Trademarks 101

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On September 25, 2019, Fish Principal Keith Barritt and Associate Nancy Ly hosted the Trademark and Copyright webinar “Trademarks 101.” The webinar focused on the basics of trademark law – what trademarks are, why they matter, how they are acquired and enforced, among many other topics. If you missed that webinar or need a refresh, you can find a summary of its content below.

What Is a Trademark?

A trademark identifies that the goods bearing the mark come from or are quality controlled by a single source. A service mark performs the same function, but for services rather than tangible goods. However, the term “trademark” is often used for marks that identify both goods and services. In its most common form, a trademark is simply a brand name (such as “Almond Joy”).

There are a number of important differences between trademarks and other forms of intellectual property protection, such as patents and copyrights. Patents are government-issued monopolies granted to new inventions (e.g., machines, methods of manufacture, processes, or compositions of matter) and last for a period of 20 from the date the patent application is filed. Copyrights protect original works of authorship (e.g., literary, musical, or sculptural works, etc.), and have a long but limited lifespan. Trademarks identify the source of goods and services and, unlike patents and copyrights, can last forever with continued use.

Trademarks serve two basic functions. First, they protect consumers by preventing confusion.Without trademark protection, a consumer could select an inferior product such as “Almond Joyce” or “Almond Boy” without realizing their mistake. Trademarks let the consumer know that the Almond Joy candy bar they select off the shelf will be from the same source and of the same quality as other Almond Joy candy bars they have purchased in the past. Second, trademarks protect their owners’ investments in goods or services by giving the trademark owner control over the “goodwill” or “reputation” represented by the mark. Without trademark protection, a seller of a high-quality product would have no recourse against a competitor who sells an inferior knockoff product under a similar name.

Trademarks come in many different forms. The most common include:

• Word marks (“Uber” or “Xbox”)
• Logos (the Nike swoosh or Microsoft’s quad-colored tiles)
• Slogans (“Finger lickin’ good” or “Just Do it”)

Other less common, but nonetheless protectable trademarks include:

• Sounds (NBC’s three-note chime)
• Colors (Owens-Corning’s pink fiberglass insulation)
• Smells (the scent of Play-Doh)
• Non-functional product or packaging shapes (the shape of a Coca-Cola bottle)

What Makes a Good Trademark?

Not all trademarks are created equal. Some are stronger than others and thus provide more brand protection. Generally, a trademark’s strength is measured by its distinctiveness relative to other words, symbols, slogans, etc. The four categories into which virtually all trademarks fall are:

• Arbitrary/fanciful
• Suggestive
• Descriptive
• Generic

Where a trademark’s distinctiveness falls on this spectrum determines the level of protection it provides.

Arbitrary and fanciful marks are “inherently distinctive” and provide the highest level of protection. An arbitrary mark is a word or symbol that has a common meaning that is completely unrelated to the products on which it is used, such as “Apple,” “Bird’s Eye,” and “Camel.” A fanciful mark is typically a made-up word that is used only in connection with the products on which it is used, such as “Pringles,” “Exxon,” and “Kodak.” Suggestive marks are also inherently distinctive, but provide less protection than arbitrary and fanciful marks. A suggestive mark suggests or hints at the nature of the goods or services and requires the consumer to make a mental leap to figure out what product or service is being associated with the mark. Examples of suggestive marks are “Chicken of the Sea,” “Greyhound,” and “Matchbox.”

Descriptive marks merely describe a quality or feature of the goods or services (including geographically descriptive marks and surnames), such as “Texas Instruments,” “Mrs. Field’s,” and “Lyft.” These marks are not inherently distinctive. Rather, to function as a trademark, the proponent must demonstrate that the mark has “acquired distinctiveness” or “secondary meaning.” The proponent can show acquired distinctiveness by submitting evidence that the public perceives the descriptive term as a source-identifying mark. Such evidence can include:

• Substantially exclusive and continuous use as a trademark (generally around five years)
• Extensive advertisements using the descriptive term as a trademark
• Customer declarations or surveys
• Consumer confusion
• Copying by competitors

A few examples of descriptive terms that have acquired distinctiveness necessary to function as trademarks include SPORTS ILLUSTRATED, MICROSOFT WINDOWS, TASTYKAKE, and 5-HOUR ENERGY.

