer in post-sale confusion is not the same one who initially made the purchasing decision

- Harmo Purchaser gets benefit of wearing knock-off and fooling others

Mastercrafters v. Vacheron (BAD LAW!) Unique appearance of P’s clock led to secondary meaning. BUT,

this is exactly like Sears/Compco! This reasoning is outdated. Don’t use this case.

o In case of inferior goods, a gift of an inferior good could dissuade a purchaser

who has never dealt with a brand to not deal with that brand again (cheap knockoff sweater for Christmas makes you not want to buy from Abercrombie anymore after it starts unraveling on New Year’s).

E. Trademark Use

- This requirement is generally not satisfied when mark is used …o For commentary.

Utah Lighthouse Ministry v. Foundation for Apologetic Research (safe harbor saves D)

D’s site parodying and criticizing P’s church was not Cybersquatting. Used § 43(d)(1)(B)(ii) → determined that because D had a belief and had reasonable grounds to believe his site was a parody, and thus legal.

But if commentary site offers goods/services, then threshold met.

1. Keyword Triggered Advertising

- Advertisements or sponsored links are not authorized by the actual owner of the TM or SM

o This can lead to infringement, usually initial interest confusion

- Courts remain divided on whether “trademark use” exists in these caseso See 1800 Contacts v. WhenU.com

Court said that adware did not use TM in commerce because it did not use mark to designate origin of goods

But the court declined to show whether use of trademark in adware directory constituted use.

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No TM use because adware did not alter or interfere with plaintiff’s website, divert or misdirect consumers, or alter results of search, did not involve the sale of trademarks keywords triggering pop-up ads

o Compare Rescuecom v. Google

Google actually sold the trademarked words and suggested them to competitors who would use them in their own advertising.

o Remember! Even when a court decides that trademark use has occurred, this

does not mean the use is also infringing or dilutive

2. Metatags

- Usually these are deemed to be trademark use

- But can be fair use if mark fairly and in good faith describes the contents of a website.o See Playboy Enters. v. Welles → she WAS the playmate of the year like a

bazillion years ago.

3. Domain Names

- Question → does the mere presence of a trademark in a domain name involve using the mark to indicate a sale of goods and services?

o If website itself is considered a good/service, then yes.

o If not, question turns on whether consumers would be confused

- Some courts = incorporating a TM into a domain name involves TM use because consumers will mistakenly encounter the unauthorized site, interfering with owner’s own offering of goods/services

- Other courts are reluctant to adopt that theory of TM use where website domain name incorporates TM to site devoted to parodying or criticism.

o See Utah Lighthouse Ministries, Grosse v. Naughty Nursery

F. Use in Commerce as Jurisdictional Predicate

- Infringement action under § 32 or § 43(a) must take place “in commerce”o Congress may not regulate purely intrastate commerce

- “in commerce” requirement for establishing subject matter jurisdiction for infringement or dilution claim under LA is different from “use in commerce” requirement for purposes of registration

o Infringement/dilution claim for jurisdiction satisfied when …

Defendant’s activity takes place in commerce

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The defendant’s conduct involves purley intrastate but nonetheless have a substantial effect on interstate commerce.

Steele v. Bulova (LA applies if EFFECT on US commerce)o If D’s conduct has any effect on US commerce, the LA can

be used to stop extraterritorial conduct. In this case, D was makingbootleg watches in MX with parts from the US, and they would make their way back to the US and harm P’s brand name.

Internet activities usually are considered “in commerce ”

o Registration → has applicant made qualifying use that congress can regulate?

G. Territorial Limitations

- Well settled that federal courts may enjoin extraterritorial conduct under LA when necessary to prevent harm to commerce in US.

- See Steele v. Bulova Watcho Three factor test

Is D a US citizen? Does the foreign activity having a substantial effect on US commerce? Whether exercising jurisdiction would interfere with the sovereignty of

another nationo Finding in this case not solely based on the fact that D bought some of its watch

components in the US, but also on the fact that the counterfeit watches were coming into the US and damaging Bulova’s domestic goodwill.

- McBee v. Delica (if no substantial effect on US commerce, no LA application)o In this case, Japanese D operated a website with teen girl clothes with P’s last

name as their mark. Since there was no substantial effect on US commerce (could not buy goods in US, site was in Japanese … ), the LA did not apply.

PART II: REVERSE PASSING OFF3.03: Reverse Passing Off

- §43(a) applies to reverse passing offo Requirements

D misbranded P’s goods Such misbranding was “material” Defendant caused plaintiff’s goods to enter interstate commerce Defendant’s misbranding caused a likelihood of confusion

- Reverse passing offo Occurs when a defendant offers the public goods or services produced by

another person, but represents them as defendant’s own goods/services

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o Express v. implied

Express → defendant places its own origin indicator on goods produced by someone else

Implied → where defendant omits plaintiff’s origin indicator but does not substitute its own

o Modification/relabeling

RPO may occur when D modifies another’s product and relabels it as its own.

Minor modifications → likely there is liability Substantial modification → new product, liability less likely

- W/R/T creative goodso SCOTUS rejected application of § 43(a) to misattribution of creative or

expressive works in Dastar v. 20 th Century Fox. Origin refers to producer of tangible goods, not to author of idea, concept,

or communication embodied in goods.

