Trademarks and What it Really Means to Be FAMOUS. An Analysis.

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[author: Olivera Medenica]

Famous marks qualify for protection under the federal anti-dilution statute, see 15 U.S.C. § 1125(c).  In most cases, trademark dilution involves an unauthorized use of another's trademark on products that do not compete with, and have little connection with, those of the trademark owner.  So for example, a famous trademark used by one company to refer to apparel might be diluted if another company began using a similar mark to refer to pet food.  If the mark is not famous, then an owner must demonstrate that the allegedly infringing use creates a likelihood of confusion as to the source of the product or service being identified by the allegedly infringing use.  In other words, where the mark is not famous, it is highly unlikely that there is likelihood of confusion if the products or services are in unrelated markets.

But the famous mark argument is not without boundaries.  Even if a mark is famous throughout Europe and Asia, for example, with multiple retail outlets, numerous press mentions and so forth, that “it” factor is useless in a U.S. court if the mark is not used in the U.S.  This has caused much confusion to foreign trademark owners relying upon the famous foreign marks doctrine (or the “famous mark doctrine”) to support their infringement argument.  According to McCarty, the "famous marks" doctrine is, in fact, a different and distinct "legal concept under which a trademark or service mark is protected within a nation if it is well known in that nation even though the mark is not actually used or registered in that nation."  J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 29.2, at 29-164 (4th ed. 2002).  Much to the chagrin of foreign mark owners, the “famous marks doctrine” has been expressly rejected in the Second Circuit as inconsonant with the territoriality principle.  ITC Ltd. v. Punchgini, Inc., 482 F.3d 135, 150-65 (2d Cir. 2007).

Indeed, in ITC v. Punchgini, plaintiffs tried to use the famous mark doctrine argument to revive an abandoned park.  There, Plaintiffs held a registered U.S. trademark for restaurant services: “Bukhara.”  Three years after plaintiffs ceased using the mark in the United States, they sought to register the Dal Bukhara mark.  Prior to that, defendants had opened the Bukhara Grill restaurant.  Plaintiffs sued defendants for trademark infringement, unfair competition, and false advertising in violation of federal and state law.

The court found in defendants’ favor on plaintiffs’ infringement and federal unfair competition claim because it found that plaintiffs had abandoned their mark.  The abandonment doctrine derives from the well-established principle that trademark rights are acquired and maintained through use of a particular mark. See Pirone v. MacMillan, Inc., 894 F.2d 579, 581 (2d Cir. 1990) ("'There is no such thing as property in a trade-mark except as a right appurtenant to an established business or trade in connection with which the mark is employed.'" (quoting United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97, 39 S. Ct. 48, 63 L. Ed. 141, 1918 Dec. Comm'r Pat. 369 (1918))). This is true even of marks that have been registered with the Patent and Trademark Office. See Basile, S.p.A. v. Basile, 283 U.S. App. D.C. 227, 899 F.2d 35, 37 n.1 (D.C. Cir. 1990) ("Although [a mark's] registration is a predicate to its protection under [section 32(1)(a) of] the Lanham Act, the underlying right depends not on registration but rather on use.").  Indeed, one of the fundamental premises underlying the registration provisions in the Lanham Act is that trademark rights flow from priority and that priority is acquired through use. See, e.g., 15 U.S.C. § 1057(c) (stating that registration of mark "shall constitute constructive use of the mark, conferring a right of priority, nationwide in effect . . . against any other person except for a person whose mark has not been abandoned and who, prior to such filing[,] . . . has used the mark"). Thus, so long as a person is the first to use a particular mark to identify his goods or services in a given market, and so long as that owner continues to make use of the mark, he is "entitled to prevent others from using the mark to describe their own goods" in that market. Defiance Button Mach. Co. v. C & C Metal Prods. Corp., 759 F.2d 1053, 1059 (2d Cir. 1985); see also Sengoku Works v. RMC Int'l, 96 F.3d 1217, 1219 (9th Cir. 1996) ("It is axiomatic in trademark law that the standard test of ownership is priority of use.").

If, however, an owner ceases to use a mark without an intent to resume use in the reasonably foreseeable future, the mark is said to have been "abandoned." See Silverman v. CBS, Inc., 870 F.2d 40, 45 (2d Cir. 1989); 2 J. Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 17:5, at 17-8 (4th ed. 2002) (observing that "abandonment" refers to situations involving the "non-use of a mark, coupled with an express or implied intention to abandon or not to resume use"). Once abandoned, a mark returns to the public domain and may, in principle, be appropriated for use by other actors in the marketplace, see Indianapolis Colts, Inc. v. Metro. Baltimore Football Club Ltd. P'ship, 34 F.3d 410, 412 (7th Cir. 1994), in accordance with the basic rules of trademark priority, see Manhattan Indus., Inc. v. Sweater Bee by Banff, Ltd., 627 F.2d 628, 630 (2d Cir. 1980).

And that was precisely the weakness in plaintiffs’ argument; they could not demonstrate use in the U.S.  Despite this fact, plaintiffs argued that use in the U.S. was not necessary because they did not abandon their mark due to their continued use of the Bukhara mark outside of the United States – giving rise to an inference of an intent to resume the mark's use in this country (a reference to the “famous mark doctrine” – which you now know, does not exist in the 2nd circuit).  The court summarily rejected this argument, citing to La Societe Anonyme des Parfums le Galion v. Jean Patou, Inc., 495 F.2d 126, 1271, no. 4, noting that it is "well-settled" view "that foreign use is ineffectual to create trademark rights in the United States.”

The lesson of the story is: no matter how famous you are overseas, it does not carry much weight here unless you do your homework.  Note to self, register early.

If you have any questions regarding famous marks, contact Olivera Medenica at  Omedenica@wrlawfirm.com.

Published In: Communications & Media Updates, Intellectual Property Updates, International Trade Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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