Introduction To Trademark Infringement

Business Torts Spring 2011
Fordham Law School

Introduction to Trademark – Consumer
protection and fair competition
George
g W. Conk
Adjunct Professor of Law & Senior Fellow, Stein Center for Law &
Ethics
Room 409
gconk@law.fordham.edu
k@l f dh d
212--636-
212 636-7446
Torts Today: http://tortstoday.blogspot.com
Otherwise – Commentaries on Law,
Law Language & Politics
Blackstonetoday.blogspot.com
Business Torts sBP Gulf Oil Spill 1

PROTECTED CATEGORIESof
Commercial rights and Property
 Common law/statutory
 TRADEMARK/TRADENAME
 Trade
T d secrett
 Statutory/constitutional
 Copyright
 Patent
Business Torts BP Gulf Oil Spill 2

Origin of trademark
 Marks or symbols have been found

on ancient artifacts discovered in the
Mid and Far East
 T d
Trademarksk were used d iin medieval
di l
times by members of guilds to
id tif th
identify the work
k off craftsmen
ft within
ithi
the guild

Characteristics of Trademarks
 A trademark is always appurtenant to
commercial activity
 Trademarks are appropriated through

adoption
d ti and d prior
i use
4
Goals of Trademarks
 Prevent mistake,, deception,
p , and confusion with
regard to the origin of goods
 Identification of goods or services
 Garner marketing or competitive advantages
 Protect the public from unscrupulous vendors
 Protect a p
prior user’s g
good will
5
Deceptive marketing
A ti
Actions att common law
l
 Misrepresentations of source
source, e
e.g.
g
“passing off”
 Misuse of another’s
another s trademark
 - action for trademark infringement
 - must show diversion of trade from the
plaintiff to the actor
 - single source requirement

Patent and copyright in the
Constitution
 Congress shall have the power…
power
 To promote the progress of science and
useful arts,
arts by securing for limited times
to authors and inventors the exclusive
right to their respective writings and
discoveries

Trademark – the federal power
 Article 1 - Constitution of the United

States
 Section 8
 The Congress shall have the power...
 ...To regulate commerce with foreign
nations, and among the several states,
and with the Indian tribes…

Th trademark
The t d k cases
100 U.S. 82 (1879)

The trademark cases
 1 Property
1. P t iin ttrademarks
d k hhas llong been
b
recognized
g and protected
p byy the common
law and by the statutes of the several
states, and does not derive its existence
f om the act of Cong
from Congress
ess p
providing
o iding for
fo the
registration
g of them in the Patent Office.
The trademark cases
 Trademark not covered by Article 1
section 8
 C
Commerce clause
l only
l basis
b i for
f federal
f d l
regulation
 Trademark act not susceptible of

narrowing construction limiting it to
interstate commerce
Is trademark a form of
intellectual property?
 Copyright – fixed in a tangible medium of
expression – minimal creativity req’t
 Patent – inventive,
inventive useful
useful, adequately
described
 T d
Trademark k – use in
i trade,
t d distinctive,
di ti ti
indicative of source

Statutory forms of action
 L h
Lanham Act
A t (1946) (15 USC 1117)
 “Little
Little Lanham Acts
Acts”
 Uniform deceptive
p trade practices
p Act
 (1966) adopted by 12 states
 Trademark Counterfeiting

N J Stat
N.J. Stat. § 56:4
56:4--1
 No merchant
merchant, firm or corporation shall
appropriate for his or their own use a
name,
name brand,
brand trade
trade--mark,
mark reputation or
goodwill of any maker in whose product
such merchant,
merchant firm or corporation deals
deals.