PART III: FEDERAL LAW OF FALSE ADVERTISING

3.04: Federal Law of False Advertising

- §43(a)(1)(B) permits plaintiff to bring a claim for false advertisingo Requirements → P must prove by preponderance of evidence that …

D has made false or misleading statements about his own product (or another’s)

False statements?o Literally false

court can enjoin continued assertion of claim without reference to advertisement’s impact on public

Coca Cola v. Tropicana (literal falsity) Tropicana claimed the juice was right from

the orange. It was really pasteurized, which is literally false. No need to reference the advertisement’s impact on the buying public before relief is granted.

McNeil v. Pfizer (bad scientic evidence → falsity) Listerine v. Flossing case. Court found

literal falsity that Listerine just as effective because scientific study used for claim was flawed. Implicit falsity → the blue stream of Listerine was equal to dental floss.

must be unambiguous, but need not be explicit. Implicit literal falsity

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Court asks → will consumer unavoidably receive false message based from advertising on its face?

Schick Manufacturing v. Gillette (misleading visual aids can be literally false)

o Hair growing case. Since the picture

showed D’s razor cutting hair more effectively that it actually was, and was not even a reasonable approximation of how the product worked, it was false.

o Likely to confuse or deceive → court must see that public

was mislead Plaintiff needs to show that there is a causal link

between the challenged statements and the injury. See p. 201 in the HB for a detailed explanation of this.

o Coors Brewing v. Anheuser-Busch (there is no falsity,

so P loses!) Beer train case. Here, there were no literal

falsehoods because Coors light IS diluted and travels to be bottled. P couldn’t prove any implied falsehoods because of faulty survey and lack of extrinsic evidence. There seems to be a large element that Coors is getting what it deserves b/c Budweiser has shown that its beer isn’t “Rocky Mountain Brewed”.

There is actual deception, or a tendency to deceive, a substantial population of the intended audience

Polar Corp v. Coca Cola (misleading as to quality of competitor)o Declaratory judgment action – bear throwing away coke

bottle case. Court found for D because P implied that coke was impure. Soda industry relied heavily on perceptions of purity, potential for harm if injunction not granted.

Deception is material to influencing purchasing decisions The advertised goods traveled in interstate commerce There is a likelihood of injury to plaintiff

Loss of sales or good will

- Misreprsentations are actionable under §43(a)(1)(B) only if they take place in commercial advertising or promotion.

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o Requirements

Commercial speech Proctor and Gamble v. Amway (commercial speech = no

protection from 1st amendment)o Satanism case. Commercial speech is not afforded the full

protection of first amendment. 3 prong “Bolger factor” test = (1) whether communication was advertisement; (2) whether the communication refers to a specific product or service; (3) whether there is economic motivation for speech

By a defendant who is in commercial competition with plaintiff For purpose of influencing consumers to buy defendant’s goods/services Must be disseminated sufficiently to the relevant purchasing public to

constitute advertising or promotion within that industry. Promotions need not be in classic advertising campaigns

o See Proctor and Gamble v. Amway

- Puffery v. False Advertising

- Autodesk v. Dassault Systemes (puffery v. false advertising)o P and D sue each other for false advertising. P said it works more easily,

efficiently, and better at sharing. These are specific measurable claims, and can be false advertising. D just gave vague claims of superiority, which could have less weight in the minds of consumers (puffery).

- Clorox Puerto Rico v. Proctor and Gamble (difference between puffery and falsity)o D’s product was a color enhancer, not a whitener. Literal falsity → detergent

alone does not whiten better than bleach. On TV ads, a factfinder could reasonably conclude that P claimed its product was superior to bleach. Also, the advertisement may have been misleading because product was color enhancer, not whitener. Consumers might have thought they were buying detergent with same powers as Clorox. The statements were not puffery because they were specific and measurable (best whitening)

PART IV: DILUTION3.05: The Concept of Trademark Dilution

- Antidilution laws protect the trademark owner’s investment in the goodwill embodied in a mark

o Dilution → the gradual undermining of a mark’s unique selling power

Courts have applied the doctrine wearily, to not swallow up TM law

- Confusion not necessaryo But the senior and junior users’ use of the marks must trigger some sort of

mental association in the mind of the consumer

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o Dilution will ordinarily only be found if there is at least some subliminal

connection in a buyer’s mind about the marks

- Schectero Argued that unfair competition law should serve the broader goal of preserving

the uniqueness of a trademark by protecting the TM owner against the “gradual whittling away or dispersion of the identity and hold upon the public mind of the mark or name by its use upon non-competing goods”

- Tarnishmento Occurs when Plaintiff’s mark is linked to products of shoddy quality, or is

portrayed in an unwholesome or unsavory context, with the end result that the public will associate the lack of quality or lack of prestige in the defendant’s goods with the plaintiff’s unrelated goods

Deere v. MTD (tarnishment) P makes fun of D’s logo with a wimpy frightened deer. Sort of a

tarnishment action, but the court doesn’t call it that. P lost on infringement because there is no LOC → nobody would believe P authorized the use.