The lowest level on the scale of distinctiveness is generic terms, which are common words or symbols for goods and services that are not distinctive and can never function as trademarks. Examples of generic terms include “corn flakes,” “aspirin,” “watch,” etc. Trademarks can also become generic – a process known as genericide – by widespread public use of the trademark to refer to the general category of the product. Terms that functioned as trademarks in the past that have now become generic include “escalator,” “linoleum,” and “thermos.”

Do’s and Don’ts for Selecting a Trademark

Do:

• Choose a mark that is arbitrary, fanciful, or suggestive (inherently distinctive)
• Choose a mark that is easy to pronounce and remember
• Consider developing a “family” of related marks (such as the McDonald’s “Mc-“ family of marks)

Don’t:

• Choose a mark that is merely descriptive or generic
• Choose a mark that has negative connotations in English (ENTERON) or foreign languages (NOVA)
• Choose a mark that may become outdated in a few years (GATEWAY 2000)

Trademark Searching

Before selecting a mark, a trademark search to assess the existing landscape is prudent. While not legally required, a trademark search can identify existing marks. Preliminary trademark searching is fairly simple, as all federally-registered and applied-for marks are searchable via the United States Patent and Trademark Office’s (USPTO) trademark database. More advanced trademark searching (also known as “full” searching) usually requires the assistance of a trademark searching service. Keep in mind, however, that even a comprehensive trademark search has limits. For example, not all trademarks are federally-registered, and thus will not appear in the USPTO database. Additionally, reasonable minds may also differ as to whether a new mark is similar enough to an existing mark to create a risk of trademark infringement.

How Are Trademark Rights Acquired?

Unlike patent rights, which can only be granted by the government, trademark rights arise primarily through use. “Use” in this context is defined as displaying the mark on a product or product packaging that is then sold in the ordinary course of trade or used in connection with the rendering of a service. In some scenarios, such as in industries whose products require extensive research and development or lengthy regulatory approval processes, “use” can also include pre-sale use of the mark in preparation to do business.

U.S. Trademark Registration

While trademark rights arise through use rather than government decree, trademarks that are not federally-registered are limited to the territory where the mark is actually used or the territory to which the trademark owner’s reputation extends. Trademark owners can obtain additional benefits by registering their trademark with the U.S. Trademark Office [global change]. Some of the benefits of federal trademark registration include:

• Publication of the mark in the USPTO database, making it easy for others to find through a preliminary trademark search
• USPTO refusal to register confusingly similar marks without any action by the registrant
• Nationwide notice of ownership
• Nationwide, rather than territorially-limited, rights of use
• Evidence of validity and exclusive ownership
• Right to use the ® symbol
• Right to sue in federal court and, in some cases, obtain treble damages and attorneys’ fees
• Right to block imports that infringe the mark or that are counterfeits
• Entitlement to statutory damages in the case of counterfeiting
• A basis for foreign trademark registrations

To register a mark with the USPTO, filers may use either a use-based application or an intent-to-use (ITU) application. Foreign applicants may also file based on ownership of a pending foreign application or registration. Generally, the application must contain three elements:

1. A drawing of the mark
2. Identification of the goods or services associated with the mark
3. A specimen showing the mark as actually used in U.S. commerce with goods or services

After filing, the application will be assigned to an examining attorney at the USPTO who will review its compliance with trademark laws and raise any issues or concerns he or she may have. Some common barriers to registration include issues with the wording used in the identification of the goods or services and conflicts with prior registrations or applications. If the examining attorney refuses the application, the applicant may respond with legal arguments as to why the examiner’s refusal is erroneous or amend the application to bring it into compliance with the examining attorney’s specifications. Once the examining attorney approves the application, it is published, beginning a 30-day period during which third parties may file an opposition to the registration. If a registration issues, as long as the mark continues to be used in U.S. commerce, the registrant may renew the registration every 10 years, potentially forever.

In addition to refusing to register a mark based on the prior rights of others, the USPTO also considers several types of marks to be categorically unregistrable. These are:

• The flag or other official insignia of the United States, any U.S. state, or any foreign country
• The name, likeness, or signature of any publicly recognized living individual without the individual’s consent
• Terms that are deceptive or that falsely suggest a connection with any person, place, or thing

Terms that were deemed to be “immoral, scandalous, or disparaging” were unregistrable until the Supreme Court recently struck down that provision as violating the First Amendment’s guarantee of freedom of speech. See Iancu v. Brunetti, 139 S. Ct. 782 (2019).