NY CLS Penal § 165.72. Trademark
counterfeiting
t f iti in i th
the second
dddegree
 …wih the intent to deceive or defraud
some other person or with the intent to
evade a lawful restriction on the sale,
sale
resale, offering for sale, or distribution of
goods he or she manufactures,
goods, manufactures
distributes, sells, or offers for sale goods
which bear a counterfeit trademark
trademark…

Common law unfair competition actions
i NY
in
 Palming off
 Misappropriation
 “ h a business,
“when b through
h h renown in New
York, possesses goodwill constituting
property or a commerciali l advantage
d in
i
this state, that goodwill is protected from
misappropriation
i i i under
d NewN York
Y k unfair
f i
competition law.”
 ITC v. Punchgini (NY 2007)
Common law unfair competition actions
i NY
in
 Palming off - Electrolux Corp. v Val-
Val-Worth,
Inc., 6 NY2d 556 [1959]
 ” the sale of the goods of one

manufacturer as those of another”
 Actionable even where the parties are not

in competition
p

Th Lanham
The L h A
Actt
False designations of origin15
U.S.C. 1125

Lanham Act (1946)
 Does not codify common law
 Creates a federal cause of action
 A means of federal enforcement,
through registration,
registration of state
trademark rights
 E t
Extensively
i l amended d d iin1988
1988
 - Federal registration on the basis of
an intent to use the mark, in addition
to actual use of marks

§ 1125. False designations of origin,
false descriptions, and dilution
forbidden
 (a) Civil action.
action
 (1) Any person who, on or in connection
with any goods or services,
services or any
container for goods, uses in commerce
any word,
word term,
term name,
name symbol
symbol, or device,
device
or any combination thereof, or any false
designation of origin,
origin, false or misleading
description of fact, or false or misleading
representation of fact
fact, which
which--
--
forbidden
 (A) is likely to cause confusion
confusion,, or to
cause mistake, or to deceive as to the
affiliation connection
affiliation, connection, or association of
such person with another person, or as to
the origin,
origin sponsorship
sponsorship, or approval of his
or her goods, services, or commercial
activities by another person,
person or

forbidden
 (B) in commercial advertising or
promotion, misrepresents the nature,
characteristics qualities
characteristics, qualities, or geographic
origin of his or her or another person's
goods services,
goods, services or commercial activities,
activities
 shall be liable in a civil action by any
person who believes that he or she is or is
likely to be damaged by such act.

“Trade dress' is the total image of the
b i
business.
 It may include the shape and general
appearance of the exterior of the
restaurant, the identifying sign, the
interior kitchen floor plan, the decor, the
menu the equipment used to serve food
menu, food,
the servers' uniforms and other features
reflecting on its total image.”
Acquisition of rights in mark
– common llaw
 Must have been actually used
 Made known to prospective

purchasers
 In the ordinary course of business
 I a manner that
In h associates
i the
h mark
k
with the goods, services, etc. of the
source Business Torts BP Gulf Oil Spill 24
1988 Lanham act amendments –
registration
i t ti andd use
 BUT
 Application for registration is
“constructive
constructive use
use”
 15 USC 1057
 Must be used made w/iw/i 6 months (or
(or
as extended)
extended)
 15 USC 1051

Requirements for Trademark
Protection
 Inherent Distinctiveness
 A
Acquired
i d secondary
d meaning
i
 Nonfunctionality
26
Distinctiveness – essential to
protection
t ti
 Must identify source of goods or
services
 Must distinguish those goods and

services from the goods and services
off others
th in
i the
th marketplace
k t l
27
Spectrum of Distinctiveness
 (1) generic
 (2) descriptive
 (3) suggestive
 4) arbitrary and fanciful marks
28
Distinctiveness and secondary
meaning
  ---
---fanciful/arbitrary
fanciful/arbitrary……
……descriptive
descriptive---
--->>
 Protected-----------unprotected
 Vaseline petroleum jelly

Arbitrary marks and trade
names – inherently distinctive

Secondary Meaning
 Provides for trademark protection of
marks that are not inherently
distinctive
 Descriptive marks usually rely upon

special proof of distinctiveness
before protection will be afforded
by common law and statute
31
Suggestive
gg marks
registrable and protectable w/o
proof of secondary meaning