- Posner’s rationale for granting TM owners protection against unauthorized uses that are both non-competing and non confusing.

o Consumer search costs will rise

o Tarnishment can become a problem

o Stop free riding

- Ty v. Perryman (no dilution when mark not used in conjunction with other products)o Case was more about the fact that D sold non-beanie baby toys on the

“bargainbeanies” site was false advertising. WRT dilution, Posner noted that a secondary market is just fine, and that Ty is probably attempting to fight off a genericide of “Beanie.”

3.07: The Federal Trademark Dilution Act

A. History

- §43(c) was added in 1995o Purpose was to protect famous TM from subsequent uses that blur the

distinctiveness of the mark or tarnish or disparage it, even in absence of likelihood of confusion

B. Elements of Federal Dilution Claim

- § 43(c)

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o Plaintiff must establish

Plaintiff owns mark that is famous AND distinctive After Plaintiff’s mark became famous, Defendant commenced use of a

mark or trade name in commerce that is likely to cause dilution of the famous mark either by blurring or by tarnishment

- Liability may arise even where there is no actual or likely confusion, no competition, and no actual injury

C. Trademark Use

- TDRA appears to permit dilution liability to be premised on use of a mark other than as an indication of origin for the defendant’s goods or services.

o TDRA’s exemptions from dilution liability include

Fair use Nominative or descriptive

Use that was not as a source designator

D. Distinctive and Famous Marks

- Remember, § 43(c) only protects marks that are BOTH famous and distinctive

1. Distinctiveness

- Most circuits interpreted this as a requirement that the mark be EITHERo Inherently distinctive

o Descriptive with 2ndary meaning

2. Fame

- §43(c)(2)(A) → mark is famous if it is widely recognized by the general consuming public of the US as a designation of source of the foods or services of the mark’s owner

o Repudiates the language of “niche fame”

o Also provides a non-exhaustive list of factors that a court MAY consider to

determine the famousness of a mark. SEE THE STATUTE.

E. Trade Dress and Nontraditional Marks

- Courts have held that TD and other nontraditional marks can qualify as famous and eligible for dilution protection

- In the case of dilution claims involving unregistered TD, the TDRA added (c)(4), which expressly requires dilution plaintiff to prove that

o TD is famous

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Mead Data v. Toyota Motor (no famousness → no dilution remedy) Lexis/Lexus case. Since only one percent of the population

(attorneys/accountants) knew what Lexis is, it is not famous, therefore there can be no dilution remedy.

o TD is not functional

o If the unregistered TD includes any registered marks, then the owner must prove

that the unregistered component of the TD, taken as a whole, is famous “separate and apart from” the fame of the registered marks

F. Similarity

- The degree of similarity necessary to support a dilution claim is greater than that required to establish a likelihood of confusion

o Similarity must be great enough even that a noncompeting use is harmful to the

senior user

G. Actual Dilution v. Likelihood of Dilution

1. The FTDA and Moseley Decision

- Moseley v. Victoria’s Secret Catalog o Court ruled that 1995 version of §43(c) required by TM owner to establish actual

dilution rather than likelihood of dilution.o But this got overruled. See below.

2. Likelihood of Dilution under TDRA

- In 2006 TDRA, congress overruled Moseley.o §43(c) allows injunctive relief against unauthorized use that is likely to cause

dilution by blurring or dilution by tarnishment Actual dilution is too high a burden for TM holders

o In addressing likelihood of confusion, a court can consider “all relevant factors,”

and specifically notes … See § 43(c)(2)(B). courts are not required to address any of these factors, but will probably address all of them.

Degree of similarity Degree of distinctiveness of famous mark Owner of famous mark’s substantial use of mark Degree of recognition of famous mark Whether the user of mark intended to create association with famous

mark Any actual association with famous mark

o The statute also made conforming amendments to §§2(f), 13(a), 14, and 24

reflecting the adoption of the likelihood of dilution standard and the clarification that dilution includes both blurring and tarnishment

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3. Judicial Interpretations

a. Likelihood of Dilution by Blurring

- Louis Vuitton v. Haute Diggity Dog o Because D was using mark as source indicator for its own goods, it was not

eligible for the “fair use” exception under the 2006 version of § 43(c)(4)(A).o But, the 4th Cir. held that the parodic context was relevant to its analysis of the six

statutory blurring factors Relevant to …

Intent to associate Actual association

- Nike v. Nikepal (dilution by blurring)o Just what Schecter had in mind. Evidence that Nikepal’s customers associated

Nikepal with Nike, even though not confused. Court just marched through the dilution factors, everything favored Nike, nothing special here.

- Starbucks v. Wolfe’s Borough Coffee (dilution does not require SUBSTANTIAL similarity)

o Mr. Charbucks case. District court erred in deciding marks had to be

substantially similar for blurring analysis – only have to be similar. Remanded for further dermination of blurring. No tarnishment because “charbucks” referred to the positive aspects of Starbucks’ over-roasted coffee. No parody exception because D used Charbucks as a source identifier.

- Hershey v. Art Van Furniture (extreme example of dilution)o Here, the court seemingly went out of control and said that a truck with Hershey

bar looking couch could dilute Hershey’s TD even though no LOC. How is this blurring? Hard to justify this.