Foreign Trademark Registration

Under the Paris Convention, foreign filings made within six months of an application’s first filing are entitled to a priority date based on the first filing. Applications that are filed after that period are not barred, but rather are treated as being filed on the actual date of filing.

Applicants may file directly in a country or utilize an international trademark filing system. An international trademark filing system, known as the Madrid Protocol, helps to minimize costs and streamline filing procedures across a majority of jurisdictions. As of October, 2019, the Madrid Protocol has 122 member countries, including the United States. Under the Madrid Protocol, an applicant may file one application with a single office, in one language, with one set of fees. The World Intellectual Property Organization (WIPO) will issue the applicant an “international registration” that serves as a filing receipt for each country the applicant selects. Each member country’s national trademark office will then review the application under their normal trademark law standards to determine whether a registration should issue based on the filing.

Protecting Trademark Rights

Successfully obtaining trademark registration is only half of the story for trademark owners. After registration, they must protect their trademarks from a variety of threats. These threats include infringement, counterfeiting, dilution, cybersquatting, genericide, and abandonment.

Infringement

Trademark infringement is the unauthorized use of a mark in connection with goods or services in a manner that is likely to cause consumer confusion as to the source of the goods or services. It could occur, for example, if the seller of a new brand of toothpaste sold its goods under the name “Kolgate,” which is very similar to the more established “Colgate” brand name. In that case, there would be a concern that the Kolgate brand is produced by Colgate or that it is somehow affiliated with or sponsored by Colgate, and that this could cause customers to be confused as to the source of the product.

When determining whether an allegedly infringing mark is likely to cause consumer confusion, courts look to a number of factors, such as:

• The strength of the plaintiff’s mark
• The similarity of the marks
• The proximity of the goods
• Evidence of actual confusion
• Marketing channels used
• Purchaser sophistication/degree of care
• The second user’s intent in selecting the mark

Plaintiffs in trademark infringement actions normally seek injunctions against the alleged infringer rather than monetary damages, as the plaintiff’s main objective is to remove the infringing use and products from the market. Damages are available in trademark infringement cases, but they can often be difficult to obtain, as they often require evidence that the defendant’s use of the mark was willful and in bad faith.

Counterfeiting

A counterfeit trademark is one that is identical with, or substantially indistinguishable from, a registered mark. Put another way, it is an intentional effort to defraud consumers by copying someone else’s trademark. It can also occur by the use of a genuine trademark on counterfeit goods, such as refilling Coca-Cola bottles with a different beverage or using GE packaging for non-GE parts. A plaintiff in a trademark counterfeiting action may petition the court to issue an order authorizing pre-suit seizure of the suspected counterfeits, which requires the plaintiff to post a bond in the event that the defendant alleges a wrongful seizure. In addition to civil liability, trademark counterfeiting can result in criminal penalties.

Dilution

Trademark dilution is the weakening of the capacity of a “famous mark” (i.e., one widely recognized by the general consuming public) to identify and distinguish goods and services. That weakening can occur either by blurring or tarnishment. Dilution by blurring occurs by using the famous mark for unrelated products or services (e.g., BUICK aspirin or TIFFANY sneakers). Dilution by tarnishment occurs by using a famous mark or something similar in an inappropriate or unflattering way (e.g., “This Bug’s for You” or “Enjoy Cocaine” written in Coca-Cola script). A trademark owner in a dilution action need not show that dilution has actually occurred, but only that there is a likelihood of dilution.

Cybersquatting

Under U.S. law, cybersquatting is a bad faith intent to profit from registering, trafficking in, or using a domain name that is confusingly similar to the trademark of another. It often occurs when a person purchases many domain names containing trademarks of others for the purpose of selling them to the trademark owner or diverting internet traffic away from the trademark owner’s website. Trademark owners have two avenues in which to recover their trademarked domain name and/or damages from the cybersquatter. The first option is to file a federal lawsuit against the cybersquatter, in which the plaintiff can recover up to $100,000 per domain name in addition to the transfer or cancellation of the domain name. Another option is to file an administrative Uniform Domain Name Dispute Resolution Policy (UDRP) action against the cybersquatter, in which the plaintiff may obtain a transfer or cancellation of the domain name, but no monetary damages.