Secondary Meaning
 D
Descriptive
i ti marks k mustt be
b shown
h to
t have
h
acquired customer recognition
(secondary meaning)
meaning), which serves
primarily to identify the source of the
products
p oducts oor se
services,
ces, and
a d not
ot merely
e e y to
describe their nature, quality,
characteristics, ingredients, or
geographic origins
33
Secondary Meaning
 Generic marks constitute the very

product and, therefore, cannot be
registered or appropriated exclusively to
one manufacturer’s use, even upon a
showing
s o goof seco
secondary
da y meaning
ea g
 Why?
34
Nonfunctionality
 Trademark pprotection is g
granted
only to symbols or features that
are not functional
 Why?
 If a product feature is unique

and useful why should it not be
protected?
35
Kettle grills

App Store

Lik lih d off confusion
Likelihood f i
Key test of infringement

9th Circuit jury instructions – factors on
lik lih d off confusion
likelihood f i
 1 Strength or Weakness of the
1.
Plaintiff’s Mark.
 The more the consuming public recognizes
the plaintiff’s trademark as an indication of
origin of the plaintiff
plaintiff’ss goods
goods, the more
likely it is that consumers would be
confused about the source of the
defendant’s goods if the defendant uses a
similar mark.
mark
2. Defendant’s
Defendant s Use of the Mark.
 If th
the defendant
d f d t and
d plaintiff
l i tiff use th
their
i
trademarks on the same,, related,, or
complementary kinds of goods there may
be a greater likelihood of confusion about
the source
so ce of the goods than othe
otherwise..
ise

3. Similarity of Plaintiff’s and
D f d t’ Marks.
Defendant’s M k
 If the overall impression created by
the plaintiff’s trademark in the
marketplace is similar to that created
by the defendant’s trademark in
[appearance] [sound] [or]
[meaning], there is a greater chance
[that consumers are likely to be
confused by defendant’s use of a
mark] [of likelihood of confusion].

3. Similarity of Plaintiff’s and
D f d t’ Marks.
Defendant’s M k
 [Similarities in appearance, sound or
meaning weigh more heavily than
differences in finding the marks are
similar].
 Lexus
 Lexis

4. Actual Confusion.
 If use by the defendant of the plaintiff’s
t d
trademark
khhas led
l d to
t instances
i t off actual
t l
confusion,, this strongly suggests a
confusion
likelihood of confusion.
 But actual confusion is not required for a
finding
g of likelihood of confusion.

4. Actual Confusion.
 As you consider whether the trademark
used by the defendant creates for
consumers a likelihood of confusion with
the p
plaintiff’s trademark,, you
y should weigh
g
any instances of actual confusion against
the opportunities for such confusion.

5. Defendant’s
Defendant s Intent.
 Knowing use by defendant of the plaintiff’s
trademark to identify similar goods may
strongly show an intent to derive benefit
from the reputation of the plaintiff
plaintiff’ss mark
mark,
suggesting an intent to cause a likelihood
of confusion.
confusion
 But even in the absence of proof that the
defendant acted knowingly
knowingly, the use of
plaintiff’s trademark to identify similar
goods may indicate a likelihood of
confusion. Business Torts BP Gulf Oil Spill 45
6. Marketing/Advertising Channels.
 If the
th plaintiff’s
l i tiff’ and
d defendant’s
d f d t’ [[goods]
d ]
[[services]] are likelyy to be sold in the same
or similar stores or outlets, or advertised
in similar media, this may increase the
likelihood of conf
confusion.
sion

7. Consumer’s Degree
g of Care.
 The more sophisticated the potential
buyers of the goods or the more costly the
goods, the more careful and discriminating
the reasonably prudent purchaser
exercising ordinary caution may be. They
may be less likely to be confused by
similarities in the plaintiff’s and
defendant’ss trademarks.
defendant

8. Product Line Expansion.
 When the parties’ products differ, you may
consider how likely the plaintiff is to begin
selling the products for which the
defendant is using the plaintiff
plaintiff’ss
trademark. If there is a strong possibility
of expanding into the other party’s
party s
market, there is a greater likelihood of
confusion.
confusion