-

o A successful parody communicates that it is NOT the famous mark, rather a

satire of the famous mark The brunt of the joke becomes more famous But a poorly done parody could be dilutive → consumers cannot tell

between parody and source designator The most successful parodies are likely to involve dissimilar marks,

because the dissimilarity is necessary to convey the parodic message

- Factor analysiso Degree of similarity

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Courts have required marks to be “nearly identical” under §43(c) to support dilution claim

Starbucks and Mr. Charbucks → different enough Victoria’s Secret v. Victor’s Little Secret → too similar Nike v. Nikepal

o Runs counter to general trend of nearly identical standard

Held Nike and Nikepal were nearly identical because

Dominant feature of each mark was Nike Survey evidence associated between two

marks Looks like court improperly merged two blurring

factors – degree of similarity and extent of actual confusion

o Intent to Create Association

Even if jr user didn’t intent to create an association, the more important question is the degree to which consumers actually associate the two marks.

Even when junior user intends to create an association with a famous mark, it hs been held that this factor does not necessarily favor the plaintiff.

See Mr. Charbucks. Coffee was dark, had to identify it.o Actual association

Courts have given great weight to consumer survey evidence. In V Secret v. Moseley, one complainer was sufficient

b. Likelihood of Dilution by Tarnishment

- The few courts that have considered post-TDRA claims have not departed significantly from their pre TDRA approaches

o Focus entirely on nature of jr user’s goods

o Most inclined to find tarnishment where they perceive those goods to be

unwholesome, offensive, or poor in quality See Mr. Charbucks. No indication that consumers associated Charbucks

with low quality V Secret Catalog v. Moseley II (presumption for sexy marks)

Created a rebuttable presumption that FTDA creates a rebuttable presumption or strong inference that a new mark used to sell sex related products is likely o tarnish a famous mark if there is a clear semantic association between the two.

H. Exceptions

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- 2006 TDRA revised §43(c)’s fair use exception to dilution liability, while leaving noncommercial use and news reporting exceptions intact.

1. Fair Use

- Nominative fair uses are non-dilutive as a matter of law.o Occurs when

Defendant uses plaintiff’s TM to describe or identify P’s goods or services P’s mark is the only way to describe goods/services

- Fair use exception applies to traditional noncomparative advertising, and also to parodies or criticisms of famous works.

o Exception does not apply if person accused of dilution uses the mark as a source

indicator for their own goods.

2. Noncommercial Use

- §43(c)(4)(B) Noncommercial use → use that consists of entirely noncommercial or fully constitutionally protected speech.

o Old §43 → Any speech that does not propose a commercial transaction. This

applies to the new § 43 too.

- This is really just a Catch-all for any speech that was protected by first amendment but fell outside of FTDA’s excepts for comparative advertising and news reporting

o See Barbie Girl case.

3. News Reporting/Commentary

- Issues may arise regarding scope, particularly where D’s news reporting has commercial aspects.

I. Remedies

- Remedies available to P’s under § 43(c) are more limited than those under § 32 or § 43(a).

o Unless defendant’s dilutive activity is willful, P is entitled only to injunctive relief

and importation of goods.o Wilfull infringement → Under §43(c)(5) the owner of a famous mark may recover

damages/profits, costs and attorney fees under §35(a), and order for destroying articles under §36.

J. Effective Date of TDRA

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- Between 1995, the enactment of the FTDA and before 2006, need to have shown actual dilution.

- After 2006 TDRA, only likelihood of dilution necessary.

K. Federal Registration as Dilution Defense

- § 43(c)(6)

- Complicated stuff. Look in this part of the book if it gets on the test. Fuck this though.

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PARTY V: CYBERSQUATTING

3.08: Anticybersquatting Consumer Protection Act (ACPA)

- § 43(d) Cybersquattingo Occurs when person other than the trademark holder registers the domain name

of a well-known trademark and then attempts to profit from this by either Ransoming the domain name back to the TM holder or Using the domain name to divert business from the TM holder to the

domain name holder

A. Elements of a Cybersquatting Claim

- §43(d) gives TM owner cause of action against anyone who, with a bad faith intent to profit from the mark, registers, traffics in, or uses a domain name that is

o Identical or confusingly similar to a mark that was distinctive at the time the

defendant’s domain name was registeredo Is identical or confusingly similar to, or dilutive of, a mark that was famous at the

time the defendant’s domain name was registered.

- TM owner asserting claim under ACPA must establish …o Valid TM subject to protection

o Mark is distinctive or famous

o Defendant’s domain name is identical or confusingly similar to or dilutive of

owner’s mark Confusingly similar?

Looking at domain name onlyo Defendant used, registered, or trafficked domain name

o Bad faith intent to profit

Courts consider the factors in §43(d)(1)(B)(i). Check the statute if this is on the test!

Sporty’s Farm v. Sportsman’s Market (bad faith intent to profit) Sporty’s “farm” acquires www.sportys.com, and the factors point

towards Cybersquatting. Sporty’s not in same line of business as Sportsman’s.

Southern Grouts & Mortars v. 3M (no intent to profit) 3M acquired the “diamond brite” domain name when it acquired

an electric sign company. It stopped using the mark. Not cyberquatting because not trying to extort domain name or divert traffic.