Genericide

As discussed above, trademarks can become generic terms when consumers regard them primarily as referring to a type or category of goods or services rather than as a trademark for a specific good or service. Examples of former trademarks that have become generic terms are aspirin, dry ice, cellophane, nylon, kerosene, lanolin, zipper, escalator, thermos, shredded wheat, and trampoline. Other marks that are close to or in danger of becoming genericized include XEROX, KLEENEX, JELLO, JEEP, FREON, and MACE. Trademark owners can avoid genericide in several ways. First, they can ensure proper use by using the marks only as adjectives rather than as nouns, verbs, plurals, or possessives (e.g., VASELINE petroleum jelly; SCOTCH brand adhesive tape). Second, they can use trademark notices in association with their marks (® for federally-registered marks and TM or SM for unregistered marks). And third, they can take steps to correct improper use of the marks by others.

Abandonment

Trademark rights arise through use. Therefore, it follows that trademark rights can be extinguished through non-use. Trademark abandonment occurs when the trademark owner does not use the mark for a significant period of time and has no intention to resume use. Although the length of non-use necessary to be considered “significant” varies, non-use for three years without a reasonable excuse creates a presumption of abandonment. Trademark owners can avoid abandoning their marks, and thus extinguishing their rights in them, by using them continuously.

Using Marks Owned by Others

Not all use of trademarks owned by others constitutes infringement or counterfeiting. The fair use doctrine creates an exception that allows others to use the owner’s mark in ways that do not cause confusion. There is descriptive fair use and nominative fair use. Under the descriptive fair use doctrine, a third party may use another’s mark to describe the third party’s own product or service rather than as a source-identifier. The nominative fair use doctrine allows a third party to use another’s mark to identify the mark owner’s goods/services. Under both of fair use, the third party who uses another’s mark must take care to be fair and truthful and to give proper attribution of the other party’s ownership of the marks. They must also avoid disparagement and implied endorsements of the third party’s goods by the trademark owner.

A third party may also use another’s trademark if it licenses the mark from the trademark owner. In these scenarios, the license must contain quality control measures over the licensee’s goods to ensure that they meet the licensor’s standards. If the licensor fails to enforce its quality standards over the licensee, it risks losing its rights in the mark.

When selling trademark rights, the trademark cannot be separated from the goodwill of the business associated with the mark. Therefore, it is improper to sell the mark without also selling the associated business to allow the new owner to carry on the prior owner’s business under the mark. An assignment of an intent-to-use trademark application without the goodwill of the ongoing business to which the mark pertains will invalidate the application.

[View source.]

 

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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  • Google Analytics - For more information on Google Analytics cookies, visit www.google.com/policies. To opt-out of being tracked by Google Analytics across all websites visit http://tools.google.com/dlpage/gaoptout. This will allow you to download and install a Google Analytics cookie-free web browser.

Facebook, Twitter and other Social Network Cookies. Our content pages allow you to share content appearing on our Website and Services to your social media accounts through the "Like," "Tweet," or similar buttons displayed on such pages. To accomplish this Service, we embed code that such third party social networks provide and that we do not control. These buttons know that you are logged in to your social network account and therefore such social networks could also know that you are viewing the JD Supra Website.

Controlling and Deleting Cookies

If you would like to change how a browser uses cookies, including blocking or deleting cookies from the JD Supra Website and Services you can do so by changing the settings in your web browser. To control cookies, most browsers allow you to either accept or reject all cookies, only accept certain types of cookies, or prompt you every time a site wishes to save a cookie. It's also easy to delete cookies that are already saved on your device by a browser.

The processes for controlling and deleting cookies vary depending on which browser you use. To find out how to do so with a particular browser, you can use your browser's "Help" function or alternatively, you can visit http://www.aboutcookies.org which explains, step-by-step, how to control and delete cookies in most browsers.

Updates to This Policy

We may update this cookie policy and our Privacy Policy from time-to-time, particularly as technology changes. You can always check this page for the latest version. We may also notify you of changes to our privacy policy by email.

Contacting JD Supra

If you have any questions about how we use cookies and other tracking technologies, please contact us at: privacy@jdsupra.com.

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