App Store

Descriptive mark not protectable
 A mark
k is
i merely
l descriptive
d i ti if it
describes an ingredient,
g , quality,
q y,
characteristic, function, feature,
purpose or use of the specified goods
and/o se
and/or services.
ices
 Isn
Isn’tt App Store merely descriptive?
Dilution 15 USC 1125(c)
 Th owner off a famous
The f markk th
thatt iis
distinctive, inherently or through acquired
di ti ti
distinctiveness,
distinctiveness , shall
h ll be
b entitled
titl d to
t an
injunction against another person who, at
an time afte
any after the oowner’s
ne ’s mark
ma k has become
famous, commences use of a mark or trade
name in commerce
comme ce that is likely
likel to cause
ca se
dilution by blurring or dilution by tarnishment
of the famous mark
mark, regardless of the
presence or absence of actual or likely
confusion of competition,
confusion, competition or of actual
economic injury.
injury.
Defenses
§ 28.
28 DDescriptive
i ti U Use (F
(Fair
i UUse)
Use)
 In an action for infringement… it is a
defense that the term used by the actor is
descriptive or geographically descriptive of
the actor's goods,
goods, services, or business, or
is the personal name of the actor or a
person connected with the actor, and the
actor has used the term fairly and in good
faith solely to describe the actor's goods,
goods,
services, or business or to indicate a
connection with the named person.
Defenses (Restatement §§ 28 - 32)
 Descriptive (fair) use
 Consent
 Abandonment
 Laches (unreasonable delay)
 U l
Unclean hands
h d ((plaintiff’s
l i tiff’
misconduct))
Remedies - 15 U.S.C. 1117 ((a))
 Declaratory judgment
 Injunction
 Lost profits/restitution of D’s unjust
gains
 Damages g
 Treble Damages
 Costs
 Attorney fees
 h
http://www.law.cornell.edu/uscode/15/usc
// l ll d / d / /
_sec_15_00001117----
_sec_15_00001117 ----000
000--.html
Damages:
g shifting
g burden
 In assessing profits the plaintiff shall be
required to prove defendant
defendant’ss sales only;
defendant must prove all elements of cost
or deduction claimed.
 Actual damages may be trebled
 D
Damages may b be adjusted
dj t d down
d or up….
shall constitute compensation and not a
penalty.
lt
 Counterfeit mark – damages shall be
trebled
Counsel fees
 The court in exceptional cases may award
reasonable attorney fees to the prevailing
party.
party
 “At the bench trial, it became entirely
clear to the Court
Court, even without cross
examination of AMI'S sole witness, Larry
Peterson Vice President of AMI
Peterson, AMI, that
AMI'S evidence in support of its
counterclaims was altogether lacking
lacking.”

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Business Torts Spring 2011

Fordham Law School

Business Torts sBP Gulf Oil Spill 1

Business Torts BP Gulf Oil Spill 2

 Marks or symbols have been found

Business Torts BP Gulf Oil Spill 3

 Trademarks are appropriated through

 Identification of goods or services

 Garner marketing or competitive advantages

 Protect the public from unscrupulous vendors

Business Torts BP Gulf Oil Spill 6

Business Torts BP Gulf Oil Spill 7

 Article 1 - Constitution of the United

Business Torts BP Gulf Oil Spill 8

Business Torts BP Gulf Oil Spill 9

 Trademark act not susceptible of

Business Torts BP Gulf Oil Spill 12

 (1966) adopted by 12 states

Business Torts BP Gulf Oil Spill 13

Business Torts BP Gulf Oil Spill 14

Business Torts BP Gulf Oil Spill 15

 ” the sale of the goods of one

 Actionable even where the parties are not

Business Torts BP Gulf Oil Spill 17

Business Torts BP Gulf Oil Spill 18

Business Torts BP Gulf Oil Spill 19

Business Torts BP Gulf Oil Spill 21

Business Torts BP Gulf Oil Spill 22

 Made known to prospective

 In the ordinary course of business

Business Torts BP Gulf Oil Spill 25

 Must distinguish those goods and

 4) arbitrary and fanciful marks

Business Torts BP Gulf Oil Spill 29

Business Torts BP Gulf Oil Spill 30

 Descriptive marks usually rely upon

Business Torts BP Gulf Oil Spill 32

 Generic marks constitute the very

 If a product feature is unique

Business Torts BP Gulf Oil Spill 36

Business Torts BP Gulf Oil Spill 37

Business Torts BP Gulf Oil Spill 38

Business Torts BP Gulf Oil Spill 40

Business Torts BP Gulf Oil Spill 41

Business Torts BP Gulf Oil Spill 42

Business Torts BP Gulf Oil Spill 43

Business Torts BP Gulf Oil Spill 44

Business Torts BP Gulf Oil Spill 46

Business Torts BP Gulf Oil Spill 47

Business Torts BP Gulf Oil Spill 48

Business Torts BP Gulf Oil Spill 49

 Laches (unreasonable delay)

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