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The Orange Bowl Committee v. Front and Center Tickets (bad faith? Really?)

This case wasn’t clear cut. Need to show bad faith, and this wasn’t exactly evident here. Secondary markets are OK. Seemed like a nominative use.

Courts usually don’t find gripe sites in bad faith. Lucas Nursery and Landscaping v. Grosse (gripe site)

o SJ for Grosse → Gripe sites weren’t the behavior that

congress was worried about when it enated the ACPA. This case has been influential among gripe-site cases.

Safe harbor provision § 43(d)(1)(B)(ii) Bad faith may not be found where D believed and had reasonable

grounds to believe the domain name was fair use and otherwise lawful

Offer to sell domain name, without more, is not bad faith

- Liability under §43(d) can only be imposed on the registrant or authorized licensee of the registrant.

- Southern Co. v. Dauben (no harm? No injunction for Cybersquatting)o On appeal, court said that since P failed to show irreparable harm (he showed

confusion), there was no Cybersquatting. E thinks this is evidence of the skepticism of the full enforcement of the ACPA.

B. In Rem Jurisdiction

- Requirementso Authorized only if court finds

Court cannot obtain in personam jurisdiction over the party in violation of § 43(d) OR

Through due diligence was unable to find the person liableo NO requirement of bad faith for in rem jurisdiction.

Harrods Limited v. 60 Internet Domain Names (in rem actions) UK/SA store confusion case. For an in rem action, you can bring

any claim from part 1 of the ACPA. All claims are good to go.

- §43(d)(2)(C)o Situs of domain name. check statute if this comes up.

C. Personal Names

- §47 → any person who registers a domain name that consists of a name of another living person, or name substantially and confusingly similar thereto, without that person’s

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consent, with intent to profit by selling domain name for financial gain, shall be liable to that party in civil action.

o Estate of Frank Gorshin v. Martin (bad faith Cybersquatting)

Riddler case. Here, there is tons of evidence of bad faith – P wanted the site shut down during his life, although D says otherwise. E thinks Martin might have had some laches or estoppels argument.

D. ACPA Remedies

- When §43(d) is established, court may order forfeiture or cancellation of domain name, or transferred to owner of mark.

o These are the exclusive remedies of § 43(d)(2)

o Under § 43(d)(1), full array of remedies under LA is available.

Including statutory damages

3.09: Alternative Forums for Domain Name Dispute

- The main mechanism for resolving domain name disputes outside of LA is the Uniform Domain Name Dispute Resolution Policy under ICANN, a non profit NGO that administers the domain name registration system.

- Paragraph 4 of the UDRP → standards for arbitration.o List of factors. Look them up in textbook for test.

- A party dissastisfied with outcome of UDRP proceeding may pursue a separate legal action in court.

o If UDRP panel orders cancellation or transfer of domain name, appeal must be

made within 10 days

- Dial A Mattress v. Moakely (obvious Cybersquatting)o Disgruntled former employee registers 1-800mattress.com. simply

Cybersquatting. Did not respond to claim, but court still had to apply the 3 UDRP factors. Slam dunk for P.

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PART VI: SECONDARY LIABILITY3.10: Contributory and Vicarious Liabilty

A. Contributory Liability - Contributory liability arises under §§32 or 43(a) when defendant either …

o Actively induces another to infringe

Franchisor’s liability for independent acts of franchisees only if intentionally infringe or knowingly participated in infringement

o Continues to supply a product to a party that it knows or has reason to know is

using the product in an infringing activity. Inwood v. Ives (no inducement = no contributory liability)

P sued D because physicians put P’s generic drug into D’s bottles. Since there was no evidence that D induced physicians to do this, no liability. Note also the appearance of the pills was functional, and thus unprotectable.

Lockheed Martin v. Network Solutions (court distinguishes SERVICE from PRODUCT)

P tried to force D, a domain hosting service, to cancel registered domain names and cease registering new domain names which allegedly infringe upon P’s mark. Court found for D because D did not supply a product with which to facilitate infringement, and D did not have constructive or actual knowledge of infringement.

- Willful blindnesso Person must suspect wrongdoing and fail to investigate

o Cannot be premised on mere failure to take reasonable precautions

o See Hard Rock → no wilfull blindness

o Tiffany v. eBay (no contributory negligence if no willful blindness)

P claimed D was contributorily liable for TM infringement because there were counterfeit goods auctioned on D’s site. Court found for D because when told of infringement, D took infringing vendors off the market. P had to protect it’s own mark to some extent. D cannot be held liabile for infringements it doesn’t know about.

- Internet related activitieso Lockheed Martin v. NSI

No contributory infringement because registrar did not control and monitor the infringing activities

o Tiffany v. eBay

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No contributory liability because eBay didn’t know which items were being infringed. Because it ceased to service customers it knew was infringing, it satisfied its requirement under Inwood.

B. Vicarious Liability

- Courts generally apply common law principles of agency in determining whether and under what circumstances to impose vicarious liability understate TM law and under the LA

o Actual or apparent partnership

o Ability to bind other party

o Exercise joint ownership or control

- Hard Rock Café Licensing v. Concession Services International (no vicarious liability when principal unaware of infringement)

o P tried to hold D, a flea market operator, liable for one of its vendors who was

making bootleg HRC shirts. Court held for D because there was not enough evidence that D knew the infringement was happening. No evidence that D was willfully blind towards the problem. Also note that Court relied on common law of torts for contributory liability

- Vulcan Golf v. Google (contributory AND vicarious liability)o P claimed D is secondarily liabile for TM infringement because they help “parking

companies” pick the best ads to put on their domain names, which are often misspellings or variations of protected marks. Court did not dismiss because P made good showing that D intentionally induced others to infringe (contributory liability), and that D had aspects of control over the companies (vicarious liability).

-

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PART VII: DEFENSES3.11: First Amendment Considerations

- Courts disagree on whether first amendment issues should be integrated with the LOC analysis, or whether considerations of the issues should be undertaken only if a LOC is found likely to exist.

o 8th circuit → failure to separate parody analysis from standard LOC analysis is

reversible error.

A. Commercial Parodies

1. Infringement and Unfair Competition

- In context of infringement and unfair competition claims, parody is generally not treated as an affirmative defense.

o Serves as additional consideration in LOC analysis

Weighs against a finding that consumers are likely to be confused

- What makes a good parody?o Comments on author’s work

o Portrays message that this is NOT the original and thereby lessens confusion

Parody that is too subtle may give rise to liability Good parody is obvious and heavy handed

o Mutual of Omaha v. Novak (bad parody = confusion)

Parody of insurance company for nuclear holocaust insurance. Parody wasn’t targeting company, just making a message. Lots of other ways to do this. Would people really be confused by this? Tarnishment seems to be the bigger issue here.

o Smith v. Wal-Mart (good parody = no LOC)

Wal-ocaust case There was no likelihood of confusion in this case – consumers will not think Walmart is behind this.

2. Dilution

- The results in dilution cases are inconsistent, and reflect courts’ widely disparate levels of tolerance for parody

o Deere & Co. v. MTD Products → no dilution claim, tarnishment rejected, but

court said … D diluted P’s mark because “alterations of that sort, established for the

sole purpose of promoting a competing product risk the possibility that

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consumers will come to attribute unfavorable characteristics to a mark and ultimately associate the mark with inferior goods and services

Fact that parties competitors was critical

o Hormel Foods v. Jim Henson Productions → tarnishment claim

3 distinctions between this case and Deere No negative association with P’s mark No direct competition D’s parody was part of the product itself

- As revised in 2006, federal dilution statute now exempts …o § 43(c)(3)(C) → Any non commercial use

o § 43(c)(3)(A)(ii) → Any fair use, other than as a designation of source for D’s own

goods or services, including use in connection with identifying and parodying, criticizing, or commenting upon the famous mark owner or the goods or services of the famous mark owner

o DOES NOT APPLY to a commercial parody that uses the famous mark as an

indicator of source for D’s product See Louis Vuitton v. Haute Diggity Dog

B. Noncommercial Expression

1. Infringement and Unfair Competition

- Most courts have employed a balancing test that weighs the public interest in free expression against the public interest in avoiding consumer confusion

o Courts are generally willing to tolerate some degree of confusion in order to avoid

chilling protected speecho San Francisco Arts & Athletics v. USOC (no free speech if commercial use)

USOC has unique rights in “Olympics” mark. Only way to defend is via 1st

amendment. SCOTUS said because commercial use, no 1st amendment protection. Have to express some other way. Eisenberg, Kozinski, and Brennan all see a political side to this where they think the speech deserves some kind of 1st amendment protection.

- Rogers v. Grimaldi

The LA should be construed to apply to artistic works only where the public interest in avoiding consumer confusion outweighs the public interest in free expression

Two prong testo Is artistic relevance above zero?

ESS Entertainment 2000 v. Rock Star Videos (artistic relevance > 0)

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Playpen case. Only way to create parody of LA is to include buildings that constitute it. Strip club similar in look and feel have at least some artistic relevance. Nothing in game indicates that consumers would believe that ESS produced the game. Modification of ESS’s TM is not explicitly misleading, therefore protected by 1st amendment.

Parks v. LaFace (artistic relevance standard) Rosa Parks song case. Since RP had no

artistic relevance to song title, no 1st amendment protection. (Rogers v. Grimaldi standard). Celebrities have automatic trademark-like rights in their name.

o Does it explicitly mislead as to the source or contents of a

work? Mattel Inc. v. MCA Records

First amendment may offer little protection for a competitor who labels its commercial good with confusingly similar mark, but trademark rights do not entitle the owner to quash an unauthorized use of the mark by another who is communicating ideas or expressing points of view.

Here, Kozinski sidesteps a lot of obvious arguments (nominative fair use, parody.) in favor of concluding that titles of literary works (song lyrics) are not source designating.” Instead, focuses on non-commercial aspect of dilution claim. Correct result, weird reasoning.

2. Dilution

- Application of dilution laws to traditional expression has an even greater potential to chill protected speech than their application to TM infringement

o Dilution can be established without any LOC

o See Louis Vuitton v. Haute Diggity Dog

Fourth circuit gave significant weight to parodic context in evaluating the likelihood of dilution by blurring

C. Political Speech

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- Political speech is the one arena in which courts have consistently subordinated the rights of TM owners in the interest of free expression, regardless whether the claim is infringement/unfair competition or dilution

- MasterCard v. Nader 2000 Primary Committee (political speech protected)o Priceless. Political speech gets Nader off the hook. Noncommercial – not

necessarily nonmonetary→ code for “entitled to heightened protection under the 1st amendment) Isn’t Nader just free-riding? No realistic likelihood of confusion, but maybe the overtly political content makes the LOC analysis skewed.

D. Expressive Merchandise

- Mutual of Omaha v. Novak o Court enjoined defendant from distributing shirts, hats, etc.

o Court applied the LOC factors, giving significant weight to survey evidence of

confusiono Court rejected first amendment defense – rights of TM owner did not yield to 1st

Amendment when adequate alternative avenues of communication exist.

3.12: Affirmative Defenses

A. Abandonment

- Both a defense to infringement and a ground for cancellation of a federal registration.

- Non use by itself constitute abandonmento Common law requires that cessation of use be coupled with an intent to abandon

- Mark enters PD once abandoned

- Once registration has been cancelled due to abandonment, the mark must be registered anew in order to enjoy the rights appurtenant to registration

- § 45 of LAo Mark is deemed abandoned when …

Bona fide use in the ordinary course of trade has been discontinued with intent not to resume such use, or

When the conduct of the mark’s owner, including acts of commission or omission, cause the mark to become generic

1. Cessation of Use

- Abandonment under section 1 of the LA definition may occur through express abandonment (owner’s cancellation of mark) or through cessation with intent not to resume use.

o Intent not to resume?

Inferred from circumstances

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Party challenging mark must establish owner is not using and has no intention to resume in reasonably foreseeable future

3 consecutive years of nonuse → PFE of abandonment Shifts the burden of production to owner → owner needs only to

show evidence to rebut abandonment.o Demonstrate reasonable grounds for suspending use of

marko Produce evidence of intent to resume within reasonably

foreseeable future Reasonably foreseeable? → depends on industry

and circumstances of the case 2d Cir. has held that intent not to resume must exist

during the three year period of non use. See ITC v. Punchgini.

Sporadic use not good enougho Must produce more than conclusory testimony or affidavits

of intent.

- Silverman v. CBS (intent not to resume inferred; mark abandoned)o Amos and Andy case. An intent to not to use was inferred by not airing the A&A

tv show for over 20 years. Nominal use, like battling infringers in court and licensing, which is non public use, does not suffice. There must be an intent to resume within the reasonably near future.

2. Other Causes of Abandonment

- Mere failures to pursue infringers does not by itself constitute abandonmento But this weakening can cause the mark to become generic

a. Naked Licensing

- Occurs when a trademark owner fails to exercise reasonable control over use of a mark by licensee such that the presence of the mark on licensee’s goods or services misrepresents their connection with the trademark owner since the mark no longer identifies goods or services that are under the control of the owner and cannot provide a meaningful assurance of quality.

- Question for courtso Did licensensor IN FACT exercise control?

Ability to control is not that important.

b. Assignment in Gross

- A mark is deemed abandoned when it is transferred separately from the goodwill it reprsents

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o Mark cannot be sold or otherwise assigned apart form the business with which it

is associated

- Assignment of mark typically NOT assignment in gross ifo Accompanied with assignment of physical assets used in the associate line of

business ORo Assignee is producing a product or providing a service which is substantially

similar to that of the assignor and where the consumers will not be deceived or harmed.

- Clark and Freeman v. Heartland (assignment in gross kills TM)o P had bought the “Heartland” mark from Sears, who only made women’s boots

under the mark. Since P used the mark on lots of other shit, and lost rights because of the assignment in gross, it could not enjoin others from using the mark.

B. First Sale Doctrine

- First sale doctrine permits a purchaser of lawfully TM’d goods to display, offer, and sell those goods under their original trademark

o Exceptions

Does not apply when reseller tricks consumer into thinking it is one of manufacturer’s franchisees

Does not apply when goods are sold that are materially different from the trademark owner has authorized for sale

Does not apply when repackaging does not have proper notice Champion Spark Plugs v. Sanders (TM for 2nd hand goods)

o As long as the refurbished goods are clearly marked as

such, there is no TM infringement. Inferiority is expected in 2nd hand goods. Any benefit that refurbisher gets is fine as long as the public is not deceived.

F. Classic Fair Use

- §33(b)(4) provides an affirmative fair use defense to TM infringement in the case of an incontestable mark, under which …

o the use of the name, term, or device charged to be an infringement is a use,

otherwise than a mark, of a term or service which is descriptive of an used fairly and in good faith only to describe the goods or services of such pary, or their geographic origin.

- Applies when D has used P’s TM only to describe D’s own goods or services, not to describe or identify P’s services.

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- Requirementso D must prove …

Its use of P’s mark was not as a TM or SM It was using the mark fairly and in good faith It is using the mark only to describe its goods and services

US Shoe v. Brown Group (fair use)o “looks like a pump, feels like a sneaker.” Court found this

was just describing P’s own product, not trying to confuse the source. P did not meet their burden for LOC.

- Fair use has been held to apply where D’s use of another’s mark in an index or catalog to indicate the source of its items, or to describe the defendant’s relationship to the TM owner

- The FU defense is not only limited to word marks, but to TD as wello Car Freshener v. S.C. Johnson (descriptive fair use)

Since pine tree shape describes the smell, D did not infringe on the shape of P’s TM’d car scenter. Fair use permits others to use a protected mark to describe aspects of their own goods, provided it is in GF and not as use as a mark.

- Defense is most likely to work when defending against a descriptive mark

- Defendant can prevail on FU claim without being required to prove an absence of likelihood of confusion.

o KP Permanent Makeup v. Lasting Impression

The plaintiff has a burden of establishing a LOC, and an affirmative defense such as FU should have legal significance independent of any such challenge to the strength of P’s PFC.

SCOTUS recognized that some confusion must be tolderated in order to preserve the rights of competitors to describe their goods and services accurately

But the degree of confusion was not necessarily irrelevant to the determination of whether D’s use was fair within § 33(b)

- FU defense has been recognized under common law and §43(a) → applies to both registered and unregistered marks.

G. Nominative Fair Use

- Not grounded specifically in §33(b)(4)o Applies when D has used P’s TM to describe or identify P’s goods and services,

even though the D’s ultimate goal is to describe their own goods/services. Typically occurs when P’s mark is the only way to describe a particular

subject matter.

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- Requirements of Nominative Fair Useo When D raises the defense, D must establish …

P’s goods/services at issue are not readily identifiable w/o use of P’s TM D used only as much of the mark as was reasonably necessary to identify

P’s goods/services D did nothing that would, in conjunction with the mark, suggest

sponsorship or endorsement by P.

- Cases about Nominative Fair Useo Playboy Enterprises v. Welles (nominative fair use)

Old playmate case. Fair use to say playmate of the year, but not to put it on the wallpaper. The wallpaper makes it looks like she was affiliated with Playboy.

o See WCVB TV v. Boston Athletic Association

o New Kids on the Block v. News America Publishing (nominative fair use)

P objected to their name being used in a phone poll. Kozinski says referring the NKOTB in that manner was nominative fair use because (1) product/service was not readily identifiable w/o reference to TM; (2) only so uch of the mark is used to reasonably identify the product/service; (3) D did nothing to identify sponsorship/endorsement.

o Kassbaum v. Steppenwolf Productions (nominative fair use)

“former member of Steppenwolf.” Same reasoning as NKOTB case.

H. Comparative Advertising

- Smith v. Chanel (comparative advertising is OK)o P sells knock off Chanel. Says “if you like Chanel, you’ll love us.” This conduct

is OK under LA as long as there is no confusion as to source or sponsorship. Court more concerned with public policy to promote competition than the law. Court rejected arguments of genericide or dilution.

- August Storck v. Nabisco (comparative advertising is OK)o Werther’s candy case. Just like Chanel case. Competition is the focus. Very

little risk of confusion, so no problem. Confusion must be probable, not just possible!

- The express exemptions in the federal dilution statute include an fair use in the context of comparative advertising

I. Federal Preemption

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- In certain cases, state TM or unfair competition law might be unenforceable because they are preempted by federal patent or copyright law.

o Clash with patent law

Sears v. Stiffel; Compco v. Day-Brite Lighting; Bonito Boats v. Thunder Craft Boats (trademark cannot be used as a substitute for patent)

these cases all say that state unfair competition statutes cannot extend patent-like property rights via unfair competition law. It is inconsistent with the limited times provision for IP protection in the constitution.

o Clash with copyright law

Dastar v. 20 th Century Fox SCOTUS rejected a reverse passing off claim under §43(a).

o Origin of goods → physical goods, not the creative content

the goods embody.

- Cheney Bros. v. Doris Silk Corp . (no federal IP protection unless provided by statute)o Unless an IP right is enumerated by statute via congress, there is no protection.

Court will not “invent” protection

J. 11 th Amendment

- SCOTUS interprets 11th amendment to preclude federal court jurisdiction in suit brought against a state

o Two exceptions

To enforce 14th Amendment When State waives sovereign immunity

See College Savings Bank v. Florida Prepaid Postsecondary Educ. Expense.

o False advertising claim under §43(a) not heard in federal

court because fed court did not have jurisdiction. State did not disclaim immunity.

K. Statute of Limitations

- LA has no SOL

3.13: Non-Monetary Remedies

A. Injunctions- The most predominant and most traditional remedy for violations of TM and unfair

competition law

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- §34(a) → permanent and temporary injunctions available for infringements of registered marks under §32, as well as for violations of §§43(a),(c), or (d) wrt both registered and unregistered marks

o Affords a court great latitude in fashioning injunctive relief

See King Seely Thermos v. Aladdin Industries Court recognized that although Thermos was still a protected

mark, it had become kind of generic, and allowed Aladdin restricted use of the term.

- Preliminary injunction requirements?o Likelihood P will ultimately succeed on the merits

o Whether P is likely to suffer irrepreable harm if D is allowed to continue it’s

allegedly infringing behavioro Whether the hardship to the plaintiff in the absence of a preliminary injunction is

likely to be greater than the hardship to the defendant if injunction is grantedo Whether preliminary injunction would serve the public interest.

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understanding tm law outline

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